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AGREEMENT AND PLAN OF MERGER
between
ALLEGIANT BANCORP, INC.,
a Missouri corporation, as Buyer
and
RELIANCE FINANCIAL, INC.,
a Delaware corporation, as Seller
Dated as of March 20, 1997
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TABLE OF CONTENTS Page
ARTICLE I THE MERGER. . . . . . . . . . . . . . . . . . . . . . 1
1.01. The Merger. . . . . . . . . . . . . . . . . . . . . . 1
1.02. Closing . . . . . . . . . . . . . . . . . . . . . . . 1
1.03. Effective Time. . . . . . . . . . . . . . . . . . . . 1
1.04. Additional Actions. . . . . . . . . . . . . . . . . . 2
1.05. Articles of Incorporation and Bylaws. . . . . . . . . 2
1.06. Boards of Directors and Officers. . . . . . . . . . . 2
1.07. Conversion of Securities. . . . . . . . . . . . . . . 2
1.08. Exchange Procedures . . . . . . . . . . . . . . . . . 3
1.09. Dissenting Shares . . . . . . . . . . . . . . . . . . 4
1.10. No Fractional Shares. . . . . . . . . . . . . . . . . 4
1.11. Closing of Stock Transfer Books . . . . . . . . . . . 4
1.12. Anti-Dilution . . . . . . . . . . . . . . . . . . . . 4
1.13. Reservation of Right to Revise Transaction. . . . . . 5
1.14. Material Adverse Effect . . . . . . . . . . . . . . . 5
ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS OF
SELLER. . . . . . . . . . . . . . . . . . . . . . . . 5
2.01. Organization and Authority. . . . . . . . . . . . . . 5
2.02. Subsidiaries. . . . . . . . . . . . . . . . . . . . . 6
2.03. Capitalization. . . . . . . . . . . . . . . . . . . . 6
2.04. Authorization . . . . . . . . . . . . . . . . . . . . 7
2.05. Seller Financial Statements.. . . . . . . . . . . . . 8
2.06. Seller Reports. . . . . . . . . . . . . . . . . . . . 8
2.07. Title to and Condition of Assets. . . . . . . . . . . 9
2.08. Real Property . . . . . . . . . . . . . . . . . . . . 9
2.09. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 10
2.10. Material Adverse Effect . . . . . . . . . . . . . . . 11
2.11. Loans, Commitments and Contracts. . . . . . . . . . . 11
2.12. Absence of Defaults . . . . . . . . . . . . . . . . . 13
2.13. Litigation and Other Proceedings. . . . . . . . . . . 13
2.14. Directors' and Officers' Insurance. . . . . . . . . . 14
2.15. Compliance with Laws. . . . . . . . . . . . . . . . . 14
2.16. Labor . . . . . . . . . . . . . . . . . . . . . . . . 16
2.17. Material Interests of Certain Persons . . . . . . . . 16
2.18. Allowance for Loan and Lease Losses; Non-
Performing Assets . . . . . . . . . . . . . . . . . . 16
2.19. Employee Benefit Plans. . . . . . . . . . . . . . . . 17
2.20. Conduct of Seller to Date . . . . . . . . . . . . . . 18
2.21. Absence of Undisclosed Liabilities. . . . . . . . . . 19
2.22. Proxy Statement, Etc. . . . . . . . . . . . . . . . . 19
2.23. Registration Obligations. . . . . . . . . . . . . . . 20
2.24. Tax and Regulatory Matters. . . . . . . . . . . . . . 20
2.25. Brokers and Finders . . . . . . . . . . . . . . . . . 20
2.26. Interest Rate Risk Management Instruments . . . . . . 20
2.27. Accuracy of Information . . . . . . . . . . . . . . . 20
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ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF
BUYER . . . . . . . . . . . . . . . . . . . . . . . . 21
3.01. Organization and Authority. . . . . . . . . . . . . . 21
3.02. Capitalization of Buyer . . . . . . . . . . . . . . . 21
3.03. Authorization . . . . . . . . . . . . . . . . . . . . 21
3.04. Buyer Financial Statements. . . . . . . . . . . . . . 22
3.05. Buyer Reports . . . . . . . . . . . . . . . . . . . . 22
3.06. Material Adverse Effect . . . . . . . . . . . . . . . 23
3.07. Legal Proceedings or Other Adverse Facts. . . . . . . 23
3.08. Registration Statement, Etc.. . . . . . . . . . . . . 23
3.09. Brokers and Finders . . . . . . . . . . . . . . . . . 23
3.10. Accuracy of Information . . . . . . . . . . . . . . . 23
3.11. Compliance with Laws. . . . . . . . . . . . . . . . . 24
3.12. Tax and Regulatory Matters. . . . . . . . . . . . . . 24
ARTICLE IV CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE
TIME. . . . . . . . . . . . . . . . . . . . . . . . . 24
4.01. Conduct of Businesses Prior to the Effective
Time. . . . . . . . . . . . . . . . . . . . . . . . . 24
4.02. Forbearances of Seller. . . . . . . . . . . . . . . . 24
4.03. Forbearances of Buyer . . . . . . . . . . . . . . . . 27
4.04. Charter Amendment . . . . . . . . . . . . . . . . . . 27
ARTICLE V ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . 27
5.01. Access and Information. . . . . . . . . . . . . . . . 27
5.02. Registration Statement; Regulatory Matters. . . . . . 28
5.03. Shareholder and Stockholder Approval. . . . . . . . . 28
5.04. Current Information . . . . . . . . . . . . . . . . . 29
5.05. Conforming Entries. . . . . . . . . . . . . . . . . . 29
5.06. Environmental Reports . . . . . . . . . . . . . . . . 30
5.07. Agreements of Affiliates. . . . . . . . . . . . . . . 30
5.08. Expenses. . . . . . . . . . . . . . . . . . . . . . . 31
5.09. Miscellaneous Agreements. . . . . . . . . . . . . . . 31
5.10. Employee Agreements and Benefits. . . . . . . . . . . 31
5.11. Press Releases. . . . . . . . . . . . . . . . . . . . 33
5.12. State Takeover Statutes . . . . . . . . . . . . . . . 33
5.13. Directors' and Officers' Indemnification. . . . . . . 33
5.14. Tax Opinion Certificates. . . . . . . . . . . . . . . 34
5.15. Employee Stock Options. . . . . . . . . . . . . . . . 34
ARTICLE VI CONDITIONS. . . . . . . . . . . . . . . . . . . . . . 35
6.01. Conditions to Each Party's Obligation to Effect
the Merger. . . . . . . . . . . . . . . . . . . . . . 35
6.02. Conditions to Obligations of Seller to Effect
the Merger. . . . . . . . . . . . . . . . . . . . . . 36
6.03. Conditions to Obligations of Buyer to Effect the
Merger. . . . . . . . . . . . . . . . . . . . . . . . 37
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ARTICLE VII TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . 38
7.01. Termination . . . . . . . . . . . . . . . . . . . . . 38
7.02. Effect of Termination . . . . . . . . . . . . . . . . 39
7.03. Amendment . . . . . . . . . . . . . . . . . . . . . . 39
7.04. Waiver. . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VIII GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . 39
8.01. Non-Survival of Representations, Warranties and
Agreements. . . . . . . . . . . . . . . . . . . . . . 39
8.02. Indemnification . . . . . . . . . . . . . . . . . . . 39
8.03. No Assignment; Successors and Assigns . . . . . . . . 40
8.04. No Implied Waiver . . . . . . . . . . . . . . . . . . 40
8.05. Headings. . . . . . . . . . . . . . . . . . . . . . . 40
8.06. Entire Agreement. . . . . . . . . . . . . . . . . . . 40
8.07. Counterparts. . . . . . . . . . . . . . . . . . . . . 40
8.08. Notices . . . . . . . . . . . . . . . . . . . . . . . 40
8.09. Severability. . . . . . . . . . . . . . . . . . . . . 41
LIST OF EXHIBITS
Exhibit A Form of Affiliate Agreement
Exhibit B Stockholder Tax Certificate
Exhibit C Officer/Director Tax Certificate
Exhibit D Form of Opinion of Counsel of Buyer
Exhibit E Form of Opinion of Counsel of Seller
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AGREEMENT AND PLAN OF MERGER
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This AGREEMENT AND PLAN OF MERGER (this "Agreement") is
made and entered into as of March 20, 1997, by and among ALLEGIANT
BANCORP, INC., a Missouri corporation ("Buyer"), and RELIANCE
FINANCIAL, INC., a Delaware corporation ("Seller").
W I T N E S S E T H:
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WHEREAS, Buyer is a registered bank holding company under
the Bank Holding Company Act of 1956, as amended (the "BHCA"); and
WHEREAS, Seller is a registered savings and loan holding
company under the Home Owners' Loan Act, as amended (the "HOLA");
and
WHEREAS, the respective Boards of Directors of Buyer and
Seller have approved the merger (the "Merger") of Seller with and
into Buyer pursuant to the terms and subject to the conditions of
this Agreement; and
WHEREAS, the parties desire to provide for certain
undertakings, conditions, representations, warranties and covenants
in connection with the transactions contemplated by this Agreement.
NOW THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the
parties agree as follows:
ARTICLE I
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THE MERGER
1.01. The Merger. Subject to the terms and
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conditions of this Agreement, Seller shall be merged with and into
Buyer in accordance with Chapter 351 of the Missouri Revised
Statutes (the "Missouri Statute") and the Delaware General
Corporation Law (the "DGCL"), and the separate corporate existence
of Seller shall cease. Buyer shall be the surviving corporation of
the Merger (sometimes referred to herein as the "Surviving
Corporation") and shall continue to be governed by the laws of the
State of Missouri.
1.02. Closing. The closing (the "Closing") of the
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Merger shall take place at 10:00 a.m., local time, on the date that
the Effective Time (as defined in Section 1.03) occurs (the
"Closing Date") at the offices of Xxxxxxxx Xxxxxx, St. Xxxxx,
Missouri, or at such other time and place as Buyer and Seller shall
agree.
1.03. Effective Time. The Merger shall become
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effective (the "Effective Time") upon the later of (i) the issuance
of the certificate of merger by the Office of the Secretary of
State of the State of Missouri and (ii) the filing of a certificate
of merger of the Office of the Secretary of State of the State of
Delaware. Unless otherwise mutually agreed in writing by Buyer and
Seller, subject to the terms and conditions of this Agreement, the
Effective Time shall occur on such date as Buyer shall notify
Seller in writing (such notice to be at least five business days in
advance of the Effective Time) but (i) not earlier than the
satisfaction of all conditions set forth in Sections 6.01(a) and
6.01(b) (the "Approval Date") and (ii) not later than the first
business day of the first full calendar month commencing at least
five business days after the Approval Date.
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1.04. Additional Actions. If, at any time after the
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Effective Time, Buyer or the Surviving Corporation shall consider
or be advised that any further deeds, assignments or assurances or
any other acts are necessary or desirable to (a) vest, perfect or
confirm, of record or otherwise, in the Surviving Corporation, all
right, title or interest in, to or under any of the rights,
properties or assets of Seller or (b) otherwise carry out the
purposes of this Agreement, Seller and each of its officers and
directors, shall be deemed to have granted to the Surviving
Corporation an irrevocable power of attorney to execute and deliver
all such deeds, assignments or assurances and to do all acts
necessary or desirable to vest, perfect or confirm title and
possession to such rights, properties or assets in the Surviving
Corporation and otherwise to carry out the purposes of this
Agreement, and the officers and directors of the Surviving
Corporation are authorized in the name of Seller or otherwise to
take any and all such action. Without limiting the generality of
the foregoing, the parties hereto agree to take all reasonable
steps to assure that the Merger and the transactions contemplated
hereby will be accounted for under the purchase method of
accounting.
1.05. Articles of Incorporation and Bylaws. The
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Articles of Incorporation and Bylaws of Buyer in effect immediately
prior to the Effective Time shall be the Articles of Incorporation
and Bylaws of the Surviving Corporation following the Merger, until
otherwise amended or repealed.
1.06. Boards of Directors and Officers. At the
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Effective Time, the directors and officers of Buyer immediately
prior to the Effective Time shall be the directors and officers,
respectively, of the Surviving Corporation following the Merger,
and such directors and officers shall hold office in accordance
with the Surviving Corporation's Bylaws and applicable law.
1.07. Conversion of Securities. At the Effective
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Time, by virtue of the Merger and without any action on the part of
Buyer, Seller or the holder of any of the following securities:
(a) Each share of the common stock, $0.01 par
value, of Buyer ("Buyer Common Stock") that is issued and
outstanding immediately prior to the Effective Time shall
remain outstanding and shall be unchanged after the
Merger; and
(b) Subject to Sections 1.09, 1.10 and 1.12
hereof, each share of common stock, $0.10 par value, of
Seller ("Seller Common Stock") issued and outstanding at
the Effective Time shall cease to be outstanding and
shall be converted into and become the right to receive
1.6741 shares of Buyer Common Stock (the "Merger
Consideration"); provided, however, that if the Average
Buyer Price (as defined in Section 6.02(f)) exceeds
$14.50, each share of Seller Common Stock issued and
outstanding at the Effective Time shall cease to be
outstanding and shall be converted into and become the
right to receive a number of shares of Buyer Common Stock
(rounded to four decimal places) equal to 1.6741 times a
fraction, the numerator of which is $14.50 and the
denominator of which is the Average Buyer Price. The
ratio determined pursuant to this Section 1.07(b) is
hereinafter referred to as the "Exchange Ratio."
Shares of Seller Common Stock held by Seller or any of its wholly
owned "Subsidiaries" (as defined in Rule 1-02 of Regulation S-X
promulgated by the Securities and Exchange Commission (the "SEC")),
or by Buyer or any of its wholly owned Subsidiaries, in each case
other than in a fiduciary capacity or as a result of debts
previously contracted, shall be cancelled and shall not be
exchanged after the Effective Time for the Merger Consideration.
In addition, no Dissenting Shares (as defined in Section 1.09 of
this Agreement) shall be converted pursuant to this Section 1.07
but shall be treated in accordance with the procedures set forth in
Section 1.09 of this Agreement.
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1.08. Exchange Procedures.
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(a) Prior to the Closing Date, Buyer shall
appoint Boatmen's Trust Company, or such other bank or trust
company selected by Buyer and reasonably acceptable to Seller, as
the exchange agent (the "Exchange Agent") to effect the exchange of
certificates evidencing shares of Seller Common Stock for shares of
Buyer Common Stock to be received in the Merger. At the Effective
Time, Buyer shall have granted the Exchange Agent the requisite
power and authority to effect for and on behalf of Buyer the
issuance of the number of shares of Buyer Common Stock issuable in
the Merger.
(b) As soon as practicable after the Effective
Time, the Exchange Agent shall mail to each holder of record of
Seller Common Stock as of the Closing Date a notice of consummation
of the Merger and a form of letter of transmittal, which shall be
in a form reasonably acceptable to Seller, pursuant to which each
such stockholder shall transmit the certificate or certificates
formerly representing shares of the Seller Common Stock, or, in
lieu thereof, such evidence of lost, stolen or mutilated
certificate or certificates and such surety bond as the Board of
Directors of Buyer may reasonably require in accordance with
customary exchange practices. Seller stockholders who satisfy such
requirements for lost, stolen or mutilated certificates shall for
purposes of the exchange procedures set forth herein be deemed to
have submitted certificates for Seller Common Stock. As soon as
practicable after surrender of such certificate to the Exchange
Agent with a properly completed letter of transmittal, the Exchange
Agent will promptly mail by first-class mail to such stockholder a
certificate or certificates representing the number of full shares
of Buyer Common Stock into which the shares of Seller Common Stock
evidenced by the certificate surrendered shall have been converted
pursuant to this Agreement.
(c) The Exchange Agent shall accept such
certificates upon compliance with such reasonable terms and
conditions as the Exchange Agent may impose to effect an orderly
exchange thereof in accordance with customary exchange practices.
Each outstanding certificate that, prior to the Effective Time,
represented Seller Common Stock shall, except as otherwise provided
in this Agreement, until duly surrendered to the Exchange Agent, be
deemed to evidence ownership of the number of shares of Buyer
Common Stock into which such Seller Common Stock shall have been
converted in the Merger. After the Effective Time, there shall be
no further transfer on the records of Seller of certificates
representing shares of capital stock of Seller, and if such
certificates are presented to Seller for transfer, they shall be
cancelled against delivery of the consideration provided therefor
in this Agreement. If the record date for any dividend or other
distribution in respect of Buyer Common Stock shall occur on or
after the Closing Date, the holders of Seller Common Stock shall be
entitled to such dividend or other distribution, but no dividends
declared on or other distributions in respect of Buyer Common Stock
will be remitted to any person entitled to receive Buyer Common
Stock under this Agreement until such person surrenders the
certificate or certificates representing Seller Common Stock, at
which time such dividends or other distributions shall be remitted
to such person, without interest and less any amounts in respect of
taxes that may have been imposed thereon and which are required to
be withheld by Buyer. Neither the Exchange Agent, Buyer nor Seller
shall be liable to any holder of Seller Common Stock for any
consideration paid to a public official pursuant to applicable
abandoned property, escheat or similar laws. The Exchange Agent
shall not be entitled to vote or exercise any rights of ownership
with respect to shares of Buyer Common Stock held by it from time
to time hereunder.
