STOCK PURCHASE AGREEMENT BY AND AMONG FIRST GUARANTY BANCSHARES, INC. And DOUGLASS BANCORP, INC., DOUGLASS NATIONAL BANK AND FANNIE MAE DATED AS OF JULY 31, 2007
EXHIBIT 2.1
BY
AND AMONG
And
▇▇▇▇▇▇▇▇
BANCORP, INC., ▇▇▇▇▇▇▇▇ NATIONAL BANK
AND
▇▇▇▇▇▇
▇▇▇
DATED
AS OF JULY 31, 2007
TABLE OF CONTENTS
Page
Article
I. CERTAIN
DEFINITIONS................................................................................................................................................................................................................................................1
Section
1.01 Certain
Definitions...................................................................................................................................................................................................................................1
Article
II. SALE AND TRANSFER OF SHARES;
CLOSING......................................................................................................................................................................................................7
Section
2.01 Shares........................................................................................................................................................................................................................................................7
Section
2.02
Purchase
Price..........................................................................................................................................................................................................................................7
Section
2.03 Stock
Options...........................................................................................................................................................................................................................................7
Section
2.04 Closing; Closing
Date.............................................................................................................................................................................................................................7
Article
III. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇▇▇ AND SELLER
BANK ........................................................................................................................................8
Section
3.01 Disclosure
Letter. ....................................................................................................................................................................................................................................8
Section
3.02 Organization. ............................................................................................................................................................................................................................................8
Section
3.03 Capitalization.............................................................................................................................................................................................................................................9
Section
3.04 Authority; No
Violation. .......................................................................................................................................................................................................................10
Section
3.05 Consents..................................................................................................................................................................................................................................................10
Section
3.06 Required
Vote..........................................................................................................................................................................................................................................10
Section
3.07 Financial
Statements...............................................................................................................................................................................................................................10
Section
3.08
Absence of Certain Changes
or
Events...............................................................................................................................................................................................11
Section
3.09 Taxes. ........................................................................................................................................................................................................................................................11
Section
3.10 Material Contracts;
Leases;
Defaults...................................................................................................................................................................................................13
Section
3.11 Ownership of Property;
Insurance
Coverage......................................................................................................................................................................................14
Section
3.12 Intellectual
Property...............................................................................................................................................................................................................................15
Section
3.13
Labor
Matters..........................................................................................................................................................................................................................................16
Section
3.14 Legal
Proceedings...................................................................................................................................................................................................................................16
Section
3.15 Compliance With Applicable
Law.........................................................................................................................................................................................................16
Section
3.16 Employee Benefit
Plans...........................................................................................................................................................................................................................17
Section
3.17
Brokers, Finders and
Financial
Advisors. ...........................................................................................................................................................................................19
Section
3.18 Environmental
Matters............................................................................................................................................................................................................................19
Section
3.19 Loan
Portfolio...........................................................................................................................................................................................................................................20
Section
3.20 Related Party
Transactions....................................................................................................................................................................................................................22
Section
3.21
Deposits....................................................................................................................................................................................................................................................22
Section
3.22 Antitakeover Provisions
Inapplicable..................................................................................................................................................................................................22
Section
3.23 Registration
Obligations. .......................................................................................................................................................................................................................22
Section
3.24 Risk Management
Instruments..............................................................................................................................................................................................................22
Article
IV. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇
▇▇▇ ...........................................................................................................................................................................23
Section
4.01 Representations and
Warranties of
▇▇▇▇▇▇
Mae................................................................................................................................................................................23
Article
V. REPRESENTATIONS AND WARRANTIES OF
Purchaser.....................................................................................................................................................................................23
Section
5.01 Organization. ...........................................................................................................................................................................................................................................23
Section
5.02
Authority; No
Violation.........................................................................................................................................................................................................................24
Section
5.03 Consents. ................................................................................................................................................................................................................................................24
Section
5.04 Access to
Funds.....................................................................................................................................................................................................................................24
Section
5.05 Financial
Statements..............................................................................................................................................................................................................................24
Section
5.06 Legal
Proceedings..................................................................................................................................................................................................................................25
Section
5.07 Present Intent Regarding
Future
Operations ....................................................................................................................................................................................25
Article
VI. COnduct pending
Acquisition ..................................................................................................................................................................................................................................25
Section
6.01 Conduct of Business
Prior to the
Closing
Date. ..............................................................................................................................................................................25
Section
6.02 Forbearances of
▇▇▇▇▇▇▇▇...................................................................................................................................................................................................................25
Section
6.03 Maintenance of
Insurance...................................................................................................................................................................................................................28
Section
6.04
All Reasonable
Efforts.........................................................................................................................................................................................................................28
Article
VII.
COVENANTS ............................................................................................................................................................................................................................................................29
Section
7.01 Current
Information..............................................................................................................................................................................................................................29
Section
7.02 Access to Properties
and
Records....................................................................................................................................................................................................29
Section
7.03 Financial and Other
Statements. .......................................................................................................................................................................................................30
Section
7.04 Disclosure Letter
Supplements. ........................................................................................................................................................................................................30
Section
7.05 Consents and Approvals
of Third
Parties........................................................................................................................................................................................31
Section
7.06 Failure to Fulfill
Conditions.................................................................................................................................................................................................................31
Section
7.07 No
Solicitation.......................................................................................................................................................................................................................................31
Section
7.08 Employee
Benefits ...............................................................................................................................................................................................................................32
Section
7.09 Directors and Officers
Insurance. .....................................................................................................................................................................................................32
Section
7.10 Certain Policies of
Seller
Bank............................................................................................................................................................................................................33
Section
7.11 Antitakeover
Provisions.....................................................................................................................................................................................................................33
Section
7.12 Voting
Agreements. ...........................................................................................................................................................................................................................33
Article
VIII. REGULATORY AND OTHER
MATTERS .........................................................................................................................................................................................................33
Section
8.01
Meeting of
Stockholders. ..................................................................................................................................................................................................................33
Section
8.02 Proxy
Statement..................................................................................................................................................................................................................................34
Section
8.03 Regulatory
Approvals.......................................................................................................................................................................................................................34
Article
IX. CLOSING
CONDITIONS .........................................................................................................................................................................................................................................34
Section
9.01
Conditions to Each Party’s
Obligations under this
Agreement..................................................................................................................................................34
Section
9.02
Conditions to the
Obligations of Purchaser under this
Agreement...........................................................................................................................................35
Section
9.03
Conditions to the
Obligations of Sellers under this
Agreement. ...............................................................................................................................................37
Article
X. THE
CLOSING.............................................................................................................................................................................................................................................................37
Section
10.01 Time and
Place. .................................................................................................................................................................................................................................37
Section
10.02 Deliveries at the Pre-Closing
and the
Closing..............................................................................................................................................................................38
Article
XI. TERMINATION, AMENDMENT AND
WAIVER..............................................................................................................................................................................................38
Section
11.01 Termination........................................................................................................................................................................................................................................38
Section
11.02 Effect of
Termination........................................................................................................................................................................................................................39
Section
11.03 Amendment, Extension
and
Waiver...............................................................................................................................................................................................40
Article
XII.
MISCELLANEOUS..................................................................................................................................................................................................................................................40
Section
12.01 Confidentiality...................................................................................................................................................................................................................................40
Section
12.02 Public
Announcements....................................................................................................................................................................................................................40
Section
12.03 Survival...............................................................................................................................................................................................................................................41
Section
12.04 Notices. ..............................................................................................................................................................................................................................................41
Section
12.05 Parties in
Interest..............................................................................................................................................................................................................................42
Section
12.06 Complete
Agreement........................................................................................................................................................................................................................42
Section
12.07 Counterparts......................................................................................................................................................................................................................................42
Section
12.08 Severability........................................................................................................................................................................................................................................42
Section
12.09 Governing
Law. ................................................................................................................................................................................................................................42
Section
12.10 Interpretation.....................................................................................................................................................................................................................................42
Section
12.11 Specific
Performance.........................................................................................................................................................................................................................43
ii
THIS
STOCK PURCHASE AGREEMENT (“Agreement”), dated as of July 31, 2007, is among
First Guaranty Bancshares, Inc., a corporation organized under the laws of
Louisiana (“Purchaser”) and ▇▇▇▇▇▇▇▇ Bancorp, Inc., a Kansas corporation
(“▇▇▇▇▇▇▇▇”), ▇▇▇▇▇▇▇▇ National Bank, a national bank headquartered in Kansas
(“Seller Bank”) and ▇▇▇▇▇▇ Mae (“▇▇▇▇▇▇ ▇▇▇”), a Congressionally chartered
federal instrumentality that is deemed a citizen of the District of Columbia
(▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇ are sometimes collectively referred to herein as the
“Sellers”). Sellers collectively own 100% of the issued and
outstanding shares of the Seller Bank.
R
E C I T A L S:
A. Exhibit
A sets forth the number of shares of Seller Bank Stock owned by each of ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇. Sellers are the owners of the respective number of
outstanding shares of the capital stock of Seller Bank as set forth on the
signature page to this Agreement.
▇. ▇▇▇▇▇▇▇
desire to sell their shares of Seller Bank Stock, and the Purchaser desires
to
purchase all of the outstanding shares of Seller Bank Stock (the “Shares”), all
on the terms set forth in this Agreement (the “Acquisition”).
C. In
order to facilitate the Acquisition, Seller Bank has been made a party to this
Agreement since Purchaser would be unwilling to enter into this Agreement except
in reliance on the representations, warranties and covenants of the Seller
Bank
contained herein.
ARTICLE
I.
CERTAIN
DEFINITIONS
Section
1.01 Certain
Definitions.
As
used
in this Agreement the following terms have the following meanings (unless the
context otherwise requires, references to Articles and Sections refer to
Articles and Sections of this Agreement).
“Acquisition
Agreement” shall have the meaning set forth in Section 7.07(b).
“Acquisition
Proposal” shall mean any inquiry, proposal or offer from any person relating to,
or that could reasonably be expected to lead to, any direct or indirect
acquisition or purchase, in one transaction or a series of transactions, of
assets (including equity securities of Seller Bank) or businesses that
constitute 25% or more of the revenues, net income or assets of ▇▇▇▇▇▇▇▇ and
Seller Bank, taken as a whole, or 25% or more of any class of equity securities
of ▇▇▇▇▇▇▇▇ or Seller Bank, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 25% or more of any
class of equity securities of ▇▇▇▇▇▇▇▇ or Seller Bank, or any merger,
consolidation, business combination, recapitalization, liquidation, dissolution,
joint venture, binding share exchange or similar transaction involving ▇▇▇▇▇▇▇▇
or Seller Bank pursuant to which any person or the stockholders of any person
would own 25% or more of any class of equity securities of ▇▇▇▇▇▇▇▇ or Seller
Bank or of any resulting parent company of ▇▇▇▇▇▇▇▇, in each case other than
the
transactions contemplated by this Agreement.
“Affiliate”
means any Person who directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such Person
and,
without limiting the generality of the foregoing, includes any executive officer
or director of such Person and any Affiliate of such executive officer or
director.
“Agreement”
means this agreement, and any amendment hereto.
“Bank”
shall mean First Guaranty Bank, a Louisiana-chartered bank, with its principal
offices located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, which
is a
wholly owned subsidiary of Purchaser.
“Bank
Regulator” shall mean any Federal or state banking regulator, including but not
limited to the FRB, OCC, the FDIC, the KBC and the LFI, which regulates the
Bank
or Seller Bank, or any of their respective holding companies or
subsidiaries.
“BHCA”
shall mean the Bank Holding Company Act.
“Closing”
shall have the meaning set forth in Section 2.04.
“COBRA”
shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.
“Code”
shall mean the Internal Revenue Code of 1986, as amended.
“Compensation
and Benefit Plans” shall have the meaning set forth in Section
3.16(a).
“Confidentiality
Agreements” shall mean the confidentiality agreements referred to in Section
12.01 of this Agreement.
“Consideration”
shall mean the cash in an aggregate per share amount to be paid by Purchaser
for
Seller Bank Stock, as set forth in Section 2.02.
“Convertible
Subordinated Debenture” shall mean the Convertible Subordinated Debenture due
December 22, 2013 issued by ▇▇▇▇▇▇▇▇ Bancorp, Inc. to Community Development
Financial Institutions Fund and dated December 22, 1998.
“CRA”
shall mean the Community Reinvestment Act of 1977.
“Derivatives
Contract” shall have the meaning set forth in Section 3.24.
“Disclosure
Letter” shall have the meaning set forth Section 3.01.
“Environmental
Laws” means any applicable Federal, state or local law, statute, ordinance,
rule, regulation, code, license, permit, authorization, approval, consent,
order, judgment, decree, injunction or agreement with any governmental entity
relating to (1) the protection, preservation or restoration of the environment
(including, without limitation, air, water vapor, surface water, groundwater,
drinking water supply, surface soil, subsurface soil, plant and animal life
or
any other natural resource), and/or (2) the exposure to, or the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Materials of Environmental
Concern. The term Environmental Law includes without limitation (a)
the Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. §9601, et seq; the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. §6901, et seq; the Clean Air Act, as amended, 42 U.S.C.
§7401, et seq; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
§1251, et seq; the Toxic Substances Control Act, as amended, 15 U.S.C. §2601, et
seq; the Emergency Planning and Community Right to Know Act, 42 U.S.C. §11001,
et seq; the Safe Drinking ▇▇▇▇▇ ▇▇▇, ▇▇ ▇.▇.▇. §▇▇▇▇, et seq; and all comparable
state and local laws, and (b) any common law (including without limitation
common law that may impose strict liability) that may impose liability or
obligations for injuries or damages due to the presence of or exposure to any
Materials of Environmental Concern.
2
“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as
amended.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.
“FDIA”
shall mean the Federal Deposit Insurance Act, as amended, and applicable
regulations thereunder.
“FDIC”
shall mean the Federal Deposit Insurance Corporation or any successor
thereto.
“FRB”
shall mean the Board of Governors of the Federal Reserve System.
“GAAP”
shall mean accounting principles generally accepted in the United States of
America.
“Governmental
Entity” shall mean any federal, state, local or other government, governmental,
regulatory or administrative authority, agency or commission or any court,
tribunal or judicial or arbitral body.
“HIPAA”
shall mean the Health Insurance Portability and Accountability Act of 1996,
as
amended.
“Intellectual
Property” shall mean all (i) trademarks, service marks, brand names, d/b/a/’s,
Internet domain names, logos, symbols, trade dress, trade names, and other
indicia of origin, all applications and registrations for the foregoing, and
all
goodwill associated therewith and symbolized thereby, including all renewals
of
same, (ii) inventions and discoveries, whether patentable or not, and all
patents, registrations, invention disclosures and applications therefor,
including divisions, continuations, continuations-in-part and renewal
applications, and including renewals, extensions and reissues, (iii) Trade
Secrets, (iv) published and unpublished works of authorship, whether
copyrightable or not (including without limitation databases and other
compilations of information), copyrights therein and thereto, and registrations
and applications therefor, and all renewals, extensions, restorations and
reversions thereof, and (v) all other intellectual property or proprietary
rights.
“IRS”
shall mean the United States Internal Revenue Service.
“IT
Assets” shall mean ▇▇▇▇▇▇▇▇’ and Seller Bank’s computers, computer software,
firmware, middleware, servers, workstations, routers, hubs, switches, data
communications lines, and all other information technology equipment, and all
associated documentation.
“KBC”
shall mean the Kansas Office of the State Bank Commissioner.
“KGCC”
shall mean the Kansas General Corporation Code.
“Knowledge”
as used with respect to a Person (including references to such Person being
aware of a particular matter) means those facts that are known by any officer
with the title ranking not less than vice president or a director of such
Person, and includes any facts, matters or circumstances set forth in any
written notice from any Bank Regulator or any other material written notice
received by an officer with the title ranking not less than vice president
or a
director of that Person. For purposes of this definition, an officer
or director will be deemed to have “Knowledge” of a particular fact or other
matter if a prudent individual could be expected to discover or otherwise become
aware of such fact or other matter in the course of conducting a reasonably
comprehensive investigation concerning the existence of such fact or other
matter.
3
“LBCL”
means the Louisiana Business Corporation Law.
“LFI”
shall mean the Louisiana Office of Financial Institutions.
“Licensed
Intellectual Property” means Intellectual Property that Seller Bank is licensed
or otherwise permitted by other Persons to use.
“Listed
Intellectual Property” shall have the meaning set forth in Section
3.12(a).
“Loan
Property” shall have the meaning set forth in Section 3.18.
“Material
Adverse Effect” shall mean an effect which (A) is material and adverse to the
assets, business, financial condition, results of operations or prospects of
▇▇▇▇▇▇▇▇, Seller Bank or Purchaser, as the context may dictate, and its
subsidiaries taken as a whole, other than any such effect attributable to or
resulting from (x) any change in banking or similar laws, rules or regulations
of general applicability or interpretations thereof by courts or governmental
authorities, (y) any change in GAAP or regulatory accounting principles, in
each
case which affects banks, thrifts or their holding companies generally or (z)
any change in interest rates, provided, that any such change in interest rates
shall not affect the referenced party to a materially greater extent than banks,
thrifts or their holding companies generally, or (B) adversely affects the
ability of Sellers or Purchaser, as the context may dictate, to perform its
material obligations hereunder or (C) materially and adversely affects the
timely consummation of the transactions contemplated hereby.
“Materials
of Environmental Concern” means pollutants, contaminants, wastes, toxic
substances, petroleum and petroleum products, and any other materials regulated
under Environmental Laws, including, but not limited to, radon, radioactive
material, asbestos, asbestos-containing material, urea formaldehyde foam
insulation, lead, polychlorinated biphenyl, flammables and
explosives.
“NASD”
shall mean the National Association of Securities Dealers, Inc.
