Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
dated as of June 7, 2000
by and between
MUTUAL FIRST FINANCIAL, INC.
and
▇▇▇▇▇▇ CAPITAL HOLDINGS, INC.
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TABLE OF CONTENTS
ARTICLE I
CERTAIN DEFINITIONS.......................................................1
1.01 Certain Definitions..............................................1
ARTICLE II
THE TRANSACTION...........................................................6
2.01 [INTENTIONALLY LEFT BLANK].......................................6
2.02 The Company Merger...............................................6
2.03 Bank Merger......................................................7
2.04 Effective Date and Effective Time................................8
2.05 Reservation of Right to Revise Transaction.......................8
ARTICLE III
CONSIDERATION; EXCHANGE PROCEDURES........................................8
3.01 Merger Consideration.............................................8
3.02 Rights as Stockholders; Stock Transfers..........................9
3.03 Fractional Shares................................................9
3.04 Exchange Procedures..............................................9
3.05 Anti-Dilution Provisions........................................11
3.06 Options.........................................................11
ARTICLE IV
ACTIONS PENDING TRANSACTION..............................................12
4.01 Forbearances of ▇▇▇▇▇▇..........................................12
4.02 Forbearances of Mutual First....................................15
ARTICLE V
REPRESENTATIONS AND WARRANTIES...........................................17
5.01 Disclosure Schedules............................................17
5.02 Standard........................................................18
5.03 Representations and Warranties of ▇▇▇▇▇▇........................18
5.04 Representations and Warranties of Mutual First..................28
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ARTICLE VI
COVENANTS................................................................35
6.01 Reasonable Best Efforts.........................................35
6.02 Stockholder Approvals...........................................35
6.03 Registration Statement..........................................35
6.04 Press Releases..................................................36
6.05 Access; Information.............................................36
6.06 ▇▇▇▇▇▇ Proposal.................................................37
6.07. Affiliate Agreement.............................................38
6.08 Takeover Laws...................................................38
6.09 Certain Policies................................................38
6.10 NASDAQ Listing..................................................38
6.11 Regulatory Applications.........................................39
6.12 Indemnification.................................................39
6.13 Benefit Plans...................................................40
6.14 Notification of Certain Matters.................................41
6.15 Directors.......................................................42
6.16 THIS PARAGRAPH INTENTIONALLY LEFT BLANK.........................42
6.17 Liabilities and Remedies and Breakup Fee........................42
6.18 ▇▇▇▇▇▇ Fee......................................................43
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE COMPANY MERGER.........................43
7.01 Conditions to Each Party's Obligation to
Effect the Company Merger.....................................43
7.02 Conditions to Obligation of ▇▇▇▇▇▇..............................45
7.03 Conditions to Obligation of Mutual First........................45
ARTICLE VIII
TERMINATION..............................................................46
8.01 Termination.....................................................46
8.02 Effect of Termination and Abandonment...........................47
ARTICLE IX
MISCELLANEOUS............................................................47
9.01 Survival........................................................47
9.02 Waiver; Amendment...............................................47
9.03 Counterparts....................................................47
9.04 Governing Law...................................................47
9.05 Expenses........................................................48
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9.06 Notices.........................................................48
9.07 Entire Understanding; No Third Party Beneficiaries..............49
9.08 Interpretation; Effect..........................................49
EXHIBIT A Form of Subsidiary Plan of Merger
EXHIBIT B Form of ▇▇▇▇▇▇ Affiliate Agreement
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AGREEMENT AND PLAN OF MERGER, dated as of June 7, 2000 (this
"Agreement"), by and between Mutual First Financial, Inc. ("Mutual First") and
▇▇▇▇▇▇ Capital Holdings, Inc. ("Marion").
RECITALS
A. Marion. Marion is an Indiana corporation, having its principal place
of business in Marion, Indiana.
B. Mutual First. Mutual First is a Maryland corporation, having its
principal place of business in Muncie, Indiana.
C. Intentions of the Parties. It is the intention of the parties to
this Agreement that the combination of Marion and Mutual First be accounted for
under the "purchase" accounting method and that each of the business
combinations contemplated hereby be treated as a "reorganization" under Section
368 of the Internal Revenue Code of 1986, as amended (the "Code").
D. Board Action. The respective Boards of Directors of Mutual First and
▇▇▇▇▇▇ have determined that it is in the best interests of their respective
companies and their stockholders to consummate a strategic business alliance
between ▇▇▇▇▇▇ and Mutual First by the merger of ▇▇▇▇▇▇ with and into Mutual
First and the other business combinations contemplated herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein the
parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 Certain Definitions. The following terms are used in this
Agreement with the meanings set forth below:
"Agreement" means this Agreement, as amended or modified from time to time
in accordance with Section 9.02.
"Bank Merger" has the meaning set forth in Section 2.03.
"CEBA" means the Competitive Equality Banking Act of 1987.
"Code" has the meaning set forth in the Recitals to this Agreement.
"Company Merger" has the meaning set forth in Section 2.02(a).
"Compensation and Benefit Plans" has the meaning set forth in Section
5.03(m).
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"Costs" has the meaning set forth in Section 6.12(a).
"Disclosure Schedule" has the meaning set forth in Section 5.01.
"DOL" means the Department of Labor.
"Effective Date" means the date on which the Effective Time occurs.
"Effective Time" means the effective time of the Company Merger and the
Bank Merger, as provided for in Section 2.04.
"Environmental Laws" means all applicable local, state and federal
environmental, health and safety laws and regulations, including, without
limitation, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation, and Liability Act, the Clean Water Act,
the Clean Air Act, and the Occupational Safety and Health Act, each as amended,
regulations promulgated thereunder, and state counterparts.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in Section 5.03(m).
"ERISA Affiliate Plan" has the meaning set forth in Section 5.03(m).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"Exchange Agent" has the meaning set forth in Section 3.04(a).
"Exchange Fund" has the meaning set forth in Section 3.04(a).
"Exchange Ratio" has the meaning set forth in Section 3.01(a).
"FDIC" means the Federal Deposit Insurance Corporation
"FFIEC" means the Federal Financial Institutions Examination Council.
"Governmental Authority" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality.
"Indemnified Party" has the meaning set forth in Section 6.12(a).
"Indiana Law" means the relevant provisions of the Indiana Business
Corporation Law.
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"Indiana Secretary" means the Secretary of State of the State of Indiana.
"Insurance Amount" has the meaning set forth in Section 6.12(b).
"IRS" means the Internal Revenue Service.
"Lien" means any charge, mortgage, pledge, security interest, restriction,
claim, lien, or encumbrance.
"▇▇▇▇▇▇" has the meaning set forth in the preamble to this Agreement.
"▇▇▇▇▇▇ Affiliate" has the meaning set forth in SEC Accounting Series
Releases 130 and 135.
"▇▇▇▇▇▇ Board" means the Board of Directors of ▇▇▇▇▇▇.
"▇▇▇▇▇▇ Bylaws" means the Bylaws of ▇▇▇▇▇▇.
"▇▇▇▇▇▇ Articles" means the Articles of Incorporation of ▇▇▇▇▇▇.
"▇▇▇▇▇▇ Common Stock" means the common stock, without par value of ▇▇▇▇▇▇.
"▇▇▇▇▇▇ Meeting" has the meaning set forth in Section 6.02.
"▇▇▇▇▇▇ Preferred Stock" means the preferred stock, without par value of
▇▇▇▇▇▇.
"▇▇▇▇▇▇ Proposal" shall mean a tender offer or exchange offer, proposal for
a merger, involving ▇▇▇▇▇▇ or any of its subsidiaries, or any proposal or offer
to acquire in any manner a substantial equity interest in, or a substantial
portion of, the assets or deposits of ▇▇▇▇▇▇ or any of its subsidiaries, other
than the transactions contemplated by this agreement.
"▇▇▇▇▇▇ Stock" means, collectively, ▇▇▇▇▇▇ Common Stock and ▇▇▇▇▇▇
Preferred Stock.
"▇▇▇▇▇▇ Stock Option" has the meaning set forth in Section 3.06(a).
"▇▇▇▇▇▇ Stock Plan" means the ▇▇▇▇▇▇ Capital Holdings, Inc. Stock Option
Plan.
"Maryland Law" means the relevant provisions of the Maryland corporate
code.
"Maryland Secretary" means the State Department of Assessments and
Taxation.
"Material Adverse Effect" means, with respect to Mutual First or ▇▇▇▇▇▇,
any effect that (i) is material and adverse to the financial position, results
of operations or business of Mutual First
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and its Subsidiaries taken as a whole or ▇▇▇▇▇▇ and its Subsidiaries taken as a
whole, respectively, or (ii) would materially impair the ability of Mutual First
or ▇▇▇▇▇▇ to perform its obligations under this Agreement or otherwise
materially threaten or materially impede the consummation of the Company Merger
and the other transactions contemplated by this Agreement; provided, however,
that Material Adverse Effect shall not be deemed to include the impact of (a)
changes in thrift, banking and similar laws of general applicability or
interpretations thereof by courts or governmental authorities, or other changes
affecting depository institutions generally, including changes in general
economic conditions and changes in prevailing interest and deposit rates, (b)
changes in generally accepted accounting principles or regulatory accounting
requirements applicable to thrifts, banks and their holding companies generally,
(c) any modifications or changes to valuation policies and practices in
connection with the Company Merger or Bank Merger or restructuring charges taken
in connection with the Company Merger or Bank Merger, in each case in accordance
with generally accepted accounting principles, (d) changes resulting from
expenses (such as legal, accounting and investment bankers' fees) incurred in
connection with this Agreement and (e) actions or omissions of Mutual First or
▇▇▇▇▇▇ taken with the prior written consent of ▇▇▇▇▇▇ or Mutual First, as
applicable, in contemplation of the transactions contemplated hereby.
"Merger Consideration" has the meaning set forth in Section 2.05.
"Mutual First" has the meaning set forth in the preamble to this Agreement.
"Mutual First Affiliate" has the meaning set forth in SEC Accounting Series
Releases 130 and 135.
"Mutual First Board" means the Board of Directors of Mutual First.
"Mutual First Common Stock" means the common stock, par value $0.01 per
share, of Mutual First.
"Mutual First Meeting" has the meaning set forth in Section 6.02.
"Mutual First Proposal" shall mean a tender offer or exchange offer,
proposal for a merger, involving Mutual First or any of its Subsidiaries, or any
proposal or offer to acquire in any manner a substantial equity interest in, or
a substantial portion of, the assets or deposits of Mutual First or any of its
subsidiaries, other than the transactions contemplated by this Agreement.
"NASDAQ" means The Nasdaq Stock Market, Inc.'s National Market System.
"New Certificates" has the meaning set forth in Section 3.04(a).
"Old Certificates" has the meaning set forth in Section 3.04(a).
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"OTS" means the Office of Thrift Supervision.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" has the meaning set forth in Section 5.03(m).
"Person" means any individual, bank, corporation, partnership, association,
joint-stock company, business trust or unincorporated organization.
"Previously Disclosed" by a party shall mean information set forth in its
Disclosure Schedule.
"Proxy Statement" has the meaning set forth in Section 6.03.
"Registration Statement" has the meaning set forth in Section 6.03.
"Regulatory Authorities" has the meaning set forth in Section 5.03(i).
"Representatives" means, with respect to any Person, such Person's
directors, officers, employees, legal or financial advisors or any
representatives of such legal or financial advisors.
"Rights" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any person any
right to subscribe for or acquire, or any options, calls or commitments relating
to, or any stock appreciation right or other instrument the value of which is
determined in whole or in part by reference to the market price or value of,
shares of capital stock of such Person.
"SEC" means the Securities and Exchange Commission.
"SEC Documents" has the meaning set forth in Section 5.03(g).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Specified Representations" has the meaning set forth in Section 5.02.
"Subsidiary" has the meaning ascribed to it in Rule 1-02 of Regulation S-X
of the SEC.
"Surviving Corporation" has the meaning set forth in Section 2.02.
"Takeover Laws" has the meaning set forth in Section 5.03(o).
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"Tax" and "Taxes" means all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gains, gross receipts, sales,
use, ad valorem, goods and services, capital, production, transfer, franchise,
windfall profits, license, withholding, payroll, employment, disability,
employer health, excise, estimated, severance, stamp, occupation, property,
environmental, unemployment or other taxes, custom duties, fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts, in each case imposed by any taxing or
Governmental Authority whether arising before, on or after the Effective Date.
"Tax Returns" means any return, amended return or other report (including
elections, declarations, disclosures, schedules, estimates and information
returns) required to be filed with any Governmental Authority with respect to
any Tax.
"Transaction" means the Company Merger and the Bank Merger.
"Treasury Stock" shall mean shares of ▇▇▇▇▇▇ Stock held by ▇▇▇▇▇▇ or any of
its Subsidiaries or by Mutual First or any of its Subsidiaries, in each case
other than in a fiduciary capacity or as a result of debts previously contracted
in good faith.
ARTICLE II
THE TRANSACTION
2.01 [INTENTIONALLY LEFT BLANK]
2.02 The Company Merger.
(a) Merger. At the Effective Time, ▇▇▇▇▇▇ shall merge with and
into Mutual First (the "Company Merger"), the separate corporate
existence of ▇▇▇▇▇▇ shall cease and Mutual First shall survive and
continue to exist as a Maryland corporation (Mutual First, as the
surviving corporation in the Company Merger, sometimes being referred
to herein as the "Surviving Corporation").
(b) Corporate Law Filings. Subject to the satisfaction or waiver
of the conditions set forth in Article VII, the Company Merger shall
become effective upon the occurrence of the filing in the office of
the Maryland Secretary of articles of merger in accordance with
Maryland Law and the filing in the office of the Indiana Secretary of
articles of merger in accordance with Indiana Law, or such later date
and time as may be set forth in such articles of merger.
(c) Effects of Company Merger. The Company Merger shall have the
effects prescribed in the Maryland Law including but not limited to,
Mutual First, as the
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Surviving Corporation, thereupon and thereafter possessing all of
the rights, privileges, immunities and franchises, of a public as well
as of a private nature, of each of the corporations so merged and
Mutual First, as the Surviving Corporation, becoming responsible and
liable for all the liabilities, obligations and penalties of each of
the corporations so merged. All rights of creditors and obligors and
all liens on the property of each of ▇▇▇▇▇▇ and Mutual First shall be
preserved unimpaired.
(d) Articles of Incorporation and Bylaws of Surviving
Corporation. The Articles of Incorporation and Bylaws of Mutual First
immediately after the Company Merger shall be those of Mutual First as
in effect immediately prior to the Effective Time.
(e) Directors and Officers of the Surviving Corporation. The
directors and officers of Mutual First immediately after the Company
Merger shall be the directors and officers of Mutual First immediately
prior to the Effective Time, subject to the provisions of Section 6.15
hereof, until such time as their successors shall be duly elected and
qualified.
(f) Service of Process. At the Effective Time, Mutual First, as
the Surviving Corporation, consents to be sued and served with process
in the State of Maryland and irrevocably appoints the Maryland
Secretary of State as its agent to accept service of process in any
proceeding in the State of Maryland to enforce against it any
obligation of Marion.
(g) Principal Office. The location of the principal office of
Mutual First, as the Surviving Corporation, in the State of Indiana
shall be ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
(h) Plan of Merger. At the reasonable request of any party,
Marion and Mutual First shall enter into a separate plan of merger
reflecting the terms of the Company Merger for purposes of any state
law filing requirement.
