Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
DATED AS OF OCTOBER 6, 2000
BY AND AMONG
▇▇▇▇▇▇▇▇▇ FINANCIAL CORPORATION,
DFC ACQUISITION CORPORATION FOUR
AND
CAMERON FINANCIAL CORPORATION
AGREEMENT AND PLAN OF MERGER
Article I. THE MERGER 1
Section 1.01 Structure of the Merger. 1
Section 1.02 Status and Conversion of Shares in the
Merger. 2
Section 1.03 Exchange Procedures. 3
Section 1.04 Stock Options; Restricted Stock. 6
Section 1.05 Directors and Officers of the Surviving
Corporation at Effective Time. 6
Section 1.06 Certificate of Incorporation and Bylaws of the
Surviving Corporation. 6
Section 1.07 Dissenters' Rights. 7
Section 1.08 Bank Merger. 7
Article II. STOCKHOLDERS' equity at Closing 8
Section 2.01 ADJUSTED stockholders' equity. 8
Section 2.02 VALUATION OF ASSETS. 8
Section 2.03 Valuation of Liabilities and special
adjustments. 9
Article III. Representations and Warranties 9
Section 3.01 Disclosure Letters. 9
Section 3.02 Standards. 10
Section 3.03 Representations and Warranties of Seller. 11
Section 3.04 Representations and Warranties of Buyer. 30
Article IV. Conduct Pending the Merger 34
Section 4.01 Conduct of Seller's Business Prior to the
Effective Time. 34
Section 4.02 Forbearance by Seller. 37
Section 4.03 Conduct of Buyer's Business Prior to the
Effective Time. 41
Article V. Covenants 42
Section 5.01 Acquisition Proposals. 42
Section 5.02 Certain Policies and Actions of Seller. 43
Section 5.03 Access and Information. 44
Section 5.04 Certain Filings, Consents and Arrangements. 45
Section 5.05 Additional Actions. 45
Section 5.06 Publicity. 46
Section 5.07 Stockholders Meeting. 46
Section 5.08 Proxy Statement. 46
Section 5.09 Notification of Certain Matters. 46
Section 5.10 Employees. 47
Section 5.11 Indemnification. 49
Section 5.12 Acquisition Sub. 51
Article VI. Conditions to Consummation 51
Section 6.01 Conditions to Each Party's Obligations. 51
Section 6.02 Conditions to the Obligations of Buyer. 52
Section 6.03 Conditions to the Obligations of Seller. 53
Article VII. Data Processing 53
Section 7.01 Sample Data. 53
Section 7.02 Information for Check Ordering. 53
Section 7.03 Installation of Data Circuits. 54
Article VIII. Termination 54
Section 8.01 Termination. 54
Section 8.02 Termination Fee. 55
Section 8.03 Effect of Termination. 56
Article IX. Closing and Effective Time 56
Section 9.01 Effective Time. 56
Section 9.02 Deliveries at the Closing. 56
Article X. Certain Other Matters 56
Section 10.01 Certain Definitions; Interpretation. 56
Section 10.02 Survival. 57
Section 10.03 Waiver; Amendment. 57
Section 10.04 Counterparts. 57
Section 10.05 Governing Law. 57
Section 10.06 Expenses. 58
Section 10.07 Notices. 58
Section 10.08 Entire Agreement, Etc. 59
Section 10.09 Specific Performance. 59
Section 10.10 Successors and Assigns; Assignment. 60
AGREEMENT AND PLAN OF MERGER
This is an Agreement and Plan of Merger, dated as of the 6th
day of October, 2000 ("Agreement"), by and among ▇▇▇▇▇▇▇▇▇
FINANCIAL CORPORATION, a Missouri corporation ("Buyer"), DFC
ACQUISITION CORPORATION FOUR, a Delaware corporation
("Acquisition Sub") and CAMERON FINANCIAL CORPORATION, a Delaware
corporation ("Seller").
INTRODUCTORY STATEMENT
The Board of Directors of each of Buyer and Seller (i) has
determined that this Agreement and the business combination and
related transactions contemplated hereby are in the best
interests of Buyer and Seller, respectively, and in the best
interests of their respective stockholders and (ii) has approved,
at meetings of each of such Boards of Directors, this Agreement.
Buyer and Seller desire to make certain representations,
warranties and agreements in connection with the business
combination and related transactions provided for herein and to
prescribe various conditions to such transactions.
Acquisition Sub has been organized as a new wholly-owned
subsidiary of Buyer to facilitate the business combination
contemplated hereby.
In consideration of their mutual promises and obligations
hereunder, the parties hereto adopt and make this Agreement and
prescribe the terms and conditions hereof and the manner and
basis of carrying it into effect, which shall be as follows:
ARTICLE I. THE MERGER
SECTION 1.01 STRUCTURE OF THE MERGER. At the Effective Time (as
defined in Section 9.01), Acquisition Sub will merge with and
into Seller ("MERGER"), with Seller being the surviving
corporation of the Merger (the "SURVIVING CORPORATION"), pursuant
to the provisions of, and with the effect provided in, the
Delaware General Corporation Law ("DGCL"). Upon consummation of
the Merger, the separate corporate existence of Acquisition Sub
shall cease. Seller, as the Surviving Corporation, shall
continue to be governed by the laws of the State of Delaware and
its separate corporate existence, with all of its rights,
privileges, immunities, powers and franchises, shall continue
unaffected by the Merger. The name of the Surviving Corporation
shall be Cameron Financial Corporation. From and after the
Effective Time, the Surviving Corporation shall possess all of
the properties and rights and be subject to all of the
liabilities and obligations of Acquisition Sub, all as more fully
described in the DGCL.
SECTION 1.02 STATUS AND CONVERSION OF SHARES IN THE MERGER.
a) Effect on Shares of Seller Common Stock. By virtue of
the Merger, automatically and without any action on the part of
the holder thereof, each share of common stock, par value $.01
per share, of Seller ("SELLER COMMON STOCK") that is issued and
outstanding at the Effective Time, other than Excluded Shares (as
defined below) and including Seller Restricted Stock held
pursuant to the Seller Restricted Stock Plan (as defined in
Section 1.04b)), shall be canceled and cease to be outstanding
and shall be converted into and become the right to receive a
cash payment equal to $20.75; provided, however that such per
share amount shall be adjusted as follows, if applicable:
(i) if the Effective Time shall occur after January 31, 2001
an additional amount equal to the lesser of (A) $.0035 times
the number of days which shall have elapsed between January
31, 2001 and the Effective Time and (B) Seller's net income
per share (based on 2,099,179 shares, including shares
subject to option) during such period shall be added to such
per share amount and
(ii) if the Adjusted Stockholders' Equity (as defined in
Section 2.01 below) of Seller as of the close of business on
the last business day next prior to the Effective Time shall
be less than $40,000,000, then an amount determined by
dividing the amount by which such Adjusted Stockholders'
Equity is less than $40,000,000 by 2,099,179 shall be
deducted from such per share amount and no interest factor
or any additional amount will be due.
(The amount so determined pursuant to this paragraph is referred
to hereinafter as the "MERGER CONSIDERATION".) After the
Effective Time, no dividends or other distributions made or
payable by Seller shall accrue for the benefit of or be payable
with respect to, any Seller Common Stock.