“Notice
of Superior Proposal” shall have the meaning set forth in Section
7.07(b).
“OCC”
shall mean the Office of the Comptroller of the Currency.
“Participation
Facility” shall have the meaning set forth in Section 3.18.
“PBGC”
shall mean the Pension Benefit Guaranty Corporation or any successor
thereto.
“Person”
shall mean any individual, corporation, partnership, joint venture, association,
trust or “group” (as that term is defined under the Exchange Act).
“Pre-Effective
Time Tax Period” means any taxable period (or the allocable portion of a
Straddle Period) ending on or before the close of business on the date the
closing occurs.
4
“Promissory
Notes” shall mean (i) the Promissory Note between ▇▇▇▇▇▇▇▇ Bancorp, Inc. and
National Community Investment Fund dated March 30, 1998 in the principal amount
of $750,000 and (ii) the Subordinated Note between ▇▇▇▇▇▇▇▇ Bank and Minbank
Capital Corp., dated February 3, 1988, as modified by the Note Modification
and
Assumption Agreement dated November 1, 1991 in the principal amount of
$450,000.
“Proxy
Statement” shall have the meaning set forth in Section 8.02.
“Purchaser”
shall mean First Guaranty Bancshares, Inc., a Louisiana corporation, with its
principal executive offices located at 400 East ▇▇▇▇▇▇ Street, Hammond,
Louisiana 70401.
“Purchaser
Subsidiary” means any substantial corporation or limited liability company, 50%
or more of the capital stock of, or membership interests in, which is or are
owned, either directly or indirectly, by Purchaser or the Bank, except any
corporation or limited liability company the stock of which is held in the
ordinary course of the lending activities of the Bank.
“Regulatory
Agreement” shall have the meaning set forth in Section 3.15(c).
“Regulatory
Approvals” means as necessary, the approvals of the FRB, OCC, FDIC and KBC to
the stock purchase and the related transactions contemplated by this
Agreement.
“Representatives”
shall have the meaning set forth in Section 7.07(a).
“Rights”
shall mean warrants, options, rights, convertible securities, stock appreciation
rights and other arrangements or commitments which obligate an entity to issue
or dispose of any of its capital stock or other ownership interests or which
provide for compensation based on the equity appreciation of its capital
stock.
“Securities
Laws” shall mean the Securities Act; the Exchange Act; the Investment Company
Act of 1940, as amended; the Investment Advisers Act of 1940, as amended; the
Trust Indenture Act of 1939, as amended; and the rules and regulations of the
SEC promulgated thereunder.
“Sellers”
shall have the meaning set forth in the preamble.
“Seller
Adverse Recommendation Change” shall have the meaning set forth in Section
7.07(b).
“Seller
Bank” shall mean ▇▇▇▇▇▇▇▇ National Bank, a national bank with its principal
offices located at 1314 ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ich is a wholly owned subsidiary of
▇▇▇▇▇▇▇▇.
“Seller
Bank Common Stock” shall have the meaning set forth in Section
3.03(b).
“Seller
Bank Preferred Stock” shall have the meaning set forth in Section
3.03(b).
“Seller
Bank Stock” shall mean Seller Bank Common Stock and Seller Bank Preferred
Stock.
“Seller
Common Stock” shall mean the common stock Class A through Class E set forth in
Section 3.03(a).
“Seller
Fee” shall have the meaning in Section 11.02(b)(iii).
5
“Seller
Group” means any combined, unitary, consolidated or other affiliated group
within the meaning of Section 1504 of the Code or otherwise, of which ▇▇▇▇▇▇▇▇
or Seller Bank is or has been a member for Tax purposes.
“Seller
Loan” shall have the meaning set forth in Section 3.19(d).
“Seller
Preferred Stock” shall have the meaning set forth in Section
3.03(a).
“Seller
Reports” shall have the meaning set forth in Section 3.07(a).
“Seller
Stockholders Meeting” shall have the meaning set forth in Section
8.01.
“Seller
Subsidiary” means any corporation, 50% or more of the capital stock of which is
owned, either directly or indirectly, by ▇▇▇▇▇▇▇▇ or Seller Bank, except any
corporation the stock of which is held in the ordinary course of the lending
activities of Seller Bank.
“Stockholder
Approval” shall have the meaning set forth in Section 9.01(a).
“Straddle
Period” means any taxable period that includes (but does not end on) the date on
which the stock purchase is completed.
“Superior
Proposal” shall mean an Acquisition Proposal, which the Board of Directors of
▇▇▇▇▇▇▇▇ reasonably determines (after consultation with a financial advisor
of
nationally recognized reputation) to be (i) more favorable to the stockholders
of ▇▇▇▇▇▇▇▇ from a financial point of view than the sale of Seller Bank Stock
(taking into account all the terms and conditions of such proposal and this
Agreement (including any changes to the financial terms of this Agreement
proposed by Purchaser in response to such offer or otherwise)) and (ii)
reasonably capable of being completed, taking into account all financial, legal,
regulatory and other aspects of such proposal.
“Tax”
means any and all (a) federal, state, local or foreign tax, fee or other like
assessment or charge of any kind, including, without limitation, any net income,
alternative or add-on minimum tax, gross income, gross receipts, sales, use,
ad
valorem, value-added, transfer, franchise, profits, license, payroll,
employment, social security (or similar), unemployment, disability,
registration, estimated, excise, severance, stamp, capital stock, occupation,
property, environmental or windfall tax, premium, customs duty or other tax,
together with any interest, penalty or additions thereto, whether disputed
or
not; (b) liability for the payment of Tax as the result of membership in the
Seller Group; and (c) transferee or secondary liability in respect of any Tax
(whether imposed by law or contractual arrangement).
“Tax
Return” means any return (including estimated returns), declaration, report,
claim for refund, or information return or statement or any amendment thereto
relating to Taxes, including any such document prepared on an affiliated,
consolidated, combined or unitary group basis and any schedule or attachment
thereto.
“Taxing
Authority” means any governmental or regulatory authority, body or
instrumentality exercising any authority to impose, regulate or administer
the
imposition of Taxes.
“Termination
Date” shall mean May 31, 2008.
“Trade
Secrets” means confidential information, trade secrets and know-how, including
confidential processes, schematics, business methods, formulae, drawings,
prototypes, models, designs, customer lists and supplier lists.
6
“Voting
Agreement” shall have the meaning set forth in the recitals to this
Agreement.
Other
terms used herein are defined in the preamble and elsewhere in this
Agreement.
ARTICLE
II.
SALE
AND TRANSFER OF SHARES; CLOSING
Section
2.01 Shares.
Subject
to the terms and conditions of this Agreement, at the closing Sellers will
sell
and transfer the shares of Seller Bank Stock to Purchaser, and Purchaser will
purchase the shares from Sellers.
Section
2.02 Purchase
Price.
(a) The
total
purchase price for the shares will be an amount of cash without interest equal
to the adjusted book value of Seller Bank immediately prior to the closing
as
determined pursuant to Disclosure Schedule 2.02(a) (the “Consideration”), and
each Seller shall have the right to receive in exchange for its shares of Seller
Bank Stock an amount of cash equal to a percentage of the adjusted book value
of
Sellers Bank Stock set forth in Disclosure Schedule 2.02(b).
Section
2.03 Stock
Options.
Seller
Bank has no options or other equity based derivative instruments that are
outstanding or which are entitled to receive any of the
Consideration.
Section
2.04 Closing;
Closing Date.
Subject
to the satisfaction or waiver of all conditions to closing contained in Article
IX hereof, the Closing shall occur the later of either (i) five business days
following the latest to occur of the receipt of all required Regulatory
Approvals, Stockholder Approval, satisfaction of all conditions to closing
(to
the extent such conditions are not waived) and the expiration of any applicable
waiting periods, (ii) at the discretion of the Purchaser, the month end
following receipt of all Regulatory Approvals, Stockholder Approval,
satisfaction of all conditions to closing (to the extent such conditions are
not
waived) and the expiration of any applicable waiting periods, or (iii) at such
other date or time upon which Purchaser and Sellers mutually agree (the
“Closing” and such date of closing is herein referred to as the “Closing
Date”.)
7
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES OF ▇▇▇▇▇▇▇▇ AND SELLER BANK
▇▇▇▇▇▇▇▇
and Seller Bank represent and warrant to Purchaser that the statements contained
in this Article III are true and correct as of the date of this Agreement and
will be true and correct as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Article III), except as set forth in the Disclosure Letter
(as defined below) delivered by ▇▇▇▇▇▇▇▇ and Seller Bank to Purchaser prior
to
the execution of this Agreement. References to the Knowledge of ▇▇▇▇▇▇▇▇ shall
include the Knowledge of Seller Bank.
Section
3.01 Disclosure
Letter.
On
or
prior to the date hereof, ▇▇▇▇▇▇▇▇ has delivered to Purchaser a letter (the
“Disclosure Letter”) setting forth, among other things, facts, circumstances and
events the disclosure of which are required or appropriate in relation to any
or
all of its covenants, representations and warranties (and making specific
reference to the section of this Agreement to which such section of the
Disclosure Letter relates), other than Section 3.08; provided, that the mere
inclusion of a fact, circumstance or event in the Disclosure Letter shall not
be
deemed an admission by a party that such item represents a material exception
or
that such item is reasonably likely to result in a Material Adverse
Effect. The Disclosure Letter is true, correct and to the knowledge
of ▇▇▇▇▇▇▇▇, complete.
Section
3.02 Organization.
(a) ▇▇▇▇▇▇▇▇
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of Kansas, and is duly registered as a bank holding company
under the BHCA. ▇▇▇▇▇▇▇▇ has all requisite corporate power and
authority to own, lease and operate its properties and carry on its business
as
now conducted. ▇▇▇▇▇▇▇▇ is duly licensed or qualified to do business
in each jurisdiction where its ownership or leasing of property or the conduct
of its business requires such qualification, except where the failure to obtain
such license or qualification would not reasonably be expected to have a
Material Adverse Effect.
(b) Seller
Bank is a national bank duly organized and validly existing under the laws
of
the United States of America. The deposits of Seller Bank are insured
by the FDIC to the fullest extent permitted by law, and all premiums and
assessments required to be paid in connection therewith have been paid by Seller
Bank when due. Seller Bank qualifies as a Community Development Financial
Institution.
(c) Seller
Bank is ▇▇▇▇▇▇▇▇’ only Subsidiary. Seller Bank has no
subsidiaries. Except for Seller Bank, there are no entities (whether
corporations, partnerships, or similar organizations), in which ▇▇▇▇▇▇▇▇ owns,
directly or indirectly, 5% or more of the ownership interests as of the date
of
this Agreement. Seller Bank is in compliance with all applicable
laws, rules and regulations relating to direct investments in equity ownership
interests. ▇▇▇▇▇▇▇▇ owns 9,600 shares of Seller Bank Common Stock, or
90.94% of the outstanding shares of Seller Bank and ▇▇▇▇▇▇ ▇▇▇ owns 450 shares
of Seller Bank Common Stock and 507 shares of Seller Bank Preferred Stock,
or
the remaining 9.06%. Such shares are validly issued, fully paid,
nonassessable and not subject to any preemptive rights and are owned by ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇ free and clear of any pledges, security interests, claims, liens,
encumbrances or restrictions (other than those imposed by applicable federal
and
state securities laws) and there are no agreements or understandings with
respect to the voting or disposition of any such shares.
8
(d) The
respective minute books of ▇▇▇▇▇▇▇▇ and Seller Bank accurately record, in all
material respects, all corporate actions of their respective stockholders and
boards of directors (including committees, to the extent minutes of committees
exist).
(e) Prior
to
the date of this Agreement, ▇▇▇▇▇▇▇▇ has made available to Purchaser true and
correct copies of the Articles of Incorporation or charter and bylaws of
▇▇▇▇▇▇▇▇ and Seller Bank.
Section
3.03 Capitalization.
(a) The
authorized capital stock of ▇▇▇▇▇▇▇▇ consists of 10 million shares of Common
Stock, Class A, no par value; 600,000 shares of Common Stock, Class B, no par
value (nonvoting); 10,000 shares of Common Stock, Class C, par value $1.00
per
share; 5.0 million shares of Common Stock, Class D, no par value; and 5.0
million shares of Common Stock, Class E, no par value (nonvoting) (collectively,
“Seller Common Stock”); and 500 shares of preferred stock, par value $1.00 per
share (“Seller Preferred Stock”). As of the date of this Agreement:
(i) 2,737,687 shares of Common Stock, Class A were issued and 2,711,857 shares
were outstanding; (ii) 433,621 shares of Common Stock, Class B were issued
and
outstanding; (iii) 9,500 shares of Common Stock, Class C were issued and 7,750
shares were outstanding; (iv) 380,000 shares of Common Stock, Class D were
issued and 360,000 shares were outstanding; (v) 1,084,706 shares of Common
Stock, Class E were issued and outstanding. As of the date of this
Agreement, no shares of Seller Preferred Stock were issued and
outstanding. As of the date of this Agreement, 28,830 shares of
Common Stock, Class A and 1,750 shares of Common Stock, Class C were held by
▇▇▇▇▇▇▇▇ in its treasury or by its Subsidiaries and 1,434,706 shares of Seller
Common Stock, Class E were reserved for issuance in connection with the
Subordinated Convertible Debenture. All outstanding shares of Seller Common
Stock are validly issued, fully paid and nonassessable and not subject to any
preemptive rights and, with respect to shares held by ▇▇▇▇▇▇▇▇ in its treasury
or by its Subsidiaries, are free and clear of all liens, claims, encumbrances
or
restrictions (other than those imposed by applicable federal and state
securities laws) and there are no agreements or understandings with respect
to
the voting or disposition of any such shares.
(b) The
authorized capital stock of Seller Bank consists of 12,000 shares of common
stock, par value $100 per share (the “Seller Bank Common Stock”), and 10,000
shares of preferred stock, no par value (the “Seller Bank Preferred
Stock”). As of the date of this Agreement, 10,050 shares of the
Seller Bank Common Stock were issued and outstanding, and 507 shares of the
Seller Bank Preferred Stock were issued and outstanding. The
ownership interests with respect to the outstanding Seller Bank Common Stock
and
Seller Bank Preferred Stock are described in Exhibit A. All of the
outstanding shares of the Seller Bank Common Stock and Seller Bank Preferred
Stock are validly issued, fully paid and nonassessable.
(c) No
bonds,
debentures, notes or other indebtedness having the right to vote on any matters
on which stockholders of ▇▇▇▇▇▇▇▇ may vote are issued or
outstanding.
(d) As
of the
date of this Agreement and, except for this Agreement, neither ▇▇▇▇▇▇▇▇ nor
any
Seller Bank has or is bound by any Rights obligating ▇▇▇▇▇▇▇▇ or Seller Bank
to
issue, deliver or sell, or cause to be issued, delivered or sold, any additional
shares of capital stock of ▇▇▇▇▇▇▇▇ or Seller Bank or obligating ▇▇▇▇▇▇▇▇ or
Seller Bank to grant, extend or enter into any such Right other than pursuant
to
the Subordinated Convertible Debenture. As of the date hereof, there
are no outstanding contractual obligations of ▇▇▇▇▇▇▇▇ or Seller Bank to
repurchase, redeem or otherwise acquire any shares of capital stock of ▇▇▇▇▇▇▇▇
or Seller Bank.
9
Section
3.04 Authority;
No Violation.
(a) ▇▇▇▇▇▇▇▇
and Seller Bank each has full corporate power and authority to execute and
deliver this Agreement, and, subject to the receipt of the Regulatory Approvals,
to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Seller Bank and the completion by ▇▇▇▇▇▇▇▇ and
Seller Bank of the transactions contemplated hereby have been duly and validly
approved by the respective Boards of Directors of ▇▇▇▇▇▇▇▇ and
Seller. This Agreement has been duly and validly executed and
delivered by ▇▇▇▇▇▇▇▇ and Seller Bank, and subject to receipt of the Regulatory
Approvals and Stockholder Approval, constitutes the valid and binding obligation
of ▇▇▇▇▇▇▇▇, enforceable against ▇▇▇▇▇▇▇▇ in accordance with its terms, subject
to applicable bankruptcy, insolvency and similar laws affecting creditors’
rights generally, and subject, as to enforceability, to general principles
of
equity, whether applied in a court of law or a court of equity.
(b) Subject
to receipt of Regulatory Approvals, the consummation of the transactions
contemplated hereby and compliance by ▇▇▇▇▇▇▇▇ with any of the terms or
provisions hereof will not: (i) conflict with or result in a breach or violation
of or a default under any provision of the Certificate of Incorporation, Federal
Charter or Bylaws of ▇▇▇▇▇▇▇▇ or Seller Bank; (ii) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree, governmental permit
or license or injunction applicable to ▇▇▇▇▇▇▇▇ or Seller Bank or any of their
respective properties or assets or enable any person to enjoin the sale of
Seller Bank Stock; or (iii) violate, conflict with, result in a breach of any
provisions of, constitute a default (or an event which, with notice or lapse
of
time, or both, would constitute a default) under, result in the termination
of,
accelerate the performance required by, or result in a right of termination
or
acceleration or the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of ▇▇▇▇▇▇▇▇ or Seller Bank
under any of the terms, conditions or provisions of any material note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which ▇▇▇▇▇▇▇▇ or Seller Bank is a party, or by
which they or any of their respective properties or assets may be bound or
affected.
Section
3.05 Consents.
Except
for the Regulatory Approvals and compliance with any conditions contained
therein, no consents, waivers or approvals of, or filings or registrations
with,
any Governmental Entity or Bank Regulator are necessary, and no consents,
waivers or approvals of, or filings or registrations with, any other third
parties are necessary, in connection with the execution and delivery of this
Agreement by ▇▇▇▇▇▇▇▇ or Seller Bank, and the sale of Seller Bank Stock by
▇▇▇▇▇▇▇▇. Each of ▇▇▇▇▇▇▇▇ and Seller Bank has no reason to believe
that (i) any required Regulatory Approvals or other required consents or
approvals will not be received, or that (ii) any public body or authority,
the
consent or approval of which is not required or to which a filing is not
required, will object to the completion of the transactions contemplated by
this
Agreement.