2.03 Bank Merger. At the Effective Time and immediately following the
Company Merger, First Federal Savings Bank of ▇▇▇▇▇▇ ("First Federal"), a
federally chartered savings bank and wholly owned Subsidiary of ▇▇▇▇▇▇, shall be
merged with and into Mutual Federal Savings Bank ("Mutual First Bank"), a
federally chartered savings bank and wholly-owned Subsidiary of Mutual First.
Such merger is hereinafter sometimes referred to as the "Bank Merger". The Bank
Merger shall be implemented pursuant to Subsidiary Plan of Merger, in
substantially the form of Exhibit A. In order to obtain the necessary state and
federal regulatory approvals for the Bank Merger, the parties hereto shall cause
the following to be accomplished prior to the filing of applications for
regulatory approval: ▇▇▇▇▇▇ shall cause the Board of Directors of First Federal
to approve Subsidiary Plan of Merger, ▇▇▇▇▇▇ as the sole stockholder of First
Federal shall approve Subsidiary Plan of Merger, and ▇▇▇▇▇▇ shall cause
Subsidiary
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Plan of Merger to be duly executed by First Federal and delivered to Mutual
First. Mutual First shall cause the Board of Directors of Mutual First Bank to
approve The Subsidiary Plan of Merger, Mutual First as the sole stockholder of
Mutual First Bank shall approve the Subsidiary Plan of Merger, and Mutual First
shall cause the Subsidiary Plan of Merger to be duly executed by Mutual First
Bank and delivered to ▇▇▇▇▇▇. Prior to the Effective Time, ▇▇▇▇▇▇ shall cause
First Federal and Mutual First shall cause Mutual First Bank to execute such
articles of combination as are necessary to make effective the Bank Merger and
cause such documents to be timely and appropriately filed and endorsed, where
required, by the OTS so that the Bank Merger shall become effective at the
Effective Time.
2.04 Effective Date and Effective Time. Subject to the satisfaction or
waiver of the conditions set forth in Article VII, the parties shall cause the
effective date of the Company Merger and the Bank Merger (the "Effective Date")
to occur on (i) the fifth business day after the last of the conditions set
forth in Article VII to be satisfied prior to the Effective Date shall have been
satisfied or waived in accordance with the terms of this Agreement or (ii) such
other date to which the parties may agree in writing. The time on the Effective
Date when the Company Merger and the Bank Merger shall become effective is
referred to as the "Effective Time".
2.05 Reservation of Right to Revise Transaction. Mutual First may at
any time prior to the Effective Time, with the prior consent of ▇▇▇▇▇▇ (such
consent not to be unreasonably withheld or delayed), change the method of
effecting the Transaction or any part thereof if and to the extent it deems such
change to be necessary, appropriate or desirable; provided, however, that no
such change shall (i) alter or change the amount or kind of consideration to be
issued to holders of ▇▇▇▇▇▇ Common Stock as provided for in this Agreement (the
"Merger Consideration"), (ii) adversely affect the tax treatment of Marion's
stockholders as a result of receiving the Merger Consideration, (iii) materially
impede or delay consummation of the Transaction, (iv) result in any
representation or warranty of any party set forth in this Agreement becoming
incorrect in any material respect, or (v) diminish the benefits, including
membership on the Mutual First Board, to be received by the directors, officers
or employees of ▇▇▇▇▇▇ and its Subsidiaries as set forth in this Agreement or in
any other written agreements between the parties made in connection with this
Agreement.
ARTICLE III
CONSIDERATION; EXCHANGE PROCEDURES
3.01 Merger Consideration. Subject to the provisions of this Agreement, at
the Effective Time, automatically by virtue of the Company Merger and without
any action on the part of any Person:
(a) Outstanding ▇▇▇▇▇▇ Common Stock. Each share, excluding
Treasury Stock, of ▇▇▇▇▇▇ Common Stock issued and outstanding
immediately prior to the
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Effective Time shall become and be converted into, subject to Sections
3.03 and 3.05 hereof, 1.862 shares of Mutual First Common Stock (the
"Exchange Ratio"). The Exchange Ratio shall be subject to adjustment as
set forth in Section 3.05.
(b) Outstanding Mutual First Common Stock. Each share of
Mutual First Common Stock issued and outstanding or held in treasury
immediately prior to the Effective Time shall remain issued and
outstanding or held in treasury and shall be unaffected by the Company
Merger.
(c) Treasury Shares. Each share of ▇▇▇▇▇▇ Common Stock held as
Treasury Stock immediately prior to the Effective Time shall be
canceled and retired at the Effective Time, and no consideration shall
be issued in exchange therefor.
3.02 Rights as Stockholders; Stock Transfers. At the Effective Time,
holders of ▇▇▇▇▇▇ Stock shall cease to be, and shall have no rights as,
stockholders of ▇▇▇▇▇▇, other than to receive any dividend or other distribution
with respect to such ▇▇▇▇▇▇ Stock permitted under this Agreement with a record
date occurring prior to the Effective Time and the consideration provided under
this Article III. After the Effective Time, there shall be no transfers on the
stock transfer books of ▇▇▇▇▇▇ or the Surviving Corporation of shares of ▇▇▇▇▇▇
Stock.
3.03 Fractional Shares. Notwithstanding any other provision hereof, no
fractional shares of Mutual First Common Stock and no certificates or scrip
therefor, or other evidence of ownership thereof, will be issued in the Company
Merger; instead, Mutual First shall pay to each holder of ▇▇▇▇▇▇ Common Stock
who would otherwise be entitled to a fractional share of Mutual First Common
Stock (after taking into account all Old Certificates delivered by such holder)
an amount in cash (without interest) determined by multiplying such fraction by
the closing sale price of Mutual First Common Stock, as reported by the NASDAQ
reporting system (as reported in The Wall Street Journal or, if not reported
therein, in another authoritative source), for the last trading day immediately
preceding the Effective Date.
3.04 Exchange Procedures.
(a) Deposit of New Certificates, Etc. At or prior to the
Effective Time, Mutual First shall deposit, or shall cause to be
deposited, with an independent exchange agent to be selected by Mutual
First and reasonably acceptable to ▇▇▇▇▇▇ (the "Exchange Agent"), for
the benefit of the holders of certificates formerly representing shares
of ▇▇▇▇▇▇ Common Stock ("Old Certificates"), for exchange in accordance
with this Article III, certificates representing the shares of Mutual
First Common Stock ("New Certificates") and an estimated amount of cash
(such cash and New Certificates, together with any dividends or
distributions with a record date occurring after the Effective Date
with respect thereto (without any interest on any such cash, dividends
or distributions), being hereinafter referred to as the "Exchange
Fund") to be paid pursuant to this Article III in exchange for
outstanding shares of ▇▇▇▇▇▇ Common Stock.
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(b) Transmittal and Deliveries. As promptly as practicable
after the Effective Date, Mutual First shall send or cause to be sent
to each former holder of record of shares of ▇▇▇▇▇▇ Common Stock
immediately prior to the Effective Time transmittal materials (which
shall specify that risk of loss and title to Old Certificates shall
pass only upon acceptance of such Old Certificates by Mutual First or
the Exchange Agent) for use in exchanging such stockholder's Old
Certificates for the consideration set forth in this Article III.
Mutual First shall cause the New Certificates into which shares of a
stockholder's ▇▇▇▇▇▇ Common Stock are converted on the Effective Date
and/or any check in respect of any fractional share interests or
dividends or distributions which such person shall be entitled to
receive to be delivered to such stockholder upon delivery to the
Exchange Agent of Old Certificates representing such shares of ▇▇▇▇▇▇
Common Stock (or indemnity reasonably satisfactory to Mutual First and
the Exchange Agent, if any of such certificates are lost, stolen or
destroyed) owned by such stockholder. No interest will be paid on any
such cash to be paid in lieu of fractional share interests or in
respect of dividends or distributions which any such person shall be
entitled to receive pursuant to this Article III upon such delivery.
Mutual First and the Exchange Agent shall be entitled to rely upon the
stock transfer books of ▇▇▇▇▇▇ to establish the identity of those
persons entitled to receive consideration specified in this Agreement,
which books shall be conclusive with respect thereto. In the event of a
dispute with respect to ownership of stock represented by any Old
Certificate, Mutual First or the Exchange Agent shall be entitled to
deposit any consideration in respect thereof in escrow with an
independent third party and thereafter be relieved with respect to any
claims thereto.
(c) Escheat. Notwithstanding the foregoing, neither the
Exchange Agent, if any, nor any party hereto shall be liable to any
former holder of ▇▇▇▇▇▇ Stock for any amount properly delivered to a
public official pursuant to applicable abandoned property, escheat or
similar laws.
(d) Restrictions on the Payment of Dividends and Voting. No
dividends or other distributions with respect to Mutual First Common
Stock with a record date occurring after the Effective Time shall be
paid to the holder of any unsurrendered Old Certificate representing
shares of ▇▇▇▇▇▇ Common Stock converted in the Company Merger into the
right to receive shares of such Mutual First Common Stock until the
holder thereof shall be entitled to receive New Certificates in
exchange therefor in accordance with the procedures set forth in this
Section 3.04, and no such shares of ▇▇▇▇▇▇ Common Stock shall be
eligible to vote until the holder of Old Certificates is entitled to
receive New Certificates in accordance with the procedures set forth in
this Section 3.04. After becoming so entitled in accordance with this
Section 3.04, the record holder thereof also shall be entitled to
receive any such dividends or other distributions, without any interest
thereon, which theretofore had become payable with respect to shares of
Mutual First Common Stock such holder had the right to receive upon
surrender of the Old Certificates.
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(e) Return of Exchange Fund to Mutual First. Any portion of
the Exchange Fund that remains unclaimed by the stockholders of ▇▇▇▇▇▇
for twelve months after the Effective Time shall be paid to Mutual
First. Any stockholders of ▇▇▇▇▇▇ who have not theretofore complied
with this Article III shall thereafter look only to Mutual First for
payment of the shares of Mutual First Common Stock, cash in lieu of any
fractional shares and unpaid dividends and distributions on Mutual
First Common Stock deliverable in respect of each share of ▇▇▇▇▇▇
Common Stock such stockholder holds as determined pursuant to this
Agreement, in each case, without any interest thereon.
3.05 Anti-Dilution Provisions. In the event Mutual First changes (or
establishes a record date for changing) the number of shares of Mutual First
Common Stock issued and outstanding prior to the Effective Date as a result of a
stock split, stock dividend, recapitalization or similar transaction with
respect to the outstanding Mutual First Common Stock and the record date
therefor shall be prior to the Effective Date, the Exchange Ratio shall be
proportionately adjusted.
3.06 Options.
(a) Conversion. At the Effective Time, each option outstanding
on the date of this Agreement to purchase shares of ▇▇▇▇▇▇ Common Stock
under the ▇▇▇▇▇▇ Stock Plan (each, a "▇▇▇▇▇▇ Stock Option") and
remaining outstanding immediately prior to the Effective Time shall, at
the Effective Time, be assumed by Mutual First and each such ▇▇▇▇▇▇
Stock Option shall continue to be outstanding, but shall represent an
option to purchase shares of Mutual First Common Stock in an amount and
at an exercise price determined as provided below (and otherwise
subject to the terms of the applicable ▇▇▇▇▇▇ Stock Plan and ▇▇▇▇▇▇
Stock Option):
(i) the number of shares of Mutual First Common Stock
to be subject to the continuing option shall be equal to the
product of the number of shares of ▇▇▇▇▇▇ Common Stock subject
to the original option and the Exchange Ratio, provided that
any fractional share of Mutual First Common Stock resulting
from such multiplication shall be rounded down to the nearest
share; and
(ii) the exercise price per share of Mutual First
Common Stock under the continuing option shall be equal to the
exercise price per share of ▇▇▇▇▇▇ Common Stock under the
original option divided by the Exchange Ratio, provided that
such exercise price shall be rounded down to the nearest cent.
It is intended that the foregoing assumption shall be
undertaken consistent with and in a manner that will not constitute a
"modification" under Section 424 of the Code as to any ▇▇▇▇▇▇ Stock
Option which is an "incentive stock option".
11
(b) Reservation of Mutual First Common Stock and Securities
Filings. At all times after the Effective Time, Mutual First shall
reserve for issuance such number of shares of Mutual First Common Stock
as necessary so as to permit the exercise of continuing options in the
manner contemplated by this Agreement and the instruments pursuant to
which such options were granted. Mutual First shall make all filings
required under federal and state securities laws promptly after the
Effective Time, but to be effective no earlier than one year from the
effective date of Mutual First Bank's mutual to stock conversion, so as
to permit the exercise of such continuing options and the sale of the
shares received by the optionee upon such exercise at and after the
Effective Time and Mutual First shall continue to make such filings
thereafter as may be necessary to permit the continued exercise of
continuing options and sale of such shares.
ARTICLE IV
ACTIONS PENDING TRANSACTION
4.01 Forbearances of ▇▇▇▇▇▇. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement or any separate
agreement entered into by ▇▇▇▇▇▇ and Mutual First on the date hereof, (any such
agreement being specifically incorporated by reference herein) without the prior
written consent of Mutual First (which consent shall not be unreasonably
withheld or delayed), ▇▇▇▇▇▇ will not, and will cause each of its Subsidiaries
not to:
(a) Ordinary Course. Conduct the business of ▇▇▇▇▇▇ and its
Subsidiaries other than in the ordinary and usual course or fail to use
reasonable efforts to (i) preserve intact in any material respect their
business organizations and assets and (ii) maintain their rights,
franchises and existing relations with customers, suppliers, employees
and business associates, or take any action reasonably likely to
materially impair Marion's ability to perform any of its obligations
under this Agreement.
(b) ▇▇▇▇▇▇ Stock. Other than pursuant to Rights Previously
Disclosed and outstanding on the date hereof, (i) issue, sell or
otherwise permit to become outstanding, or authorize the creation of,
any additional shares of ▇▇▇▇▇▇ Stock or any Rights, (ii) enter into
any agreement with respect to the foregoing, or (iii) permit any
additional shares of ▇▇▇▇▇▇ Stock to become subject to new grants of
employee or director stock options, other Rights or similar
stock-based employee rights.
(c) Other Securities. Issue any other capital securities, capital
stock of any Subsidiary, debentures, or subordinated notes.
(d) Dividends, Etc. (i) Make, declare, pay or set aside for
payment any dividend (other than (A), quarterly cash dividends on
▇▇▇▇▇▇ Common Stock in an amount not to exceed $0.22 per share with
record and payment dates consistent with past
12
practice (provided the declaration of the last quarterly dividend by
▇▇▇▇▇▇ prior to the Effective Time and the payment thereof shall be
coordinated with, and subject to the approval of Mutual First, so as
to preclude any duplication of dividend benefit) and (B) dividends
from wholly owned Subsidiaries to ▇▇▇▇▇▇ or another wholly owned
Subsidiary of ▇▇▇▇▇▇) on or in respect of, or declare or make any
distribution on any shares of ▇▇▇▇▇▇ Stock or (ii) directly or
indirectly adjust, split, combine, redeem, reclassify, purchase or
otherwise acquire, any shares of its capital stock or Rights.
(e) Compensation; Employment Agreements, Etc. Enter into or amend
or renew any employment, consulting, severance or similar agreements
or arrangements with any director, officer or employee of ▇▇▇▇▇▇ or
its Subsidiaries, or grant any salary or wage increase or increase any
employee benefit (including incentive or bonus payments) except (i)
for oral at will employment agreements, (ii) for normal individual
increases in compensation to employees in the ordinary course of
business consistent with past practice, (iii) for other changes that
are required by applicable law, or (iv) to satisfy contractual
obligations and planned programs existing as of the date hereof that
are Previously Disclosed.