"EXCLUDED SHARES" shall consist of (i) shares of Seller
Common Stock as to which the respective holders thereof have
properly demanded appraisal rights and have not failed to
perfect, have not effectively withdrawn and have not lost their
rights to appraisal and payment pursuant to any applicable law
providing for dissenters' or appraisal rights (the "DISSENTERS'
SHARES"), (ii) shares held directly or indirectly by Buyer (other
than shares held in a fiduciary capacity or in satisfaction of a
debt previously contracted) and (iii) shares held by Seller as
treasury stock. After the Effective Time, no dividends or other
distributions made or payable by Seller shall accrue for the
benefit of or be payable with respect to, any Dissenters' Shares,
and no interest shall accrue with respect to payments due to
holders of Dissenters' Shares, unless such accruals are required
by the DGCL.
b) As of the Effective Time, each Excluded Share, other than
Dissenters' Shares, shall be canceled and retired and shall cease
to exist, and no exchange or payment shall be made with respect
thereto. In addition, no Dissenters' Shares shall be converted
into the Merger Consideration pursuant to this Section 1.02 but
instead shall be treated in accordance with the procedures set
forth in Section 1.07 of this Agreement.
c) At and as of the Effective Time, each share of
Acquisition Sub shall be converted into one share of Common Stock,
$.01 par value, of the Surviving Corporation.
SECTION 1.03 EXCHANGE PROCEDURES.
a) Appropriate transmittal materials ("LETTER OF
TRANSMITTAL") shall be mailed by Buyer or Exchange Agent (as
defined in Section 1.03c)) as soon as reasonably practicable
after the Effective Time, and in no event later than five (5)
business days thereafter, to each holder of record of Seller
Common Stock, other than holders of Excluded Shares, as of the
Effective Time. A Letter of Transmittal will be deemed properly
completed by holders of Seller Common Stock only if accompanied
by certificates representing all shares of Seller Common Stock to
be converted thereby, except as provided in Section 1.03h) below.
b) At and after the Effective Time, each certificate
("SELLER CERTIFICATE") previously representing shares of Seller
Common Stock (except as specifically set forth in Section 1.02)
shall represent only the right to receive the Merger
Consideration multiplied by the number of shares of Seller Common
Stock previously represented by the Seller Certificate.
c) Prior to the Effective Time, Buyer may select a bank or
trust company acceptable to Seller, which shall act as exchange
agent ("EXCHANGE AGENT") for the benefit of the holders of shares
of Seller Common Stock, for exchange in accordance with this
Section 1.03. If Buyer elects not to select such a bank or trust
company as Exchange Agent, then Buyer shall be deemed to be the
Exchange Agent for all purposes under this Agreement. At the
Effective Time, Buyer shall transfer to the Exchange Agent, or
set aside and hold in trust for the benefit of the stockholders
of Seller if Buyer is the Exchange Agent, sufficient funds to pay
the Merger Consideration to all stockholders of the Seller.
d) The Letter of Transmittal (which shall be subject to the
reasonable approval of Seller and Buyer) shall (i) specify that
delivery shall be effected, and risk of loss of the Seller
Certificates shall pass, only upon delivery of the Seller
Certificates to the Exchange Agent, (ii) specify that the shares
of Seller Common Stock have been canceled, that the consideration
to be paid for such shares shall be paid only upon delivery and
surrender of such Seller Certificates (except as provided in
Section 1.03h) below), and that neither dividends nor interest
shall accrue on the cash consideration payable after the
Effective Time of the Merger, (iii) be in a form and contain any
other provisions as Buyer may reasonably determine, and (iv)
include instructions for use in effecting the surrender of the
Seller Certificates in exchange for the Merger Consideration.
Upon the proper surrender of the Seller Certificates to the
Exchange Agent together with a properly completed and duly
executed Letter of Transmittal, the holder of such Seller
Certificates shall be entitled to receive in exchange therefor a
check in the amount equal to the cash that such holder has the
right to receive pursuant to Section 1.02. As soon as
practicable, but no later than 10 business days following receipt
of the properly completed letter of Transmittal and any necessary
accompanying documentation, the Exchange Agent shall distribute
the cash as provided herein. If there is a transfer of ownership
of any shares of Seller Common Stock not registered in the
transfer records of Seller the Merger Consideration shall be
issued to the transferee thereof if the Seller Certificates
representing such Seller Common Stock are presented to the
Exchange Agent, accompanied by all documents required, in the
reasonable judgment of Buyer and the Exchange Agent, (x) to
evidence and effect such transfer and (y) to evidence that any
applicable stock transfer taxes have been paid.
e) From and after the Effective Time there shall be no
transfers on the stock transfer records of Seller of any shares
of Seller Common Stock. If, after the Effective Time, Seller
Certificates are presented to Buyer, they shall be exchanged for
the Merger Consideration deliverable in respect thereof pursuant
to this Agreement in accordance with the procedures set forth in
this Section 1.03.
f) If Buyer is not acting as Exchange Agent, any portion of
the aggregate amount of cash to be paid pursuant to Section 1.02
that remains unclaimed by the stockholders of Seller for 12
months after the Effective Time shall be repaid by the Exchange
Agent to Buyer upon the written request of Buyer. After such
request is made, any stockholders of Seller who have not
theretofore complied with this Section 1.03 shall look only to
Buyer for the Merger Consideration deliverable in respect of each
share of Seller Common Stock such stockholder holds, as
determined pursuant to Section 1.02 of this Agreement, without
any interest. If outstanding Seller Certificates are not
surrendered prior to the date on which such payments would
otherwise escheat to or become the property of any governmental
unit or agency, the unclaimed items shall, to the extent
permitted by any abandoned property, escheat or other applicable
laws, become the property of Buyer (and, to the extent not in its
possession, shall be paid over to it), free and clear of all
claims or interest of any person previously entitled to such
claims. Notwithstanding the foregoing, neither the Exchange
Agent nor any party to this Agreement (or any affiliate thereof)
shall be liable to any former holder of Seller Common Stock for
any amount delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
g) Buyer and the Exchange Agent shall be entitled to rely
upon Seller's stock transfer books to establish the identity of
those persons entitled to receive the Merger Consideration, which
books shall be conclusive with respect thereto. In the event of
a dispute with respect to ownership of stock represented by any
Seller Certificate, Buyer and the Exchange Agent shall be
entitled (i) to deposit any Merger Consideration represented
thereby in escrow with an independent third party and thereafter
be relieved with respect to any claims thereto, or at Buyer's
option, or (ii) to file a suit in interpleader against the
competing parties, deposit the Merger Consideration due with
respect to the disputed Seller Certificate with a court of
competent jurisdiction, and thereafter be discharged from any
responsibility to the competing parties.
h) If any Seller Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the
person claiming such Seller Certificate to be lost, stolen or
destroyed and, if required by the Exchange Agent, the posting by
such person of a bond in such amount as the Exchange Agent may
direct as indemnity against any claim that may be made against it
with respect to such Seller Certificate, the Exchange Agent will
deliver in exchange for such lost, stolen or destroyed Seller
Certificate the Merger Consideration deliverable in respect
thereof pursuant to Section 1.02.
SECTION 1.04 STOCK OPTIONS; RESTRICTED STOCK.
a) At the Effective Time, each option to acquire shares of
Seller Common Stock (a "SELLER OPTION"), whether or not then
vested, granted pursuant to the Seller's Amended 1995 Stock
Option Plan (the "SELLER OPTION PLAN") that is then outstanding
and unexercised shall be deemed vested and exercisable, whether
or not then exercisable, and shall be canceled and terminated and
in lieu thereof the holders of such options shall be paid by
Seller or Seller S&L in cash (from funds provided by Buyer if
necessary) in an amount equal to the product of (i) the number of
shares of Seller Common Stock subject to such unexercised option
at the Effective Time and (ii) the amount by which the Merger
Consideration per share exceeds the exercise price per share of
such option net of any cash which must be withheld under federal
and state income and employment tax requirements. In the event
that the exercise price of a Seller Option is greater than the
Merger Consideration, then at the Effective Time such Seller
Option shall be canceled without any payment made in exchange
therefor. At the Effective Time, the Seller Option Plan shall be
deemed terminated.
b) Inasmuch as at the Effective Time, all shares of
restricted Seller Common Stock (the "SELLER RESTRICTED STOCK"),
held under the Seller's Recognition and Retention Plan (the
"SELLER RESTRICTED STOCK PLAN") are to be canceled and the Merger
Consideration in respect of such shares to be paid to the holders
thereof, the Seller Restricted Stock Plan shall be deemed
terminated as of the Effective Time.