Section
3.06 Required
Vote.
Except
as
otherwise required by this Agreement, no vote of ▇▇▇▇▇▇▇▇’ shareholders is
required to approve the sale of Seller Bank Stock by ▇▇▇▇▇▇▇▇ or to consummate
the transactions contemplated by this Agreement.
Section
3.07 Financial
Statements.
(a) As
of
their respective dates, neither ▇▇▇▇▇▇▇▇’ unaudited financial statements and
call reports for the periods subsequent to ▇▇▇▇▇▇▇▇’ fiscal year end December
31, 2005) (collectively the “Seller Reports”), contained or will contain any
untrue statement of a material fact or omitted or will omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. Each of the financial statements of ▇▇▇▇▇▇▇▇ included in
the Seller Reports have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved. Each of the balance
sheets contained or incorporated by reference in Seller Reports (including
in
each case any related notes and schedules) fairly presented the financial
position of the entity or entities to which it relates as of its date and each
of the statements of income and of changes in stockholders’ equity and of cash
flows, contained or incorporated by reference in the Seller Reports (including
in each case any related notes and schedules), fairly presented the results
of
operations, stockholders’ equity and cash flows, as the case may be, of the
entity or entities to which it relates for the periods set forth therein
(subject, in the case of unaudited interim statements, to normal year-end audit
adjustments that are not material in amount or effect), in each case in
accordance with GAAP consistently applied during the periods involved, except
as
may be noted therein. To the Knowledge of ▇▇▇▇▇▇▇▇, no event has
occurred that would cause a normal year-end adjustment to the unaudited interim
financial statements prepared prior to the date hereof that would be material
in
amount or effect and no such adjustment is reasonably likely to
occur. ▇▇▇▇▇▇▇▇ has made available to Purchaser a true and complete
copy of all Seller Reports since December 31, 2005.
10
(b) ▇▇▇▇▇▇▇▇
and Seller Bank have each timely filed all reports, registrations and
statements, together with any amendments required to be made with respect
thereto, that they were required to file since December 31, 2003 with (i) the
FRB, (ii) the FDIC, (iii) the OCC, (iv) any state banking commission, (v) and
other state or federal regulatory authority having jurisdiction over insured
depository institutions or their holding companies, and (v) any other self
regulatory organization, and have paid all fees and assessments due and payable
in connection therewith, except to the extent the failure of a report,
registration or statement to have been filed in a “timely” fashion has not and
will not result in a failure to comply with applicable laws, rules or
regulations or materially prejudice ▇▇▇▇▇▇▇▇ or Seller Bank with respect to
the
applicable Governmental Entity.
Section
3.08 Absence
of Certain Changes or Events.
Except
as
disclosed in the Seller Reports filed since December 31, 2005 and except for
the
reasonable out-of-pocket fees and disbursements of ▇▇▇▇▇▇▇▇ incurred in
connection with the completion of the transactions contemplated hereby,
including, but not limited to, the cost of obtaining ▇▇▇▇▇▇▇▇’ stockholders
approval of this Agreement and holding a stockholders meeting for this purpose,
reasonable attorney’s fees of ▇▇▇▇▇▇▇▇ and the fees of ▇▇▇▇▇▇▇▇’ financial
advisor, good faith estimates of which have been provided to Purchaser, since
December 31, 2005 (i) neither ▇▇▇▇▇▇▇▇ nor Seller Bank has incurred any
liability, except in the ordinary course of its business consistent with past
practice, (ii) ▇▇▇▇▇▇▇▇ and Seller Bank has conducted its respective businesses
only in the ordinary and usual course of such businesses and (iii) there has
not
been any condition, event, change or occurrence that, individually or in the
aggregate, has had, or is reasonably likely to have, a Material Adverse
Effect.
Section
3.09 Taxes.
(a) (i)
▇▇▇▇▇▇▇▇ and Seller Bank have filed or caused to be filed, and with respect
to
Tax Returns due between the date of this Agreement and the Closing Date, will
timely file (including any applicable extensions) all Tax Returns required
to be
filed, (ii) all such Tax Returns are, or in the case of such Tax Returns not
yet
filed, will be, true, complete and correct in all material respects and such
Tax
Returns correctly reflected (or in the case of such Tax Returns not yet filed,
will correctly reflect) the facts regarding the income, business, assets,
operations, activities, status and other matters of ▇▇▇▇▇▇▇▇ and Seller Bank
and
any other information required to be shown thereon, and
(iii) all Taxes of ▇▇▇▇▇▇▇▇ and the Seller Bank (whether or not reflected
on any such Tax Returns) attributable to a Pre-Effective Time Tax Period have
been, or in the case of Taxes the due date for payment of which is between
the
date of this Agreement and the date the Closing Date occurs, timely paid in
full, including, without limitation, all Taxes which ▇▇▇▇▇▇▇▇ and Seller Bank
is
obligated to withhold for amounts paid or owing to employees, independent
contractors, stockholders creditors and other third parties other than Taxes
that have been reserved or accrued on the balance sheet contained in the most
recent Seller Report, which the v is contesting in good faith.
11
(b) The
most
recent audited financial statements for ▇▇▇▇▇▇▇▇ reflect an adequate reserve
for
all Taxes payable by ▇▇▇▇▇▇▇▇ and Seller Bank for all taxable periods and
portions thereof through the date of such financial statements, and, in the
case
of Taxes owed as of the date hereof, an adequate reserve is (and until the
date
the Closing Date occurs will continue to be) reflected in the accruals for
Taxes
payable on the balance sheet contained in the most recent Seller Report, other
than accruals established to reflect timing differences and accruals reflected
only in the notes thereto.
(c) There
are
no liens for Taxes, except for statutory liens not yet due with respect to
any
of the assets or properties of ▇▇▇▇▇▇▇▇ or Seller Bank.
(d) (i)
No
Tax Return of ▇▇▇▇▇▇▇▇ or Seller Bank has within the past six (6) years been
examined by the Internal Revenue Service, (ii) no Tax Return of ▇▇▇▇▇▇▇▇ or
Seller Bank is under audit or examination by any other Taxing Authority, and
(iii) no notice of such an audit or examination has been received by ▇▇▇▇▇▇▇▇
or
Seller Bank.
(e) Each
deficiency, if any, resulting from any audit or examination relating to Taxes
by
any Taxing Authority has been timely paid. No issues relating to
Taxes were raised by the relevant Taxing Authority in any completed audit or
examination that can reasonably be expected to recur in a later taxable
period. The relevant statute of limitations is closed with respect to
the Tax Returns of ▇▇▇▇▇▇▇▇ and Seller Bank for all years through
2002. ▇▇▇▇▇▇▇▇ has made available to Purchaser documents setting
forth the dates of the most recent audits or examinations of ▇▇▇▇▇▇▇▇ and Seller
Bank by any Taxing Authority in respect of Taxes for all taxable periods for
which the statute of limitations has not yet expired.
(f) Except
as
set forth in the Disclosure Letter, neither ▇▇▇▇▇▇▇▇ nor Seller Bank is a party
to or is bound by any Tax sharing agreement, Tax indemnity obligation or similar
agreement, arrangement or practice with respect to Taxes (including, without
limitation, any advance pricing agreement, closing agreement or other agreement
relating to Taxes with any Taxing Authority).
(g) Neither
▇▇▇▇▇▇▇▇ nor Seller Bank will be required to include in a taxable period ending
after the Closing Date any taxable income attributable to income that accrued,
but was not recognized, in a Pre-Effective Time Tax Period (or the portion
of a
Straddle Period allocable to the Pre-Effective Time Tax Period) as a result
of
an adjustment under Section 481 of the Code, the installment method of
accounting, the long-term contract method of accounting, the cash method of
accounting, any comparable provision of state, local, or foreign Tax law, or
for
any other reason.
(h) There
are
no outstanding agreements or waivers extending, or having the effect of
extending, the statutory period of limitation applicable to any Tax Returns
required to be filed with respect to ▇▇▇▇▇▇▇▇ or Seller Bank, and none of
▇▇▇▇▇▇▇▇, Seller Bank or the Seller Group has requested any extension of time
within which to file any Tax Return, which return has not yet been
filed. No power of attorney with respect to any Taxes has been
executed or filed with any Taxing Authority by or on behalf of ▇▇▇▇▇▇▇▇, Seller
Bank or the Seller Group.
(i) ▇▇▇▇▇▇▇▇
and Seller Bank have complied in all respects with all applicable laws relating
to the payment and withholding of Taxes (including withholding of Taxes pursuant
to Sections 1441, 1442, 3121 and 3402 of the Code or any comparable
provision of any state, local or foreign laws) and have, within the time and
in
the manner prescribed by applicable law, withheld from and paid over to the
proper Taxing Authorities all amounts required to be so withheld and paid over
under such laws.
12
(j) Neither
▇▇▇▇▇▇▇▇ nor Seller Bank has been a party to any distribution occurring during
the last five years in which the parties to such distribution treated the
distribution as one to which Section 355 of the Code applied.
(k) Neither
▇▇▇▇▇▇▇▇ nor Seller Bank is a party to any “listed transaction” as defined in
Treasury Regulation Section 1.6011-4(b)(2).
(l) None
of the Tax Returns filed by ▇▇▇▇▇▇▇▇, Seller Bank or the Seller Group contains
a
disclosure statement under former Section 6661 of the Code or Section 6662
of
the Code (or any similar provision of state, local or foreign Tax
law).
(m) ▇▇▇▇▇▇▇▇
has not been, at any time during the applicable time period set forth in
Section 897(c)(1) of the Code, a United States real property holding
company within the meaning of Section 897(c)(2) of the Code.
(n) ▇▇▇▇▇▇▇▇
has made available to Purchaser for inspection (i) complete and correct copies
of all material Tax Returns of ▇▇▇▇▇▇▇▇, Seller Bank and the Seller Group
relating to Taxes for all taxable periods for which the applicable statute
of
limitations has not yet expired, and (ii) complete and correct copies of all
private letter rulings, revenue agent reports, information document requests,
notices of proposed deficiencies, deficiency notices, protests, petitions,
closing agreements, settlement agreements, pending ruling requests, and any
similar documents, submitted by, received by or agreed to by or on behalf of
▇▇▇▇▇▇▇▇ or Seller Bank, or, to the extent related to the income, business,
assets, operations, activities or status of ▇▇▇▇▇▇▇▇ or Seller Bank, submitted
by, received by or agreed to by or on behalf of any Seller Group, and relating
to Taxes for all taxable periods for which the statute of limitations has not
yet expired.
(o) The
Disclosure Letter sets forth each state, county, local, municipal or foreign
jurisdiction in which ▇▇▇▇▇▇▇▇ or Seller Bank files, or is or has been required
to file, a Tax Return relating to state and local income, franchise, license,
excise, net worth, property or sales and use taxes or is or has been liable
for
any Taxes on a “nexus” basis at any time for a taxable period for which the
relevant statutes of limitation have not expired. Neither ▇▇▇▇▇▇▇▇
nor Seller Bank has received notice of any claim by a Taxing Authority in a
jurisdiction where ▇▇▇▇▇▇▇▇ or Seller Bank does not file Tax Returns that
▇▇▇▇▇▇▇▇ or Seller Bank is or may be subject to taxation by such
jurisdiction.
(p) Neither
▇▇▇▇▇▇▇▇ nor Seller Bank has ever (i) made an election under Section 1362 of
the
Code to be treated as an S corporation for federal income tax purposes, or
(ii)
made any similar election under any comparable provision of any state, local
or
foreign Tax law.
Section
3.10 Material
Contracts; Leases; Defaults.
(a) Except
as
set forth in the Disclosure Letter, neither ▇▇▇▇▇▇▇▇ nor Seller Bank is a party
to or subject to: (i) any employment, consulting or severance contract with
any
present officer, director or employee of ▇▇▇▇▇▇▇▇ or Seller Bank, except for
“at
will” arrangements; (ii) any plan or contract providing for bonuses, pensions,
options, or other equity deferred compensation, retirement payments, profit
sharing, insurance benefits, death benefits, health, medical or disability
benefits or similar material arrangements for or with any past or present
officers, directors or employees of ▇▇▇▇▇▇▇▇ or Seller Bank; (iii) any
collective bargaining agreement with any labor union relating to employees
of
▇▇▇▇▇▇▇▇ or Seller Bank; (iv) any agreement which by its terms limits the
payment of dividends by ▇▇▇▇▇▇▇▇ or Seller Bank; (v) any instrument evidencing
or related to indebtedness for borrowed money whether directly or indirectly,
by
way of purchase money obligation, conditional sale, lease purchase, guaranty
or
otherwise, in respect of which ▇▇▇▇▇▇▇▇ or Seller Bank is an obligor to any
person, which instrument evidences or relates to indebtedness other than
deposits, bankers’ acceptances, and “treasury tax and loan” accounts established
in the ordinary course of business and transactions in “federal funds” or which
contains financial covenants or other restrictions (other than those relating
to
the payment of principal and interest when due) which would be applicable on
or
after the Closing Date to Purchaser or any Purchaser Subsidiary; (vi) any other
agreement, written or oral, not terminable on 60 days’ notice, that obligates
▇▇▇▇▇▇▇▇ or Seller Bank for the payment of more than $10,000 annually; or that
has a term of no more than one year or (vii) any agreement (other than this
Agreement), contract, arrangement, commitment or understanding (whether written
or oral) that restricts or limits in any material way the conduct of business
by
▇▇▇▇▇▇▇▇ or Seller Bank (it being understood that any non-compete or similar
provision shall be deemed material) or any other material
agreement.
13
(b) Subject
to any consents that may be required as a result of the transactions
contemplated by this Agreement, neither ▇▇▇▇▇▇▇▇ nor Seller Bank is in default
under any material contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument to which it is a party, by which its
assets, business, or operations may be bound or affected, or under which it
or
its assets, business, or operations receive benefits, and to the Knowledge
of
▇▇▇▇▇▇▇▇ there has not occurred any event that, with the lapse of time or the
giving of notice or both, would constitute such a default.
(c) True
and
correct copies of agreements, contracts, arrangements and instruments referred
to in Sections 3.10(a) and (b) have been made available to Purchaser on or
before the date hereof, are listed on the Disclosure Letter and are in full
force and effect on the date hereof and enforceable against the counterparty
to
which it relates.
Section
3.11 Ownership
of Property; Insurance Coverage.
(a) Except
as
set forth in the Disclosure Letter, ▇▇▇▇▇▇▇▇ and Seller Bank, each have good
and, as to real property, marketable title to all assets and properties owned
by
▇▇▇▇▇▇▇▇ or Seller Bank in the conduct of its businesses, whether such assets
and properties are real or personal, tangible or intangible, including assets
and property reflected in the balance sheet contained in the most recent Seller
Financial Statements or acquired subsequent thereto (except to the extent that
such assets and properties have been disposed of in the ordinary course of
business, since the date of such balance sheet and except to the extent that
the
failure to have good title to any personal property would not reasonably be
expected to have a Material Adverse Effect), subject to no encumbrances, liens,
mortgages, security interests or pledges, except (i) those items which secure
liabilities for public or statutory obligations or any discount with, inter-bank
credit facilities, reverse repurchase agreements or any transaction by Seller
Bank acting in a fiduciary capacity, (ii) statutory liens for amounts not yet
delinquent or which are being contested in good faith. ▇▇▇▇▇▇▇▇ and
Seller Bank, as lessee, have the right under valid and existing leases of real
and personal properties used by ▇▇▇▇▇▇▇▇ and Seller Bank in the conduct of
their
businesses to occupy or use all such properties as presently occupied and used
by each of them and (iii) encumbrances that do not materially affect the
marketability of any title to real property. Such existing leases and
commitments to lease constitute or will constitute operating leases for both
tax
and financial accounting purposes and the lease expense and minimum rental
commitments with respect to such leases and lease commitments are as disclosed
in all respects in the notes to the Seller Financial Statements. Each
real estate lease that will require the consent of the lessor or its agent
to
consummate the effects intended by this Agreement or otherwise as a result
of
the Agreement by virtue of the terms of any such lease is listed in the
Disclosure Letter identifying the section of the lease that contains such
prohibition or restriction.
14
(b) With
respect to all agreements pursuant to which ▇▇▇▇▇▇▇▇ or Seller Bank has
purchased securities subject to an agreement to resell, if any, ▇▇▇▇▇▇▇▇ or
Seller Bank, as the case may be, has a lien or security interest (which to
▇▇▇▇▇▇▇▇’ Knowledge is a valid, perfected first lien) in the securities or other
collateral securing the repurchase agreement, and the value of such collateral
equals or exceeds the amount of the debt secured thereby.
(c) ▇▇▇▇▇▇▇▇
and Seller Bank currently maintain insurance for reasonable amounts with
financially sound and reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. Except as set forth in the
Disclosure Letter, neither ▇▇▇▇▇▇▇▇ nor Seller Bank has received notice from
any
insurance carrier that (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated, or (ii) premium costs with respect
to
such policies of insurance will be substantially increased. There are
presently no material claims pending under such policies of insurance and except
as set forth in the Disclosure Letter no notices have been given by ▇▇▇▇▇▇▇▇
or
Seller Bank under such policies. All such insurance is valid and
enforceable and in full force and effect, and within the last three years
▇▇▇▇▇▇▇▇ and Seller Bank has received each type of insurance coverage for which
it has applied and during such periods has not been denied indemnification
for
any claims submitted under any of its insurance policies. The Seller
Disclosure Letter identifies all policies of insurance maintained by ▇▇▇▇▇▇▇▇
and Seller Bank as well as the other matters required to be disclosed under
this
Section.
