EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
by and among
PRIVATEBANCORP, INC.,
BHB ACQUISITION CORP.
and
BLOOMFIELD HILLS BANCORP. INC.
Dated as of April 14, 2005
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TABLE OF CONTENTS
PAGE
ARTICLE I THE MERGER.................................................................................1
Section 1.1 The Merger........................................................................1
Section 1.2 Effective Time....................................................................2
Section 1.3 Effect of the Merger..............................................................2
Section 1.4 Effect on Capital Stock...........................................................2
Section 1.5 The Closing.......................................................................4
ARTICLE II EXCHANGE OF CERTIFICATES...................................................................4
Section 2.1 Buyer to Make Merger Consideration Available......................................4
Section 2.2 Exchange of Certificates..........................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BHB......................................................5
Section 3.1 Corporate Organization............................................................5
Section 3.2 Capitalization....................................................................7
Section 3.3 Authority.........................................................................7
Section 3.4 Financial Statements..............................................................7
Section 3.5 Absence of Certain Changes or Events..............................................8
Section 3.6 Undisclosed Liabilities...........................................................8
Section 3.7 Consents and Approvals............................................................9
Section 3.8 Reports...........................................................................9
Section 3.9 Broker's Fees; Other Transaction Fees............................................10
Section 3.10 Legal Proceedings................................................................10
Section 3.11 Taxes and Tax Returns............................................................10
Section 3.12 Employee Benefit Plans...........................................................11
Section 3.13 Compliance with Applicable Law...................................................14
Section 3.14 Material Contracts...............................................................14
Section 3.15 Investment Securities............................................................16
Section 3.16 Insurance........................................................................16
Section 3.17 Allowance for Loan Losses........................................................17
Section 3.18 Title to Properties; Leases......................................................17
Section 3.19 Environmental Matters............................................................18
Section 3.20 Approval Delays..................................................................20
Section 3.21 Vote Required....................................................................20
Section 3.22 Participation Loans..............................................................20
Section 3.23 Fairness Opinion.................................................................20
Section 3.24 Dissenter's Rights...............................................................20
Section 3.25 Loan Portfolio...................................................................20
Section 3.26 Interest Rate Risk Management Arrangements.......................................21
Section 3.28 Insider Interests................................................................21
Section 3.29 Antitakeover Provisions Inapplicable.............................................21
Section 3.30 Internal Controls................................................................22
Section 3.31 Accuracy of All Representations..................................................22
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER AND ACQUISITION CORP..............................22
Section 4.1 Corporate Organization...........................................................22
Section 4.2 Authority........................................................................23
Section 4.3 Consents and Approvals...........................................................23
Section 4.4 Financial Resources..............................................................23
Section 4.5 Approval Delays..................................................................23
Section 4.6 Fairness Opinion.................................................................23
ARTICLE V ADDITIONAL AGREEMENTS.....................................................................23
Section 5.1 Conduct of Business..............................................................23
Section 5.2 Negative Covenants...............................................................24
Section 5.3 Access to Information and Due Diligence..........................................26
Section 5.4 Regulatory Filings...............................................................26
Section 5.5 Reasonable Efforts...............................................................27
Section 5.6 No Conduct Inconsistent with this Agreement......................................27
Section 5.7 Board of Directors' Notices, Minutes, Etc........................................27
Section 5.8 Untrue Representations and Warranties............................................27
Section 5.9 Indemnification; Directors' and Officers' Insurance..............................27
Section 5.10 Resolution of BHB Plans..........................................................28
Section 5.11 Certain Consents.................................................................29
Section 5.12 Accounting and Other Adjustments.................................................29
Section 5.13 List of BHB Shareholders.........................................................30
Section 5.14 The Oxford Investment Group Inc. Office Usage....................................30
Section 5.15 Retention Bonuses................................................................30
Section 5.16 Financial Statements and Reports.................................................30
Section 5.17 Delivery of Supplements to Disclosure Schedules..................................30
ARTICLE VI CONDITIONS PRECEDENT......................................................................31
Section 6.1 Conditions Precedent to Obligations of Buyer and Acquisition Corp................31
Section 6.2 Conditions Precedent to Obligations of BHB.......................................32
ARTICLE VII TERMINATION, EXPENSES AND AMENDMENT.......................................................33
Section 7.1 Termination......................................................................33
Section 7.2 Effect of Termination............................................................34
Section 7.3 Amendment........................................................................34
Section 7.4 Extension; Waiver................................................................34
ARTICLE VIII GENERAL PROVISION.........................................................................34
Section 8.1 Non-Survival of Representations, Warranties and Agreements.......................34
Section 8.2 Notices..........................................................................35
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TABLE OF CONTENTS
(continued)
PAGE
Section 8.3 Interpretation...................................................................35
Section 8.4 Counterparts.....................................................................35
Section 8.5 Entire Agreement.................................................................36
Section 8.6 Governing Law....................................................................36
Section 8.7 Severability.....................................................................36
Section 8.8 Publicity........................................................................36
Section 8.9 Assignment; Third Party Beneficiaries............................................36
Section 8.10 Transaction Expenses.............................................................36
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of the 14th day of April, 2005, by and among PRIVATEBANCORP,
INC., a Delaware corporation ("Buyer"), BHB ACQUISITION CORP., a Michigan
corporation and a wholly-owned subsidiary of Buyer ("Acquisition Corp."), and
BLOOMFIELD HILLS BANCORP. INC., a Michigan corporation ("BHB").
WHEREAS, the respective Boards of Directors of the parties hereto deem
it advisable and in the best interests of the parties hereto and their
respective shareholders to consummate the Merger (as defined in Section 1.1),
upon the terms and subject to the conditions of this Agreement and have duly and
validly approved this Agreement and the transactions contemplated hereby.
WHEREAS, the holders representing a majority of the outstanding shares
of Class A Common Stock of BHB and a majority of the outstanding shares of Class
B Common Stock of BHB, each voting as a separate class (collectively, the
"Requisite Majority of Shareholders"), have approved this Agreement and the
consummation of the transactions contemplated hereby.
WHEREAS, the parties hereto desire to make certain representations,
warranties, covenants and agreements in connection with this Agreement and the
Merger.
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. At the Effective Time (as hereinafter defined)
and subject to and upon the terms and conditions of this Agreement and the
Michigan Business Corporation Act (the "Michigan Act"), Acquisition Corp. shall
merge (the "Merger") with and into BHB, the separate corporate existence of
Acquisition Corp. shall cease, and BHB shall continue as the surviving
corporation (as such, the "Surviving Corporation"), which shall be a
wholly-owned subsidiary of Buyer. Pursuant to the Merger:
(a) the Articles of Incorporation of BHB, as in effect immediately
before the Effective Time, shall be amended and restated in their entirety, from
and after the Effective Time, to read as the Articles of Incorporation of
Acquisition Corp., as in effect immediately before the Effective Time, until
thereafter amended as provided therein and under the Michigan Act;
(b) the Bylaws of Acquisition Corp., as in effect immediately before
the Effective Time, shall be, from and after the Effective Time, the Bylaws of
the Surviving Corporation, until thereafter amended as provided therein and
under the Michigan Act;
(c) the directors of Acquisition Corp. immediately before the Effective
Time shall be, from and after the Effective Time, the directors of the Surviving
Corporation to serve until their death, resignation or removal or until their
successors are duly elected and qualified; and
(d) the officers of Acquisition Corp. immediately before the Effective
Time shall be, from and after the Effective Time, the officers of the Surviving
Corporation to serve until their death, resignation or removal or until their
successors are duly elected and qualified.
Section 1.2 Effective Time. As promptly as practicable on the Closing
Date (as hereinafter defined), the parties shall cause the Merger to be
consummated by filing a Certificate of Merger (the "Certificate of Merger") with
the Michigan Department of Labor & Economic Growth, Bureau of Commercial
Services (the "Michigan Department") with respect to the Merger, in such form as
required by, and executed in accordance with, the relevant provisions of the
Michigan Act, and substantially in the form attached hereto as Exhibit A. The
Merger shall become effective at such time as the Certificate of Merger is duly
filed with the Michigan Department (such time as the Merger becomes effective
being hereinafter referred to 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 the applicable provisions of the Michigan
Act. At the Effective Time, the Surviving Corporation shall be a direct
wholly-owned subsidiary of Buyer.
Section 1.4 Effect on Capital Stock.
(a) At the Effective Time, subject to Section 2.2 hereof, by virtue of
the Merger and without any action on the part of BHB, or the holder of any
securities of BHB, each share of BHB Class A Common Stock (the "Class A Common
Stock"), and each share of BHB Class B Common Stock (the "Class B Common
Stock"), issued and outstanding immediately before the Effective Time (other
than shares cancelled pursuant to Section 1.4(c)), shall be converted into the
right to receive an amount equal to the Per Share Merger Consideration (as
defined below). All of the shares of Class A Common Stock and all of the shares
of Class B Common Stock (the Class A Common Stock and the Class B Common Stock
are collectively referred to hereinafter as the "BHB Common Stock") converted
into the right to receive the Per Share Merger Consideration pursuant to this
Article I shall no longer be outstanding, shall automatically be cancelled and
shall cease to exist as of the Effective Time, and each certificate (each an
"BHB Common Stock Certificate") previously representing any such shares of BHB
Common Stock shall thereafter represent only the right to receive the Per Share
Merger Consideration.
(b) As used herein, the following terms have the following meanings:
(i) "Per Share Merger Consideration" means a cash amount equal
to the quotient of (A) divided by (B), where (A) is the sum of (1) the
Merger Consideration (as defined below), plus (2) Per Diem Amount (as
defined below), if any, and (B) is the number of shares of BHB Common
Stock issued and outstanding at the Effective Time.
(ii) "Merger Consideration" means $64,000,000.
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(iii) "Per Diem Amount" means the product of (X) and (Y),
where (X) is the number of days elapsed in the period beginning and
including July 1, 2005 and ending on and including the day immediately
preceding the Effective Time, and (Y) is the quotient of the Closing
Adjusted Net Income (as defined below) divided by the number of days
elapsed in the period beginning January 1, 2005 and ending on the
Determination Date.
(iv) "Closing Adjusted Net Income" means the amount that is
equal to the net income of BHB for the period beginning January 1, 2005
and ending on the Determination Date, as reflected on an unaudited
income statement (the "Closing Income Statement") prepared by BHB in
conformity with GAAP (as defined below) applied on a basis consistent
with the preparation of the BHB Financial Statements (as defined
below), subject to normal audit and year-end adjustments and need not
include notes, provided further that such Closing Income Statement
shall reflect adjustments so as to exclude the effects of (i) any
accounting and other adjustments required under Section 5.12 hereof and
(ii) expenses attributable to this Agreement and the transactions
contemplated hereby. BHB shall deliver to Buyer not less than five (5)
business days prior to the Closing Date (i) the Closing Income
Statement and (ii) an unaudited balance sheet of BHB and the BHB
Subsidiaries (the "Closing Balance Sheet") prepared by BHB as of the
Determination Date in conformity with GAAP applied on a basis
consistent with the preparation of the BHB Financial Statements,
subject to normal audit and year-end adjustments and need not include
notes, provided further that such Closing Balance Sheet shall reflect
adjustments so as to exclude the effects of (i) any accounting and
other adjustments required under Section 5.12 hereof and (ii) expenses
attributable to this Agreement and the transactions contemplated
hereby.
(v) "Determination Date" means the last day of the month which
immediately precedes the month during with the Closing Date occurs.
(c) At the Effective Time, each share of BHB Common Stock (i) held by
BHB, if any, (ii) owned directly or indirectly (other than in a fiduciary
capacity), by The Private Bank, a Michigan state bank and a wholly-owned
subsidiary of BHB (the "Bank"), or any subsidiary of BHB or the Bank, or (iii)
owned by Buyer, Acquisition Corp. or any other subsidiary of Buyer (other than
in a fiduciary capacity), if any, immediately before the Effective Time, shall
be cancelled and retired and no Per Share Merger Consideration shall be paid
with respect thereto.
(d) At the Effective Time, the shares of common stock, without par
value, of Acquisition Corp. issued and outstanding immediately before the
Effective Time, and all rights in respect thereof, shall, without any action on
the part of Buyer, forthwith cease to exist and be converted into an aggregate
of 100 validly issued, fully paid and nonassessable shares of common stock of
the Surviving Corporation, without par value (the "Surviving Corporation Common
Stock"). Immediately after the Effective Time and upon surrender by Buyer of the
certificate representing the shares of the common stock of Acquisition Corp.,
the Surviving Corporation shall deliver to Buyer an appropriate certificate or
certificates representing the shares of Surviving Corporation Common Stock
created by conversion of the common stock of Acquisition Corp. owned by Buyer.