(d) No transfer taxes shall be payable by any
stockholder of Seller in respect of the issuance of certificates
for Buyer Common Stock and no expenses shall be imposed on any
stockholder of Seller in connection with the conversion of shares
of Seller Common Stock into shares of Buyer Common Stock and the
delivery of such shares to the former holder of Seller Common Stock
entitled thereto, except that (i) if any certificate for shares of
Buyer Common Stock is to be issued in a name other than that in
which a certificate or certificates for shares of Seller Common
Stock surrendered
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shall have been registered, it shall be a condition to such issuance that
the person requesting such issuance shall pay to Buyer any transfer
taxes payable by reason thereof or of any prior transfer of such
surrendered certificate or certificates or establish to the reasonable
satisfaction of Buyer that such taxes have been paid or are not
payable, and (ii) nothing herein shall relieve a stockholder of Seller
of any expenses associated with surrendering such holder's
certificates evidencing Seller Common Stock to the Exchange Agent.
1.09. Dissenting Shares.
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(a) "Dissenting Shares" means any shares held
by any holder who becomes entitled to payment of the fair value of
such shares under Section 262 of the DGCL. Any holders of
Dissenting Shares shall be entitled to payment for such shares only
to the extent permitted by and in accordance with the provisions of
such law, with funds provided by Buyer.
(b) Each party hereto shall give the other
prompt notice of any written demands for the payment of the fair
value of any shares, withdrawals of such demands, and any other
instruments, served pursuant to the DGCL received by such party and
Seller shall give Buyer the opportunity to participate in all
negotiations and proceedings with respect to such demands. Seller
shall not voluntarily make any payment with respect to any demands
for payment of fair value and shall not, except with the prior
written consent of Buyer, which consent shall not be unreasonably
withheld, settle or offer to settle any such demands.
1.10. No Fractional Shares. Notwithstanding any
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other provision of this Agreement, neither certificates nor scrip
for fractional shares of Buyer Common Stock shall be issued in the
Merger. Each holder of shares of Seller Common Stock who otherwise
would have been entitled to a fraction of a share of Buyer Common
Stock shall receive (by check from the Exchange Agent, mailed to
the stockholder with the certificate(s) for Buyer Common Stock
which such holder is to receive pursuant to the Merger) in lieu
thereof, and at the time such holder receives the shares of Buyer
Common Stock to which the holder is entitled, cash (without
interest) in an amount determined by multiplying the fractional
share interest to which such holder would otherwise be entitled by
the closing stock price of Buyer Common Stock on the Nasdaq
National Market (the "Nasdaq") as reported in The Wall Street
Journal, Midwest Edition, on the Closing Date of the Merger or if
no closing stock price is reported on such date, then on the
immediately preceding date on which a closing price is so reported.
No such holder shall be entitled to dividends, voting rights or any
other rights in respect of any fractional share.
1.11. Closing of Stock Transfer Books. The stock
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transfer books of Seller shall be closed at the close of business
on the Business Day immediately preceding the Closing Date. In the
event of a transfer of ownership of Seller Common Stock which is
not registered in the transfer records of Seller, the consideration
to be distributed pursuant to this Agreement may be delivered to a
transferee, if the certificate representing such shares is
presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and all applicable
stock transfer taxes are paid. Buyer and the Exchange Agent shall
be entitled to rely upon the stock transfer books of Seller to
establish the identity of those persons entitled to receive the
consideration specified in this Agreement for their shares of
Seller Common Stock, which books shall be conclusive with respect
to the ownership of such shares. In the event of a dispute with
respect to the ownership of any such shares, Buyer and the Exchange
Agent shall be entitled to deposit any consideration represented
thereby in escrow with an independent party and thereafter be
relieved with respect to any claims to such consideration.
1.12. Anti-Dilution. If between the date of this
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Agreement and the Effective Time a share of Buyer Common Stock
shall be changed into a different number of shares of Buyer Common
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Stock or a different class of shares by reason of reclassification,
recapitalization, split-up, exchange of shares (including, without
limitation, as a result of a merger, acquisition, reorganization or
other transaction involving Buyer) or readjustment, or if a stock
dividend thereon shall be declared with a record date within such
period, then the number of shares of Buyer Common Stock into which
a share of Seller Common Stock shall be converted pursuant to
Section 1.07 of this Agreement will be appropriately and
proportionately adjusted so that each stockholder of Seller shall
be entitled to receive such number of shares of Buyer Common Stock
or other securities as such stockholder would have received
pursuant to such reclassification, recapitalization, split-up,
exchange of shares or readjustment or as a result of such stock
dividend had the record date therefor been immediately following
the Effective Time.
1.13. Reservation of Right to Revise Transaction.
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Buyer may at any time change the method of effecting the
acquisition of Seller by Buyer (including, without limitation, the
provisions of this Article I) if and to the extent Buyer deems such
change to be desirable; provided, however, that no such change
shall (A) alter or change the amount or kind of the Merger
Consideration to be received by the stockholders of Seller in the
Merger, (B) adversely affect the tax treatment to Seller
stockholders, as generally described in Section 6.01(e) hereof or
(C) materially impede or delay receipt of any approvals, referred
to in Section 6.01(b) or the consummation of the transactions
contemplated by this Agreement. For purposes of this Section 1.13,
a material delay shall mean a delay in excess of 30 days.
1.14. Material Adverse Effect. As used in this
-----------------------
Agreement, the term "Material Adverse Effect" with respect to an
entity means any condition, event, change or occurrence that has or
may reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), properties, business or results
of operations, of such entity and its Subsidiaries, taken as a
whole as reflected in the Seller Financial Statements (as defined
in Section 2.05(b)) or the Buyer Financial Statements (as defined
in Section 3.04), as the case may be; it being understood that a
Material Adverse Effect shall not include: (i) a change with
respect to, or effect on, such entity and its Subsidiaries
resulting from a change in law, rule, regulation, generally
accepted accounting principles or regulatory accounting principles,
including, but not limited to, changes resulting from amendments to
or modifications of any law, rule, regulation or policy relating to
the bad debt reserve of or deduction taken by thrift institutions,
as such would apply to the financial statements of such entity on
a consolidated basis; (ii) a change with respect to, or effect on,
such entity and its Subsidiaries resulting from any other matter
affecting depository institutions generally including, without
limitation, changes in general economic conditions and changes in
prevailing interest and deposit rates; (iii) the one-time special
insurance premium assessed by the Federal Deposit Insurance
Corporation ("FDIC") on deposits insured by the Savings Association
Insurance Fund ("SAIF"); (iv) in the case of Seller, any financial
change resulting from adjustments taken pursuant to Section 5.05
hereof; or (v) a change disclosed in the Seller Financial
Statements or the Buyer Financial Statements, as the case may be.
ARTICLE II
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REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER
As an inducement to Buyer to enter into and perform its
obligations under this Agreement, and notwithstanding any
examination, inspection, audit or any other investigation made by
Buyer, Seller represents and warrants to and covenants with Buyer
as follows:
2.01. Organization and Authority. Seller is a
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corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, is duly qualified to do
business and is in good standing in all jurisdictions where its
ownership or leasing of property or the conduct of
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its business requires it to be so qualified and has corporate power
and authority to own its properties and assets and to carry on its
business as it is now being conducted. Seller is registered as a
savings and loan holding company with the Office of Thrift
Supervision (the "OTS") under the HOLA. True and complete copies
of the Certificate of Incorporation and Bylaws of Seller and the
Charter and Bylaws of Reliance Federal Savings and Loan Association
of St. Louis County, a wholly owned subsidiary of Seller ("RFSLA"),
each as in effect on the date of this Agreement, are attached
hereto as Schedule 2.01. Also attached hereto as Schedule 2.01 are
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true and complete lists of the stockholders of each of the Seller
and RFSLA, as of the close of business on December 13, 1996.
2.02. Subsidiaries.
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(a) Schedule 2.02 sets forth, a complete and
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correct list of all of Seller's Subsidiaries (each a
"Seller Subsidiary" and, collectively, the "Seller
Subsidiaries"), all outstanding Equity Securities (as
defined in Section 2.03) of each, all of which are owned
directly or indirectly by Seller. Except as disclosed in
Schedule 2.02, all of the outstanding shares of capital
-------------
stock of the Seller Subsidiaries owned directly or
indirectly by Seller are validly issued, fully paid and
nonassessable and are owned free and clear of any lien,
claim, charge, option, encumbrance, agreement, mortgage,
pledge, security interest or restriction (a "Lien") with
respect thereto. Each of the Seller Subsidiaries is a
corporation or federal savings and loan association
incorporated or organized and validly existing under the
laws of its jurisdiction of incorporation or
organization, and has corporate power and authority to
own or lease its properties and assets and to carry on
its business as it is now being conducted. Each of the
Seller Subsidiaries is duly qualified to do business in
each jurisdiction where its ownership or leasing of
property or the conduct of its business requires it so to
be qualified, except where the failure to so qualify
would not have a Material Adverse Effect on Seller and
the Seller Subsidiaries, taken as a whole. Neither
Seller nor any Seller Subsidiary owns beneficially,
directly or indirectly, any shares of any class of Equity
Securities or similar interests of any corporation, bank,
business trust, association or organization, or any
interest in a partnership or joint venture of any kind,
other than those identified in Schedule 2.02 hereof.
-------------
(b) RFSLA is a federally-chartered savings and
loan association duly organized and validly existing
under the laws of the United States of America. The
deposits of RFSLA are insured by the Federal Deposit
Insurance Corporation (the "FDIC") under the Federal
Deposit Insurance Act of 1950, as amended (the "FDI
Act").
2.03. Capitalization. The authorized capital stock
--------------
of Seller consists of (i) 1,500,000 shares of Seller Common Stock,
of which, as of the date hereof, 447,200 shares are issued and
425,700 shares are outstanding and (ii) 250,000 shares of preferred
stock, $0.01 par value, of which, as of the date hereof, no shares
were issued and outstanding. As of the date hereof, Seller had
reserved 60,200 shares of Seller Common Stock for issuance under
Seller's stock option and incentive plans, a list of which is set
forth on Schedule 2.03 (the "Seller Stock Plans"), pursuant to
-------------
which options ("Seller Employee Stock Options") covering 43,000
shares of Seller Common Stock were outstanding as of the date
hereof. "Equity Securities" of an issuer means capital stock or
other equity securities of such issuer, options, warrants, scrip,
rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into,
shares of any capital stock or other equity securities of such
issuer, or contracts, commitments, understandings or arrangements
by which such issuer is or may become bound to issue additional
shares of its capital stock or other equity securities of such
issuer, or options, warrants, scrip or rights to purchase, acquire,
subscribe to, calls on or commitments for any
- 6 -
11
shares of its capital stock or other equity securities. Except as set
forth above, there are no other Equity Securities of Seller
outstanding. All of the issued and outstanding shares of Seller
Common Stock are validly issued, fully paid and nonassessable, and
have not been issued in violation of any preemptive right of any
stockholder of Seller. Attached hereto as Schedule 2.03 is a list of
-------------
the holders of the Seller Employee Stock Options, the exercise price
of such options and the number of shares of Seller Common Stock
subject thereto.
2.04. Authorization.
-------------
(a) Seller has the corporate power and
authority to enter into this Agreement and, subject to
the approval of this Agreement by the stockholders of
Seller and Regulatory Authorities (as defined in Section
2.06), to carry out its obligations hereunder. The only
stockholder vote required for Seller to approve this
Agreement is the affirmative vote of the holders of a
majority of the outstanding shares of Seller Common Stock
entitled to vote at a meeting called for such purpose.
The execution, delivery and performance of this Agreement
by Seller and the consummation by Seller of the
transactions contemplated hereby in accordance with and
subject to the terms of this Agreement have been duly
authorized by the Board of Directors of Seller. Subject
to the approval of Seller's stockholders and subject to
the receipt of such approvals of the Regulatory
Authorities as may be required by statute or regulation,
this Agreement is a valid and binding obligation of
Seller (subject to the valid execution by Buyer)
enforceable against Seller in accordance with its terms.
(b) Except as disclosed in Schedule 2.04(b),
----------------
neither the execution nor delivery nor performance by
Seller of this Agreement, nor the consummation by Seller
of the transactions contemplated hereby, nor compliance
by Seller with any of the provisions hereof, will (i)
violate, conflict with, or result in a breach of any
provisions of, or constitute a default (or an event
which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result
in a right of termination or acceleration of, or result
in the creation of, any Lien upon any of the properties
or assets of Seller or any of the Seller Subsidiaries
under any of the terms, conditions or provisions of (x)
its Certificate or Articles of Incorporation, as the case
may be, charter or Bylaws or (y) any note, bond,
mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which
Seller or any of the Seller Subsidiaries is a party or by
which it may be bound, or to which Seller or any of the
Seller Subsidiaries or any of the properties or assets of
Seller or any of the Seller Subsidiaries may be subject,
or (ii) subject to compliance with the statutes and
regulations referred to in subsection (c) of this Section
2.04 and, to the best of Seller's knowledge, violate any
judgment, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to Seller or any
of the Seller Subsidiaries or any of their respective
properties or assets; other than violations, conflicts,
breaches, defaults, terminations, accelerations or Liens
which would not have a Material Adverse Effect on Seller
and Seller Subsidiaries, taken as a whole.
(c) Other than in connection or in compliance
with the provisions of the Missouri Statute, the DGCL,
the Securities Act of 1933, as amended, and the rules and
regulations thereunder (the "Securities Act"), the
Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (the "Exchange Act"),
the securities or blue sky laws of the various states or
filings, consents, reviews, authorizations, approvals or
exemptions required under the BHCA, the Xxxx-Xxxxx-Xxxxxx
Antitrust
- 7 -
12
Improvement Act of 1976 or any required
approvals of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") and the OTS
or other governmental agencies or governing boards having
regulatory authority over Seller or any Seller
Subsidiary, no notice to, filing with, exemption or
review by, or authorization, consent or approval of, any
public body or authority is necessary for the
consummation by Seller of the transactions contemplated
by this Agreement.
2.05. Seller Financial Statements.
---------------------------
(a) Attached hereto as Schedule 2.05(a) are
----------------
copies of the following documents:
(i) Annual Report on Form 10-K for the
year ended September 30, 1996;
(ii) Quarterly Report on Form 10-Q for the
quarter ended December 31, 1996; and
(iii) OTS Thrift Financial Report for RFSLA
for the years ended December 31, 1994, 1995 and 1996.
(b) The financial statements contained in the
documents referenced in Schedule 2.05(a) are referred to
----------------
collectively as the "Seller Financial Statements." The Seller
Financial Statements referenced in Sections 2.05(a)(i) and (ii)
have been prepared in accordance with the books and records of
Seller in accordance with generally accepted accounting principles
and present fairly the consolidated financial positions of Seller
and the Seller Subsidiaries, at the dates thereof and the
consolidated results of operations and cash flows of Seller and the
Seller Subsidiaries for the periods stated therein.
(c) Seller and the Seller Subsidiaries have each
prepared, kept and maintained through the date hereof true, correct
and complete financial and other books and records of their affairs
which fairly reflect their respective financial conditions, results
of operations, businesses, assets, prospects and operations.
2.06. Seller Reports. Since January 1, 1993, each of
--------------
Seller and the Seller Subsidiaries has timely filed all material
reports, registrations and statements, together with any required
amendments thereto, that it was required to file with (i) the SEC,
including, but not limited to, Forms 10-K, Forms 10-Q, Forms 8-K
and proxy statements, (ii) the OTS, (iii) the FDIC and (iv) any
federal, state, municipal or local government, securities, banking,
savings and loan, insurance and other governmental or regulatory
authority, and the agencies and staffs thereof (the entities in the
foregoing clauses (i) through (v) being referred to herein
collectively as the "Regulatory Authorities" and, individually, as
a "Regulatory Authority"), having jurisdiction over the affairs of
it. All such reports and statements filed with any such Regulatory
Authority are collectively referred to herein as the "Seller
Reports." As of each of their respective dates, the Seller Reports
complied in all material respects with all the rules and
regulations promulgated by the applicable Regulatory Authority.
With respect to Seller Reports filed with the Regulatory
Authorities, there is no unresolved violation, criticism or
exception by any Regulatory Authority with respect to any report or
statement filed by, or any examinations of, Seller or any of the
Seller Subsidiaries that, if unresolved, would result in a Material
Adverse Effect on the Seller and Seller Subsidiaries, taken as a
whole.