Section
3.12 Intellectual
Property.
(a) The
Disclosure Letter sets forth a true and complete list of all (i) Registered
and/or material Intellectual Property owned by ▇▇▇▇▇▇▇▇ and Seller Bank
indicating for each Registered item the registration or application number
and
the applicable filing jurisdiction (collectively, the “Listed Intellectual
Property”). ▇▇▇▇▇▇▇▇ or the relevant Seller Bank exclusively owns
(beneficially, and of record where applicable) all Listed Intellectual Property,
free and clear of all encumbrances, exclusive licenses and non-exclusive
licenses not granted in the ordinary course of business. The Listed Intellectual
Property is valid, subsisting and enforceable, and is not subject to any
outstanding order, judgment, decree or agreement adversely affecting ▇▇▇▇▇▇▇▇’
use thereof or its rights thereto. ▇▇▇▇▇▇▇▇ and Seller Bank have
sufficient rights to use all Intellectual Property used in its business as
currently conducted. To ▇▇▇▇▇▇▇▇’▇ Knowledge, ▇▇▇▇▇▇▇▇ and Seller Bank do not
and have not in the past five years infringed or otherwise violated the
Intellectual Property rights of any third party. There is no material
litigation, opposition, cancellation, proceeding, objection or claim pending,
asserted or threatened against ▇▇▇▇▇▇▇▇ or Seller Bank concerning the ownership,
validity, registerability, enforceability, infringement or use of, or licensed
right to use, any Intellectual Property. To ▇▇▇▇▇▇▇▇’▇ Knowledge, (x) no valid
basis for any such litigation, opposition, cancellation, proceeding, objection
or claim exists, (y) no Person is violating any Listed Intellectual Property
or
other Intellectual Property right owned or held exclusively by ▇▇▇▇▇▇▇▇ or
Seller Bank, and (z) the Licensed Intellectual Property is valid, subsisting
and
enforceable and is not subject to any outstanding order, judgment, decree or
agreement adversely affecting the Seller Bank’s use thereof or its rights
thereto. Consummation of the transactions contemplated by this Agreement will
not terminate or alter the terms pursuant to ▇▇▇▇▇▇▇▇ or Seller Bank is
permitted to use any Licensed Intellectual Property and will not create any
rights by third parties to use any Intellectual Property owned by the Purchaser
(other than any termination, alteration or creation of any rights that results
from action of the Purchaser and its Affiliates).
(b) ▇▇▇▇▇▇▇▇
and Seller Bank have taken commercially reasonable measures to protect the
confidentiality of all Trade Secrets that are owned, used or held by ▇▇▇▇▇▇▇▇
and Seller Bank, and to ▇▇▇▇▇▇▇▇’▇ Knowledge, such Trade Secrets have not been
used, disclosed to or discovered by any Person except pursuant to valid and
appropriate non-disclosure and/or license agreements which have not been
breached. ▇▇▇▇▇▇▇▇ has exercised commercially reasonable efforts to ensure
that
▇▇▇▇▇▇▇▇’ and Seller Bank’s current and prior employees who have access to
confidential information have executed valid intellectual property and
confidentiality agreements or are obligated, pursuant to ▇▇▇▇▇▇▇▇ policies,
to
maintain the confidentiality of such information for the benefit of ▇▇▇▇▇▇▇▇
or
the relevant Seller Bank on terms and conditions consistent with industry
standards. All Intellectual Property developed under contract for ▇▇▇▇▇▇▇▇
or
Seller Bank has been assigned to ▇▇▇▇▇▇▇▇ or Seller Bank.
15
(c) To
▇▇▇▇▇▇▇▇’▇ Knowledge, the IT Assets operate and perform in all respects in
accordance with their documentation and functional specifications and otherwise
as required by ▇▇▇▇▇▇▇▇ in connection with its business, and have not materially
malfunctioned or to any material extent failed within the past three
years. To ▇▇▇▇▇▇▇▇’ Knowledge, the IT Assets do not contain any “time
bomb,” “Trojan horse,” “back door,” “trap door,” “worm,” viruses, bugs, faults
or other devices or effects that (1) enable or assist any person to access
without authorization the IT Assets, or (ii) otherwise significantly adversely
affect the functionality of the IT Assets, in either case except as disclosed
in
its documentation. To ▇▇▇▇▇▇▇▇’▇ Knowledge, no person has gained unauthorized
access to the IT Assets. ▇▇▇▇▇▇▇▇ has implemented commercially
reasonable backup and disaster recovery technology consistent with industry
practices.
(d) To
▇▇▇▇▇▇▇▇’▇ Knowledge, none of the software owned by it contains any shareware,
open source code, or other software whose use requires disclosure or licensing
of Intellectual Property, to which ▇▇▇▇▇▇▇▇ or Seller Bank have not
agreed.
Section
3.13 Labor
Matters.
Neither
▇▇▇▇▇▇▇▇ nor Seller Bank is or has ever been a party to, or is or has ever
been
bound by, any collective bargaining agreement, contract, or other agreement
or
understanding with a labor union or labor organization with respect to its
employees and no such agreement or contract is currently being negotiated by
▇▇▇▇▇▇▇▇ or Seller Bank, nor is ▇▇▇▇▇▇▇▇ or Seller Bank the subject of any
proceeding asserting that it has committed an unfair labor practice or otherwise
relating to labor matters involving any current or former employees of ▇▇▇▇▇▇▇▇
or Seller Bank or seeking to compel it or Seller Bank to bargain with any labor
organization as to wages and conditions of employment, nor is any strike, other
labor dispute or organizational effort involving ▇▇▇▇▇▇▇▇ or Seller Bank pending
or, to the Knowledge of ▇▇▇▇▇▇▇▇ threatened. To the Knowledge of
▇▇▇▇▇▇▇▇ and Seller Bank, each is in compliance with applicable laws regarding
employment of employees and retention of independent contractors, and are in
compliance with applicable employment tax laws.
Section
3.14 Legal
Proceedings.
Except
as
set forth in the Disclosure Letter, neither ▇▇▇▇▇▇▇▇ nor Seller Bank is a party
to any, and there are no pending or, to ▇▇▇▇▇▇▇▇’▇ Knowledge, threatened legal,
administrative, arbitration or other proceedings, claims (whether asserted
or
unasserted), actions or governmental investigations or inquiries of any nature,
(i) against ▇▇▇▇▇▇▇▇ or Seller Bank, (ii) to which ▇▇▇▇▇▇▇▇ or Seller Bank’s
assets are or may be subject, (iii) challenging the validity or propriety of
any
of the transactions contemplated by this Agreement, or (iv) which could
adversely affect the ability of ▇▇▇▇▇▇▇▇ to perform under this
Agreement.
Section
3.15 Compliance
With Applicable Law.
(a) ▇▇▇▇▇▇▇▇
and Seller Bank are each in compliance in all material respects with all
applicable federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable to it, its
properties, assets and deposits, its business, and its conduct of business
and
its relationship with its employees, including, without limitation, the USA
PATRIOT Act, the Bank Secrecy Act, the Equal Credit Opportunity Act, the Fair
Housing Act, the CRA, the Home Mortgage Disclosure Act, and all other applicable
fair lending laws and other laws relating to discriminatory business
practices.
16
(b) ▇▇▇▇▇▇▇▇
and Seller Bank has all permits, licenses, authorizations, orders and approvals
of, and has made all filings, applications and registrations with, all Bank
Regulators and government authorities that are required in order to permit
it to
own or lease its properties and to conduct its business as presently conducted;
all such permits, licenses, certificates of authority, orders and approvals
are
in full force and effect and, to the Knowledge of ▇▇▇▇▇▇▇▇, no suspension or
cancellation of any such permit, license, certificate, order or approval is
threatened or will result from the consummation of the transactions contemplated
by this Agreement, subject to obtaining the approvals set forth in Section
8.03.
(c) Except
as
set forth in the Disclosure Letter, from the period beginning January 1, 2003,
neither ▇▇▇▇▇▇▇▇ nor Seller Bank has received any written notification or any
other communication from any Bank Regulator and government authorities (i)
asserting that ▇▇▇▇▇▇▇▇ or Seller Bank is not in material compliance with any
of
the statutes, regulations or ordinances which such Bank Regulator enforces;
(ii)
threatening to revoke any license, franchise, permit or governmental
authorization; (iii) requiring or threatening to require ▇▇▇▇▇▇▇▇ or Seller
Bank, or indicating that ▇▇▇▇▇▇▇▇ or Seller Bank may be required, to enter
into
a cease and desist order, agreement or memorandum of understanding or any other
agreement with any federal or state governmental agency or authority which
is
charged with the supervision or regulation of banks or engages in the insurance
of bank deposits restricting or limiting, or purporting to restrict or limit,
in
any material respect the operations of ▇▇▇▇▇▇▇▇ or Seller Bank, including
without limitation any restriction on the payment of dividends; or (iv)
directing, restricting or limiting, or purporting to direct, restrict or limit,
in any manner the operations of Seller Bank (any such notice, communication,
memorandum, agreement or order described in this sentence is hereinafter
referred to as a “Regulatory Agreement”). Except as set forth in the
Disclosure Letter, neither ▇▇▇▇▇▇▇▇ nor Seller Bank has consented to or entered
into any Regulatory Agreement that is currently in effect. The most
recent regulatory rating given to Seller Bank as to compliance with the CRA
is
“satisfactory” or better.
Section
3.16 Employee
Benefit Plans.
(a) The
Disclosure Letter includes a descriptive list of all plans, programs, policies,
payroll practices, contracts, agreements and other arrangements providing for
bonus, incentive compensation, deferred compensation, pension, retirement
benefits or payments, profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock, stock option, stock appreciation,
phantom stock, and other stock and stock related awards, severance, welfare
benefits, fringe benefits, employment, severance and change in control benefits
or payments and all other types of compensation and types of compensation and
compensation and benefit practices, policies and arrangements, in each case,
sponsored or contributed to, required to be contributed to or maintained by
▇▇▇▇▇▇▇▇ or Seller Bank in which any employee or former employee, consultant
or
former consultant or director or former director of ▇▇▇▇▇▇▇▇ or Seller Bank
participates or to which any such employee, consultant or director is a party
or
is otherwise entitled to receive benefits (the “Compensation and Benefit
Plans”). Other than as set forth in the Disclosure Letter, neither ▇▇▇▇▇▇▇▇ nor
any of its Subsidiaries has any commitment to create any additional Compensation
and Benefit Plan or to modify, change or renew any existing Compensation and
Benefit Plan (any modification or change that increases the cost of such plans
would be deemed material), except as required by law or regulation to maintain
the qualified status thereof. ▇▇▇▇▇▇▇▇ has made available to
Purchaser true and correct copies of the Compensation and Benefit Plans and
amendments thereto.
17
(b) Each
Compensation and Benefit Plan has, to the Knowledge of ▇▇▇▇▇▇▇▇, been operated
and administered in all material respects in accordance with its terms and
with
applicable law, including, but not limited to, ERISA, the Code, the Age
Discrimination in Employment Act, COBRA, HIPAA and any regulations or rules
promulgated thereunder, and all filings, disclosures and notices required by
ERISA, the Code, the Age Discrimination in Employment Act and any other
applicable law have been timely made or any interest, fines, penalties or other
impositions for late filings have been paid in full. ▇▇▇▇▇▇▇▇ is not
aware of any facts or circumstances that would cause any Compensation and
Benefit Plan not to be in compliance with all applicable laws, including but
not
limited to, the laws referenced in the preceding sentence. Each
Compensation and Benefit Plan which is an “employee pension benefit plan” within
the meaning of Section 3(2) of ERISA and which is intended to be qualified
under
Section 401(a) of the Code is, and since its inception has been, so qualified,
and has received a favorable determination letter from the IRS, or was a
prototype document that has received a favorable letter from the IRS, and
▇▇▇▇▇▇▇▇ is not aware of any circumstances which are reasonably likely to result
in revocation of any such favorable determination letter. There is no
pending or, to the Knowledge of ▇▇▇▇▇▇▇▇ threatened, action, suit or claim
relating to any of the Compensation and Benefit Plans (other than routine claims
for benefits). Neither ▇▇▇▇▇▇▇▇ nor Seller Bank has engaged in a
transaction, or omitted to take any action, with respect to any Compensation
and
Benefit Plan that would reasonably be expected to subject ▇▇▇▇▇▇▇▇ or Seller
Bank to an unpaid tax or penalty imposed by either Section 4975 of the Code
or
Section 502 of ERISA, assuming for purposes of Section 4975 of the Code that
the
taxable period of any such transaction expired as of the date hereof, and
subsequently expires as of the day next preceding the effective date of the
sale
of Seller Bank Stock to Purchaser.
(c) Neither
▇▇▇▇▇▇▇▇ nor Seller Bank has contributed to a Compensation and Benefit Plan
that
is subject to Title IV of ERISA. Neither ▇▇▇▇▇▇▇▇ nor Seller Bank has
contributed to a “multi-employer plan” as such term is defined in section 3(37)
of ERISA or had any direct or indirect liability or potential liability with
respect to such a plan.
(d) All
contributions required to be made under the terms of any Compensation and
Benefit Plan or ERISA Affiliate Plan or any employee benefit arrangements to
which ▇▇▇▇▇▇▇▇ or Seller Bank is a party or a sponsor have been timely made,
and
all anticipated contributions and funding obligations are accrued on ▇▇▇▇▇▇▇▇’
consolidated financial statements to the extent required by GAAP consistently
applied. ▇▇▇▇▇▇▇▇ and Seller Bank have expensed and accrued as a
liability the present value of future benefits under each applicable
Compensation and Benefit Plan for financial reporting purposes as required
by
GAAP.
(e) Except
as
set forth in the Disclosure Letter, neither ▇▇▇▇▇▇▇▇ nor Seller Bank has any
obligations to provide retiree health, life insurance, disability insurance,
or
death benefits under any Compensation and Benefit Plan, other than benefits
mandated by Section 4980B of the Code and there has been no communication to
employees by ▇▇▇▇▇▇▇▇ or Seller Bank that would reasonably be expected to
promise or guarantee such benefits.
(f) With
respect to each Compensation and Benefit Plan, if applicable, ▇▇▇▇▇▇▇▇ has
provided or made available to Purchaser copies of the: (A) trust instruments
and
insurance contracts; (B) two most recent Forms 5500 filed with the IRS; (C)
two
most recent actuarial reports and financial statements; (D) most recent summary
plan description; (E) most recent determination letter issued by the IRS; and
(F) any Form 5310 or Form 5330 filed with the IRS within the last two
years.
(g) Except
as
set forth in the Disclosure Letter, the sale of Seller Bank Stock will not,
directly or indirectly (including, without limitation, as a result of any
termination of employment or service at any time prior to or following the
Closing Date): (A) entitle any current or former employee,
consultant, independent contractor or director to any payment or benefit
(including severance pay, change in control benefit, or similar compensation)
or
any increase in compensation, (B) result in the vesting or acceleration of
any
benefits under any Compensation and Benefit Plan, or (C) result in any increase
in benefits payable under or the obligation to fund benefits under any
Compensation and Benefit Plan.
18
(h) Except
as
set forth in the Disclosure Letter, neither ▇▇▇▇▇▇▇▇ nor Seller Bank maintains
any compensation plans, programs or arrangements under which (i) payment is
reasonably likely to become non-deductible, in whole or in part, for tax
reporting purposes as a result of the limitations under Section 162(m) of the
Code and the regulations issued thereunder, or (ii) any payment is reasonably
likely to become subject to an excise tax under section 409A or 4999 of the
Code.
(i) There
are
no stock option, stock appreciation or similar rights, earned dividends or
dividend equivalents, or shares of restricted stock, outstanding under any
of
the Compensation and Benefit Plans or otherwise as of the date hereof and none
will be granted, awarded, or credited after the date hereof.
(j) Except
as
set forth in the Disclosure Letter, each Compensation and Benefit Plan can
be
amended, terminated or otherwise discontinued without liability to ▇▇▇▇▇▇▇▇,
Seller Bank, Purchaser, or any ERISA Affiliate.
Section
3.17 Brokers,
Finders and Financial Advisors.
Neither
▇▇▇▇▇▇▇▇ nor Seller Bank, nor any of their respective officers, directors,
employees or agents, has employed any broker, finder or financial advisor in
connection with the transactions contemplated by this Agreement, or incurred
any
liability or commitment for any fees or commissions to any such person in
connection with the transactions contemplated by this Agreement except for
the
retention of The Capital Corporation, LLC by ▇▇▇▇▇▇▇▇ and the fee payable
pursuant thereto, which ▇▇▇▇▇▇▇▇ has separately disclosed to
Purchaser.
Section
3.18 Environmental
Matters.