SECTION 1.05 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION
AT EFFECTIVE TIME. At the Effective Time, the directors and
officers of the Surviving Corporation shall consist of the
directors and officers of Acquisition Sub serving immediately
prior to the Effective Time (a list of which is attached hereto
as EXHIBIT A), each to hold office in accordance with the
certificate of incorporation and bylaws of the Surviving
Corporation until their respective successors are duly elected or
appointed and qualified.
SECTION 1.06 CERTIFICATE OF INCORPORATION AND BYLAWS OF THE
SURVIVING CORPORATION. The certificate of incorporation and
bylaws of Seller in effect immediately prior to the Effective
Time shall be the certificate of incorporation and bylaws of the
Surviving Corporation from and after the Effective Time until
amended as provided by law.
SECTION 1.07 DISSENTERS' RIGHTS.
a) Buyer shall pay for any Dissenters' Shares in accordance
with Section 262 of the DGCL providing for appraisal rights, and
the holders thereof shall not be entitled to receive any Merger
Consideration; provided, that if appraisal rights under such law
with respect to any Dissenters' Shares shall have been
effectively withdrawn or lost, such shares will thereupon cease
to be treated as Dissenters' Shares and shall be converted into
the right to receive the Merger Consideration pursuant to Section
1.02.
b) Seller shall (i) give Buyer prompt written notice of the
receipt of any notice from a stockholder purporting to exercise
any dissenters' rights, (ii) not settle nor offer to settle any
demand for payment without the prior written consent of Buyer and
(iii) not waive any failure to comply strictly with any
procedural requirements of Section 262 of the DGCL.
SECTION 1.08 BANK MERGER. Immediately following the Effective
Time, Buyer anticipates that Buyer will cause Seller S&L (as
defined in Section 3.03a) to be merged into Buyer Bank (as
defined in Section 3.04a) pursuant to a Bank Merger Agreement
substantially in the form attached as Exhibit C with such changes
as Buyer may reasonably suggest. Concurrently with or at
approximately the same time as Buyer files applications with the
regulatory authorities for the necessary approvals for the
Merger, Buyer will file applications for the necessary approvals
for the Bank Merger so that it may become effective shortly after
the Effective Time. Buyer Bank and Seller S&L shall enter into
such Merger Agreement and Seller agrees to cooperate with Buyer,
and to use its power as the sole stockholder of Seller S&L to
cause Seller S&L to cooperate with Buyer in any necessary
preparations for the Bank Merger. Seller's and Seller S&L's
cooperation shall include but not be limited to board approvals
of the Bank Merger and the execution of merger documents;
provided, however, that (i) neither Seller nor Seller S&L shall
be requested to do any act in violation of any law or fiduciary
duty; (ii) such Bank Merger shall not become effective until
after the Effective Time, (iii) there shall be no stockholder
approval by Seller or Seller S&L of the Bank Merger until after
the Effective Time, and (iv) such Bank Merger Agreement will
automatically terminate in the event of the termination of this
Agreement prior to the Closing.
ARTICLE II. STOCKHOLDERS' EQUITY AT CLOSING
SECTION 2.01 ADJUSTED STOCKHOLDERS' EQUITY. Seller agrees that
Buyer's obligation to consummate the Merger shall, at Buyer's
option, be conditioned upon the Stockholders' Equity of Seller,
consolidated with all of its Subsidiaries (as defined in Section
3.03a), at the close of business on the day prior to the
Effective Time being not less than $39,500,000 after taking into
account the adjustments described below ("Adjusted Stockholders'
Equity"). Such Adjusted Stockholders' Equity shall be determined
according to generally accepted accounting principles as they are
applied to savings and loan associations and savings and loan
association holding companies and in a manner consistent with
Seller's past practices, with assets and liabilities valued as
follows:
SECTION 2.02 VALUATION OF ASSETS.
Seller's assets shall be valued in the following manner:
a) Cash and Due. Cash items, cash equivalent items, federal
funds sold, and items in the process of collection shall be
valued at their historical book value on Seller's books,
including accrued interest not over 90 days past due;
b) Loans. Loans shall be valued at their historical book
values on Seller S&L's books, plus accrued but unpaid interest
which is not over 90 days past due, less any dealer reserve, less
any unearned discount, and less a loan loss reserve equal to .75%
of gross loans outstanding;
c) Investment Securities. Any investment securities
classified by Seller S&L as "Available for Sale" shall be valued
at their fair market values, determined by market quotations
issued by a reputable source acceptable to both parties no more
than 10 days prior to the Effective Time, plus any accrued but
unpaid interest not over 90 days past due, and investment
securities classified by Seller S&L as "Held to Maturity" shall
be valued at their historical book values on Seller S&L's books,
plus any accrued but unpaid interest not over 90 days past due;
d) Fixed Assets. Real and personal property shall be valued
at historical book value on Seller S&L's books, net of all
depreciation and any specific reserves; and
e) Other Assets. Other assets shall be valued at their
historical book values on Seller S&L's books, less any applicable
depreciation as shown on Seller S&L's books, and less any contra
asset or liability accounts in the nature of valuation or
contingency reserves existing on Seller S&L's books with respect
to any such assets.
SECTION 2.03 VALUATION OF LIABILITIES AND SPECIAL ADJUSTMENTS.
a) Deposit Liabilities. Deposit liabilities shall be valued
at their historical book values on Seller S&L's books, plus all
accrued but unpaid interest;
b) Expense Items. All items of expense shall be accrued
through the banking business day next preceding the Effective
Time, based on the most recently available billing, or based on
estimates if no related prior billing is available, and any
expense estimates agreed between the parties shall be considered
final between the parties, regardless of the amount of the actual
▇▇▇▇▇▇▇▇, except in the event of a breach of a representation or
warranty contained herein; and
c) Other Liabilities. Other liabilities shall be valued at
their historical book value on Seller S&L's books, or in the case
of contingent or unliquidated liabilities at their reasonably
estimated future cost in accordance with GAAP (FASB 5) and
consistent with past practices; provided, however, that any
contingent or unliquidated liabilities the reporting of which is
not required by GAAP and which were disclosed on Seller's
Disclosure Letter delivered to Buyer prior to the date hereof
shall not be shown as liabilities.
d) Fees. Any fees due or paid to Seller's or Seller S&L's
advisors, agents, attorneys, accountants, brokers or finders
(other than the fees owed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. for
investment banking services) regarding this transaction shall be
treated as a liability and expense in computing such
Stockholders' Equity.
e) Other Adjustments. Any adjustments to assets or
liabilities made pursuant to Section 5.02 shall not be shown and
there shall be no accrual for payments to be made pursuant to
Section 1.04 hereof or by reason of payments which are to be made
pursuant to the change in control provisions of Seller's Director
Emeritus Agreements to the extent that such payments exceed the
normal accrual for past service.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
SECTION 3.01 DISCLOSURE LETTERS. Prior to the execution and
delivery of this Agreement, Seller and Buyer each shall have
delivered to the other a letter (each, its "DISCLOSURE LETTER")
setting forth, among other things, facts, circumstances and
events the disclosure of which is required or appropriate in
relation to any or all of their respective representations and
warranties (and making specific reference to the section or
subsection, as the case may be, of this Agreement to which they
relate); provided, that (a) no such fact, circumstance or event
is required to be set forth in the Disclosure Letter as an
exception to a representation or warranty if its absence is not
reasonably likely to result in the related representation or
warranty being deemed untrue or incorrect under the standards
established by Section 3.02 except that Seller's Disclosure
Letter shall include any fact, circumstance or event having a
negative financial impact of $25,000 or greater regardless of
whether or not the standards established by Section 3.02 have
been met and (b) the mere inclusion of a fact, circumstance or
event in a Disclosure Letter shall not be deemed an admission by
a party that such item represents a material exception or that
such item is reasonably likely to result in a Material Adverse
Effect (as defined in Section 3.02(b)).