- 8 -
13
2.07. Title to and Condition of Assets.
--------------------------------
(a) Except as may be reflected in the Seller
Financial Statements and with the exception of all "Real
Property" (which is the subject of Section 2.08 hereof)
Seller and the Seller Subsidiaries have, and at the
Closing Date will have, good and marketable title to
their owned properties and assets, including, without
limitation, those reflected in the Seller Financial
Statements (except those disposed of in the ordinary
course of business since the date thereof), free and
clear of any Lien, except for Liens for (i) taxes,
assessments or other governmental charges not yet
delinquent, (ii) non-monetary encumbrances that do not
interfere with the use of the property for the business
conducted thereon and (iii) as set forth or described in
the Seller Financial Statements or any subsequent Seller
Financial Statements delivered to Buyer prior to the
Effective Time.
(b) No material properties or assets that are
reflected as owned by Seller or any of the Seller
Subsidiaries in the Seller Financial Statements as of
December 31, 1996 have been sold, leased, transferred,
assigned or otherwise disposed of since such date, except
in the ordinary course of business.
(c) All furniture, fixtures, vehicles, machinery
and equipment and computer software owned or used by
Seller or the Seller Subsidiaries, including any such
items leased as a lessee (taken as a whole as to each of
the foregoing with no single item deemed to be of
material importance) are in good working order and free
of known defects, subject only to normal wear and tear.
The operation by Seller or the Seller Subsidiaries of
such properties and assets is in compliance in all
material respects with all applicable laws, ordinances
and rules and regulations of any governmental authority
having jurisdiction over such use.
2.08. Real Property.
-------------
(a) The legal description of each parcel of real
property owned by Seller or any of the Seller
Subsidiaries (other than real property acquired in
foreclosure or in lieu of foreclosure in the course of
the collection of loans and being held by Seller or a
Seller Subsidiary for disposition as required by law) is
set forth in Schedule 2.08(a) under the heading "Owned
----------------
Real Property" (such real property being herein referred
to as the "Owned Real Property"). The legal description
of each parcel of real property leased by Seller or any
of the Seller Subsidiaries is also set forth in Schedule
--------
2.08(a) under the heading "Leased Real Property" (such
-------
real property being herein referred to as the "Leased
Real Property"). Collectively, the Owned Real Property
and the Leased Real Property is herein referred to as the
"Real Property."
(b) There is no pending action involving Seller
or any of the Seller Subsidiaries as to the title of or
the right to use any of the Real Property.
(c) Neither Seller nor any of the Seller
Subsidiaries has any interest in any other real property
not listed on Schedule 2.08(a), except interests as a
----------------
mortgagee, and except for any real property acquired in
foreclosure or in lieu of foreclosure and being held for
disposition as required by law.
- 9 -
14
(d) None of the buildings, structures or other
improvements located on the Real Property encroaches upon
or over any adjoining parcel of real estate or any
easement or right-of-way or "setback" line in any
material respect and all such buildings, structures and
improvements are in all material respects located and
constructed in conformity with all applicable zoning
ordinances and building codes.
(e) None of the buildings, structures or
improvements located on the Owned Real Property are the
subject of any official complaint or notice by any
governmental authority of violation of any applicable
zoning ordinance or building code, and there is no zoning
ordinance, building code, use or occupancy restriction or
condemnation action or proceeding pending, or, to the
best knowledge of Seller, threatened, with respect to any
such building, structure or improvement which, if
resolved against Seller, would result in a Material
Adverse Effect on the Seller and the Seller Subsidiaries
taken as a whole. The Owned Real Property is in
generally good condition for its intended purpose,
ordinary wear and tear excepted, and has been maintained
in accordance with reasonable and prudent business
practices applicable to like facilities.
(f) Except as may be reflected in the Seller
Financial Statements or with respect to such easements,
Liens, defects or encumbrances as do not individually or
in the aggregate materially adversely affect the use or
value of the parcel of Owned Real Property, Seller and
the Seller Subsidiaries have, and at the Closing Date
will have, good and marketable title to their respective
Owned Real Properties.
(g) Neither Seller nor any of the Seller
Subsidiaries has received any notice of any past, pending
or threatened investigation, proceeding, claim, action or
lawsuit, whether by a third party or Regulatory
Authority, arising out of the ownership of or the
operations at the Real Property or environmental
conditions that exist or allegedly exist at the Real
Property or at any Real Property previously owned, leased
or operated by Seller or any of the Seller Subsidiaries.
(h) Neither Seller nor any of the Seller
Subsidiaries has caused or allowed the generation,
treatment, storage, disposal or release at the Real
Property of any toxic or hazardous materials regulated
under federal, state or local law.
(i) To the best of Seller's knowledge, there are
no underground storage tanks located on, in or under the
Real Property.
2.09. Taxes. Seller and each Seller Subsidiary have
-----
timely filed or will timely file (including extensions) all
material tax returns required to be filed at or prior to the
Closing Date ("Seller Returns"). Each of Seller and the Seller
Subsidiaries has paid, or set up adequate reserves on the Seller
Financial Statements for the payment of, all taxes required to be
paid in respect of the periods covered by such Seller Returns and
has set up adequate reserves on the most recent Seller Financial
Statements for the payment of all taxes anticipated to be payable
in respect of all periods up to and including the latest period
covered by such Seller Financial Statements. Except as set forth
in Schedule 2.09, neither Seller nor any Seller Subsidiary has any
-------------
liability material to the condition of Seller and the Seller
Subsidiaries, taken as a whole, for any such taxes in excess of the
amounts so paid or reserves so established, and no material
deficiencies for any tax, assessment or governmental charge have
been proposed, asserted or assessed (tentatively or definitely)
against Seller or any of the Seller Subsidiaries which would not be
covered by existing reserves. Neither Seller nor any of the Seller
Subsidiaries is delinquent in the payment of any tax, assessment or
governmental charge, nor has it requested any
- 10 -
15
extension of time within which to file any tax returns in respect of
any fiscal year which have not since been filed and no requests for
waivers of the time to assess any tax are pending. No federal or
state income tax return of Seller or any Seller Subsidiaries has been
audited by the Internal Revenue Service (the "IRS") or any state tax
authority for the seven (7) most recent full fiscal years. There is
no deficiency or refund litigation or, to the best knowledge of
Seller, matter in controversy with respect to Seller Returns.
Neither Seller nor any of the Seller Subsidiaries has extended or
waived any statute of limitations on the assessment of any tax due
that is currently in effect.
2.10. Material Adverse Effect. Since December 31,
-----------------------
1996, there have been no events or circumstances, which
individually or in the aggregate, have had or are reasonably likely
to have a Material Adverse Effect on Seller and the Seller
Subsidiaries, taken as a whole.
2.11. Loans, Commitments and Contracts.
--------------------------------
(a) Schedule 2.11(a) contains a complete and
----------------
accurate listing as of the date hereof of all contracts
entered into with respect to deposits of $100,000 or
more, by account, and all loan agreements and
commitments, notes, security agreements, repurchase
agreements, bankers' acceptances, outstanding letters of
credit and commitments to issue letters of credit,
participation agreements, and other documents relating to
or involving extensions of credit and other commitments
to extend credit by Seller or any of the Seller
Subsidiaries with respect to any one entity or related
group of entities in excess of $75,000 to which Seller or
any of the Seller Subsidiaries is a party or by which it
is bound, by account, and, where applicable, such other
information as shall be necessary to identify any related
group of entities.
(b) Except for the contracts and agreements
required to be listed on Schedule 2.11(a) and the loans
----------------
required to be listed on Schedule 2.11(f), and except as
----------------
otherwise listed on Schedule 2.11(b), as of the date
----------------
hereof neither Seller nor any of the Seller Subsidiaries
is a party to or is bound by any:
(i) agreement, contract, arrangement,
understanding or commitment with any labor
union;
(ii) franchise or license agreement;
(iii) written employment, severance,
termination pay, agency, consulting or similar
agreement or commitment in respect of personal
services;
(iv) material agreement, arrangement or
commitment (A) not made in the ordinary course
of business, and (B) pursuant to which Seller or
any of the Seller Subsidiaries is or may become
obligated to invest in or contribute to any
Seller Subsidiary other than pursuant to Seller
Employee Plans (as that term is defined in
Section 2.19 hereof) and agreements relating to
joint ventures or partnerships set forth in
Schedule 2.02, true and complete copies of which
-------------
have been furnished to Buyer;
(v) agreement, indenture or other
instrument not disclosed in the Seller Financial
Statements relating to the borrowing of money by
Seller or any of the Seller Subsidiaries or the
guarantee by Seller or any of the Seller
Subsidiaries of any such obligation (other than
trade payables or instruments related to
- 11 -
16
transactions entered into in the ordinary course
of business by Seller or any of the Seller
Subsidiaries, such as deposits, Federal Funds
borrowings and repurchase and reverse repurchase
agreements), other than such agreements,
indentures or instruments providing for annual
payments of less than $5,000;
(vi) contract containing covenants which
limit the ability of Seller or any of the Seller
Subsidiaries to compete in any line of business
or with any person or which involves any
restrictions on the geographical area in which,
or method by which, Seller or any of the Seller
Subsidiaries may carry on their respective
businesses (other that as may be required by law
or any applicable Regulatory Authority);
(vii) contract or agreement which is a
"material contract" within the meaning of Item
601(b)(10) of Regulation S-K as promulgated by
the SEC to be performed after the date of this
Agreement;
(viii) lease with annual rental payments
aggregating $5,000 or more;
(ix) loans or other obligations payable
or owing to any officer, director or employee
except (A) salaries, wages and directors' fees
or other compensation incurred and accrued in
the ordinary course of business and (B)
obligations due in respect of any depository
accounts maintained by any of the foregoing at
Seller or any of the Seller Subsidiaries in the
ordinary course of business; or
(x) other agreement, contract, arrange-
ment, understanding or commitment involving an
obligation by Seller or any of the Seller
Subsidiaries of more than $5,000 and extending
beyond six months from the date hereof that
cannot be cancelled without cost or penalty upon
notice of 30 days or less, other than contracts
entered into in respect of deposits, loan
agreements and commitments, notes, security
agreements, repurchase and reverse repurchase
agreements, bankers' acceptances, outstanding
letters of credit and commitments to issue
letters of credit, participation agreements and
other documents relating to transactions entered
into by Seller or any of the Seller Subsidiaries
in the ordinary course of business and not
involving extensions of credit with respect to
any one entity or related group of entities in
excess of $5,000.
(c) Seller and/or the Seller Subsidiaries
carry property, liability, director and officer errors
and omissions, products liability and other insurance
coverage as set forth in Schedule 2.11(c) under the
----------------
heading "Insurance."
(d) True, correct and complete copies of the
agreements, contracts, leases, insurance policies and
other documents referred to in Section 2.11(b) have been
included with Schedule 2.11(b) hereto. True, correct and
----------------
complete copies of the agreements, contracts, leases,
insurance policies and other documents referred to in
Sections 2.11(a) and (c) have been or shall be furnished
or made available to Buyer.
(e) To the best knowledge of Seller, each of
the agreements, contracts, leases, insurance policies and
other documents referred to in Schedules 2.11 (a), (b)
-----------------------
and (c) is a valid, binding and enforceable obligation of
-------
the parties sought to be bound thereby, except as the
enforceability thereof against the parties thereto (other
than Seller or any
- 12 -
17
of the Seller Subsidiaries) may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws now
or hereafter in effect relating to the enforcement of
creditors' rights generally, and except that equitable
principles may limit the right to obtain specific
performance or other equitable remedies.
(f) Schedule 2.11(f) under the heading "Loans"
----------------
contains a true, correct and complete listing, as of the
date of this Agreement, by account, of: (i) all loans in
excess of $10,000 of Seller or any of the Seller
Subsidiaries which have been accelerated during the past
twelve months; (ii) all loan commitments or lines of
credit of Seller or any of the Seller Subsidiaries in
excess of $10,000 which have been terminated by Seller or
any of the Seller Subsidiaries during the past twelve
months by reason of default or adverse developments in
the condition of the borrower or other events or
circumstances affecting the credit of the borrower; (iii)
all loans, lines of credit and loan commitments in excess
of $10,000, as to which Seller or any of the Seller
Subsidiaries has given written notice of its intent to
terminate during the past twelve months; (iv) with
respect to all loans in excess of $10,000, all "demand"
letters and other written communications from Seller or
any of the Seller Subsidiaries to any of their respective
borrowers, customers or other parties during the past
twelve months wherein Seller or any of the Seller
Subsidiaries has requested or demanded that actions be
taken to correct existing defaults or facts or circum-
stances which may become defaults; (v) each borrower,
customer or other party which has notified Seller or any
of the Seller Subsidiaries during the past twelve months
of, or has asserted against Seller or any of the Seller
Subsidiaries, in each case in writing, any "lender
liability" or similar claim, and, to the best knowledge
of Seller, each borrower, customer or other party which
has given Seller or any of the Seller Subsidiaries any
oral notification of, or orally asserted to or against
Seller or any of the Seller Subsidiaries, any such claim;
(vi) all loans in excess of $10,000 (A) that are
contractually past due 90 days or more in the payment of
principal and/or interest, (B) that are on non-accrual
status, (C) that have been classified "doubtful," "loss"
or the equivalent thereof by any Regulatory Authority,
(D) where a reasonable doubt exists as to the timely
future collectibility of principal and/or interest,
whether or not interest is still accruing or the loan is
less than 90 days past due, (E) the interest rate terms
have been reduced and/or the maturity dates have been
extended subsequent to the agreement under which the loan
was originally created due to concerns regarding the
borrower's ability to pay in accordance with such initial
terms, or (F) where a specific reserve allocation exists
in connection therewith; and (vii) all loans or debts
payable or owing by any executive officer or director of
Seller or any of the Seller Subsidiaries or any other
person or entity deemed an "executive officer" or a
"related interest" of any of the foregoing, as such terms
are defined in Regulation O of the Federal Reserve Board.
2.12. Absence of Defaults. Neither Seller nor any of
-------------------
the Seller Subsidiaries is in violation of its charter documents or
Bylaws or in default under any material agreement, commitment,
arrangement, lease, insurance policy or other instrument, whether
entered into in the ordinary course of business or otherwise and
whether written or oral, and there has not occurred any event that,
with the lapse of time or giving of notice or both, would consti-
tute such a default, except, in all cases, where such violation or
default would not have a Material Adverse Effect on Seller and the
Seller Subsidiaries, taken as a whole.
2.13. Litigation and Other Proceedings. Except as set
--------------------------------
forth on Schedule 2.13 or otherwise disclosed in the Seller
-------------
Financial Statements, neither Seller nor any of the Seller
Subsidiaries is a party to any pending or, to the best knowledge of
Seller, threatened claim, action, suit, investigation
- 13 -
18
or proceeding, or is subject to any order, judgment or decree,
except for matters which, in the aggregate, will not have, or
reasonably could not be expected to have, a Material Adverse Effect on
Seller and the Seller Subsidiaries, taken as a whole. Without
limiting the generality of the foregoing, there are no actions, suits
or proceedings pending or, to the best knowledge of Seller, threatened
against Seller or any of the Seller Subsidiaries or any of their
respective officers or directors by any stockholder of Seller or
any of the Seller Subsidiaries (or any former stockholder of Seller
or any of the Seller Subsidiaries) or involving claims under the
Community Reinvestment Act of 1977, as amended, the Bank Secrecy
Act or the fair lending and fair credit laws.
2.14. Directors' and Officers' Insurance. Each of
----------------------------------
Seller and the Seller Subsidiaries has taken or will take all
requisite action (including, without limitation, the making of
claims and the giving of notices) pursuant to its directors' and
officers' liability insurance policy or policies in order to
preserve all rights thereunder with respect to all matters (other
than matters arising in connection with this Agreement and the
transactions contemplated hereby) occurring prior to the Effective
Time that are known to Seller, except for such matters which,
individually or in the aggregate, will not have and reasonably
could not be expected to have a Material Adverse Effect on Seller
and the Seller Subsidiaries, taken as a whole.
2.15. Compliance with Laws.
--------------------
(a) To the best knowledge of Seller, Seller
and each of the Seller Subsidiaries have all permits,
licenses, authorizations, orders and approvals of, and
have made all filings, applications and registrations
with, all Regulatory Authorities that are required in
order to permit them to own or lease their respective
properties and assets and to carry on their respective
businesses as presently conducted; all such permits,
licenses, certificates of authority, orders and approvals
are in full force and effect and no suspension or
cancellation of any of them is, to the best of Seller's
knowledge, threatened; and all such filings, applications
and registrations are current; in each case except for
permits, licenses, authorizations, orders, approvals,
filings, applications and registrations the failure to
have (or have made) would not have a Material Adverse
Effect on Seller and the Seller Subsidiaries, taken as a
whole.
