EXHIBIT 10.1
AGREEMENT AND PLAN OF MERGER
BETWEEN
NATIONAL CITY BANCORPORATION
AND
XXXXXXXX & XXXXXX CORPORATION
Dated as of April 30, 2001
TABLE OF CONTENTS
Page
ARTICLE I - THE MERGER
SECTION 1.1 The Merger...........................................................................................1
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SECTION 1.2 Effective Time.......................................................................................1
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SECTION 1.3 Effect of the Merger.................................................................................2
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SECTION 1.4 Articles of Incorporation; By-Laws...................................................................2
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SECTION 1.5 Directors and Officers...............................................................................2
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SECTION 1.6 Conversion of Securities; Dissenting Shares..........................................................2
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SECTION 1.7 Exchange of Certificates.............................................................................4
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SECTION 1.8 Stock Transfer Books.................................................................................6
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SECTION 1.9 Adjustments for Dilution and Other Matters...........................................................6
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SECTION 1.10 Company Common Stock.................................................................................6
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ARTICLE II - REPRESENTATIONS AND WARRANTIES OF SELLER
SECTION 2.1 Organization and Qualification; Subsidiaries.........................................................6
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SECTION 2.2 Articles of Incorporation and By-Laws................................................................8
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SECTION 2.3 Capitalization.......................................................................................8
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SECTION 2.4 Authority............................................................................................9
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SECTION 2.5 No Conflict; Required Filings and Consents...........................................................9
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SECTION 2.6 Compliance; Permits.................................................................................10
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SECTION 2.7 Securities and Banking Reports; Financial Statements................................................10
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SECTION 2.8 Absence of Certain Changes or Events................................................................11
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SECTION 2.9 Absence of Litigation...............................................................................12
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SECTION 2.10 Employee Benefit Plans..............................................................................12
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SECTION 2.11 Registration Statement; Proxy Statement/Prospectus..................................................14
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SECTION 2.12 Title to Property...................................................................................15
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SECTION 2.13 Environmental Matters...............................................................................15
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SECTION 2.14 Absence of Agreements...............................................................................16
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SECTION 2.15 Taxes...............................................................................................16
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SECTION 2.16 Insurance...........................................................................................17
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SECTION 2.17 Brokers.............................................................................................17
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SECTION 2.18 Tax Matters.........................................................................................18
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SECTION 2.19 Material Adverse Effect.............................................................................18
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SECTION 2.20 Material Contracts..................................................................................18
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SECTION 2.21 Opinion of Financial Advisor........................................................................18
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SECTION 2.22 Vote Required.......................................................................................18
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ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.1 Organization and Qualification; Subsidiaries........................................................18
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SECTION 3.2 Articles of Incorporation and By-Laws...............................................................19
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SECTION 3.3 Capitalization......................................................................................19
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SECTION 3.4 Authority...........................................................................................20
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SECTION 3.5 No Conflict; Required Filings and Consents..........................................................21
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SECTION 3.6 Compliance; Permits.................................................................................21
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SECTION 3.7 Securities and Banking Reports; Financial Statements................................................21
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SECTION 3.8 Absence of Certain Changes or Events................................................................22
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SECTION 3.9 Absence of Litigation...............................................................................23
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SECTION 3.10 Employee Benefit Plans..............................................................................23
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SECTION 3.11 Registration Statement; Proxy Statement/Prospectus..................................................24
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SECTION 3.12 Title to Property...................................................................................25
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SECTION 3.13 Environmental Matters...............................................................................25
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SECTION 3.14 Absence of Agreements...............................................................................25
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SECTION 3.15 Taxes...............................................................................................25
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SECTION 3.16 Brokers.............................................................................................26
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SECTION 3.17 Tax Matters.........................................................................................26
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SECTION 3.18 Material Adverse Effect.............................................................................26
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ARTICLE IV - COVENANTS OF SELLER
SECTION 4.1 Affirmative Covenants...............................................................................27
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SECTION 4.2 Negative Covenants..................................................................................27
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SECTION 4.3 Letter of Seller's Accountants......................................................................29
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SECTION 4.4 No Solicitation of Transactions.....................................................................30
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SECTION 4.5 Update Disclosure; Breaches.........................................................................31
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SECTION 4.6 Affiliates; Tax Treatment...........................................................................31
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SECTION 4.7 Delivery of Shareholder List........................................................................32
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SECTION 4.8 Loan and Investment Policies........................................................................32
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SECTION 4.9 Access and Information..............................................................................32
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SECTION 4.10 Confidentiality Letter..............................................................................33
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SECTION 4.11 Employment Agreements...............................................................................33
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ARTICLE V - COVENANTS OF THE COMPANY
SECTION 5.1 Affirmative Covenants...............................................................................33
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SECTION 5.2 Negative Covenants..................................................................................33
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SECTION 5.3 Update Disclosure...................................................................................34
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SECTION 5.4 Breaches............................................................................................34
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SECTION 5.5 Stock Exchange Listing..............................................................................34
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SECTION 5.6 Tax Treatment.......................................................................................34
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SECTION 5.7 Confidentiality Letter..............................................................................34
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ARTICLE VI - ADDITIONAL AGREEMENTS
SECTION 6.1 Proxy Statement/Prospectus; Registration Statement..................................................34
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SECTION 6.2 Meeting of Seller's Shareholders....................................................................35
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SECTION 6.3 Appropriate Action; Consents; Filings...............................................................35
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SECTION 6.4 Directors' and Officers' Indemnification and Insurance..............................................35
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SECTION 6.5 Notification of Certain Matters.....................................................................36
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SECTION 6.6 Public Announcements................................................................................36
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SECTION 6.7 Customer Retention..................................................................................36
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SECTION 6.8 Expenses............................................................................................37
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SECTION 6.9 Employee Benefit Matters............................................................................37
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ARTICLE VII - CONDITIONS OF MERGER
SECTION 7.1 Conditions to Obligation of Each Party to Effect the Merger.........................................37
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SECTION 7.2 Additional Conditions to Obligations of the Company.................................................38
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SECTION 7.3 Additional Conditions to Obligations of Seller......................................................40
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ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination.........................................................................................42
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SECTION 8.2 Effect of Termination...............................................................................43
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SECTION 8.3 Amendment...........................................................................................43
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SECTION 8.4 Waiver..............................................................................................43
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ARTICLE IX - GENERAL PROVISIONS
SECTION 9.1 Non-Survival of Representations, Warranties and Agreements..........................................43
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SECTION 9.2 Notices.............................................................................................44
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SECTION 9.3 Certain Definitions.................................................................................44
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SECTION 9.4 Headings............................................................................................45
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SECTION 9.5 Severability........................................................................................45
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SECTION 9.6 Entire Agreement....................................................................................45
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SECTION 9.7 Assignment..........................................................................................45
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SECTION 9.8 Parties in Interest.................................................................................46
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SECTION 9.9 Governing Law.......................................................................................46
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SECTION 9.10 Counterparts........................................................................................46
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SECTION 9.11 Time is of the Essence..............................................................................46
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SECTION 9.12 Specific Performance................................................................................46
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ANNEX A SUBSIDIARIES OF SELLER
ANNEX B EMPLOYEE BENEFIT MATTERS
ANNEX C FORM OF OPINION OF COUNSEL TO SELLER
ANNEX D FORM OF OPINION OF COUNSEL TO COMPANY
EXHIBIT 1.1 PLAN OF MERGER
EXHIBIT 4.6 AFFILIATE LETTER
Index of Defined Terms
Section
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Affiliate............................................ SECTION 9.3(a)
Agreement............................................ PREAMBLE
Articles of Merger................................... SECTION 1.2
Average Trading Price................................ SECTION 1.6(b)
BHCA................................................. SECTION 2.1(a)
Blue Sky Laws........................................ SECTION 2.5(b)
Business Day......................................... SECTION 9.3(b)
Certificates......................................... SECTION 1.7(b)
Code................................................. PREAMBLE
Company.............................................. PREAMBLE
Company Approvals.................................... SECTION 3.1(a)
Company Articles..................................... SECTION 1.4
Company By-Laws...................................... SECTION 1.4
Company Common Stock................................. SECTION 1.6(a)
Company Disclosure Schedule.......................... ARTICLE III, PREAMBLE
Company Plans........................................ SECTION 3.10(a)
Company Preferred Stock.............................. SECTION 3.3(a)
Company Reports...................................... SECTION 3.7(a)
Company SEC Reports.................................. SECTION 3.7(a)
Company Subsidiary................................... SECTION 3.1(a)
Company Subsidiaries................................. SECTION 3.1(a)
Competing Proposal................................... SECTION 4.4(b)
Control.............................................. SECTION 9.3(c)
DFI.................................................. SECTION 1.2
Dissenting Shares.................................... SECTION 1.6(e)
Effective Time....................................... SECTION 1.2
Employee Changes..................................... SECTION 4.2(a)(i)
Environmental Claims................................. SECTION 2.13
Environmental Laws................................... SECTION 2.13
ERISA................................................ SECTION 2.10(a)
Exchange Act......................................... SECTION 2.5(b)
Exchange Agent....................................... SECTION 1.7(a)
Exchange Fund........................................ SECTION 1.7(a)
Exchange Rate........................................ SECTION 1.6(b)
Exhibit 21........................................... SECTION 3.1(c)
Expenses............................................. SECTION 6.8(b)
FDIC ................................................ SECTION 2.1(a)
Federal Reserve Board................................ SECTION 2.1(a)
Governmental Authority............................... SECTION 2.13
Hazardous Materials.................................. SECTION 2.13
IBCA................................................. PREAMBLE
Indemnified Parties.................................. SECTION 6.4(c)
Iowa Secretary of State.............................. SECTION 1.2
IRS.................................................. SECTION 2.15
Laws................................................. SECTION 2.5(a)
Material Adverse Effect.............................. SECTION 2.1(d)
Merger............................................... PREAMBLE
NYSE................................................. SECTION 1.6(b)
OCC.................................................. SECTION 2.1(a)
Participation Facility............................... SECTION 2.13
Person............................................... SECTION 9.3(d)
Plans................................................ SECTION 2.10(a)
Proxy Statement/Prospectus........................... SECTION 2.11
Registration Statement............................... SECTION 3.11
Representatives...................................... SECTION 4.4(a)
Shares............................................... SECTION 1.6(a)
SEC.................................................. SECTION 2.7(a)
Section 180.0622(2)(b) of the WBCL................... SECTION 3.3(a)
Securities Act....................................... SECTION 2.5(b)
Seller............................................... PREAMBLE
Seller Affiliate..................................... SECTION 4.6
Seller Approvals..................................... SECTION 2.1(a)
Seller Articles...................................... SECTION 2.2
Seller By-Laws....................................... SECTION 2.2
Seller Common Stock.................................. SECTION 1.6(a)
Seller Disclosure Schedule........................... ARTICLE II, PREAMBLE
Seller Reports....................................... SECTION 2.7(a)
Seller SEC Reports................................... SECTION 2.7(a)
Seller Subsidiaries.................................. SECTION 2.1(a)
Seller Subsidiary.................................... SECTION 2.1(a)
Seller's Shareholders' Meeting....................... SECTION 2.11
Series A Preferred Stock............................. SECTION 3.3(a)
Subsidiary or Subsidiaries........................... SECTION 9.3(e)
Superior Competing Transaction....................... SECTION 4.4(c)
Surviving Corporation................................ SECTION 1.1
Tax or Taxes......................................... SECTION 2.15
Tax Returns.......................................... SECTION 2.15
Title IV Plan........................................ SECTION 2.10(b)
USBL................................................. SECTION 2.5(b)
WBCL................................................. PREAMBLE
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 30, 2001 (the
"Agreement"), between NATIONAL CITY BANCORPORATION, an Iowa corporation (the
"Seller") and XXXXXXXX & ILSLEY CORPORATION, a Wisconsin corporation (the
"Company").
WHEREAS, the Boards of Directors of the Company and the Seller have
each determined that it is fair to and in the best interests of their respective
shareholders for the Seller to merge with and into the Company (the "Merger")
upon the terms and subject to the conditions set forth herein and in accordance
with the Iowa Business Corporation Act (the "IBCA") and the Wisconsin Business
Corporation Law (the "WBCL");
WHEREAS, the respective Boards of Directors of the Company and the
Seller have each approved the Merger of the Seller with and into the Company,
upon the terms and subject to the conditions set forth herein, and adopted this
Agreement;
WHEREAS, subsequent to the Seller's approval of this Agreement and
concurrently with the execution of this Agreement and as a condition and an
inducement to the willingness of the Company to enter into this Agreement, the
Company and each of the Xxxxxx X. Xxxxxxx Revocable Trust, as amended and
restated November 3, 1998, the Xxxxx X. Xxxxxxx Revocable Trust, amended on
December 18, 1998, the D.I.A. Revocable Trust, amended and restated on July 15,
1995, the Xxxxxx Xxx Xxxxxxx McMurtie Trust, amended and restated on September
14, 1999 and the Xxxxx X. Xxxxxxx Trust, amended and restated on August 1, 2000
have entered into an agreement pursuant to which each such shareholder has
agreed to vote its shares of Seller Common Stock in favor of the Merger;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization under the provisions of Section 368 of
the Internal Revenue Code of 1986, as amended (the "Code"), and this Agreement
shall constitute the plan of reorganization; and
WHEREAS, for financial accounting purposes it is intended that the
Merger shall be accounted for as a purchase.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the parties hereto hereby agree as
follows:
ARTICLE I - THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the IBCA, the WBCL and the
Plan of Merger attached hereto as Exhibit 1.1, at the Effective Time (as defined
in Section 1.2) Seller shall be merged with and into the Company. As a result of
the Merger, the separate corporate existence of Seller shall cease and the
Company shall continue as the surviving corporation of the Merger (the
"Surviving Corporation").
SECTION 1.2 Effective Time. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VII, the parties hereto shall cause the Merger to be consummated by filing
articles of merger (the "Articles of Merger") with the Secretary
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of State of the State of Iowa (the "Iowa Secretary of State") and the Department
of Financial Institutions of the State of Wisconsin (the "DFI"), in such form as
required by, and executed in accordance with the relevant provisions of, the
IBCA and the WBCL (the date and time of such filing is referred to herein as the
"Effective Time").
SECTION 1.3 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement and the applicable provisions
of the IBCA and the WBCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, except as otherwise provided herein, all
the property, rights, privileges, powers and franchises of the Company and the
Seller shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and the Seller shall become the debts, liabilities and
duties of the Surviving Corporation.
SECTION 1.4 Articles of Incorporation; By-Laws. At the Effective Time,
the Articles of Incorporation, as amended of the Company (the "Company
Articles") and the By-Laws, as amended, of the Company (the "Company By-Laws"),
as in effect immediately prior to the Effective Time, shall be the Articles of
Incorporation and the By-Laws of the Surviving Corporation.
SECTION 1.5 Directors and Officers. At the Effective Time, the
directors of the Company immediately prior to the Effective Time shall be the
initial directors of the Surviving Corporation, each to hold office in
accordance with the Articles of Incorporation and By-Laws of the Surviving
Corporation and to be assigned to the class previously assigned. At the
Effective Time, the officers of the Company immediately prior to the Effective
Time, shall be the initial officers of the Surviving Corporation, in each case
until their respective successors are duly elected or appointed.