(a) With
respect to ▇▇▇▇▇▇▇▇ and Seller Bank:
(i) Each
of
▇▇▇▇▇▇▇▇ and Seller Bank, each Participation Facility, and, to ▇▇▇▇▇▇▇▇’
Knowledge, each Loan Property is, and has been, in compliance in all material
respects with, and is not liable under, any Environmental Laws;
(ii) There
is
no suit, claim, action, demand, executive or administrative order, directive,
investigation or proceeding pending and, to ▇▇▇▇▇▇▇▇’▇ Knowledge, no such action
is threatened, before any court, governmental agency or other forum against
it
or the Seller Bank or any Participation Facility (x) for alleged noncompliance
(including by any predecessor) with, or liability under, any Environmental
Law
or (y) relating to the presence of or release into the environment of any
Materials of Environmental Concern (as defined herein), whether or not occurring
at or on a site owned, leased or operated by it or any of the Seller Bank or
any
Participation Facility;
(iii) There
is
no suit, claim, action, demand, executive or administrative order, directive,
investigation or proceeding pending and, to ▇▇▇▇▇▇▇▇’▇ Knowledge no such action
is threatened, before any court, governmental agency or other forum relating
to
or against any Loan Property (or ▇▇▇▇▇▇▇▇ or any of Seller Bank in respect
of
such Loan Property) (x) relating to alleged noncompliance (including by any
predecessor) with, or liability under, any Environmental Law or (y) relating
to
the presence of or release into the environment of any Materials of
Environmental Concern, whether or not occurring at or on a site owned, leased
or
operated by a Loan Property;
19
(iv) The
properties owned or operated by ▇▇▇▇▇▇▇▇ or Seller Bank and, to ▇▇▇▇▇▇▇▇’
Knowledge, the Loan Properties (including, without limitation, soil, groundwater
or surface water on, or under the properties, and buildings thereon) are not
contaminated with and do not otherwise contain any Materials of Environmental
Concern;
(v) There
is
no suit from any federal, state, local or foreign governmental entity or any
third party indicating that it may be in violation of, or liable under, any
Environmental Law;
(vi) There
are
no underground storage tanks on, in or under any properties owned or operated
by
▇▇▇▇▇▇▇▇ or any of the Seller Bank or any Participation Facility, and, to
▇▇▇▇▇▇▇▇’ Knowledge, the Loan Properties; no underground storage tanks have been
closed or removed from any properties owned or operated by ▇▇▇▇▇▇▇▇ or Seller
Bank or any Participation Facility and except as set forth in the Disclosure
Schedule, the Loan Properties; and
(vii) During
the period of (s) ▇▇▇▇▇▇▇▇’▇ or any of Seller Bank’s ownership or operation of
any of their respective properties or (t) ▇▇▇▇▇▇▇▇’ or any of Seller Bank’s
participation in the management of any Participation Facility, there has been
no
contamination by or release of Materials of Environmental Concern in, on, under
or affecting such properties that could reasonably be expected to result in
material liability under the Environmental Laws. To ▇▇▇▇▇▇▇▇’
Knowledge, prior to the period of (x) ▇▇▇▇▇▇▇▇’ or any of Seller Bank’s
ownership or operation of any of their respective current properties or (y)
▇▇▇▇▇▇▇▇’ or any of Seller Bank’s participation in the management of any
Participation Facility, there was no contamination by or release of Materials
of
Environmental Concern in, on, under or affecting such properties that could
reasonably be expected to result in material liability under the Environmental
Laws.
(viii) To
▇▇▇▇▇▇▇▇’ knowledge, there is no reasonable basis for any suit, claim, action,
demand, executive or administrative order, directive or proceeding of a type
described in Section 3.18(a)(ii) or (iii).
“Loan
Property” means any property in which ▇▇▇▇▇▇▇▇ or Seller Bank holds a security
interest, and, where required by the context, includes the owner or operator
of
such property, but only with respect to such property.
“Participation
Facility” means any facility in which ▇▇▇▇▇▇▇▇ or Seller Bank participates in
the management (including all property held as trustee or in any other fiduciary
capacity) and, where required by the context, includes the owner or operator
of
such property, but only with respect to such property.
Section
3.19 Loan
Portfolio.
(a) The
allowance for loan losses reflected in the Seller Bank’s unaudited statement of
financial condition at March 31, 2007 was, and the allowance for loan losses
shown in the notes to the unaudited consolidated financial statements in the
Seller Reports for periods ending after December 31, 2005 were, or will be,
adequate, as of the dates thereof, under GAAP.
(b) The
Disclosure Letter sets forth a listing, as of the most recently available date,
by account, of: (A) each borrower, customer or other party which has notified
Seller Bank during the past twelve months of, or has asserted against Seller
Bank, in each case in writing, any “lender liability” or similar claim, and, to
the knowledge of Seller Bank each borrower, customer or other party which has
given Seller Bank any oral notification of, or orally asserted to or against
Seller Bank, any such claim; and (B) all loans, (1) that are contractually
past
due 90 days or more in the payment of principal and/or interest, (2) that are
on
non-accrual status, (3) that as of the date of this Agreement are classified
as
“Other Loans Specially Mentioned”, “Special Mention”, “Substandard”, “Doubtful”,
“Loss”, “Classified”, “Criticized”, “Watch list” or words of similar import,
together with the principal amount of and accrued and unpaid interest on each
such loan and the identity of the obligor thereunder, (4) where a reasonable
doubt exists as to the timely future collectability of principal and/or
interest, whether or not interest is still accruing or the loans are less than
90 days past due, (5) 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, or (6) where a specific reserve
allocation exists in connection therewith; and (C) all other assets classified
by Seller Bank as real estate acquired through foreclosure or in lieu of
foreclosure, including in-substance foreclosures, and all other assets currently
held that were acquired through foreclosure or in lieu of
foreclosure.
20
(c) All
loans
receivable (including discounts) and accrued interest entered on the books
of
▇▇▇▇▇▇▇▇ and Seller Bank arose out of bona fide arm’s-length transactions, were
made for good and valuable consideration in the ordinary course of ▇▇▇▇▇▇▇▇’ or
the appropriate Seller Bank’s respective business, and each note or other
evidences of indebtedness with respect to such loans (including discounts)
is a
legal, valid and binding obligation of the maker or obligor thereof, enforceable
against such maker or obligor in accordance with its terms. To the Knowledge
of
▇▇▇▇▇▇▇▇, the loans, discounts and the accrued interest reflected on the books
of ▇▇▇▇▇▇▇▇ and Seller Bank are subject to no defenses, set-offs or
counterclaims (including, without limitation, those afforded by usury or
truth-in-lending laws), except as may be provided by bankruptcy, insolvency
or
similar laws affecting creditors’ rights generally or by general principles of
equity. All such loans are owned by ▇▇▇▇▇▇▇▇ or Seller Bank free and
clear of any liens.
(d) With
respect to each loan owned by ▇▇▇▇▇▇▇▇ or Seller Bank, in whole or in part
(each, a “Seller Loan”):
(i) neither
▇▇▇▇▇▇▇▇ nor any Seller Bank nor any prior holder of a Seller Loan has modified
the note or any of the related security documents in any material respect or
satisfied (other than the ordinary amortization of principal or prepayment
of
principal as permitted by the applicable loan documents), canceled or
subordinated the note or any of the related security documents except as
otherwise disclosed by documents in the applicable Seller Loan
file;
(ii) ▇▇▇▇▇▇▇▇
or Seller Bank is the sole holder of legal and beneficial title to each Seller
Loan (or ▇▇▇▇▇▇▇▇ or Seller Bank’s applicable participation interest, as
applicable);
(iii) the
note
and the related security documents, copies of which are included in the Seller
Loan files, are true and correct copies of the documents they purport to be
and
have not been suspended, amended, modified, canceled or otherwise changed except
as otherwise disclosed by documents in the applicable Seller Loan
file;
(iv) there
is
no pending or, to ▇▇▇▇▇▇▇▇’▇ Knowledge, threatened condemnation proceeding or
similar proceeding affecting the property which serves as security for a Seller
Loan;
(v) there
is
no litigation or proceeding pending or, to ▇▇▇▇▇▇▇▇’▇ Knowledge, threatened,
relating to the property which serves as security for a Seller Loan that would
have a material adverse effect upon the related Seller Loan;
21
(vi) with
respect to a Seller Loan held in the form of a participation, the participation
documentation is legal, valid, binding and enforceable and the interest in
such
Seller Loan of ▇▇▇▇▇▇▇▇ or Seller Bank created by such participation would
not
be a part of the insolvency estate of the Seller Loan originator or other third
party upon the insolvency thereof; and
(vii) each
Seller Loan secured by a mortgage on residential property (except for
construction loans) was originated by a bank, thrift, other HUD-approved lender,
licensed mortgage broker or insurance company.
Section
3.20 Related
Party Transactions.
Neither
▇▇▇▇▇▇▇▇ nor Seller Bank is a party to any transaction (including any loan
or
other credit accommodation) with ▇▇▇▇▇▇▇▇, Seller Bank, or any Affiliate of
▇▇▇▇▇▇▇▇.
Section
3.21 Deposits.
Except
as
set forth in the Disclosure Letter, none of the deposits of ▇▇▇▇▇▇▇▇ or Seller
Bank is a “brokered” deposit or subject to any encumbrance, legal restraint or
other legal process except to the extent any such deposits serve as collateral
for any Loan or are subject to legal restraint in the ordinary course of the
banking business due to the action of the depositor or a third
party.
Section
3.22 Antitakeover
Provisions Inapplicable.
The
transactions contemplated by this Agreement are not subject to the requirements
of any “moratorium,” “control share,” “fair price,” “affiliate transactions,”
“business combination” or other antitakeover laws and regulations of any state,
applicable to ▇▇▇▇▇▇▇▇ or Seller Bank.
Section
3.23 Registration
Obligations.
Neither
▇▇▇▇▇▇▇▇ nor Seller Bank is under any obligation, contingent or otherwise,
which
will survive the Closing Date by reason of any agreement to register any
transaction involving any of its securities under the Securities
Act.
Section
3.24 Risk
Management Instruments.
Neither
▇▇▇▇▇▇▇▇ nor Seller Bank is a party to or has agreed to enter into an
exchange-traded or over-the-counter equity, interest rate, foreign exchange
or
other swap, forward, future, option, cap, floor or collar or any other contract
that is not included in the consolidated statements of condition and is a
derivative contract (including various combinations thereof) (each, a
“Derivatives Contract”) or owns securities that (A) are referred to generically
as “structured notes,” “high risk mortgage derivatives (other than “high risk
mortgage derivatives” set forth in the Disclosure Letter),” “capped floating
rate notes” or “capped floating rate mortgage derivatives” or (B) are likely to
have changes in value as a result of interest or exchange rate changes that
significantly exceed normal changes in value attributable to interest or
exchange rate changes, except for those Derivatives Contracts and other
instruments legally purchased or entered into in the ordinary course of
business, consistent with safe and sound banking practices and regulatory
guidance, and listed (as of the date hereof) in the Disclosure Letter or
disclosed in Seller Reports filed on or prior to the date hereof.
22
ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES OF ▇▇▇▇▇▇ MAE
Section
4.01 Representations
and Warranties of ▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇
▇▇▇ represents and warrants to Purchaser that the statements contained in this
Article IV are true and correct as of the date of this Agreement and will be
true and correct as of the Closing Date (as though made then and as though
the
Closing Date were substituted for the date of this Agreement throughout this
Article IV).
(a) Authorization
and Validity of Agreement. (i) ▇▇▇▇▇▇ Mae has full power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder, and to consummate the transactions contemplated hereby, and (ii)
the
Agreement has been duly executed and delivered by ▇▇▇▇▇▇ ▇▇▇ and is a valid
and
binding obligation of ▇▇▇▇▇▇ Mae enforceable against ▇▇▇▇▇▇ ▇▇▇ in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
enforcement of creditor’s rights generally, and general equitable
principles.
(b) Ownership
of
Shares. ▇▇▇▇▇▇
Mae owns 450 shares of Seller Bank Common Stock and 507 shares of Seller Bank
Preferred Stock, free and clear of all liens, claims, charges, restrictions,
equities, and Encumbrances of any kind and has full power and legal right to
sell, assign, transfer and deliver the same to Purchaser pursuant to this
Agreement.
(c) Consents
and Approvals; No Violations. The execution, delivery and
performance of this Agreement by ▇▇▇▇▇▇ ▇▇▇ and the consummation by ▇▇▇▇▇▇
Mae
of the transactions contemplated hereby will not, with or without the giving
of
notice or lapse of time or both: (a) violate any rule applicable to ▇▇▇▇▇▇
▇▇▇,
(b) violate any order, judgment or decree of any court or of any Governmental
Entity applicable to ▇▇▇▇▇▇ Mae, (c) require any filing by ▇▇▇▇▇▇ ▇▇▇ with,
or
require ▇▇▇▇▇▇ Mae to obtain any consent or require ▇▇▇▇▇▇ ▇▇▇ to give any
notice to any Governmental Entity, or (d) result in a violation or breach by
▇▇▇▇▇▇ Mae, conflict with, constitute (with or without due notice or lapse
of
time or both) a default by ▇▇▇▇▇▇ ▇▇▇ (or give right to any right of
termination, cancellation, payment or acceleration) under any obligation of
▇▇▇▇▇▇ Mae or result in the creation of any encumbrance upon any of the assets
of Seller Bank.
ARTICLE
V.
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser
represents and warrants to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇ that the statements contained
in this Article V are true and correct as of the date of this Agreement and
will
be true and correct as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout
this
Article V).
Section
5.01 Organization.
(a) Purchaser
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of Louisiana, and has received FRB approval to become a bank
holding company under the BHCA. Purchaser has all requisite corporate
power and authority to own, lease and operate its properties and carry on its
business as now conducted and is duly licensed or qualified to do business
in
the states of the United States and foreign jurisdictions where its ownership
or
leasing of property or the conduct of its business requires such qualification
except when the failure will not have a material adverse effect.
23
(b) The
Bank
is a stock bank duly organized, validly existing and in good standing under
the
laws of the State of Louisiana. The deposits of the Bank are insured
by the FDIC to the fullest extent permitted by law, and all premiums and
assessments required to be paid in connection therewith have been paid when
due.
Section
5.02 Authority;
No Violation.
(a) Purchaser
has full corporate power and authority to execute and deliver this Agreement
and, subject to receipt of the required Regulatory Approvals, to consummate
the
transactions contemplated hereby. The execution and delivery of this
Agreement by Purchaser and the completion by Purchaser of the transactions
contemplated hereby, have been duly and validly approved by the Board of
Directors of Purchaser, and no other corporate proceedings on the part of
Purchaser are necessary to complete the transactions contemplated
hereby. This Agreement has been duly and validly executed and
delivered by Purchaser, and subject to the receipt of the Regulatory Approvals,
constitutes the valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally, and subject,
as to enforceability, to general principles of equity, whether applied in a
court of law or a court of equity.
(b) The
execution and delivery of this Agreement by Purchaser, subject to receipt of
the
Regulatory Approvals and compliance by Sellers and Purchaser with any conditions
contained therein, the consummation of the transactions contemplated hereby
and
compliance by Purchaser with any of the terms or provisions hereof will not
(i)
conflict with or result in a breach or violation of, or default under and
provision of the certificate of incorporation or bylaws of Purchaser or (ii)
violate any statute, code, ordinance, rule, regulation, judgment, order, writ,
decree, governmental permit or license or injunction applicable to
Purchaser.
Section
5.03 Consents.
Except
for the Regulatory Approvals and compliance with any conditions contained
therein, no consents, waivers or approvals of, or filings or registrations
with,
any Governmental Entity or Bank Regulator are necessary, and, to the Knowledge
of Purchaser, no consents, waivers or approvals of, or filings or registrations
with, any other third parties are necessary, in connection with the execution
and delivery of this Agreement by Purchaser. Purchaser has no reason
to believe that (i) any Regulatory Approvals or other required consents or
approvals will not be received, or that (ii) any public body or authority,
the
consent or approval of which is not required or to which a filing is not
required, will object to the completion of the transactions contemplated by
this
Agreement.
Section
5.04 Access
to Funds.
Purchaser
has, or on the Closing Date will have, access to all funds necessary to
consummate the purchase of Seller Bank Stock and pay the aggregate
Consideration.
Section
5.05 Financial
Statements.
The
financial statements of the Bank included in the Bank’s Annual Report on Form
10-K for the fiscal year ended December 31, 2006 filed with the FDIC have been
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited financial statements, as permitted by FDIC Form 10-Q or the
Securities Laws).
24
Section
5.06 Legal
Proceedings.
Purchaser
is not a party to any action, suit or proceeding that would materially adversely
affect the ability of Purchaser to consummate the transactions contemplated
by
this Agreement.
Section
5.07 Present
Intent Regarding Future Operations.
Purchaser
acknowledges that its representatives have advised ▇▇▇▇▇▇▇▇ of its present
intent to use reasonable efforts to cause Seller Bank to be operated as a
Community Development Financial Institution and to continue to serve the needs
of the African American community of Greater Kansas City and to acknowledge
▇▇▇▇▇▇▇▇’ historic roots in the Kansas City community. Purchaser
intends to purchase Seller Bank stock as an investment and not with any current
intent to sell Seller Bank.
ARTICLE
VI.
CONDUCT
PENDING ACQUISITION
Section
6.01 Conduct
of Business Prior to the Closing
Date.
Except
as
expressly provided in this Agreement or with the prior written consent of
Purchaser, during the period from the date of this Agreement to the Closing
Date, ▇▇▇▇▇▇▇▇ shall, and shall cause Seller Bank to: (i) conduct its business
in the ordinary and usual course consistent with prudent banking practice;
(ii)
maintain and preserve intact its business organization, properties, leases
and
advantageous business relationships and retain the services of its officers
and
key employees; (iii) take no action which would adversely affect or delay the
ability of each of ▇▇▇▇▇▇▇▇ or Seller Bank to perform its covenants and
agreements on a timely basis under this Agreement; (iv) take no action which
would adversely affect or delay the ability of parties to obtain any necessary
approvals, consents or waivers of any Governmental Authority required for the
transactions contemplated hereby or which would reasonably be expected to result
in any such approvals, consents or waivers containing any material condition
or
restriction; and (v) take no action that results in or is reasonably likely
to
have a Material Adverse Effect on ▇▇▇▇▇▇▇▇ or Seller Bank taken as a
whole.
Section
6.02 Forbearances
of ▇▇▇▇▇▇▇▇.