(b) (i) Each of Seller and the Seller
Subsidiaries has complied with all laws, regulations and
orders (including, without limitation, zoning ordinances,
building codes, the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and securities, tax,
environmental, civil rights, and occupational health and
safety laws and regulations including, without
limitation, in the case of Seller or any Seller
Subsidiary that is a bank or savings association, banking
organization, banking corporation or trust company, all
statutes, rules, regulations and policy statements
pertaining to the conduct of a banking, deposit-taking,
lending or related business, or to the exercise of trust
powers) and governing instruments applicable to it and to
the conduct of its business, except where such failure to
comply would not have a Material Adverse Effect on Seller
and the Seller Subsidiaries, taken as a whole, and (ii)
neither Seller nor any of the Seller Subsidiaries is in
default under, and no event has occurred which, with the
lapse of time or notice or both, could result in the
default under, the terms of any judgment, order, writ,
decree, permit, or license of any Regulatory Authority or
court, whether federal, state, municipal or local, and
whether at law or in equity, except where such default
would not have a Material Adverse Effect on Seller and
the Seller Subsidiaries, taken as a whole.
- 14 -
19
(c) Neither Seller nor any of the Seller
Subsidiaries is subject to or reasonably likely to incur
a liability as a result of its ownership, operation, or
use of any Property (as defined below) of Seller (whether
directly or, to the best knowledge of Seller, as a
consequence of such Property being acquired in
foreclosure or in lieu of foreclosure and held for
disposition or being part of the investment portfolio of
Seller or any of the Seller Subsidiaries) (A) that is
contaminated by or contains any hazardous waste, toxic
substance or related materials, including, without
limitation, petroleum, asbestos, PCBs, pesticides, herbi-
cides and any other substance or waste that is hazardous
to human health or the environment (collectively, a
"Toxic Substance"), or (B) on which any Toxic Substance
has been stored, disposed of, placed or used in the
construction thereof; and which, in each case, reasonably
could be expected to have a Material Adverse Effect on
Seller and the Seller Subsidiaries, taken as a whole.
"Property" shall include all property (real or personal,
tangible or intangible) owned or controlled by Seller or
any of the Seller Subsidiaries, including, without
limitation, property acquired under foreclosure or in
lieu of foreclosure, property in which any venture
capital or similar unit of Seller or any of the Seller
Subsidiaries has an interest and, to the best knowledge
of Seller, property held by Seller or any of the Seller
Subsidiaries in its capacity as a trustee. No claim,
action, suit or proceeding is pending and no material
claim has been asserted against Seller or any of the
Seller Subsidiaries relating to Property of Seller or any
of the Seller Subsidiaries before any court or other
Regulatory Authority or arbitration tribunal relating to
Toxic Substances, pollution or the environment, and there
is no outstanding judgment, order, writ, injunction,
decree or award against or affecting Seller or any of the
Seller Subsidiaries with respect to the same. Except for
statutory or regulatory restrictions of general
application, no Regulatory Authority has placed any
restriction on the business of Seller or any of the
Seller Subsidiaries which reasonably could be expected to
have a Material Adverse Effect on Seller and the Seller
Subsidiaries, taken as a whole.
(d) Since December 31, 1993, neither Seller
nor any of the Seller Subsidiaries has received any
notification or communication which has not been resolved
from any Regulatory Authority (i) asserting that any
Seller or any of the Seller Subsidiaries is not in
substantial compliance with any of the statutes,
regulations or ordinances that such Regulatory Authority
enforces, except with respect to matters which reasonably
could not be expected to have a Material Adverse Effect
on Seller and the Seller Subsidiaries, taken as a whole,
(ii) threatening to revoke any license, franchise, permit
or governmental authorization that is material to the
condition of Seller and the Seller Subsidiaries, taken as
a whole, including, without limitation, RFSLA's status as
an insured depository institution under the FDI Act,
(iii) requiring or threatening to require Seller or any
of the Seller Subsidiaries, or indicating that Seller or
any of the Seller Subsidiaries may be required, to enter
into a cease and desist order, agreement or memorandum of
understanding or any other agreement restricting or
limiting or purporting to direct, restrict or limit in
any manner the operations of Seller or any of the Seller
Subsidiaries, including, without limitation, any
restriction on the payment of dividends. No such cease
and desist order, agreement or memorandum of
understanding or other agreement is currently in effect.
(e) Neither Seller nor any of the Seller
Subsidiaries is required by Section 32 of the FDI Act to
give prior notice to any federal banking agency of the
proposed addition of an individual to its board of
directors or the employment of an individual as a senior
executive officer.
- 15 -
20
2.16. Labor. No work stoppage involving Seller or any
-----
of the Seller Subsidiaries is pending or, to the best knowledge of
Seller, threatened. Neither Seller nor any of the Seller Subsid-
iaries is involved in, or, to the best knowledge of Seller,
threatened with or affected by, any labor dispute, arbitration,
lawsuit or administrative proceeding which reasonably could be
expected to have a Material Adverse Effect on Seller and the Seller
Subsidiaries, taken as a whole. None of the employees of Seller or
the Seller Subsidiaries are represented by any labor union or any
collective bargaining organization.
2.17. Material Interests of Certain Persons. No
-------------------------------------
officer or director of Seller or any of the Seller Subsidiaries, or
any "associate" (as such term is defined in Rule 14a-1 under the
Exchange Act) of any such officer or director, has any interest in
any contract or property (real or personal, tangible or
intangible), used in, or pertaining to the business of, Seller or
any of the Seller Subsidiaries, which in the case of Seller and
each of the Seller Subsidiaries would be required to be disclosed
by Item 404 of Regulation S-K promulgated by the SEC.
2.18. Allowance for Loan and Lease Losses; Non-
-----------------------------------------
Performing Assets.
-----------------
(a) All of the accounts, notes, and other
receivables which are reflected in the Seller Financial
Statements as of December 31, 1996 were acquired in the
ordinary course of business and were collectible in full
in the ordinary course of business, except for possible
loan and lease losses which are adequately provided for
in the allowance for loan and lease losses reflected in
such Seller Financial Statements, and the collection
experience of Seller and the Seller Subsidiaries since
December 31, 1996 to the date hereof, has not deviated in
any material and adverse manner from the credit and
collection experience of Seller and the Seller
Subsidiaries, taken as a whole, for the three-months
ended December 31, 1996.
(b) The allowances for loan losses contained
in the Seller Financial Statements were established in
accordance with the past practices and experiences of
Seller and the Seller Subsidiaries, and the allowance for
loan and lease losses shown on the consolidated balance
sheet of Seller and the Seller Subsidiaries as of
December 31, 1996, were adequate in all material respects
under the requirements of generally accepted accounting
principles, or regulatory accounting principles, as the
case may be, to provide for possible losses on loans and
leases (including, without limitation, accrued interest
receivable) and credit commitments (including, without
limitation, stand-by letters of credit) as of the date of
such balance sheet.
(c) Schedule 2.18(c) sets forth as of the date
----------------
of this Agreement all assets classified by Seller as real
estate acquired through foreclosure or repossession,
including in-substance foreclosure.
(d) The aggregate amount of all Non-Performing
Assets (as defined below) on the books of Seller and the
Seller Subsidiaries does not exceed $75,000. "Non-
Performing Assets" shall mean (i) all loans (A) that are
contractually past due 90 days or more in the payment of
principal and/or interest, (B) that are on nonaccrual
status, (C) that have been classified "doubtful," "loss"
or the equivalent thereof by any Regulatory Agency or (D)
where the interest rate terms have been reduced and/or
the maturity dates have been extended subsequent to the
agreement under which the loan was originally created due
to concerns regarding the borrower's ability to pay in
accordance with such initial terms, and (ii) all assets
classified by Seller as real estate acquired through
- 16 -
21
foreclosure or in lieu of foreclosure, including in-
substance foreclosures, and all other assets acquired
through foreclosure or in lieu of foreclosure.
2.19. Employee Benefit Plans.
----------------------
(a) Schedule 2.19(a) lists all pension,
----------------
retirement, supplemental retirement, stock option, stock
purchase, stock ownership, savings, stock appreciation
right, profit sharing, deferred compensation, consulting,
bonus, medical, disability, workers' compensation,
vacation, group insurance, severance and other employee
benefit, incentive and welfare policies, contracts, plans
and arrangements, and all trust agreements related
thereto, maintained by or contributed to by Seller or any
of the Seller Subsidiaries in respect of any of the
present or former directors, officers, or other employees
of and/or consultants to Seller or any of the Seller
Subsidiaries (collectively, "Seller Employee Plans").
Seller has furnished Buyer with the following documents
with respect to each Seller Employee Plan: (i) a true and
complete copy of all written documents comprising such
Seller Employee Plan (including amendments and individual
agreements relating thereto) or, if there is no such
written document, an accurate and complete description of
the Seller Employee Plan; (ii) the most recently filed
Form 5500 or Form 5500-C/R (including all schedules
thereto), if applicable; (iii) the most recent financial
statements and actuarial reports, if any; (iv) the
summary plan description currently in effect and all
material modifications thereof, if any; and (v) the most
recent IRS determination letter, if any.
(b) All Seller Employee Plans have been
maintained and operated in all material respects in
accordance with their terms and the requirements of all
applicable statutes, orders, rules and final regulations,
including, without limitation, to the extent applicable,
ERISA and the Internal Revenue Code of 1986, as amended
(the "Code"), or as reflected in the applicable statutes,
the underlying Department of Labor or Internal Revenue
Service regulations, and any Department of Labor Advisory
Opinions or Internal Revenue Service Revenue Rulings.
All contributions required to be made to Seller Employee
Plans have been made or reserved.
(c) With respect to each of the Seller
Employee Plans which is a pension plan (as defined in
Section 3(2) of ERISA) (the "Pension Plans"), to the best
knowledge of Seller: (i) each Pension Plan which is
intended to be "qualified" within the meaning of Section
401(a) of the Code has been determined to be so qualified
by the IRS and such determination letter may still be
relied upon, and each related trust is exempt from
taxation under Section 501(a) of the Code; (ii) the
present value of all benefits vested and all benefits
accrued under each Pension Plan which is subject to Title
IV of ERISA did not, in each case, as of the last
applicable annual valuation date (as indicated on
Schedule 2.19(a)), exceed the value of the assets of the
----------------
Pension Plan allocable to such vested or accrued
benefits; (iii) there has been no "prohibited
transaction," as such term is defined in Section 4975 of
the Code or Section 406 of ERISA, which could subject any
Pension Plan or associated trust, or Seller or any of the
Seller Subsidiaries, to any material tax or penalty; (iv)
no Pension Plan or any trust created thereunder has been
terminated as of the date hereof, nor has there been any
"reportable events" with respect to any Pension Plan, as
that term is defined in Section 4043 of ERISA since
January 1, 1989; and (v) no Pension Plan or any trust
created thereunder has incurred any "accumulated funding
deficiency", as such term is defined in Section 302 of
ERISA (whether or not waived). Except as disclosed on
Schedule 2.19(a), no Pension Plan is a "multiemployer
----------------
plan" as that term is defined in Section 3(37) of ERISA.
- 17 -
22
(d) Neither Seller nor any of the Seller
Subsidiaries has any liability for any post-retirement
health, medical or similar benefit of any kind
whatsoever, except as required by statute or regulation.
(e) Neither Seller nor any of the Seller
Subsidiaries has any material liability under ERISA or
the Code as a result of its being a member of a group
described in Sections 414(b), (c), (m) or (o) of the
Code.
(f) Except as disclosed in Schedule 2.19(f),
----------------
neither the execution nor delivery of this Agreement, nor
the consummation of any of the transactions contemplated
hereby, will (i) result in any payment (including,
without limitation, severance, unemployment compensation
or golden parachute payment) becoming due to any director
or employee of Seller or any of the Seller Subsidiaries
from any of such entities, (ii) increase any benefit
otherwise payable under any of the Seller Employee Plans
or (iii) result in the acceleration of the time of
payment of any such benefit.
(g) The withdrawal of RFSLA from the Financial
Institutions Retirement Plan adopted by RFSLA (the
"Retirement Plan") will not result in the payment by
either RFSLA or Seller, after the date hereof, of
contributions, assessments, fees or expenses, including,
but not limited to, fees with respect to the withdrawal
by RFSLA from the Retirement Plan and the payment of any
contributions due by RFSLA, in excess of $50,000 in the
aggregate.
2.20. Conduct of Seller to Date. Except as set forth
-------------------------
on Schedule 2.20, from and after December 31, 1996 through the date
-------------
of this Agreement, and except as set forth in the Seller Financial
Statements or specifically contemplated by this Agreement: (i)
Seller and the Seller Subsidiaries have conducted their respective
businesses in the ordinary and usual course consistent with past
practices; (ii) neither Seller nor any of the Seller Subsidiaries
has issued, sold, granted, conferred or awarded any of its Equity
Securities (except shares of Seller Common Stock upon exercise of
Seller Employee Stock Options and awards made pursuant to the
Seller's Recognition and Retention Plan), or any corporate debt
securities which would be classified under generally accepted
accounting principles as long-term debt on the balance sheets of
Seller or the Seller Subsidiaries; (iii) Seller has not effected
any stock split or adjusted, combined, reclassified or otherwise
changed its capitalization; (iv) Seller has not declared, set aside
or paid any dividend (other than its regular quarterly dividends)
or other distribution in respect of its capital stock, or
purchased, redeemed, retired, repurchased or exchanged, or
otherwise acquired or disposed of, directly or indirectly, any of
its Equity Securities, whether pursuant to the terms of such Equity
Securities or otherwise; (v) neither Seller nor any of the Seller
Subsidiaries has incurred any obligation or liability (absolute or
contingent), except liabilities incurred in the ordinary course of
business, or subjected to Lien any of its assets or properties
other than in the ordinary course of business consistent with past
practice; (vi) neither Seller nor any of the Seller Subsidiaries
has discharged or satisfied any Lien or paid any obligation or
liability (absolute or contingent), other than in the ordinary
course of business; (vii) neither Seller nor any of the Seller
Subsidiaries has sold, assigned, transferred, leased, exchanged or
otherwise disposed of any of its properties or assets other than
for (in the reasonable opinion of management of Seller) a fair
consideration in the ordinary course of business; (viii) except as
required by contract or law, neither Seller nor any of the Seller
Subsidiaries has (A) increased the rate of compensation of, or paid
any bonus to, any of its directors, officers or other employees,
except in accordance with existing policy, (B) entered into any
new, or amended or supplemented any existing, employment,
management, consulting, deferred compensation, severance or other
similar contract, (C) entered into, terminated or substantially
modified any of the Seller Employee Plans or (D) agreed to do any
of the foregoing; (ix) neither Seller nor any Seller Subsidiary has
suffered any material damage,
- 18 -
23
destruction or loss, whether as the result of fire, explosion,
earthquake, accident, casualty, labor trouble, requisition or taking
of property by any Regulatory Authority, flood, windstorm, embargo,
riot, act of God or the enemy, or other casualty or event, and whether
or not covered by insurance; (x) neither Seller nor any of the Seller
Subsidiaries has cancelled or compromised any debt, except for debts
charged off or compromised in accordance with the past practice of
Seller and the Seller Subsidiaries; and (xi) neither Seller nor any of
the Seller Subsidiaries has entered into any material transaction,
contract or commitment outside the ordinary course of its business.
2.21. Absence of Undisclosed Liabilities.
----------------------------------
(a) As of the date of this Agreement, neither
Seller nor any of the Seller Subsidiaries has any debts,
liabilities or obligations equal to or exceeding $5,000,
individually or $10,000 in the aggregate, whether
accrued, absolute, contingent or otherwise and whether
due or to become due, which are required to be reflected
in the Seller Financial Statements or the notes thereto
in accordance with generally accepted accounting
principles except:
(i) liabilities and obligations
reflected on the Seller Financial Statements;
(ii) operating leases reflected on
Schedule 2.11; and
-------------
(iii) debts, liabilities or obligations
incurred since December 31, 1996 in the ordinary
and usual course of their respective businesses,
none of which are for breach of contract, breach
of warranty, tort, infringement or lawsuits and
none of which have a Material Adverse Effect on
Seller and the Seller Subsidiaries, taken as a
whole.
(b) Neither Seller nor any of the Seller
Subsidiaries was as of December 31, 1996, and since such
date to the date hereof, has become a party to, any
contract or agreement, excluding deposits, loan
agreements and commitments, notes, security agreements,
repurchase and reverse repurchase agreements, bankers'
acceptances, outstanding letters of credit and
commitments to issue letters of credit, participation
agreements and other documents relating to transactions
entered into by Seller or any of the Seller Subsidiaries
in the ordinary course of business, which had, has or may
be reasonably expected to have a Material Adverse Effect
on Seller and the Seller Subsidiaries, taken as a whole.