SECTION 1.6 Conversion of Securities; Dissenting Shares. Subject to
Section 1.7(e) regarding fractional shares, at the Effective Time, by virtue of
the Merger and without action on the part of the Company, the Seller or the
holder of the following securities:
(a) Each share of common stock, par value $1.25 per share, of
Seller ("Seller Common Stock") issued and outstanding immediately prior
to the Effective Time (all shares of Seller Common Stock issued and
outstanding immediately prior to the Effective Time being referred to
herein as the "Shares"), other than Shares held in the treasury of
Seller or owned by the Company and any Company Subsidiary for its own
account and other than Dissenting Shares (as defined in Section
1.6(e)), shall be converted in accordance with Section 1.7, into the
right to receive shares of common stock, par value $1.00 per share, of
the Company ("Company Common Stock") having a value of $29.50 (subject
to adjustment in accordance with Section 1.6(b), below). All such
shares of Seller Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and
each certificate previously representing any such shares shall
thereafter represent the right to receive a certificate representing
shares of Company Common Stock into which such Seller Common Stock
shall have been converted. Certificates previously representing shares
of Seller Common Stock shall be exchanged for certificates representing
whole shares of Company Common Stock issued in consideration therefor
upon the surrender of such certificates in accordance with the
provisions of Section 1.7, without interest. No fractional share of
Company Common Stock shall be issued, and, in lieu thereof, a cash
payment shall be made pursuant to Section 1.7.
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(b) The number of shares of Company Common Stock that each
Share shall have the right to receive in accordance with Section 1.6(a)
above shall equal $29.50 divided by the Average Trading Price of the
Company Common Stock (rounded to the nearest one hundred thousandth);
provided, however, that if the number of shares as so calculated (1) is
greater than 0.65556, such number shall be reduced to 0.65556, or (2)
is less than 0.53636, such number shall be increased to 0.53636 (the
exchange rate, as adjusted if applicable, is hereinafter referred to as
the "Exchange Rate"). The "Average Trading Price" of the Company Common
Stock shall be the average of the average high and low sale price per
share of the Company Common Stock on the New York Stock Exchange (the
"NYSE") as reported in the Midwest Edition of THE WALL STREET JOURNAL
for the twenty (20) trading days ending on and including the third
trading day preceding the Effective Time. The Company agrees that all
of its purchases of Company Common Stock shall be in accordance with
Regulation M under the Exchange Act.
(c) Each Share held by the Seller as treasury stock
immediately prior to the Effective Time shall be canceled and
extinguished without any conversion thereof into Company Common Stock
or payment therefor.
(d) Each Share held by the Company and any Company Subsidiary
for its own account shall be canceled and extinguished without
conversion thereof into Company Common Stock or payment therefor.
(e) Notwithstanding anything in this Agreement to the
contrary, Shares which are issued and outstanding immediately prior to
the Effective Time and which are held by shareholders who have validly
exercised dissenter's rights available under Sections 490.1301 to
490.1331 of the IBCA (the "Dissenting Shares") shall not be converted
into or be exchangeable for the right to receive Company Common Stock
in accordance with this Section 1.6, unless and until such holders
shall have failed to perfect or shall have effectively withdrawn or
lost their rights to appraisal under the IBCA. Dissenting Shares shall
be treated in accordance with Division XIII of the IBCA, if and to the
extent applicable. If any such holder shall have failed to perfect or
shall have effectively withdrawn or lost such right to dissent, such
holder's Shares shall thereupon be converted into and become
exchangeable only for the right to receive, as of the Effective Time,
Company Common Stock in accordance with this Section 1.6, without any
interest thereon. Seller shall give the Company (a) prompt notice of
each and every notice of a shareholder's intent to demand payment for
the shareholder's Shares, attempted withdrawals of such demands, and
any other instruments served pursuant to the IBCA and received by the
Seller relating to rights to be paid the "fair value" of Dissenting
Shares, as provided in Sections 490.1301 to 490.1331 of the IBCA and
(b) the opportunity to direct all negotiations and proceedings with
respect to demands for appraisal under the IBCA. Seller shall not,
except with the prior written consent of the Company, voluntarily make
any payment with respect to any demands for appraisals of capital stock
of Seller, offer to settle or settle any demands or approve any
withdrawal of any such demands.
SECTION 1.7 Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, the Company
shall deposit, or shall cause to be deposited, with a bank or trust
company designated by the Company (the "Exchange Agent"), for the
benefit of the holders of Shares, for exchange in accordance
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with this Article I, through the Exchange Agent, certificates
representing the shares of Company Common Stock (such certificates for
shares of Company Common Stock, together with any dividends or
distributions with respect thereto are referred to herein as the
"Exchange Fund") issuable pursuant to Section 1.6 in exchange for
outstanding Shares.
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, the Exchange Agent shall mail to each holder
of record of a certificate or certificates which immediately prior to
the Effective Time represented outstanding Shares (the "Certificates"),
whose Shares were converted into the right to receive shares of Company
Common Stock pursuant to Section 1.6, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss
and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have
such other provisions as the Company may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of Company Common Stock.
Upon surrender of a Certificate for cancellation to the Exchange Agent
together with such letter of transmittal, duly executed, the holder of
such Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of Company Common
Stock which such holder has the right to receive in respect of the
Certificate surrendered pursuant to the provisions of this Article I
(after taking into account all Shares then held by such holder), and
the Certificate so surrendered shall forthwith be canceled. In the
event of a transfer of ownership of Shares which is not registered in
the transfer records of the Seller, a certificate representing the
proper number of shares of Company Common Stock may be issued to a
transferee if the Certificate representing such Shares is presented to
the Exchange Agent, accompanied by all documents required to evidence
and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. In the event any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming such Certificate to be lost, stolen or
destroyed and the posting by such person of a bond in such amount as
the Company may direct as indemnity against any claim that may be made
against it or the Exchange Agent with respect to such Certificate, the
Exchange Agent will issue in exchange for such lost, stolen or
destroyed Certificate a certificate representing the proper number of
shares of Company Common Stock. Until surrendered as contemplated by
this Section 1.7, each Certificate (other than Certificates
representing Shares owned by the Company or any Company Subsidiary, and
Certificates representing Dissenting Shares) shall be deemed at any
time after the Effective Time to represent only the right to receive
upon such surrender the certificate representing shares of Company
Common Stock and cash in lieu of any fractional shares of Company
Common Stock as contemplated by Section 1.7(e).
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the Effective
Time with respect to Company Common Stock with a record date after the
Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Company Common Stock
represented thereby, and no cash payment in lieu of fractional shares
shall be paid to any such holder pursuant to Section 1.7(e), until the
holder of such Certificate shall surrender such Certificate. Subject to
the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the holder of the certificates
representing whole shares of Company Common Stock issued in exchange
therefor, without interest, (i) promptly, the amount of any cash
payable with respect to a fractional share of Company Common Stock
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to which such holder is entitled pursuant to Section 1.7(e) and the
amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of
Company Common Stock, and (ii) at the appropriate payment date, the
amount of dividends or other distributions, with a record date after
the Effective Time but prior to surrender and a payment date occurring
after surrender, payable with respect to such whole shares of Company
Common Stock.
(d) No Further Rights in the Shares. All shares of Company
Common Stock issued upon conversion of the Shares in accordance with
the terms hereof (including any cash paid pursuant to Section 1.7(e))
shall be deemed to have been issued in full satisfaction of all rights
pertaining to such Shares.
(e) No Fractional Shares. No certificates or scrip
representing fractional shares of Company Common Stock shall be issued
upon the surrender for exchange of Certificates, and such fractional
share interest will not entitle the owner thereof to vote or to any
rights of a shareholder of the Company. Each holder of a fractional
share interest shall be paid an amount in cash equal to the product
obtained by multiplying such fractional share interest to which such
holder (after taking into account all fractional share interests then
held by such holder) would otherwise be entitled by the Average Trading
Price. As soon as reasonably practicable after the determination of the
amount of cash, if any, to be paid to holders of fractional share
interests, the Company shall make available such amounts (without
interest) to such holders of such fractional share interests.
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the former shareholders of Seller
for one (1) year after the Effective Time shall be delivered to the
Company, upon demand, and any former shareholders of Seller who have
not theretofore complied with this Article I shall thereafter look only
to the Company to claim their shares of Company Common Stock, any cash
in lieu of fractional shares of Company Common Stock and any dividends
or distributions with respect to Company Common Stock, in each case
without interest thereon, and subject to Section 1.7(g).
(g) No Liability. Neither the Company nor the Seller shall be
liable to any former holder of Shares for any such Shares (or dividends
or distributions with respect thereto) or cash or other payment
delivered to a public official pursuant to any abandoned property,
escheat or similar laws.
(h) Withholding Rights. The Company shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant
to this Agreement to any former holder of Shares such amounts as the
Company is required to deduct and withhold with respect to the making
of such payment under the Code, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by the
Company, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the former holder of the Shares
in respect of which such deduction and withholding was made by the
Company.
SECTION 1.8 Stock Transfer Books. At the Effective Time, the stock
transfer books of Seller shall be closed and there shall be no further
registration of transfers of shares of Seller Common Stock thereafter on the
records of Seller. From and after the Effective Time, the holders
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of certificates evidencing ownership of shares of Seller Common Stock
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares except as otherwise provided herein or by
law. On or after the Effective Time, any Certificates presented to the Exchange
Agent or the Company for any reason shall be converted into shares of Company
Common Stock in accordance with this Article I, subject to applicable law in the
case of Dissenting Shares.
SECTION 1.9 Adjustments for Dilution and Other Matters. If prior to the
Effective Time, (i) Seller shall declare a stock dividend or distribution upon
or subdivide, split up, reclassify or combine the Seller Common Stock, or
declare a dividend or make a distribution on the Seller Common Stock in any
security convertible into Seller Common Stock, or (ii) the Company shall declare
a stock dividend or distribution upon or subdivide, split up, reclassify or
combine the Company Common Stock or declare a dividend or make a distribution on
the Company Common Stock in any security convertible into Company Common Stock,
appropriate adjustment or adjustments will be made to the Exchange Rate
determined pursuant to Section 1.6(b).
SECTION 1.10 Company Common Stock. The shares of Company Common Stock
issued and outstanding immediately prior to the Effective Time shall be
unaffected by the Merger and at the Effective Time, such shares shall remain
issued and outstanding.
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in the Disclosure Schedule delivered by Seller to
the Company prior to the execution of this Agreement (the "Seller Disclosure
Schedule"), which shall identify exceptions by specific Section references,
Seller hereby represents and warrants to the Company that:
SECTION 2.1 Organization and Qualification; Subsidiaries.
(a) Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Iowa, and is a
registered bank holding company under the Bank Holding Company Act of
1956, as amended (the "BHCA"). Each subsidiary of Seller ("Seller
Subsidiary" or, collectively, "Seller Subsidiaries") is a federally
chartered national bank or a corporation duly organized, validly
existing and in good standing under the laws of the state of its
incorporation. Each of Seller and the Seller Subsidiaries has the
requisite corporate power and authority and is in possession of all
franchises, grants, authorizations, licenses, permits, easements,
consents, certificates, approvals and orders ("Seller Approvals")
necessary to own, lease and operate its properties and to carry on its
business as it is now being conducted, including appropriate
authorizations from the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), the Office of the Comptroller of
the Currency (the "OCC"), the Federal Deposit Insurance Corporation
(the "FDIC") and the Iowa Secretary of State, and neither Seller nor
any Seller Subsidiary has received any notice of proceedings relating
to the revocation or modification of any Seller Approvals, except in
each case where the revocations or modifications, the failure to be so
organized, existing and in good standing or to have such power,
authority and Seller Approvals would not, individually or in the
aggregate, have a Material Adverse Effect (as defined in Section
2.1(d)) on Seller and Seller Subsidiaries, taken as a whole.
(b) Seller and each Seller Subsidiary is duly qualified or
licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character
6
of its properties owned, leased or operated by it or the nature of its
activities makes such qualification or licensing necessary, except for
such failures to be so duly qualified or licensed and in good standing
that would not, either individually or in the aggregate, have a
Material Adverse Effect on Seller or Seller Subsidiaries, taken as a
whole.
(c) A true and complete list of all of the Seller
Subsidiaries, together with (i) the Seller's percentage ownership of
each Seller Subsidiary and (ii) laws under which the Seller Subsidiary
is incorporated is set forth on Annex A. Except as set forth on Annex
A, Seller and/or one or more of the Seller Subsidiaries owns
beneficially and of record all of the outstanding shares of capital
stock of each of the Seller Subsidiaries. Except for the subsidiaries
set forth on Annex A, Seller does not directly or indirectly own any
equity or similar interests in, or any interests convertible into or
exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business association
or entity other than in the ordinary course of business, and in no
event in excess of 5% of the outstanding equity securities of such
entity.
(d) As used in this Agreement, the term "Material Adverse
Effect" means, with respect to the Company or the Seller, as the case
may be, any effect that (i) is material and adverse to the business,
assets, liabilities, results of operations or financial condition of
the Company and the Company Subsidiaries (as defined in Section 3.1(a))
taken as a whole or the Seller and Seller Subsidiaries taken as a
whole, respectively, or (ii) materially impairs the ability of the
Company or Seller to consummate the transactions contemplated hereby;
provided, however, that Material Adverse Effect shall not be deemed to
include the impact of (a) compliance with the terms of, or the taking
of actions contemplated by, this Agreement, (b) changes in laws and
regulations or interpretations thereof that are generally applicable to
the banking industry, (c) changes in generally accepted accounting
principles that are generally applicable to the banking industry, (d)
reasonable expenses incurred in connection with the transactions
contemplated hereby, and (e) changes attributable to or resulting from
changes in general economic conditions affecting banks or their holding
companies generally, including changes in the prevailing level of
interest rates; provided, further, however, that none of the following
shall be deemed (either alone or in combination ) to constitute, and
none of the following shall be taken into account in determining
whether there has been or will be, a Material Adverse Effect with
respect to the Seller: (a) any change in the market price or trading
volume of the Seller's Common Stock; (b) the payment of any amounts due
to, or the provision of any other benefits to, any officers or
employees under employment contracts, non-competition agreements,
employee benefit plans, severance agreements or other arrangements in
existence as of the date of this Agreement; (c) the taking of any
action by the Seller approved or consented to by the Company; or (d)
any adverse event (including litigation, employee terminations or
disruption of business relationships) directly caused by this Agreement
and the transactions contemplated herein. Failure by the Seller to meet
its revenue or income projections shall not be deemed in and of itself
to be a Material Adverse Effect.
(e) The minute books of the Seller and each of the Seller
Subsidiaries contain true, complete and accurate records in all
material respects of all meetings and other corporate actions held or
taken since January 1, 2001, of their respective shareholders and
Boards of Directors (including committees of their respective Boards of
Directors).
7
SECTION 2.2 Articles of Incorporation and By-Laws. Seller has
heretofore furnished to the Company a complete and correct copy of the Articles
of Incorporation and the By-Laws, as amended or restated, of Seller ("Seller
Articles" and "Seller By-Laws," respectively") and each Seller Subsidiary. Such
Articles of Incorporation and By-Laws of Seller and each Seller Subsidiary are
in full force and effect. Neither Seller nor any Seller Subsidiary is in
violation in any material respect of any of the provisions of its Articles of
Incorporation or By-Laws.
SECTION 2.3 Capitalization. The authorized capital stock of Seller
consists of 40,000,000 shares of Seller Common Stock. As of the date of this
Agreement, (i) 8,868,183.857 shares of Seller Common Stock are issued and
outstanding, all of which are duly authorized, validly issued, fully paid and
non-assessable, and not issued in violation of any preemptive right of any
Seller shareholder and (ii) 394,285 shares of Seller Common Stock are held in
the treasury of Seller. There are no outstanding options, warrants or other
rights, agreements, arrangements or commitments of any character, including
without limitation voting agreements or arrangements, relating to the issued or
unissued capital stock of Seller or any Seller Subsidiary or obligating Seller
or any Seller Subsidiary to issue or sell any shares of capital stock of, or
other equity interests in, Seller or any Seller Subsidiary. All shares of Seller
Common Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
shall be duly authorized, validly issued, fully paid and non-assessable. There
are no obligations, contingent or otherwise, of Seller or any Seller Subsidiary
to repurchase, redeem or otherwise acquire any shares of Seller Common Stock or
the capital stock of any Seller Subsidiary or to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in any
Seller Subsidiary or any other entity, except for loan commitments and other
funding obligations entered into in the ordinary course of business. Each of the
outstanding shares of capital stock of each Seller Subsidiary are duly
authorized, validly issued, fully paid and non-assessable, and not in violation
of any preemptive rights of any Seller Subsidiary shareholder, and such shares
owned by Seller or another Seller Subsidiary are owned free and clear of all
security interests, liens, claims, pledges, agreements, limitations of Seller's
voting rights, charges or other encumbrances of any nature whatsoever.