(f) Benefit Plans. Enter into, establish, adopt or amend (except
as may be required by existing contractual obligation or applicable
law) any pension, profit sharing, employee stock ownership,
retirement, stock option, stock appreciation, phantom stock, stock
purchase, savings, deferred compensation, consulting, bonus, group
insurance or other employee benefit, incentive or welfare contract,
plan or arrangement, or any trust agreement (or similar arrangement)
related thereto, in respect of any director, officer or employee of
▇▇▇▇▇▇ or its Subsidiaries, or take any action to accelerate the
vesting or exercisability of stock options, restricted stock or other
compensation or benefits payable thereunder.
(g) Dispositions. Except as Previously Disclosed, sell, transfer,
mortgage, encumber or otherwise dispose of or discontinue any of its
assets, deposits, business or properties except in the ordinary course
of business for fair value and in a transaction that is not material
to it and its Subsidiaries taken as a whole.
(h) Acquisitions. Except as Previously Disclosed, acquire (other
than by way of foreclosures or acquisitions of control in a bona fide
fiduciary capacity or in satisfaction of debts previously contracted
in good faith, in each case in the ordinary and usual course of
business consistent with past practice) all or any portion of, the
assets, business, deposits or properties of any other entity.
(i) Governing Documents. Amend the ▇▇▇▇▇▇ Articles, ▇▇▇▇▇▇ Bylaws
or the certificate or articles of incorporation, charter or bylaws (or
similar governing documents) of any of Marion's Subsidiaries.
13
(j) Accounting Methods. Implement or adopt any change in its
accounting principles, practices or methods, other than as may be
required by generally accepted accounting principles.
(k) Contracts. Except to satisfy Previously Disclosed written
commitments outstanding on the date hereof, enter into or terminate
any material contract (as defined in Section 5.03(k)) or amend or
modify in any material respect or renew any of its existing material
contracts.
(l) Claims. Except in the ordinary course of business consistent
with past practice, settle any claim, action or proceeding, except for
any claim, action or proceeding which does not involve precedent for
other material claims, actions or proceedings and which involves
solely money damages in an amount, individually or in the aggregate
for all such settlements, that is not material to ▇▇▇▇▇▇ and its
Subsidiaries, taken as a whole.
(m) Foreclose. Foreclose upon or otherwise take title to or
possession or control of any real property without first obtaining a
phase one environmental report thereon; provided, however, that ▇▇▇▇▇▇
and its Subsidiaries shall not be required to obtain such a report
with respect to one-to four-family, non-agricultural residential
property of five acres or less to be foreclosed upon unless it has
reason to believe that such property might be in violation of or
require remediation under Environmental Laws.
(n) Deposit Taking and Branch Activities. In the case of First
Federal (i) voluntarily make any material changes in or to its deposit
mix; (ii) increase or decrease the rate of interest paid on time
deposits or on certificates of deposit, except in a manner and
pursuant to policies consistent with past practice; (iii) except as
Previously Disclosed open any new branch or deposit taking facility;
(iv) except as Previously Disclosed close or relocate any existing
branch or other facility; or (v) incur any liability or obligation
relating to retail banking and branch merchandising, marketing and
advertising activities and initiatives materially in excess of the
amounts budgeted in its 2000 business plan as Previously Disclosed;
(o) Investments. Enter into any securities transaction for its
own account or purchase or otherwise acquire any investment security
for its own account except purchases and sales of securities
consistent with past practice in order to maintain investment
portfolios at ▇▇▇▇▇▇ and its Subsidiaries that have risk and asset mix
characteristics substantially similar to those of the respective
investment portfolios as of the date hereof.
(p) Capital Expenditures. Purchase or lease any fixed asset where
the amount paid or committed thereof is in excess of $25,000, except
for Previously Disclosed amounts budgeted in the 2000 budget.
14
(q) Lending. (i) Make any material changes in its policies
concerning loan underwriting or which persons may approve loans or
fail to comply with such policies; or (ii) make or commit to make any
new loan, line or letter of credit, or any new or additional
discretionary advance under any existing loan, line or letter of
credit, or restructure any existing loan, line or letter of credit so
that any such loan, line or letter of credit after such actions
exceeds $500,000 without the prior written consent of Mutual First
acting through its Chief Executive Officer or a Senior Vice President
in a written notice to ▇▇▇▇▇▇, which approval or rejection shall be
given within five business days after delivery by ▇▇▇▇▇▇ to such
officer of Mutual First of the complete loan package;
(r) Adverse Actions. (i) Take any action or fail to take any
action while knowing that such action or inaction would, or is
reasonably likely to, prevent or impede the Company Merger and the
Bank Merger from qualifying as reorganizations within the meaning of
Section 368 of the Code; or (ii) knowingly take any action or fail to
take any action that is intended or is reasonably likely to result in
(A) any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time
at or prior to the Effective Time, (B) any of the conditions to the
Company Merger set forth in Article VII not being satisfied or (C) a
material violation of any provision of this Agreement except, in each
case, as may be required by applicable law or regulation.
(s) Risk Management. Except as required by applicable law or
regulation, (i) implement or adopt any material change in its interest
rate and other risk management policies, procedures or practices; (ii)
fail to follow its existing policies or practices with respect to
managing its exposure to interest rate and other risk; or (iii) fail
to use commercially reasonable means to avoid any material increase in
its aggregate exposure to interest rate risk.
(t) Indebtedness. Incur any indebtedness for borrowed money other
than in the ordinary course of business and with a term of one year or
less.
(u) Commitments. Agree or commit to do any of the foregoing.
4.02 Forbearances of Mutual First. From the date hereof until the
Effective Time, except as expressly contemplated by this Agreement, without the
prior written consent of ▇▇▇▇▇▇ (which consent under subsection (e) shall not be
unreasonably withheld or delayed), Mutual First will not, and will cause each of
its Subsidiaries not to:
(a) Preservation. Fail to use reasonable efforts to (i)
preserve intact in any material respect their business organizations
and assets and (ii) maintain their rights, franchises and existing
relations with customers, suppliers, employees and business associates,
or take any action reasonably likely to materially impair the ability
of Mutual First to perform any of its obligations under this Agreement.
15
(b) Adverse Actions. (i) Take any action or fail to take any
action while knowing that such action or inaction would, or is
reasonably likely to, prevent or impede the Company Merger and the
Bank Merger from qualifying as reorganizations within the meaning of
Section 368 of the Code; or (ii) knowingly take any action or fail to
take any action that is intended or is reasonably likely to result in
(A) any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time
at or prior to the Effective Time, (B) any of the conditions to the
Company Merger set forth in Article VII not being satisfied or (C) a
material violation of any provision of this Agreement except, in each
case, as may be required by applicable law or regulation.
(c) Accounting Methods. Implement or adopt any material change in
its accounting principles, practices or methods, other than as may be
required by generally accepted accounting principles.
(d) Acquisitions. Except as Previously Disclosed, acquire (other
than by way of foreclosures or acquisitions of control in a bona fide
fiduciary capacity or in satisfaction of debts previously contracted
in good faith, in each case in the ordinary and usual course of
business consistent with past practice) all or a significant portion
of the assets, business, deposits or properties of any other entity if
the impact of any such acquisition would be to prevent or materially
delay the Effective Time of the Transaction.
(e) Ordinary Course. Conduct the business of Mutual First and its
Subsidiaries other than in the ordinary and usual course or fail to
use reasonable efforts to (i) preserve intact in any material respect
their business organizations and assets and (ii) maintain their
rights, franchises and existing relations with customers, suppliers,
employees and business associates, or take any action reasonably
likely to materially impair Mutual First's ability to perform any of
its obligations under this Agreement.
(f) Dividends, Etc. (i) Make, declare, pay or set aside for
payment any dividend (other than (A), quarterly cash dividends on
Mutual First Common Stock in an amount not to exceed $0.07 per share
with record and payment dates consistent with past practice (provided
the declaration of the last quarterly dividend by Mutual First prior
to the Effective Time and the payment thereof shall be coordinated
with, and subject to the approval of Mutual First, so as to preclude
any duplication of dividend benefit) and (B) dividends from wholly
owned Subsidiaries to Mutual First or another wholly owned Subsidiary
of Mutual First) on or in respect of, or declare or make any
distribution on any shares of Mutual First Stock or (ii) directly or
indirectly adjust, split, combine, redeem, reclassify, purchase or
otherwise acquire, any shares of its capital stock or Rights.
16
(g) Compensation; Employment Agreements, Etc. Enter into or amend
or renew any employment, consulting, severance or similar agreements
or arrangements with any director, officer or employee of Mutual First
or its Subsidiaries, or grant any salary or wage increase or increase
any employee benefit (including incentive or bonus payments) except
(i) for oral at will employment agreements, (ii) for normal individual
increases in compensation to employees in the ordinary course of
business consistent with past practice, (iii) for other changes that
are required by applicable law, or (iv) to satisfy contractual
obligations and planned programs existing as of the date hereof that
are Previously Disclosed.
(h) Dispositions. Except as Previously Disclosed, sell, transfer,
mortgage, encumber or otherwise dispose of or discontinue any of its
assets, deposits, business or properties except in the ordinary course
of business for fair value and in a transaction that is not material
to it and its Subsidiaries taken as a whole.
(i) Risk Management. Except as required by applicable law or
regulation, (i) implement or adopt any material change in its interest
rate and other risk management policies, procedures or practices; (ii)
fail to follow its existing policies or practices with respect to
managing its exposure to interest rate and other risk; or (iii) fail
to use commercially reasonable means to avoid any material increase in
its aggregate exposure to interest rate risk.
(j) Indebtedness. Incur any indebtedness for borrowed money other
than in the ordinary course of business.
(k) Commitments. Agree or commit to do any of the foregoing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Disclosure Schedules. Prior to the date hereof, Mutual First has
delivered to ▇▇▇▇▇▇ a schedule and ▇▇▇▇▇▇ has delivered to Mutual First a
schedule (respectively, its "Disclosure Schedule") setting forth, among other
things, items the disclosure of which is necessary or appropriate either in
response to an express disclosure requirement contained in a provision hereof or
as an exception to one or more representations or warranties contained in
Section 5.03 or 5.04 or to one or more of its covenants contained in Article IV;
provided, that (a) no such item is required to be set forth in a Disclosure
Schedule as an exception to a Specified Representation if its absence would not
be reasonably likely to result in the Specified Representation being deemed
untrue or incorrect under the standard established by Section 5.02, and (b) the
mere inclusion of an item in a Disclosure Schedule as an exception to a
Specified Representation shall not be deemed an admission by a party that such
item represents a material
17
exception or fact, event or circumstance or that such item is reasonably likely
to result in a Material Adverse Effect on the party making the representation.
Marion's representations, warranties and covenants contained in this Agreement
shall not be deemed to be untrue or breached as a result of effects arising
solely from actions taken in compliance with a written request of Mutual First.
5.02 Standard. No representation or warranty of ▇▇▇▇▇▇ or Mutual First
contained in Section 5.03(a), (c)(iii), (d), (e), (f)(i), (f)(ii)(A),
(f)(ii)(C), (j)(ii), (h), (n), (o), (q), (r), (s), (t), (u) and (w) or 5.04(a),
(c), (d), (e), (f)(i), (h), (k), (m), (n), (o), (q) and (r) (collectively, the
"Specified Representations") shall be deemed untrue or incorrect, and no party
hereto shall be deemed to have breached a Specified Representation, as a
consequence of the existence of any fact, event or circumstance unless such
fact, circumstance or event, individually or taken together with all other
facts, events or circumstances inconsistent with any Specified Representation
has had or is reasonably likely to have a Material Adverse Effect. For purposes
of this Agreement, "knowledge" shall mean, with respect to a party hereto,
actual knowledge of any officer of that party with the title, if any, ranking
not less than senior vice president and that party's in-house counsel, if any.
5.03 Representations and Warranties of ▇▇▇▇▇▇. Subject to Sections 5.01
and 5.02 and except as Previously Disclosed in a paragraph of its Disclosure
Schedule corresponding to the relevant paragraph below, ▇▇▇▇▇▇ hereby represents
and warrants to Mutual First:
(a) Organization, Standing and Authority. ▇▇▇▇▇▇ is a
corporation duly organized and validly existing under the laws of the
State of Indiana. ▇▇▇▇▇▇ is duly qualified to do business and is in
good standing in the states of the United States and any foreign
jurisdictions where its ownership or leasing of property or assets or
the conduct of its business requires it to be so qualified.
(b) ▇▇▇▇▇▇ Stock. The authorized capital stock of ▇▇▇▇▇▇
consists solely of (i) 5,000,000 shares of ▇▇▇▇▇▇ Common Stock, of
which 1,362,971 shares were outstanding as of the day prior to the date
hereof, and (ii) 2,000,000 shares of ▇▇▇▇▇▇ Preferred Stock, of which
no shares are outstanding. The outstanding shares of ▇▇▇▇▇▇ Stock have
been duly authorized and are validly issued and outstanding, fully paid
and nonassessable, and subject to no preemptive rights (and were not
issued in violation of any preemptive rights). As of the date hereof,
except as Previously Disclosed, there are no shares of ▇▇▇▇▇▇ Stock
authorized and reserved for issuance, ▇▇▇▇▇▇ does not have any Rights
issued or outstanding with respect to ▇▇▇▇▇▇ Stock, and ▇▇▇▇▇▇ does not
have any commitment to authorize, issue or sell any ▇▇▇▇▇▇ Stock or
Rights, other than as set forth in this Agreement. The number of shares
of ▇▇▇▇▇▇ Common Stock which are issuable upon exercise of each ▇▇▇▇▇▇
Stock Option outstanding as of the date hereof and the exercise price
per share are Previously Disclosed.
18
(c) Subsidiaries. (i)(A) ▇▇▇▇▇▇ has Previously Disclosed a
list of all of its Subsidiaries together with the jurisdiction of
organization of each such Subsidiary, (B) except as previously
disclosed, it owns, directly or indirectly, all the issued and
outstanding equity securities of each of its Subsidiaries, (C) no
equity securities of any of its Subsidiaries are or may become required
to be issued (other than to it or its wholly- owned Subsidiaries) by
reason of any Right or otherwise, (D) there are no contracts,
commitments, understandings or arrangements by which any of such
Subsidiaries is or may be bound to sell or otherwise transfer any
equity securities of any such Subsidiaries (other than to it or its
wholly-owned Subsidiaries), (E) there are no contracts, commitments,
understandings, or arrangements relating to its rights to vote or to
dispose of such securities and (F) all the equity securities of each
Subsidiary held by ▇▇▇▇▇▇ or its Subsidiaries are fully paid and
nonassessable and are owned by ▇▇▇▇▇▇ or its Subsidiaries free and
clear of any Liens.
(ii) Neither ▇▇▇▇▇▇ nor any ▇▇▇▇▇▇ Subsidiary owns
beneficially any equity securities or similar interests of any
Person, or any interest in a partnership or joint venture of
any kind, other than a ▇▇▇▇▇▇ Subsidiary.
(iii) Each of Marion's Subsidiaries has been duly
organized and is validly existing in good standing under the
laws of the jurisdiction of its organization, and is duly
qualified to do business and in good standing in the
jurisdictions where its ownership or leasing of property or
the conduct of its business requires it to be so qualified.
(d) Corporate Power. Each of ▇▇▇▇▇▇ and its Subsidiaries has
the corporate power and authority to carry on its business as it is now
being conducted and to own all its properties and assets; and ▇▇▇▇▇▇
has the corporate power and authority to execute, deliver and perform
its obligations under this Agreement and to consummate the transactions
contemplated hereby.