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Section 1.5 The Closing. Consummation of the transactions contemplated
by this Agreement shall take place at a closing (the "Closing") to be held upon
the satisfaction or waiver of all of the conditions to the Merger set forth
herein, which Closing shall take place at 10:00 a.m., local time, at the office
of Xxxxxx Xxxxxxx PLLC in Bloomfield Hills, Michigan on a date mutually
agreeable to the parties hereto, but in no event later than the second business
day after all of the conditions to the Merger set forth herein have been
satisfied or waived, unless the parties mutually agree to another date
(hereinafter referred to as the "Closing Date").
ARTICLE II
EXCHANGE OF CERTIFICATES
Section 2.1 Buyer to Make Merger Consideration Available. At or before
the Effective Time, Buyer and BHB shall designate LaSalle Bank, National
Association or such other third party as Buyer shall reasonably determine in its
sole discretion, as paying agent (the "Paying Agent") and shall irrevocably
deposit into trust, or shall cause to be deposited, with the Paying Agent, for
the benefit of the holders of BHB Common Stock Certificates, for payment in
accordance with Article I hereof and this Article II, an amount of cash
sufficient for payment of the aggregate Per Share Merger Consideration payable
to the holders of BHB Common Stock under Section 1.4 of this Agreement (such
cash being hereinafter referred to as the "Conversion Fund").
Section 2.2 Exchange of Certificates.
(a) On the Effective Date, Buyer shall cause the Paying Agent to make
available for personal pick up and mail to each holder of record of one or more
BHB Common Stock Certificates a letter of transmittal and instructions (the
"Transmittal") for use in effecting the surrender of the BHB Common Stock
Certificates in exchange for the Per Share Merger Consideration into which the
shares of BHB Common Stock represented by such BHB Common Stock Certificate or
Certificates shall have been converted pursuant to this Agreement. The
Transmittal form is attached hereto as Exhibit B. Upon receipt of an BHB Common
Stock Certificate for payment and cancellation to the Paying Agent, together
with such properly completed Transmittal, duly executed, the holder of such BHB
Common Stock Certificate shall be entitled to receive in exchange therefore a
bank check of the Paying Agent representing the Per Share Merger Consideration
for such holder's shares pursuant to Section 1.4 of this Agreement, and the BHB
Common Stock Certificate so surrendered shall forthwith be cancelled. Such check
shall be mailed by express mail to the address designated on the Transmittal
within three (3) days of receipt of the Transmittal. All risk of loss for
non-delivery of such check shall remain with the Buyer and Paying Agent. No
interest will be paid or accrued on any Per Share Merger Consideration payable
to a holder of BHB Common Stock Certificates.
(b) If any check is to be issued in a name other than that in which the
BHB Common Stock Certificate surrendered in exchange therefore is registered, it
shall be a condition of the issuance thereof that the BHB Common Stock
Certificate so surrendered shall be properly endorsed or accompanied by an
appropriate instrument of transfer and otherwise in proper form for transfer.
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(c) After the Effective Time, there shall be no transfers on the stock
transfer books of BHB of the shares of BHB Common Stock that were issued and
outstanding immediately before the Effective Time. If, after the Effective Time,
BHB Common Stock Certificates are presented for transfer to the Paying Agent,
they shall be cancelled and exchanged for the Per Share Merger Consideration as
provided in Section 1.4 hereof and this Article II.
(d) Any portion of the Conversion Fund that remains unclaimed by
shareholders of BHB for one (1) year after the Effective Time shall be paid to
the Surviving Corporation. Any shareholders of BHB who have not theretofore
complied with this Article II shall thereafter look only to the Surviving
Corporation for the cash consideration payable in respect of each share of BHB
Common Stock such shareholder holds as determined pursuant to this Agreement, in
each case, without any interest thereon. Notwithstanding the foregoing, none of
Buyer, BHB, the Paying Agent or any other person shall be liable to any former
holder of shares of BHB Common Stock for any amount delivered in good faith to a
public official pursuant to applicable abandoned property, escheat or similar
laws.
(e) In the event any BHB Common Stock Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such BHB Common Stock Certificate to be lost, stolen or destroyed and
providing an indemnification agreement for the benefit of the Buyer and Paying
Agent in a form reasonably determined by the Paying Agent reasonably necessary
as indemnity against any claim that may be made against it with respect to such
BHB Common Stock Certificate, the Paying Agent shall issue in exchange for such
lost, stolen or destroyed BHB Common Stock Certificate the Per Share Merger
Consideration payable in respect thereof pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BHB
Except as set forth in the "BHB Disclosure Schedules," which shall
consist of all of the agreements, lists, instruments and other documentation and
information described or referred to in this Agreement as being provided on a
specified schedule, BHB hereby represents and warrants to Buyer as follows:
Section 3.1 Corporate Organization.
(a) BHB is a corporation duly organized and validly existing under the
laws of the State of Michigan. BHB has the corporate power and authority to own
or lease all of its properties and assets and to carry on its business as it is
now being conducted, and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed or qualified would not have a Material Adverse Effect (as defined
below) on BHB. BHB is duly registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended ("BHCA"). True and complete copies of
the Articles of Incorporation and Bylaws of BHB, as in effect as of the date of
this Agreement, are attached hereto as Schedule 3.1(a) of the BHB Disclosure
Schedules. As used in this Agreement, the term "Material Adverse Effect"
5
means with respect to BHB, any effect that (1) is or is reasonably likely to be
material and adverse to the financial condition, business or results of
operations of BHB and its subsidiaries taken as a whole other than any change,
effect, event or occurrence arising out of the performance by the parties of
their obligations under this Agreement or (2) would prevent or materially impair
the ability of such person to perform its obligations under this Agreement or to
consummate the transactions contemplated hereby in accordance with the terms of
this Agreement; provided, however, that Material Adverse Effect shall not be
deemed to include the impact of (i) changes in banking and other laws of general
applicability or interpretations thereof by courts or governmental authorities,
(ii) changes in GAAP or regulatory accounting requirements applicable to banks
and their holding companies generally, (iii) this Agreement and the transactions
contemplated hereby and the announcement hereof, (iv) actions or omissions of a
party to this Agreement taken with the prior written consent of the other
parties to this Agreement, in contemplation of the transactions contemplated
hereby, (v) changes attributable or resulting from changes in general economic
conditions affecting similarly situated banks, saving institutions or their
holding companies generally and (vi) any modifications or changes to valuation
policies and practices of BHB or any of its subsidiaries in connection with the
Merger or restructuring charges, in each case taken with the prior approval of
Buyer, in connection with the Merger, in each case in accordance with GAAP.
(b) As of the date of this Agreement, the Bank is BHB's sole
wholly-owned, direct subsidiary. The Bank also conducts business under the names
"The Bank of Bloomfield Hills, The Private Bank," "The Bank of Rochester, The
Private Bank," and "The Bank of Gross Pointe, The Private Bank." The Bank has,
as its only direct or indirect subsidiaries, The Private Mortgage Company (the
"Mortgage Company") and BBH Financial Advisors, Inc. ("BBH Financial") (the
Bank, the Mortgage Company and BBH Financial are sometimes collectively referred
to herein as the "BHB Subsidiaries"). Except as set forth in Schedule 3.1(b) of
the BHB Disclosure Schedules, BHB does not own or hold any options, warrants,
calls or commitments of any character relating to, any voting or non-voting
stock or equity securities of any bank, corporation, partnership, limited
liability company, or other organization, whether incorporated or
unincorporated, other than the BHB Subsidiaries.
(c) The Bank is duly organized and validly existing as a banking
corporation under the laws of the State of Michigan. The Bank is an "insured
depository institution" as defined in the Federal Deposit Insurance Act (the
"FDI Act") and applicable regulations thereunder, the deposits of which are
insured by the Federal Deposit Insurance Corporation ("FDIC") through the Bank
Insurance Fund to the full extent permitted under applicable laws. Each of the
Mortgage Company and BBH Financial is a corporation duly organized and validly
existing under the laws of the State of Michigan. Each of the BHB Subsidiaries
(i) is duly qualified to do business and in good standing in all jurisdictions
(whether federal, state, local or foreign) where its ownership or leasing of
property or the conduct of its business requires it to be so qualified except
where the failure to be so qualified would not have a Material Adverse Effect on
BHB, and (ii) has all requisite corporate power and authority to own or lease
its properties and assets and to carry on its business as now conducted. Except
as set forth in Schedule 3.1(c) of the BHB Disclosure Schedules, the BHB
Subsidiaries do not own, or hold any options, warrants, calls or commitments of
any character relating to, any voting or non-voting stock or equity securities
of any bank, corporation, partnership, limited liability company, or other
organization, whether incorporated or unincorporated.
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Section 3.2 Capitalization.
(a) The authorized capital stock of BHB consists of (i) 10,000 shares
of Class A Common Stock, of which 310 shares are issued and outstanding; (ii)
10,000 shares of Class B Common Stock, of which 600 shares are issued and
outstanding; and (iii) 30,000 shares of preferred stock ("BHB Preferred Stock"),
of which no shares are issued and outstanding. No shares of BHB Common Stock and
no shares of BHB Preferred Stock are held in treasury. All of the issued and
outstanding shares of BHB Common Stock have been duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive rights. Except
as set forth in Schedule 3.2(a) of the BHB Disclosure Schedules, BHB does not
have and is not subject to any outstanding subscriptions, options, warrants,
calls, commitments, agreements, preemptive or other rights of any character
calling for the purchase or issuance of any shares of BHB Common Stock or BHB
Preferred Stock or any other equity securities of BHB or any securities
representing the right to purchase or otherwise receive any shares of the
capital stock of BHB, nor are there any securities, debts, obligations or rights
outstanding which are convertible into or exchangeable for shares of the capital
stock of BHB. No shares of BHB Common Stock and no shares of BHB Preferred Stock
have been reserved for issuance. The holders of Class A Common Stock and the
holders of Class B Common Stock, each voting as a separate class, are entitled
to vote on this Agreement.
(b) BHB owns, directly or indirectly, all of the issued and outstanding
shares of capital stock of the BHB Subsidiaries, free and clear of any liens,
pledges, charges, encumbrances and security interests whatsoever ("Liens"). All
of the shares of capital stock of the BHB Subsidiaries are duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive rights.
The BHB Subsidiaries are not bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character calling for the
purchase or issuance of any shares of capital stock or any other equity security
of the BHB Subsidiaries or any securities representing the right to purchase or
otherwise receive any shares of capital stock or any other equity security of
the BHB Subsidiaries.
Section 3.3 Authority. BHB has full corporate power and authority to
execute and deliver this Agreement and, subject only to regulatory approvals as
described herein, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by each of
(a) the Board of Directors of BHB and (b) the Requisite Majority of
Shareholders. No other corporate proceedings on the part of BHB are necessary to
approve this Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by BHB and
(assuming due authorization, execution and delivery by Buyer) constitutes a
valid and binding obligation of BHB, enforceable against BHB in accordance with
its terms.
Section 3.4 Financial Statements. True, correct and complete copies of
the following financial statements (collectively referred to as the "BHB
Financial Statements") are included in Schedule 3.4 of the BHB Disclosure
Schedules:
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(a) the audited Consolidated Statement of Financial Condition of BHB
for the fiscal year ended December 31, 2004 and the related Statement of Income,
Statement of Changes in Shareholders Equity, and Statement of Cash Flows for the
fiscal year then ended;
(b) the Bank's Call Report for the twelve month period ended December
31, 2004;
(c) BHB's FR-Y9LP as of December 31, 2004 as filed with the FRB (as
hereafter defined); and
(d) unaudited consolidated income statement of BHB for the period
commencing January 1, 2005 and ending March 31, 2005 and an unaudited
consolidated balance sheet as of such period end.
The financial statements described in clause (a) have been prepared in
conformity with generally accepted accounting principles ("GAAP") consistently
applied and fairly present the consolidated financial condition and results of
operations at the date and for the period presented. The financial statements
described in clauses (b) and (c) above have been prepared on a basis consistent
with past accounting practices and as required by applicable rules and
regulations. The financial statements described in clause (d) have been prepared
in conformity with GAAP (as defined below) applied on a basis consistent with
the preparation of the BHB Financial Statements described in clauses (a) through
(c) above, subject to normal audit and year-end adjustments and need not include
notes, provided further that such income statement shall reflect adjustments so
as to exclude the effects of (i) any accounting and other adjustments required
under Section 5.12 hereof and (ii) expenses attributable to this Agreement and
the transactions contemplated hereby.