SECTION 3.02 STANDARDS.
a) No representation or warranty of Seller or Buyer
contained in Section 3.03 or Section 3.04, respectively, shall be
deemed untrue or incorrect, and no party hereto shall be deemed
to have breached a representation or warranty, on account of the
existence of any fact, circumstance or event unless, as a direct
or indirect consequence of such fact, circumstance or event,
individually or taken together with all other facts,
circumstances or events inconsistent with any paragraph of
Section 3.03 or Section 3.04, as applicable, there is reasonably
likely to exist a Material Adverse Effect. Seller'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 pursuant to
this Agreement or in compliance with a written request of Buyer.
b) As used in this Agreement, the term "Material Adverse
Effect" means an effect which is material and adverse to the
business, financial condition or results of operations of Seller
and its Subsidiaries (as defined in Section 3.03a) or Buyer and
its Subsidiaries, as the context may dictate, taken as a whole;
provided, however, that any such effect resulting from any (i)
changes in laws, rules or regulations or GAAP or regulatory
accounting requirements or interpretations thereof that apply to
either Buyer and its Subsidiaries or Seller and its Subsidiaries,
as the case may be, or to similarly situated financial and/or
depository institutions or (ii) changes in economic conditions
affecting financial institutions generally, including but not
limited to, changes in the general level of market interest rates
and/or deposit rates, shall not be considered in determining if a
Material Adverse Effect has occurred.
c) For purposes of this Agreement, "knowledge" shall mean,
with respect to a party hereto, actual knowledge of any of the
members of the Board of Directors of that party, any officer of
that party with the title ranking not less than vice president,
or any in-house general counsel of such party.
SECTION 3.03 REPRESENTATIONS AND WARRANTIES OF SELLER. Subject
to Section 3.01 and Section 3.02, Seller represents and warrants
to Buyer that, except as disclosed in Seller's Disclosure Letter:
a) Organization.
Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and is
registered as a savings and loan holding company under the Home
Owners' Loan Act, as amended ("HOLA"). The Cameron Savings &
Loan Association F.A. ("Seller S&L") is a stock savings
association duly organized, validly existing and in good standing
under the laws of the United States of America and is a wholly-
owned Subsidiary (as defined below) of Seller. Each Subsidiary
of Seller, other than Seller S&L, is a corporation, limited
liability company or partnership duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation or organization. Each of Seller and its
Subsidiaries has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its
business as now being conducted. As used in this Agreement,
unless the context requires otherwise, the term "Subsidiary" when
used with respect to any party means any corporation or other
organization, whether incorporated or unincorporated, which is
consolidated with such party for financial reporting purposes or
which is owned or controlled, directly or indirectly, by such
party through a sufficient number of shares or other evidence of
ownership of such corporation or other organization to have the
power to elect a majority of the board of directors or otherwise
to control such corporation or other organization.
Seller and each of its Subsidiaries has the requisite
corporate power and authority and is duly qualified to do
business and is in good standing in each jurisdiction in which
the nature of its organization, business or the ownership or
leasing of its properties makes such qualification necessary.
Seller's Disclosure Letter sets forth all of Seller's
Subsidiaries and all entities (whether corporations, partnerships
or similar organizations), including the corresponding percentage
ownership, in which Seller owns, directly or indirectly, 5% or
more of the ownership interests as of the date of this Agreement
and indicates for each of Seller's Subsidiaries, as of such date,
its jurisdiction of organization and the jurisdiction(s) wherein
it is qualified to do business. All such Subsidiaries and
ownership interests are in compliance with all applicable laws,
rules and regulations relating to direct investments in equity
ownership interests. Seller owns, either directly or indirectly
through Seller S&L, both the legal title to and all beneficial
interests in all of the outstanding capital stock of each of its
Subsidiaries. No Subsidiary of Seller other than Seller S&L is
an "insured depository institution" as defined in the Federal
Deposit Insurance Act, as amended ("FDIA"), and the applicable
regulations thereunder. All of the shares of capital stock of
Seller's Subsidiaries, including Seller S&L, are fully paid,
nonassessable and not subject to any preemptive rights and are
owned by Seller or a Subsidiary of Seller free and clear of any
claims, liens, encumbrances or restrictions (other than those
imposed by applicable federal and state securities laws), except
for the shares of Seller S&L pledged as collateral under the loan
agreement with Commerce Bank as set forth in Seller's Disclosure
Letter, and there are no agreements or understandings with
respect to the voting or disposition of any such shares.
The deposits of Seller S&L are insured by the Savings
Association Insurance Fund of the Federal Deposit Insurance
Corporation ("FDIC") to the extent provided in the FDIA.
b) Capital Structure.
The authorized capital stock of Seller consists of
10,000,000 shares of Seller Common Stock, par value $.01 per
share, and 2,000,000 shares of preferred stock, par value $.01
per share. As of the date of this Agreement (A) 3,026,928 shares
of Seller Common Stock had been issued, of which 1,914,049 were
issued and outstanding, (B) no shares of Seller preferred stock
were issued and outstanding, (C) no shares of Seller Common Stock
were reserved for issuance, except that 185,130 shares of Seller
Common Stock were reserved for issuance pursuant to the Seller
Option Plan, (D) no shares of Seller preferred stock were
reserved for issuance and (E) 1,112,879 shares of Seller Common
Stock were held by Seller in its treasury or by its Subsidiaries.
The authorized capital stock of Seller S&L consists of 10,000,000
shares of common stock, par value $.01 per share, and 2,000,000
shares of preferred stock. As of the date of this Agreement,
3,026,928 shares of such common stock were outstanding, no shares
of such preferred stock were outstanding and all outstanding
shares of such common stock were, and as of the Effective Time
will be, owned both legally and beneficially by Seller. All
outstanding shares of capital stock of Seller are duly authorized
and validly issued, fully paid and nonassessable and not subject
to any preemptive rights and, with respect to shares of Seller
held by Seller in its treasury or by its Subsidiaries and shares
of Seller S&L, are free and clear of all liens, claims,
encumbrances or restrictions (other than those imposed by
applicable federal and state securities laws), and there are no
agreements or understandings with respect to the voting or
disposition of any such shares. Seller's Disclosure Letter sets
forth a complete and accurate list of all outstanding options to
purchase Seller Common Stock that have been granted pursuant to
the Seller Option Plan, including the names of the optionees,
dates of grant, exercise prices, dates of vesting, dates of
termination and shares subject to each grant.
No bonds, debentures, notes or other indebtedness having the
right to vote on any matters on which stockholders may vote of
Seller are issued or outstanding.