(e) Corporate Authority. Subject in the case of this Agreement
to receipt of the requisite approval of this Agreement (including the
agreement of merger set forth herein) by the holders of a majority of
the outstanding shares of ▇▇▇▇▇▇ Common Stock entitled to vote thereon
(which is the only ▇▇▇▇▇▇ shareholder vote required thereon) and the
corporate approvals required in Section 2.03 of this Agreement, this
Agreement and the transactions contemplated hereby have been authorized
by all necessary corporate action of ▇▇▇▇▇▇ and the ▇▇▇▇▇▇ Board on or
prior to the date hereof. This Agreement is a valid and legally binding
obligation of ▇▇▇▇▇▇, enforceable in accordance with its terms (except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of
general applicability relating to or affecting creditors' rights or by
general equity principles).
19
(f) Regulatory Filings; No Defaults. (i) No consents or
approvals of, or filings or registrations with, any Governmental
Authority or with any third party are required to be made or obtained
by ▇▇▇▇▇▇ or any of its Subsidiaries in connection with the execution,
delivery or performance by ▇▇▇▇▇▇ of this Agreement or to consummate
the Company Merger or the Bank Merger except for (A) filings of
applications or notices with the OTS, (B) filings with the SEC and
state securities authorities, (C) filings for approval of listing on
the Nasdaq System of the shares to be issued, and (D) the filing of
(and endorsement of, if required) articles of merger or articles of
combination with the Maryland Secretary, the Indiana Secretary and the
OTS. As of the date hereof, ▇▇▇▇▇▇ is not aware of any reason why the
approvals set forth in Section 7.01(b) will not be received in a timely
manner without the imposition of a condition, restriction or
requirement of the type described in Section 7.01(b).
(ii) Subject to receipt of the regulatory approvals referred
to in the preceding paragraph, and expiration of related waiting
periods, and required filings under federal and state securities laws,
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby and thereby do not
and will not (A) constitute a breach or violation of, or a default
under, or give rise to any Lien, any acceleration of remedies or any
right of termination under, any law, rule or regulation or any
judgment, decree, order, governmental permit or license, or material
agreement, indenture or instrument of ▇▇▇▇▇▇ or of any of its
Subsidiaries or to which ▇▇▇▇▇▇ or any of its Subsidiaries or
properties is subject or bound, (B) constitute a breach or violation
of, or a default under, the ▇▇▇▇▇▇ Articles or the ▇▇▇▇▇▇ Bylaws, or
(C) require any consent or approval under any such law, rule,
regulation, judgment, decree, order, governmental permit or license,
material agreement, indenture or instrument.
(g) Financial Reports and SEC Documents. (i) Marion's Annual
Reports on Form 10-K for the fiscal years ended June 30, 1997, 1998 and
1999, and all other reports, registration statements, definitive proxy
statements or information statements filed or to be filed by it or any
of its Subsidiaries subsequent to June 30, 1999 under the Securities
Act, or under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, in
the form filed or to be filed (collectively, Marion's "SEC Documents")
with the SEC, as of the date filed, (A) complied or will comply in all
material respects with the applicable requirements under the Securities
Act or the Exchange Act, as the case may be, and (B) did not and will
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and each of the balance sheets or statements of
condition contained in or incorporated by reference into any such SEC
Document (including the related notes and schedules thereto) fairly
presents, or will fairly present in all material respects, the
financial position of ▇▇▇▇▇▇ and its Subsidiaries as of its date, and
each of the statements of income and changes in stockholders' equity
and cash flows or equivalent statements in such SEC Documents
20
(including any related notes and schedules thereto) fairly presents, or
will fairly present, in all material respects, the results of
operations, changes in stockholders' equity and cash flows, as the case
may be, of ▇▇▇▇▇▇ and its Subsidiaries for the periods to which they
relate, in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except in
each case as may be noted therein, subject to normal year-end audit
adjustments and the absence of footnotes in the case of unaudited
statements.
(ii) Except for liabilities incurred in connection with
negotiation of and compliance with this Agreement and otherwise in
connection with the transactions contemplated hereby, since June 30,
1999, ▇▇▇▇▇▇ and its Subsidiaries have not incurred any liability other
than in the ordinary course of business consistent with past practice.
(iii) Since June 30, 1999, (A) ▇▇▇▇▇▇ and its Subsidiaries
have conducted their respective businesses in the ordinary and usual
course consistent with past practice (excluding matters related to this
Agreement and the transactions contemplated hereby) and (B) no event
has occurred or circumstance arisen that, individually or taken
together with all other facts, circumstances and events (described in
any paragraph of Section 5.03 or otherwise), is reasonably likely to
have a Material Adverse Effect with respect to ▇▇▇▇▇▇.
(h) Litigation. No material litigation, claim or other
proceeding before any Governmental Authority is pending against ▇▇▇▇▇▇
or any of its Subsidiaries and, to Marion's knowledge, no such
litigation, claim or other proceeding has been threatened.
(i) Regulatory Matters. (i) Neither ▇▇▇▇▇▇ nor any of its
Subsidiaries or properties is a party to or is subject to any order,
decree, agreement, memorandum of understanding or similar arrangement
with, or a commitment letter or similar submission to, or extraordinary
supervisory letter from, any federal or state governmental agency or
authority charged with the supervision or regulation of financial
institutions (or their holding companies) or issuers of securities or
engaged in the insurance of deposits (including, without limitation,
the Board of Governors of the Federal Reserve System, the OTS, and the
FDIC) or the supervision or regulation of it or any of its Subsidiaries
(collectively, the "Regulatory Authorities").
(ii) Neither ▇▇▇▇▇▇ nor any of its Subsidiaries has been
advised by any Regulatory Authority that such Regulatory Authority is
contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree,
agreement, memorandum of understanding, commitment letter, supervisory
letter or similar submission.
21
(j) Compliance with Laws. Each of ▇▇▇▇▇▇ and its Subsidiaries:
(i) is in substantial compliance with all applicable
federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable
thereto or to the employees conducting such businesses,
including, without limitation, the Equal Credit Opportunity
Act, the Fair Housing Act, the Community Reinvestment Act of
1977, the Home Mortgage Disclosure Act and all other
applicable fair lending laws and other laws relating to
discriminatory business practices;
(ii) has all permits, licenses, authorizations,
orders and approvals of, and has made all filings,
applications and registrations with, all Governmental
Authorities that are required in order to permit them to own
or lease their properties and to conduct their businesses as
presently conducted; all such permits, licenses, certificates
of authority, orders and approvals are in full force and
effect and, to Marion's knowledge, no suspension or
cancellation of any of them is threatened or will result from
the consummation of the transactions contemplated by this
Agreement; and
(iii) has received, since June 30, 1998, no
notification or communication from any Governmental Authority
(A) asserting that ▇▇▇▇▇▇ or any of its Subsidiaries is not in
compliance in any material respect with any of the statutes,
regulations, or ordinances which such Governmental Authority
enforces or (B) threatening to revoke any material license,
franchise, permit, or governmental authorization (nor, to
Marion's knowledge, do any grounds for any of the foregoing
exist).
(k) Material Contracts; Defaults. Except for this Agreement
and those agreements and other documents filed as exhibits to its SEC
Documents, neither it nor any of its Subsidiaries is a party to, bound
by or subject to any agreement, contract, arrangement, commitment or
understanding (whether written or oral) (i) that is a "material
contract" within the meaning of Item 601(b)(10) of the SEC's Regulation
S-K or (ii) that restricts or limits in any material way the conduct of
business by it or any of its Subsidiaries (it being understood that any
non-compete or similar provision which restricts the ability of ▇▇▇▇▇▇
or its Subsidiaries to compete with others shall be deemed material).
Neither it nor any of its Subsidiaries is in default in any material
respect under any material contract, agreement, commitment,
arrangement, lease, insurance policy or other instrument to which it is
a party, by which its respective assets, business, or operations may be
bound or affected, or under which it or its respective assets,
business, or operations receive benefits, and there has not occurred
any event that, with the lapse of time or the giving of notice or both,
would constitute such a default.
22
(l) Brokers. No action has been taken by ▇▇▇▇▇▇ that would
give rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment with respect to the
transactions contemplated by this Agreement, excluding Previously
Disclosed fees to be paid to ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ("KBW") and
▇▇▇▇▇ ▇. ▇▇▇▇▇ & Company.
(m) Employee Benefit Plans. (i) Section 5.03(m)(i) of Marion's
Disclosure Schedule contains a complete and accurate list of all
existing bonus, incentive, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus,
stock purchase, restricted stock, stock option, stock appreciation,
phantom stock, severance, welfare and fringe benefit plans, employment
or severance agreements and all similar practices, policies and
arrangements maintained by ▇▇▇▇▇▇ or any of its Subsidiaries in which
any employee or former employee, consultant or former consultant or
director or former director of ▇▇▇▇▇▇ or any of its Subsidiaries
participates or to which any such employees, consultants or directors
are a party other than plans and programs involving immaterial
obligations (the "Compensation and Benefit Plans"). Except as expressly
contemplated by a separate agreement entered into by ▇▇▇▇▇▇ and Mutual
First on the date hereof, neither ▇▇▇▇▇▇ nor any of its Subsidiaries
has any commitment to create any additional Compensation and Benefit
Plan or to modify or change any existing Compensation and Benefit Plan.
(ii) Each Compensation and Benefit Plan has been operated and
administered in all material respects in accordance with its terms and
with applicable law, including, but not limited to, ERISA, the Code,
the Securities Act, the Exchange Act, the Age Discrimination in
Employment Act, or any regulations or rules promulgated thereunder, and
all material filings, disclosures and notices required by ERISA, the
Code, the Securities Act, the Exchange Act, the Age Discrimination in
Employment Act and any other applicable law have been timely made. Each
Compensation and Benefit Plan which is an "employee pension benefit
plan" within the meaning of Section 3(2) of ERISA (a "Pension Plan")
and which is intended to be qualified under Section 401(a) of the Code
has received a favorable determination letter (including a
determination that the related trust under such Compensation and
Benefit Plan is exempt from tax under Section 501(a) of the Code) from
the IRS, and ▇▇▇▇▇▇ is not aware of any circumstances likely to result
in revocation of any such favorable determination letter. There is no
material pending or, to the knowledge of ▇▇▇▇▇▇, threatened legal
action, suit or claim relating to the Compensation and Benefit Plans.
Neither ▇▇▇▇▇▇ nor any of its Subsidiaries 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 any of its Subsidiaries to a material 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.
23
(iii) No material liability (other than for payment of
premiums to the PBGC which have been made or will be made on a timely
basis) under Title IV of ERISA has been or is expected to be incurred
by ▇▇▇▇▇▇ or any of its Subsidiaries with respect to any ongoing,
frozen or terminated "single-employer plan", within the meaning of
Section 4001(a)(15) of ERISA, currently or formerly maintained by any
of them, or any single-employer plan of any entity (an "ERISA
Affiliate") which is considered one employer with ▇▇▇▇▇▇ under Section
4001(a)(14) of ERISA or Section 414(b) or (c) of the Code (an "ERISA
Affiliate Plan"). None of ▇▇▇▇▇▇, any of its Subsidiaries or any ERISA
Affiliate has contributed, or has been obligated to contribute, to a
multiemployer plan under Subtitle E of Title IV of ERISA at any time
since September 26, 1980. No notice of a "reportable event", within the
meaning of Section 4043 of ERISA for which the 30-day reporting
requirement has not been waived, has been required to be filed for any
Compensation and Benefit Plan or by any ERISA Affiliate Plan within the
12-month period ending on the date hereof. The PBGC has not instituted
proceedings to terminate any Pension Plan or ERISA Affiliate Plan and,
to Marion's knowledge, no condition exists that presents a material
risk that such proceedings will be instituted by the PBGC. To the
knowledge of ▇▇▇▇▇▇, there is no pending investigation or enforcement
action by the PBGC, DOL or IRS or any other Governmental Authority with
respect to any Compensation and Benefit Plan. Under each Pension Plan
and ERISA Affiliate Plan, as of the date of the most recent actuarial
valuation performed prior to the date of this Agreement, the
actuarially determined present value of all "benefit liabilities",
within the meaning of Section 4001(a)(16) of ERISA (as determined on
the basis of the actuarial assumptions contained in such actuarial
valuation of such Pension Plan or ERISA Affiliate Plan), did not exceed
the then current value of the assets of such Pension Plan or ERISA
Affiliate Plan and since such date there has been neither a material
adverse change in the financial condition of such Pension Plan or ERISA
Affiliate Plan nor any amendment or other change to such Pension Plan
or ERISA Affiliate Plan that would increase the amount of benefits
thereunder which reasonably could be expected to change such result.
(iv) All material contributions required to be made under the
terms of any Compensation and Benefit Plan or ERISA Affiliate Plan or
any employee benefit arrangements under any collective bargaining
agreement to which ▇▇▇▇▇▇ or any of its Subsidiaries is a party have
been timely made or have been reflected on Marion's financial
statements. Neither any Pension Plan nor any ERISA Affiliate Plan has
an "accumulated funding deficiency" (whether or not waived) within the
meaning of Section 412 of the Code or Section 302 of ERISA and all
required payments to the PBGC with respect to each Pension Plan or
ERISA Affiliate Plan have been made on or before their due dates. None
of ▇▇▇▇▇▇, any of its Subsidiaries or any ERISA Affiliate (x) has
provided, or would reasonably be expected to be required to provide,
security to any Pension Plan or to any ERISA Affiliate Plan pursuant to
Section 401(a)(29) of the Code, and (y) has taken any action, or
omitted to take any action, that has resulted, or
24
would reasonably be expected to result, in the imposition of a lien
under Section 412(n) of the Code or pursuant to ERISA.
(v) Except as Previously Disclosed, neither ▇▇▇▇▇▇ nor any of
its Subsidiaries has any obligations to provide retiree health and life
insurance or other retiree death benefits under any Compensation and
Benefit Plan, other than benefits mandated by Section 4980B of the
Code. Except as Previously Disclosed, there has been no communication
to employees by ▇▇▇▇▇▇ or any of its Subsidiaries that would reasonably
be expected to promise or guarantee such employees retiree health or
life insurance or other retiree death benefits on a permanent basis.
(vi) ▇▇▇▇▇▇ and its Subsidiaries do not maintain any
Compensation and Benefit Plans covering foreign employees.
(vii) With respect to each Compensation and Benefit Plan, if
applicable, ▇▇▇▇▇▇ has provided or made available to Mutual First, true
and complete copies of existing: (A) Compensation and Benefit Plan
documents and amendments thereto; (B) trust instruments and insurance
contracts; (C) two most recent Forms 5500 filed with the IRS; (D) two
most recent actuarial report and financial statement; (E) the most
recent summary plan description; (F) forms filed with the PBGC (other
than for premium payments); (G) most recent determination letter issued
by the IRS; (H) any Form 5310 or Form 5330 filed with the IRS; and (I)
two most recent nondiscrimination tests performed under ERISA and the
Code (including 401(k) and 401(m) tests).
(viii) Except as Previously Disclosed or expressly
contemplated by a separate agreement entered into by ▇▇▇▇▇▇ and Mutual
First on the date hereof, the consummation of the transactions
contemplated by this Agreement would not, directly or indirectly
(including, without limitation, as a result of any termination of
employment prior to or following the Effective Time) reasonably be
expected to (A) entitle any employee, consultant or director to any
payment (including severance pay 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 material increase in benefits payable under any Compensation and
Benefit Plan.