Section 3.5 Absence of Certain Changes or Events.
(a) Since December 31, 2004, no event has occurred which has had a
Material Adverse Effect on BHB or, to BHB's "knowledge" (as defined below), no
event has occurred which is reasonably likely to have a Material Adverse Effect
on BHB.
(b) "BHB's knowledge", "knowledge of BHB" or words of similar effect
means the actual knowledge, after due inquiry, of any one of Xxxxxx Xxxxxx, Xxx
X. Xxxxxxxxxxx, Xx., Xxxxx X. Xxxxxxx, Xxxxxxx X. XxXxxxx, Xxxxxx X. Xxxxx or
Xxxxxx X. Xxxxx.
(c) Since December 31, 2004, BHB and each BHB Subsidiary have conducted
their respective businesses in all material respects in the ordinary and usual
course consistent with past practice and, since the date of this Agreement,
consistent with the restrictions set forth in Section 5.2.
Section 3.6 Undisclosed Liabilities. Except for those liabilities that
are fully reflected or reserved against on the audited Consolidated Statement of
Financial Condition of BHB for the fiscal year ended December 31, 2004,
liabilities disclosed in Schedule 3.6 of the BHB Disclosure Schedules,
liabilities less than $25,000 individually or in the aggregate, and liabilities
incurred in the ordinary course of business consistent with past practice, since
December 31, 2004, BHB and
8
the BHB Subsidiaries to the knowledge of BHB, have not incurred any liability of
any nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether due or to become due).
Section 3.7 Consents and Approvals. Except as set forth on Schedule 3.7
of the BHB Disclosure Schedules, no consents or approvals of or filings or
registrations with any court, administrative agency or commission or other
governmental authority or instrumentality (each a "Governmental Entity") are
necessary in connection with the execution and delivery by BHB of this Agreement
and the consummation by BHB of the Merger and the other transactions
contemplated hereby except for (a) the filing of applications with the Board of
Governors of the Federal Reserve System or the appropriate Federal Reserve Bank
(the "FRB") and the Michigan Office of Financial and Insurance Services ("OFIS")
and the approval of such applications by the FRB and OFIS (the "Regulatory
Applications"), and (b) the filing of the Certificate of Merger with the
Michigan Department under the Michigan Act.
Section 3.8 Reports. (a) BHB and each of the BHB Subsidiaries have
timely filed all reports, registrations and statements, together with any
amendments required to be made with respect thereto, that they were required to
file during the five (5) years preceding the date hereof with (i) the FRB, (ii)
the FDIC, (iii) OFIS, (iv) any state regulatory authority, and (v) any
self-regulatory organization with jurisdiction over any of the activities of BHB
or the BHB Subsidiaries (collectively "Regulatory Agencies"), and all other
reports and statements required to be filed by them, including, without
limitation, any report or statement required to be filed pursuant to the laws,
rules or regulations of the United States, any state, or any Regulatory Agency
(the "BHB Reports"), and have paid all fees and assessments due and payable in
connection therewith, except where the failure to file such report, registration
or statement or to pay such fees and assessments will not have a Material
Adverse Effect on BHB. As of their respective filing dates, each of the BHB
Reports (after giving effect to any amendments thereto), including the financial
statements, exhibits, and schedules thereto, complied in all material respects
with the applicable provisions of the statutes, rules, and regulations enforced
or promulgated by the authority with which they were filed. To the knowledge of
BHB, none of the BHB Reports contained any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading. None of BHB and the BHB Subsidiaries are subject to any
cease-and-desist or other similar order issued by, or is a party to any written
agreement, consent agreement or memorandum of understanding with, or is a party
to any commitment letter or similar undertaking to, or is subject to any order
or directive by any Regulatory Agency or other Governmental Entity that
currently restricts the conduct of its business or that relates to its capital
adequacy, compliance with laws, its credit policies, its management or its
business (each a "BHB Regulatory Agreement"), and none of BHB and the BHB
Subsidiaries have been advised during the five (5) years preceding the date
hereof by any Regulatory Agency or other Governmental Entity that it is
considering issuing or requesting any such BHB Regulatory Agreement.
(b) Except for examinations or reviews conducted by the Regulatory
Agencies in the ordinary course of the business of BHB or the BHB Subsidiaries,
no federal, state or local governmental agency, commission or other entity has
initiated any proceeding or, to the knowledge of BHB, investigation into the
business or operations of BHB or the BHB
9
Subsidiaries within the past five (5) years nor, to the knowledge of BHB, has
any such proceedings or investigation been threatened or is currently pending.
Except as disclosed in Schedule 3.8(b) of the BHB Disclosure Schedules, there is
no unresolved violation, criticism or exception noted by any Regulatory Agency
with respect to any BHB Report other than those that have not had and are not
expected to have a Material Adverse Effect on the business of BHB or the BHB
Subsidiaries that is subject to the Regulatory Agency.
Section 3.9 Broker's Fees; Other Transaction Fees. (a) Other than the
financial advisory services performed for BHB by Xxxxxxxxxxx & Co. Inc. in
connection with the preparation and delivery of the BHB Fairness Opinion (as
defined below), neither BHB nor any of the BHB Subsidiaries, nor any of their
respective shareholders, officers, directors, employees or agents, has employed
a broker or finder or incurred any liability for any financial advisory fees,
brokerage fees, commissions, or finder's fees, and no broker or finder has acted
directly or indirectly for BHB or any BHB Subsidiary in connection with this
Agreement or the transactions contemplated hereby. A copy of BHB's agreement
with Xxxxxxxxxxx & Co. Inc. is included in Schedule 3.9 of the BHB Disclosure
Schedules. The fee payable under such agreement shall not exceed $60,000 in the
aggregate. No other action has been taken by BHB or any BHB Subsidiary that
would give rise to any claim by any party hereto for a brokerage commission,
finder's fee or other like payment with respect to the transactions contemplated
by this Agreement.
(b) There are no fees and expenses paid, incurred or expected to be
incurred by BHB and the BHB Subsidiaries for legal, investment banking,
accounting and other professional services received in connection with this
Agreement or any of the transactions contemplated hereby, except (i) the fees
set forth in Section 3.9(a) above, (ii) the reasonable accounting fees of Xxxxx,
Xxxxxx and Company, LLC, and (iii) the reasonable legal fees of Xxxxxx Xxxxxxx
PLLC billed at an hourly rate.
Section 3.10 Legal Proceedings. Except as set forth on Schedule 3.10 of
the BHB Disclosure Schedules:
(a) There is no pending or, to the knowledge of BHB, threatened
litigation or other legal, administrative, arbitration or other proceeding,
claim, action or investigation of any nature against BHB or any BHB Subsidiary
or which is seeking to enjoin consummation of the transactions provided for
herein or to obtain other relief in connection with this Agreement or the
transactions contemplated hereby, having, or which would have in the future, any
such effect; and,
(b) There is no injunction, order, judgment, decree, or regulatory
restriction (other than regulatory restrictions that apply to similarly situated
bank holding companies or banks) imposed upon BHB, the BHB Subsidiaries or the
assets of BHB or the BHB Subsidiaries.
Section 3.11 Taxes and Tax Returns.
(a) BHB, each BHB Subsidiary and each other company (including any
limited liability company) or joint venture where BHB or any BHB Subsidiary owns
more than 50% of the equity interest of such company or venture measured by vote
and value (a "Tax
10
Subsidiary") have duly filed all federal, state, county, foreign and local Tax
Returns (as defined in Section 3.11(c)) required to be filed (all such Tax
Returns being accurate and complete in all material respects). All Taxes (as
defined in Section 3.11(c)) required to be shown on such Tax Returns have been
paid when due. Except as set forth on Schedule 3.11 of the BHB Disclosure
Schedules, no application for an extension of time for filing a Tax Return or
consent to any extension of the period of limitations applicable to the
assessment or collection of any Tax is in effect with respect to BHB, each BHB
Subsidiary or any Tax Subsidiary. None of BHB, each BHB Subsidiary or any Tax
Subsidiary is delinquent in the payment of any Taxes. Adequate reserves for
Taxes (including any penalties and interest) payable by BHB, each BHB Subsidiary
or any Tax Subsidiary have been made on the books of BHB and on the most recent
Financial Statements. No taxing authority has asserted any claims for, Taxes or
assessments which remain unpaid upon BHB, each BHB Subsidiary or any Tax
Subsidiary or notified BHB, BHB Subsidiaries or any Tax Subsidiary of any audit.
Neither BHB, nor any BHB Subsidiary or any Tax Subsidiary has received any
written notice of a proposed audit or proposed deficiency for any Tax which
remains unpaid. In addition, proper and accurate amounts have been withheld by
BHB, each BHB Subsidiary and each Tax Subsidiary from each of their employees,
partners, members, shareholders or holders of deposit accounts for all prior
periods in compliance in all material respects with the Tax withholding
provisions of applicable federal, state, foreign and local laws. There are no
Tax liens upon any property or assets of BHB, each BHB Subsidiary or any Tax
Subsidiary, except for liens for Taxes not yet past due.
(b) BHB has not filed any consolidated federal income tax return with
an "affiliated group" (within the meaning of Section 1504 of the Code) where BHB
was not the common parent of the group. Neither BHB, nor any BHB Subsidiary or
any Tax Subsidiary is, or has been, a party to a tax allocation agreement or
arrangement pursuant to which it has any contingent or outstanding Tax liability
to anyone other than BHB, any BHB Subsidiary or any Tax Subsidiary.
(c) As used in this Agreement, the term "Tax" or "Taxes" means any and
all taxes, charges, fees, levies or other assessments, including but not limited
to all federal, state, county, local, and foreign income, excise, gross
receipts, gross income, ad valorem, profits, gains, property, capital, sales,
transfer, use, payroll, employment, severance, withholding, duties, intangibles,
franchise, backup withholding, and other taxes, charges, levies or like
assessments together with all penalties and additions to tax and interest
thereon. "Tax Return" shall mean any report, return, document, declaration or
other information or filing required to be supplied to any taxing authority or
jurisdiction with respect to Taxes.
Section 3.12 Employee Benefit Plans.
(a) (i) BHB Plan. The term, "BHB Plan" includes each bonus, deferred
compensation, pension, retirement, profit sharing, thrift savings, employee
stock ownership, stock bonus, stock purchase, stock appreciation right,
restricted stock and stock option plan, each employment, consulting, severance
contract or recognition and retention, each other material employee benefit
plan, any applicable "change in control" or similar provisions in any plan,
program, policy, contract or arrangement, and each other benefit plan, contract,
program, policy or arrangement, oral or written, including but not limited to,
each employee benefit plan, as defined in Section 3(3) of ERISA (other than a
BHB Multiemployer Plan and including any
11
terminated BHB Plans) that currently or since January 1, 1998: (1) is or has
been maintained for directors, former directors, employees and former employees
of BHB or of any BHB Control Group member or (2) to which BHB or any BHB Control
Group member made or was required to make contributions.
(ii) BHB Qualified Plan. The term "BHB Qualified Plan" means
any BHB Plan which is an employee pension benefit plan as defined in
Section 3(2) of ERISA and which is intended to meet the qualification
requirements of Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code").
(iii) BHB Title IV Plan. The term "BHB Title IV Plan" means
any BHB Qualified Plan that is a defined benefit plan (as defined in
Section 3(35) of ERISA) and is subject to Title IV of ERISA.
(iv) BHB Multiemployer Plan. The term "BHB Multiemployer Plan"
means any employee benefit plan that is a "multiemployer plan" within
the meaning of Section 3(37) of ERISA and to which BHB or any BHB
Control Group member has or had any obligation to contribute.
(v) BHB Control Group. The term "BHB Control Group" means a
controlled group of corporations of which BHB or any of the BHB
Subsidiaries is a member within the meaning of Section 414(b) of the
Code, any group of corporations or entities under common control with
BHB or any of the BHB Subsidiaries within the meaning of Section 414(c)
of the Code, or any affiliated service group of which BHB or any of the
BHB Subsidiaries is a member within the meaning of Section 414(m) of
the Code.
(vi) ERISA. The term "ERISA" means the Employee Retirement
Income Security Act of 1974, as amended.
(b) All BHB Plans are listed in Schedule 3.12(b) of the BHB Disclosure
Schedules.
(c) (i) Each BHB Plan has been administered in material compliance with
its terms and with all filing, reporting, disclosure and other requirements of
all applicable statutes (including but not limited to ERISA and the Code),
regulations or interpretations thereunder.