As of the date of this Agreement, except for options granted
pursuant to the Seller Option Plan, neither Seller nor any of its
Subsidiaries has or is bound by any outstanding subscriptions,
options, warrants, calls, rights, convertible securities,
commitments or agreements of any character obligating Seller or
any of its Subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, any additional shares of capital stock
of Seller or any of its Subsidiaries or obligating Seller or any
of its Subsidiaries to grant, extend or enter into any such
option, warrant, call, right, convertible security, commitment or
agreement. As of the date hereof, there are no outstanding
contractual obligations of Seller or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital
stock of Seller or any of its Subsidiaries.
c) Authority. Seller has all requisite corporate power and
authority to enter into this Agreement, and, subject to approval
of this Agreement by the requisite vote of Seller's stockholders
and receipt of all required regulatory or governmental approvals,
to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and, subject to the
approval of this Agreement by Seller's stockholders, the
consummation of the transactions contemplated hereby, have been
duly authorized by all necessary corporate actions on the part of
Seller. This Agreement has been duly and validly executed and
delivered by Seller and constitutes a valid and binding
obligation of Seller, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights and remedies generally and subject,
as to enforceability, to general principles of equity, whether
applied in a court of law or a court of equity.
d) Stockholder Approval; Fairness Opinion. The affirmative
vote of a majority of the outstanding shares of Seller Common
Stock entitled to vote on this Agreement is the only vote of the
stockholders of Seller required for approval of this Agreement
and the consummation of the Merger and the related transactions
contemplated hereby. Seller has received the written opinion of
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. to the effect that, as of the
date hereof, the Merger Consideration to be received by Seller's
stockholders (other than Buyer) is fair, from a financial point
of view, to such stockholders.
e) No Violations; Consents. The execution, delivery and
performance of this Agreement by Seller does not, and the
consummation of the transactions contemplated hereby will not,
constitute (i) assuming receipt of all Requisite Regulatory
Approvals (as defined in Section 3.04d)) and requisite
stockholder approvals, a breach or violation of, or a default
under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license to which Seller or any of
its Subsidiaries (or any of their respective properties) is
subject, (ii) a breach or violation of, or a default under, the
certificate of incorporation or bylaws of Seller or the similar
organizational documents of any of its Subsidiaries or (iii) a
breach or violation of, or a default under (or an event which,
with due notice or lapse of time or both, would constitute a
default under), or result in the termination of, accelerate the
performance required by, or result in the creation of any lien,
pledge, security interest, charge or other encumbrance upon any
of the properties or assets of Seller or any of its Subsidiaries
under, any of the terms, conditions or provisions of any note,
bond, indenture, deed of trust, loan agreement or other
agreement, instrument or obligation to which Seller or any of its
Subsidiaries is a party, or to which any of their respective
properties or assets may be subject. The consummation by Seller
of the transactions contemplated hereby will not require any
approval, consent or waiver under any such law, rule, regulation,
judgment, decree, order, governmental permit or license or the
approval, consent or waiver of any other party to any such
agreement, or instrument, other than (v) the approval of the
holders of a majority of the outstanding shares of Seller Common
Stock entitled to vote thereon, (x) the approval of Seller as the
sole stockholder of Seller S&L, (y) the consent of the Office of
Thrift Supervision ("OTS"), and (z) the consent of any regulatory
agency having jurisdiction over Buyer. As of the date hereof,
the executive officers of Seller know of no reason pertaining to
Seller why any of the approvals referred to in this Section
3.03e) should not be obtained without the imposition of any
material condition or restriction described in the last sentence
of Section 6.01(b).
f) Reports and Financial Statements.
Seller and each of its Subsidiaries have each timely filed
all material reports, registrations and statements, together with
any amendments required to be made with respect thereto, that
they were required to file with (a) the FDIC, (b) the OTS, (c)
the National Association of Securities Dealers, Inc. ("NASD"),
(d) the Missouri Department of Insurance, and (e) the Securities
and Exchange Commission ("SEC") (collectively, "Seller's
Reports") and, to Seller's knowledge, have paid all fees and
assessments due and payable in connection therewith. As of their
respective dates, none of Seller's Reports contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were
made, not misleading. All of Seller's Reports filed with the SEC
complied in all material respects with the applicable
requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and the rules and regulations of the SEC
promulgated thereunder.
Each of the financial statements of Seller included in
Seller's Reports complied as to form, as of their respective
dates of filing with the SEC, in all material respects with
applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto and have been
prepared in accordance with GAAP applied on a consistent basis
during the periods involved (except as may be indicated in the
notes thereto or, in the case of the unaudited financial
statements, as permitted by the SEC). Each of the consolidated
statements of condition contained or incorporated by reference in
Seller's Reports (including in each case any related notes and
schedules) and each of the consolidated statements of operations,
consolidated statements of cash flows and consolidated statements
of changes in stockholders' equity, contained or incorporated by
reference in Seller's Reports (including in each case any related
notes and schedules) fairly presented (a) the financial position
of the entity or entities to which it relates as of its date and
(b) the results of operations, stockholders' equity and cash
flows, as the case may be, of the entity or entities to which it
relates for the periods set forth therein (subject, in the case
of unaudited interim statements, to normal year-end adjustments
that are not material in amount or effect).
g) Absence of Certain Changes or Events. Except as
disclosed in Seller's Reports filed on or prior to the date of
this Agreement or in Seller's Disclosure Letter, since September
30, 1999 (i) Seller and its Subsidiaries have not incurred any
liability, either accrued, alleged, contingent or disputed,
except in the ordinary course of their business consistent with
past practice and except for the engagement letter agreements
with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. set forth in Seller's
Disclosure Letter, (ii) Seller and its Subsidiaries have
conducted their respective businesses only in the ordinary and
usual course of such businesses consistent with their past
practices, and (iii) there has not been any other event, change
or occurrence or continuance of any circumstance which has had,
or is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect with respect to Seller and
its Subsidiaries. To the knowledge of Seller, there are no
impending termination, expiration, or loss of contracts,
franchises, licenses, permits or other assets that, individually
or in the aggregate, are reasonably likely to have a Material
Adverse Effect on Seller.
h) Absence of Claims. No litigation, controversy, claim,
action, suit or other legal, administrative or arbitration
proceeding before any court, governmental agency or arbitrator is
pending against Seller or any of its Subsidiaries and, to the
knowledge of Seller, no such litigation, controversy, claim,
action, suit or proceeding has been threatened or asserted in
either case which is reasonably likely to have a Material Adverse
Effect with respect to Seller or its Subsidiaries, or the
transactions contemplated by this Agreement, or upon the ability
of Seller to perform its obligations under this Agreement.
i) Absence of Regulatory Actions. Except as set forth in
Seller's Disclosure Letter, neither Seller nor any of its
Subsidiaries has been a party to any cease and desist order,
written agreement or memorandum of understanding with, or any
commitment letter or similar undertaking to, or has been subject
to any action, proceeding, order or directive by, or has been a
recipient of any extraordinary supervisory letter from any
federal or state governmental authority charged with the
supervision or regulation of depository institutions or
depository institution holding companies or engaged in the
insurance of bank and/or savings and loan deposits ("Government
Regulators"), or has adopted any board resolutions at the request
of any Government Regulator, or has been advised by any
Government Regulator that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or
requesting) any such action, proceeding, order, directive,
written agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter, board resolutions or
similar undertaking.
j) Taxes. All federal, state, local and foreign tax returns
required to be filed by or on behalf of Seller or any of its
Subsidiaries have been timely filed or requests for extensions
have been timely filed and any such extension shall have been
granted and not have expired, and all such filed returns are
complete and accurate in all material respects. All taxes shown
on such returns, all taxes required to be shown on returns for
which extensions have been granted and all other taxes required
to be paid by Seller or any of its Subsidiaries have been paid in
full or adequate provision has been made for any such taxes on
Seller's balance sheet (in accordance with GAAP). For purposes
of this Section 3.03j), the term "taxes" shall include all
income, franchise, gross receipts, real and personal property,
real property transfer and gains, wage and employment taxes. As
of the date of this Agreement, there is no audit examination,
deficiency assessment, tax investigation or refund litigation
with respect to any taxes of Seller or any of its Subsidiaries,
and no claim has been made by any authority in a jurisdiction
where Seller or any of its Subsidiaries do not file tax returns
that Seller or any such Subsidiary is subject to taxation in that
jurisdiction. All taxes, interest, additions and penalties due
with respect to completed and settled examinations or concluded
litigation relating to Seller or any of its Subsidiaries have
been paid in full or adequate provision has been made for any
such taxes on Seller's balance sheet (in accordance with GAAP).