Without
limiting the covenants set forth in Section 6.01 hereof, from the date hereof
until the Closing Date, except as expressly contemplated or permitted by this
Agreement, without the prior written consent of Purchaser, which consent shall
not be unreasonably withheld, ▇▇▇▇▇▇▇▇ will not, and it will cause Seller Bank
not to:
(a) change
or
waive any provision of its Articles of Incorporation, charter or bylaws or
any
similar governing documents of ▇▇▇▇▇▇▇▇ or Seller Bank except as required by
law;
(b) change
the number of authorized or issued shares of the capital stock of ▇▇▇▇▇▇▇▇
or
Seller Bank, issue any shares of Seller Bank Stock, or issue or grant any Right
or agreement of any character relating to its authorized or issued capital
stock
or any securities convertible into shares of such stock, make any grant or
award
of stock or derivative instrument, or split, combine or reclassify any shares
of
its capital stock;
25
(c) declare,
set aside or pay any dividend or other distribution in respect of its capital
stock, or purchase or redeem or otherwise acquire any shares of its capital
stock;
(d) enter
into, amend in any material respect or terminate any contract or agreement
(including without limitation any settlement agreement with respect to
litigation) involving a payment by ▇▇▇▇▇▇▇▇ or Seller Bank of $5,000 or
more;
(e) make
any
commitment relating to an application for the opening or closing of any, or
open
or close any, branch, automated banking or other office facility;
(f) make
any
payment on any outstanding debt, promissory note or debenture;
(g) enter
into any new line of business or introduce any new products;
(h) grant
or
agree to pay any bonus, severance or termination payment (including, but not
limited to discretionary severance pay) to, or enter into, renew or amend any
employment agreement, severance agreement and/or supplemental executive
agreement with, or adjust in any manner the compensation or fringe benefits
of,
any of its directors, officers or employees;
(i) hire
any
employees at an annual salary in excess of $40,000;
(j) enter
into or, except as may be required by law, materially modify any pension,
retirement, savings, profit sharing, deferred compensation, supplemental
retirement, consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any trust agreement
related thereto, in respect of any of its directors, officers or employees;
or
make any contributions to any defined contribution or defined benefit
plan;
(k) merge
or
consolidate ▇▇▇▇▇▇▇▇ or Seller Bank with any other corporation; sell or lease
all or any substantial portion of the assets or business of ▇▇▇▇▇▇▇▇ or Seller
Bank; make any acquisition of all or any substantial portion of the business
or
assets of any other Person other than in connection with foreclosures,
settlements in lieu of foreclosure, troubled loan or debt restructuring, or
the
collection of any loan or credit arrangement between ▇▇▇▇▇▇▇▇, or Seller Bank,
and any other Person; enter into a purchase and assumption transaction with
respect to deposits and liabilities; permit the revocation or surrender by
Seller Bank of its certificate of authority to maintain, or file an application
for the relocation of, any existing branch office, or file an application for
a
certificate of authority to establish a new branch office;
(l) sell
or
otherwise dispose of the capital stock of Seller Bank or sell or otherwise
dispose of any assets of ▇▇▇▇▇▇▇▇ or of Seller Bank;
(m) incur
any
indebtedness for borrowed money (or guarantee any indebtedness for borrowed
money) or subject any asset of ▇▇▇▇▇▇▇▇ or of Seller Bank to any lien, pledge,
security interest or other encumbrance (other than in connection with deposits,
repurchase agreements, bankers acceptances, “treasury tax and loan” accounts
established in the ordinary course of business and transactions in “federal
funds” and the satisfaction of legal requirements in the exercise of trust
powers), except as set forth in the Disclosure Letter;
(n) take
any
action which would result in any of the representations and warranties of
▇▇▇▇▇▇▇▇ or Seller Bank set forth in this Agreement becoming untrue as of any
date after the date hereof or in any of the conditions set forth in Article
IX
hereof not being satisfied, except in each case as may be required by applicable
law;
26
(o) change
any method, practice or principle of accounting, except as may be required
from
time to time by GAAP (without regard to any optional early adoption date) or
any
Bank Regulator responsible for regulating ▇▇▇▇▇▇▇▇ or Seller Bank;
(p) waive,
release, grant or transfer any material rights of value or modify or change
in
any material respect any existing agreement or indebtedness to which ▇▇▇▇▇▇▇▇
or
Seller Bank is a party;
(q) make
any
investment in any debt security, including mortgage-backed and mortgage related
securities, other than U.S. government and U.S. government agency securities
with final maturities not greater than one year, that are purchased in the
ordinary course of business, with a purchase price no greater than 100% of
par
value;
(r) other
than investments for Seller Bank’s portfolio made in accordance with Section
6.02(q), make any investment either by purchase of stock or securities,
contributions to capital, property transfers, or purchase of any property or
assets of any other individual, corporation or other entity other than pursuant
to existing commitments set forth in the Disclosure Letter;
(s) except
pursuant to commitments existing at the date hereof which are set forth in
the
Disclosure Letter, make, renegotiate, renew, increase, extend or purchase any
loan, lease (credit equivalent), advance, credit enhancement or other extension
of credit, or make any commitment in respect of any of the foregoing, except
in
conformity with existing lending practices set forth in the Selling Bank’s
Lending Policy and in amounts not to exceed $100,000 for secured loans and
$10,000 for unsecured loans;
(t) enter
into, renew, extend or modify any other transaction (other than a deposit
transaction) with any Affiliate;
(u) enter
into any futures contract, option, interest rate caps, interest rate floors,
interest rate exchange agreement or other agreement, or take any other action
for purposes of hedging the exposure of its interest-earning assets and
interest-bearing liabilities to changes in market rates of
interest;
(v) except
for the execution of this Agreement, and actions taken or which will be taken
in
accordance with this Agreement and performance thereunder, take any action
that
would give rise to a right of payment to any individual under any employment
agreement;
(w) make
any
change in policies in existence on the date of this Agreement with regard to:
the extension of credit, or the establishment of reserves with respect to the
possible loss thereon or the charge off of losses incurred thereon; investments;
asset/liability management; or other material banking policies in any material
respect except as may be required by changes in applicable law or regulations
or
by a Bank Regulator or changes in GAAP, as advised by ▇▇▇▇▇▇▇▇’ independent
public accountants;
(x) except
for the execution of this Agreement, and the transactions contemplated therein,
take any action that would give rise to an acceleration of the right to payment
to any individual under any ▇▇▇▇▇▇▇▇ Compensation and Benefit Plan;
(y) make
any
capital expenditures in excess of $5,000 individually or $10,000 in the
aggregate, other than pursuant to binding commitments existing on the date
hereof which are set forth in the Disclosure Letter and other than expenditures
necessary to maintain existing assets in good repair;
(z) purchase
or otherwise acquire, or sell or otherwise dispose of, any assets or incur
any
liabilities other than in the ordinary course of business;
27
(aa) sell
any
participation interest in any loan unless the Bank has been given the first
opportunity and a reasonable time to purchase any loan participation being
sold;
(bb) undertake
or, enter into any lease, contract or other commitment for its account,
involving a payment by ▇▇▇▇▇▇▇▇ or Seller Bank of more than $10,000 annually,
or
containing any financial commitment extending beyond 12 months from the date
hereof;
(cc) pay,
discharge, settle or compromise any claim, action, litigation, arbitration
or
proceeding, that involves solely money damages in the amount not in excess
of
$25,000 individually or $50,000 in the aggregate;
(dd) sell,
transfer, mortgage, encumber or otherwise dispose of any of its material
properties, leases or assets to any individual, corporation or other entity
other than a direct or indirect wholly owned subsidiary of ▇▇▇▇▇▇▇▇, or cancel,
release or assign any indebtedness of any such person, except pursuant to
contracts or agreements in force at the date of this Agreement and which are
set
forth in the Disclosure Letter; provided, however, that no sales may be made
with recourse;
(ee) purchase
or sell servicing rights (other than loan sales with servicing released) with
respect to loans the principal balance of which, either individually or in
the
aggregate, exceeds $150,000;
(ff) fail
to
maintain all its properties in repair, order and condition no worse than on
the
date of this Agreement other than as a result of ordinary wear and
tear;
(gg) make
any
investment or commitment to invest in real estate or in any real estate
development project, other than real estate acquired in satisfaction of
defaulted mortgage loans and investments or commitments approved by the Board
of
Directors of ▇▇▇▇▇▇▇▇ or Seller Bank prior to the date of this Agreement and
disclosed in writing to Purchaser;
(hh) elect
to
the Board of Directors of Seller Bank any person who is not a member of the
Board of Directors of Seller Bank as of the date of this Agreement;
(ii) make
or
change any election in respect of Taxes, adopt or change any accounting method
in respect of Taxes or otherwise, enter into any closing agreement, settle
any
claim or assessment in respect of Taxes, or consent to any extension or waiver
of the limitation period applicable to any claim or assessment in respect of
Taxes, except as required by law, rule, regulation or GAAP; or
(jj) agree
to
do any of the foregoing.
Section
6.03 Maintenance
of Insurance.
▇▇▇▇▇▇▇▇
shall maintain, and cause the Seller Bank to maintain, insurance in such amounts
as are reasonable to cover such risks as are customary in relation to the
character and location of its properties, and the nature of its
business.
Section
6.04 All
Reasonable Efforts.
Subject
to the terms and conditions herein provided, ▇▇▇▇▇▇▇▇ agrees to use, and agrees
to cause Seller Bank to use, all commercially reasonable 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.
28
ARTICLE
VII.
COVENANTS
Section
7.01 Current
Information.
(a) During
the period from the date of this Agreement to the Closing Date, Seller Bank
will
cause one or more of its representatives to confer with representatives of
Purchaser and report the general status of its ongoing operations at such times
as Purchaser may reasonably request. ▇▇▇▇▇▇▇▇ and Seller Bank will promptly
notify Purchaser of any material change in the normal course of its business
or
in the operation of its properties and, to the extent permitted by applicable
law, of any governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated), or the institution
or the known threat of material litigation involving ▇▇▇▇▇▇▇▇ or Seller
Bank.
(b) Seller
Bank and the Bank shall meet on a regular basis to discuss and plan for the
conversion of Seller Bank’s data processing and related electronic informational
systems to those used by the Bank which planning shall include, but not be
limited to, discussion of the possible termination by Seller Bank of third-party
service provider arrangements effective at the Closing Date or at a date
thereafter, non-renewal of personal property leases and software licenses used
by Seller Bank in connection with its systems operations, retention of outside
consultants and additional employees to assist with the conversion, and
outsourcing, as appropriate, of proprietary or self-provided system services,
it
being understood that, unless Seller Bank otherwise agrees, no conversion shall
take place prior to the Closing Date. Seller Bank shall reasonably
cooperate with Purchaser to effect any conversion of the operating systems
of
Seller Bank to those of Purchaser or its Affiliates on the Closing Date or
as
soon thereafter as is reasonably practicable. In connection
therewith, ▇▇▇▇▇▇▇▇ and Seller Bank shall, from and after the date hereof
through the Closing, reasonably assist Purchaser in making and sending notices,
information and materials to the customers and service providers of ▇▇▇▇▇▇▇▇
and
Seller Bank.
(c) Seller
Bank shall provide Purchaser, within 10 business days of the end of each
calendar month, a written list of nonperforming assets (the term “nonperforming
assets,” for purposes of this subsection, means (i) loans that are “troubled
debt restructuring” as defined in Statement of Financial Accounting Standards
No. 15, “Accounting by Debtors and Creditors for Troubled Debt Restructuring,”
(ii) loans on nonaccrual, (iii) real estate owned, (iv) all loans ninety (90)
days or more past due as of the end of such month and (iv) impaired
loans). On a monthly basis, Seller Bank shall provide Purchaser with
a schedule of all loan approvals, which schedule shall indicate the loan amount,
loan type and other material features of the loan.
(d) ▇▇▇▇▇▇▇▇
shall promptly inform Purchaser upon receiving notice of any legal,
administrative, arbitration or other proceedings, demands, notices, audits
or
investigations (by any federal, state or local commission, agency or board)
relating to the alleged liability of ▇▇▇▇▇▇▇▇ or Seller Bank under any labor
or
employment law.
Section
7.02 Access
to Properties and Records.
▇▇▇▇▇▇▇▇
shall permit Purchaser reasonable access upon reasonable notice to its
properties and those of Seller Bank, and shall disclose and make available
to
Purchaser during normal business hours all of its books, papers and records
relating to the assets, properties, operations, obligations and liabilities,
including, but not limited to, all books of account (including the general
ledger), tax records, minute books of directors’ (other than minutes that
discuss any of the transactions contemplated by this Agreement or any other
subject matter ▇▇▇▇▇▇▇▇ reasonably determines should be treated as confidential)
and stockholders’ meetings, organizational documents, Bylaws, material contracts
and agreements, filings with any regulatory authority, litigation files, plans
affecting employees, and any other business activities or prospects in which
Purchaser may have a reasonable interest; provided, however, that
▇▇▇▇▇▇▇▇ shall not be required to take any action that would provide access
to
or disclose information where such access or disclosure, in ▇▇▇▇▇▇▇▇’ reasonable
judgment, would interfere with the normal conduct of ▇▇▇▇▇▇▇▇’ business or would
violate or prejudice the rights or business interests or confidences of any
customer or other person, or would result in the waiver by it of the privilege
protecting communications between it and any of its counsel, or would be
contrary to any law or regulation applicable to Seller Bank. ▇▇▇▇▇▇▇▇
shall provide and shall request its auditors to provide Purchaser with such
historical financial information regarding it (and related audit reports,
consents and work papers) as Purchaser may reasonably
request. Purchaser shall use commercially reasonable efforts to
minimize any interference with ▇▇▇▇▇▇▇▇’ regular business operations during any
such access to ▇▇▇▇▇▇▇▇’ property, books and records. ▇▇▇▇▇▇▇▇ and
Seller Bank shall permit Purchaser, at Purchaser’s expense, to cause a “phase I
environmental audit” and a “phase II environmental audit” to be performed at any
physical location owned or occupied by ▇▇▇▇▇▇▇▇ or Seller Bank.
29
Section
7.03 Financial
and Other Statements.
(a) Promptly
upon receipt thereof, ▇▇▇▇▇▇▇▇ will furnish to Purchaser copies of each annual,
interim or special audit of the books of ▇▇▇▇▇▇▇▇ and Seller Bank made by its
independent accountants and copies of all internal control reports submitted
to
▇▇▇▇▇▇▇▇ by such accountants in connection with each annual, interim or special
audit of the books of ▇▇▇▇▇▇▇▇ and Seller Bank made by such
accountants.
(b) As
soon
as reasonably available, ▇▇▇▇▇▇▇▇ shall cause to be prepared financial
information for the year ended December 31, 2006 for Seller Bank based upon
mutually acceptable procedures. The results of such financial
statements, in the reasonable opinion of Purchaser, shall not contain any
material adverse changes from the financial information previously made
available to Purchaser, including but not limited to copies of unaudited
financial statements of, and call reports relating to Seller
Bank. Within 10 business days after the end of each month ▇▇▇▇▇▇▇▇
will deliver to Purchaser a consolidated balance sheet and a consolidated
statement of operations, without related notes, for such month prepared in
accordance with current financial reporting practices. ▇▇▇▇▇▇▇▇ will
deliver to Purchaser ▇▇▇▇▇▇▇▇ reports within two business days after filing
with
the Regulatory Agencies.
(c) ▇▇▇▇▇▇▇▇
will advise Purchaser promptly of the receipt of any examination report or
other
document or correspondence of any Bank Regulator with respect to the condition
or activities of ▇▇▇▇▇▇▇▇ or Seller Bank.
(d) With
reasonable promptness ▇▇▇▇▇▇▇▇ will furnish to Purchaser such additional
financial data that ▇▇▇▇▇▇▇▇ possesses and as Purchaser may reasonably request,
including without limitation, detailed monthly financial statements and loan
reports.
Section
7.04 Disclosure
Letter Supplements.
From
time
to time prior to the Closing Date, ▇▇▇▇▇▇▇▇ and Seller Bank will promptly
supplement or amend the Disclosure Letter delivered in connection herewith
with
respect to any matter hereafter arising which, if existing, occurring or known
at the date of this Agreement, would have been required to be set forth or
described in such Disclosure Letter or which is necessary to correct any
information in such Disclosure Letter which has been rendered materially
inaccurate thereby. No supplement or amendment to such Disclosure
Letter shall have any effect for the purpose of determining satisfaction of
the
conditions set forth in Article VIII or shall relieve ▇▇▇▇▇▇▇▇ and Seller Bank
of any liability hereunder.
30
Section
7.05 Consents
and Approvals of Third Parties.
In
addition to the obligations of Article VII hereunder, ▇▇▇▇▇▇▇▇ shall use all
commercially reasonable efforts, and shall cause Seller Bank, to obtain as
soon
as practicable all consents and approvals of any other persons necessary or
desirable for the consummation of the transactions contemplated by this
Agreement.
Section
7.06 Failure
to Fulfill Conditions.
In
the
event that ▇▇▇▇▇▇▇▇ determines that a condition to its obligation to complete
the sale of Seller Bank Stock cannot be fulfilled and that it will not waive
that condition, it will promptly notify Purchaser.
Section
7.07 No
Solicitation.