(ix) Neither ▇▇▇▇▇▇ nor any of its Subsidiaries maintains any
compensation plans, programs or arrangements the payments under which
would not reasonably be expected to be deductible as a result of the
limitations under Section 162(m) of the Code and the regulations issued
thereunder.
(x) To the knowledge of ▇▇▇▇▇▇, as a result, directly or
indirectly, of the transactions contemplated by this Agreement
(including, without limitation, as a result of any termination of
employment prior to or following the Effective Time), none of Mutual
First, ▇▇▇▇▇▇ or the Surviving Corporation, or any of their respective
25
Subsidiaries will be obligated to make a payment that would be
characterized as an "excess parachute payment" to an individual who is
a "disqualified individual" (as such terms are defined in Section 280G
of the Code), without regard to whether such payment is reasonable
compensation for personal services performed or to be performed in the
future (provided this representation does not take into account any
payments to be made pursuant to any employment agreement to be entered
into by Mutual First and the Chief Executive Officer of ▇▇▇▇▇▇).
(xi) There are no LSAR's, Tandem SARs, Stand-Alone SARs or
shares of Phantom Stock (as such terms may be defined in the ▇▇▇▇▇▇
Stock Plan) outstanding under the ▇▇▇▇▇▇ Stock Plan and except as
Previously Disclosed neither ▇▇▇▇▇▇ nor any ▇▇▇▇▇▇ Subsidiary has any
commitment or obligation to make any awards thereof.
(xii) There are no phantom stock shares or awards outstanding.
(n) Labor Matters. Neither ▇▇▇▇▇▇ nor any of its Subsidiaries
is a party to or is bound by any collective bargaining agreement,
contract or other agreement or understanding with a labor union or
labor organization, nor is ▇▇▇▇▇▇ or any of its Subsidiaries the
subject of a proceeding asserting that it or any such Subsidiary has
committed an unfair labor practice (within the meaning of the National
Labor Relations Act) or seeking to compel ▇▇▇▇▇▇ or any such Subsidiary
to bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute involving it
or any of its Subsidiaries pending or, to Marion's knowledge,
threatened, nor is ▇▇▇▇▇▇ aware of any activity involving its or any of
its Subsidiaries' employees seeking to certify a collective bargaining
unit or engaging in other organizational activity.
(o) Takeover Laws; Dissenters Rights. Subject to the
continuing accuracy of Mutual First's representation in Section
5.04(p), this Agreement and the transactions contemplated hereby 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, including the
provisions of Section 23-1-42 and 21-1- 43 of Indiana law ("Takeover
Laws") applicable to ▇▇▇▇▇▇ or any ▇▇▇▇▇▇ Subsidiary. Subject to the
continuing accuracy of Mutual First's representation in Section
5.04(p), the provisions of Article 12 of the ▇▇▇▇▇▇ Articles do not
apply to the entering into of this Agreement and the transactions
contemplated hereby, including the Company Merger. Holders of ▇▇▇▇▇▇
Common Stock will not have dissenters' rights in connection with the
Company Merger.
(p) Environmental Matters. To Marion's knowledge, neither the
conduct nor operation of ▇▇▇▇▇▇ or its Subsidiaries nor any condition
of any property currently or previously owned or operated by any of
them (including, without limitation, in a fiduciary or agency
capacity), or on which any of them holds a Lien, results or resulted in
26
a material violation of any Environmental Laws and to Marion's
knowledge, no condition has existed or event has occurred with respect
to any of them or any such property that, with notice or the passage of
time, or both, is reasonably likely to result in any material liability
to ▇▇▇▇▇▇ or any ▇▇▇▇▇▇ Subsidiary under Environmental Laws. To
Marion's knowledge, neither ▇▇▇▇▇▇ nor any of its Subsidiaries has
received any notice from any person or entity that ▇▇▇▇▇▇ or its
Subsidiaries or the operation or condition of any property ever owned,
operated, or held as collateral or in a fiduciary capacity by any of
them are or were in material violation of or otherwise are alleged to
have material liability under any Environmental Law, including, but not
limited to, responsibility (or potential responsibility) for the
cleanup or other remediation of any pollutants, contaminants, or
hazardous or toxic wastes, substances or materials at, on, beneath, or
originating from any such property.
(q) Tax Matters. (i) (a) All Tax Returns that are required to
be filed by or with respect to ▇▇▇▇▇▇ and its Subsidiaries have been
duly filed, or requests for extensions have been timely filed or an
extension is automatic) and any such extension has been granted and has
not been rescinded, (b) all Taxes shown to be due on Tax Returns
referred to in clause (a), if filed, and all Taxes required to be shown
on the Tax Returns for which extensions have been granted have been
paid in full or adequate provision has been made for such Taxes on
Marion's most recent balance sheet provided to Mutual First, (c) the
Tax Returns referred to in clause (a) that have been filed (with the
exception of the tax returns filed in the last three calendar years)
have been examined by the IRS or the appropriate state, local or
foreign taxing authority or the period for assessment of the Taxes in
respect of which such Tax Returns were required to be filed has
expired, (d) all deficiencies asserted or assessments made as a result
of such examinations have been paid in full or non-material amounts are
being contested in good faith, (e) no material issues that have been
raised by the relevant taxing authority in connection with the
examination of any of the Tax Returns referred to in clause (a) are
currently pending, and (f) no waivers of statutes of limitation have
been given by or requested with respect to any Taxes of ▇▇▇▇▇▇ or its
Subsidiaries. ▇▇▇▇▇▇ has made available to Mutual First true and
correct copies of the United States federal income Tax Returns filed by
▇▇▇▇▇▇ and its Subsidiaries for each of the three most recent fiscal
years ended on or before June 30, 1999. Neither ▇▇▇▇▇▇ nor any of its
Subsidiaries has any material liability with respect to income,
franchise or similar Taxes that accrued on or before the end of the
most recent period covered by Marion's SEC Documents filed prior to the
date hereof in excess of the amounts accrued with respect thereto that
are reflected in the financial statements included in Marion's SEC
Documents filed on or prior to the date hereof. As of the date hereof,
neither ▇▇▇▇▇▇ nor any of its Subsidiaries has any reason to believe
that any conditions exist that might prevent or impede the Company
Merger and the Bank Merger from qualifying as reorganizations within
the meaning of Section 368(a) of the Code.
27
(ii) No Tax is required to be withheld pursuant to Section
1445 of the Code as a result of the transfer contemplated by this
Agreement.
(iii) ▇▇▇▇▇▇ and its Subsidiaries will not be liable for any
taxes as a result of the Company Merger.
(r) Risk Management Instruments. All material interest rate
swaps, caps, floors, option agreements, futures and forward contracts
and other similar risk management arrangements, whether entered into
for Marion's own account, or for the account of one or more of Marion's
Subsidiaries or their customers (all of which are Previously
Disclosed), were entered into (i) in accordance with prudent business
practices and in all material respects in compliance with all
applicable laws, rules, regulations and regulatory policies and (ii)
with counterparties believed to be financially responsible at the time;
and each of them constitutes the valid and legally binding obligation
of ▇▇▇▇▇▇ or one of its Subsidiaries, enforceable in accordance with
its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
and similar laws of general applicability relating to or affecting
creditors' rights or by general equity principles), and is in full
force and effect. Neither ▇▇▇▇▇▇ nor its Subsidiaries, nor to Marion's
knowledge any other party thereto, is in breach of any of its
obligations under any such agreement or arrangement in any material
respect.
(s) Books and Records. The books and records of ▇▇▇▇▇▇ and its
Subsidiaries have been fully, properly and accurately maintained in all
material respects, and there are no material inaccuracies or
discrepancies of any kind contained or reflected therein and they
fairly reflect the substance of events and transactions included
therein.
(t) Insurance. Marion's Disclosure Schedule sets forth all of
the material insurance policies, binders, or bonds maintained by ▇▇▇▇▇▇
or its Subsidiaries. ▇▇▇▇▇▇ and its Subsidiaries are insured with
reputable insurers against such risks and in such amounts as the
management of ▇▇▇▇▇▇ reasonably has determined to be prudent in
accordance with industry practices and in accordance in all material
respects with all contractual obligations. All such insurance policies
are in full force and effect; ▇▇▇▇▇▇ and its Subsidiaries are not in
material default thereunder; and all material claims thereunder have
been filed in due and timely fashion.
(u) Governmental Reviews. No investigation or review by any
Governmental Authority with respect to ▇▇▇▇▇▇ or any ▇▇▇▇▇▇ Subsidiary
is pending or, to the knowledge of ▇▇▇▇▇▇, threatened, nor has any
Governmental Authority indicated to ▇▇▇▇▇▇ or any ▇▇▇▇▇▇ Subsidiary an
intention to conduct the same, other than normal or routine regulatory
examinations.
28
(v) Fairness Opinion. On the date of this Agreement, ▇▇▇▇▇ ▇.
▇▇▇▇▇ & Company has provided to the ▇▇▇▇▇▇ Board a written fairness
opinion to the effect that the Exchange Ratio is fair to the
stockholders of ▇▇▇▇▇▇ from a financial point of view.
(w) Compliance with Servicing Obligations. ▇▇▇▇▇▇ and the
▇▇▇▇▇▇ Subsidiaries are in compliance in all material respects with all
contract, agency and investor requirements and guidelines, and all
applicable laws, rules and regulations of Governmental Authorities,
relating to the servicing and administration of loans by them, or any
of them, including but not limited to, properly and timely making
interest rate adjustments to adjustable rate loans.
(x) Disclosure. The representations and warranties contained
in this Section 5.03 do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements and information contained in this Section 5.03 not
misleading.
5.04 Representations and Warranties of Mutual First. Subject to
Sections 5.01 and 5.02 and except as Previously Disclosed in a paragraph of its
Disclosure Schedule corresponding to the relevant paragraph below, Mutual First
hereby represents and warrants to ▇▇▇▇▇▇ as follows:
(a) Organization, Standing and Authority. Mutual First is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Maryland. Mutual First is duly qualified to do
business and is in good standing in the states of the United States and
foreign jurisdictions where its ownership or leasing of property or
assets or the conduct of its business requires it to be so qualified.
(b) Mutual First Stock. (i) As of the date hereof, the
authorized capital stock of Mutual First consists solely of (i)
20,000,000 shares of Mutual First Common Stock, of which no more than
5,819,611 shares were outstanding, and no shares were held in treasury,
as of the day prior to the date hereof and (ii) 5,000,000 shares of
preferred stock, $0.01 par value per share, of which none were issued
and outstanding on the date hereof. As of the date hereof, Mutual First
does not have any Rights issued or outstanding with respect to Mutual
First Common Stock and Mutual First does not have any commitment to
authorize, issue or sell any Mutual First Common Stock or Rights, other
than pursuant to this Agreement. The outstanding shares of Mutual First
Common Stock have been duly authorized and are validly issued and
outstanding, fully paid and nonassessable, and subject to no preemptive
rights (and were not issued in violation of any preemptive rights).
(ii) The shares of Mutual First Common Stock to be issued in
exchange for shares of ▇▇▇▇▇▇ Common Stock in the Company Merger, when
issued in accordance
29
with the terms of this Agreement, will be duly authorized, validly
issued, fully paid and nonassessable and subject to no preemptive
rights.
(c) Subsidiaries. Each of Mutual First's Subsidiaries has been
duly organized and is validly existing in good standing under the laws
of the jurisdiction of its organization, and is duly qualified to do
business and is in good standing in the jurisdictions where its
ownership or leasing of property or the conduct of its business
requires it to be so qualified and Mutual First owns, directly or
indirectly, all the issued and outstanding equity securities of each of
its Subsidiaries.
(d) Corporate Power. Each of Mutual First and its Subsidiaries
has the corporate power and authority to carry on its business as it is
now being conducted and to own all its properties and assets; and
Mutual First has the corporate power and authority to execute, deliver
and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby.
(e) Corporate Authority. Subject to the approval of the Merger
and the issuance of Mutual First Common Stock to be issued in the
Company Merger by the holders of Mutual First Common Stock in
accordance with Maryland Law and the NASDAQ rules (which are the only
Mutual First stockholder votes required thereon), the Board has
declared this transaction advisable and this Agreement and the
transactions contemplated hereby have been authorized by all necessary
corporate action of Mutual First and the Board on or prior to the date
hereof. This Agreement is a valid and legally binding agreement of
Mutual First enforceable in accordance with its terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of
general applicability relating to or affecting creditors' rights or by
general equity principles).
(f) Regulatory Approvals; No Defaults. (i) No consents or
approvals of, or filings or registrations with, any Governmental
Authority or with any third party are required to be made or obtained
by Mutual First or any of its Subsidiaries in connection with the
execution, delivery or performance by Mutual First of this Agreement or
to consummate the Company Merger or the Bank Merger except for (A) the
filings referred to in Section 5.03(f)(i); (B) such filings as are
required to be made or approvals as are required to be obtained under
the securities or "Blue Sky" laws of various states in connection with
the issuance of Mutual First Common Stock in the Company Merger; and
(C) receipt of the approvals set forth in Section 7.01(b). As of the
date hereof, Mutual First is not aware of any reason why the approvals
set forth in Section 7.01(b) will not be received in a timely manner
without the imposition of a condition, restriction or requirement of
the type described in Section 7.01(b).
(ii) Subject to the satisfaction of the requirements referred
to in the preceding paragraph and expiration of the related waiting
periods, and required filings under federal
30
and state securities laws, the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby do not and will not (A) constitute a breach or violation of, or
a default under, or give rise to any Lien, any acceleration of remedies
or any right of termination under, any law, rule or regulation or any
judgment, decree, order, governmental permit or license, or material
agreement, indenture or instrument of Mutual First or of any of its
Subsidiaries or to which Mutual First or any of its Subsidiaries or
properties is subject or bound, (B) constitute a breach or violation
of, or a default under, the articles of incorporation or bylaws (or
similar governing documents) of Mutual First or any of its
Subsidiaries, or (C) require any consent or approval under any such
law, rule, regulation, judgment, decree, order, governmental permit or
license, material agreement, indenture or instrument.
(g) Financial Reports and SEC Documents; Material Adverse
Effect. (i) Mutual First's SEC Documents, as of the date filed, (A)
complied or will comply in all material respects with the applicable
requirements under the Securities Act or the Exchange Act, as the case
may be, and (B) did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and each of
the balance sheets or statements of condition contained in or
incorporated by reference into any such SEC Document (including the
related notes and schedules thereto) fairly presents, or will fairly
present in all material respects, the financial position of Mutual
First and its Subsidiaries as of its date, and each of the statements
of income or results of operations and changes in stockholders' equity
and cash flows or equivalent statements in such SEC Documents
(including any related notes and schedules thereto) fairly presents, or
will fairly present, in all material respects, the results of
operations, changes in stockholders' equity and cash flows, as the case
may be, of Mutual First and its Subsidiaries for the periods to which
they relate, in each case in accordance with generally accepted
accounting principles consistently applied during the periods involved,
except in each case as may be noted therein, subject to normal year-
end audit adjustments in the case of unaudited statements.
(ii) Since December 31, 1999, no event has occurred or
circumstance arisen that, individually or taken together with all other
facts, circumstances and events (described in any paragraph of Section
5.04 or otherwise), is reasonably likely to have a Material Adverse
Effect with respect to Mutual First.
(h) Litigation; Regulatory Action. (i) No material litigation,
claim or other proceeding before any Governmental Authority is pending
against Mutual First or any of its Subsidiaries and, to Mutual First's
knowledge, no such litigation, claim or other proceeding has been
threatened.