Seller and each of its Subsidiaries have not executed an
extension or waiver of any statute of limitations on the
assessment or collection of any material tax due that is
currently in effect. Seller and each of its Subsidiaries has
withheld and paid all taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third
party, and Seller and each of its Subsidiaries has timely
complied with all applicable information reporting requirements
under Part III, Subchapter A of Chapter 61 of the IRC and similar
applicable state and local information reporting requirements.
Adequate provision for any taxes due or to become due for Seller
or any of its Subsidiaries for the period or periods reflected on
Seller's most recent financial statements has been made and is
reflected on such Seller financial statements. Deferred Taxes of
Seller and its Subsidiaries have been provided for in accordance
with GAAP. To the knowledge of Seller, there is no item of
deferred taxable income which will become taxable due to the
consummation of the Merger or the Bank Merger that is reasonably
likely to have a Material Adverse Effect on Seller or its
Subsidiaries, other than as disclosed in Seller's Disclosure
Letter.
k) Agreements.
Except (w) for arrangements made in the ordinary course of
business, (x) as set forth in Seller's Disclosure Letter, (y) as
disclosed in Seller's Reports filed on or prior to the date of
this Agreement, or (z) as contemplated by this Agreement, Seller
and its Subsidiaries are not bound by any material contract (as
defined in Item 601 (b)(10) of Regulation S-K promulgated by the
SEC) to be performed after the date hereof that has not been
filed with or incorporated by reference in Seller's Reports.
Except (1) as disclosed in Seller's Disclosure Letter, (2) as
disclosed in Seller's Reports filed on or prior to the date of
this Agreement, or (3) as contemplated by this Agreement, neither
Seller nor any of its Subsidiaries is a party to an oral or
written or, to Seller's knowledge, an oral (A) consulting
agreement (including data processing and software programming
contracts) not terminable on 60 days' or less notice, (B)
agreement with any present or former director, officer or
employee of Seller or any of its Subsidiaries the benefits of
which are contingent, or the terms of which are materially
altered, upon the occurrence of a transaction involving Seller or
any of its Subsidiaries of the nature contemplated by this
Agreement, (C) agreement with respect to any employee or director
of Seller or any of its Subsidiaries providing any term of
employment or compensation guarantee extending for a period
longer than 60 days, (D) agreement or plan, including any stock
option plan, phantom stock or stock appreciation rights plan,
restricted stock plan or stock purchase plan, any of the benefits
of which will be increased, or the vesting or payment of the
benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement or the value
of any of the benefits of which will be calculated on the basis
of any of the transactions contemplated by this Agreement or (E)
agreement containing covenants that limit the ability of Seller
or any of its Subsidiaries to compete in any line of business or
with any person, or that involve any restriction on the
geographic area in which, or method by which, Seller (including
any successor thereof) or any of its Subsidiaries may carry on
its business (other than as may be required by law or any
regulatory agency);
Neither Seller nor any of its Subsidiaries is in default
under or is in violation of any provision of any note, bond,
indenture, mortgage, deed of trust, loan agreement, lease or
other agreement to which it is a party or by which it is bound or
to which any of its respective properties or assets is subject;
and,
Seller and each of its Subsidiaries owns or possesses valid
and binding licenses and other rights to use without payment all
patents, copyrights, trade secrets, trade names, service marks
and trademarks used in its businesses, and neither Seller nor any
of its Subsidiaries has received any notice of conflict with
respect thereto that asserts the right of others. Each of Seller
and its Subsidiaries has performed all the obligations required
to be performed by it and are not in default under any contract,
agreement, arrangement or commitment relating to any of the
foregoing.
Seller's Disclosure Letter contains a summary description of
all leases, commitments, contracts, licenses, maintenance
agreements and other agreements of Seller and its Subsidiaries
involving a liability or obligation of Seller in excess of
$10,000 per annum, and a true and complete list of all letters
of credit, guarantees, indemnity agreements and all commitments
to loan or discount or issue a letter of credit which would
aggregate in excess of $10,000 to any person, firm or
corporation.
l) Labor Matters. Neither Seller nor any of its
Subsidiaries is or, to Seller's knowledge, has ever been a party
to, or is or, to Seller's knowledge, has ever been bound by, any
collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization with
respect to its employees, nor is Seller or any of its
Subsidiaries the subject of any proceeding asserting that it has
committed an unfair labor practice or seeking to compel it or any
such Subsidiary to bargain with any labor organization as to
wages and conditions of employment nor, to Seller's knowledge,
has any such proceeding been threatened, nor, to Seller's
knowledge, is there any strike, other labor dispute or
organizational effort involving Seller or any of its Subsidiaries
pending or threatened.
m) Employee Benefit Plans. Seller's Disclosure Letter
contains a complete and accurate list of all written and, to
Seller's knowledge, oral pension, retirement, stock option, stock
purchase, stock ownership, savings, stock appreciation right,
profit sharing, deferred compensation, consulting, bonus, group
insurance, severance and other benefit plans, funds, contracts,
agreements and arrangements, including, but not limited to,
"employee benefit plans," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), incentive and welfare policies, contracts, plans and
arrangements and all trust agreements related thereto with
respect to any present or former directors, officers or other
employees of Seller or any of its Subsidiaries, cafeteria or
section 125 plans, fringe benefit plans including but not limited
to automobiles, sabbaticals, clubs or any item considered a
fringe benefit within the meaning of IRC Section 32 (hereinafter
collectively referred to as the "Seller Employee Plans"). All of
the Seller Employee Plans comply in all material respects with
all applicable requirements of ERISA, the IRC and other
applicable laws; with respect to the Seller Employee Plans, to
the knowledge of Seller, no event has occurred that would subject
Seller or any of its Subsidiaries to a material liability under
ERISA, the IRC or any other applicable law; there has occurred no
"prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the IRC) which is reasonably likely to result in
the imposition of any penalties or taxes under Section 502(i) of
ERISA or Section 4975 of the IRC upon Seller or any of its
Subsidiaries; and all required contributions to the Seller
Employee Plans through the date hereof have been made. Neither
Seller nor any of its Subsidiaries has provided, or is required
to provide, security to any Seller pension plan or to any single-
employer plan of an ERISA Affiliate (as defined under Section
4001(b)(l) of ERISA or Section 414 of the IRC) pursuant to
Section 401(a)(29) of the IRC. Neither Seller, its Subsidiaries,
nor any ERISA Affiliate has contributed to any "multiemployer
plan," as defined in Section 3(37) of ERISA, on or after
September 26, 1980. Seller does not maintain any plan that is
subject to Title IV of ERISA, and has not terminated any such
plan within the past five (5) years. Each Seller Employee Plan
that is an "employee pension benefit plan" (as defined in Section
3(2) of ERISA) and which is intended to be qualified under
Section 401(a) of the IRC (a "Seller Qualified Plan") has
received a favorable determination letter from the Internal
Revenue Service ("IRS"), and Seller and its Subsidiaries are not
aware of any circumstances likely to result in revocation of any
such favorable determination letter. There is no pending or, to
Seller's knowledge, threatened litigation, administrative action
or proceeding relating to any Seller Employee Plan. There has
been no announcement or commitment by Seller or any of its
Subsidiaries to create an additional Seller Employee Plan, or to
amend any Seller Employee Plan, except for amendments required by
applicable law which do not materially increase the cost of such
Seller Employee Plan; and, except as specifically identified in
Seller's Disclosure Letter, Seller and its Subsidiaries do not
have any obligations for post-retirement or post-employment
benefits under any Seller Employee Plan that cannot be amended or
terminated upon 60 days' notice or less without incurring any
liability thereunder, except for coverage required by Part 6 of
Title I of ERISA or Section 4980B of the IRC, or similar state
laws, the cost of which is borne by the insured individuals. The
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby will not result in any
payment or series of payments by Buyer, Seller or any of their