(ii) Neither BHB nor any BHB Control Group member currently or
at any time maintains or maintained, or contributes or contributed to,
or is required to contribute to, any BHB Title IV Plan or any BHB
Multiemployer Plan.
(iii) Neither BHB nor any BHB Control Group member, nor any of
their respective employees, directors, or any fiduciaries, nor any BHB
Plan has been a party to or has engaged in any transaction, including
the execution and delivery of this Agreement and other agreements,
instruments and documents for which execution and delivery by BHB is
contemplated herein, in violation of Section 406(a) or (b) of ERISA or
any "prohibited transaction" (as defined in Section 4975(c)(1) of the
Code) for which
12
no exemption exists under Section 408(b) of ERISA or Section 4975(d) of
the Code or for which no administrative exemption has been granted
under Section 408(a) of ERISA.
(iv) Each BHB Qualified Plan is the subject of a favorable
Internal Revenue Service determination with respect to qualification (a
copy of the most recent favorable determination letter has been made
available to Buyer) and, except as disclosed on Schedule 3.12(c)(iv) of
the BHB Disclosure Schedules, no event has occurred which will or could
give rise to disqualification of such BHB Plan under Section 401(a) or
501(a) of the Code or to a material liability under Section 511 of the
Code.
(v) No matter is pending relating to any BHB Plan before any
court or governmental agency.
(vi) None of the payments contemplated by BHB, any BHB
Subsidiary or by or under any BHB Plan will constitute excess parachute
payments as defined in Section 280G of the Code.
(vii) All group health plans of BHB and any BHB Subsidiary
(including any plans of current and former affiliates of BHB and the
BHB Subsidiaries which must be taken into account under Section 4980B
of the Code or Sections 601-609, 701-702 and 711-713 of ERISA) have
been operated in material compliance with the group health plan
continuation coverage requirements of Section 4980B of the Code and
Section 601 of ERISA, to the extent such requirements are applicable.
(viii) There have been no acts or omissions by BHB or any BHB
Subsidiary which have given rise to or may give rise to any material
fines, penalties, taxes or related charges under Sections 502(c),
502(i), 502(l) or 4071 of ERISA or Chapter 43 of the Code, for which
BHB, the Surviving Corporation or any BHB Subsidiary may be liable.
(d) (i) Complete and correct copies of all current and prior documents,
including all amendments thereto, with respect to each BHB Plan, have been made
available to Buyer. These documents include, but are not limited to, the
following: BHB Plan documents, trust agreements, insurance contracts, annuity
contracts, summary plan descriptions, filings with governmental agencies,
investment manager and investment adviser contracts, and actuarial reports,
audit reports, financial statements and annual reports (Form 5500) for the most
recent three plan years ending before the date of this Agreement.
(ii) All contributions payable to each BHB Plan for all
benefits earned and other liabilities accrued through the date of this
Agreement, determined in accordance with the terms and conditions of
such BHB Plan, ERISA and the Code, have been paid or otherwise provided
for, and to the extent unpaid are reflected in the Consolidated
Statement of Financial Condition of BHB as of the date of this
Agreement.
(e) There is no pending or, to the knowledge of BHB, threatened
litigation or pending claim (other than individual benefit claims made in the
ordinary course) by or on behalf of or against any of the BHB Plans (or with
respect to the administration of any of such Plans) now or heretofore maintained
by BHB or any BHB Subsidiary which allege violations of
13
applicable state or federal law or the terms of the Plan which are reasonably
likely to result in any material liability on the part of BHB or any BHB
Subsidiary or any such Plan.
(f) Neither BHB nor any BHB Subsidiary is a party to or bound by any
collective bargaining agreement and, to BHB's knowledge, no labor union claims
to or is seeking to represent any employees of BHB or any BHB Subsidiary.
(g) There are no obligations of BHB or any BHB Subsidiary under any BHB
Plan or otherwise to provide severance or other post-termination compensation or
post-employment health or welfare benefits to any present or former employees,
directors or their dependents (other than rights under any BHB Plan listed on
Schedule 3.12(b) of the BHB Disclosure Schedules, or Section 4980B of the Code
or Section 601 of ERISA relating to COBRA).
Section 3.13 Compliance with Applicable Law. BHB and each of the BHB
Subsidiaries hold all material licenses, franchises, permits and authorizations
necessary for the lawful conduct of their respective businesses as now being
conducted under and pursuant to all, and have complied in all material respects
with any applicable material federal and state laws, ordinances, statutes,
orders, rules, regulations, policies and/or guidelines of any Governmental
Entity relating to BHB or the BHB Subsidiaries.
Section 3.14 Material Contracts. (a) Except as set forth in Schedule
3.14 of the BHB Disclosure Schedules, none of BHB and the BHB Subsidiaries is a
party to or bound by:
(i) any contract, arrangement, commitment or understanding
(whether written or oral) in an amount in excess of $25,000 with
respect to the employment, severance, termination or compensation of
any directors, officers or employees that is not terminable without
liability on 30 days' (or less) notice;
(ii) any contract, arrangement, commitment or understanding
(whether written or oral) which, upon the consummation of the
transactions contemplated by this Agreement, will (either alone or upon
the occurrence of any additional acts or events) result in any payment
(including, without limitation, severance, unemployment compensation,
golden parachute or otherwise) becoming due from BHB, Buyer, the
Surviving Corporation, or any of their respective subsidiaries to any
officer, director or employee thereof or to the trustee under any
"rabbi trust" or similar arrangement;
(iii) any contract, arrangement, commitment or understanding
(whether written or oral), including any stock option plan, stock
appreciation rights plan, restricted stock plan or stock purchase plan,
any of the benefits of which will be increased or be required to be
paid, or the vesting of the benefits of which will be accelerated, by
the occurrence of any of the transactions contemplated by this
Agreement, or the value of any of the benefits of which will be
calculated on the basis of the transactions contemplated by this
Agreement;
(iv) any agreement of indemnification or guaranty between BHB
or any BHB Subsidiary and any of their officers or directors;
14
(v) any agreement, contract or commitment currently in force
relating to the disposition or acquisition of any of BHB's or any BHB
Subsidiary's assets or business (other than dispositions or
acquisitions made in the ordinary course or dispositions or
acquisitions less than $100,000);
(vi) any voting agreement, voting trust, shareholder agreement
or other similar agreement which restricts the voting or disposition of
BHB Common Stock;
(vii) any partnership, limited liability company, joint
venture or other similar agreement or arrangement, or any options or
rights to acquire from any person any capital stock, voting securities
or securities convertible into or exchangeable for capital stock or
voting securities of such person;
(viii) any agreement that restricts or contains limitations on
the ability of BHB or any BHB Subsidiary to compete in any line of
business (including geographic limitations), to solicit customers or to
solicit or hire employees;
(ix) any agreement which relates to funded indebtedness owed
by BHB or any BHB Subsidiary, or the guarantee thereof (other than
contracts evidencing deposit liabilities, purchases of federal funds,
repurchase agreements, trade payables and contracts relating to
borrowings or guarantees made in the ordinary course of business);
(x) any mortgage, pledge, indenture or security agreement or
similar agreement (whether incurred, assumed, guaranteed, secured by
any asset or otherwise) constituting a lien upon the assets or
properties of BHB or any BHB Subsidiary;
(xi) any agreement for the sale or purchase of personal
property having a value individually, with respect to all sales or
purchases thereunder, in excess of $250,000, other than in the ordinary
course of business;
(xii) any agreement involving intellectual property or
relating to the provision of data processing, network communication or
other technical services to or by BHB or any BHB Subsidiary, other than
agreements entered into in the ordinary course of business;
(xiii) any lease or license of personal property (whether
tangible or intangible, including intellectual property and software),
whether as licensor or licensee involving payments or receipts in
excess of $50,000;
(xiv) contract or commitment for the performance of services
involving an amount in excess of $50,000; or
(xv) any other agreement, if the performance remaining
thereunder involves aggregate consideration to or by BHB or any BHB
Subsidiary in excess of $250,000 per annum, and such agreement is not
cancelable, without material penalty, by BHB or any BHB Subsidiary on
180 days' or less notice.
15
Each contract, arrangement, commitment or understanding of the type
described in this Section 3.14(a) is referred to herein as a "BHB Contract," and
a copy of each BHB Contract is attached to Schedule 3.14(a) of the BHB
Disclosure Schedules. To the knowledge of BHB, BHB and each of the BHB
Subsidiaries is not in violation of any BHB Contract and is unaware of and has
received no written notice of any violation of any BHB Contract by any of the
parties thereto and neither BHB nor any BHB Subsidiary has waived any right
under any BHB Contract.
(b) (i) Each BHB Contract is valid and binding on BHB or the applicable
BHB Subsidiary, as the case may be, and is in full force and effect,
(ii) To the knowledge of BHB, BHB and the BHB Subsidiaries have
each performed all obligations required to be performed by it to date
under each BHB Contract to which it is a party, except where such
noncompliance, individually or in the aggregate, would not give rise to
remedies under the applicable BHB Contract, and
(iii) To the knowledge of BHB, no event or condition exists which
constitutes or, after notice or lapse of time or both, would
constitute, a default on the part of BHB or any BHB Subsidiary under
any such BHB Contract, except where any such default would not give
rise to remedies under the applicable BHB Contract, and
(iv) Except as disclosed on Schedule 3.14 of the BHB Disclosure
Schedules, none of the BHB Contracts contain an express prohibition
against a change of control of BHB or a BHB Subsidiary (or require
written consent or notice to the other party), or contain any other
provision which would preclude Buyer from exercising and enjoying all
of the rights, remedies and obligations of BHB or a BHB Subsidiary, as
the case may be, under such BHB Contracts.
Section 3.15 Investment Securities.
(a) BHB and each of the BHB Subsidiaries has good and marketable title
to all securities held by it (except as set forth on Schedule 3.15(a) of the BHB
Disclosure Schedules or held in any fiduciary capacity), free and clear of any
Lien. Except as set forth on Schedule 3.15(a) of the BHB Disclosure Schedules,
none of the investments reflected in the BHB Financial Statements, and none of
the investments made by BHB or any BHB Subsidiary since the date of the BHB
Financial Statements, are subject to any restriction, whether contractual or
statutory, which materially impairs the ability of BHB or any BHB Subsidiary to
dispose freely of such investment at any time.
(b) All United States Treasury securities, obligations of other United
States Government agencies and corporations, obligations of States of the United
States and their political subdivisions, and other investment securities
classified as "held to maturity," "available for sale" and "trading" held by BHB
or any BHB Subsidiary, as reflected in the BHB Financial Statements were
classified and accounted for in accordance with F.A.S.B. 115 and the intentions
of management.
Section 3.16 Insurance. Schedule 3.16 of the BHB Disclosure Schedules
describes all policies of insurance in which BHB or any BHB Subsidiary is named
as a primary insured party or which otherwise relate to or cover any assets or
properties of BHB or any BHB Subsidiary
16
and copies of all such policies have previously been made available to BHB to
Buyer. BHB and each BHB Subsidiary maintain insurance with an insurer, which in
the best judgment of management of BHB is sound and reputable, on their
respective assets, and upon their respective businesses and operations, against
loss or damage, risks, hazards and liabilities of the kinds customarily insured
against by prudent corporations engaged in the same or similar businesses. BHB
and the BHB Subsidiaries maintain in effect all insurance required to be carried
by law or by any agreement by which they are bound. All material claims under
all policies of insurance maintained by BHB and each BHB Subsidiary have been
filed in due and timely fashion. Each of such policies is in full force and
effect, and the coverage provided under such policies complies with the
requirements of any contracts binding on BHB any BHB Subsidiary relating to such
assets or properties. Except as set forth in Schedule 3.16 of the BHB Disclosure
Schedules, neither BHB nor any BHB Subsidiary has received any notice of
cancellation or termination with respect to any material insurance policy
applicable to BHB or any BHB Subsidiary.
Section 3.17 Allowance for Loan Losses. The allowance for loan losses
set forth in the BHB Financial Statements is reasonably adequate in all material
respects under applicable regulatory requirements to provide for possible
losses, net of recoveries relating to loans previously charged off, on loans
outstanding (including accrued interest receivable) as of December 31, 2004, and
based on GAAP. The aggregate loan balances of the BHB Subsidiaries at such date
in excess of such allowance are, to the knowledge of BHB, collectible in
accordance with their terms.
Section 3.18 Title to Properties; Leases.