(ii) Neither Mutual First nor any of its Subsidiaries or
properties is a party to or is subject to any order, decree, agreement,
memorandum of understanding or similar
31
arrangement with, or a commitment letter or similar submission to, or
extraordinary supervisory letter from a Regulatory Authority, nor has
Mutual First or any of its Subsidiaries been advised by a Regulatory
Authority that such agency is contemplating issuing or requesting (or
is considering the appropriateness of issuing or requesting) any such
order, decree, agreement, memorandum of understanding, commitment
letter, supervisory letter or similar submission.
(i) Compliance with Laws. Each of Mutual First and its
Subsidiaries:
(i) is in substantial compliance with all applicable
federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees
applicable thereto or to the employees conducting such
businesses, including, without limitation, the Equal Credit
Opportunity Act, the Fair Housing Act, the Community
Reinvestment Act of 1977, the Home Mortgage Disclosure Act
and all other applicable fair lending laws and other laws
relating to discriminatory business practices; and
(ii) has all permits, licenses, authorizations, orders
and approvals of, and has made all filings, applications and
registrations with, all Governmental Authorities that are
required in order to permit them to conduct their businesses
substantially as presently conducted; all such permits,
licenses, certificates of authority, orders and approvals
are in full force and effect and, to the best of its
knowledge, no suspension or cancellation of any of them is
threatened or will result from the consummation of the
transactions contemplated by this Agreement; and
. (iii) has received, since June 30, 1998, no
notification or communication from any Governmental
Authority (A) asserting that Mutual First or any of its
Subsidiaries is not in compliance in any material respect
with any of the statutes, regulations, or ordinances which
such Governmental Authority enforces or (B) threatening to
revoke any material license, franchise, permit, or
governmental authorization (nor, to Mutual First's
knowledge, do any grounds for any of the foregoing exist).
(j) Brokers. No action has been taken by Mutual First that
would give rise to any valid claim against any party hereto for a
brokerage commission, finder's fee or other like payment with respect
to the transactions contemplated by this Agreement, except for a fee to
be paid to RP Financial, lc.
(k) Takeover Laws. Mutual First has taken all action required
to be taken by it in order to exempt this Agreement and the
transactions contemplated hereby from, and this Agreement and the
transactions contemplated hereby are exempt from, the requirements of
any Takeover Laws applicable to Mutual First or their Subsidiaries.
32
Holders of Mutual First common stock will not have dissenters' rights
in connection with the Company Merger.
(l) Environmental Matters. To Mutual First's knowledge,
neither the conduct nor operation of Mutual First or its Subsidiaries
nor any condition of any property currently or previously owned or
operated by any of them (including, without limitation, in a fiduciary
or agency capacity), or on which any of them holds a Lien, results or
resulted in a material violation of any Environmental Laws and to
Mutual First's knowledge no condition has existed or event has occurred
with respect to any of them or any such property that, with notice or
the passage of time, or both, is reasonably likely to result in any
material liability to Mutual First or any Mutual First Subsidiary under
Environmental Laws. To Mutual First's knowledge, neither Mutual First
nor any of its Subsidiaries has received any notice from any person or
entity that Mutual First or its Subsidiaries or the operation or
condition of any property ever owned, operated, or held as collateral
or in a fiduciary capacity by any of them are or were in material
violation of or otherwise are alleged to have material liability under
any Environmental Law, including, but not limited to, responsibility
(or potential responsibility) for the cleanup or other remediation of
any pollutants, contaminants, or hazardous or toxic wastes, substances
or materials at, on, beneath, or originating from any such property.
(m) Tax Matters. (i) All Tax Returns that are required to be
filed by or with respect to Mutual First and its Subsidiaries have been
duly filed, or requests for extensions have been timely filed (or an
extension is automatic) and any such extension has been granted and has
not been rescinded, (ii) all Taxes shown to be due on Tax Returns
referred to in clause (i) , if filed, and all Taxes required to be
shown on the Tax Returns for which extensions have been granted have
been paid in full or adequate provision has been made for such Taxes on
Mutual First's most recent balance sheet provided to ▇▇▇▇▇▇, (iii) the
Tax Returns referred to in clause (i) that have been filed have been
examined by the IRS or the appropriate state, local or foreign taxing
authority or the period for assessment of the Taxes in respect of which
such Tax Returns were required to be filed has expired, (iv) all
deficiencies asserted or assessments made as a result of such
examinations have been paid in full, or non-material amounts are being
contested in good faith, (v) no material issues that have been raised
by the relevant taxing authority in connection with the examination of
any of the Tax Returns referred to in clause (i) are currently pending,
and (vi) no waivers of statutes of limitation have been given by or
requested with respect to any Taxes of Mutual First or its
Subsidiaries. Neither Mutual First nor any of its Subsidiaries has any
material liability with respect to income, franchise or similar Taxes
that accrued on or before the end of the most recent period covered by
Mutual First's SEC Documents filed prior to the date hereof in excess
of the amounts accrued with respect thereto that are reflected in the
financial statements included in Mutual First's SEC Documents filed on
or prior to the date hereof. As of the date hereof, neither Mutual
First nor any of its Subsidiaries has any reason to believe that any
conditions exist that might prevent or impede the Company Merger and
the Bank
33
Merger from qualifying as reorganizations within the meaning of Section
368(a) of the Code.
(n) Books and Records. The books and records of Mutual First
and its Subsidiaries have been fully, properly and accurately
maintained in all material respects, and there are no material
inaccuracies or discrepancies of any kind contained or reflected
therein, and they fairly present the substance of events and
transactions included therein.
(o) Insurance. Mutual First's Disclosure Schedule sets forth
all of the material insurance policies, binders, or bonds maintained by
Mutual First or its Subsidiaries. Mutual First and its Subsidiaries are
insured with reputable insurers against such risks and in such amounts
as the management of Mutual First reasonably has determined to be
prudent in accordance with industry practices and in all material
respects in accordance with all contractual obligations. All such
insurance policies are in full force and effect; Mutual First and its
Subsidiaries are not in material default thereunder; and all material
claims thereunder have been filed in due and timely fashion.
(p) Mutual First Ownership of ▇▇▇▇▇▇ Stock. Neither Mutual
First nor any of its Subsidiaries either beneficially owns any shares
of ▇▇▇▇▇▇ Common Stock or, other than as contemplated by this
Agreement, has any option, warrant or right of any kind to acquire the
beneficial ownership of any shares of ▇▇▇▇▇▇ Common Stock.
(q) Governmental Reviews. No investigation or review by any
Governmental Authority with respect to Mutual First or any of its
Subsidiary is pending or, to the knowledge of Mutual First, threatened,
nor has any Governmental Authority indicated to Mutual First or any of
its Subsidiary an intention to conduct the same, other than normal or
routine regulatory examinations.
(r) Risk Management Instruments. All material interest rate
swaps, caps, floors, option agreements, futures and forward contracts
and other similar risk management arrangements, whether entered into
for Mutual First's own account, or for the account of one or more of
Mutual First's Subsidiaries or their customers, were entered into (i)
in accordance with prudent business practices and in all material
respects in compliance with all applicable laws, rules, regulations and
regulatory policies and (ii) with counterparties believed to be
financially responsible at the time; and each of them constitutes the
valid and legally binding obligation of Mutual First or one of its
Subsidiaries, enforceable in accordance with its terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of
general applicability relating to or affecting creditors' rights or by
general equity principles), and is in full force and effect. Neither
Mutual First nor its Subsidiaries, nor to Mutual First's knowledge any
other party thereto, is in breach of any of its obligations under any
such agreement or arrangement in any material respect.
34
(s) Fairness Opinion. On the date of this Agreement, RP
Financial, lc has provided to the Mutual First Board a written fairness
opinion to the effect that the Exchange Ratio is fair to the
stockholders of Mutual First from a financial point of view.
(t) Disclosure. The representations and warranties contained
in this Section 5.04 do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements and information contained in this Section 5.04 not
misleading
(u) Employee Benefit Plans. (iii) Section 5.03(m)(i) of Mutual
First's Disclosure Schedule contains a complete and accurate list of
all existing bonus, incentive, deferred compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock, stock option, stock
appreciation, phantom stock, severance, welfare and fringe benefit
plans, employment or severance agreements and all similar practices,
policies and arrangements maintained by Mutual First or any of its
Subsidiaries in which any employee or former employee, consultant or
former consultant or director or former director of Mutual First or any
of its Subsidiaries participates or to which any such employees,
consultants or directors are a party other than plans and programs
involving immaterial obligations (the "Compensation and Benefit
Plans"). Except as expressly contemplated by a separate agreement
entered into by Mutual First and ▇▇▇▇▇▇ on the date hereof, neither
Mutual First nor any of its Subsidiaries has any commitment to create
any additional Compensation and Benefit Plan or to modify or change any
existing Compensation and Benefit Plan.
ARTICLE VI
COVENANTS
6.01 Reasonable Best Efforts. Subject to the terms and conditions of
this Agreement, each of ▇▇▇▇▇▇ and Mutual First agrees to use its reasonable
best efforts in good faith to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, proper or desirable, or advisable
under applicable laws, so as to permit consummation of the Transaction as
promptly as practicable and otherwise to enable consummation of the Transaction
and shall cooperate fully with the other party hereto to that end.
6.02 Stockholder Approvals. Mutual First and ▇▇▇▇▇▇ agree to take, in
accordance with applicable law or NASDAQ rules and their articles of
incorporation and bylaws, all action necessary to convene an appropriate meeting
of their stockholders to consider and vote upon, in the case of ▇▇▇▇▇▇, the
approval of the plan of merger and adoption of this Agreement and in the case of
Mutual First to approve the Company Merger and approve the issuance of Mutual
First
35
Common Stock to be issued in the Company Merger, and in each case any other
matter required to be approved by such stockholders for consummation of the
Company Merger (including any adjournment or postponement, the "Mutual First
Meeting" or "▇▇▇▇▇▇ Meeting", whichever is applicable), in each case as promptly
as practicable after the Registration Statement is declared effective. The
Mutual First Board and the ▇▇▇▇▇▇ Board shall each recommend such approval, the
Mutual First Board shall declare the transaction advisable and Mutual First and
▇▇▇▇▇▇ shall take all reasonable, lawful action to solicit such approval by its
stockholders, unless either board of directors, after having received a ▇▇▇▇▇▇
Proposal or a Mutual First Proposal, as applicable, and after having consulted
with and considered the advice of outside counsel and its investment banking
firm, has determined in good faith that to do so would result in a failure by
the directors to discharge properly their fiduciary duties in accordance with
the applicable law.
6.03 Registration Statement. (a) Mutual First agrees to prepare a
registration statement on Form S-4 (the "Registration Statement") to be filed by
Mutual First with the SEC in connection with the issuance of Mutual First Common
Stock in the Company Merger (including the joint proxy statement and prospectus
and other proxy solicitation materials of Mutual First and ▇▇▇▇▇▇ constituting a
part thereof (the "Proxy Statement") and all related documents). ▇▇▇▇▇▇ agrees
to cooperate, and to cause its Subsidiaries to cooperate, with Mutual First, its
counsel and its accountants, in preparation of the Registration Statement and
the Proxy Statement; and provided that ▇▇▇▇▇▇ and its Subsidiaries have
cooperated as required above, Mutual First agrees to file the Registration
Statement (or the form of the Proxy Statement) with the SEC as promptly as
reasonably practicable and shall use reasonable efforts to cause such filing to
occur within 60 days after execution of this Agreement. Each of ▇▇▇▇▇▇ and
Mutual First agrees to use all reasonable efforts to cause the Registration
Statement to be declared effective under the Securities Act as promptly as
reasonably practicable after filing thereof. Mutual First also agrees to use all
reasonable efforts to obtain, prior to the effective date of the Registration
Statement, all necessary state securities law or "Blue Sky" permits and
approvals required to carry out the transactions contemplated by this Agreement.
▇▇▇▇▇▇ agrees to furnish to Mutual First all information concerning ▇▇▇▇▇▇, its
Subsidiaries, officers, directors and stockholders as may be reasonably
requested in connection with the foregoing.
(b) Each of ▇▇▇▇▇▇ and Mutual First agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it for
inclusion or incorporation by reference in (i) the Registration Statement will,
at the time the Registration Statement and each amendment or supplement thereto,
if any, becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and (ii) the
Proxy Statement and any amendment or supplement thereto will, at the date of
mailing to stockholders and at the time of the Mutual First Meeting or the
▇▇▇▇▇▇ Meeting, as the case may be, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or any statement which,
in the light of the circumstances under which such statement is made, will be
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements
36
therein not false or misleading or necessary to correct any statement in any
earlier statement in the Proxy Statement or any amendment or supplement thereto.
Each of ▇▇▇▇▇▇ and Mutual First further agrees that if it shall become aware
prior to the Effective Date of any information furnished by it that would cause
any of the statements in the Proxy Statement to be false or misleading with
respect to any material fact, or to omit to state any material fact necessary to
make the statements therein not false or misleading, to promptly inform the
other party thereof and to take the necessary steps to correct the Proxy
Statement.
(c) Mutual First agrees to advise ▇▇▇▇▇▇, promptly after Mutual First
receives notice thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, of the issuance of any
stop order or the suspension of the qualification of Mutual First Common Stock
for offering or sale in any jurisdiction, of the initiation or threat of any
proceeding for any such purpose, or of any request by the SEC for the amendment
or supplement of the Registration Statement or for additional information.
(d) Each of Mutual First and Marion, in consultation with the other,
shall employ professional proxy solicitors to assist it in contacting
stockholders in connection with soliciting votes on the matters to be considered
and voted upon at the Mutual First Meeting and ▇▇▇▇▇▇ Meeting.
6.04 Press Releases. Each of ▇▇▇▇▇▇ and Mutual First agrees that it
will not, without the prior approval of the other party, issue any press release
or written statement for general circulation relating to the transactions
contemplated hereby, except as otherwise required by applicable law or
regulation or NASDAQ rules, and then only after making reasonable efforts to
first consult with the other party.
6.05 Access; Information. (a) Each of ▇▇▇▇▇▇ and Mutual First agrees
that upon reasonable notice and subject to applicable laws relating to the
exchange of information, it shall afford the other party and the other party's
Representatives, such access during normal business hours throughout the period
prior to the Effective Time to the books, records (including, without
limitation, Tax Returns and work papers of independent auditors), properties,
personnel and to such other information as any party may reasonably request and,
during such period, it shall furnish promptly to such other party (i) a copy of
each material report, schedule and other document filed by it pursuant to the
requirements of federal or state securities or banking laws, and (ii) all other
information concerning the business, properties and personnel of it as the other
may reasonably request.
(b) Each of ▇▇▇▇▇▇ and Mutual First agrees that it will not, and will
cause its Representatives not to, use any information obtained pursuant to this
Section 6.05 (as well as any other information obtained prior to the date hereof
in connection with the entering into of this Agreement) for any purpose
unrelated to the consummation of the transactions contemplated by this
Agreement. Subject to the requirements of law, each party will keep
confidential, and will cause its Representatives to keep confidential, all
information and documents obtained
37
pursuant to this Section 6.05 (as well as any other information obtained prior
to the date hereof in connection with the entering into of this Agreement)
unless such information (i) was already known to such party, (ii) becomes
available to such party from other sources not known by such party to be bound
by a confidentiality obligation, (iii) is disclosed with the prior written
approval of the party to which such information pertains or (iv) is or becomes
readily ascertainable from published information or trade sources. In the event
that this Agreement is terminated or the transactions contemplated by this
Agreement shall otherwise fail to be consummated, each party shall promptly
cause all copies of documents, extracts thereof or notes, analyses,
compilations, studies or other documents containing information and data as to
another party hereto to be returned to the party which furnished the same. No
investigation by either party of the business and affairs of the other shall
affect or be deemed to modify or waive any representation, warranty, covenant or
agreement in this Agreement, or the conditions to either party's obligation to
consummate the transactions contemplated by this Agreement.