2.22. Proxy Statement, Etc. None of the information
--------------------
regarding Seller or any of the Seller Subsidiaries to be supplied
by Seller for inclusion or included, with Seller's consent (which
shall not be unreasonably withheld), in (i) the Registration
Statement on Form S-4 to be filed with the SEC by Buyer for the
purpose of registering the shares of Buyer Common Stock to be
exchanged for shares of Seller Common Stock pursuant to the
provisions of this Agreement (the "Registration Statement"), (ii)
the Proxy Statement to be mailed to Seller's stockholders in
connection with the meeting to be called to consider this Agreement
and the Merger (the "Seller Proxy Statement"), (iii) the Proxy
Statement to be mailed to Buyer's shareholders in connection with
the meeting to be called to consider this Agreement and the Merger
(the "Buyer Proxy Statement" and, collectively with the Seller
Proxy Statement, the "Proxy Statements") or (iv) any other
documents to be filed with any Regulatory Authority in connection
with the transactions contemplated hereby will, at the respective
times such documents are filed with any Regulatory Authority and,
in the case of the Registration Statement, when it becomes
effective and, with
- 19 -
24
respect to the Proxy Statements, when mailed, be false or misleading
with respect to any material fact, or omit to state any material fact
necessary in order to make the statements therein not misleading or,
in the case of the Proxy Statements or any amendment thereof or
supplement thereto, at the time of the meeting of Seller's
stockholders referred to in Section 5.03, be false or misleading with
respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier communication with
respect to the solicitation of any proxy for such meeting. All
documents which Seller or any of the Seller Subsidiaries is
responsible for filing with any Regulatory Authority in connection
with the Merger will comply as to form in all material respects with
the provisions of applicable law.
2.23. Registration Obligations. Neither Seller nor
------------------------
any of the Seller Subsidiaries is under any obligation, contingent
or otherwise, which will survive the Effective Time by reason of
any agreement to register any transaction involving any of its
securities under the Securities Act.
2.24. Tax and Regulatory Matters. Neither Seller nor
--------------------------
any of the Seller Subsidiaries has taken or agreed to take any
action or has any knowledge of any fact or circumstance that would
(i) prevent the transactions contemplated hereby from qualifying as
a reorganization within the meaning of Section 368 of the Code or
(ii) materially impede or delay receipt of any approval referred to
in Section 6.01(b) or the consummation of the transactions
contemplated by this Agreement.
2.25. Brokers and Finders. Except as set forth on
-------------------
Schedule 2.25, neither Seller nor any of the Seller Subsidiaries
-------------
nor any of their respective officers, directors or employees has
employed any 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
Seller or any of the Seller Subsidiaries in connection with this
Agreement or the transactions contemplated hereby.
2.26. Interest Rate Risk Management Instruments.
-----------------------------------------
(a) Set forth on Schedule 2.26(a) is a list as
----------------
of the date hereof of all interest rate swaps, caps, floors and
option agreements and other interest rate risk management
arrangements to which Seller or any of the Seller Subsidiaries is
a party or by which any of their properties or assets may be bound.
(b) All such interest rate swaps, caps, floors
and option agreements and other interest rate risk management
arrangements to which Seller or any of the Seller Subsidiaries is
a party or by which any of their properties or assets may be bound
were entered into in the ordinary course of business and, to the
best knowledge of Seller, in accordance with prudent banking
practice and applicable rules, regulations and policies of
Regulatory Authorities and with counterparties believed to be
financially responsible at the time and are legal, valid and
binding obligations of Seller or a Seller Subsidiary and are in
full force and effect. Seller and each of the Seller Subsidiaries
has duly performed in all material respects all of its obligations
thereunder to the extent that such obligations to perform have
accrued, and to the best knowledge of Seller, there are no material
breaches, violations or defaults or allegations or assertions of
such by any party thereunder.
2.27. Accuracy of Information. The statements
-----------------------
contained in this Agreement, the Schedules and any other written
document executed and delivered by or on behalf of Seller pursuant
to the terms of this Agreement are true and correct as of the date
hereof or as of the date delivered in all material respects, and
such statements and documents do not omit any material fact
necessary to make the statements contained therein not misleading
in all material respects.
- 20 -
25
ARTICLE III
-----------
REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER
As an inducement to Seller to enter into and perform its
obligations under this Agreement, and notwithstanding any examina-
tion, inspection, audit or other investigation made by Seller,
Buyer represents and warrants to and covenant with Seller as
follows:
3.01. Organization and Authority. Buyer is a
--------------------------
corporation duly organized, validly existing and in good standing
under the laws of the State of Missouri, is qualified to do
business and is in good standing in all jurisdictions where its
ownership or leasing of property or the conduct of its business
requires it to be so qualified and has corporate power and
authority to own its properties and assets and to carry on its
business as it is now being conducted, except where the failure to
be so qualified would not have a Material Adverse Effect on Buyer
and its Subsidiaries, taken as a whole. Buyer is registered as a
bank holding company with the Federal Reserve Board under the BHCA.
3.02. Capitalization of Buyer. The authorized capital
-----------------------
stock of Buyer consists of 7,800,000 shares of Buyer Common Stock,
of which, as of February 28, 1997, 2,838,685 shares were issued and
outstanding. As of February 28, 1997, Buyer had reserved:
(a) 809,628 shares of Buyer Common Stock for issuance under various
Buyer employee and/or director stock option, incentive and/or
benefit plans ("Buyer Employee/Director Stock Grants"); and
(b) 115,851 shares of Buyer Common Stock for issuance pursuant to
outstanding warrants. From February 28, 1997 through the date of
this Agreement, no shares of Buyer Common Stock have been issued,
excluding any such shares which may have been issued in connection
with Buyer Employee/Director Stock Grants.
Buyer continually evaluates possible
acquisitions and may prior to the Effective Time enter into one or
more agreements providing for, and may consummate, the acquisition
by it of another bank, association, bank holding company, savings
and loan holding company or other company (or the assets thereof)
for consideration that may include Equity Securities. In addition,
prior to the Effective Time, Buyer may, depending on market
conditions and other factors, otherwise determine to issue equity,
equity-linked or other securities for financing purposes or
repurchase its outstanding Equity Securities. Notwithstanding the
foregoing, neither Buyer nor any Buyer Subsidiary has taken or
agreed to take any action or has any knowledge of any fact or
circumstance and Buyer will not take any action that would (i)
prevent the transactions contemplated hereby from qualifying as a
reorganization within the meaning of Section 368 of the Code or
(ii) materially impede or delay receipt of any approval referred to
in Section 6.01(b) or the consummation of the transactions
contemplated by this Agreement. Except as set forth above, there
are no other Equity Securities of Buyer outstanding. All of the
issued and outstanding shares of Buyer Common Stock are validly
issued, fully paid and nonassessable, and have not been issued in
violation of any preemptive right of any shareholder of Buyer. At
the Effective Time, the Buyer Common Stock to be issued in the
Merger or reserved for issuance pursuant to Seller Employee Stock
Options that are to be converted into and become rights with
respect to Buyer Common Stock will be duly authorized, validly
issued, fully paid and nonassessable, will not be issued in
violation of any preemptive right of any shareholder of Buyer and
will be listed for trading on the Nasdaq.
3.03. Authorization.
-------------
(a) Buyer has the corporate power and
authority to enter into this Agreement and, subject to
the approval of this Agreement by the shareholders of
Buyer and the Regulatory Authorities, to carry out its
obligations hereunder. The only shareholder vote
required for Buyer to approve this Agreement is an
affirmative vote of the holders of at
- 21 -
26
least two-thirds of the outstanding shares of Buyer Common
Stock entitled to vote at a meeting called for such
purpose. The execution, delivery and performance of this
Agreement by Buyer and the consummation by Buyer of the
transactions contemplated hereby have been duly authorized
by all requisite corporate action of Buyer. Subject to the
receipt of such approvals of the Regulatory Authorities
as may be required by statute or regulation, this
Agreement is a valid and binding obligation of Buyer
enforceable against it in accordance with its terms.
(b) Neither the execution, delivery and
performance by Buyer of this Agreement, nor the
consummation by Buyer of the transactions contemplated
hereby, nor compliance by Buyer with any of the
provisions hereof, will (i) violate, conflict with or
result in a breach of any provisions of, or constitute a
default (or an event which, with notice or lapse of time
or both, would constitute a default) or result in the
termination of, or accelerate the performance required
by, or result in a right of termination or acceleration
of, or result in the creation of, any Lien upon any of
the properties or assets of Buyer under any of the terms,
conditions or provisions of (x) its Articles of
Incorporation or Bylaws, or (y) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which Buyer is a party
or by which it may be bound, or to which Buyer or any of
its properties or assets may be subject, or (ii) subject
to compliance with the statutes and regulations referred
to in subsection (c) of this Section 3.03, violate any
judgment, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to Buyer or any of
its properties or assets; other than violations,
conflicts, breaches, defaults, terminations,
accelerations or Liens which would not have a Material
Adverse Effect on Buyer and its Subsidiaries, taken as a
whole.
(c) Other than in connection with or in
compliance with the provisions of the Missouri Statute,
the DGCL, the Securities Act, the Exchange Act, the
securities or blue sky laws of the various states or
filings, consents, reviews, authorizations, approvals or
exemptions required under the BHCA, the FDI Act or any
required approvals of any other Regulatory Authority, no
notice to, filing with, exemption or review by, or
authorization, consent or approval of, any public body or
authority is necessary for the consummation by Buyer of
the transactions contemplated by this Agreement.
3.04. Buyer Financial Statements. The consolidated
--------------------------
balance sheets of Buyer and its Subsidiaries as of December 31,
1995 and 1996 and related consolidated statements of income,
changes in shareholders' equity and cash flows for each of the two
years in the period ended December 31, 1996, together with the
notes thereto, audited by BDO Xxxxxxx, LLP, as filed with the SEC
on Form 10-K (the "Buyer Financial Statements"), have been prepared
in accordance with generally accepted accounting principles,
present fairly the consolidated financial position of Buyer and its
Subsidiaries at the dates thereof and the consolidated results of
operations, changes in shareholders' equity and cash flows of Buyer
and its Subsidiaries for the periods stated therein and are derived
from the books and records of Buyer and its Subsidiaries, which are
complete and accurate in all material respects and have been
maintained in accordance with good business practices, and as of
each of their respective dates, the Buyer Financial Statements were
materially true and correct and not misleading and did not omit any
material fact necessary to make the contents thereof not
misleading. Neither Buyer nor any of its Subsidiaries has any
material contingent liabilities that are not described in the Buyer
Financial Statements.
3.05. Buyer Reports. Since January 1, 1993, each of
-------------
Buyer and its Subsidiaries has filed all reports, registrations and
statements, together with any required amendments thereto, that it was
- 22 -
27
required to file with any Regulatory Authority. All such reports and
statements filed with any such Regulatory Authority are collectively
referred to herein as the "Buyer Reports." As of its respective date,
each Buyer Report complied in all material respects with all the rules
and regulations promulgated by the applicable Regulatory Authority and
did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. With respect to Buyer
Reports filed with the Regulatory Authorities, there is no material
unresolved violation, criticism or exception by any Regulatory
Authority with respect to any report or statement filed by, or any
examination of, Buyer or any of the Buyer Subsidiaries.
3.06. Material Adverse Effect. Since December 31,
-----------------------
1996, there has been no events or circumstances, which individually
or in the aggregate, have had or are reasonably likely to have a
Material Adverse Effect on Buyer and its Subsidiaries, taken as a
whole.
3.07. Legal Proceedings or Other Adverse Facts.
----------------------------------------
Except as otherwise disclosed in the Buyer Financial Statements,
neither Buyer nor any of its Subsidiaries is a party to any pending
or, to the best knowledge of Buyer, threatened claim, action, suit,
investigation or proceeding, or is subject to any order, judgment
or decree, except for matters which, in the aggregate, will not
have, or reasonably could not be expected to have, a Material
Adverse Effect on Buyer and its Subsidiaries, taken as a whole.
Without limiting the generality of the foregoing, there are no
actions, suits or proceedings pending or, to the best knowledge of
Buyer, threatened against Buyer or any of its Subsidiaries or any
of their respective officers or directors by any shareholder of
Buyer or any of its Subsidiaries (or any former shareholder of
Buyer or any of its Subsidiaries) or involving claims under the
Community Reinvestment Act of 1977, as amended, the Bank Secrecy
Act, the fair lending laws or any other similar laws.
3.08. Registration Statement, Etc. None of the
---------------------------
information regarding Buyer or any of its Subsidiaries to be
supplied by Buyer for inclusion or included in (i) the Registration
Statement, (ii) the Proxy Statements or (iii) any other documents
to be filed with any Regulatory Authority in connection with the
transactions contemplated hereby will, at the respective times such
documents are filed with any Regulatory Authority and, in the case
of the Registration Statement, when it becomes effective and, with
respect to the Proxy Statements, when mailed, be false or
misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein not
misleading or, in the case of the Proxy Statements or any amendment
thereof or supplement thereto, at the time of the meeting of
stockholders referred to in Section 5.03, be false or misleading
with respect to any material fact, or omit to state any material
fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for
such meeting. All documents which Buyer is responsible for filing
with any Regulatory Authority in connection with the Merger will
comply as to form in all material respects with the provisions of
applicable law.
3.09. Brokers and Finders. Except as set forth on
-------------------
Schedule 3.09, neither Buyer nor any of its respective officers,
-------------
directors or employees has employed any 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 Buyer in connection with this
Agreement or the transactions contemplated hereby.
3.10. Accuracy of Information. The statements
-----------------------
contained in this Agreement, the Schedules and in any other written
document executed and delivered by or on behalf of Buyer pursuant
to the terms of this Agreement are true and correct in all material
respects, and such statements and documents do not omit any
material fact necessary to make the statements contained herein or
therein not misleading.
- 23 -
28
3.11. Compliance with Laws. To the best knowledge of
--------------------
Buyer, Buyer and each of its Subsidiaries have (i) complied with
all laws, regulations and orders (including, without limitation,
zoning ordinances, building codes, ERISA and securities, tax,
environmental, civil rights and occupational health and safety laws
and regulations including, without limitation, in the case of Buyer
or any Buyer Subsidiary that is a bank or savings association,
banking organization, banking corporation or trust company, all
statutes, rules, regulations and policy statements pertaining to
the conduct of a banking, deposit-taking, lending or related
business, or to the exercise of trust powers) and governing
instruments applicable to it and to the conduct of its business,
except where the failure to comply would not have a Material
Adverse Effect on Buyer and its Subsidiaries, taken as a whole, and
(ii) all permits, licenses, authorizations, orders and approvals
of, and have made all filings, applications and registrations with,
all Regulatory Authorities that are required in order to permit
them to own or lease their respective properties and assets and to
carry on their respective businesses as presently conducted; all
such permits, licenses, certificates of authority, orders and
approvals are in full force and effect, and no suspensions or
cancellation of any of them is threatened; and all such filings,
applications and registrations are current; in each case except for
permits, licenses, authorizations, orders, approvals, filings,
applications and registrations the failure to have (or have made)
would have a Material Adverse Effect on Buyer and its Subsidiaries,
taken as a whole.
3.12. Tax and Regulatory Matters. Neither Buyer nor
--------------------------
any of the Buyer Subsidiaries has taken or agreed to take any
action or has any knowledge of any fact or circumstance that would
(i) prevent the transactions contemplated hereby from qualifying as
a reorganization within the meaning of Section 368 of the Code or
(ii) materially impede or delay receipt of any approval referred to
in Section 6.01(b) or the consummation of the transactions
contemplated by this Agreement.
ARTICLE IV
----------
CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME
4.01. Conduct of Businesses Prior to the Effective
--------------------------------------------
Time. During the period from the date of this Agreement to the
----
Effective Time, Seller shall, and shall cause each of the Seller
Subsidiaries to, conduct their respective businesses according to
the ordinary and usual course consistent with past practices and
shall, and shall cause each such Seller Subsidiary to, use its best
efforts to maintain and preserve its business organization,
employees and advantageous business relationships and retain the
services of its officers and key employees.