SECTION 2.4 Authority. Seller has the requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby (other than,
with respect to the Merger, the approval and adoption of this Agreement by
Seller's shareholders in accordance with the IBCA and the Seller Articles and
Seller By-Laws). The execution and delivery of this Agreement by Seller and the
consummation by Seller of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action, including without
limitation Seller's Board of Directors, and no other corporate proceedings on
the part of Seller are necessary to authorize this Agreement or to consummate
the transactions so contemplated hereby (other than, with respect to the Merger,
the approval and adoption of this Agreement by Seller's shareholders in
accordance with the IBCA and the Seller Articles and Seller By-Laws). The action
of Seller's Board of Directors has been taken in compliance with Article VII(b)
of the Seller Articles. This Agreement has been duly executed and delivered by,
and constitutes a valid and binding obligation of Seller and assuming due
authorization, execution and delivery by Company, enforceable against Seller in
accordance with its terms, except as enforcement may be limited by laws
affecting insured depository institutions, general principles of equity whether
applied in a court of law or a court of equity and by bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally.
8
SECTION 2.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Seller do
not, and the performance of this Agreement and the transactions
contemplated hereby by Seller shall not, (i) conflict with or violate
the Seller Articles or Seller By-Laws or the Articles of Incorporation
or By-Laws of any Seller Subsidiary, (ii) conflict with or violate any
domestic (federal, state or local) or foreign law, statute, ordinance,
rule, regulation, order, judgment or decree (collectively, "Laws")
applicable to Seller or any Seller Subsidiary or by which its or any of
their respective properties is bound or affected, or (iii) result in
any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of a lien or encumbrance on any of the
properties or assets of Seller or any Seller Subsidiary pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which
Seller or any Seller Subsidiary is a party or by which Seller or any
Seller Subsidiary or its or any of their respective properties is bound
or affected, except in the case of clauses (ii) and (iii) for any such
conflicts, violations, breaches, defaults or other occurrences that
would not, individually or in the aggregate, have a Material Adverse
Effect on Seller and the Seller Subsidiaries, taken as a whole. The
Board of Directors of Seller has taken all actions necessary including
approving the transactions contemplated herein to ensure that none of
(A) the restrictions set forth in Section 490.1110 of the IBCA, and (B)
the provisions set forth in Article VII of the Seller Articles, do or
will apply to the transactions contemplated herein.
(b) The execution and delivery of this Agreement by Seller do
not, and the performance of this Agreement by Seller shall not, require
any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic or
foreign, except (i) for applicable requirements, if any, of the
Securities Act of 1933, as amended (the "Securities Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), state
securities or blue sky laws ("Blue Sky Laws"), the BHCA, the banking
laws of the United States of America (the "USBL") and the filing and
recordation of appropriate merger or other documents as required by the
IBCA and the WBCL and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or delay consummation of the Merger or
otherwise prevent Seller from performing its obligations under this
Agreement, and would not have a Material Adverse Effect on Seller or
Seller Subsidiaries, taken as a whole.
SECTION 2.6 Compliance; Permits. Neither Seller nor any Seller
Subsidiary is in conflict with, or in default or violation of, (i) any Law
applicable to Seller or any Seller Subsidiary or by which its or any of their
respective properties is bound or affected, or (ii) any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Seller or any Seller Subsidiary is a party or
by which Seller or any Seller Subsidiary or its or any of their respective
properties is bound or affected, except for any such conflicts, defaults or
violations which would not, individually or in the aggregate, have a Material
Adverse Effect on Seller or Seller Subsidiaries, taken as a whole.
9
SECTION 2.7 Securities and Banking Reports; Financial Statements.
(a) Seller and each Seller Subsidiary have filed all forms,
reports and documents required to be filed with (x) the Securities and
Exchange Commission (the "SEC") since December 31, 2000, and as of the
date of this Agreement has delivered to the Company (i) its Annual
Reports on Form 10-K for the fiscal years ended December 31, 1998, 1999
and 2000, respectively, (ii) all proxy statements relating to Seller's
meetings of shareholders (whether annual or special) held since
December 31, 1998, (iii) all Reports on Form 8-K filed by Seller with
the SEC since December 31, 1998, (iv) all other reports or registration
statements since December 31, 1998 and (v) all amendments and
supplements to all such reports and registration statements filed by
Seller with the SEC since December 31, 1998 (collectively, the "Seller
SEC Reports") and (y) the OCC, the Federal Reserve Board, and any other
applicable federal or state securities or banking authorities (all such
reports and statements are collectively referred to with the Seller SEC
Reports as the "Seller Reports"). The Seller Reports, including all
Seller Reports filed after the date of this Agreement, (i) were or will
be prepared in all material respects in accordance with the
requirements of applicable Law and (ii) did not at the time they were
filed, or will not at the time they are filed, contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(b) Each of the consolidated financial statements (including,
in each case, any related notes thereto) contained in the Seller SEC
Reports, including any Seller SEC Reports filed since the date of this
Agreement and prior to or on the Effective Time, have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as may be
indicated in the notes thereto) and each fairly presents the
consolidated financial position of Seller and Seller Subsidiaries as of
the respective dates thereof and the consolidated results of its
operations and changes in financial position for the periods indicated,
except that any unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments, which were not or
are not expected to be material in amount.
(c) Except (i) for those liabilities that are fully reflected
or reserved against on the consolidated balance sheet of the Seller
included in the Seller's Form 10-K for the fiscal year ended December
31, 2000, (ii) for liabilities incurred in the ordinary course of
business consistent with past practice since December 31, 2000, and
(iii) as set forth in Section 2.7 of the Seller Disclosure Schedule,
neither Seller nor any Seller Subsidiary has incurred any liability of
any nature whatsoever (whether absolute, accrued, contingent or
otherwise due or to become due), that, either alone or when combined
with all other undisclosed liabilities, has had, or would reasonably be
expected to have, a Material Adverse Effect on the Seller and the
Seller Subsidiaries, taken as a whole.
SECTION 2.8 Absence of Certain Changes or Events. Except as disclosed
in the Seller SEC Reports filed prior to the date of this Agreement or set forth
in Section 2.8 of the Seller Disclosure Schedule, since December 31, 2000 to the
date of this Agreement, Seller and the Seller Subsidiaries have conducted their
businesses only in the ordinary course and in a manner consistent with past
practice and, since December 31, 2000, there has not been (i) any change in the
financial condition, results of operations or business of Seller and any of the
Seller Subsidiaries having a
10
Material Adverse Effect on Seller or the Seller Subsidiaries, taken as a whole,
(ii) any damage, destruction or loss (whether or not covered by insurance) with
respect to any assets of Seller or any of the Seller Subsidiaries having a
Material Adverse Effect on Seller and the Seller Subsidiaries, taken as a whole,
(iii) any change by Seller in its accounting methods, principles or practices
having a material effect on Seller's financial statements, (iv) any revaluation
by Seller of any material portion of its assets which has a Material Adverse
Effect on Seller and the Seller Subsidiaries, taken as a whole, (v) except for
regular quarterly cash dividends on Seller Common Stock with usual record and
payment dates, to the date of this Agreement, any declaration, setting aside or
payment of any dividends or distributions in respect of shares of Seller Common
Stock or any redemption, purchase or other acquisition of any of its securities
or any of the securities of any Seller Subsidiary, (vi) increased the wages,
salaries, compensation, pension, or other fringe benefits or perquisites payable
to any executive officer, employee, or director from the amount thereof in
effect as of January 1, 2001 (which amounts have been previously disclosed to
Company), granted any severance or termination pay except in the ordinary course
of business consistent with past practices, entered into any contract to make or
grant any severance or termination pay, or paid any bonus other than year-end
bonuses for fiscal 2000 or quarter-end bonuses for the quarter ended March 31,
2001 (which bonuses have been previously disclosed to the Company), (vii)
suffered any strike, work stoppage, slow-down or other labor disturbance, (viii)
been a party to a collective bargaining agreement, contract or other agreement
or understanding with a labor union or organization, or (ix) had any union
organizing activities.
SECTION 2.9 Absence of Litigation.
(a) Except as set forth in Section 2.9 of the Seller
Disclosure Schedule, neither the Seller nor any of the Seller
Subsidiaries is a party to any, and there are no pending or, to the
Seller's knowledge, threatened, legal, administrative, arbitral or
other proceedings, claims, actions or governmental or regulatory
investigations of any nature against the Seller or any of the Seller
Subsidiaries or challenging the validity or propriety of the
transactions contemplated by this Agreement as to which there is
reasonable probability of an adverse determination and which, if
adversely determined, would, individually or in the aggregate, have a
Material Adverse Effect on the Seller and the Seller Subsidiaries,
taken as a whole.
(b) There is no injunction, order, judgment, decree or
regulatory restriction imposed upon the Company, any of the Seller
Subsidiaries or the assets of the Seller or any of the Seller
Subsidiaries which has had a Material Adverse Effect on the Seller and
the Seller Subsidiaries, taken as a whole.
SECTION 2.10 Employee Benefit Plans.
(a) Section 2.10(a) of the Seller Disclosure Schedule lists
(i) all employee benefit plans (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
and all bonus, stock option, stock purchase, restricted stock,
incentive, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance or other benefit plans, programs or
arrangements, and all material employment, termination, severance or
other employment contracts or employment agreements, with respect to
which Seller or any Seller Subsidiary has any obligation (collectively,
the "Plans"). Seller has furnished or made available to the Company a
complete and accurate copy of each Plan (or a description of the Plans,
if the Plans are not in writing) and a complete and accurate copy of
each material document prepared in connection with each such Plan,
11
including, without limitation, and where applicable, a copy of (i) each
trust or other funding arrangement, (ii) each summary plan description
and summary of material modifications, (iii) as applicable, the three
(3) most recently filed IRS Forms 5500 and related schedules, (iv) as
applicable, the most recently issued IRS determination letter for each
such Plan and (v) as applicable, the three (3) most recently prepared
actuarial and financial statements with respect to each such Plan.
(b) Absence of Certain Types of Plans. Except as disclosed in
the Seller Disclosure Schedule, no member of Seller's "controlled
group," within the meaning of Section 4001(a)(14) of ERISA, maintains
or contributes to, or within the five years preceding the Effective
Time has maintained or contributed to, an employee pension benefit plan
subject to Title IV of ERISA ("Title IV Plan"). No Title IV Plan is a
"multiemployer pension plan" as defined in Section 3(37) of ERISA.
Except as disclosed in the Seller Disclosure Schedule, none of the
Plans obligates Seller or any of the Seller Subsidiaries to pay
material separation, severance, termination or similar-type benefits
solely as a result of any transaction contemplated by this Agreement or
as a result of a "change in control," within the meaning of such term
under Section 280G of the Code. Except as disclosed in the Seller
Disclosure Schedule, or as required by COBRA, none of the Plans
provides for or promises retiree medical, disability or life insurance
benefits to any current or former employee, officer or director of
Seller or any of the Seller Subsidiaries. Each of the Plans is subject
only to the laws of the United States or a political subdivision
thereof.
(c) Compliance with Applicable Law. Except as disclosed in the
Seller Disclosure Schedule, each Plan has been operated in all respects
in accordance with the requirements of all applicable Law and all
persons who participate in the operation of such Plans and all Plan
"fiduciaries" (within the meaning of Section 3(21) of ERISA) have acted
in accordance with the provisions of all applicable Law, except where
such violations of applicable Law would not, individually or in the
aggregate, have a Material Adverse Effect on Seller and the Seller
Subsidiaries, taken as a whole. Seller and the Seller Subsidiaries have
performed all obligations required to be performed by any of them
under, are not in any respect in default under or in violation of, and
Seller and the Seller Subsidiaries have no knowledge of any default or
violation by any party to, any Plan, except where such failures,
defaults or violations would not, individually or in the aggregate,
have a Material Adverse Effect on Seller and the Seller Subsidiaries,
taken as a whole. No legal action, suit or claim is pending or, to the
knowledge of Seller or the Seller Subsidiaries, threatened with respect
to any Plan (other than claims for benefits in the ordinary course)
and, except as disclosed in the Seller Disclosure Schedule, to the
knowledge of Seller or the Seller Subsidiaries, no fact or event exists
that could reasonably be expected to give rise to any such action, suit
or claim. Except as disclosed in the Seller Disclosure Schedule,
neither Seller nor any Seller Subsidiary has incurred any material
liability under Section 302 of ERISA or Section 412 of the Code that is
currently due and that has not been satisfied in full and no condition
exists that presents a material risk of incurring any such liability.
(d) Qualification of Certain Plans. Each Plan that is intended
to be qualified under Section 401(a) of the Code or Section 401(k) of
the Code (including each trust established in connection with such a
Plan that is intended to be exempt from Federal income taxation under
Section 501(a) of the Code) has received a favorable determination
letter from the IRS (as defined herein) that it is so qualified, and,
except as disclosed in the Seller Disclosure
12
Schedule, Seller is not aware of any fact or event that has occurred
since the date of such determination letter from the IRS to adversely
affect the qualified status of any such Plan. Except as disclosed on
the Seller Disclosure Schedule, no trust maintained or contributed by
the Seller or any of the Seller Subsidiaries is intended to be
qualified as a voluntary employees' beneficiary association or is
intended to be exempt from federal income taxation under Section
501(c)(9) of the Code.
(e) Absence of Certain Liabilities and Events. Except for
matters disclosed in the Seller Disclosure Schedule, there has been no
prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) with respect to any Plan that is subject to
ERISA, that would individually or in the aggregate have a Material
Adverse Effect on the Seller and the Seller Subsidiaries, taken as a
whole. Neither Seller nor any of the Seller Subsidiaries has incurred
any liability for any excise tax arising under Section 4972 or 4980B of
the Code that would individually or in the aggregate have a Material
Adverse Effect on the Seller and the Seller Subsidiaries, taken as a
whole, and, to the knowledge of Seller or the Seller Subsidiaries, no
fact or event exists that could reasonably be expected to give rise to
any such liability.
(f) Plan Contributions. All material contributions, premiums
or payments required to be made prior to the Effective Time with
respect to any Plan have been made on or before the Effective Time.
(g) Employment Contracts. Except for employment, severance,
consulting or other similar contracts with any employees, consultants,
officers or directors of Seller or any of the Seller Subsidiaries
disclosed in Section 2.10(g) of the Seller Disclosure Schedule, neither
Seller nor any Seller Subsidiary is a party to any such contracts.
Neither Seller nor any Seller Subsidiary is a party to any collective
bargaining agreements.
(h) Effect of Agreement. Except as disclosed on the Seller
Disclosure Schedule, the consummation of the transactions contemplated
by this Agreement will not, either alone or in conjunction with another
event, entitle any current or former employee of Seller or any Seller
Subsidiary to severance pay, unemployment compensation or any other
payment, except as expressly provided herein, or accelerate the time of
payment or vesting or increase the compensation due any such employee
or former employee, in each case, except as expressly provided herein.