(a) Schedule 3.18 of the BHB Disclosure Schedules sets forth a list of
all real property owned or leased by BHB or any BHB Subsidiary, including but
not limited to the Bank's owned real estate, and a reasonable description of the
size, use and location thereof. Copies of all leases referenced therein are
attached to Schedule 3.18(a) of the BHB Disclosure Schedules. Except as set
forth on Schedule 3.18(a) of the BHB Disclosure Schedules, BHB and each BHB
Subsidiary, as applicable, is the owner of good and marketable title to all real
properties and is the owner of good title to all other property and assets,
tangible and intangible, that it claims or otherwise purports to own to the
extent it claims or otherwise purports to own them (including, without
limitation, all of its assets reflected in its financial statements for the
fiscal year ended December 31, 2004 or that it purports to have acquired since
December 31, 2004), free and clear of any Liens, except for (the following
collectively referred to as "Permitted Exceptions") (i) pledges and liens given
to secure deposits and other banking liabilities arising in the ordinary course
of business, (ii) liens for current taxes not yet due and payable, (iii) all
easements, covenants, conditions, assignments, defects, restrictions,
exceptions, reservations and other encumbrances, which do not materially
interfere with the use or operation of the property as the same is being
currently used and operated, or render title to any material portion of any
material asset unmarketable, (iv) all leases, subleases and any memoranda
thereof and any non-disturbance agreements with tenants, subtenants or other
occupants of any property as reflected on Schedule 3.18(a) of the BHB Disclosure
Schedules or (v) any liens, encumbrances, objections or other matters which are
caused or created by or on behalf of Buyer or the Surviving Corporation.
17
(b) Each lease under which BHB or any BHB Subsidiary is the lessee of
any real or personal property is and will be, upon consummation of the Merger,
in full force and effect, and BHB or the applicable BHB Subsidiary has been in
peaceable possession of the property covered thereby since the commencement of
the original term of such lease. Except as set forth in Schedule 3.18(b) of the
BHB Disclosure Schedules, no right of approval or consent on the part of the
lessor under any such lease exists or will be required to be obtained in
connection with consummation of the transactions contemplated by this Agreement.
No waiver, indulgence or postponement of BHB or any BHB Subsidiary's obligations
under any such lease has been granted by the lessor thereunder, or of such
lessor's obligations by BHB or the applicable BHB Subsidiary and neither BHB nor
any BHB Subsidiary nor, to the knowledge of BHB, the lessor under any such lease
has violated, in any material respect, any of the terms or conditions of such
lease, and all of the material covenants to be performed by BHB or any BHB
Subsidiary and the lessor as of the date hereof have been fully performed in all
material respects.
Section 3.19 Environmental Matters. (a) Except as set forth in Schedule
3.19 of the BHB Disclosure Schedules, to BHB's knowledge:
(i) BHB and each BHB Subsidiary have obtained all licenses,
permits, authorizations, approvals and consents required under any
applicable Environmental Law in respect of its business or operations
("Environmental Permits"). Each of such Environmental Permits is in
full force and effect and BHB and each BHB Subsidiary is in compliance
with the terms and conditions of all such Environmental Permits and
with any applicable Environmental Law.
(ii) Neither BHB nor any BHB Subsidiary has received oral or
written notice of proceedings, claims or losses related to alleged
violations of any Environmental Law relating to: (i) any property
owned, occupied or leased by BHB or any BHB Subsidiary or operations
thereon; (ii) disposal or shipments of Hazardous Substances from any
property owned, occupied or leased by BHB or any BHB Subsidiary; or
(iii) the presence, discharge, Release or disposal of Hazardous
Substances on any property owned, occupied or leased by BHB or any BHB
Subsidiary, or any property adjoining or adjacent to any property
owned, occupied or leased by BHB or any BHB Subsidiary.
(iii) Neither BHB nor any BHB Subsidiary has received notice
as a potentially responsible party for any facility, site or location
pursuant to CERCLA or other similar Environmental Law relating to any
property owned, occupied or leased by BHB or any BHB Subsidiary or
business or operations related thereto.
(iv) No oral or written notification of a Release of a
Hazardous Substances has been filed by or on behalf of BHB or BHB
Subsidiary and BHB has received no written or oral notice that any site
or facility now or previously owned, operated, or leased by BHB or any
BHB Subsidiary is listed or proposed for listing on the National
Priorities List promulgated pursuant to CERCLA, or on any similar State
or local list of sites requiring investigation or clean-up.
(v) BHB and every BHB Subsidiary are and have been in
compliance with all applicable limitations, restrictions, conditions,
standards, prohibitions,
18
requirements and obligations established under the requirements of
Environmental Law relating to any property owned, occupied or leased by
BHB or any BHB Subsidiary, and BHB business or operations.
(vi) Neither BHB nor any BHB Subsidiary has ever caused any
Hazardous Substances (above levels that exceed remediation standards
based on regulations, guidance or risk-based criteria or Environmental
Law warranting studies or remediation) to be disposed onto or into
soils or groundwater of any property owned, occupied or leased by BHB
or any BHB Subsidiary which constitute a violation of any Environmental
Law.
(vii) There are no underground storage tanks, active or
abandoned, on or under any property owned, occupied or leased by BHB or
any BHB Subsidiary. Any underground storage tanks, previously active or
abandoned, on or under any property owned, occupied or leased by BHB or
any BHB Subsidiary have been removed together with any associated
contaminated media in accordance with applicable requirements at the
time of such removal.
(viii) Neither BHB nor any BHB Subsidiary has arranged for the
transportation, treatment or disposal of any waste from any property
owned, occupied or leased by BHB or any BHB Subsidiary or in connection
or related to BHB business or operations that was disposed of, Released
or treated at any site listed on any federal CERCLA or state list or
other lists of hazardous substance sites.
(b) As used herein, the following terms shall have the following
meanings:
(i) "Environmental Law" shall mean any and all federal,
international, state or local statutes, laws, regulations, ordinances,
orders, policies, or decrees and the like, whether now existing or
subsequently enacted or amended, relating to public health or safety,
worker health or safety, pollution or protection of human health or the
environment, including natural resources, including but not limited to
the Clean Air Act, 42 U.S.C. ss. 7401 et seq., the Clean Water Act, 33
U.S.C. ss. 1251 et seq., the Resource Conservation Recovery Act
("RCRA"), 42 U.S.C. ss. 6901 et seq., the Toxic Substances Control Act,
15 U.S.C. ss. 2601 et seq., and the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. ss. 9601
et seq. and any similar or implementing state or local law, or any
common law, which governs: (a) the existence, clean-up, removal and/or
remedy of contamination or threat of contamination on or about real
property; (b) the emission, discharge, Release or threatened release,
of Hazardous Substances or contaminants into the environment; (c) the
control of Hazardous Substances or contaminants; or (d) the use,
generation, or transport, treatment, storage, disposal, removal,
recycling, handling, or recovery of Hazardous Substances.
(ii) "Hazardous Substances" shall mean any substances or
substance: (a) which is or becomes defined as a "hazardous substance",
"pollutant", "contaminant", "hazardous Substances", "hazardous waste",
"extremely hazardous waste", "restricted hazardous waste", "infectious
waste", "toxic substance" or any other formulation intended to define,
list or classify substances by reason of deleterious property, such as
19
ignitability, corrosivity, reactivity, carcinogenicity, toxicity,
reproductive toxicity, "TCLP Toxicity", or "EP Toxicity" or words of
similar import or effect, under or pursuant to CERCLA, or other
Environmental Law, and amendments thereto and regulations promulgated
thereunder; (b) containing gasoline, oil, diesel fuel or other
petroleum products, or fractions thereof; (c) which is or becomes
defined as a "hazardous waste" pursuant to RCRA and amendments thereto
and regulations promulgated thereunder; (d) containing polychlorinated
biphenyls; (e) containing asbestos in any form that is or could become
friable; (f) which is radioactive; (g) which is biologically hazardous;
(h) the presence of which is regulated by or subject to, or requires
investigation or remediation under, any federal, international, state,
or local statute, regulation, ordinance, policy or other Environmental
Law; (i) which is defined as a "hazardous waste", "hazardous
substance", "pollutant" or "contaminant" or other such term used to
defined a substance having an adverse affect on the environment under
Environmental Laws; or (j) any toxic, explosive, dangerous, corrosive
or otherwise hazardous substance, substances or waste, which is
regulated by any federal, international, state or local governmental
authority.
(iii) "Release" shall mean any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, ejecting, injecting,
escaping, leaching, migrating, dumping or disposing into the indoor or
outdoor environment, including without limitation the abandonment or
discarding or disposal of barrels, drums, containers, tanks and other
receptacles containing or previously containing any Hazardous
Substances, and shall include threatened release.
Section 3.20 Approval Delays. BHB knows of no reason why any of the
regulatory approvals referenced in Section 6.1(c) and Section 6.2(c) may be
denied or unduly delayed.
Section 3.21 Vote Required. The approval of this Agreement by the
Requisite Majority of Shareholders is the only vote of the holders of any class
or series of the capital stock of BHB required for the transactions contemplated
by this Agreement. On or prior to the date hereof, the Requisite Majority of
Shareholders approved this Agreement and the transactions contemplated herein,
and no further vote or other action of the shareholders is required with respect
thereto.
Section 3.22 Participation Loans. Except as set forth in Schedule 3.22
of the BHB Disclosure Schedules, no BHB Subsidiary has any participation loans
outstanding.
Section 3.23 Fairness Opinion. BHB and its shareholders have received a
written opinion from Xxxxxxxxxxx & Co. Inc. (the "BHB Fairness Opinion"), dated
as of the date hereof, to the effect that as of such date, the Per Share Merger
Consideration is fair to BHB and its shareholders from a financial point of
view. BHB has delivered to Buyer a copy of such opinion.
Section 3.24 Dissenter's Rights. BHB has taken no action, and there
exists no situation, which would permit holders of BHB Common Stock to exercise
"dissenters rights" pursuant to Section 762 of the Michigan Act.
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Section 3.25 Loan Portfolio. (a) All loans shown in the BHB Financial
Statements, or which were entered into after December 31, 2004, but before the
Closing Date, were and will be made in all material respects for good, valuable
and adequate consideration in the ordinary course of the business of BHB or any
BHB Subsidiary, in accordance in all material respects with sound banking
practices, and to the knowledge of BHB are not subject to any material defenses,
setoffs or counterclaims, including without limitation any such as are afforded
by usury or truth in lending laws. The notes or other evidences of indebtedness
evidencing such loans and all forms of pledges, mortgages and other collateral
documents and security agreements are, and will be, enforceable, valid, true and
genuine and what they purport to be, except to the extent that the
enforceability thereof may be limited by (i) applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws from time to
time in effect affecting generally the enforcement of creditors' rights and
remedies and (ii) general principles of equity. BHB and the BHB Subsidiaries
have not sold, purchased or entered into any loan participation arrangement
except where such participation is on a pro rata basis according to the
respective contributions of the participants to such loan amount. BHB has no
knowledge that any condition of property in which BHB or any BHB Subsidiary has
an interest as collateral to secure a loan violates the Environmental Laws
(defined in Section 3.19) or obligates BHB or any BHB Subsidiary or the owner or
operator of such property to remedy, stabilize, neutralize or otherwise alter
the environmental condition of such property.
(b) Except as set forth in Schedule 3.25(b) of the BHB Disclosure
Schedule, none of BHB or any BHB Subsidiary had any loan in excess of $10,000
that has been classified by regulatory examiners or management of BHB or the BHB
Subsidiaries as "Substandard," "Doubtful" or "Loss" or in excess of $10,000 that
has been identified by accountants or auditors (internal or external) as having
a significant risk of uncollectability. As of the date hereof, the most recent
loan watch list of BHB or any BHB Subsidiary and a list of all loans in excess
of $10,000 that BHB or any BHB Subsidiary has determined to be ninety (90) days
or more past due with respect to principal or interest payments or has placed on
nonaccrual status are set forth in Schedule 3.25(b) of the BHB Disclosure
Schedules.
Section 3.26 Interest Rate Risk Management Arrangements. Except as set
forth on Schedule 3.26 of the BHB Disclosure Schedules, neither BHB nor any BHB
Subsidiary is a party to any, nor is any property bound by, any interest rate
swaps, caps, floors and option agreements or other interest rate risk management
arrangements.
Section 3.27 Indemnification. To the knowledge of BHB, no action or
failure to take action by any director, officer, employee or agent of BHB or
each BHB Subsidiary has occurred which would give rise to a claim by any such
person for indemnification from BHB or any BHB Subsidiary under the corporate
indemnification provisions of BHB or any BHB Subsidiary in effect on the date of
this Agreement.