4.02. Forbearances of Seller. Except as set forth in
----------------------
Schedule 4.02 and except to the extent required by law, regulation
-------------
or any Regulatory Authority, or with the prior written consent of
Buyer (which consent shall not be unreasonably withheld), or unless
otherwise specifically noted in this Section 4.02), during the
period from the date of this Agreement to the Effective Time,
Seller shall not and shall not permit any of the Seller
Subsidiaries to:
(a) declare, set aside or pay any dividends or
other distributions, directly or indirectly, in respect
of its capital stock (other than dividends from any of
the Seller Subsidiaries to Seller or to another of the
Seller Subsidiaries), except that Seller may declare and
pay regular quarterly cash dividends of not more than
$0.15 per share on the Seller Common Stock; provided,
however, that Seller shall not declare or pay a quarterly
dividend for any quarter in which Seller stockholders
will be entitled to receive a regular quarterly dividend
on the shares of Buyer Common Stock to be issued in the
Merger;
- 24 -
29
(b) except as specifically contemplated or
required by this Agreement, enter into or amend any
employment, severance or similar agreement or arrangement
with any director, officer or employee, or materially
modify any of the Seller Employee Plans or grant any
salary or wage increase or materially increase any
employee benefit (including incentive or bonus payments),
except (i) normal individual increases in compensation to
employees consistent with past practice, (ii) as required
by law or contract and (iii) such increases of which
Seller notifies Buyer in writing and which Buyer does not
reasonably disapprove (in writing) within 10 days of the
receipt of such notice;
(c) authorize, recommend, propose or announce
an intention to authorize, recommend or propose, or enter
into an agreement in principle with respect to, any
merger, consolidation or business combination (other than
the Merger), any acquisition of a material amount of
assets or securities, any disposition of a material
amount of assets or securities or any release or
relinquishment of any material contract rights; provided
however, that the foregoing shall not apply to the
consideration of any inquiry, offer or proposal not
solicited by Seller or any Seller Subsidiary, or any of
their respective officers, directors, stockholders,
agents or affiliates which relates to the possible sale
or other disposition of Seller Common Stock or the common
stock of any Seller Subsidiary or the possible sale or
other disposition of substantially all of Seller's or any
Seller Subsidiary's assets to, or merger or consolidation
with, another corporation or association (an "Unsolicited
Acquisition Proposal") if and to the extent that the
Board of Directors of Seller reasonably determines in
good faith, after consultation with its financial advisor
and counsel to Seller, that failure to consider such
Unsolicited Acquisition Proposal could reasonably be
expected to constitute a breach of its fiduciary duties
to the stockholders of Seller; provided, further,
however, that Seller shall give Buyer prompt notice of
any Unsolicited Acquisition Proposal and keep Buyer
continually and promptly informed regarding the substance
thereof and the response of the Board of Directors of
Seller thereto;
(d) propose or adopt any amendments to its
Certificate or Articles of Incorporation or other charter
document or Bylaws, other than as set forth in Section
4.04 hereof;
(e) issue, sell, grant, confer or award any of
its Equity Securities (except shares of Seller Common
Stock issued upon exercise of Seller Employee Stock
Options outstanding on the date of this Agreement) or
effect any stock split or adjust, combine, reclassify or
otherwise change its capitalization as it existed on the
date of this Agreement;
(f) purchase, redeem, retire, repurchase or
exchange, or otherwise acquire or dispose of, directly or
indirectly, any of its Equity Securities, whether
pursuant to the terms of such Equity Securities or
otherwise;
(g) (i) without first consulting with and
obtaining the written consent of Buyer (which consent
shall not be unreasonably withheld), cause or permit
RFSLA to enter into, renew or increase any loan or credit
commitment (including stand-by letters of credit) to, or
invest or agree to invest in any person or entity or
modify any of the material provisions or renew or
otherwise extend the maturity date of any existing loan
or credit commitment (collectively, "Lend to") in an
amount equal to or in excess of $75,000 or in any amount
which, when aggregated with any and all loans or credit
commitments of
- 25 -
30
Seller and the Seller Subsidiaries to such person or
entity, would be equal to or in excess of $100,000;
provided, however, that Seller or any of the Seller
Subsidiaries may make any such loan or credit
commitment in the event (A) Seller or any Seller
Subsidiary has delivered to Buyer or its designated
representative a notice of its intention to make such
loan and such information as Buyer or its designated
representative may reasonably require in respect thereof
and (B) Buyer or its designated representative shall not
have reasonably objected to such loan by giving written
or facsimile notice of such objection within five (5)
business days following the delivery to Buyer or its
designated representative of the notice of intention and
information as aforesaid;
(h) directly or indirectly (including through
its officers, directors, employees or other
representatives) (i) initiate, solicit or encourage any
discussions, inquiries or proposals with any third party
(other than Buyer) relating to the disposition of any
significant portion of the business or assets of Seller
or any of the Seller Subsidiaries or the acquisition of
Equity Securities of Seller or any of the Seller
Subsidiaries or the merger of Seller or any of the Seller
Subsidiaries with any person (other than Buyer) or any
similar transaction (each such transaction being referred
to herein as an "Acquisition Transaction"), or (ii)
provide any such person with non-public information or
assistance or negotiate with any such person with respect
to an Acquisition Transaction, and Seller shall promptly
notify Buyer orally of all the relevant details,
including, without limitation, the identities of
inquiring parties, relating to all inquiries, indications
of interest and proposals which it may receive with
respect to any Acquisition Transaction; provided,
however, the forbearances set forth in this subparagraph
(h) shall not apply to the consideration of an
Unsolicited Acquisition Proposal if and to the extent
that the Board of Directors of Seller reasonably
determines in good faith, after consultation with its
financial advisors and counsel to Seller, that failure to
consider such Unsolicited Acquisition Proposal could
reasonably be expected to constitute a breach of its
fiduciary duties to the stockholders of Seller;
(i) take any action that would (A) materially
impede or delay the consummation of the transactions
contemplated by this Agreement or the ability of Buyer or
Seller to obtain any approval of any Regulatory Authority
required for the transactions contemplated by this
Agreement or to perform its covenants and agreements
under this Agreement or (B) prevent or impede the
transactions contemplated hereby from qualifying as a
reorganization within the meaning of Section 368 of the
Code; provided, however, that the foregoing shall not
apply to the consideration of an Unsolicited Acquisition
Proposal if and to the extent that the Board of Directors
of Seller reasonably determines in good faith, after
consultation with its financial advisors and counsel to
Seller, that failure to consider such Unsolicited
Acquisition Proposal could reasonably be expected to
constitute a breach of its fiduciary duties to the
stockholders of Seller;
(j) other than in the ordinary course of
business consistent with past practice, incur any
indebtedness for borrowed money or assume, guarantee,
endorse or otherwise as an accommodation become
responsible or liable for the obligations of any other
individual, corporation or other entity;
(k) materially restructure or change its
investment securities portfolio, through purchases, sales
or otherwise, or the manner in which the portfolio is
classified or reported, or execute individual investment
transactions of greater than $250,000 for U.S. Treasury
or Federal Agency Securities and $100,000 for all other
investment instruments;
- 26 -
31
(l) agree in writing or otherwise to take any
of the foregoing actions or engage in any activity, enter
into any transaction or intentionally take or omit to
take any other act which would make any of the
representations and warranties in Article II of this
Agreement untrue or incorrect in any material respect if
made anew after engaging in such activity, entering into
such transaction, or taking or omitting such other act;
or
(m) enter into, increase or renew any loan or
credit commitment (including standby letters of credit)
to any executive officer or director of Seller or any of
the Seller Subsidiaries, any holder of 10% or more of the
outstanding shares of Seller Common Stock, or any entity
controlled, directly or indirectly, by any of the
foregoing or engage in any transaction with any of the
foregoing which is of the type or nature sought to be
regulated in 12 U.S.C. Section 371c and 12 U.S.C. Section 371c-1,
without first obtaining the prior written consent of
Buyer, which consent shall not be unreasonably withheld.
For purposes of this subsection (m), "control" shall have
the meaning associated with that term under 12 U.S.C.
Section 371c.
4.03. Forbearances of Buyer. During the period from
---------------------
the date of this Agreement to the Effective Time, Buyer shall not,
and shall not permit any of its respective Subsidiaries to, without
the prior written consent of Seller, agree in writing or otherwise
engage in any activity, enter into any transaction or take or omit
to take any other action:
(a) that would (i) materially impede or delay
the consummation of the transactions contemplated by this
Agreement or the ability of Buyer or Seller to obtain any
approval of any Regulatory Authority required for the
transactions contemplated by this Agreement or to perform
its covenants and agreements under this Agreement or (ii)
prevent or impede the transactions contemplated hereby
from qualifying as a reorganization within the meaning of
Section 368 of the Code; or
(b) which would make any of the representa-
tions and warranties of Article III of this Agreement
untrue or incorrect in any material respect if made anew
after engaging in such activity, entering into such
transaction, or taking or omitting such other action.
4.04. Charter Amendment. As soon as practicable after
-----------------
the date hereof, but prior to the Closing Date, Seller shall take
any and all actions, and shall direct the Board of Directors of
RFSLA to take any and all actions, that are required to (i) amend
Section 8 of the Charter of RFSLA to eliminate the requirement that
no person can acquire more than 10% of the common stock of RFSLA
and (ii) change the name of RFSLA to Allegiant Bank, FSB, which
name change shall be effective as of the Effective Time. Such
actions shall include, but be not limited to, obtaining the prior
approval of the OTS.
ARTICLE V
---------
ADDITIONAL AGREEMENTS
5.01. Access and Information. Buyer and Seller shall
----------------------
each afford to the other, and to the other's accountants, counsel
and other representatives, reasonable access during normal business
hours, during the period prior to the Effective Time, to all their
respective properties, books, contracts, commitments and records
and, during such period, each shall furnish promptly to the other
(i) a copy of each report, schedule and other document filed or
received by it during such period pursuant to the requirements of
federal and state securities laws and (ii) all other information
concerning its business,
- 27 -
32
properties and personnel as the other may reasonably request. Each
party shall, and shall cause its advisors and representatives to, (A)
hold confidential all information obtained in connection with any
transaction contemplated hereby with respect to the other party and
its Subsidiaries which is not otherwise public knowledge, (B) in the
event of a termination of this Agreement, return all documents
(including copies thereof) obtained hereunder from the other party or
any of its Subsidiaries to it and (C) use their respective best
efforts to cause all of such party's confidential information obtained
pursuant to this Agreement or in connection with the negotiation of
this Agreement to be treated as confidential and not use, or knowingly
permit others to use, any such information unless such information
becomes generally available to the public.
5.02. Registration Statement; Regulatory Matters.
------------------------------------------
(a) Buyer shall prepare and, subject to the
review, comment and consent of Seller with respect to
matters relating to Seller, file with the SEC as soon as
is reasonably practicable the Registration Statement (or
the equivalent in the form of preliminary proxy
materials) with respect to the shares of Buyer Common
Stock to be issued in the Merger. Buyer shall prepare
and, subject to the review, comment and consent of Seller
with respect to matters relating to Seller, use its best
efforts to file as soon as is reasonably practicable an
application for approval of the Merger with the Federal
Reserve Board, and such additional regulatory authorities
as may require an application, and shall use its best
efforts to cause the Registration Statement to become
effective. Buyer shall also take any action required to
be taken under any applicable state blue sky or
securities laws in connection with the issuance of such
shares, and Seller and the Seller Subsidiaries shall
furnish Buyer all information concerning Seller and the
Seller Subsidiaries and the stockholders thereof as Buyer
may reasonably request in connection with any such
action.
(b) Seller and Buyer shall cooperate and use
their respective best efforts to prepare all
documentation, to effect all filings and to obtain all
permits, consents, approvals and authorizations of all
third parties and Regulatory Authorities necessary to
consummate the transactions contemplated by this
Agreement and, as and if directed by Buyer, to consummate
such other transactions by and among Buyer's Subsidiaries
and the Seller Subsidiaries concurrently with or
following the Effective Time, provided that such actions
do not: (i) materially impede or delay the receipt of
any approval referred to in Section 6.01(b); (ii) prevent
or impede the transactions contemplated hereby from
qualifying as a reorganization within the meaning of
Section 368 of the Code; or (iii) the consummation of the
transactions contemplated by this Agreement.
5.03. Shareholder and Stockholder Approval. Each of
------------------------------------
Buyer and Seller shall call a meeting of its shareholders and
stockholders, as the case may be, to be held as soon as practicable
after the date the Registration Statement is declared effective by
the SEC for the purpose of voting upon this Agreement and the
transactions contemplated hereby. In connection with such meeting,
Buyer shall prepare, subject to the review, comment and consent of
Seller, the Proxy Statements (which shall be part of the
Registration Statement to be filed with the SEC by Buyer), which
Registration Statement shall conform in all material respects to
all applicable legal requirements, and mail the Buyer Proxy
Statement to the shareholders of Buyer and the Seller Proxy
Statement to the stockholders of Seller. The Board of Directors of
Seller shall submit for approval of Seller's stockholders the
matters to be voted upon at such meeting. The board of directors
of each party hereby does and will recommend this Agreement and the
transactions contemplated hereby to the shareholders or
stockholders, as the case may be, of such party and will use its
best efforts to obtain any vote of its shareholders or stockholders,
as the case may be, necessary for the approval and adoption of this
Agreement; provided, however, that the foregoing shall
- 28 -
33
not apply to Seller in the event of an Unsolicited Acquisition
Proposal if and to the extent that the Board of Directors of Seller
reasonably determines in good faith, after consultation with its
financial advisors and counsel to Seller, that failure to consider
such Unsolicited Acquisition Proposal could reasonably be expected to
constitute a breach of its fiduciary duties to the stockholders of
Seller. Buyer will advise Seller, promptly after Buyer receives
notice thereof, of the time when the Registration Statement has become
effective or any supplement or amendment thereto has been filed (after
providing drafts in advance to Seller and its counsel for review and
comment), of the issuance of any stop order or the suspension of
the qualification of Buyer Common Stock for offering or sale in any
jurisdiction or the initiation or threat of any proceeding for any
such purpose, or of any request by the SEC for the amendment or
supplement of the Registration Statement or for additional
information.
5.04. Current Information. During the period from the
-------------------
date of this Agreement to the Effective Time, each party shall
promptly furnish the other with copies of all interim financial
statements as the same become available and shall cause one or more
of its designated representatives to confer on a regular and
frequent basis with representatives of the other party. Each party
shall promptly notify the other party of the following events
immediately upon learning of the occurrence thereof, describing the
same and, if applicable, the steps being taken by the affected
party with respect thereto: (a) an event which would cause any
representation or warranty of such party or any Schedule,
statement, report, notice, certificate or other writing furnished
by such party to be untrue or misleading in any material respect;
(b) any Material Adverse Effect with respect to it; (c) the
issuance or commencement of any governmental complaint,
investigation or hearing (or any communication indicating that the
same may be contemplated); or (d) the institution or threat of
material litigation involving such party, and shall keep the other
party fully informed of such events.
5.05. Conforming Entries.
------------------
(a) Notwithstanding that Seller believes that
Seller and Seller Subsidiaries have established all
reserves and taken all provisions for possible loan
losses required by generally accepted accounting
principles and applicable laws, rules and regulations,
Seller recognizes that Buyer may have adopted different
loan, accrual and reserve policies (including loan
classifications and levels of reserves for possible loan
losses). From and after the date of this Agreement to
the Effective Time, Seller and Buyer shall consult and
cooperate with each other with respect to conforming the
loan, accrual and reserve policies of Seller and the
Seller Subsidiaries to those policies of Buyer, as
specified in each case in writing to Seller, based upon
such consultation and as hereinafter provided.
(b) In addition, from and after the date of
this Agreement to the Effective Time, Seller and Buyer
shall consult and cooperate with each other with respect
to determining appropriate Seller accruals, reserves and
charges to establish and take in respect of excess
equipment write-off or write-down of various assets and
other appropriate charges and accounting adjustments
taking into account the parties' business plans following
the Merger, as specified in each case in writing to
Seller, based upon such consultation and as hereinafter
provided.
(c) Seller and Buyer shall consult and
cooperate with each other with respect to determining the
amount and the timing for recognizing for financial
accounting purposes Seller's expenses of the Merger and
the restructuring charges related to or to be incurred in
connection with the Merger.
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34
(d) Subject to subsection (e) hereof, at the
request of Buyer, Seller shall (i) establish and take
such reserves and accruals to conform Seller's loan,
accrual and reserve policies to Buyer's policies, (ii)
establish and take such accruals, reserves and charges in
order to implement such policies in respect of excess
facilities and equipment capacity, severance costs,
litigation matters, write-off or write-down of various
assets and other appropriate accounting adjustments, and
to recognize for various accounting purposes such
expenses of the Merger and restructuring charges related
to or to be incurred in connection with the Merger, and
(iii) effect such divestitures or otherwise implement
such restructuring in respect of its investment
securities portfolio to conform Seller's investment
securities portfolio policies to Buyer's policies, in the
case of each of the foregoing at such times as are
requested by Buyer in a written notice to Seller.
(e) With respect to clauses (a) through (d) of
this Section 5.05, such reserves, accruals, charges and
divestitures, if any, to be taken shall be consistent
with generally accepted accounting principles and taken
(i) only after the Seller shall be reasonably satisfied
that the conditions to the obligations of the parties to
consummate the transactions contemplated herein will be
satisfied or waived on or before the Closing Date and
(ii) no sooner than 10 days prior to the Closing Date.
(f) No reserves, accruals or charges taken in
accordance with Section 5.05(d) above may be a basis to
assert a violation of a breach of a representation,
warranty or covenant of Seller herein.