(a) ▇▇▇▇▇▇▇▇
shall not, nor shall it authorize or permit Seller Bank or any of their
respective directors, officers or employees or any investment banker, financial
advisor, attorney, accountant or other advisor, agent or representative
(collectively, “Representatives”) retained by it or Seller Bank to, directly or
indirectly, (i) solicit, initiate or knowingly encourage, or take any other
action designed to, or which could reasonably be expected to, facilitate, any
Acquisition Proposal or (ii) enter into, continue or otherwise participate
in
any discussions or negotiations regarding, or furnish to any person any
information with respect to, or otherwise cooperate in any way with, any
Acquisition Proposal. ▇▇▇▇▇▇▇▇ shall, and shall cause Seller Bank and any
Representative engaged thereby, to immediately cease and cause to be terminated
all existing discussions or negotiations with any Person conducted heretofore
with respect to any Acquisition Proposal and request the prompt return or
destruction of all confidential information previously
furnished. Notwithstanding the foregoing, at any time prior to
obtaining the Stockholder Approval, in response to a bona fide written
Acquisition Proposal that the Board of Directors of ▇▇▇▇▇▇▇▇ in good faith
reasonably determines (after consultation with its outside legal counsel and
a
financial advisor of nationally recognized reputation) (i) it is legally
necessary for the proper discharge of its fiduciary duties to respond to such
Acquisition Proposal and (ii) such Acquisition Proposal constitutes or is
reasonably likely to lead to a Superior Proposal, and which Acquisition Proposal
was not solicited after the date hereof and was made after the date hereof
and
did not otherwise result from a breach of this Section 7.07(a), ▇▇▇▇▇▇▇▇ may,
subject to compliance with Section 7.07(c), (x) furnish information with respect
to ▇▇▇▇▇▇▇▇ and Seller Bank to the person making such Acquisition Proposal
(and
its Representatives) pursuant to a customary confidentiality agreement not
less
restrictive to such person than the confidentiality provisions of the
Confidentiality Agreement, provided that all such information has previously
been provided to Purchaser or is provided to Purchaser prior to or substantially
concurrent with the time it is provided to such person, and (y) participate
in
discussions or negotiations with the person making such Acquisition Proposal
(and its Representatives) regarding such Acquisition Proposal.
(b) Neither
the Board of Directors of ▇▇▇▇▇▇▇▇ nor any committee thereof shall (i) (A)
withdraw (or modify in a manner adverse to Purchaser), or publicly propose
to
withdraw (or modify in a manner adverse to ▇▇▇▇▇▇▇▇), the adoption or
recommendation by such Board of Directors or any such committee thereof of
this
Agreement, the sale of Seller Bank Stock or the other transactions contemplated
by this Agreement or (B) adopt or recommend, or propose publicly to adopt or
recommend, any Acquisition Proposal (any action described in this clause (i)
being referred to as a “▇▇▇▇▇▇▇▇ Adverse Recommendation Change”) or (ii) adopt
or recommend, or publicly propose to adopt or recommend, or allow ▇▇▇▇▇▇▇▇
or
Seller Bank to execute or enter into, any letter of intent, memorandum of
understanding, agreement in principle, merger agreement, acquisition agreement,
option agreement, joint venture agreement, partnership agreement or other
similar contract constituting or related to, or that is intended to or could
reasonably be expected to lead to, any Acquisition Proposal (other than a
confidentiality agreement referred to in Section 7.07(a)) (an “Acquisition
Agreement”). Notwithstanding the foregoing, at any time prior to obtaining the
Stockholder Approval, the Board of Directors of ▇▇▇▇▇▇▇▇ may in response to
an
Acquisition Proposal that the Board of Directors of ▇▇▇▇▇▇▇▇ in good faith
reasonably determines (after consultation with outside legal counsel and a
financial advisor of nationally recognized reputation) constitutes a Superior
Proposal and that was unsolicited and made after the date hereof and that did
not otherwise result from a breach of this Section 7.07, (1) make a ▇▇▇▇▇▇▇▇
Adverse Recommendation Change or (2) cause ▇▇▇▇▇▇▇▇ to terminate this Agreement
and concurrently with or after such termination enter into an Acquisition
Agreement as provided by and with the effect set forth in Article XI; provided,
however, that ▇▇▇▇▇▇▇▇ shall not be entitled to exercise its right to make
a
▇▇▇▇▇▇▇▇ Adverse Recommendation Change or terminate this Agreement pursuant
to
this clause until after the fifth business day following Purchaser’s receipt of
written notice (a "Notice of Superior Proposal") from ▇▇▇▇▇▇▇▇ advising
Purchaser that the Board of Directors intends to take such action and specifying
the reasons therefor, including the terms and conditions of any Superior
Proposal that is the basis of the proposed action by the Board of Directors.
In
determining whether to make a ▇▇▇▇▇▇▇▇ Adverse Recommendation Change or to
cause
▇▇▇▇▇▇▇▇ to so terminate this Agreement, the Board of Directors of ▇▇▇▇▇▇▇▇
shall take into account any changes to the financial terms of this Agreement
proposed by Purchaser in response to a Notice of Superior Proposal or
otherwise.
31
(c) In
addition to the obligations of ▇▇▇▇▇▇▇▇ set forth in Sections 7.07(a) and
7.07(b), ▇▇▇▇▇▇▇▇ shall promptly advise Purchaser orally and in writing of
any
Acquisition Proposal, the material terms and conditions of any such Acquisition
Proposal (including any changes thereto) and the identity of the person making
any such Acquisition Proposal. ▇▇▇▇▇▇▇▇ shall (i) keep Purchaser fully informed
in all material respects of the status and details (including any change to
the
terms thereof) of any Acquisition Proposal, (ii) provide to Purchaser as soon
as
practicable after receipt or delivery thereof copies of all correspondence
and
other written material sent or provided to ▇▇▇▇▇▇▇▇ or Seller Bank from any
person that describes any of the terms or conditions of any Acquisition Proposal
(including any draft acquisition agreement) and (iii) keep Purchaser fully
informed in all material respects of the status and details of any determination
by ▇▇▇▇▇▇▇▇’ Board of Directors with respect to any such Acquisition
Proposal.
(d) Nothing
contained in this Section 7.07 shall prohibit ▇▇▇▇▇▇▇▇ from complying with
its
disclosure obligations under federal or state law; provided, however, that
in no
event shall ▇▇▇▇▇▇▇▇ or its Board of Directors or any committee thereof take,
or
agree or resolve to take, any action prohibited by Section 7.07(b) (it being
understood that any accurate disclosure of factual information to the
stockholders of ▇▇▇▇▇▇▇▇ that is required to be made to such stockholders under
applicable federal securities laws shall not be considered a modification
prohibited by clause (i)(A) of Section 7.07(b)).
Section
7.08 Employee
Benefits
Purchaser
intends to approach suitably qualified employees of Seller Bank whose positions
do not continue after the Closing Date to fill vacancies within the Purchaser
wherever possible. Purchaser will review all Compensation and Benefit
Plans to determine whether to maintain, terminate or continue such
plans.
Section
7.09 Directors
and Officers Insurance.
Purchaser
shall use commercially reasonable efforts to maintain in effect for three years
following the Closing Date, the current directors’ and officers’ liability
insurance policies maintained by Seller Bank (provided, that ▇▇▇▇▇▇▇▇ shall
pay
the premium for such insurance prior to the Closing Date) with respect to
matters occurring prior to the Closing Date; provided, however, that in no
event
shall ▇▇▇▇▇▇▇▇ expend in the aggregate pursuant to this Section 7.09 more than
125% of the annual cost currently expended by ▇▇▇▇▇▇▇▇ and Seller Bank with
respect to such insurance (the “Maximum Amount”). In connection with
the foregoing, ▇▇▇▇▇▇▇▇ agrees in order for Purchaser to fulfill its agreement
to provide directors and officers liability insurance policies for three years
to provide such insurer or substitute insurer with such representations as
such
insurer may request with respect to the reporting of any prior
claims.
32
Section
7.10 Certain
Policies of Seller Bank.
At
the
written request of Purchaser, Seller Bank shall modify and change its loan,
litigation, real estate valuation policies and practices (including loan
classifications and levels of reserves), investment and asset/liability
management policies and practices and operating and internal control procedures
after the date on which all required regulatory and shareholder approvals are
received and immediately prior to the Closing Date; provided, that such policies
and procedures are consistent with GAAP and all applicable laws and
regulations. ▇▇▇▇▇▇▇▇ and Seller Bank’s representations, warranties
and covenants contained in this Agreement shall not be deemed to be untrue
or
breached in any respect for any purpose as a consequence of any modifications
or
changes undertaken solely on account of this Section 7.10.
Section
7.11 Antitakeover
Provisions.
▇▇▇▇▇▇▇▇
shall take all steps (i) to exempt or continue to exempt Purchaser, this
Agreement, the sale of Seller Bank Stock from any provisions of an anti-takeover
nature in ▇▇▇▇▇▇▇▇ or Seller Bank Certificate of Incorporation or Bylaws (or
equivalent documents), and the provisions of any federal or state anti-takeover
laws, and (ii) upon the request of Purchaser, to assist in any challenge by
Purchaser to the applicability to this Agreement, the sale of Seller Bank Stock
of any federal or state anti-takeover law.
Section
7.12 Voting
Agreements.
Each
director and executive officer of ▇▇▇▇▇▇▇▇ and Seller Bank shall execute a
voting agreement substantially in the form attached as Exhibit A as of the
date
hereof.
ARTICLE
VIII.
REGULATORY
AND OTHER MATTERS
Section
8.01 Meeting
of Stockholders.
▇▇▇▇▇▇▇▇
shall take all steps necessary to duly call, give notice of, convene and hold
a
meeting of its stockholders for the purpose of considering
and voting on approval of this Agreement and the sale of Seller Bank Stock,
and
for such other purposes as may be, in ▇▇▇▇▇▇▇▇’ reasonable judgment, necessary
or desirable (the “▇▇▇▇▇▇▇▇ Stockholders Meeting”). Within five (5)
business days after the complete execution of this Agreement, the Board of
Directors of ▇▇▇▇▇▇▇▇ shall establish the date for holding a Special Meeting
of
its stockholders, the purpose of which such meeting shall be to consider and
approve the consummation of the transactions contemplated under this Agreement
by the holders of a majority of the outstanding shares of ▇▇▇▇▇▇▇▇ entitled
to
vote thereon. In connection with the solicitation of proxies with
respect to ▇▇▇▇▇▇▇▇’ Stockholders Meeting, the Board of Directors of ▇▇▇▇▇▇▇▇
shall recommend approval of this Agreement to ▇▇▇▇▇▇▇▇ stockholders (subject
to
Section 7.07) and cooperate and consult with Purchaser with respect to each
of
the foregoing matters. ▇▇▇▇▇▇▇▇ shall use its best efforts to solicit
approval of the transactions contemplated by this
Agreement. Notwithstanding the foregoing, ▇▇▇▇▇▇▇▇ shall not be
obliged to hire a proxy solicitation firm.
33
Section
8.02 Proxy
Statement.
As
soon
as practicable after the date hereof, ▇▇▇▇▇▇▇▇ shall prepare a Proxy Statement,
which shall be reasonably acceptable to counsel to Purchaser, for the purpose
of
taking stockholder action on the sale of Seller Bank Stock and the transactions
contemplated by this Agreement. Not later than 45 days from the date
hereof ▇▇▇▇▇▇▇▇ shall mail the Proxy Statement to the holders of record (as
of
the applicable record date) of shares of voting stock of
▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ represents and covenants that the Proxy Statement
and any amendment or supplement thereto, with respect to the information
pertaining to it or Seller Bank at the date of mailing to its stockholders
and
the date of the Stockholder Meetings to be held in connection with the sale
of
Seller Bank Stock, will not contain any untrue statement of a material fact
or
omit to state any material fact required to be stated or necessary in order
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading (except as to information regarding Purchaser as to which
no representation or covenant is being made). Purchaser shall supply
such information as is reasonably requested by ▇▇▇▇▇▇▇▇ for use in the
preparation of the Proxy Statement. Purchaser represents and
covenants that information regarding Purchaser, that Purchaser provides to
▇▇▇▇▇▇▇▇ for inclusion in the Proxy Statement, will not contain any untrue
statement of a material fact or omit to state any material fact required to
be
stated or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading at the date of mailing
of the Proxy Statement.
Section
8.03 Regulatory
Approvals.
Each
of
▇▇▇▇▇▇▇▇ and Purchaser will cooperate with the other and use all reasonable
efforts to promptly prepare and file all necessary documentation to obtain
the
Regulatory Approvals. ▇▇▇▇▇▇▇▇ and Purchaser will furnish each other
and each other’s counsel with all information concerning themselves, their
respective Subsidiaries, directors, officers and stockholders and such other
matters as may be necessary or advisable in connection with any application,
petition or other statement made by or on behalf of ▇▇▇▇▇▇▇▇ or Purchaser to
any
Bank Regulator or governmental body in connection with the sale of Seller Bank
Stock and the other transactions contemplated by this Agreement. Each
party acknowledges that time is of the essence in connection with the
preparation and filing of the documentation referred to above, and shall file
the regulatory applications or notices with the FRB and KBC within 30 days
from
the date of this Agreement. ▇▇▇▇▇▇▇▇ shall have the right to review
all characterizations of the information relating to ▇▇▇▇▇▇▇▇ and any of
▇▇▇▇▇▇▇▇’ Subsidiaries which appear in any filing made in connection with the
transactions contemplated by this Agreement with any governmental
body. In addition, ▇▇▇▇▇▇▇▇ and Purchaser shall each furnish to the
other a copy of each publicly available portion of such filing made in
connection with the transactions contemplated by this Agreement with any
governmental body promptly after its filing.
ARTICLE
IX.
CLOSING
CONDITIONS
Section
9.01 Conditions
to Each Party’s Obligations under this Agreement.
The
respective obligations of each party under this Agreement shall be subject
to
the fulfillment at or prior to the Closing Date of the following
conditions:
(a) Stockholder
Approval. This Agreement and the transactions contemplated
hereby shall have been approved by the vote of the stockholders of ▇▇▇▇▇▇▇▇
by
the vote of a majority of the shares entitled to vote at a meeting of
stockholders.
34
(b) Injunctions. None
of the parties hereto shall be subject to any order, decree or injunction of
a
court or agency of competent jurisdiction, and no statute, rule or regulation
shall have been enacted, entered, promulgated, interpreted, applied or enforced
by any Governmental Entity or Bank Regulator, that enjoins or prohibits the
consummation of the transactions contemplated by this Agreement.
(c) Regulatory
Approvals. All required Regulatory Approvals shall have been
obtained and shall remain in full force and effect and all waiting periods
relating thereto shall have expired; and no such Regulatory Approval shall
include any condition or requirement, that would, in the judgment of the Board
of Directors of Purchaser, have a Material Adverse Effect on (x) ▇▇▇▇▇▇▇▇ and
the Seller Subsidiaries taken as a whole or (y) Purchaser and the Purchaser
Subsidiaries taken as a whole.
Section
9.02 Conditions
to the Obligations of Purchaser under this Agreement.
The
obligations of Purchaser under this Agreement shall be further subject to the
satisfaction of the conditions set forth in this Section 9.02 at or prior to
the
Closing Date:
(a) Representations
and Warranties. Each of the representations and warranties of
Sellers set forth in this Agreement that are qualified as to materiality shall
be true and correct in all respects and each representation or warranty that
is
not so qualified shall be true and correct in all material respects, in each
case, as of the date of this Agreement and upon the Closing Date with the same
effect as though all such representations and warranties had been made at the
Closing Date (except to the extent such representations and warranties speak
as
of an earlier date), and ▇▇▇▇▇▇▇▇ and Seller Bank shall each have delivered
to
Purchaser a certificate to such effect signed by the Chief Executive Officer
and
the Chief Financial Officer of ▇▇▇▇▇▇▇▇ and Seller Bank as of the Closing
Date.
(b) Agreements
and Covenants. ▇▇▇▇▇▇▇▇ and Seller Bank each shall have
performed in all material respects all obligations and complied in all material
respects with all agreements or covenants to be performed or complied with
by it
at or prior to the Closing Date, and Purchaser shall have received a certificate
signed on behalf of ▇▇▇▇▇▇▇▇ and Seller Bank by the Chief Executive Officer
and
Chief Financial Officer of each of ▇▇▇▇▇▇▇▇ and Seller Bank to such effect
dated
as of the Closing Date.
(c) Good
Standing. Purchaser shall have received certificates (such
certificates to be dated as of a day as close as practicable to the Closing
Date) from appropriate authorities as to the good standing or corporate
existence, as applicable, of ▇▇▇▇▇▇▇▇ and Seller Bank.
(d) Third
Party Consents. ▇▇▇▇▇▇▇▇ and Seller Bank shall have obtained the
consent or approval of each person (other than the governmental approvals or
consents referred to in Section 8.03) whose consent or approval shall be
required in connection with the transactions contemplated hereby under any
loan
or credit agreement, note, mortgage, indenture, lease, license or other
agreement or instrument to which ▇▇▇▇▇▇▇▇ or Seller Bank is a party or is
otherwise bound.