SECTION 2.11 Registration Statement; Proxy Statement/Prospectus. The
information supplied by Seller for inclusion in the Registration Statement (as
hereinafter defined) shall not at the time the Registration Statement is
declared effective contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. The information supplied by Seller for inclusion in
the proxy statement/prospectus to be sent to the shareholders of Seller in
connection with the meeting of Seller's shareholders to consider the Merger (the
"Seller Shareholders' Meeting") (such proxy statement/prospectus as amended or
supplemented is referred to herein as the "Proxy Statement/Prospectus") shall
not at the date the Proxy Statement/Prospectus (or any amendment thereof or
supplement thereto) is first mailed to shareholders, at the time of the Seller
Shareholders' Meeting and at the Effective Time, be false or misleading with
respect to any material fact required to be stated herein, or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the
13
light of the circumstances under which they are made, not misleading. If at any
time prior to the Effective Time any event relating to Seller or any of its
affiliates, officers or directors should be discovered by Seller which should be
set forth in an amendment to the Registration Statement or a supplement to the
Proxy Statement/Prospectus, Seller shall promptly inform the Company. The Proxy
Statement/Prospectus shall comply in all material respects as to form with the
requirements of the Securities Act, the Exchange Act and the rules and
regulations thereunder. Notwithstanding the foregoing, Seller makes no
representation or warranty with respect to any information about, or supplied or
omitted by, the Company which is contained in any of the foregoing documents.
SECTION 2.12 Title to Property. Seller and each of the Seller
Subsidiaries has good and marketable title to all of their respective properties
and assets, real and personal, free and clear of all mortgage liens, and free
and clear of all other liens, charges and encumbrances except liens for taxes
not yet due and payable, pledges to secure deposits and such minor imperfections
of title, if any, as do not materially detract from the value of or interfere
with the present use of the property affected thereby or which, individually or
in the aggregate, would not have a Material Adverse Effect on Seller and the
Seller Subsidiaries, taken as a whole; and all leases pursuant to which Seller
or any of the Seller Subsidiaries lease from others material amounts of real or
personal property are in good standing, valid and effective in accordance with
their respective terms, and there is not, under any of such leases, any existing
material default or event of default by Seller or any Seller Subsidiary (or
event which with notice or lapse of time, or both, would constitute a material
default by Seller or any Seller Subsidiary and in respect of which the Seller or
such Seller Subsidiary has not taken adequate steps to prevent such a default
from occurring) except where the lack of good standing, validity or
effectiveness or default, individually or in the aggregate, would not have a
Material Adverse Effect on Seller and the Seller Subsidiaries, taken as a whole.
Substantially all of Seller's and each of the Seller's Subsidiaries' buildings
and equipment in regular use have been reasonably maintained and are in good and
serviceable condition, reasonable wear and tear excepted.
SECTION 2.13 Environmental Matters. Except as set forth in Section 2.13
of the Seller Disclosure Schedule, Seller represents and warrants that to the
Seller's knowledge: (i) each of the Seller, the Seller's Subsidiaries,
properties owned or operated by the Seller or the Seller's Subsidiaries, and the
Participation Facilities (each as hereinafter defined) are and have been in
compliance with all applicable federal, state and local laws including common
law, rules, guidance, regulations and ordinances and with all applicable
decrees, orders, judgments, and contractual obligations relating to the
environment, health, safety, natural resources, wildlife or "Hazardous
Materials" which are hereinafter defined as chemicals, pollutants, contaminants,
wastes, toxic substances, compounds, products, solid, liquid, gas, petroleum or
other regulated substances or materials which are hazardous, toxic or otherwise
harmful to health, safety, natural resources, or the environment ("Environmental
Laws"), except for violations which, either individually or in the aggregate,
would not have a Material Adverse Effect on Seller or Seller's Subsidiaries;
(ii) during and prior to the period of (a) the Seller's or any of the Seller's
Subsidiaries' ownership or operation of any of their respective current
properties, or (b) the Seller's or any of the Seller's Subsidiaries'
participation in the management of any Participation Facility, Hazardous
Materials have not been generated, treated, stored, transported, released or
disposed of in, on, under, above, from or affecting any such property, except
where such release, generation, treatment, storage, transportation, or disposal
would not have, either individually or in the aggregate, a Material Adverse
Effect on the Seller or Seller's Subsidiaries; (iii) there is no asbestos or any
material amount of ureaformaldehyde materials in or on any property owned or
operated by Seller or Seller's Subsidiaries or any Participation Facility and no
electrical transformers or capacitors, other than
14
those owned by public utility companies, on any such properties contain any
PCB's; (iv) there are no underground or aboveground storage tanks and there have
never been any underground or aboveground storage tanks located on, in or under
any properties currently or formerly owned or operated by the Seller or any of
Seller's Subsidiaries or any Participation Facility; (v) neither Seller nor
Seller's Subsidiaries have received any notice from any governmental agency or
third party notifying the Seller or Seller's Subsidiaries of any Environmental
Claim; (vi) and there are no circumstances with respect to any properties
currently owned or operated by the Seller or any of Seller's Subsidiaries or any
Participation Facility that could reasonably be anticipated (a) to form the
basis for an Environmental Claim against Seller or Seller's Subsidiaries or any
properties currently or formerly owned or operated by the Seller or any of
Seller's Subsidiaries or any Participation Facility or (b) to cause any
properties currently owned or operated by the Seller or any of Seller's
Subsidiaries or any Participation Facility to be subject to any restrictions on
ownership, occupancy, use or transferability under any applicable Environmental
Law or require notification to or consent of any Governmental Authority or third
party pursuant to any Environmental Law.
The following definitions apply for purposes of this Section 2.13: (a)
"Participation Facility" means any facility in which the Seller or any of the
Seller's Subsidiaries participates in the management and, where required by the
context, said term means the owner or operator of such property; (b)
"Environmental Claims" shall mean any and all administrative, regulatory,
judicial or private actions, suits, demands, demand letters, notices, claims,
liens, notices of non-compliance or violation, investigations, allegations,
injunctions or proceedings relating in any way to (i) any Environmental Law;
(ii) any Hazardous Material including without limitation any abatements,
removal, remedial, corrective or other response action in connection with any
Hazardous Material, Environmental Law or order of a Governmental Authority or
(iii) any actual or alleged damage, injury, threat or harm to health, safety,
natural resources, wildlife, or the environment, which individually or in the
aggregate would have a Material Adverse Effect on Seller or Seller's
Subsidiaries; (c) "Governmental Authority" shall mean any applicable federal,
state, regional, county or local person or body having governmental authority.
SECTION 2.14 Absence of Agreements. Neither Seller nor any Seller
Subsidiary is a party to any agreement or memorandum of understanding with, or a
party to any commitment letter or similar undertaking to, or is subject to any
order or directive by, or is a recipient of any extraordinary supervisory letter
which restricts materially the conduct of its business (including any contract
containing covenants which limit the ability of Seller or of any Seller
Subsidiary to compete in any line of business or with any person or which
involve any restriction of the geographical area in which, or method by which,
Seller or any Seller Subsidiary may carry on its business (other than as may be
required by Law or applicable regulatory authorities)), or in any manner relates
to its capital adequacy, its credit policies or its management, except as
disclosed in the Seller Disclosure Schedule, nor has Seller been advised that
any federal, state, or governmental agency is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting) any
such order, decree, agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter or similar submission, except as disclosed
by Seller in Section 2.14 of the Seller Disclosure Schedule.
SECTION 2.15 Taxes. Seller and the Seller Subsidiaries have timely
filed all material Tax Returns (as defined below) required to be filed by them,
and Seller and the Seller Subsidiaries have timely paid and discharged all
material Taxes (as defined below) due in connection with or with respect to the
filing of such Tax Returns, except such as are being contested in good faith by
appropriate proceedings and with respect to which Seller is maintaining reserves
adequate for their
15
payment. To the knowledge of Seller, the liability for Taxes set forth on each
such Tax Return adequately reflects the Taxes required to be reflected on such
Tax Return. For purposes of this Agreement, "Tax" or "Taxes" shall mean taxes,
charges, fees, levies, and other governmental assessments and impositions of any
kind, payable to any federal, state, local or foreign governmental entity or
taxing authority or agency, including, without limitation, (i) income,
franchise, profits, gross receipts, estimated, ad valorem, value added, sales,
use, service, real or personal property, capital stock, license, payroll,
withholding, disability, employment, social security, workers compensation,
unemployment compensation, utility, severance, production, excise, stamp,
occupation, premiums, windfall profits, transfer and gains taxes, (ii) customs
duties, imposts, charges, levies or other similar assessments of any kind, and
(iii) interest, penalties and additions to tax imposed with respect thereto; and
"Tax Returns" shall mean returns, reports, and information statements with
respect to Taxes required to be filed with the United States Internal Revenue
Service (the "IRS") or any other governmental entity or taxing authority or
agency, domestic or foreign, including, without limitation, consolidated,
combined and unitary tax returns. For the purposes of this Section 2.15,
references to the Seller and the Seller Subsidiaries include former subsidiaries
of Seller for the periods during which any such corporations were owned,
directly or indirectly, by Seller. Except as otherwise disclosed in the Seller's
Disclosure Schedule, to the knowledge of the Seller, neither the IRS nor any
other governmental entity or taxing authority or agency is now asserting, either
through audits, administrative proceedings or court proceedings, any deficiency
or claim for additional Taxes. Except as otherwise disclosed, neither Seller nor
any of the Seller Subsidiaries has granted any waiver of any statute of
limitations with respect to, or any extension of a period for the assessment of,
any Tax. Except as otherwise disclosed in the Seller Disclosure Schedule and
except for statutory liens for current taxes not yet due, there are no material
tax liens on any assets of Seller or any of the Seller Subsidiaries. Except as
otherwise disclosed in the Seller Disclosure Schedule, neither Seller nor any of
the Seller Subsidiaries has received a ruling or entered into an agreement with
the IRS or any other taxing authority that would have a Material Adverse Effect
on Seller or the Seller Subsidiaries, taken as a whole, after the Effective
Time. Except as otherwise disclosed in the Seller Disclosure Schedule, no
agreements relating to allocating or sharing of Taxes exist among Seller and the
Seller Subsidiaries and no tax indemnities given by Seller or the Seller
Subsidiaries in connection with a sale of stock or assets remain in effect.
Neither the Seller nor any of the Seller Subsidiaries is required to include
income either (i) any amount in respect of any adjustment under Section 481 of
the Code, or (ii) any installment sale gain. Neither Seller nor any of the
Seller Subsidiaries has made an election under Section 341(f) of the Code.
SECTION 2.16 Insurance. Section 2.16 of the Seller Disclosure Schedule
lists all material policies of insurance of Seller and the Seller Subsidiaries
currently in effect. Neither Seller nor any of the Seller Subsidiaries has any
material liability for unpaid premiums or premium adjustments not properly
reflected on Seller's financial statements included in Seller's Report on Form
10-K for the fiscal year ended December 31, 2000.
SECTION 2.17 Brokers. No broker, finder or investment banker (other
than Xxxxx Financial LLC) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Seller. Prior to the date of
this Agreement, Seller has furnished to the Company a complete and correct copy
of all agreements between Seller and Xxxxx Financial LLC pursuant to which such
firm would be entitled to any payment relating to the transactions contemplated
hereunder.
16
SECTION 2.18 Tax Matters. Neither Seller nor, to the Seller's
knowledge, any of its affiliates has through the date of this Agreement taken or
agreed to take any action that would prevent the Merger from qualifying as a
reorganization under Section 368(a)(1)(A) of the Code.
SECTION 2.19 Material Adverse Effect. Since December 31, 2000, there
has been no Material Adverse Effect on Seller or the Seller Subsidiaries, taken
as a whole.
SECTION 2.20 Material Contracts. Except as disclosed in the Seller
Disclosure Schedule (which may reference other sections of such Schedule) and,
except as included as exhibits in the Seller SEC Reports, neither the Seller nor
any Seller Subsidiary is a party to or obligated under any contract, agreement
or other instrument or understanding which is not terminable by Seller or the
Seller Subsidiary without additional payment or penalty within 60 days and
obligates Seller or any Seller Subsidiary for payments or other consideration
with a value in excess of $100,000 (except for agreements or documents whereby
Seller or a Seller Subsidiary is making loans or otherwise extending credit or
making investments in the ordinary course of business consistent with past
practices that pertain to Seller's or a Seller Subsidiary's primary businesses),
or would require disclosure by Seller pursuant to item 601(b)(10) of Regulation
S-K under the Exchange Act.
SECTION 2.21 Opinion of Financial Advisor. Seller has received the
written opinion of Xxxxx Financial LLC on the date of this Agreement to the
effect that, as of the date of this Agreement, the consideration to be received
in the Merger by Seller's shareholders is fair to Seller's shareholders from a
financial point of view, and Seller will promptly, after the date of this
Agreement, deliver a copy of such opinion to the Company.
SECTION 2.22 Vote Required. The affirmative vote of a majority of the
votes that holders of the outstanding shares of Seller Common Stock are entitled
to cast is the only vote of the holders of any class or series of Seller capital
stock necessary to approve the Merger.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Schedule delivered by the Company
to Seller prior to the execution of this Agreement (the "Company Disclosure
Schedule"), which shall identify exceptions by specific Section references, the
Company hereby represents and warrants to Seller that:
SECTION 3.1 Organization and Qualification; Subsidiaries.
(a) The Company is a company duly organized, validly existing
and in active status under the laws of the State of Wisconsin and a
registered bank holding company under the BHCA. Each subsidiary of the
Company (a "Company Subsidiary" or, collectively, "Company
Subsidiaries") is a bank, a corporation, a limited liability company,
or another form of business entity duly organized, validly existing and
in good standing under the laws of the state of its organization or the
United States of America. Each of the Company and the Company
Subsidiaries have the requisite power and authority and are in
possession of all franchises, grants, authorizations, licenses,
permits, easements, consents, certificates, approvals and orders
("Company Approvals") necessary to own, lease and operate their
respective properties and to carry on their respective business as now
being conducted, including appropriate authorizations from the Federal
Reserve Board, the FDIC, the DFI or the OCC and neither Company nor any
Company Subsidiary has received any notice of
17
proceedings relating to the revocation or modification of any Company
Approvals, except in each case where the revocations or modifications,
the failure to be so organized, existing and in good standing or to
have such power, authority, Company Approvals would not, individually
or in the aggregate, have a Material Adverse Effect on the Company and
the Company Subsidiaries, taken as a whole.
(b) The Company and each Company Subsidiary is duly qualified
or licensed as a foreign business entity to do business, and is in good
standing, in each jurisdiction where the character of its properties
owned, leased or operated by it or the nature of its activities makes
such qualification or licensing necessary, except for such failures to
be so duly qualified or licensed and in good standing that would not,
either individually or in the aggregate, have a Material Adverse Effect
on the Company and the Company Subsidiaries, taken as a whole.
(c) A true and complete list of all of the Company
Subsidiaries as of February 28, 2001 is set forth in Exhibit 21 to the
Company's Annual Report on Form 10-K for the year ended December 31,
2000 ("Exhibit 21") previously delivered to Seller. The Company and/or
one or more of the Company Subsidiaries owns beneficially and of record
substantially all of the outstanding shares of capital stock or other
equity interest of each of the Company Subsidiaries which is a
"significant subsidiary" under Rule 12b-2 under the Exchange Act.
Except for the Company Subsidiaries, set forth on said Exhibit 21, the
Company did not as of February 28, 2001 directly or indirectly own any
equity or similar interests in, or any interests convertible into or
exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business, other than
in the ordinary course of business, which would be required to be
disclosed on Exhibit 21.
SECTION 3.2 Articles of Incorporation and By-Laws. The Company has
previously furnished to Seller a complete and correct copy of the Company
Articles and the Company By-laws. The Company Articles and Company By-laws are
in full force and effect. The Company is not in violation of any of the
provisions of the Company Articles or the Company By-laws. No Company Subsidiary
is in violation of any of the provisions of its Articles of Incorporation or
By-laws or other organizational documents which violation would have a Material
Adverse Effect on the Company and the Company Subsidiaries, taken as a whole.