5.06. Environmental Reports. Within 75 days after the
---------------------
date hereof, Buyer, with the cooperation of Seller and at Buyer's
expense, may perform, through an environmental consulting firm
selected by Buyer, a phase one environmental investigation and an
asbestos survey on all real property owned, leased or operated by
Seller or any of Seller Subsidiaries as of the date hereof (but
excluding space in retail and similar establishments leased by
Seller for automatic teller machines or bank branch facilities
where the space leased comprises less than 20% of the total space
leased to all tenants of such property) and within ten (10) days
after the acquisition or lease of any real property acquired or
leased by Seller or any of Seller Subsidiaries after the date
hereof (but excluding space in retail and similar establishments
leased by Seller for automatic teller machines or bank branch
facilities where the space leased comprises less that 20% of the
total space leased to all tenants of such property). If the
results of the phase one investigation so recommend or warrant
additional investigation, in Buyer's sole discretion, Buyer, during
such 75-day period, and with the cooperation of Seller, may
perform, through an environmental consulting firm selected by
Buyer, at Buyer's expense, a phase two investigation on properties
warranting such additional study. Buyer shall have fifteen (15)
business days from the receipt of any such phase two investigation
report to notify Seller of any dissatisfaction with the contents of
such report. Should the cost of taking all remedial or other
corrective actions and measures (i) required by applicable law, or
(ii) recommended or suggested by such report or reports or prudent
in light of serious life, health or safety concerns, in the
aggregate, exceed the sum of $50,000, as reasonably estimated by
the environmental consulting firm, or if the cost of such actions
and measures cannot be so reasonably estimated by such firm to be
such amount or less with any reasonable degree of certainty, Buyer
shall have the right pursuant to Section 7.01(e) hereof, for a
period of fifteen (15) business days following receipt of such
estimate or indication that the cost of such actions and measures
can not be so reasonably estimated, to terminate this Agreement.
5.07. Agreements of Affiliates. Set forth as Schedule
------------------------ --------
5.07 is a list (which includes individual and beneficial ownership)
----
of all persons whom Seller believes to be "affiliates" of Seller
for purposes of Rule 145 under the Securities Act. Seller shall
use its best efforts to cause each person who
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35
is identified as an "affiliate" to deliver to Buyer, as of the date
hereof, or as soon as practicable hereafter, a written agreement in
substantially the form set forth as Exhibit A to this Agreement
---------
providing that each such person will agree not to sell, pledge,
transfer or otherwise dispose of any shares of Buyer Common Stock to
be received by such person in the Merger except in compliance with the
applicable provisions of the Securities Act. Prior to the Effective
Time, and via letter, Seller shall amend and supplement Schedule 5.07
and use its best efforts to cause each additional person who is
identified as an "affiliate" to execute a written agreement as set
forth in this Section 5.07. In the event any individual designated as
------------
an "affiliate" fails to deliver the written agreement in the form set
forth in Exhibit A, Buyer shall issue a stop order letter to
---------
Buyer's transfer agent with respect to any shares of Buyer Common
Stock received by such individual in the Merger.
5.08. Expenses. Each party hereto shall bear its own
--------
expenses incident to preparing, entering into and carrying out this
Agreement and to consummating the Merger; provided, however, that
Buyer shall pay all printing and mailing expenses and filing fees
associated with the Registration Statement, the Proxy Statements
and regulatory applications.
5.09. Miscellaneous Agreements.
------------------------
(a) Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its
respective best efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the
transactions contemplated by this Agreement as
expeditiously as possible, including, without limitation,
using its respective best efforts to lift or rescind any
injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the
transactions contemplated hereby. Each party shall, and
shall cause each of its respective Subsidiaries to, use
its best efforts to obtain consents of all third parties
and Regulatory Authorities necessary or, in the
reasonable opinion of Buyer, desirable for the consum-
mation of the Merger.
(b) Seller, prior to the Effective Time, shall
(i) consult and cooperate with Buyer regarding the
implementation of those policies and procedures
established by Buyer for its governance and that of its
Subsidiaries and not otherwise referenced in Section 5.05
hereof, including, without limitation, policies and
procedures pertaining to the accounting, asset/liability
management, audit, credit, human resources, treasury and
legal functions, and (ii) at the reasonable request of
Buyer, conform Seller's existing policies and procedures
in respect of such matters to Buyer' policies and
procedures or, in the absence of any existing Seller
policy or procedure regarding any such function,
introduce Buyer' policies or procedures in respect
thereof, unless to do so would cause Seller or any of the
Seller Subsidiaries to be in violation of any law, rule
or regulation of any Regulatory Authority having
jurisdiction over Seller and/or the Seller Subsidiary
affected thereby.
5.10. Employee Agreements and Benefits.
--------------------------------
(a) Following the Effective Time, Buyer shall
honor in accordance with their terms all employment,
severance and other compensation contracts set forth on
Schedule 2.11(b) between Seller, any of the Seller
----------------
Subsidiaries, and any current or former director,
officer, employee or agent thereof, and all provisions
for vested benefits or other vested amounts earned or
accrued through the Effective Time under the Seller
Employee Plans.
- 31 -
36
(b) Notwithstanding anything to the contrary
herein, Seller shall by amendment or resolution, as
appropriate, ensure that all awards under the Reliance
Financial, Inc. 1996 Recognition and Retention Plan shall
accelerate and become vested in the award recipient
immediately prior to the Effective Time.
(c) As soon as practicable after the date
hereof, Seller shall file with the IRS an Application for
Determination for Terminating Plan (IRS Form 5310) with
respect to the Reliance Federal Savings and Loan
Association of St. Louis County Employee Stock Ownership
Plan (the "ESOP") seeking a favorable determination from
the IRS of the qualified status of the ESOP upon
termination (the "Determination Letter"). In the event
the Seller receives the Determination Letter prior to the
Effective Time, Seller shall take all steps necessary or
required to terminate the ESOP, including the repayment
of the outstanding ESOP loan and the allocation of
unallocated shares and other assets to ESOP participants
followed by the distribution of all account balances to
ESOP participants all in accordance with the plan
document approved by the IRS. Following such termination
and allocation of unallocated shares and other assets,
the account balances of the ESOP shall be distributed to
the Participants. In the event the IRS notifies RFSLA
prior to the Effective Time that it will not issue the
Determination Letter, RFSLA may take all steps necessary
to terminate the ESOP but only if RFSLA shall have first
received a waiver from each of the participants in the
ESOP, in form reasonably acceptable to Buyer, whereby
each such participant waives any and all claims against
RFSLA, Seller and Buyer, and any successors thereto, with
respect to the termination of the ESOP (the "Waiver").
In the event that, prior to the Effective Time, RFSLA
does not receive either (i) the Determination Letter or
(ii) a notice from the IRS that it will not issue the
Determination Letter, Buyer hereby agrees that it will
take all steps necessary or required to terminate the
ESOP, including the repayment of the outstanding ESOP
loan, the allocation of unallocated shares and any other
assets to ESOP participants, the distribution of account
balances to participants and the allocation of
unallocated shares to ESOP participants, but only after
either (i) RFSLA receives the Determination Letter or
(ii) (A) the IRS notifies RFSLA that it will not issue
the Determination Letter and (B) the Waiver of each
participant in the ESOP is delivered to Buyer.
(d) Seller shall take any and all actions
necessary to withdraw RFSLA from the Retirement Plan
prior to the Effective Time, including, but not limited
to, paying any and all amounts due (subject to the
limitations of Section 2.19(g) hereof) to the Retirement
Plan upon such withdrawal.
(e) Except as set forth in Sections 5.10(b),
(c) and (d) hereof, the Seller Employee Plans shall not
be terminated by reason of the Merger but shall continue
thereafter as plans of the Surviving Corporation until
such time as the employees of Seller and the Seller
Subsidiaries are integrated into Buyer's employee benefit
plans that are available to other employees of Buyer and
its Subsidiaries, subject to the terms and conditions
specified in such plans and to such changes therein as
may be necessary to reflect the consummation of the
Merger. Buyer shall take such steps as are necessary or
required to integrate the employees of Seller and the
Seller Subsidiaries into Buyer's employee benefit plans
available to other employees of Buyer and its
Subsidiaries as soon as practicable after the Effective
Time, with (i) full credit for prior service with Seller
or any of the Seller Subsidiaries for purposes of vesting
and eligibility for participation (but not benefit
accruals under any defined benefit plan), and co-payments
and deductibles, and (ii) waiver of all waiting periods
and pre-existing condition exclusions
- 32 -
37
or penalties; provided, however, Seller must notify Buyer
of any pre-existing condition with respect to any employee
or dependent of an employee prior to the Closing and
coverage must be approved by the applicable insurers at
a cost that is reasonably acceptable to Buyer. If any
employee or dependent of an employee presently receiving
coverage under any Seller health plan has a pre-existing
condition that is covered by Seller's health plan but
cannot be covered by Buyer's health plan at a cost that
is reasonably acceptable to Buyer, Buyer agrees to
reimburse such employee the cost of such coverage that
such employee or dependent obtains in accordance with the
continued health care coverage provisions of the
Consolidated Omnibus Budget Reconciliation Act, as
amended ("COBRA"), or otherwise, until the sooner to
occur of (i) such employee or dependent becoming fully
covered, including such pre-existing condition, under
Seller's health plan or (ii) the end of the applicable
COBRA continued healthcare coverage period.
5.11. Press Releases. Except as may be required by
--------------
law, Seller and Buyer shall consult and agree with each other as to
the form and substance of any proposed press release relating to
this Agreement or any of the transactions contemplated hereby.
5.12. State Takeover Statutes. Seller will take all
-----------------------
steps necessary to exempt the transactions contemplated by this
Agreement and any agreement contemplated hereby from, and if
necessary challenge the validity of, any applicable state takeover
law.
5.13. Directors' and Officers' Indemnification. For
----------------------------------------
five years after the Closing Date, Buyer shall, and shall cause the
Surviving Corporation to, indemnify, defend and hold harmless the
present and former directors, officers, employees and agents of
Seller or any Seller Subsidiary (each, an "Indemnified Party")
against all liabilities arising out of actions or omissions
occurring at or prior to the Effective Time (including, without
limitation, the transactions contemplated by this Agreement) to the
extent such persons are indemnified under the DGCL or by virtue of
the Certificate or Articles of Incorporation, as the case may be,
Charter or Bylaws in the form in effect at the date of this
Agreement for Seller or any Seller Subsidiary, including provisions
relating to advances of expenses incurred in the defense of any
such litigation. If Buyer or the Surviving Corporation or any of
its successors or assigns shall consolidate with or merge into any
other entity and shall not be the continuing or surviving entity of
such consolidation or merger or shall transfer all or substantially
all of its assets to any entity, then and in each case, proper
provisions shall be made so that the successors and assigns of
Buyer or the Surviving Corporation shall assume the obligations set
forth in this Section. To the extent that Seller's existing
directors' and officers' liability insurance policy would provide
coverage for any action or omission occurring prior to the
Effective Time, Seller agrees to give proper notice to the
insurance carrier and to Buyer of a potential claim thereunder so
as to preserve Seller's rights to such insurance coverage. Seller
may purchase up to three years' tail coverage under its existing
directors' and officers' liability insurance policy on such terms
and provisions as Seller deems appropriate provided that the total
cost thereof shall not exceed $15,000.
5.14. Tax Opinion Certificates. Seller shall use its
------------------------
reasonable best efforts to cause such of its executive officers,
directors and/or holders of one percent (1%) or more of the Seller
Common Stock (including shares beneficially or constructively (for
purposes of Code Section 318) held) as may be requested by Xxxxxxxx
Xxxxxx to timely execute and deliver to Xxxxxxxx Xxxxxx
certificates substantially in the form of Exhibit B or Exhibit C
--------- ---------
hereto, as the case may be (in each case conformed, to the extent
necessary, to render such certificate accurate).
- 33 -
38
5.15. Employee Stock Options.
----------------------
(a) At the Effective Time, all rights with
respect to Seller Common Stock pursuant to Seller Employee Stock
Options that are outstanding at the Effective Time, whether or not
then exercisable, shall be converted into and become rights with
respect to Buyer Common Stock, and Buyer shall assume all Seller
Employee Stock Options in accordance with the terms of the Seller
Stock Plan under which it was issued and the Seller Employee Stock
Option Agreement by which it is evidenced. From and after the
Effective Time, (i) each Seller Employee Stock Option assumed by
Buyer shall be exercised solely for shares of Buyer Common Stock,
(ii) the number of shares of Buyer Common Stock subject to each
Seller Employee Stock Option shall be equal to the number of shares
of Seller Common Stock subject to such Seller Employee Stock Option
immediately prior to the Effective Time multiplied by the Exchange
Ratio (subject to adjustment pursuant to Section 1.12 hereof) and
(iii) the per share exercise price under each Seller Employee Stock
Option shall be adjusted by dividing the per share exercise price
under such Seller Employee Stock Option by the Exchange Ratio
(subject to adjustment pursuant to Section 1.12 hereof) and
rounding down to the nearest cent; provided, however, that the
terms of each Seller Employee Stock Option shall, in accordance
with its terms, be subject to further adjustment as appropriate to
reflect any stock split, stock dividend, recapitalization, exchange
of shares or other similar transaction subsequent to the Effective
Time. It is intended that the foregoing shall be undertaken in a
manner that will not constitute a "modification" as defined in the
Code, as to any Seller Employee Stock Option that is an "incentive
stock option" as defined under the Code. In addition to the above,
Seller shall enter into an Amended and Restated Option Agreement
with Xxxx X. Xxxxxx, President and Chief Executive Officer of
Seller, and Xxxxxxxxx Xxxxxx, Executive Vice President of Seller,
to permit them to exercise their options until the expiration of
ten years from the original date of grant of such options, and
Buyer acknowledges that Seller may cause the Seller Stock Option
Plan to be amended as necessary, consistent with the foregoing.
(b) The shares of Buyer Common Stock covered
by the stock options to be issued pursuant to Section 5.15(a) shall
be covered by an effective registration statement filed on Form S-8
with the SEC, which shall be filed by Buyer as soon as practicable
after the Closing Date and shall be duly authorized, validly issued
and in compliance with all applicable federal and state securities
laws, fully paid and nonassessable and not subject to or in
violation of any preemptive rights. Buyer shall at and after the
Effective Time have reserved sufficient shares of Buyer Common
Stock for issuance with respect to such options. Buyer shall also
take any action reasonably required to be taken under any
applicable state blue sky or securities laws in connection with the
issuance of such shares.
5.16 RFSLA Board. Buyer shall operate RFSLA as a
-----------
separate savings and loan association subsidiary for at least one
year following the Effective Time. At the Effective Time, Buyer
shall cause the addition of two individuals to the Board of
Directors of RFSLA (the "RFSLA Board"), who shall serve along with
the current members of the RFSLA Board. Seller shall take, and
shall direct that RFSLA take, any and all actions necessary,
including filing a notice with the OTS, to amend Article III,
Section 2 of the Bylaws of RFSLA to increase, as of the Effective
Time, the number of members of the Board of Directors of RFSLA to
eight. Each member of the Board of Directors of RFSLA following
the Closing Date shall continue to serve as such unless removed for
cause or unless such member resigns from the Board of Directors.
During such service, such members shall be entitled to Board of
Directors' fees in the amount and with the frequency currently paid
by RFSLA. If RFSLA shall be merged or otherwise consolidated with
and into Allegiant Bank, Allegiant Bank shall establish an advisory
board (which shall be subject to annual review and renewal by
Allegiant Bank's Board of Directors) to be comprised of the current
members of the RFSLA Board. Allegiant Bank recognizes the need for
an advisory board in order for Allegiant Bank to realize its full
potential in the market area now served by RFSLA, to maintain close
personal and business relationships and to assist in the transition
of RFSLA
- 34 -
39
to Allegiant Bank's system of operations. The parties believe that
the advisory board members, through their continued identification
with Allegiant Bank and active support, will ensure an ongoing program
of interest and commitment in the current RFSLA market area. The
advisory board will provide Allegiant Bank's management and Board of
Directors with advice and counsel with respect to the following: (i)
loan originations from the current RFSLA markets; (ii) savings
programs to be offered in the RFSLA markets; (iii) advertising
programs; (iv) community activities and involvement; and (v) such
other business and financial matters as the advisory board believes
may further contribute to Allegiant Bank's successful operation in the
current RFSLA market area. The advisory board shall meet as
designated by the Board of Directors of Allegiant Bank and each member
of the advisory board shall receive fees commensurate with the fees
paid to other members of the advisory boards of Allegiant Bank.
ARTICLE VI
----------
CONDITIONS
6.01. Conditions to Each Party's Obligation to Effect
-----------------------------------------------
the Merger. The respective obligations of each party to effect the
----------
Merger shall be subject to the fulfillment or waiver at or prior to
the Effective Time of the following conditions:
(a) This Agreement shall have received the
requisite approval of the shareholders of Buyer and the
stockholders of Seller at the meeting of shareholders of
Buyer and the meeting of stockholders of Seller called
pursuant to Section 5.03 of this Agreement.
(b) All requisite approvals of this Agreement
and the transactions contemplated hereby shall have been
received from the Regulatory Authorities, and all waiting
periods after such approvals required by law or
regulation have been satisfied.