Section 3.28 Insider Interests. All outstanding loans and other
contractual arrangements (including deposit relationships) between BHB or any
BHB Subsidiary and any officer, director or employee of BHB or any BHB
Subsidiary conform to the applicable rules and regulations and requirements of
all applicable regulatory agencies, which were in effect when such loans and
other contractual arrangements were entered into. Except as set forth on
Schedule 3.28 of the BHB Disclosure Schedules, no officer, director or employee
of BHB or any
21
BHB Subsidiary has any material interest in any property, real or personal,
tangible or intangible, used in or pertaining to the business of BHB or any BHB
Subsidiary.
Section 3.29 Antitakeover Provisions Inapplicable. No "business
combination," "moratorium," "control share" or other state antitakeover statute
or regulation, nor any provision in BHB's Certificate of Incorporation or
By-laws, (i) prohibits or restricts BHB's ability to perform its obligations
under this Agreement, or its ability to consummate the transactions contemplated
hereby and thereby, (ii) would have the effect of invalidating or voiding this
Agreement, or any provision hereof or thereof, or (iii) would subject Buyer to
any impediment or condition in connection with the exercise of any of its rights
under this Agreement.
Section 3.30 Internal Controls. (a) The management of BHB has designed
disclosure controls and procedures to ensure that material information relating
to BHB and the BHB Subsidiaries is made known to the management of BHB by others
within BHB and the BHB Subsidiaries. To BHB's knowledge, there are no
significant deficiencies or material weaknesses in the design or operation of
internal controls which could adversely affect the ability of BHB to record,
process, summarize and report financial data; and there has been no fraud,
whether or not material, that involves management or other employees who have a
significant role in BHB's internal controls. BHB and each BHB Subsidiary
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(b) Neither BHB, nor, to BHB's knowledge, any employee of BHB or the
BHB Subsidiaries has received or otherwise had or obtained knowledge of any
complaint, allegation, assertion or claim, whether written or oral, regarding
the accounting or auditing practices, procedures, methodologies or methods of
BHB or the BHB Subsidiaries, insofar as it relates to BHB's or the BHB
Subsidiaries' businesses or BHB's internal accounting controls, including any
complaint, allegation, assertion or claim that BHB or the BHB Subsidiaries has
engaged in questionable accounting or auditing practices insofar as it relates
to BHB's or the BHB Subsidiaries' businesses.
Section 3.31 Accuracy of All Representations. The representations and
warranties made by BHB in this Agreement do not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements contained in such representations and warranties not misleading.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND ACQUISITION CORP.
Buyer represents and warrants to BHB as follows:
Section 4.1 Corporate Organization. Buyer is a corporation duly
organized and validly existing under the laws of the State of Delaware.
Acquisition Corp. is a corporation duly organized and validly existing under the
laws of the State of Michigan. Each of Buyer and Acquisition Corp. has the
corporate power and authority to own or lease all of its properties and assets
and to carry on its business as it is now being conducted. Buyer is duly
registered as a bank holding company under the BHCA.
Section 4.2 Authority. Each of Buyer and Acquisition Corp. has full
corporate power and authority to execute and deliver this Agreement and, subject
to regulatory approvals, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by the
Board of Directors of each of Buyer and Acquisition Corp., and Buyer, as the
owner of all of the outstanding shares of capital stock of Acquisition Corp.,
has caused this Agreement and the Merger to be approved in accordance with the
Michigan Act. No other corporate proceedings on the part of Buyer or Acquisition
Corp. are necessary to approve this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by each of Buyer and Acquisition Corp. and, assuming due
authorization, execution and delivery by BHB, constitutes a valid and binding
obligation of each of Buyer and Acquisition Corp., enforceable against each of
Buyer and Acquisition Corp. in accordance with its terms.
Section 4.3 Consents and Approvals. No consents or approvals of or
filings or registrations with any Governmental Entity or with any third party
are necessary in connection with the execution and delivery by each of Buyer and
Acquisition Corp. of this Agreement and the consummation by Acquisition Corp. of
the Merger and the other transactions contemplated hereby except for (a) the
filing of the Regulatory Applications and the approval of the Regulatory
Applications, and (b) the filing of the Certificate of Merger with the Michigan
Department under the Michigan Act.
Section 4.4 Financial Resources. Buyer has the financial wherewithal,
whether by using its internal funds, external financing, or both, to perform its
obligations under this Agreement. Buyer and its subsidiaries comply in all
material respects with applicable capital and debt criteria of each Regulatory
Agency having jurisdiction over them.
Section 4.5 Approval Delays. Buyer knows of no reason why any of the
regulatory approvals referred to in Section 6.1(c) and Section 6.2(c) should be
denied or unduly delayed.
Section 4.6 Fairness Opinion. Buyer has received an opinion from
Xxxxxx, Xxxxxxxx & Company Incorporated, dated as of the date of this Agreement,
to the effect that as of such date the Per Share Merger Consideration is fair to
Buyer's stockholders from a financial point of view.
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ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Conduct of Business. Between the date hereof and the
Closing Date, BHB and each of the BHB Subsidiaries shall conduct their
respective businesses and shall cause their subsidiaries to conduct their
businesses in the usual and ordinary course consistent in all material respects
with prudent banking practices.
Section 5.2 Negative Covenants. Between the date hereof and the Closing
Date, and subject to the provisions of Section 5.12 of this Agreement, without
the prior written consent of Buyer, which consent shall not be unreasonably
withheld:
(a) BHB shall, and shall cause each BHB Subsidiary to, make no changes
in its respective charters or bylaws except for any changes required by
applicable law or regulation;
(b) BHB shall, and shall cause each BHB Subsidiary to, not issue any
additional shares of BHB Common Stock or other equity securities or any
securities which are convertible into shares of capital stock of BHB or the BHB
Subsidiaries or grant any rights, options or similar agreements with respect
thereto or permit the imposition of any Lien on any shares of BHB Common Stock
by BHB or any BHB Subsidiary;
(c) BHB shall, and shall cause each BHB Subsidiary to, not grant any
increase in the compensation of its directors, officers or employees or pay any
bonuses to any of its directors, officers or employees;
(d) BHB shall, and shall cause each BHB Subsidiary to, make no loan for
$3 million or more or, if less, the Bank's legal lending limit net of
participations;
(e) BHB shall not declare or pay any stock dividend, cash dividend or
other similar distribution other than scheduled interest payments on BHB's
floating rate junior subordinated deferrable interest debentures due 2034;
(f) BHB shall, and shall cause each BHB Subsidiary to use its
reasonable efforts to maintain its present insurance coverage in respect to
their respective properties and businesses;
(g) BHB shall, and shall cause each BHB Subsidiary to, make no
significant changes in the general nature of the business conducted by BHB and
the BHB Subsidiaries, including but not limited to the investment or use of
their assets, the liabilities they incur, or the facilities they operate;
(h) BHB shall, and shall cause each BHB Subsidiary to, not take any
action that would result in an amendment, modification, termination, partial
termination, curtailment, discontinuance or merger into another plan or trust,
of any BHB Plan, or adopt any new BHB Plan, except as contemplated by this
Agreement;
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(i) BHB shall, and shall cause each BHB Subsidiary and each Tax
Subsidiary to, timely file all required Tax Returns with all applicable taxing
authorities and pay all Taxes due;
(j) except as already reflected in the BHB Financial Statements
referred to in Section 3.4 of this Agreement, BHB shall, and shall cause each
BHB Subsidiary to, not make any expenditure for fixed assets in excess of
$50,000 for any single item, or $100,000 in the aggregate, or enter into any
lease of fixed assets, if the monthly rental payment under such lease exceeds
$2,500;
(k) BHB shall, and shall cause each BHB Subsidiary to, not incur any
liabilities or obligations, make any commitments or disbursements, acquire or
dispose of any property or asset, dispose of real estate owned, make any
contract or agreement, or engage in any transaction, except in the ordinary
course consistent in all material respects with prudent banking practices;
(l) BHB shall, and shall cause each BHB Subsidiary to, not do or fail
to do anything that will cause a material breach of, or material default under,
any material contract, agreement, commitment, obligation, appointment, plan,
trust or other arrangement to which BHB or any BHB Subsidiary is a party or by
which BHB or any BHB Subsidiary is otherwise bound that would give rise to
remedies to other parties to such agreement;
(m) BHB shall, and shall cause each BHB Subsidiary to, make no changes
in its accounting procedures, methods, policies or practices or the manner in
which it conducts its businesses and maintains its records unless required by
applicable law or regulation;
(n) BHB shall, and shall cause each BHB Subsidiary to, comply with all
material laws applicable to the conduct of its business;
(o) BHB shall, and shall cause each BHB Subsidiary to, use its
reasonable efforts to preserve its business organization intact, to keep
available the services of its present officers and employees and to preserve the
goodwill of its customers and others having business relations with it;
(p) BHB shall, and shall cause each BHB Subsidiary to, not make any
borrowings, except for borrowings of Fed Funds and borrowings from the Federal
Home Loan Bank utilized in the ordinary course of business;
(q) BHB shall, and shall cause each BHB Subsidiary to, not nominate or
appoint any new directors or executive officers of BHB or any BHB Subsidiary, as
the case may be, except for replacements of existing directors or executive
officers;
(r) Except as required by applicable law or regulation, BHB (i) will
not, and will not permit any BHB Subsidiary to, implement or adopt any material
change in its interest rate and other risk management policies, procedures or
practices, and (ii) will, and will cause each BHB Subsidiary to, follow its
existing policies and practices with respect to managing its exposure to
interest rate and other risk and to use commercially reasonable means to avoid
any material increase in its aggregate exposure to interest risk;
25
(s) Neither BHB, nor any BHB Subsidiary, will file any application to
close, open or relocate operations from their existing locations; and
(t) Neither BHB, nor any BHB Subsidiary, will settle any litigation or
claims against them unless settlement does not require BHB or any BHB Subsidiary
to pay any monies in excess of $25,000, incur any obligation or admit any
wrongdoing or liability.
Section 5.3 Access to Information and Due Diligence.
(a) Upon reasonable notice and subject to applicable laws relating to
the exchange of information and privacy rights, BHB shall, and shall cause each
BHB Subsidiary to, afford to the officers, employees, accountants, counsel and
other representatives of Buyer, access, during normal business hours during the
period before the Effective Time, to its employees, properties, books,
contracts, commitments and records and, during such period, BHB shall, and shall
cause each BHB Subsidiary to, make available to Buyer (i) a copy of each report,
schedule, registration statement and other document filed or received by it
during such period pursuant to the requirements of federal or state securities
laws or federal or state banking, insurance or similar laws relating to BHB and
the BHB Subsidiaries, and (ii) all other information concerning its business,
properties and personnel as Buyer may reasonably request; provided, however, the
activities of Buyer pursuant to this Section shall be carried out in a manner
that does not unreasonably interfere with the conduct of the business of BHB and
the BHB Subsidiaries. Neither BHB nor any BHB Subsidiary shall be required to
provide access to or to disclose information where such access or disclosure
would (A) violate or prejudice the rights of BHB's customers or employees, or
contravene any law, rule, regulation, order, judgment, decree, fiduciary duty or
binding agreement entered into before the date of this Agreement, or (B) impair
any attorney-client privilege of the disclosing party. The parties hereto shall
use their reasonable efforts to make appropriate substitute disclosure
arrangements under circumstances in which the restrictions of the preceding
sentence apply.
(b) Buyer and Acquisition Corp. and their respective officers,
directors, employees, advisors and representatives shall hold all information
furnished by or on behalf of BHB or the BHB Subsidiaries or their
representatives pursuant to Section 5.3(a) in confidence and, if the
transactions contemplated hereby shall not take place, shall immediately return
all documents containing any information concerning the properties, business and
assets of such parties that may have been obtained in the course of negotiations
or examination of the affairs of BHB or the BHB Subsidiaries either before or
after the execution of this Agreement (other than such information as shall be
in the public domain or otherwise ascertainable from public sources) and shall
destroy any information, analyses or the like derived from such confidential
information and provide a certificate signed by an executive officer of Buyer
attesting to such destruction. Buyer shall use such information solely for the
purpose of conducting business, legal and financial reviews of the BHB and for
such other purposes as may be related to this Agreement.
(c) Buyer shall promptly notify BHB if Buyer has determined that any
material information obtained by it during the course of any due diligence
conducted by Buyer or its representatives after the date of this Agreement in
accordance with this Section 5.3 is materially inconsistent with any
representation or warranty made by BHB under this Agreement.