SECTION 3.3 Capitalization.
(a) The authorized capital stock of the Company consists of
(i) 320,000,000 shares of Company Common Stock of which, as of December
31, 2000, 112,757,546 shares were issued and outstanding, 9,910,839
shares were held in treasury, 8,115,520 shares were reserved for
issuance pursuant to outstanding employee stock options, and 3,844,228
shares were reserved for issuance pursuant to the exchange of the
Company Preferred Stock (as defined below); (ii) 5,000,000 shares of
Preferred Stock, $1.00 par value ("Company Preferred Stock"), of which
2,000,000 shares of Company Preferred Stock has been designated as
Series A Convertible Preferred Stock ("Series A Preferred Stock") and
336,370 of which, as of December 31, 2000, were outstanding. All of the
outstanding shares of the Company's capital stock have been duly
authorized and validly issued and are fully paid and non-assessable,
except pursuant to Section 180.0622(2)(b) of the WBCL (such section,
including judicial interpretations thereof and Section 180.40(6), its
predecessor statute, are referred to herein as "Section 180.0622(2)(b)
of the WBCL"). Except as set forth in clauses (i)-(ii), above, as of
the date of this Agreement there are no options, warrants or other
rights,
18
agreements, arrangements or commitments of any character, including,
without limitation, voting agreements or arrangements, relating to the
issued or unissued capital stock of the Company or obligating the
Company to issue or sell any shares of capital stock of, or other
equity interests in, the Company. All shares of Company Common Stock
subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are
issuable, shall be duly authorized, validly issued, fully paid and
non-assessable, except pursuant to Section 180.0622(2)(b) of the WBCL.
Except as disclosed in the Company SEC Reports (as hereinafter
defined), there are no obligations, contingent or otherwise, of the
Company to repurchase, redeem or otherwise acquire any shares of
Company Common Stock.
(b) The shares of Company Common Stock to be issued pursuant
to the Merger will, upon issuance in accordance with the provisions of
this Agreement, be duly authorized, validly issued, fully paid and
non-assessable, except as otherwise provided by Section 180.0622(2)(b)
of the WBCL.
SECTION 3.4 Authority. The Company has the requisite corporate power
and authority to execute and deliver this Agreement, and to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of the Company,
including without limitation the Company's Board of Directors, and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions so contemplated hereby. This
Agreement has been duly and validly executed and delivered by the Company and
constitutes a valid and binding obligation of the Company and assuming the
authorization, execution and delivery by the Seller, enforceable against the
Company in accordance with its terms, except as enforcement may be limited by
laws affecting insured depository institutions, general principles of equity,
whether applied in a court of law or a court of equity, and by bankruptcy,
insolvency and similar laws affecting creditors' rights and remedies generally.
SECTION 3.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the
Company does not, and the performance of this Agreement by the Company
shall not, (i) conflict with or violate the Company Articles or Company
By-Laws or the Articles of Incorporation or By-Laws of any Company
Subsidiary, (ii) conflict with or violate any Laws applicable to the
Company or any Company Subsidiary or by which any of their respective
properties is bound or affected, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the properties or
assets of the Company or any Company Subsidiary pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any
Company Subsidiary is a party or by which the Company or any Company
Subsidiary or its or any of their respective properties is bound or
affected, except in the case of clause (ii) and (iii) for any such
conflicts, violations, breaches, defaults or other occurrences that
would not,
19
individually or in the aggregate, have a Material Adverse Effect on the
Company and the Company Subsidiaries, taken as a whole.
(b) The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company
shall not, require any consent, approval, authorization or permit of,
or filing with or notification to, any governmental or regulatory
authority, domestic or foreign, except (i) for applicable requirements,
if any, of the Securities Act, the Exchange Act, Blue Sky Laws, the
BHCA, the USBL and the filing and recordation of appropriate merger or
other documents as required by Wisconsin law and (ii) where the failure
to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or delay
consummation of the Merger, or otherwise would not prevent or delay
consummation of the Merger, or otherwise prevent the Company from
performing its obligations under this Agreement, and would not have a
Material Adverse Effect on the Company or the Company Subsidiaries,
taken as a whole.
SECTION 3.6 Compliance; Permits. Neither the Company nor any Company
Subsidiary is in conflict with, or in default or violation of, (i) any Law
applicable to the Company or any Company Subsidiary or by which its or any of
their respective properties is bound or affected, or (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any Company Subsidiary is
a party or by which the Company or any Company Subsidiary or any of its or any
of their respective properties is bound or affected, except for any such
conflicts, defaults or violations which would not, individually or in the
aggregate, have a Material Adverse Effect on the Company or the Company
Subsidiaries, taken as a whole.
SECTION 3.7 Securities and Banking Reports; Financial Statements.
(a) The Company and each Company Subsidiary have filed all
forms, reports and documents required to be filed with (x) the SEC
since December 31, 2000, and as of the date of this Agreement have
delivered or made available to Seller, in the form filed with the SEC,
(i) its Annual Reports on Form 10-K for the fiscal years ended December
31, 1998, 1999 and 2000, respectively, (ii) all proxy statements
relating to the Company's meetings of shareholders (whether annual or
special) held since December 31, 1998, (iii) all Reports on Form 8-K
filed by the Company with the SEC since December 31, 1998, (iv) all
other reports or registration statements filed by the Company with the
SEC since December 31, 1998, and (v) all amendments and supplements to
all such reports and registration statements filed by the Company with
the SEC since December 31, 1998 (collectively, the "Company SEC
Reports") and (y) the OCC, the Federal Reserve Board, the DFI and any
other applicable Federal or state securities or banking authorities
(all such reports and statements are collectively referred to with the
Company SEC Reports as the "Company Reports"). The Company Reports,
including all Company Reports filed after the date of this Agreement,
(i) were or will be prepared in accordance with the requirements of
applicable Law and (ii) did not at the time they were filed, or will
not at the time they are filed, contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(b) Each of the consolidated financial statements (including,
in each case, any related notes thereto) contained in the Company SEC
Reports, including any Company SEC
20
Reports filed since the date of this Agreement and prior to or on the
Effective Time, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto)
and each fairly presents the consolidated financial position of the
Company and the Company Subsidiaries as of the respective dates thereof
and the consolidated results of its operations and changes in financial
position for the periods indicated, except that any unaudited interim
financial statements were or are subject to normal and recurring
year-end adjustments, which were not or are not expected to be material
in amount.
(c) Except (i) for those liabilities that are fully reflected
or reserved against on the consolidated statement of condition of the
Company included in the Company Form 10-K for the year ended December
31, 2000, (ii) for the liabilities incurred in the ordinary course of
business consistent with past practice since December 31, 2000, and
(iii) as set forth in Section 3.7 of the Company Disclosure Schedule,
neither Company nor any Company Subsidiary has incurred any liability
of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether due or to become due) that, either alone or when
combined with all similar liabilities, has had, or would reasonably be
expected to have, a Material Adverse Effect on the Company and the
Company Subsidiaries, taken as a whole.
SECTION 3.8 Absence of Certain Changes or Events. Except as disclosed
in the Company SEC Reports filed prior to the date of this Agreement or in the
Company Disclosure Schedule, since December 31, 2000 to the date of this
Agreement, the Company and the Company Subsidiaries have conducted their
businesses only in the ordinary course and in a manner consistent with past
practice and, since December 31, 2000, there has not been (i) any change in the
financial condition, results of operations or business of the Company or any of
the Company Subsidiaries having a Material Adverse Effect on the Company and the
Company Subsidiaries, taken as a whole, (ii) any damage, destruction or loss
(whether or not covered by insurance) with respect to any assets of the Company
or any of the Company Subsidiaries having a Material Adverse Effect on the
Company and the Company Subsidiaries, taken as a whole, (iii) any change by the
Company in its accounting methods, principles or practices, (iv) any revaluation
by the Company of any of its assets in any respect, (v) to the date of this
Agreement, any entry by the Company or any of the Company Subsidiaries into any
commitment or transactions material to the Company and the Company Subsidiaries
taken as a whole, (vi) except for repurchases pursuant to the Company's Common
Stock repurchase program or for regular quarterly cash dividends of Company
Common Stock with usual record and payment dates, to the date of this Agreement,
any declaration, setting aside or payment of any dividends or distributions in
respect of shares of Company Common Stock or any redemption, purchase or other
acquisition of any of its securities or any of the securities of any Company
Subsidiary, (vii) suffered any strike, work stoppage, slow-down or other labor
disturbance, (viii) been a party to a collective bargaining agreement, contract
or other agreement or understanding with a labor union or organization, or (ix)
had any union organizing activities.
SECTION 3.9 Absence of Litigation.
(a) Except as set forth in Section 3.9 of the Company
Disclosure Schedule or in the Company SEC Reports, neither the Company
nor any of the Company Subsidiaries is a party to any, and there are no
pending or, to the Company's knowledge, threatened, legal,
administrative, arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against the
Company or any of the Company Subsidiaries or
21
challenging the validity or propriety of the transactions contemplated
by this Agreement as to which there is a reasonable probability of an
adverse determination and which, if adversely determined, would,
individually or in the aggregate, have a Material Adverse Effect on the
Company and the Company's Subsidiaries, taken as a whole.
(b) There is no injunction, order, judgment, decree or
regulatory restriction imposed upon the Company, any of the Company
Subsidiaries or the assets of the Company or any of the Company
Subsidiaries which has had a Material Adverse Effect on the Company and
the Company's Subsidiaries, taken as a whole.
SECTION 3.10 Employee Benefit Plans.
(a) Compliance with Applicable Laws. Each of the Company's
"employee benefit plans" within the meaning of Section 3(3) of ERISA,
for the benefit of employees of the Company and the Company
Subsidiaries (the "Company Plans") has been operated in all respects in
accordance with the requirements of all applicable Law and all persons
who participate in the operation of such Company Plans and all Company
Plan "fiduciaries" (within the meaning of Section 3(21) of ERISA) have
acted in accordance with the provisions of all applicable Law, except
where such violations of applicable Law would not, individually or in
the aggregate, have a Material Adverse Effect on the Company and the
Company Subsidiaries, taken as a whole. The Company and the Company
Subsidiaries have performed all obligations required to be performed by
any of them under, are not in any respect in default under or in
violation of, and the Company and the Company Subsidiaries have no
knowledge of any default or violation by any party to, any Company
Plan, except where such failures, defaults or violations would not,
individually or in the aggregate, have a Material Adverse Effect on the
Company and the Company Subsidiaries, taken as a whole. No legal
action, suit or claim is pending or, to the knowledge of the Company or
the Company Subsidiaries, threatened with respect to any Company Plan
(other than claims for benefits in the ordinary course) and, to the
knowledge of the Company or the Company Subsidiaries, no fact or event
exists that could give rise to any such action, suit or claim.
(b) Qualification of Certain Plans. Each Company Plan that is
intended to be qualified under Section 401(a) of the Code or Section
401(k) of the Code (including each trust established in connection with
such a Plan that is intended to be exempt from Federal income taxation
under Section 501(a) of the Code) has received a favorable
determination letter from the IRS (as defined herein) that it is so
qualified, and the Company is not aware of any fact or event that has
occurred since the date of such determination letter from the IRS to
adversely affect the qualified status of any Company Plan or the exempt
status of any such trust. No trust maintained or contributed to by the
Company or any of the Company Subsidiaries is intended to be qualified
as a voluntary employees' beneficiary association or is intended to be
exempt from federal income taxation under Section 501(c)(9) of the
Code.
(c) Absence of Certain Liabilities and Events. There have been
no prohibited transactions (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) with respect to any Company Plan. The
Company and each of the Company Subsidiaries has not incurred any
liability for any excise tax arising under Section 4972 or 4980B of the
Code and, to the knowledge of Company or the Company Subsidiaries, no
fact or event exists that could give rise to any such liability.
22
(d) Plan Contributions. All contributions, provisions or
payments required to be made with respect to any Company Plan have been
made on or before their due dates.
SECTION 3.11 Registration Statement; Proxy Statement/Prospectus. The
information supplied by the Company for inclusion in the registration statement
of the Company (the "Registration Statement") pursuant to which the shares of
Company Common Stock to be issued in the Merger will be registered with the SEC
shall not, at the time the Registration Statement (including any amendments or
supplements thereto) is declared effective by the SEC, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The information
supplied by the Company for inclusion in the Proxy Statement/Prospectus shall
not, at the date the Proxy Statement/Prospectus (or any amendment thereof or
supplement thereto) is first mailed to shareholders, at the time of the Seller's
Shareholders' Meeting and at the Effective Time, be false or misleading with
respect to any material fact required to be stated therein, or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they are made, not misleading. If at any time
prior to the Effective Time any event relating to the Company or any of its
affiliates, officers or directors should be discovered by the Company which
should be set forth in an amendment to the Registration Statement or a
supplement to the Proxy Statement/Prospectus, the Company will promptly inform
the Seller. The Registration Statement and the Proxy Statement/Prospectus shall
comply in all material respects as to form with the requirements of the
Securities Act, the Exchange Act and the rules and regulations thereunder.
Notwithstanding the foregoing, the Company makes no representation or warranty
with respect to any information about, or supplied or omitted by, Seller which
is contained in any of the foregoing documents.
SECTION 3.12 Title to Property. The Company and each of the Company
Subsidiaries has good and marketable title to all of their respective properties
and assets, real and personal, free and clear of all mortgage liens, and free
and clear of all other liens, charges and encumbrances except liens for taxes
not yet due and payable, pledges to secure deposits and such minor imperfections
of title, if any, as do not materially detract from the value of or interfere
with the present use of the property affected thereby or which, individually or
in the aggregate, would not have a Material Adverse Effect on the Company and
the Company Subsidiaries, taken as a whole; and all leases pursuant to which the
Company or any of the Company Subsidiaries lease from others material amounts of
real or personal property are in good standing, valid and effective in
accordance with their respective terms, and there is not, under any of such
leases, any existing material default or event of default (or event which with
notice or lapse of time, or both, would constitute a material default and in
respect of which the Company or such subsidiary has not taken adequate steps to
prevent such a default from occurring). Substantially all of the Company's and
each of the Company Subsidiaries' buildings and equipment in regular use have
been reasonably maintained and are in good and serviceable condition, reasonable
wear and tear excepted.
SECTION 3.13 Environmental Matters. There is not pending and, to the
Company's knowledge, there is not threatened, any litigation, action, or other
proceeding related to a violation or alleged violation of any Environmental Laws
by the Company or the Company Subsidiaries which could reasonably be expected to
have a Material Adverse Effect on the Company and the Company Subsidiaries taken
as a whole.
23
SECTION 3.14 Absence of Agreements. Neither the Company nor any of the
Company Subsidiaries is a party to any agreement or memorandum of understanding
with, or a party to any commitment letter or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any extraordinary
supervisory letter which restricts materially the conduct of its business
(including any contract containing covenants which limit the ability of the
Company or Company Subsidiary to compete in any line of business or with any
person or which involve any restriction of the geographical area in which, or
method by which, the Company or any Company Subsidiary may carry on its business
(other than as may be required by Law or applicable regulatory authorities)), in
any manner relates to its capital adequacy, its credit policies, or its
management, except for those the existence of which has been disclosed to Seller
prior to the date of this Agreement, nor has the Company been advised that any
federal, state, or governmental agency is contemplating issuing or requesting
(or is considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, extraordinary supervisory
letter, commitment letter or similar submission, except as disclosed by the
Company in Section 3.14 of the Company Disclosure Schedule.