(e) Legal
Opinion. ▇▇▇▇▇▇▇▇ shall have caused to be delivered to Purchaser
an opinion, dated the Closing Date, from the law firm of ▇▇▇▇▇▇▇▇ Rice ▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, P.C., counsel to ▇▇▇▇▇▇▇▇, concerning the following
matters:
(i) ▇▇▇▇▇▇▇▇
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of Kansas, and Seller Bank is a national bank duly organized
and in existence under the laws of the United States of America;
35
(ii) ▇▇▇▇▇▇▇▇
and Seller Bank have the power and authority to carry on their respective
businesses as presently conducted and to consummate the transactions
contemplated by this Agreement;
(iii) this
Agreement has been duly authorized and approved by ▇▇▇▇▇▇▇▇ and Seller Bank,
executed and delivered by ▇▇▇▇▇▇▇▇ and Seller Bank;
(iv) all
corporate acts, other proceedings required to be taken by or on the part of
▇▇▇▇▇▇▇▇, and the necessary approvals, consents, authorizations or notifications
required to be taken to consummate the transactions contemplated by this
Agreement, have been properly taken or obtained; neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby, with or without the giving of notice or the lapse of time, or both,
will
(i) violate any provision of the certificate of incorporation, charter or bylaws
of ▇▇▇▇▇▇▇▇ or Seller Bank, as the case may be; or (ii) violate, conflict with,
result in the material breach or termination of, constitute a material default
under, or accelerate the performance required by any indenture, mortgage, deed
of trust, or other agreement or instrument to which ▇▇▇▇▇▇▇▇ or Seller Bank
are
a party or by which it or any of their properties or assets may be bound and
of
which such counsel is aware, or violate any statute, rule or regulation
applicable to ▇▇▇▇▇▇▇▇ or Seller Bank; no consent, approval, authorization,
order, registration or qualification of or with any court, regulatory authority
or other governmental body, other than as specifically contemplated by this
Agreement is required for the consummation by ▇▇▇▇▇▇▇▇ or Seller Bank of the
transactions contemplated by this Agreement;
(v) except
for such vote as may be required by Sections 8.01, 8.02 and 9.01(a) of this
Agreement, no vote of ▇▇▇▇▇▇▇▇’▇ shareholders is required to approve the sale of
Seller Bank Stock by ▇▇▇▇▇▇▇▇ to Purchaser;
(vi) to
counsel’s knowledge, there are no actions, suits, proceedings or investigations
pending or threatened that challenge the validity or legality of the
transaction contemplated by the Agreement or which seek or threaten to restrain,
enjoin or prohibit or to obtain substantial damages in connection with the
consummation of such transaction;
(vii) ▇▇▇▇▇▇▇▇’
shareholders are not entitled to dissenters’ rights of appraisal as a result of
the sale of Seller Bank Stock;
(viii) All
of
Seller Bank’s issued and outstanding shares have been duly authorized, validly
issued and are not assessable.
(f) Other
Documents. ▇▇▇▇▇▇▇▇ and Seller Bank will furnish Purchaser with
such certificates of its officers or others and such other documents to evidence
fulfillment of the conditions set forth in this Section 9.02 or as are customary
for transactions of the type provided for herein as Purchaser may reasonably
request.
(g) Settlement
of Litigation. All outstanding litigation set forth in
Disclosure Letter 3.14 shall have been settled to Purchaser’s
satisfaction.
(h) Legal
Proceedings. No suit, action or other proceeding shall be
pending before any court or governmental agency in which it is sought to obtain
substantial monetary or other relief against one or more of the parties hereto
in connection with this Agreement and which Purchaser determines in good faith
following consultation with its counsel, that it is inadvisable to proceed
with
the sale of Seller Bank Stock.
36
(i) Convertible
Subordinated Debenture and ▇▇▇▇▇▇▇▇ Promissory Notes. The
lenders under each of the Convertible Subordinated Debenture and Promissory
Notes with National Community Investment Fund and Minbanc Capital Corp shall
have agreed to forego any claims against Seller Bank or Purchaser under the
respective instruments.
(j) Delivery
of Certificates. Sellers shall have delivered to Purchaser the
certificates for all outstanding shares of Seller Bank Stock in a form
satisfactory to Purchaser.
Section
9.03 Conditions
to the Obligations of Sellers under this Agreement.
The
obligations of Sellers under this Agreement shall be further subject to the
satisfaction of the conditions set forth in Section 9.03 at or prior to the
Closing Date:
(a) Representations
and Warranties. Each of the representations and warranties of
Purchaser set forth in this Agreement that are qualified as to materiality
shall
be true and correct in all respects and each representation or warranty that
is
not so qualified shall be true and correct in all material respects, in each
case, as of the date of this Agreement and upon the Closing Date with the same
effect as though all such representations and warranties had been made at the
Closing Date (except to the extent such representations and warranties speak
as
of an earlier date), and Purchaser shall have delivered to Sellers a
certificate to such effect signed by the Chief Executive Officer and the Chief
Financial Officer of Purchaser as of the Closing Date.
(b) Agreements
and Covenants. Purchaser shall have performed in all material
respects all obligations and complied in all material respects with all
agreements or covenants to be performed or complied with by it at or prior
to
the Closing Date, and Sellers shall have received a certificate signed on behalf
of Purchaser by the Chief Executive Officer and Chief Financial Officer of
Purchaser to such effect dated as of the Closing Date.
(c) Payment
of Consideration. Purchaser shall have delivered the
Consideration on or before the Closing Date.
(d) Good
Standing. ▇▇▇▇▇▇▇▇ shall have received a certificate (such
certificate to be dated as of a day as close as practicable to the Closing
Date)
from the appropriate authority as to the good standing or corporate existence,
as applicable of Purchaser.
(e) Other
Documents. Purchaser will furnish Sellers with such certificates
of its officers or others and such other documents to evidence fulfillment
of
the conditions set forth in this Section 9.03 or as are customary for
transaction of the type provided for herein as Sellers may reasonably
request.
ARTICLE
X.
THE
CLOSING
Section
10.01 Time
and Place.
Subject
to the provisions of Articles IX and XI hereof, the Closing of the transactions
contemplated hereby shall take place at the offices of ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇, P.C., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
at 10:00 a.m., or at such other place or time upon which Purchaser and Sellers
mutually agree. A pre-closing of the transactions contemplated hereby
(the “Pre-Closing”) shall take place at the offices of ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇, P.C., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,,
at 10:00 a.m. on the day prior to the Closing Date.
37
Section
10.02 Deliveries
at the Pre-Closing and the Closing.
At
the
Pre-Closing there shall be delivered to Purchaser and Sellers the opinions,
certificates, and other documents and instruments required to be delivered
at
the Closing under Article IX hereof. At or prior to the Closing,
Purchaser shall deliver the Consideration as set forth under Section 9.03(c)
hereof.
ARTICLE
XI.
TERMINATION,
AMENDMENT AND WAIVER
Section
11.01 Termination.
This
Agreement may be terminated prior to the Closing Date:
(a) At
any
time by the mutual written agreement of Purchaser on the one hand and ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇ on the other hand;
(b) By
either
party (provided, that the terminating party is not then in breach of any
representation, warranty, covenant or other agreement contained herein) if
there
shall have been a breach of any of the representations or warranties set forth
in this Agreement (subject to the standard set forth in Section 9.02(a) or
9.03(a), as applicable) on the part of the other party, which breach by its
nature cannot be cured prior to the Termination Date or shall not have been
cured within 30 days after written notice of such breach by the terminating
party to the other party;
(c) By
either
party (provided, that the terminating party is not then in breach of any
representation, or warranty, covenant or other agreement contained herein)
if
there shall have been a failure to perform or comply in any material respect
with any of the covenants or agreements set forth in this Agreement on the
part
of the other party, which failure by its nature cannot be cured prior to the
Termination Date or shall not have been cured within 30 days after written
notice of such failure by the terminating party to the other party;
(d) At
the
election of either party, if the Closing shall not have occurred by the
Termination Date, or such later date as shall have been agreed to in writing
by
Purchaser on the one hand and ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇ on the other hand;
provided, that no party may terminate this Agreement pursuant to this
Section 11.01(d) if the failure of the Closing to have occurred on or before
said date was due to such party’s willful breach of any representation or
warranty or material breach of any covenant or other agreement contained in
this
Agreement;
(e) By
either
party if (i) final action has been taken by a Bank Regulator whose approval
is
required in connection with this Agreement and the transactions contemplated
hereby, which final action (x) has become unappealable and (y) does not approve
this Agreement or the transactions contemplated hereby, (ii) any Bank Regulator
whose approval or nonobjection is required in connection with this Agreement
and
the transactions contemplated hereby has stated that it will not issue the
required approval or nonobjection, or (iii) any court of competent jurisdiction
or other governmental authority shall have issued an order, decree, ruling
or
taken any other action restraining, enjoining or otherwise prohibiting the
sale
and such order, decree, ruling or other action shall have become final and
unappealable;
38
(f) By
either
party, if Stockholder Approval shall not have been obtained at ▇▇▇▇▇▇▇▇
Stockholders Meeting duly convened therefor or at any adjournment or
postponement thereof;
(g) By
Sellers in accordance with the terms and subject to the conditions of Section
7.07(b); or
(h) By
Purchaser if prior to obtaining Stockholder Approval (i) a Seller Adverse
Recommendation Change shall have occurred or (ii) the Board of Directors of
▇▇▇▇▇▇▇▇ fails to publicly reaffirm its adoption and recommendation of this
Agreement, or the other transactions contemplated by this Agreement within
ten
business days of receipt of a written request by Purchaser to provide such
reaffirmation following an Acquisition Proposal.
Section
11.02 Effect
of Termination.
(a) In
the
event of termination of this Agreement pursuant to any provision of Section
11.01, this Agreement shall forthwith become void and have no further force,
except that (i) the provisions of Sections 11.02, 12.01, 12.06, 12.09, 12.10,
and any other Section which, by its terms, relates to post-termination rights
or
obligations, shall survive such termination of this Agreement and remain in
full
force and effect.
(b) If
this
Agreement is terminated, expenses and damages of the parties hereto shall be
determined as follows:
(i) Except
as
provided below, whether or not the sale of Seller Bank Stock is completed,
all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses.
(ii) In
the
event of a termination of this Agreement because of a willful breach of any
representation, warranty, covenant or agreement contained in this Agreement,
the
breaching party shall be liable for any and all damages, costs and expenses,
including all reasonable attorneys’ fees, sustained or incurred by the
non-breaching party as a result thereof or in connection therewith or with
respect to the enforcement of its rights hereunder.
(iii) As
a
condition of Purchaser’s willingness, and in order to induce Purchaser to enter
into this Agreement, and to reimburse Purchaser for incurring the costs and
expenses related to entering into this Agreement and consummating the
transactions contemplated by this Agreement, ▇▇▇▇▇▇▇▇ hereby agrees to pay
Purchaser, and Purchaser shall be entitled to payment of, a fee of $85,000
(the
“Seller Fee”), within three business days after written demand for payment is
made by Purchaser, following the occurrence of any of the events set forth
below:
(A) This
Agreement is terminated pursuant to Sections 11.01(g) or 11.01(h);
or
(B) The
entering into a definitive agreement by ▇▇▇▇▇▇▇▇ relating to an Acquisition
Proposal or the consummation of an Acquisition Proposal involving ▇▇▇▇▇▇▇▇
within twelve months after the occurrence of any of the following: (i) the
termination of the Agreement by Purchaser pursuant to Section 11.01(b) or
11.01(c) because of a willful breach by ▇▇▇▇▇▇▇▇ or Seller Bank; or (ii) the
failure of the stockholders of ▇▇▇▇▇▇▇▇ to approve this Agreement after the
occurrence of an Acquisition Proposal.
39
(iv) If
demand
for payment of the Seller Fee is made pursuant to Section 11.02(b)(iii) and
payment is timely made, then Purchaser will not have any other rights or claims
against ▇▇▇▇▇▇▇▇ or the Seller Subsidiaries, or their respective officers and
directors, under this Agreement, it being agreed that the acceptance of the
Seller Fee under Section 11.02(b)(iii) will constitute the sole and exclusive
remedy of Purchaser against ▇▇▇▇▇▇▇▇ and Seller Bank and their respective
officers and directors.
Section
11.03 Amendment,
Extension and Waiver.
Subject
to applicable law, at any time prior to the Closing Date, the parties hereto
by
action of their respective Boards of Directors, may (a) amend this Agreement,
(b) extend the time for the performance of any of the obligations or other
acts
of any other party hereto, (c) waive any inaccuracies in the representations
and
warranties contained herein or in any document delivered pursuant hereto, or
(d)
waive compliance with any of the agreements or conditions contained herein;
provided, however, that after any approval of this Agreement and the
transactions contemplated hereby by the stockholders of ▇▇▇▇▇▇▇▇, there may
not
be, without further approval of such stockholders, any amendment of this
Agreement which reduces the amount or value, or changes the form of, the
Consideration to be delivered to ▇▇▇▇▇▇▇▇’ stockholders pursuant to this
Agreement except for such changes in consideration as is set forth in the
Agreement. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto. Any agreement on the
part of a party hereto to any extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party, but such
waiver or failure to insist on strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Any termination of this
Agreement pursuant to Article XI may only be effected upon a vote of a majority
of the entire Board of Directors of the terminating party.
ARTICLE
XII.
MISCELLANEOUS
Section
12.01 Confidentiality.
Except
as
specifically set forth herein, Purchaser and ▇▇▇▇▇▇▇▇ mutually agree to be
bound
by the terms of the confidentiality agreements dated October 4, 2006 (the
“Confidentiality Agreements”) previously executed by the parties hereto, which
Confidentiality Agreements are hereby incorporated herein by
reference. The parties hereto agree that such Confidentiality
Agreements shall continue in accordance with their respective terms,
notwithstanding the termination of this Agreement. ▇▇▇▇▇▇▇▇ acknowledges that
Purchaser is a third party beneficiary of any and all confidentiality agreements
entered into by ▇▇▇▇▇▇▇▇ in the past six (6) months similar to the
confidentiality agreement between the parties hereto.
Section
12.02 Public
Announcements.
Sellers
and Purchaser shall cooperate in the development and distribution of all news
releases and other public disclosures with respect to this Agreement, and except
as may be otherwise required by law, neither ▇▇▇▇▇▇▇▇ nor Purchaser shall issue
any news release, or other public announcement or communication with respect
to
this Agreement unless such news release or other public announcement or
communication has been mutually agreed upon by the parties hereto.
40
Section
12.03 Survival.
All
representations, warranties and covenants in this Agreement or in any instrument
delivered pursuant hereto shall expire and be terminated and extinguished at
the
Closing Date, except for those covenants and agreements contained herein which
by their terms apply in whole or in part after the Closing Date.
Section
12.04 Notices.
All
notices or other communications hereunder shall be in writing and shall be
deemed given if delivered by receipted hand delivery or mailed by prepaid
registered or certified mail (return receipt requested) or by recognized
overnight courier addressed as follows:
|
If
to Purchaser, to:
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
President
and Chief Executive Officer
First
Guaranty Bank
▇▇▇
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
With
required copies to:
|
▇▇▇▇
▇▇▇▇▇▇, Esq.
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
If
to ▇▇▇▇▇▇▇▇, to:
|
▇▇▇▇▇▇▇▇
Bancorp, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ( )
|
|
With
required copies to:
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
If
to ▇▇▇▇▇▇ Mae:
|
▇▇▇▇▇▇
▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇
▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
|
or
such
other address as shall be furnished in writing by any party, and any such notice
or communication shall be deemed to have been given: (a) as of the date
delivered by hand; (b) three business days after being delivered to the U.S.
mail, postage prepaid; or (c) one business day after being delivered to the
overnight courier.
41
Section
12.05 Parties
in Interest.
This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns; provided, however,
that neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any party hereto without the prior written
consent of the other party, and that (except as specifically provided in this
Agreement) nothing in this Agreement is intended to confer upon any other person
any rights or remedies under or by reason of this Agreement. Nothing in this
Agreement is intended to confer upon any other person any rights or remedies
of
any nature whatsoever under or by reason of this Agreement.
Section
12.06 Complete
Agreement.
This
Agreement, including the Exhibits hereto and the documents and other writings
referred to herein or therein or delivered pursuant hereto, together with the
Confidentiality Agreements referred to in Section 12.01, contains the entire
agreement and understanding of the parties with respect to its subject
matter. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties other than those expressly set
forth herein or therein. This Agreement supersedes all prior
agreements and understandings (other, than the Confidentiality Agreements
referred to in Section 12.01 hereof) between the parties, both written and
oral,
with respect to its subject matter.
Section
12.07 Counterparts.
This
Agreement may be executed in two or more counterparts all of which shall be
considered one and the same agreement and each of which shall be deemed an
original.
Section
12.08 Severability.
In
the
event that any one or more provisions of this Agreement shall for any reason
be
held invalid, illegal or unenforceable in any respect, by any court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Agreement and the parties shall use their
reasonable efforts to substitute a valid, legal and enforceable provision which,
insofar as practical, implements the purposes and intents of this
Agreement.
Section
12.09 Governing
Law.
This
Agreement shall be governed by the laws of the State of Louisiana, without
giving effect to its principles of conflicts of laws.
Section
12.10 Interpretation.
When
a
reference is made in this Agreement to Sections or Exhibits, such reference
shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. The recitals hereto constitute an integral part of this
Agreement. References to Sections include subsections, which are part
of the related Section (e.g., a section numbered “Section 5.01(a)” would be part
of “Section 5.01” and references to “Section 5.01” would also refer to material
contained in the subsection described as “Section 5.01(a)”). The
table of contents, index and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words “include”,
“includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation”. The phrases “the date of
this Agreement”, “the date hereof” and terms of similar import, unless the
context otherwise requires, shall be deemed to refer to the date set forth
in
the Recitals to this Agreement.
42
Section
12.11 Specific
Performance.
The
parties hereto agree that irreparable damage would occur in the event that
the
provisions contained in this Agreement were not performed in accordance with
its
specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions without
the
necessity of posting bond other securities to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of
the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
43
IN
WITNESS WHEREOF, Purchaser and Sellers have caused this Agreement to be executed
by their duly authorized officers as of the date first set forth
above.
By: /s/▇▇▇▇▇▇▇
▇.
▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
President
and Chief Executive Officer
Number
of Shares owned
of ▇▇▇▇▇▇▇▇
Bancorp, Inc.
▇▇▇▇▇▇▇▇
National Bank
9,600
Common
Stock By: /s/▇▇▇▇▇▇
▇. ▇▇▇▇▇
▇▇▇▇▇▇
▇.
▇▇▇▇▇
Chairman
of Board of Directors
▇▇▇▇▇▇▇▇
National
Bank
By: /s/▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
Vice
Chairman of Board of Directors
▇▇▇▇▇▇
Mae
450
shares of Common Stock
507
shares of Preferred
Stock By: /s/▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Senior
Vice
President
44