26
Section 5.4 Regulatory Filings. Buyer, at its sole cost and expense and
as soon as is reasonably practical, but in no event later than the 30th day
following the date of this Agreement, shall make all appropriate filings
necessary to obtain the regulatory approvals referred to in Section 6.1(c)
hereof, and BHB will cooperate fully in the process of obtaining all such
approvals.
Section 5.5 Reasonable Efforts. The parties to this Agreement agree to
use their reasonable efforts in good faith to satisfy the various conditions to
Closing and to consummate the Merger as soon as practicable. None of the parties
hereto shall intentionally take or intentionally permit to be taken any action
that would be in breach of the terms or provisions of this Agreement or that
would cause any of the representations and warranties contained herein to be or
to become untrue.
Section 5.6 No Conduct Inconsistent with this Agreement. BHB agrees
that it shall not, nor shall it encourage or authorize any individual,
corporation or other entity to, during the term of this Agreement, (i) solicit,
encourage or authorize any individual, corporation or other entity to solicit
from any third party any inquiries or proposals relating to the disposition of
its business or assets, or the acquisition of its capital stock, or the merger
of it or any BHB Subsidiary with any corporation or other entity other than as
provided by this Agreement except pursuant to a written direction from a
regulatory authority; or (ii) negotiate with or entertain any proposal from any
other person for any such transaction wherein the business, assets or capital
stock of it or any BHB Subsidiary would be acquired, directly or indirectly, by
any party other than as provided in this Agreement. BHB shall promptly (i)
reject in writing any such proposal and (ii) notify Buyer of all of the relevant
details relating to all inquiries and proposals that it may receive after the
date hereof relating to any proposed disposition of its business or assets, or
the acquisition of its capital stock, or the merger of it or any BHB Subsidiary
with any corporation or other entity other than as provided by this Agreement
and shall keep Buyer informed of the status and details of any such inquiry or
proposal.
Section 5.7 Board of Directors' Notices, Minutes, Etc. BHB shall give
reasonable notice to Buyer of all meetings of the Board of Directors and Board
committees of BHB and each BHB Subsidiary and the agenda, if any, for or
business to be discussed at such meeting and shall afford Buyer an opportunity
to have a representative present at each BHB Subsidiary's Board of Directors
meeting; provided, however, such representative can be excluded from privileged
discussions. BHB shall transmit to Buyer, promptly, copies of all notices,
minutes, consents and other materials that BHB or any BHB Subsidiary provides to
its directors to the extent permissible under law, other than materials relating
to any proposed acquisition of BHB or the BHB Subsidiaries. Buyer agrees to hold
in confidence and trust and to act in a fiduciary manner with respect to such
information.
Section 5.8 Untrue Representations and Warranties. During the term of
this Agreement, if a party hereto becomes aware of any facts or of the
occurrence or impending occurrence of any event that would cause one or more of
such party's representations and warranties contained in this Agreement to be or
to become untrue as of the Closing Date, then such party shall immediately give
detailed written notice thereof to the other party.
27
Section 5.9 Indemnification; Directors' and Officers' Insurance. From
and after the Effective Time, Buyer shall cause the Surviving Corporation and
any successor to fulfill and honor in all respects the obligations of BHB and
each BHB Subsidiary pursuant to any indemnification agreements for the benefit
of directors and officers existing prior to the date hereof. Furthermore, for a
period following the Effective Time during which any claim could be asserted,
Buyer agrees to indemnify and hold harmless those directors and officers of BHB
and each BHB Subsidiary entitled to indemnification under, and to the fullest
extent permitted by, the charters and bylaws of BHB and the BHB Subsidiaries as
they existed immediately prior to the Effective Time and as if the charters and
bylaws were still in effect without amendment; provided, however, that all
rights to indemnification in respect of any claim asserted or made within such
period shall continue until the final disposition of such claim. Buyer shall
also acquire a tail coverage for directors and officers indemnification
insurance at not less than the current coverage levels maintained by BHB for a
term of five (5) years following the Effective Time; provided, however, that
Buyer shall not be required to pay a premium amount in excess of 150% the most
recent annual premium paid by BHB.
Section 5.10 Resolution of BHB Plans. BHB and Buyer shall cooperate in
effecting the following treatment of the BHB Plans, except as mutually agreed
upon by Buyer and BHB prior to the Effective Time:
(a) At the Effective Time, Buyer (or a Buyer Subsidiary) shall be
substituted for BHB or a BHB Subsidiary as the sponsoring employer under those
BHB Plans with respect to which BHB or a BHB Subsidiary is a sponsoring employer
immediately prior to the Effective Time, and shall assume and be vested with all
of the powers, rights, duties, obligations and liabilities previously vested in
BHB or a BHB Subsidiary with respect to each such plan. Except as otherwise
provided herein, each such plan and any BHB Plan sponsored by BHB or a BHB
Subsidiary shall be continued in effect by Buyer or any applicable Buyer
Subsidiary after the Effective Time without a termination or discontinuance
thereof as a result of the Merger, subject to the power reserved to Buyer or any
applicable Buyer Subsidiary under each such plan to subsequently amend or
terminate the plan, which amendments or terminations shall comply with
applicable law. BHB and Buyer will use all reasonable efforts (i) to effect said
substitutions and assumptions, and take such other actions contemplated under
this Agreement, and (ii) to amend such plans as to the extent necessary to
provide for said substitutions and assumptions, and such other actions
contemplated under this Agreement.
(b) Except as contemplated in any Employment Agreement described below,
at or as promptly as practicable after the Effective Time, and in no event later
than January 1, 2006 provided such date is after the Closing Date, as Buyer
shall reasonably determine, Buyer shall provide, or cause any Buyer Subsidiary
to provide, to each employee of BHB and each BHB Subsidiary as of the Effective
Time ("BHB Employees") the opportunity to participate in each employee benefit
plan and program maintained by Buyer or the Buyer Subsidiaries for similarly
situated employees (the "Buyer Benefit Plans"); provided, however, that with
respect to such Buyer Benefit Plans, BHB Employees shall be given credit for
service with BHB and each BHB Subsidiary in determining eligibility for and
vesting in benefits thereunder, but not for purposes of benefit accrual;
provided, further, that BHB Employees shall not be subject to any waiting
periods or pre-existing condition exclusions under the Buyer Benefit Plans to
the extent that such periods are longer or restrictions impose a greater
limitation than the periods or
28
limitations imposed under the BHB Plans; provided, further, that to the extent
that the initial period of coverage for BHB Employees under any Buyer Benefit
Plan that is an "employee welfare benefit plan" as defined in Section 3(1) of
ERISA is not a full 12-month period of coverage, BHB Employees shall be given
credit under the applicable Buyer Benefit Plans for any deductibles and
co-insurance payments made by such BHB Employees under the BHB Plans during the
balance of such 12-month period of coverage; provided, further, that BHB
Employees shall receive any contribution to the BHB Qualified Plans for the
portion of the plan years during which such BHB Qualified Plans are maintained
by BHB or Buyer. Nothing in the preceding sentence shall obligate Buyer to
provide or cause to be provided any benefits duplicative of those provided under
any BHB Plan continued pursuant to subparagraph (a) above, including, but not
limited to, extending participation in any Buyer Benefit Plan which is an
"employee pension benefit plan" under ERISA with respect to any year during
which allocations are made to BHB Employees under the BHB Qualified Plans.
Except as otherwise provided in this Agreement, the power of Buyer or any Buyer
Subsidiary to amend or terminate any benefit plan or program, including any BHB
Plan, shall not be altered or affected. Moreover, this Agreement shall not
confer upon any BHB Employee any rights or remedies hereunder and shall not
constitute a contract of employment or create the rights, to be retained or
otherwise, in employment with Buyer or any Buyer Subsidiary.
(c) Prior to or concurrently with the Effective Time, Buyer shall have
offered employment agreements (the "Employment Agreements") to Xxxxx X. Xxxxxxx,
Xxxxxx X. Xxxxx and Xxxxxxx X. XxXxxxx, substantially in the form attached
hereto as Exhibits C-1, C-2 and C-3, respectively.
(d) On or about January 1, 2006 (provided such date is at least sixty
(60) days after the Closing Date), Buyer shall merge the BHB Qualified Plan
which is a defined contribution plan into a similar Buyer Benefit Plan in
accordance with Code Section 414(l) or may freeze such BHB Qualified Plan and
extend participation in such Buyer Benefit Plan as of such date.
Section 5.11 Certain Consents. In the event of a request by BHB for
written consent from Buyer for purposes of Sections 5.2 hereof, Buyer shall use
reasonable efforts to respond to such request promptly and BHB shall be entitled
to rely, for purposes of any of such section, on a written or oral consent given
on behalf of Buyer by the Chief Executive Officer or Chief Financial Officer of
Buyer.
Section 5.12 Accounting and Other Adjustments. Prior to the Effective
Time, BHB agrees that it shall, and shall cause each BHB Subsidiary to: (a) make
any accounting adjustments or entries to its books of account and other
financial records; (b) make additional provisions to any allowance for loan
losses; (c) sell or transfer any investment securities held by it; (d)
charge-off any loan or lease; (e) create any new reserve account or make
additional provisions to any other existing reserve account; (f) make changes in
any accounting method; (g) accelerate, defer or accrue any anticipated
obligation, expense or income item; and (h) make any other adjustments as Buyer
shall reasonably request, provided, however, that neither BHB nor the Bank shall
be obligated to take any such requested action until immediately prior to the
Effective Time and at such time as BHB shall have received reasonable assurances
that all conditions precedent to BHB's and Buyer's obligations under this
Agreement (except for the
29
completion of actions to be taken at the Closing) have been satisfied and;
provided, further, no such adjustment which BHB or the BHB Subsidiaries would
not have been required to make but for the provisions of this Section shall be
taken into account for purposes of determining the Closing Date Adjusted Net
Income or satisfaction by BHB of the conditions set forth in Section 6.1(e) of
this Agreement.
Section 5.13 List of BHB Shareholders. At the Effective Time, BHB shall
deliver to Buyer a list of holders of record of the outstanding BHB Common Stock
as of the most recent reasonably practicable date, and the accuracy of such list
shall be certified by an authorized officer of BHB.
Section 5.14 The Oxford Investment Group Inc. Office Usage. Buyer shall
permit The Oxford Investment Group Inc. to continue to use the office it
currently uses until March 31, 2006.
Section 5.15 Retention Bonuses. Buyer shall pay retention bonuses up to
$500,000 in the aggregate as further set forth on Exhibit D.
Section 5.16 Financial Statements and Reports. From the date of this
Agreement and prior to the Effective Time: (a) BHB will deliver to Buyer, as
soon as reasonably available, but in no event later than five (5) days after
filing, all reports filed by it or any of the BHB Subsidiaries with any
Regulatory Authority subsequent to the date hereof including all financial
reports filed with the FRB, OFIS and the FDIC, which shall be prepared in
accordance with the rules and regulations of such Regulatory Authority; (b) BHB
will deliver to Buyer, as soon as reasonably available, but in no event later
than thirty (30) days after the end of each fiscal quarters, all quarterly
financial statement of BHB and the BHB Subsidiaries prepared with respect to
period ending subsequent to December 31, 2004 and prepared in conformity with
GAAP; and (c) BHB will deliver to Buyer, as soon as practicable after the end of
each month, monthly financial statements of BHB and the BHB Subsidiaries as
requested by Buyer.
Section 5.17 Delivery of Supplements to Disclosure Schedules. Five (5)
business days prior to the Effective Time, BHB will supplement or amend the BHB
Disclosure Schedules with respect to any matter hereafter arising which, if
existing or occurring at or prior to the date of this Agreement, would have been
required to be set forth or described in such BHB Disclosure Schedule or which
is necessary to correct any information in the BHB Disclosure Schedule or would
have caused or constituted a breach of any representation or warranty made by
BHB had such representation or warranty been made at the time of the occurrence
of such event or condition; provided, however, that in order to determine the
fulfillment of the conditions set forth in Section 6.1(a) hereof as of the
Effective Time, the BHB Disclosure Schedules shall be deemed to include only the
information contained therein on the date hereof; provided, however, that
delivery of such supplements containing information which causes any
representation or warranty of either BHB to be false or materially misleading
will not cure any breach hereunder of such representations or warranties, unless
expressly consented to by Buyer.
Section 5.18 Noncompetition, Nondisclosure and Nonsolicitation
Agreements. Prior to or concurrently with the execution of this Agreement, Buyer
shall have received executed Noncompetition, Nondisclosure and Nonsolicitation
Agreements from Xxxxxx Xxxxxx, Xxx X.