Subsidiaries to any person which is an "excess parachute payment"
(as defined in Section 280G of the IRC). All payments made by
Buyer, Seller or any of their Subsidiaries to any employee under
a Seller Employee Plan will be fully tax-deductible as employment
compensation to Buyer, Seller, or one of their Subsidiaries. To
the best knowledge of Seller, no breach of a fiduciary duty under
ERISA Section 404 or Section 405 has occurred and with respect to which any
outstanding liability to any participant or any excise tax or
liability exists or will exist as of the Effective Time with
respect to any of the Seller Employee Plans. Each of the Seller
Employee Plans which is a group health plan within the meaning of
IRC Section 5000(b)(1) is in compliance with the continuation of health
care coverage requirements contained in IRC Section 4980B and ERISA
Section 601 et seq. A list of participants or beneficiaries who have
elected continuation coverage in accordance with such laws is provided in
Seller's Disclosure Letter. With respect to each Seller Employee
Plan, Seller has supplied to Buyer a true and correct copy of (A)
the annual report on the applicable form of the Form 5500 series
filed with the IRS for the three most recent plan years, if
required to be filed, (B) such Seller Employee Plan, including
amendments thereto, (C) each trust agreement, insurance contract
or other funding arrangement relating to such Seller Employee
Plan, including amendments thereto, (D) the most recent summary
plan description and summary of material modifications thereto
for such Seller Employee Plan, if the Seller Employee Plan is
subject to Title I of ERISA, (E) the most recent actuarial report
or valuation if such Seller Employee Plan is a Seller pension
plan and any subsequent changes to the actuarial assumptions
contained therein, and (F) the most recent determination letter
issued by the IRS if such Seller Employee Plan is a Seller
Qualified Plan. With respect to Seller's ESOP, Seller also has
supplied Buyer a true and correct copy of (A) the latest
financial statement of the ESOP including a list of assets, (B) a
schedule of stock purchases by the ESOP, including seller,
valuation and number of shares, (C) a schedule of stock
contributions to the ESOP, (D) a list of the most recent ESOP
distributions including participant name and amount, and (E) a
schedule of the most recent contribution allocation including
participant name, compensation and share of contribution.
n) Title to Assets. Seller's Disclosure Letter contains a
complete and accurate list of all real property owned or leased
by Seller or any of its Subsidiaries, including all properties of
Seller or any of its Subsidiaries classified as "Real Estate
Owned" or words of similar import (the "Real Property") and
except as disclosed in Seller's Disclosure Letter, title to all
of such real properties is insured for an amount not less than
the book value of all such real properties on Seller's or its
Subsidiaries' books under an owner's title insurance policy
issued by a title insurance company authorized to do business in
the state where the property is located. Seller and each of its
Subsidiaries have good and marketable title to their respective
properties and assets (including any intellectual property asset
such as any trademark, service ▇▇▇▇, trade name or copyright) and
property acquired in a judicial foreclosure proceeding or by way
of a deed in lieu of foreclosure or similar transfer in each case
free and clear of any liens, security interests, encumbrances,
mortgages, pledges, restrictions, charges or rights or interests
of others, except pledges to secure deposits and other liens
incurred in the ordinary course of business. Each lease for real
or personal property pursuant to which Seller or any of its
Subsidiaries is lessee or lessor is valid and in full force and
effect and neither Seller nor any of its Subsidiaries, nor any
other party to any such lease is in default or in violation of
any provisions of any such lease. All material tangible
properties of Seller and each of its Subsidiaries are in a good
state of maintenance and repair, conform with all applicable
ordinances, regulations and zoning laws, are considered by Seller
to be adequate for the current business of Seller and its
Subsidiaries and improvements on real property owned or leased by
Seller are located wholly within the boundaries of the property
owned or leased by Seller or its Subsidiaries. There are no
unpaid charges, debts, liabilities, claims or obligations arising
from the construction, ownership or operation of the banking
premises of Seller S&L which would give rise to any mechanics'
liens against any such real estate or any part thereof, or for
which Seller or Seller S&L would be responsible, except for i)
liens imposed by law and incurred in the ordinary course of
business for obligations not yet due to carriers, warehousemen,
laborers, materialmen and the like, but only to the extent the
obligation giving rise to the lien is included as a liability on
Seller's books and records and ii) such minor encumbrances, if
any, as do not materially detract from the value of, or
materially interfere with the present use of, such properties,
and which minor encumbrances do not render the title to such
property unmarketable.
o) Compliance with Laws. Seller and each of its
Subsidiaries has all permits, licenses, certificates of
authority, orders and approvals of and has made all filings,
applications and registrations with, all federal, state, local
and foreign governmental or regulatory bodies (each, a
"Governmental Entity") that are required in order to operate its
material assets and to permit it to carry on its business as it
is presently conducted; all such permits, licenses, certificates
of authority, orders and approvals are in full force and effect,
and, to the knowledge of Seller, no suspension or cancellation of
any of them is threatened. Since the date of its incorporation,
the corporate affairs of Seller have not been conducted in
violation in any material respect of any law, ordinance,
regulation, order, writ, rule, decree or approval of any
Governmental Entity. Neither Seller nor any of its Subsidiaries
is in material violation of, is, to the knowledge of Seller,
under investigation with respect to any material violation of, or
has been given notice or been charged with any material violation
of, any law, ordinance, regulation, order, writ, rule, decree or
condition to approval of any Governmental Entity.
p) Fees. Other than investment banking services performed
for Seller by ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C., neither Seller nor
any of its Subsidiaries, nor any of their respective officers,
directors, employees or agents, has employed any broker or finder
or incurred any liability for any financial advisory' fees,
brokerage fees, commissions or finder's fees, and no broker or
finder has acted directly or indirectly for Seller or any of its
Subsidiaries in connection with this Agreement or the
transactions contemplated hereby. Seller has provided Buyer with
a true and correct copy of the contract between Seller and
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
q) Environmental Matters. There is no suit, claim, action,
demand, executive or administrative order, directive,
investigation or proceeding pending or, to the knowledge of
Seller, threatened before any court, governmental agency or board
or other forum against Seller or any of its Subsidiaries for
alleged noncompliance (including by any predecessor) with, or
liability under, any Environmental Law (as defined below) or
relating to the presence of or release into the environment of
any Hazardous Material (as defined below), whether or not
occurring at or on a site owned, leased or operated by it or any
of its Subsidiaries. To Seller's knowledge, the properties
currently owned or operated by Seller or any of its Subsidiaries
(including, without limitation, soil, groundwater or surface
water on, under or adjacent to the properties, and buildings
thereon) are not contaminated with and do not otherwise contain
any Hazardous Material other than as permitted under applicable
Environmental Law. Neither Seller nor any of its Subsidiaries
has received any notice, demand letter, executive or
administrative order, directive, request or other communication
(written or oral) for information from any federal, state, local
or foreign governmental entity or any third party indicating that
it may be in violation of, or liable under, any Environmental
Law. To Seller's knowledge, there are no underground storage
tanks on, in or under any properties owned or operated by Seller
or any of its Subsidiaries and no underground storage tanks have
been closed or removed from any properties owned or operated by
Seller or any of its Subsidiaries. To Seller's knowledge, during
the period of Seller's or any of its Subsidiaries' ownership or
operation of any of their respective current properties, there
has been no contamination by or release of Hazardous Materials
in, on, under or affecting such properties. To Seller's
knowledge, prior to the period of Seller's or any of its
Subsidiaries' ownership or operation of any of their respective
current properties, there was no contamination by or release of
Hazardous Material in, on, under or affecting such properties.