SECTION 3.15 Taxes. The Company and the Company Subsidiaries have
timely filed all material Tax Returns (as defined below) required to be filed by
them, and Company and the Company Subsidiaries have timely paid and discharged
all material Taxes (as defined below) due in connection with or with respect to
the filing of such Tax Returns and have timely paid all other Taxes as are due,
except such as are being contested in good faith by appropriate proceedings and
with respect to which Seller is maintaining reserves adequate for their payment.
For purposes of this Agreement, "Tax" or "Taxes" shall mean taxes, charges,
fees, levies, and other governmental assessments and impositions of any kind,
payable to any federal, state, local or foreign governmental entity or taxing
authority or agency, including, without limitation, (i) income, franchise,
profits, gross receipts, estimated, ad valorem, value added, sales, use,
service, real or personal property, capital stock, license, payroll,
withholding, disability, employment, social security, workers compensation,
unemployment compensation, utility, severance, production, excise, stamp,
occupation, premiums, windfall profits, transfer and gains taxes, (ii) customs
duties, imposts, charges, levies or other similar assessments of any kind, and
(iii) interest, penalties and additions to tax imposed with respect thereto; and
"Tax Returns" shall mean returns, reports, and information statements with
respect to Taxes required to be filed with the IRS or any other governmental
entity or taxing authority or agency, domestic or foreign, including, without
limitation, consolidated, combined and unitary tax returns. For the purposes of
this Section 3.15, references to the Company Subsidiaries include former
subsidiaries of the Company for the periods during which any such subsidiaries
were owned, directly or indirectly, by the Company. Except as otherwise
disclosed in the Company Disclosure Schedule, to the knowledge of the Company,
neither the IRS nor any other governmental entity or taxing authority or agency
is now asserting, either through audits, administrative proceedings or court
proceedings, any deficiency or claim for additional Taxes. Except as otherwise
disclosed in the Company Disclosure Schedule, neither Company nor any of the
Company's Subsidiaries has granted any waiver of any statute of limitations with
respect to, or any extension of a period for the assessment of, any Tax. Except
as otherwise disclosed in the Company Disclosure Schedule, and except for
statutory liens for current taxes not yet due, there are no material tax liens
on any assets of Company or any of the Company Subsidiaries. Except as otherwise
disclosed in the Company Disclosure Schedule, neither Company nor any of the
Company Subsidiaries has received a ruling or entered into an agreement with the
IRS or any other taxing authority that would have a Material Adverse Effect on
Company and the Company Subsidiaries, taken as a whole, after the Effective
Time. Except as otherwise disclosed in the Company Disclosure Schedule, no tax
indemnities have
24
been given by the Company or the Company Subsidiaries to third parties in
connection with the sale of Company Common Stock or assets that remain in effect
and are material to the Company and Company Subsidiaries, taken as a whole.
Neither Company nor any of the Company Subsidiaries has made an election under
Section 341(f) of the Code.
SECTION 3.16 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company.
SECTION 3.17 Tax Matters. Neither the Company nor, to the Company's
knowledge, any of its affiliates has through the date of this Agreement taken or
agreed to take any action that would prevent the Merger from qualifying as a
reorganization under Section 368(a)(1)(A) of the Code.
SECTION 3.18 Material Adverse Effect. Since December 31, 2000 there has
been no Material Adverse Effect on the Company and the Company Subsidiaries,
taken as a whole.
ARTICLE IV - COVENANTS OF SELLER
SECTION 4.1 Affirmative Covenants. Seller hereby covenants and agrees
with the Company that prior to the Effective Time, unless the prior written
consent of the Company shall have been obtained and except as otherwise
contemplated herein, it will and it will cause each Seller Subsidiary to:
(a) operate its business in the usual, regular and ordinary
course consistent with past practices;
(b) use all reasonable efforts to preserve intact its business
organization and assets, maintain its rights and franchises, retain the
services of its officers and key employees and maintain its
relationships with customers;
(c) use all reasonable efforts to maintain and keep its
properties in as good repair and condition as at present, ordinary wear
and tear excepted;
(d) use all reasonable efforts to keep in full force and
effect insurance and bonds comparable in amount and scope of coverage
to that now maintained by it;
(e) use all reasonable efforts to perform in all material
respects all obligations required to be performed by it under all
material contracts, leases, and documents relating to or affecting its
assets, properties, and business;
(f) use all reasonable efforts to comply with and perform in
all material respects all obligations and duties imposed upon it by all
applicable Laws; and
(g) use all reasonable efforts not to take any action or fail
to take any action which individually or in the aggregate can be
expected to have a Material Adverse Effect on the Seller and the Seller
Subsidiaries, taken as a whole.
SECTION 4.2 Negative Covenants. Except as specifically contemplated by
this Agreement, as set forth on Annex B and as set forth on Schedule 4.2(g),
from the date of this
25
Agreement until the Effective Time, Seller shall not do, or permit any Seller
Subsidiary to do, without the prior written consent of the Company, any of the
following:
(a) (i) except as required by applicable law or to maintain
qualification pursuant to the Code, adopt, amend, renew or terminate
any Plan or any agreement, arrangement, plan or policy between the
Seller or any Subsidiary of the Seller and one or more of its current
or former directors, officers or employees ("Employee Changes"), except
that Employee Changes for employees who are not directors or officers
subject to Section 16 of the Exchange Act may be made in the ordinary
course of business consistent with past practice or (ii) except for
normal increases in the ordinary course of business consistent with
past practice or, except as required by applicable law, increase in any
manner the base salary, bonus incentive compensation or fringe benefits
of any director, officer or employee or pay any benefit not required by
any plan or agreement as in effect as of the date hereof (including,
without limitation, the granting of stock options, stock appreciation
rights, restricted stock, restricted stock units or performance units
or shares);
(b) (i) except as provided below declare or pay any dividend
on, or make any other distribution in respect of, its outstanding
shares of capital stock, except for (A) regular quarterly cash
dividends on Seller Common Stock with usual record and payment dates
for such dividends with each such dividend at a rate per share of
Seller Common Stock not in excess of $0.14 per share and (B) dividends
by a Seller Subsidiary to Seller;
(ii) declare or pay any dividends or make any
distributions in any amount on Seller Common Stock in or with
respect to the quarter in which the Effective Time shall occur
and in which the shareholders of Seller Common Stock are
entitled to receive dividends on the shares of Company Common
Stock into which the shares of Seller Common Stock have been
converted; provided that, it is the intent of this clause (ii)
to provide that the holders of Seller Common Stock will
receive either the payment of cash dividends on their shares
of Seller Common Stock or the payment of cash dividends as the
holders of shares of Company Common Stock received in exchange
for the shares of Seller Common Stock pursuant to this
Agreement for the calendar quarter during which the Effective
Time shall occur, but will not receive and will not become
entitled to receive for the same calendar quarter both the
payment of a cash dividend as shareholders of Seller Common
Stock and the payment of a cash dividend as the holders of
shares of Company Common Stock received in exchange for the
shares of Seller Common Stock pursuant to this Agreement; and
if Seller does not declare and pay cash dividends in a
particular calendar quarter because of Seller's reasonable
expectation that the Effective Time was to have occurred in
such calendar quarter wherein the holders of Seller Common
Stock would have become entitled to receive cash dividends for
such calendar quarter on the shares of Company Common Stock to
have been exchanged for the shares of Seller Common Stock
pursuant to this Agreement, and the Effective Time does not in
fact occur in such calendar quarter, then, as a result
thereof, Seller shall be entitled to declare and pay a cash
dividend (within the limitations of this clause (ii)) on such
shares of Seller Common Stock for such calendar quarter by the
declaration and payment of such cash dividends as soon as
reasonably practicable after the end of such calendar quarter;
26
(c) (i) redeem, purchase or otherwise acquire any shares of
its capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock, or any options,
warrants, conversion or other rights to acquire any shares of its
capital stock or any such securities or obligations; (ii) subject to
Section 4.4 hereof, merge with or into any other corporation or bank,
permit any other corporation or bank to merge into it or consolidate
with any other corporation or bank, or effect any reorganization or
recapitalization; (iii) purchase or otherwise acquire any substantial
portion of the assets, or more than 5% of any class of stock, of any
corporation, bank or other business other than in the ordinary course
of business and consistent with past practice; (iv) liquidate, sell,
dispose of, or encumber any assets or acquire any assets, other than in
the ordinary course of its business consistent with past practice; or
(v) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock;
(d) issue, deliver, award, grant or sell, or authorize or
propose the issuance, delivery, award, grant or sale of, any shares of
any class of capital stock of Seller or any Seller Subsidiary
(including shares held in treasury) or any rights, warrants or options
to acquire, any such shares;
(e) propose or adopt any amendments to its articles of
incorporation or by-laws in any way adverse to the Company;
(f) change in any material manner its methods of accounting in
effect at December 31, 2000 or change in any material manner its
methods of reporting income or deductions for federal income tax
purposes from those employed in the preparation of the federal income
tax returns for the taxable year ending December 31, 2000, except as
may be required by Law or generally accepted accounting principles;
(g) change in any material manner any lending, investment,
liability management or other material policies concerning the business
or operations of Seller or any of the Seller Subsidiaries, except as
required by Law, including, without limitation: (i) acquire or sell any
contracts for the purchase or sale of financial or other futures or any
put or call options, or enter into any xxxxxx or interest rate swaps
relating to cash, securities, or any commodities or enter into any
other derivative transaction except in the ordinary course of business
consistent with past practice; (ii) sell, assign, transfer, pledge,
mortgage or otherwise encumber, or permit any encumbrances to exist
with respect to, any of its assets, except in the ordinary course of
business consistent with past practice; (iii) incur any material
liabilities or material obligations, whether directly or by way of
guaranty, including any obligation for borrowed money, whether or not
evidenced by a note, bond, debenture or similar instrument, except in
the ordinary course of business consistent with past practice; (iv)
enter into any agreement with respect to any acquisition of a material
amount of assets or securities or any discharge, waiver, satisfaction,
release or relinquishment of any material contract rights, liens,
encumbrances, debt or claims, not in the ordinary course of business
and consistent with past practices; (v) settle any claim, action, suit,
litigation, proceeding, arbitration, investigation or controversy of
any kind, which would restrict in any material respect the operations
or business of Seller or any of the Seller Subsidiaries; or (vi) make
any capital expenditure, except in the ordinary course and
substantially consistent with the Seller's business plan provided to
the Company; or
27
(h) agree in writing or otherwise to do any of the foregoing.
SECTION 4.3 Letter of Seller's Accountants. Seller shall use its
reasonable efforts to cause to be delivered to the Company "comfort" letters of
Ernst & Young, LLP, Seller's independent public accountants, dated the date on
which the Registration Statement shall become effective and the Effective Time,
respectively, and addressed to the Company, in a form reasonably satisfactory to
the Company and reasonably customary in scope and substance for letters
delivered by independent public accountants in connection with registration
statements similar to the Registration Statement and transactions such as those
contemplated by this Agreement.
SECTION 4.4 No Solicitation of Transactions.
(a) Seller shall immediately cease and cause to be terminated
any existing discussions or negotiations relating to a Competing
Proposal (as defined below), other than with respect to the Merger,
with any parties conducted heretofore. Seller will not, directly or
indirectly, and will instruct its directors, officers, employees,
accountants, consultants, legal counsel, agents, investment bankers,
advisors and other representatives (collectively, "Representatives")
not to, directly or indirectly, initiate, solicit or encourage
(including by way of furnishing information or assistance), or take any
other action or facilitate, any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any
Competing Proposal, or enter into or maintain discussions or negotiate
with any person in furtherance of or relating to such inquiries or to
obtain a Competing Proposal, or agree to or endorse any Competing
Proposal, or authorize or permit any Representative of Seller or any of
the Seller Subsidiaries to take any such action, and Seller shall use
all reasonable efforts to cause the Representatives of Seller and the
Seller Subsidiaries not to take any such action, and Seller shall
promptly notify the Company if any such inquiries or proposals are made
regarding a Competing Proposal, and Seller shall keep the Company
informed, on a current basis, of the status and terms of any such
proposals; provided, however, that prior to such time as the
shareholders of Seller shall have adopted and approved this Agreement
in accordance with the IBCA , nothing contained in this Section 4.4
shall prohibit the Board of Directors of Seller from (i), in connection
with a Superior Competing Transaction (as defined below), furnishing
information to, or entering into discussions or negotiations with, any
person that makes an unsolicited bona fide proposal to acquire Seller
pursuant to a merger, consolidation, share exchange, business
combination or other similar transaction, if, and only to the extent
that, (A) the Board of Directors of Seller, after consultation with and
based upon the advice of independent legal counsel, determines in good
faith that such action is required for the Board of Directors of Seller
to comply with its fiduciary duties to shareholders imposed by Iowa
law, (B) prior to furnishing such information to, or entering into
discussions or negotiations with, such person, Seller provides written
notice to the Company to the effect that is furnishing information to,
or entering into discussions or negotiations with, such person, (C)
prior to furnishing such information to such person, Seller receives
from such person an executed confidentiality agreement, and (D) Seller
keeps the Company informed, on a current basis, of the status and
details of any such discussions or negotiations, or (ii) complying with
Rule 14e-2 promulgated under the Exchange Act.
(b) For purposes of this Agreement, "Competing Proposal" shall
mean any of the following involving Seller or any Seller Subsidiary:
any inquiry proposal or offer from any
28
person relating to any direct or indirect acquisition or purchase of a
business that constitutes 15% or more of the net revenues, net income
or the assets of Seller and the Seller Subsidiaries taken as a whole,
or 15% or more of any class of equity securities of Seller or any of
the Seller Subsidiaries, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 15% or more
any class of equity securities of Seller or any of the Seller
Subsidiaries, any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction
involving Seller or any of the Seller Subsidiaries, other than the
transactions contemplated by this Agreement.
(c) For purposes of this Agreement "Superior Competing
Transaction" shall mean any of the following involving Seller or any
Seller Subsidiary: any proposal made by a third party to acquire,
directly or indirectly, including pursuant to a tender offer, exchange
offer, merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction, for consideration
consisting of cash and/or securities, more than 50% of the combined
voting power of the shares of Seller Common Stock then outstanding or
all or substantially all of the assets of Seller, and otherwise on
terms which the Board of Directors of Seller determines in its good
faith judgment (based on the opinion of a financial advisor of
nationally recognized reputation) to be more favorable to its
shareholders than the Merger and for which financing, to the extent
required, is then committed or which if not committed is, in the good
faith judgment of its Board of Directors, reasonably capable of being
obtained by such third party.
SECTION 4.5 Update Disclosure; Breaches.
(a) From and after the date of this Agreement until the
Effective Time, Seller shall update the Seller Disclosure Statement on
a regular basis by written notice to the Company to reflect any matters
which have occurred from and after the date of this Agreement which, if
existing on the date of this Agreement, would have been required to be
described therein; provided that (i) to the extent that any information
that would be required to be included in an update under this Section
4.5(a) would have in the past been contained in internal reports
prepared by Seller or any Seller Subsidiary in the ordinary course,
such update may occur by delivery of such internal reports prepared in
accordance with past practice, with appropriate steps taken by Seller
to identify relevant information contained therein, and (ii) to the
extent that updating required under this Section is unduly burdensome
to Seller, Seller and the Company will use their reasonable efforts to
develop alternate updating procedures using, wherever possible,
existing reporting systems.
(b) Seller shall, in the event it becomes aware of the
impending or threatened occurrence of any event or condition which
would cause or constitute a material breach (or would have caused or
constituted a material breach had such event occurred or been known
prior to the date of this Agreement) of any of its representations or
agreements contained or referred to herein, give prompt written notice
thereof to the Company and use its reasonable efforts to prevent or
promptly remedy the same.