30
Schlaybaugh, Jr., Xxxxx X. Xxxxxxx, Xxxxxx X. Xxxxx and Xxxxxxx X. XxXxxxx, in
substantially the form attached hereto as Exhibits E-1 and E-2, as applicable.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1 Conditions Precedent to Obligations of Buyer and
Acquisition Corp. Unless the conditions are waived by Buyer or Acquisition
Corp., all obligations of Buyer and Acquisition Corp. under this Agreement are
subject to the fulfillment, before or at the Closing, of each of the following
conditions:
(a) Representations and Warranties; Performance of Agreements. The
representations and warranties of BHB contained in Article III of this
Agreement, or in any documents, certificates, schedules or exhibits delivered
by, or on behalf of, BHB to Buyer pursuant to this Agreement shall be true and
correct in all material respects as of this date (except for representations and
warranties expressly stated to relate to a specific date, in which case such
representations and warranties shall be true and correct as of such earlier
date) and shall be true and correct in all material respects as of the Closing
Date as though made on and as of the Closing Date (except for representations
and warranties expressly stated to relate to a specific date, in which case such
representations and warranties shall be true and correct as of such earlier
date). BHB shall have performed in all material respects all agreements herein
required to be performed by it on or before the Closing Date, provided, that the
failure of the parties to enter into the Employment Agreements described in
Section 5.10(c) shall not in any way constitute a failure of BHB to perform an
agreement herein.
(b) Closing Certificate. Buyer shall have received a certificate signed
by the Chief Executive Officer of BHB, dated as of the Closing Date, certifying
as to the fulfillment of the conditions to the obligations of Buyer as set forth
in this Agreement and required to be fulfilled by BHB on or before the Closing
Date.
(c) Regulatory and Other Approvals. Buyer shall have obtained the
approval of all required regulatory entities (including, without limitation, the
approval of the FRB and OFIS) of the transactions contemplated by this
Agreement, all required regulatory waiting periods shall have expired, and there
shall have been no motion for rehearing or appeal from such approval.
(d) No Litigation with Respect to Transactions. No suit or other legal
proceeding shall have been instituted or threatened against BHB or Buyer seeking
to enjoin the consummation of the transactions contemplated hereby, which
reasonably could be expected to result in the issuance of a court order
enjoining such transactions, or which seeks substantial damages in respect
thereof.
(e) No Adverse Changes. Between the date of this Agreement and the
Closing Date, the business of BHB and each BHB Subsidiary shall have been
conducted in the ordinary course consistent in all respects with prudent banking
practices, and no action shall
31
have been taken or event shall have occurred that is reasonably likely to result
in a Material Adverse Effect on BHB.
(f) Consents. BHB and each BHB Subsidiary shall have obtained all
written consents, permissions and approvals as required under any material
agreements, contracts, appointments, indentures, plans, trusts or other
arrangements with third parties required to effect the transactions contemplated
by this Agreement.
(g) Resignations. BHB shall (a) have procured and delivered to Buyer
the resignations of each of the directors of BHB in the form attached as Exhibit
F-1 and (b) have either (i) procured and delivered to Buyer the resignations of
each of the directors of the BHB Subsidiaries in the form attached as Exhibit
F-2 or (ii) removed all such directors from office immediately prior to the
Effective Time.
(h) Legal Opinion. Buyer shall have received an opinion of Xxxxxx
Xxxxxxx PLLC, counsel for BHB, substantially in the form of Exhibit G.
(i) Closing Balance Sheet; Closing Income Statement. BHB shall have
timely delivered the Closing Balance Sheet and the Closing Income Statement.
(j) Material Adverse Change in Net Income. BHB's actual net income for
the period beginning January 1, 2005 and ending on the Determination Date as
reflected on the Closing Income Statement shall not be less than 85% of BHB's
projected net income for such period as set forth on Schedule 6.1(j) of the BHB
Disclosure Schedules.
Section 6.2 Conditions Precedent to Obligations of BHB. Unless the
conditions are waived by BHB, all obligations of BHB under this Agreement are
subject to the fulfillment, before or at the Closing, of each of the following
conditions:
(a) Representations and Warranties; Performance of Agreements. The
representations and warranties of Buyer and Acquisition Corp. contained in
Article IV of this Agreement, or in any documents, certificates or exhibits
delivered by them, or on their behalf to BHB pursuant to this Agreement shall be
true and correct as of this date (except for representations and warranties
expressly stated to relate to a specific date, in which case such
representations and warranties shall be true and correct as of such earlier
date) and shall be true and correct as of the Closing Date as though made on and
as of the Closing Date (except for representations and warranties expressly
stated to relate to a specific date, in which case such representations and
warranties shall be true and correct as of such earlier date), except where the
failure of such representations and warranties to be so true and correct would
not have a Material Adverse Effect on Buyer or Acquisition Corp. Buyer and
Acquisition Corp. shall have performed in all material respects all agreements
herein required to be performed by them on or before the Closing Date.
(b) Closing Certificate. BHB shall have received a certificate signed
by the Chief Executive Officer of Buyer, dated as of the Closing Date,
certifying in such detail as BHB may reasonably request, as to the fulfillment
of the conditions to the obligations of BHB as set forth in this Agreement and
required to be fulfilled by Buyer or Acquisition Corp. on or before the Closing.
32
(c) Regulatory and Other Approvals. Buyer shall have obtained the
approval of all appropriate regulatory entities (including, without limitation,
the approval of the FRB and OFIS) of the transactions contemplated by this
Agreement, all required regulatory waiting periods shall have expired, and there
shall have been no motion for rehearing or appeal from such approval.
(d) No Litigation with Respect to Transactions. No suit or other legal
proceeding shall have been instituted or threatened against BHB or Buyer seeking
to enjoin the consummation of the transactions contemplated hereby, which
reasonably could be expected to result in the issuance of a court order
enjoining such transactions, or which seeks substantial changes in respect
hereof.
(e) Legal Opinion. BHB shall have received an opinion of Vedder, Price,
Xxxxxxx & Kammholz, P.C., counsel for Buyer, substantially in the form of
Exhibit H.
(f) Paying Agent Certification. BHB shall have received a certificate
from the Paying Agent certifying that it has received the Conversion Fund in
immediately available funds and that it is holding the Conversion Fund for the
benefit of the holders of the BHB Common Stock.
ARTICLE VII
TERMINATION, EXPENSES AND AMENDMENT
Section 7.1 Termination. This Agreement may be terminated at any time
before the Effective Time:
(a) by mutual written consent of the boards of directors of Buyer and
BHB;
(b) by Buyer or BHB if there shall have been a final judicial or
regulatory determination (as to which all periods for appeal shall have expired
and no appeal shall be pending) that any material provision of this Agreement is
illegal, invalid or unenforceable (unless the enforcement thereof is waived by
the affected party) or denying any regulatory approval of the transactions
contemplated by this Agreement, the approval of which is a condition precedent
to either party's obligations hereunder;
(c) by either Buyer or BHB in the event of the material breach by the
other party of any representation, warranty, covenant or agreement contained
herein or in any document delivered pursuant hereto (other than as a result of
the failure of the other party to comply with its obligations under this
Agreement), which breach would result in the failure to satisfy the closing
conditions set forth in Section 6.1 hereof, in the case of Buyer, or Section 6.2
hereof, in the case of BHB; provided, however, the breaching party shall be
given a reasonable opportunity to cure such breach;
(d) by either Buyer or BHB if any of the conditions in Section 6.1
hereof, in the case of Buyer, and Section 6.2 hereof, in the case of BHB, has
not been satisfied as of the Closing Date or if satisfaction of such condition
is or becomes impossible (other than through the failure of the other party to
comply with its obligations under this Agreement);
33
(e) by either Buyer or BHB if the Closing has not occurred (other than
through the failure of any party seeking to terminate this Agreement to comply
in all material respects with its obligations under this Agreement) by August 1,
2005, or such later date as the parties may agree.
Section 7.2 Effect of Termination. Each party's right of termination
under Section 7.1 is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of such right of termination will not
be an election of remedies. In the event of termination of this Agreement by BHB
or Buyer pursuant to Section 7.1 hereof, there shall be no liability on the part
of either BHB or Buyer or their respective officers, directors or shareholders
hereunder, except that Section 5.3(b) hereof shall survive the termination.
Section 7.3 Amendment. Subject to compliance with applicable law, this
Agreement may be amended in writing only by the parties hereto; provided,
however, that there may not be, without further approval of BHB's shareholders,
any amendment of this Agreement that changes the amount or the form of the
consideration to be delivered to the holders of BHB Common Stock as contemplated
by this Agreement. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
Section 7.4 Extension; Waiver. At any time before the Effective Time,
the parties hereto may, to the extent legally allowed, (a) extend the time for
the performance of any of the obligations or other acts of the other parties
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; provided
however, that there may not be, without further approval of BHB's shareholders,
any waiver under this Agreement which reduces the amount or changes the form of
the consideration to be delivered to the holders of BHB Common Stock as
contemplated by this Agreement. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party, 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 or other failure.
ARTICLE VIII
GENERAL PROVISION
Section 8.1 Non-Survival of Representations, Warranties and Agreements.
None of the representations, warranties, covenants and agreements in this
Agreement (or in any instrument delivered pursuant to this Agreement, which
shall terminate in accordance with its terms) shall survive the Effective Time,
except for those covenants and agreements contained herein which by their terms
apply in whole or in part after the Effective Time.
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Section 8.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation), mailed by registered or certified mail (return
receipt requested) or delivered by an express courier (with confirmation) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
If to Buyer addressed to: PrivateBancorp, Inc.
Xxx Xxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Chairman, President and
Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Vedder, Price, Xxxxxxx & Kammholz, P.C.
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to BHB, addressed to: Bloomfield Hills Bancorp. Inc.
00000 Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Chairman
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxx X. Xxxxxxxxxxx, Xx., Esq.
Xxxxxx Xxxxxxx PLLC
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Section 8.3 Interpretation. When a reference is made in this Agreement
to Sections, Exhibits or Schedules, such reference shall be to a section of or
exhibit or schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
Section 8.4 Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each of the parties
and delivered to the other parties, it being
35
understood that all parties need not sign the same counterpart. A signature page
of this Agreement executed and transmitted via electronic means shall be deemed
an original for all purposes.
Section 8.5 Entire Agreement. This Agreement (including the documents
and the instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties hereto with respect to the subject matter hereof.
Section 8.6 Governing Law. This Agreement and the exhibits attached
hereto shall be governed and construed in accordance with the laws of the State
of Michigan, without regard to any applicable conflicts of law.
Section 8.7 Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If, however, any
provision of this Agreement is declared invalid or unenforceable by a court of
competent jurisdiction, then the parties hereto shall in good faith amend this
Agreement to include an alternative provision that accomplishes a similar
result.
Section 8.8 Publicity. Except as otherwise required by applicable law
or the rules of any applicable securities exchange, neither BHB nor Buyer shall,
nor shall BHB or Buyer permit any BHB Subsidiary or any subsidiary of Buyer,
respectively, to issue or cause the publication of any press release or other
public announcement with respect to, or otherwise make any public statement
concerning, the transactions contemplated by this Agreement without the consent
of the other party, which consent shall not be unreasonably withheld.
Section 8.9 Assignment; Third Party Beneficiaries. Neither this
Agreement nor any of the rights, interests or obligations of the parties under
this Agreement shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the parties and their
respective successors and assigns. Except as otherwise specifically provided in
Section 5.9, this Agreement (including the documents and instruments referred to
herein) shall not confer upon any person other than the parties hereto (or
thereto) any rights or remedies hereunder.
Section 8.10 Transaction Expenses. Whether or not the Merger is
consummated, all fees and expenses incurred by BHB or Buyer, as applicable, in
connection with the Merger, including all legal, accounting, financial advisory,
fairness opinion, consulting and all other fees and expenses of third parties
incurred by BHB or Buyer, as applicable, in connection with the negotiation an
effectuation of the transactions contemplated by this Agreement shall be the
obligations of either BHB or Buyer, to the extent such party incurred such fees
and expenses.
[SIGNATURE PAGE FOLLOWS]
36
IN WITNESS WHEREOF, Buyer, Acquisition Corp. and BHB have executed this
Agreement as of the day and year hereinabove first written.
PRIVATEBANCORP, INC.
By:/s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman, President and
Chief Executive Officer
BHB ACQUISITION CORP.
By:/s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman, President and
Chief Executive Officer
BLOOMFIELD HILLS BANCORP. INC.
By:/s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Chairman
37