(c) The Registration Statement shall have been
declared effective and shall not be subject to a stop
order or any threatened stop order.
(d) Neither Seller nor Buyer shall be subject
to any order, decree or injunction of a court or agency
of competent jurisdiction which enjoins or prohibits the
consummation of the Merger.
(e) At the time of filing of the Registration
Statement and at the Closing Date, each of Buyer and
Seller shall have received from Xxxxxxxx Xxxxxx an
opinion reasonably satisfactory in form and substance to
them, to the effect that the Merger will constitute a
reorganization within the meaning of Section 368 of the
Code and to the effect that, as a result of the Merger,
except with respect to fractional share interests and
assuming that such Seller Common Stock is a capital asset
in the hands of the holder thereof at the Effective Time,
(i) holders of Seller Common Stock who receive solely
Buyer Common Stock in the Merger will not recognize gain
or loss for federal income tax purposes upon the receipt
of such stock, (ii) the basis of such Buyer Common Stock
will equal the basis of the Seller Common Stock for which
it is exchanged, and (iii) the holding period of such
Buyer Common Stock will include the holding period of the
Seller Common Stock for which it is exchanged.
- 35 -
40
6.02. Conditions to Obligations of Seller to Effect the
-------------------------------------------------
Merger. The obligations of Seller to effect the Merger shall be
------
subject to the fulfillment or waiver at or prior to the Effective
Time of the following additional conditions:
(a) Representations and Warranties. The
------------------------------
representations and warranties of Buyer set forth in
Article III of this Agreement shall be true and correct
in all material respects as of the date of this Agreement
and as of the Effective Time (as though made on and as of
the Effective Time, except (i) to the extent such
representations and warranties are by their express
provisions made as of a specified date, (ii) where the
facts which caused the failure of any representation or
warranty to be so true and correct have not resulted, and
are not likely to result, in a Material Adverse Effect on
Buyer and its Subsidiaries, taken as a whole, and (iii)
for the effect of transactions contemplated by this
Agreement, and Seller shall have received a certificate
of the President of Buyer, signing solely in his capacity
as an officer of Buyer, to such effect.
(b) Performance of Obligations. Buyer shall
--------------------------
have performed in all material respects all obligations
required to be performed by it under this Agreement prior
to the Effective Time, and Seller shall have received a
certificate of the President of Buyer, signing solely in
his capacity as an officer of Buyer, to that effect.
(c) Permits, Authorizations, Etc. Buyer shall
----------------------------
have obtained any and all material permits,
authorizations, consents, waivers and approvals required
for the lawful consummation of the Merger.
(d) No Material Adverse Effect. Since the
--------------------------
date of this Agreement, there shall not have been any
event that would constitute or result in a Material
Adverse Effect on Buyer and its Subsidiaries, taken as a
whole.
(e) Opinion of Counsel. Buyer shall have
------------------
delivered to Seller an opinion of Buyer's counsel dated
as of the Closing Date or a mutually agreeable earlier
date in substantially the form set forth as Exhibit D to
---------
this Agreement.
(f) Average Buyer Price. The Average Buyer
-------------------
Price (as hereinafter defined) shall be greater than or
equal to $11.35 per share. "Average Buyer Price" shall
be the average of the daily averages of the high and low
transaction prices of Buyer Common Stock, as reported in
The Wall Street Journal, Midwest Edition, for the twenty
(20) trading days on which trades are reported,
immediately prior to the second business day immediately
prior to the Closing.
(g) Opinion of Financial Advisor. Seller
----------------------------
shall have received an opinion of RP Financial, L.C.,
dated as of the date of the mailing of the Seller Proxy
Statement, to the effect that the consideration to be
received by the Seller stockholders in the Merger is fair
from a financial point of view, which opinion shall not
have been withdrawn at or prior to the Closing.
6.03. Conditions to Obligations of Buyer to Effect the
------------------------------------------------
Merger. The obligations of Buyer to effect the Merger shall be
------
subject to the fulfillment or waiver at or prior to the Effective
Time of the following additional conditions:
- 36 -
41
(a) Representations and Warranties. The
------------------------------
representations and warranties of Seller set forth in
Article II of this Agreement shall be true and correct in
all material respects as of the date of this Agreement
and as of the Effective Time (as though made on and as of
the Effective Time, except (i) to the extent such
representations and warranties are by their express
provisions made as of a specific date, (ii) where the
facts which caused the failure of any representation or
warranty to be so true and correct have not resulted, and
are not likely to result, in a Material Adverse Effect on
Seller and its Subsidiaries, taken as a whole, and (iii)
for the effect of transactions contemplated by this
Agreement) and Buyer shall have received a certificate of
the President of Seller, signing solely in his capacity
as an officer of Seller, to such effect.
(b) Performance of Obligations. Seller shall
--------------------------
have performed in all material respects all obligations
required to be performed by it under this Agreement prior
to the Effective Time, and Buyer shall have received a
certificate of the President of Seller signing solely in
his capacity as an officer of Seller, to that effect.
(c) Permits, Authorizations, Etc. Seller
----------------------------
shall have obtained any and all material permits,
authorizations, consents, waivers and approvals required
for the lawful consummation by it of the Merger.
(d) No Material Adverse Effect. Since the
--------------------------
date of this Agreement, there shall not have been any
event that would constitute or result in a Material
Adverse Effect on Seller and the Seller Subsidiaries,
taken as a whole.
(e) Opinion of Counsel. Seller shall have
------------------
delivered to Buyer an opinion of Seller's counsel dated
as of the Closing Date or a mutually agreeable earlier
date in substantially the form set forth as Exhibit E to
---------
this Agreement.
(f) Closing Book Value. Immediately prior to
------------------
the Closing, the total stockholders' equity account
determined in accordance with generally accepted
accounting principles on a basis consistent with the
Seller Financial Statements, of Seller shall be not less
than $6,500,000, as reasonably determined by Buyer's
independent public accountant, in consultation with
Seller's independent public accountant; provided,
however, that for purposes of calculating total
stockholders' equity, the Seller's expenses associated
with the payout of severance payments to Seller's
employees as a result of the Merger will not be counted.
(g) Opinion of Financial Advisor. Buyer shall
----------------------------
have received an opinion of Xxxxxx, Xxxxxxxx & Company,
Incorporated, dated as of the date of the mailing of the
Buyer Proxy Statement, to the effect that the
consideration to be paid by the Buyer to the Seller
stockholders as a result of the Merger is fair from a
financial point of view, which opinion shall not have
been withdrawn at or prior to the Closing.
(h) Charter Amendment. Seller shall have
-----------------
taken, and caused RFSLA to have taken, all actions
required by Section 4.04 hereof to (i) amend Section 8 of
the Charter of RFSLA and (ii) to change the name of RFSLA
to Allegiant Bank, FSB.
(i) Bylaws Amendment. Seller shall have
----------------
taken, and caused RFSLA to have taken, all actions
required by Section 5.16 hereof to amend Article III,
Section 2 of the Bylaws of RFSLA.
- 37 -
42
(j) Termination of Retirement Plan. Seller
------------------------------
shall have taken, and caused RFSLA to have taken, all
actions required by Section 5.10(c) hereof to withdraw
RFSLA from the Retirement Plan prior to the Effective
Time, including, but not limited to, paying any and all
amounts due to the Retirement Plan upon such withdrawal,
which amounts shall not exceed $50,000 in the aggregate.
ARTICLE VII
-----------
TERMINATION, AMENDMENT AND WAIVER
7.01. Termination. This Agreement may be terminated at
-----------
any time prior to the Effective Time, whether before or after
approval by Seller's stockholders:
(a) by mutual consent of the Board of
Directors of Buyer and the Board of Directors of Seller;
(b) by the Board of Directors of Buyer or the
Board of Directors of Seller at any time after December
31, 1997 if the Merger shall not theretofore have been
consummated (provided that the terminating party is not
then in material breach of any representation, warranty,
covenant or other agreement contained herein);
(c) by the Board of Directors of Buyer or the
Board of Directors of Seller if (i) the Federal Reserve
Board or any other federal and/or state regulatory agency
whose approval is required for the consummation of the
transactions contemplated hereby has denied approval of
the Merger and such denial has become final and
nonappealable, (ii) the stockholders of Seller shall not
have approved this Agreement at the meeting referred to
in Section 5.03 or at any adjournment thereof or (iii)
the shareholders of Buyer shall not have approved this
Agreement at the meeting referred to in Section 5.03 or
at any adjournment thereof;
(d) by the Board of Directors of Buyer, on the
one hand, or by the Board of Directors of Seller, on the
other hand, in the event of a material volitional breach
by the other party to this Agreement of any
representation, warranty or agreement contained herein,
which breach is not cured within 30 days after written
notice thereof is given to the breaching party by the
non-breaching party or is not waived by the non-breaching
party during such period;
(e) by the Board of Directors of Buyer
pursuant to and in accordance with the provisions of
Section 5.06 hereof; or
(f) by the Board of Directors of Seller if
Seller's Board of Directors is excused pursuant to
Section 5.03 hereof, from its obligations to hold the
Seller's stockholder meeting referred to in Section 5.03
hereof and to recommend that Seller's stockholders
approve this Agreement or present this Agreement at such
meeting for approval.
7.02. Effect of Termination. In the event of termin-
---------------------
ation of this Agreement as provided in Section 7.01 hereof, this
Agreement shall forthwith become void and there shall be no
liability on the part of Buyer or Seller or their respective
officers or directors except as set forth in the second sentence of
Section 5.01 and in Sections 5.08 and 8.02, and except that no
termination of this Agreement pursuant to Section 7.01(e) shall
relieve the breaching party of any liability to the non-breaching
party hereto
- 38 -
43
arising from the intentional, deliberate and willful
non-performance of any covenant contained herein, after giving
notice to such breaching party and an opportunity to cure as set
forth in Section 7.01(e).
7.03. Amendment. This Agreement, the Exhibits and the
---------
Schedules hereto may be amended by the parties hereto, by action
taken by or on behalf of the Board of Directors of Buyer and the
Director of Directors of Seller, at any time before or after
approval of this Agreement by the stockholders of Seller; provided,
however, that after any such approval by the stockholders of Seller
no such modification shall (A) alter or change the amount or kind
of Merger Consideration to be received by holders of Seller Common
Stock as provided in this Agreement or (B) adversely affect the tax
treatment to Seller stockholders as a result of the receipt of the
Merger Consideration. This Agreement, the Exhibits and the
Schedules hereto may not be amended except by an instrument in
writing signed on behalf of each of Buyer and Seller.
7.04. Waiver. Any term, condition or provision of this
------
Agreement may be waived in writing at any time by the party which
is, or whose shareholders or stockholders, as the case may be, are,
entitled to the benefits thereof.
ARTICLE VIII
------------
GENERAL PROVISIONS
8.01. Non-Survival of Representations, Warranties and
-----------------------------------------------
Agreements. No investigation by the parties hereto made heretofore
----------
or hereafter shall affect the representations and warranties of the
parties which are contained herein and each such representation and
warranty shall survive such investigation. Except as set forth
below in this Section 8.01, all representations, warranties and
agreements in this Agreement of Buyer and Seller or in any
instrument delivered by Buyer or Seller pursuant to or in
connection with this Agreement shall expire at the Effective Time
or upon termination of this Agreement in accordance with its terms.
In the event of consummation of the Merger, the agreements
contained in or referred to in Sections 1.07 through 1.12, 5.02(b),
5.07, 5.08, 5.10, 5.13, 5.14 and 5.15 shall survive the Effective
Time. In the event of termination of this Agreement in accordance
with its terms, the agreements contained in or referred to in the
second sentence of Section 5.01 and Sections 5.08, 7.02 and 8.02
shall survive such termination.
8.02. Indemnification. Buyer and Seller (hereinafter,
---------------
in such capacity being referred to as the "Indemnifying Party")
agree to indemnify and hold harmless each other and their officers,
directors and controlling persons (each such other party being
hereinafter referred to, individually and/or collectively, as the
"Indemnified Party") against any and all losses, claims, damages or
liabilities, joint or several, to which the Indemnified Party may
become subject under the Securities Act, the Exchange Act or other
federal or state law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions
in respect thereof): (a) arise primarily out of any information
furnished to the Indemnified Party by the Indemnifying Party and
included in the Registration Statement as originally filed or in
any amendment thereof, or in the Proxy Statements, or in any
amendment therefor or supplement thereof, or are based primarily
upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement as originally filed or
in any amendment thereof, or in the Proxy Statements, or in any
amendment thereof or supplement thereto, and provided for inclusion
thereof by the Indemnifying Party or (b) arise primarily out of or
are based primarily upon the omission or alleged omission by the
Indemnifying Party to state in the Registration Statement as
originally filed or in any amendment thereof, or in the Proxy
Statements, or in any amendment thereof, a material fact required
to be stated therein or necessary to make the statements made
therein not misleading, and agrees to reimburse each such
Indemnified Party, as incurred, for any legal
- 39 -
44
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action.
8.03. No Assignment; Successors and Assigns. This
-------------------------------------
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, but
neither this Agreement nor any right or obligation set forth in any
provision hereof may be transferred or assigned by any party hereto
without the prior written consent of the other party, and any
purported transfer or assignment in violation of this Section 8.03
shall be void and of no effect. There shall not be any third party
beneficiaries of any provisions hereof except for Sections 1.08,
1.09, 5.08, 5.10, 5.13, 5.15 and 8.02, which may be enforced
against Buyer or Seller by the parties therein identified.
8.04. No Implied Waiver. No failure or delay on the
-----------------
part of either party hereto to exercise any right, power or
privilege hereunder or under any instrument executed pursuant
hereto shall operate as a waiver nor shall any single or partial
exercise of any right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power
or privilege.
8.05. Headings. Article, section, subsection and
--------
paragraph titles, captions and headings herein are inserted only as
a matter of convenience and for reference, and in no way define,
limit, extend or describe the scope of this Agreement or the intent
or meaning of any provision hereof.
8.06. Entire Agreement. This Agreement, the Exhibits
----------------
and the Schedules hereto and that certain letter agreement dated as
of the date hereof by and between Buyer and Seller constitute the
entire agreement between the parties with respect to the subject
matter hereof, supersede all prior negotiations, representations,
warranties, commitments, offers, letters of interest or intent,
proposal letters, contracts, writings or other agreements or
understandings, whether written or oral, with respect thereto.
8.07. Counterparts. This Agreement may be executed in
------------
one or more counterparts, and any party to this Agreement may
execute and deliver this Agreement by executing and delivering any
of such counterparts, each of which when executed and delivered
shall be deemed to be an original and all of which taken together
shall constitute one and the same instrument.
8.08. Notices. All notices and other communications
-------
hereunder shall be in writing and shall be deemed to be duly
received (i) on the date given if delivered personally or (ii) upon
confirmation of receipt, if by facsimile transmission or (iii) on
the date received if mailed by registered or certified mail (return
receipt requested), to the parties at the following addresses (or
at such other address for a party as shall be specified by like
notice):
(i) if to Buyer:
Allegiant Bancorp, Inc.
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
President
Telecopy: (000) 000-0000
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45
Copy to:
Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Jan Xxxxx Xxxxxx, Esq.
Telecopy: (000) 000-0000
(ii) if to Seller:
Reliance Financial, Inc.
0000 Xxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
President and Chief Executive Officer
Telecopy: (000) 000-0000
Copies to:
Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx
0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
8.09. Severability. Any term, provision, covenant or
------------
restriction contained in this Agreement held by a court or a
Regulatory Authority of competent jurisdiction to be invalid, void
or unenforceable, shall be ineffective to the extent of such
invalidity, voidness or unenforceability, but neither the remaining
terms, provisions, covenants or restrictions contained in this
Agreement nor the validity or enforceability thereof in any other
jurisdiction shall be affected or impaired thereby. Any term,
provision, covenant or restriction contained in this Agreement that
is so found to be so broad as to be unenforceable shall be
interpreted to be as broad as is enforceable.
8.10. Governing Law. This Agreement shall be governed
-------------
by and controlled as to validity, enforcement, interpretation,
effect and in all other respects by the internal laws of the State
of Missouri, without regards to its conflict of laws principles.
[remainder of this page intentionally left blank]
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46
IN WITNESS WHEREOF, Buyer and Seller have caused this
Agreement to be signed and, by such signature, acknowledged by
their respective officers thereunto duly authorized, and such
signatures to be attested to by their respective officers thereunto
duly authorized, all as of the date first above written.
"Buyer"
ALLEGIANT BANCORP, INC.
ATTEST:
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxxx X. Wool
---------------------------------- ------------------------------------
Xxxxxx X. Wool
Chairman and Chief Executive
Officer
"Seller"
RELIANCE FINANCIAL, INC.
ATTEST:
/s/ Xxxxxxxxx Xxxxxx By: /s/ Xxxx X. Xxxxxx
---------------------------------- ------------------------------------
Xxxx X. Xxxxxx
President and
Chief Executive Officer
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