SECTION 4.6 Affiliates; Tax Treatment. Within thirty (30) days after
the date of this Agreement (a) Seller shall deliver to the Company a letter
identifying all persons who are then "affiliates" of Seller, including, without
limitation, all directors and executive officers of Seller, for purposes of Rule
145 promulgated under the Securities Act (each a "Seller Affiliate") and (b)
Seller shall advise the persons identified in such letter of the resale
restrictions imposed by applicable
29
securities laws. Seller shall use its reasonable efforts to obtain from each
person identified in such letter a written agreement, substantially in the form
attached hereto as Exhibit 4.6. Seller shall use its reasonable efforts to
obtain from any person who becomes an affiliate of Seller after Seller's
delivery of the letter referred to above, on or prior to the Effective Time, a
written agreement, substantially in the form attached hereto as Exhibit 4.6 as
soon as practicable after such person attains such status. Seller will use its
reasonable efforts to cause the Merger to qualify as a reorganization under
Section 368(a)(1)(A) of the Code.
SECTION 4.7 Delivery of Shareholder List. Seller shall arrange to have
its transfer agent deliver to the Company or its designee, from time to time
prior to the Effective Time, a true and complete list setting forth the names
and addresses of the Seller shareholders, their holdings of stock as of the
latest practicable date, and such other shareholder information as the Company
may reasonably request.
SECTION 4.8 Loan and Investment Policies. To the extent permitted by
applicable law or regulations, Seller agrees to give the Company prior notice of
any material change in its loan and investment policies and procedures designed
to insure safe and sound banking practices. Seller agrees to use all reasonable
efforts to communicate on a regular and reasonable basis with the Company
regarding its loan and investment activity prior to the Effective Time. The
Seller and the Company agree to use their reasonable efforts to develop a plan
for such communications.
SECTION 4.9 Access and Information. Seller will give the Company and
its representatives, employees, counsel and accountants reasonable access to the
properties, books and records of the Seller and any other information relating
to Seller that is reasonably requested by the Company for purpose of permitting
the Company, among other things, to: (a) verify the accuracy of the
representations and warranties of Seller contained in this Agreement, (b)
confirm compliance by Seller with the terms of this Agreement, and (c) prepare
for the consummation of the transactions contemplated by the Agreement. The
parties hereto acknowledge and agree that any investigation by the Company
pursuant to this Section 4.9 shall not unreasonably interfere with the business
and operations of Seller. The Company shall not, without the consent of Seller
contact any customers or key employees of Seller. If the Merger contemplated
hereby is not consummated, the Company shall maintain in confidentiality all
non-public and all proprietary information acquired by the Company from the
Seller in connection with its due diligence review.
SECTION 4.10 Confidentiality Letter. Seller agrees that the
Confidentiality Letter entered into between the Company and the Seller on July
15, 1999 shall remain in full force and effect and binding upon the Seller and
shall survive termination of this Agreement.
SECTION 4.11 Employment Agreements. Seller will use all reasonable
efforts to cause the employees listed on Schedule 4.11 of the Seller Disclosure
Schedule to enter into employment agreements or, as applicable, amendments to
their employment agreements in the form set forth as Exhibit 4.11 hereof.
30
ARTICLE V - COVENANTS OF THE COMPANY
SECTION 5.1 Affirmative Covenants. The Company hereby covenants and
agrees with Seller that prior to the Effective Time, unless the prior written
consent of Seller shall have been obtained and except as otherwise contemplated
herein, it will:
(a) maintain its corporate existence in good standing and
maintain all books and records in accordance with accounting principles
and practices as used in the Company's financial statements applied on
a consistent basis;
(b) conduct its business in a manner that does not violate any
Law, except for possible violations which individually or in the
aggregate do not, and, insofar as reasonably can be foreseen, in the
future will not, have a Material Adverse Effect on the Company and the
Company Subsidiaries, taken as a whole; and
(c) perform in all material respects all obligations required
to be performed by it under all material contracts, leases and
documents relating to or affecting the Company or any Company
Subsidiary and their respective business, assets and properties, except
to the extent nonperformance of such obligations would not have a
Material Adverse Effect on the Company and the Company Subsidiaries,
taken as a whole.
SECTION 5.2 Negative Covenants. Except as set forth in Section 5.2 of
the Company Disclosure Schedule or as otherwise contemplated by this Agreement,
from the date of this Agreement until the Effective Time, the Company shall not,
or agree to commit to, or permit any Company Subsidiaries to, without the prior
written consent of Seller, (a) propose or adopt any amendments to its Articles
of Incorporation or By-laws in a manner which would adversely affect in any
manner the terms of the Company Common Stock or the ability of Company to
consummate the transactions contemplated hereby, or agree in writing to do any
of the foregoing; provided, however, that any such amendment to the Company
Articles to increase the authorized number of shares of Company Common Stock
shall not be deemed to have such an adverse effect; (b) take any action that
would adversely effect or delay the ability of the Company to (i) obtain the
necessary approvals of any applicable regulatory authority required for the
transactions contemplated hereby, (ii) perform its covenants or agreements under
this Agreement, or (iii) consummate the transactions contemplated hereby; or (c)
take any action in violation of Regulation M under the Exchange Act.
SECTION 5.3 Update Disclosure.
(a) From and after the date of this Agreement until the
Effective Time, Company shall update the Company Disclosure Statement
on a regular basis by written notice to the Seller to reflect any
matters which have occurred from and after the date of this Agreement
which, if existing on the date of this Agreement, would have been
required to be described therein; provided, that (i) to the extent that
any information that would be required to be included in an update
under this Section 5.3 would have in the past been contained in
internal reports prepared by the Company or any Company Subsidiary in
the ordinary course, such update may occur by delivery of such internal
reports prepared in accordance with past practice, with appropriate
steps taken by the Company to identify relevant information contained
therein, and (ii) to the extent that updating required under this
Section 5.3 is unduly burdensome to the Company, the Company and the
Seller will use their
31
reasonable efforts to develop alternate updating procedures using,
wherever possible, existing reporting systems.
(b) The Company shall, in the event it becomes aware of the
impending or threatened occurrence of any event or condition which
would cause or constitute a material breach (or would have caused or
constituted a material breach had such event occurred or been known
prior to the date of this Agreement) of any of its representations or
agreements contained or referred to herein, give prompt written notice
thereof to the Seller and use its best efforts to prevent or promptly
remedy the same.
SECTION 5.4 Breaches. The Company shall, in the event it becomes aware
of the impending or threatened occurrence of any event or condition which would
cause or constitute a material breach (or would have caused or constituted a
material breach had such event occurred or been known prior to the date of this
Agreement) of any of its representations or agreements contained or referred to
herein, give prompt written notice thereof to the Seller and use its best
efforts to prevent or promptly remedy the same.
SECTION 5.5 Stock Exchange Listing. The Company shall cause the shares
of Company Common Stock to be issued in the Merger to be approved for listing on
the NYSE (subject to official notice of issuance) prior to the Effective Time.
SECTION 5.6 Tax Treatment. The Company will use its reasonable best
efforts to cause the Merger to qualify as a reorganization under Section
368(a)(1)(A) of the Code.
SECTION 5.7 Confidentiality Letter. The Company agrees that the
Confidentiality Letter entered into between the Company and the Seller on July
15, 1999 shall remain in full force and effect and binding upon the Company and
shall survive termination of this Agreement.
ARTICLE VI - ADDITIONAL AGREEMENTS
SECTION 6.1 Proxy Statement/Prospectus; Registration Statement. As
promptly as practicable after the execution of this Agreement, Seller and the
Company shall prepare and file with the SEC the Proxy Statement/Prospectus and
registration statement on Form S-4 promulgated under the Securities Act and the
Exchange Act (or on such other form as shall be appropriate) relating to the
approval of the Merger by the shareholders of Seller and shall use all
reasonable efforts to cause the Registration Statement to become effective as
soon thereafter as practicable. The Proxy Statement/Prospectus shall include the
recommendation of the Board of Directors of Seller in favor of the Merger;
provided, however, that in connection with the Seller's Board of Directors'
recommendation to the Seller's Shareholders in favor of a Superior Competing
Transaction (as defined in Section 4.4), the Board of Directors of Seller may,
at any time prior to such time as the shareholders of Seller shall have adopted
and approved this Agreement and the Merger in accordance with the IBCA,
withdraw, modify or change any such recommendation to the extent Board of
Directors of Seller determines in good faith, after consultation with and based
upon the advice of independent legal counsel, that the failure to so withdraw,
modify or change its recommendation would cause the Board of Directors of Seller
to breach its fiduciary duties to Seller's shareholders under applicable Law.
SECTION 6.2 Meeting of Seller's Shareholders. Seller shall promptly
after the date of this Agreement take all action necessary in accordance with
the IBCA and the Seller Articles and the
32
Seller By-Laws to convene the Seller Shareholders' Meeting. Seller shall use all
reasonable efforts to solicit from shareholders of Seller proxies in favor of
the Merger and shall take all other action necessary or advisable to secure the
vote or consent of shareholders required by the IBCA to approve the Merger,
unless the Board of Directors of Seller shall have determined in good faith
based on advice of counsel that such actions would violate its fiduciary duty to
Seller's Shareholders under applicable Law.
SECTION 6.3 Appropriate Action; Consents; Filings. Seller and the
Company shall use all reasonable efforts to (i) take, or cause to be taken, all
appropriate action, and do, or cause to be done, all things necessary, proper or
advisable under applicable Law to consummate and make effective the transactions
contemplated by this Agreement, (ii) obtain all consents, licenses, permits,
waivers, approvals, authorizations or orders required under Law (including,
without limitation, all foreign and domestic (federal, state and local)
governmental and regulatory rulings and approvals and parties to contracts)
required in connection with the authorization, execution and delivery of this
Agreement and the consummation by them of the transactions contemplated hereby,
including, without limitation, the Merger, (iii) make all necessary filings, and
thereafter make any other required submissions, with respect to this Agreement
and the Merger required under (A) the Securities Act and the Exchange Act and
the rules and regulations thereunder, and any other applicable federal or state
securities laws, (B) the BHCA, the USBL and any other applicable federal or
state banking laws and (C) any other applicable Law; provided that, the Company
and Seller shall cooperate with each other in connection with the making of all
such filings, including providing copies of all such documents to the non-filing
party and its advisors prior to filing and, if requested, to accept all
reasonable additions, deletions or changes suggested in connection therewith.
Seller and the Company shall furnish all information required for any
application or other filing to be made pursuant to the rules and regulations of
any applicable Law (including all information required to be included in the
Proxy Statement/Prospectus and the Registration Statement) in connection with
the transactions contemplated by this Agreement. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each party to
this Agreement shall use all reasonable efforts to take all such necessary
action.
SECTION 6.4 Directors' and Officers' Indemnification and Insurance.
(a) By virtue of the occurrence of the Merger, the Company
shall from and after the Effective Time succeed to Seller's obligations
with respect to indemnification or exculpation now existing in favor of
the directors, officers, employees and agents of Seller and the Seller
Subsidiaries as provided in the Seller Articles, Seller By-Laws,
indemnification agreements of Seller or the Seller Subsidiaries or
otherwise in effect as of the date of this Agreement with respect to
matters occurring prior to the Effective Time. Section 6.4 of the
Seller Disclosure Schedule contains a complete list of all
indemnification arrangements to which Seller is a party to on the date
of this Agreement. Seller agrees not to amend or enter into new
arrangements or agreements from and after the date hereof.
(b) From and after the Effective Time, the Company agrees to
maintain an insurance policy for directors' and officers' liabilities
for all present and former directors and officers of Seller covered by
Seller's current insurance policies on the date of this Agreement for a
period of six years from and after the Effective Time with terms
(including coverage
33
limits) not less advantageous as currently in effect on the date of
this Agreement with respect to acts, omissions and other matters
occurring prior to the Effective Time.
(c) The provisions of this Section 6.4 are intended to be for
the benefit of, and shall be enforceable by, each person who is now, or
has been at any time prior to the date of this Agreement or who becomes
prior to the Effective Time, an officer or director of Seller or any
Seller Subsidiary (the "Indemnified Parties") and his or her heirs and
representatives against the Company and its successor and assigns.
SECTION 6.5 Notification of Certain Matters. Seller shall give prompt
notice to the Company, and the Company shall give prompt notice to Seller, of
(i) the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate and (ii) any failure of
Seller or the Company, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 6.5 shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
SECTION 6.6 Public Announcements. The Company and Seller shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to the Merger and shall not issue any such press release
or make any such public statement prior to such consultation, except as may be
required by Law, including disclosures required under the federal securities
laws.
SECTION 6.7 Customer Retention. To the extent permitted by law or
applicable regulation, Seller shall use all reasonable efforts to assist the
Company and cooperate with the Company in all reasonable efforts to retain
Seller's customers for the Surviving Corporation; provided, however, Seller
shall not be required to take any action which Seller in good faith believes is
reasonably likely to disrupt its existing customer relationships or practices or
procedures.
SECTION 6.8 Expenses.
(a) All Expenses (as defined below) incurred by the Company
and Seller shall be borne solely and entirely by the party which has
incurred the same, except that the parties shall share equally in the
expense of printing and filing the Registration Statement and the Proxy
Statement/Prospectus and all SEC, NYSE and other regulatory filing fees
incurred in connection herewith.
(b) "Expenses" as used in this Agreement shall include all
reasonable out-of-pocket expenses (including, without limitation, all
fees and expenses of counsel, accountants, investment bankers, experts
and consultants to the party and its affiliates) incurred by a party or
on its behalf in connection with or related to the authorization,
preparation and execution of this Agreement, the solicitation of
shareholder approvals and all other matters related to the closing of
the transactions contemplated hereby.
SECTION 6.9 Employee Benefit Matters. Annex B sets forth certain
agreements with respect to Seller's employee benefit matters.
34
ARTICLE VII - CONDITIONS OF MERGER
SECTION 7.1 Conditions to Obligation of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Effectiveness of the Registration Statement. The
Registration Statement shall have been declared effective by the SEC
under the Securities Act. No stop order suspending the effectiveness of
the Registration Statement shall have been issued by the SEC and no
proceedings for that purpose shall, on or prior to the Effective Time,
have been initiated or, to the knowledge of the Company or Seller,
threatened by the SEC. The Company shall have received all other
Federal or state securities permits and other authorizations necessary
to issue Company Common Stock in exchange for Seller Common Stock and
to consummate the Merger.
(b) Shareholder Approval. This Agreement and the Merger shall
have been approved and adopted by the requisite vote of the
shareholders of Seller.
(c) Federal Reserve Board. The Merger shall have been approved
by the Federal Reserve Board, which approval shall not contain any
materially burdensome condition that would significantly adversely
affect the Company, all conditions required to be satisfied prior to
the Effective Time imposed by the terms of such approval shall have
been satisfied and all waiting periods relating to such approval shall
have expired.
(d) No Order. No federal or state governmental or regulatory
authority or other agency or commission, or federal or state court of
competent jurisdiction, shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect restricting, preventing or prohibiting
consummation of the transactions contemplated by this Agreement.
(e) NYSE Listing. The shares of Company Common Stock to be
issued at the Effective Time shall have been authorized for listing on
the NYSE subject to official notice of issuance.
SECTION 7.2 Additional Conditions to Obligations of the Company. The
obligations of the Company to effect the Merger are also subject to the
following conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Seller contained in this Agreement,
without giving effect to any update to the Seller Disclosure Schedule
or notice to the Company under Section 4.5 or 6.5, shall be true and
correct in all respects as of the date of this Agreement and (except to
the extent such representations and warranties speak as of an earlier
date) as of the Effective Time as though made on and as of the
Effective Time; provided, however, that for purposes of determining the
satisfaction of the condition contained in this clause, no effect shall
be given to any exception in such representations and warranties
relating to materiality or a Material Adverse Effect, and provided,
further, however, that, for purposes of this clause, such
representations and warranties shall be deemed to be true and correct
in all material respects unless the failure or failures of such
representations and warranties to be so true and correct,
35
individually or in the aggregate, represent a Material Adverse Effect
on the Seller. Company shall have received a certificate signed on
behalf of the Seller by the Chief Executive Officer and the Chief
Financial Officer of the Seller to the foregoing effect.