(c) During the period from the date of this Agreement to the Effective
Time, each party shall promptly furnish the other with copies of all monthly and
other interim financial statements produced in the ordinary course of business
as the same shall become available.
6.06 ▇▇▇▇▇▇ Proposal. ▇▇▇▇▇▇ agrees that it shall not, and shall cause
its Subsidiaries and its and its Subsidiaries' officers, directors, agents,
advisors and affiliates not to, solicit or encourage inquiries or proposals with
respect to, or engage in any negotiations concerning, or provide any
confidential information to, or have any discussions with, any person relating
to, any ▇▇▇▇▇▇ Proposal. It shall immediately cease and cause to be terminated
any activities, discussions or negotiations conducted prior to the date of this
Agreement with any parties other than Mutual First with respect to any of the
foregoing and shall use its reasonable best efforts to enforce any
confidentiality or similar agreement relating to a Marion Proposal in existence
on the date hereof. ▇▇▇▇▇▇ shall promptly (within 24 hours) advise Mutual First
following the receipt by ▇▇▇▇▇▇ of any ▇▇▇▇▇▇ Proposal and the substance thereof
(including the identity of the person making such ▇▇▇▇▇▇ Proposal), and advise
Mutual First of any material developments with respect to such ▇▇▇▇▇▇ Proposal
immediately upon the occurrence thereof. Notwithstanding the foregoing but only
after receipt of a ▇▇▇▇▇▇ Proposal and during the period prior to the ▇▇▇▇▇▇
Meeting, ▇▇▇▇▇▇ may provide information at the request of or enter into
negotiations with a third party with respect thereto, if the ▇▇▇▇▇▇ Board, after
having consulted with and considered the advice of outside counsel and its
investment banking firm, has determined that the failure to do so would result
in a failure by the directors to properly discharge their fiduciary duties under
applicable law.
6.07 Affiliate Agreement. (a) Not later than the 15th day prior to the
mailing of the Proxy Statement, ▇▇▇▇▇▇ shall deliver to Mutual First a schedule
of each person that, to the best of its knowledge, is or is reasonably likely to
be, as of the date of the ▇▇▇▇▇▇ Meeting, deemed to be an "affiliate" of ▇▇▇▇▇▇
(each, a "▇▇▇▇▇▇ Affiliate") as that term is used in Rule 145 under the
Securities Act or SEC Accounting Series Releases 130 and 135.
38
(b) ▇▇▇▇▇▇ and Mutual First shall use its reasonable best efforts to
cause each person who may be deemed to be a ▇▇▇▇▇▇ Affiliate to execute and
deliver to ▇▇▇▇▇▇ and Mutual First on or before the date of mailing of the Proxy
Statement an agreement in the form attached hereto as Exhibit B.
6.08 Takeover Laws. No party hereto shall take any action that would
cause the transactions contemplated by this Agreement to be subject to
requirements imposed by any Takeover Law and each of them shall take all
necessary steps within its control to exempt (or ensure the continued exemption
of) the transactions contemplated by this Agreement from, or if necessary
challenge the validity or applicability of, any applicable Takeover Law, as now
or hereafter in effect.
6.09 Certain Policies. Prior to the Effective Date, ▇▇▇▇▇▇ shall, and
shall cause its Subsidiaries, but only to the extent consistent with generally
accepted accounting principles and on a basis mutually satisfactory to it and
Mutual First, modify and change its loan, litigation and real estate valuation
policies and practices (including loan classifications and levels of reserves)
so as to be applied on a basis that is consistent with that of Mutual First;
provided, however, that ▇▇▇▇▇▇ shall not be obligated to take any such action
pursuant to this Section 6.09 unless and until Mutual First acknowledges that
all conditions to its obligation to consummate the Transaction have been
satisfied and certifies to ▇▇▇▇▇▇ that Mutual First's representations and
warranties, subject to Section 5.02, are true and correct as of such date and
that Mutual First is otherwise in material compliance with this Agreement.
Marion'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 6.09.
6.10 NASDAQ Listing. Mutual First agrees to use its best efforts to
list, prior to the Effective Time, on the NASDAQ, subject to official notice of
issuance, the shares of Mutual First Common Stock to be issued to the holders of
Marion Common Stock in the Company Merger.
6.11 Regulatory Applications. (a) Mutual First and ▇▇▇▇▇▇ and their
respective Subsidiaries shall cooperate and use their respective reasonable best
efforts to prepare all documentation, to effect all filings and to obtain all
permits, consents, approvals and authorizations of all third parties and
Governmental Authorities necessary to consummate the transactions contemplated
by this Agreement. Each of Mutual First and ▇▇▇▇▇▇ shall have the right to
review in advance, and to the extent practicable each will consult with the
other, in each case subject to applicable laws relating to the exchange of
information, with respect to, all material written information submitted to any
third party or any Governmental Authority in connection with the transactions
contemplated by this Agreement. In exercising the foregoing right, each of the
parties hereto agrees to act reasonably and as promptly as practicable. Each
party hereto agrees that it will consult with the other party hereto with
respect to the obtaining of all material permits, consents, approvals and
authorizations of all third parties and Governmental
39
Authorities necessary or advisable to consummate the transactions contemplated
by this Agreement and each party will keep the other party apprised of the
status of material matters relating to completion of the transactions
contemplated hereby.
(b) Each party agrees, upon request, to furnish the other party with
all information concerning itself, its Subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary or advisable
in connection with any filing, notice or application made by or on behalf of
such other party or any of its Subsidiaries to any third party or Governmental
Authority.
6.12 Indemnification. (a) Following the Effective Date and for a period
of six years thereafter, Mutual First shall indemnify, defend and hold harmless
the present and former directors, officers and employees of ▇▇▇▇▇▇ and its
Subsidiaries (each, an "Indemnified Party") against all costs or expenses
(including reasonable attorneys' fees), judgments, fines, losses, claims,
damages or liabilities (collectively, "Costs") incurred in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of actions or omissions occurring
at or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement) to the fullest extent that ▇▇▇▇▇▇
is permitted to indemnify (and advance expenses to) its directors and officers
under the laws of the State of Indiana, the Marion Articles and the Marion
Bylaws as in effect on the date hereof; provided that any determination required
to be made with respect to whether an officer's, director's or employee's
conduct complies with the standards set forth under Indiana law, the Marion
Certificate and the ▇▇▇▇▇▇ Bylaws shall be made by independent counsel (which
shall not be counsel that provides material services to Mutual First) selected
by Mutual First and reasonably acceptable to such officer or director.
(b) For a period of three years from the Effective Time, Mutual First
shall use its best efforts to provide that portion of director's and officer's
liability insurance that serves to reimburse the present and former officers and
directors of ▇▇▇▇▇▇ or any of its Subsidiaries (determined as of the Effective
Time) (as opposed to ▇▇▇▇▇▇) with respect to claims against such directors and
officers arising from facts or events which occurred before the Effective Time,
which insurance shall contain at least the same coverage and amounts, and
contain terms and conditions no less advantageous, as that coverage currently
provided by Marion; provided, however, that in no event shall Mutual First be
required to expend in the aggregate during the coverage period more than 150
percent of the current annual amount expended by ▇▇▇▇▇▇ (the "Insurance Amount")
to maintain or procure such directors and officers insurance coverage; provided,
further, that if Mutual First is unable to maintain or obtain the insurance
called for by this Section 6.12(b), Mutual First shall use its reasonable best
efforts to obtain as much comparable insurance as is available for the Insurance
Amount; provided, further, that officers and directors of ▇▇▇▇▇▇ or any
Subsidiary may be required to make application and provide customary
representations and warranties to Mutual First's insurance carrier for the
purpose of obtaining such insurance.
40
(c) Any Indemnified Party wishing to claim indemnification under
Section 6.12(a), upon learning of any claim, action, suit, proceeding or
investigation described above, shall promptly notify Mutual First thereof;
provided that the failure so to notify shall not affect the obligations of
Mutual First under Section 6.12(a) unless and to the extent that Mutual First is
actually prejudiced as a result of such failure.
(d) If Mutual First or any of its successors or assigns shall
consolidate with or merge into any other entity and shall not be the continuing
or surviving entity of such consolidation or merger or shall transfer all or
substantially all of its assets to any entity, then and in each case, proper
provision shall be made so that the successors and assigns of Mutual First shall
assume the obligations set forth in this Section 6.12.
6.13 Benefit Plans.
(a) At the Effective Time, Mutual First or a Mutual First
Subsidiary shall be substituted for ▇▇▇▇▇▇ or a ▇▇▇▇▇▇ Subsidiary as
the sponsoring employer under those benefit and welfare plans with
respect to which ▇▇▇▇▇▇ or any of its Subsidiaries is a sponsoring
employer immediately prior to the Effective Time, and shall assume and
be vested with all of the powers, rights, duties, obligations and
liabilities previously vested in ▇▇▇▇▇▇ or its Subsidiary with respect
to each such plan. Except as expressly contemplated by a separate
agreement entered into by ▇▇▇▇▇▇ and Mutual First on the date hereof,
each such plan shall be continued in effect by Mutual First or any
applicable Mutual First Subsidiary after the Effective Time without a
termination or discontinuance thereof as a result of the Company Merger
or the Bank Merger, subject to the power reserved to Mutual First or
any applicable Mutual First Subsidiary under each such plan to
subsequently amend or terminate the plan, which amendments or
terminations shall comply with applicable law. ▇▇▇▇▇▇, each ▇▇▇▇▇▇
Subsidiary, and Mutual First will use all reasonable efforts (i) to
effect said substitutions and assumptions, and such other actions
contemplated under this Agreement, and (ii) to amend such plans as to
the extent necessary to provide for said substitutions and assumptions,
and such other actions contemplated under this Agreement.
(b) At or as promptly as practicable after the Effective Time
as Mutual First shall reasonably determine, Mutual First shall provide,
or cause a Mutual First Subsidiary to provide, to each full time
employee of ▇▇▇▇▇▇, and its wholly-owned Subsidiaries as of the
Effective Time ("▇▇▇▇▇▇ Employees") the opportunity to participate in
each employee benefit and welfare plan maintained by Mutual First or a
Mutual First Subsidiary, whichever is applicable, for
similarly-situated employees provided that with respect to such plans
maintained by Mutual First or a Mutual First Subsidiary, whichever is
applicable, ▇▇▇▇▇▇ Employees shall be given credit for service
recognized under the corresponding plan of ▇▇▇▇▇▇ and its Subsidiaries
in determining participation in, eligibility for and vesting in
benefits thereunder, and only with respect to severance and vacation
plans, accrual of benefits; provided further that ▇▇▇▇▇▇ Employees
shall not be
41
subject to any waiting periods or pre-existing condition exclusions
under the group health plan of Mutual First or any applicable Mutual
First Subsidiary to the extent that such periods are longer or
restrictions impose a greater limitation than the periods or
limitations imposed under the applicable ▇▇▇▇▇▇ group health plan; and
provided further that to the extent that the initial period of coverage
for ▇▇▇▇▇▇ Employees under any plan of Mutual First or a Mutual First
Subsidiary, whichever is applicable, that is an "employee welfare
benefit plan" as defined in Section 3(1) of ERISA is not a full 12-
month period of coverage, ▇▇▇▇▇▇ Employees shall be given credit under
the applicable welfare plan for any deductibles and co-insurance
payments made by such ▇▇▇▇▇▇ Employees under the corresponding ▇▇▇▇▇▇
welfare plan during the balance of such 12- month period of coverage.
Nothing in the preceding sentence shall obligate Mutual First or any
Mutual First Subsidiary to provide or cause to be provided any benefits
duplicative to those provided under any ▇▇▇▇▇▇ benefit or welfare plan
continued pursuant to subparagraph (a) above, including, but not
limited to, extending participation in any plan which is an "employee
pension benefit plan" under ERISA relative to any period of time with
respect to which allocations are made to ▇▇▇▇▇▇ Employees under any
employee pension benefit plan maintained or sponsored by ▇▇▇▇▇▇ or a
Marion Subsidiary. Except as otherwise provided in this Agreement, the
power of Mutual First or any Mutual First Subsidiary to amend or
terminate any benefit or welfare plans of ▇▇▇▇▇▇ and its Subsidiaries
shall not be altered or affected. Moreover, this subsection 6.13(b)
shall not confer upon any ▇▇▇▇▇▇ Employee any rights or remedies
hereunder and shall not constitute a contract of employment or create
any rights, to be retained or otherwise, in employment at Mutual First
or any Mutual First Subsidiary.
(c) Any separate agreement entered into by ▇▇▇▇▇▇ and Mutual
First on the date hereof relating to employee or other benefits is
incorporated herein by reference and shall be deemed a part of this
Agreement.
6.14 Notification of Certain Matters. Each of ▇▇▇▇▇▇ and Mutual First
shall give prompt notice to the other of any fact, event or circumstance known
to it that (i) is reasonably likely, individually or taken together with all
other facts, events and circumstances known to it, to result in any Material
Adverse Effect with respect to it, (ii) would cause or constitute a breach of
any of its representations, warranties, covenants or agreements contained herein
as of the date of this Agreement or (iii) would require any material amendment
to any information Previously Disclosed arising from events or circumstances
after the date of this Agreement or otherwise would cause a material breach of
any of its representations, warranties, covenants or agreements contained
herein.
6.15 Directors. At the Effective Time, Mutual First agrees to cause
four directors of ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇
▇▇▇▇▇▇, to be elected to the Mutual First Board and Mutual First Bank's Board of
Directors for such terms as shall be agreed upon between the parties, subject to
compliance with applicable law.
42
6.16 Termination of Agreement. In the event that this Agreement is
terminated by a party (the "Aggrieved Party") solely by reason of the material
breach by the other party ("Breaching Party") of any of its representations,
warranties, covenants or agreements contained herein then the Aggrieved Party
shall be entitled to such remedies and relief against the Breaching Party as are
available at law or in equity. Moreover, the Aggrieved Party without terminating
this Agreement shall be entitled to specifically enforce the terms hereof
against the Breaching Party in order to cause the Merger to be consummated. Each
party acknowledges that there is not an adequate remedy at law to compensate the
other parties relating to the non- consummation of the Merger. To this end, each
party, to the extent permitted by law, irrevocably waives any defense it might
have based on the adequacy of a remedy at law which might be asserted as a bar
to specific performance, injunctive relief or other equitable relief.
6.17 Liabilities and Remedies and Breakup Fee-Mutual First. (a) In the
event that (i) the ▇▇▇▇▇▇ Meeting does not take place, the Board of Directors of
▇▇▇▇▇▇ fails to recommend approval of this Agreement and the Company Merger to
the stockholders of ▇▇▇▇▇▇, or such Board of Directors shall adversely alter or
modify its favorable recommendation of this Agreement and the Company Merger to
the stockholders of ▇▇▇▇▇▇, and (ii) this Agreement and the Company Merger is
not approved by the stockholders of ▇▇▇▇▇▇ by the required vote, and Mutual
First is not, as of the date of such event, in material breach of this
Agreement, then, upon termination of this Agreement, ▇▇▇▇▇▇ and First Federal
shall be obligated to pay Mutual First in immediately available funds a cash
amount of $975,000 as an agreed upon break up fee and as the sole and exclusive
remedy of Mutual First and Mutual First Bank. In order to obtain the benefit of
the break-up fees provided in this Section 6.17, Mutual First shall be required
to execute a waiver of its rights under Section 6.16 above, and shall not take
any further action to enforce any right that it might have under Section 6.16
hereof.