(b) Agreements and Covenants. The Seller shall have performed
or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Effective Time.
(c) Consents Obtained. All Seller Approvals and all filings
required to be made by Seller for the authorization, execution and
delivery of this Agreement and the consummation by it of the
transactions contemplated hereby shall have been obtained and made by
Seller, except when the failure to obtain any Seller Approvals required
to be obtained or filings required to be made would not have a Material
Adverse Effect on the Seller and Seller Subsidiaries, taken as a whole.
(d) No Challenge. There shall not be pending any action,
proceeding or investigation before any court or administrative agency
or by a government agency or any other person (i) challenging or
seeking material damages in connection with, the Merger or the
conversion of Seller Common Stock into Company Common Stock pursuant to
the Merger or (ii) seeking to restrain, prohibit or limit the exercise
of full rights of ownership or operation by the Company or the Company
Subsidiaries of all or any portion of the business or assets of Seller,
which in either case is reasonably likely to have a Material Adverse
Effect on either Seller and the Seller Subsidiaries, taken as a whole,
or the Company and the Company Subsidiaries, taken as a whole.
(e) Tax Opinion. An opinion of Xxxxxxx & Xxxx, S.C.,
independent counsel to the Company, dated as of the Effective Time,
substantially to the effect that on the basis of facts, representations
and assumptions set forth in such opinion which are consistent with the
state of facts existing at the Effective Time, the Merger will be
treated for federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code, and accordingly that no gain or
loss will be recognized by Seller as a result of the Merger. In
rendering such opinion, Xxxxxxx & Xxxx may require and rely upon
representations and covenants contained in certificates of officers of
the Company, the Seller and others.
(f) Opinion of Counsel. The Company shall have received from
Xxxxxx Xxxxxxx Xxxxxx & Brand, LLP or other independent counsel for
Seller reasonably satisfactory to the Company, an opinion dated the
Effective Time, in form and substance reasonably satisfactory to the
Company, covering the matters set forth in Annex C hereto, which
opinion shall be based on such assumptions and containing such
qualifications and limitations as are appropriate and reasonably
satisfactory to the Company.
(g) Comfort Letters. The Company shall have received from
Ernst & Young, LLP the "comfort" letters referred to in Section 4.3.
(h) Affiliate Agreements. The Company shall have received from
each person who is identified in the affiliate letter as an "affiliate"
of Seller a signed affiliate agreement in the form attached hereto as
Exhibit 4.6.
36
(i) Burdensome Condition. There shall not be any action taken,
or any statute, rule, regulation or order enacted, entered, enforced or
deemed applicable to the Merger, by any federal or state governmental
entity which, in connection with the grant of any regulatory approval,
imposes any condition or restriction upon the Company or Seller or
their respective subsidiaries (or the Surviving Corporation or its
subsidiaries after the Effective Time), requiring the disposition of
more than 10% of Seller's deposits and/or loans (as of March 31, 2001)
or would otherwise reasonably be expected to have a Material Adverse
Effect on either Seller and the Seller Subsidiaries taken as a whole or
the Company and the Company Subsidiaries taken as a whole.
(j) No Material Adverse Changes. Since the date of the
Agreement, there has not been any change in the financial condition,
results of operations or business of the Seller and the Seller
Subsidiaries, taken as a whole, that either individually or in the
aggregate would have a Material Adverse Effect on the Seller and the
Seller Subsidiaries taken as a whole. The Company shall have received a
certificate of the President and the Chief Financial Officer of the
Company to that effect.
(k) Seller Expenses. Seller shall have delivered to the
Company evidence in form reasonably satisfactory to the Company that
all out-of-pocket expenses (including, without limitation, all fees and
expenses of counsel, accountants, investment bankers, experts and
consultants to the Seller and its affiliates) incurred by the Seller or
on its behalf in connection with or related to the authorization,
preparation and execution of this Agreement, the Registration Statement
and the Proxy Statement/Prospectus and all SEC and other regulatory
filings, the solicitation of shareholder approvals and all other
matters related to the closing of the transactions contemplated hereby
are not in excess of $5,000,000.00.
(l) Seller shall own 100% of the outstanding capital stock of
each Seller Subsidiary.
SECTION 7.3 Additional Conditions to Obligations of Seller. The
obligation of Seller to effect the Merger is also subject to the following
conditions:
(a) Representations and Warranties. Each of the
representations and warranties of the Company contained in this
Agreement, without giving effect to any notice to Seller under Section
5.4 or 6.5, shall be true and correct in all respects as of the date of
this Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Effective Time, as
though made on and as of the Effective Time; provided, however, that
for purposes of determining the satisfaction of the condition contained
in this clause, no effect shall be given to any exception in such
representations and warranties relating to materiality or a Material
Adverse Effect, and provided, further, however, that, for purposes of
this clause, such representations and warranties shall be deemed to be
true and correct in all material respects unless the failure or
failures of such representations and warranties to be so true and
correct, individually or in the aggregate, represent a Material Adverse
Effect on the Company. The Seller shall have received a certificate
signed on behalf of the Company by the Chief Executive Officer and the
Chief Financial Officer of the Company to the foregoing effect.
37
(b) Agreements and Covenants. The Company shall have performed
or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Effective Time.
(c) Consents Obtained. All material consents, waivers,
approvals, authorizations or orders required to be obtained, and all
filings required to be made by the Company for the authorization,
execution and delivery of this Agreement and the consummation by it of
the transactions contemplated hereby shall have been obtained and made
by the Company, except where the failure to obtain any consents,
waivers, approvals, authorizations or orders required to be obtained or
any filings required to be made would not have a Material Adverse
Effect on the Company and the Company Subsidiaries, taken as a whole.
(d) Tax Opinion. The Seller shall have received an opinion of
Xxxxxx Xxxxxxx Xxxxxx & Brand, LLP, in form and substance reasonably
satisfactory to the Seller, dated as of the Effective Time,
substantially to the effect that on the basis of facts, representations
and assumptions set forth in such opinion which are consistent with the
state of facts existing at the Effective Time, the Merger will be
treated as a reorganization within the meaning of Section 368(a) of the
Code, and that, accordingly, for federal income tax purposes:
(i) No gain or loss will be recognized by the Seller
as a result of the Merger;
(ii) No gain or loss will be recognized by the
shareholders of the Seller who exchange their Seller Common
Stock for Company Common Stock pursuant to the Merger (except
with respect to cash received in lieu of a fractional share
interest in Company Common Stock); and
(iii) The aggregate tax basis of the Company Common
Stock received by shareholders who exchange their Seller
Common Stock for Company Common Stock pursuant to the Merger
will be the same as the aggregate tax basis of the Seller
Common Stock surrendered in exchange therefor (reduced by any
amount allocable to a fractional share interest for which cash
is received).
In rendering such opinion, the Seller's Counsel may require and rely upon
representations and covenants contained in certificates of officers of Company,
the Seller and others.
(e) Opinion of Counsel. Seller shall have received from
Xxxxxxx & Xxxx, S.C., or other independent counsel for the Company
reasonably satisfactory to Seller, opinions dated the Effective Time,
in form and substance reasonably satisfactory to Seller, covering the
matters set forth in Annex D hereto, which opinion shall be based on
such assumptions and contain such qualifications and limitations as are
appropriate and reasonably satisfactory to Seller.
(f) No Material Adverse Changes. Since the date of the
Agreement, there has not been any change in the financial condition,
results of operations or business of the Company and the Company
Subsidiaries, taken as a whole, that either individually or in the
aggregate would have a Material Adverse Effect on the Company and the
Company Subsidiaries taken as a whole. The Seller shall have received a
certificate of the President and the Chief Financial Officer of the
Company to that effect.
38
ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination.
(a) This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the matters
presented in connection with the Merger by the shareholders of Seller:
(i) by mutual consent of the Company and Seller by a
vote of majority of the members of the entire Board of
Directors of both the Company and Seller;
(ii) by Seller or the Company (A) if there has been a
breach in any material respect (except that where any
statement in a representation or warranty expressly includes a
standard of materiality, such statement shall have been
breached in any respect) of any representation, warranty,
covenant or agreement on the part of Seller, on the one hand,
or the Company, on the other hand, respectively, set forth in
this Agreement, or (B) if any representation or warranty of
Seller, on the one hand, or the Company, on the other hand,
respectively, shall be discovered to have become untrue in any
material respect (except that where any statement in a
representation or warranty expressly includes a standard of
materiality, such statement shall have become untrue in any
respect), in either case which breach or other condition has
not been cured within 30 business days following receipt by
the nonterminating party of notice of such breach or other
condition, or which breach by its nature, cannot be cured
prior to Closing; provided, however, neither party shall have
the right to terminate this Agreement pursuant to this Section
8.1(a)(ii) unless the breach of any representation or warranty
(but not breaches of covenants or agreements), together with
all other such breaches, would entitle the party receiving
such representation or warranty not to consummate the
transactions contemplated hereby under Section 7.2(a) (in the
case of a breach of a representation or warranty by the
Seller) or Section 7.3(a) (in the case of a breach of
representation or warranty by the Company); provided, further,
this Agreement may not be terminated pursuant to this clause
(ii) by the breaching party or party making any representation
or warranty which shall have become untrue in any material
respect;
(iii) by either the Company or Seller if any
permanent injunction preventing the consummation of the Merger
shall have become final and nonappealable;
(iv) by either the Company or Seller if the Merger
shall not have been consummated by December 31, 2001, for a
reason other than the failure of the party seeking termination
to comply with its obligations under this Agreement;
(v) by either the Company or Seller if the Federal
Reserve Board has denied approval of the Merger, and neither
the Company nor Seller has, within 30 days after the entry of
such order denying approval, filed a petition seeking review
of such order as provided by applicable law;
(vi) by either the Company or the Seller, if at the
Seller Shareholders' Meeting, this Agreement and the
transactions contemplated hereby shall fail to receive the
requisite vote for approval and adoption by the Seller's
Shareholders;
39
(vii) by the Company, if there shall exist a proposal
for a Superior Competing Transaction with respect to the
Seller and the Board of Directors of the Seller have withdrawn
or modified in a manner adverse to the Company its approval
and recommendation of this Agreement or its approval of the
Merger or any other transaction contemplated hereby or if the
Board of Directors of the Seller shall have approved or
recommended such Superior Competing Transaction; or
(viii) by the Company if any person or persons
holding in the aggregate 10% or more of the outstanding Seller
Common Stock deliver a notice or notices of intent to demand
payment in accordance with Section 490.1321 of the IBCA.
SECTION 8.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.1, this Agreement shall forthwith become
void and all rights and obligations of any party hereto shall cease except: (i)
as set forth in Section 9.1 of this Agreement and (ii) nothing herein shall
relieve any party from liability for any willful breach of this Agreement or
shall restrict either party's rights in the case thereof.
SECTION 8.3 Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after approval
of the Merger by the shareholders of Seller, no amendment may made which would
reduce the amount or change the type of consideration into which each Share
shall be converted pursuant to this Agreement upon consummation of the Merger.
This Agreement may not be amended except by an instrument in writing signed by
the parties hereto.
SECTION 8.4 Waiver. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby, but such extension or waiver or failure to insist on strict compliance
with an obligation, covenant, agreement or condition shall not operate as a
waiver of, or estoppel with respect to, any subsequent other failure.
ARTICLE IX - GENERAL PROVISIONS
SECTION 9.1 Non-Survival of Representations, Warranties and Agreements.
The representations, warranties and agreements in this Agreement shall terminate
at the Effective Time or upon the termination of this Agreement pursuant to
Article VIII, except that the agreements set forth in Article I and Sections 6.4
and 6.6 shall survive the Effective Time indefinitely and those set forth in
Sections 4.10, 5.7, 8.2 and Article IX hereof shall survive termination
indefinitely.
SECTION 9.2 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed given if delivered
personally, mailed by registered or certified mail (postage prepaid, return
receipt requested) or telecopied (with confirmation) to the parties at the
following addresses or telecopy numbers, as the case may be (or at such other
address or telecopy number for a party as shall be specified by like changes of
address or telecopy number) and shall be effective upon receipt:
40
(a) If to the Company:
Xxxxxxxx & Ilsley Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx & Xxxx, S.C.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
(b) If to Seller:
National City Bancorporation
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Facsimile: (612)
With a copy to:
Xxxxxx Xxxxxxx Xxxxxx & Brand
3300 Xxxxx Fargo Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
SECTION 9.3 Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliate" means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is
under common control with, the first mentioned person; including,
without limitation, any partnership or joint venture in which any
person (either alone, or through or together with any other subsidiary)
has, directly or indirectly, an interest of 5% or more;
(b) "business day" means any day other than a day on which
banks in Wisconsin are required or authorized to be closed;
(c) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or
as trustee or executor, of the power to direct or cause the direction
of the management or policies of a person, whether through the
ownership of stock or as trustee or executor, by contract or credit
arrangement or otherwise;
41
(d) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group
(as defined in Section 13(d) of the Exchange Act); and
(e) "subsidiary" or "subsidiaries" of Seller, the Company, the
Surviving Corporation, or any other person, means any corporation,
partnership, joint venture or other legal entity of which Seller, the
Corporation, the Surviving Corporation or such other person, as the
case may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, 50% or more of the stock or
other equity interests the holders of which are generally entitled to
vote for the election of the board of directors or other governing body
of such corporation or other legal entity.
SECTION 9.4 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.5 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
SECTION 9.6 Entire Agreement. This Agreement constitutes the entire
agreement of the parties and supersede all prior agreements and undertakings,
both written and oral, between the parties, or any of them, with respect to the
subject matter hereof and, except as otherwise expressly provided herein, are
not intended to confer upon any other person any rights or remedies hereunder.
SECTION 9.7 Assignment. This Agreement shall not be assigned by
operation of law or otherwise, except that the Company may assign all or any of
its rights hereunder and thereunder to any affiliate provided that no such
assignment shall relieve the assigning party of its obligations hereunder.
SECTION 9.8 Parties in Interest. This Agreement (including Annex B
hereto) shall be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, other than Section 6.4 (which
is intended to be for the benefit of the Indemnified Parties and may be enforced
by such Indemnified Parties).
SECTION 9.9 Governing Law. Except to the extent that the laws of the
State of Iowa are mandatorily applicable to the matters arising under or in
connection with this Agreement, this Agreement shall be governed by, and
construed in accordance with, the laws of the State of Wisconsin, regardless of
the laws that might otherwise govern under applicable principles of choice of
law or conflicts of law.
42
SECTION 9.10 Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
SECTION 9.11 Time is of the Essence. Time is of the essence of this
Agreement.
SECTION 9.12 Specific Performance. The parties hereto acknowledge that
monetary damages would not be a sufficient remedy for breach of this Agreement.
Therefore, upon breach of this Agreement by any party, the aggrieved party may
proceed to protect its rights and enforce this Agreement by suit in equity,
action at law or other appropriate proceeding, including an action for the
specific performance of any provision herein or any other remedy granted by law,
equity or otherwise. Any action for specific performance hereunder shall not be
deemed exclusive and may also include claims for monetary damages as may be
warranted under the circumstances. The prevailing party in any such suit, action
or other proceeding arising out of or related to this Agreement shall be
entitled to recover its costs, including attorney's fees, incurred in such suit,
action or other proceeding.
43
IN WITNESS WHEREOF, the Company and Seller have caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
NATIONAL CITY BANCORPORATION
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
XXXXXXXX & XXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Executive Officer
44