(b) In the event that a ▇▇▇▇▇▇ Proposal occurs between the
date hereof and the time of the ▇▇▇▇▇▇ Meeting and the stockholders of ▇▇▇▇▇▇
fail to approve this Agreement and the Company Merger under circumstances where
the Board of Directors of ▇▇▇▇▇▇ continuously maintained its favorable
recommendation of this Agreement and the Company Merger, and Mutual First was
not, as of the date of such action, in material breach of this Agreement, then
if a definitive agreement relating to a ▇▇▇▇▇▇ Proposal is executed by ▇▇▇▇▇▇ or
any ▇▇▇▇▇▇ Subsidiary, or a Marion Proposal is consummated, in either case
within 15 months after the termination of this Agreement, then upon the
happening of such event ▇▇▇▇▇▇ and First Federal shall be jointly and severally
obligated to pay Mutual First a cash amount of $975,000 as an agreed upon break
up fee and as the sole and exclusive remedy of Mutual First. There shall be no
duplication of remedy under this Section 6.17(b) and 6.17(a). In order to obtain
the benefit of the break-up fee provided in this Section 6.17(b), Mutual First
shall be required to execute a waiver of its rights under Section 6.16 above,
and shall not take any further action to enforce any right that it might have
under Section 6.16 hereof.
6.18 Liabilities and Remedies and Breakup Fee-Marion. (a) In the event that
(i) the Mutual First Meeting does not take place, the Board of Directors of
Mutual First fails to
43
recommend approval of this Agreement and the Company Merger to the stockholders
of Mutual First, or such Board of Directors shall adversely alter or modify its
favorable recommendation of this Agreement and the Company Merger to the
stockholders of Mutual First, and (ii) this Agreement and the Company Merger is
not approved by the stockholders of Mutual First by the required vote, and
▇▇▇▇▇▇ is not, as of the date of such event, in material breach of this
Agreement, then, upon termination of this Agreement, Mutual First and Mutual
First Bank shall be obligated to pay Marion in immediately available funds a
cash amount of $975,000 as an agreed upon break up fee and as the sole and
exclusive remedy of ▇▇▇▇▇▇ and First Federal. In order to obtain the benefit of
the break-up fees provided in this Section 6.18, ▇▇▇▇▇▇ shall be required to
execute a waiver of its rights under Section 6.16 above, and shall not take any
further action to enforce any right that it might have under Section 6.16
hereof.
(b) In the event that a Mutual First Proposal occurs between
the date hereof and the time of the Mutual First Meeting and the stockholders of
Mutual First fail to approve this Agreement and the Company Merger under
circumstances where the Board of Directors of Mutual First continuously
maintained its favorable recommendation of this Agreement and the Company
Merger, and ▇▇▇▇▇▇ was not, as of the date of such action, in material breach of
this Agreement, then if a definitive agreement relating to a Mutual First
Proposal is executed by Mutual First or any Mutual First Subsidiary, or a Mutual
First Proposal is consummated, in either case within 15 months after the
termination of this Agreement, and the transactions contemplated by this
Agreement are not consummated, then upon the happening of such events Mutual
First and Mutual First Bank shall be jointly and severally obligated to pay
▇▇▇▇▇▇ ▇ ▇▇▇▇ amount of $975,000 as an agreed upon break up fee and as the sole
and exclusive remedy of ▇▇▇▇▇▇. There shall be no duplication of remedy under
this Section 6.18(b) and 6.18(a). In order to obtain the benefit of the break-up
fee provided in this Section 6.18(b), ▇▇▇▇▇▇ shall be required to execute a
waiver of its rights under Section 6.16 above, and shall not take any further
action to enforce any right that it might have under Section 6.16 hereof.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE COMPANY MERGER
7.01 Conditions to Each Party's Obligation to Effect the Company
Merger. The respective obligation of each of Mutual First, ▇▇▇▇▇▇ and their
respective Subsidiaries to consummate the Company Merger is subject to the
fulfillment or written waiver by Mutual First and ▇▇▇▇▇▇ prior to the Effective
Time of each of the following conditions:
(a) Stockholder Approvals. This Agreement shall have been duly
approved by the requisite vote of the stockholders of Marion under the
Indiana Law and the Company Merger and the issuance of Mutual First
Common Stock as contemplated by this Agreement shall have been approved
by the requisite vote of the Mutual First stockholders under NASDAQ
rules and applicable provisions of Maryland Laws.
44
(b) Regulatory Approvals. All regulatory approvals required to
consummate the Company Merger shall have been obtained and shall remain
in full force and effect and all statutory waiting periods in respect
thereof shall have expired and no such approvals shall contain (i) any
conditions, restrictions or requirements which the Mutual First Board
reasonably determines would either before or after the Effective Time
have a Material Adverse Effect on Mutual First and its Subsidiaries
taken as a whole or (ii) any conditions, restrictions or requirements
that are not customary and usual for approvals of such type and which
the Mutual First Board reasonably determines would either before or
after the Effective Time be unduly burdensome.
(c) No Injunction. No Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, judgment, decree, injunction or
other order (whether temporary, preliminary or permanent) which is in
effect and prohibits consummation of the Company Merger.
(d) Registration Statement. The Registration Statement shall
have become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
initiated or threatened by the SEC.
(e) Blue Sky Approvals. All permits and other authorizations
under state securities laws necessary to consummate the transactions
contemplated hereby and to issue the shares of Mutual First Common
Stock to be issued in the Company Merger shall have been received and
be in full force and effect.
(f) Listing. The shares of Mutual First Common Stock to be
issued in the Company Merger shall have been approved for listing on
the NASDAQ, subject to official notice of issuance.
(g) Permits, Authorizations. Each of Mutual First and ▇▇▇▇▇▇
shall have obtained all material permits, authorizations, consents,
waivers and approvals required for the lawful consummation of the
Company Merger.
7.02 Conditions to Obligation of ▇▇▇▇▇▇. The obligation of Marion and
its Subsidiaries to consummate the Company Merger is also subject to the
fulfillment (or written waiver by ▇▇▇▇▇▇) prior to the Effective Time of each of
the following conditions:
(a) Representations and Warranties. The representations and
warranties of Mutual First set forth in this Agreement shall be true
and correct in all material respects, subject in the case of Specified
Representations to the standard set forth in Section 5.02, as of the
date of this Agreement and as of the Effective Date as though made on
and as of the Effective Date (except that (i) representations and
warranties that by their terms speak as of the date of this Agreement
or some other date shall be true and correct as of
45
such date and (ii) with respect to any information provided by Mutual
First pursuant to Section 6.14(iii) relating to Section 5.04(l) on
account of events arising after the date of this Agreement the
representations and warranties in Section 5.04(l) shall be deemed true
and correct as of the Effective Date unless such information
individually or taken together with other facts, events and
circumstances has resulted in or is reasonably likely to result in a
Material Adverse Effect on Mutual First), and ▇▇▇▇▇▇ shall have
received a certificate, dated the Effective Date, signed on behalf of
Mutual First by the Chief Executive Officer and the Chief Financial
Officer of Mutual First to such effect.
(b) Performance of Obligations of Mutual First. Mutual First
and its Subsidiaries shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or
prior to the Effective Time, and ▇▇▇▇▇▇ shall have received a
certificate, dated the Effective Date, signed on behalf of Mutual First
by the Chief Executive Officer and the Chief Financial Officer of
Mutual First to such effect.
7.03 Conditions to Obligation of Mutual First. The obligation of Mutual
First and its Subsidiaries to consummate the Company Merger is also subject to
the fulfillment (or written waiver by Mutual First) prior to the Effective Time
of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of ▇▇▇▇▇▇ set forth in this Agreement shall be true and
correct in all material respects, subject in the case of Specified
Representations to the standard set forth in Section 5.02, as of the
date of this Agreement and as of the Effective Date as though made on
and as of the Effective Date (except that (i) representations and
warranties that by their terms speak as of the date of this Agreement
or some other date shall be true and correct as of such date and (ii)
with respect to any information provided by ▇▇▇▇▇▇ pursuant to Section
6.14(iii) relating to Section 5.03(p) on account of events arising
after the date of this Agreement the representations and warranties in
Section 5.03(p) shall be deemed true and correct as of the Effective
Date unless such information individually or taken together with other
facts, events and circumstances has resulted in or is reasonably likely
to result in a Material Adverse Effect on ▇▇▇▇▇▇) and Mutual First
shall have received a certificate, dated the Effective Date, signed on
behalf of ▇▇▇▇▇▇ by the Chief Executive Officer and the Chief Financial
Officer of ▇▇▇▇▇▇ to such effect.
(b) Performance of Obligations of ▇▇▇▇▇▇. ▇▇▇▇▇▇ and its
Subsidiaries shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or
prior to the Effective Time, and Mutual First shall have received a
certificate, dated the Effective Date, signed on behalf of ▇▇▇▇▇▇ by
the Chief Executive Officer and the Chief Financial Officer of ▇▇▇▇▇▇
to such effect.
46
ARTICLE VIII
TERMINATION
8.01 Termination. This Agreement may be terminated, and the Transactions
may be abandoned:
(a) Mutual Consent. At any time prior to the Effective Time,
by the mutual consent of Mutual First and ▇▇▇▇▇▇, if the Board of
Directors of each so determines by vote of a majority of the members of
its entire Board.
(b) Breach. At any time prior to the Effective Time, by Mutual
First or ▇▇▇▇▇▇, if its Board of Directors so determines by vote of a
majority of the members of its entire Board, in the event of either:
(i) a breach by the other party of any representation or warranty
contained herein (subject in the case of Specified Representations to
the standard set forth in Section 5.02), which breach cannot be or has
not been cured within 30 days after the giving of written notice to the
breaching party of such breach; or (ii) a breach by the other party in
any material respect of any of the covenants or agreements contained
herein, which breach cannot be or has not been cured within 30 days
after the giving of written notice to the breaching party of such
breach.
(c) Delay. At any time prior to the Effective Time, by Mutual
First or ▇▇▇▇▇▇, if its Board of Directors so determines by vote of a
majority of the members of its entire Board, in the event that the
Company Merger is not consummated by February 28, 2001, except to the
extent that the failure of the Company Merger then to be consummated
arises out of or results from the knowing action or inaction of the
party seeking to terminate pursuant to this Section 8.01(c).
(d) No Approval. By ▇▇▇▇▇▇ or Mutual First, if its Board of
Directors so determines by a vote of a majority of the members of its
entire Board, in the event (i) the approval of any Governmental
Authority required for consummation of the Company Merger and the Bank
Merger shall have been denied by final nonappealable action of such
Governmental Authority or (ii) any stockholder approval required by
Section 7.01(a) herein is not obtained at the ▇▇▇▇▇▇ Meeting or the
Mutual First Meeting.
(e) Failure to Recommend, Etc. At any time prior to the ▇▇▇▇▇▇
Meeting, by Mutual First if the ▇▇▇▇▇▇ Board shall have failed to
unanimously recommend approval and adoption of this Agreement to the
▇▇▇▇▇▇ stockholders, withdrawn such recommendation or modified or
changed such recommendation in a manner adverse in any respect to the
interests of Mutual First; or at any time prior to the Mutual First
Meeting, by ▇▇▇▇▇▇, if the Mutual First Board shall have failed to
unanimously recommend to the Mutual First stockholders approval of the
issuance of Mutual First Common Stock to be issued pursuant to the
Company Merger, withdrawn such
47
recommendation or modified or changed such recommendation in a manner
adverse in any respect to the interests of ▇▇▇▇▇▇.
8.02 Effect of Termination and Abandonment. In the event of termination
of this Agreement and the abandonment of the Transaction pursuant to this
Article VIII, no party to this Agreement shall have any liability or further
obligation to any other party hereunder except (i) as set forth in Section 9.01
and (ii) that termination will not relieve a breaching party from liability for
any willful breach of this Agreement giving rise to such termination. Provided,
however, if a party pursues its rights under Section 6.17 or 6.18, whichever is
applicable, then such party shall not be entitled to any other relief.
Conversely, if a party pursues a remedy pursuant to this Section 8.02, then it
shall waive its rights under Section 6.17 or 6.18, whichever is applicable.
ARTICLE IX
MISCELLANEOUS
9.01 Survival. No representations, warranties, agreements and covenants
contained in this Agreement shall survive the Effective Time (other than the
agreements and covenants contained in Section 6.12 and 6.15 and this Article IX
which shall survive the Effective Time) or the termination of this Agreement if
this Agreement is terminated prior to the Effective Time (other than Sections
6.03(b), 6.04, 6.05(b), 6.17, 6.18, 8.02 and this Article IX which shall survive
such termination).
9.02 Waiver; Amendment. Prior to the Effective Time, any provision of
this Agreement may be (i) waived by the party benefitted by the provision, or
(ii) amended or modified at any time, by an agreement in writing between the
parties hereto executed in the same manner as this Agreement, except that after
the ▇▇▇▇▇▇ Meeting, the consideration to be received by the Marion stockholders
for each share of ▇▇▇▇▇▇ Common Stock shall not thereby be decreased if such
decrease shall violate Indiana Law.
9.03 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
9.04 Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Indiana applicable to
contracts made and to be performed entirely within such State (except to the
extent that mandatory provisions of Federal law are applicable).
9.05 Expenses. Except as otherwise provided herein, each party hereto
will bear all expenses incurred by it in connection with this Agreement and the
transactions contemplated hereby.
48
9.06 Notices. All notices, requests and other communications hereunder
to a party shall be in writing and shall be deemed given if personally
delivered, telecopied (with confirmation) or mailed by registered or certified
mail (return receipt requested) to such party at its address set forth below or
such other address as such party may specify by notice to the parties hereto.
If to Marion, to:
▇▇▇▇▇▇ Capital Holdings, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer
With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to Mutual First, to:
Mutual First Financial, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: R. ▇▇▇▇ ▇▇▇▇▇▇▇, Chief Executive Officer
With a copy to:
Silver, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, LLP
Suite 700 East
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
49
9.07 Entire Understanding; No Third Party Beneficiaries. This Agreement
and any Supplemental Letter entered into by the parties on the date hereof
represent the entire understanding of the parties hereto with reference to the
transactions contemplated hereby and thereby and this Agreement supersedes any
and all other oral or written agreements heretofore made. Except for Section
6.12 and 6.15 and the separate agreement entered into by ▇▇▇▇▇▇ and Mutual First
on the date hereof, nothing in this Agreement expressed or implied, is intended
to confer upon any person, other than the parties hereto or their respective
successors, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
9.08 Interpretation; Effect. When a reference is made in this Agreement
to Sections, Exhibits or Schedules, such reference shall be to a Section of, or
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and are not part 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." No provision of this Agreement shall
be construed to require ▇▇▇▇▇▇, Mutual First or any of their respective
Subsidiaries, affiliates or directors to take any action which would violate
applicable law (whether statutory or common law), rule or regulation.
50
* * *
The parties hereto have caused this Agreement to be executed in
counterparts by their duly authorized officers, all as of the day and year first
above written.
▇▇▇▇▇▇ CAPITAL HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
MUTUAL FIRST FINANCIAL, INC.
By: /s/ R. ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------
Name: R. ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
51