"ENVIRONMENTAL LAW" means (i) any federal, state or local
law, statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, legal doctrine, order,
directive, executive or administrative order, judgment, decree,
injunction, legal requirement or agreement with any Governmental
Entity relating to (A) the protection, preservation or
restoration of the environment (which includes, without
limitation, air, water vapor, surface water, groundwater,
drinking water supply, structures, soil, surface land, subsurface
land, plant and animal life or any other natural resource), or to
human health or safety as it relates to Hazardous Materials, or
(B) the exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling,
production, release or disposal of, Hazardous Materials, in each
case as amended and as now in effect, including, without
limitation, (i) the Federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Superfund Amendments
and Reauthorization Act of 1986, the Federal Water Pollution
Control Act of 1972, the Federal Clean Air Act, the Federal Clean
Water Act, the Federal Resource Conservation and Recovery Act of
1976 (including, but not limited to, the Hazardous and Solid
Waste Amendments thereto and Subtitle I relating to underground
storage tanks), the Federal Solid Waste Disposal and the Federal
Toxic Substances Control Act, the Federal Insecticide, Fungicide
and Rodenticide Act, the Federal Occupational Safety and Health
Act of 1970 as it relates to Hazardous Materials, the Federal
Hazardous Substances Transportation Act, the Emergency Planning
and Community Right-To-Know Act, the Safe Drinking Water Act, the
Endangered Species Act, the National Environmental Policy Act,
the Rivers and Harbors Appropriation Act or any so-called
"Superfund" or "Superlien" law, each as amended and as now or
hereafter in effect, and (ii) any common law or equitable
doctrine (including, without limitation, injunctive relief and
tort doctrines such as negligence, nuisance, trespass and strict
liability) that may impose liability or obligations for injuries
or damages due to, or threatened as a result of the presence of
or exposure to any Hazardous Material.
"HAZARDOUS MATERIAL" means any substance (whether solid,
liquid or gas) which is or could be detrimental to the
environment, currently or hereafter listed, defined, designated
or classified as hazardous, toxic, radioactive or dangerous, or
otherwise regulated under any Environmental Law, whether by type
or by quantity, including any substance containing any such
substance as a component. Hazardous Material includes, without
limitation, any toxic waste, pollutant, contaminant, hazardous
substance, toxic substance, hazardous waste, special waste,
industrial substance, oil or petroleum, or any derivative or by-
product thereof, radon, radioactive material, asbestos, asbestos-
containing material, urea formaldehyde foam insulation, lead and
polychlorinated biphenyl.
r) Loan Portfolio; Allowance; Asset Quality.
With respect to each loan owned by Seller or its
Subsidiaries in whole or in part, (A) the note and the related
security documents are each legal, valid and binding obligations
of the maker or obligor thereof, enforceable against such maker
or obligor in accordance with their terms, without valid set-offs
or counterclaims and (B) the note and the related security
documents, copies of which are included in the loan files, are
true and correct copies of the documents they purport to be and
have not been suspended, amended, modified, canceled or otherwise
changed except as otherwise disclosed by documents in the
applicable loan file. To the knowledge of Seller (x) all notes,
evidences of indebtedness and agreements for the payment of money
and all related documents, instruments, papers and other security
agreements of Seller S&L applicable thereto, are bona fide, are
genuine as to signatures of all makers, endorsers and guarantors,
and were given for valid consideration; (y) all collateral
securing such indebtedness existed at the disbursement of the
funds which created the indebtedness; and (z) except as may be
disclosed in the books and records of Seller S&L relating to its
loans, Seller S&L has made no affirmative or negative oral or
written commitments which would materially impair the enforcement
of any of Seller S&L's loans.
The allowance for loan losses reflected in Seller's
statement of financial condition at September 30, 1999, was, and
the allowance for loan losses shown on the balance sheets in
Seller's Reports for periods ending after September 30, 1999, was
or will be, in the opinion of Seller's management, adequate to
provide for losses inherent in Seller's loan portfolio.
s) Deposits. None of the deposits of Seller or any of its
Subsidiaries is a "brokered" deposit.
t) Anti-takeover Provisions Inapplicable. Seller and its
Subsidiaries have taken all actions required to exempt Seller,
Buyer, Acquisition Sub, the Agreement and the Merger from Section
203 of the DGCL.
u) Charter Provisions. Seller and its Subsidiaries have
taken all action so that the entering into of this Agreement and
the consummation of the Merger and the other transactions
contemplated by this Agreement (including the Bank Merger) do not
and will not result in the grant of any rights to any person
under the Certificate of Incorporation, bylaws, or other
governing instruments of Seller or any of its Subsidiaries or
restrict or impair the ability of Buyer or any of its
Subsidiaries or Affiliates to vote, or otherwise to exercise the
rights of a stockholder with respect to, shares of Seller or any
of its Subsidiaries that may be directly or indirectly acquired
or controlled by it.
v) Material Interests of Certain Persons; Transactions with
Insiders. No officer or director or 5% stockholder of Seller, or
any "associate" (as such term is defined in Rule 12b-2
promulgated under the Exchange Act) of any such officer or
director or stockholder, has any material interest in any
material contract or property (real or personal), tangible or
intangible, used in or pertaining to the business of Seller or
any of its Subsidiaries. Seller's Disclosure Letter describes
all transactions in which any current officer or director, or any
Affiliate or Subsidiary thereof, directly or indirectly, has
borrowed from, loaned to, supplied or provided goods or services
to, purchased assets from, sold assets to, or done business in
any manner with Seller or Seller S&L or is a party to any
agreement with Seller or Seller S&L, and all transactions known
to management in which any current 5% stockholder or employee of
Seller or Seller S&L, or any Affiliate or Subsidiary thereof,
directly or indirectly, has borrowed from, loaned to, supplied or
provided goods or services to, purchased assets from, sold assets
to, or done business in any manner with Seller or Seller S&L or
is a party to any agreement with Seller or Seller S&L.
w) Insurance. Seller's Disclosure Letter contains a
complete list of all insurance policies of Seller and its
Subsidiaries presently in effect. In the opinion of Seller's
management, Seller and its Subsidiaries are presently insured for
amounts deemed reasonable by management against such risks as
companies engaged in a similar business would, in accordance with
good business practice, customarily be insured. All of the
insurance policies and bonds maintained by Seller and its
Subsidiaries are in full force and effect, Seller and its
Subsidiaries are not in default thereunder and all material
claims thereunder have been filed in due and timely fashion.
Seller and its Subsidiaries have received no notice from any
insurance carrier that (i) any insurance will be canceled or
that coverage thereunder will be reduced or eliminated, or (ii)
premium costs with respect to any policies of insurance will be
substantially increased.
x) Investment Securities; Derivatives.
Except for investments in Federal Home Loan Bank ("FHLB")
Stock, pledges to secure FHLB borrowings, pledges to secure
deposits and reverse repurchase agreements entered into in arms-
length transactions pursuant to normal commercial terms and
conditions and entered into in the ordinary course of business
and restrictions that exist for securities to be classified as
"held to maturity," none of the investment securities held by
Seller or any of its Subsidiaries as of the date of this
Agreement is, or will be at Closing, subject to any restriction
(contractual or statutory) that would materially impair the
ability of the entity holding such investment freely to dispose
of such investment at any time.
Except (x) as set forth in Seller's Disclosure Letter, (y)
as disclosed in Seller's Reports filed on or prior to the date of
this Agreement, or (z) for adjustable-rate mortgage loans and
adjustable-rate advances, neither Seller nor any of its
Subsidiaries is a party to or has agreed to enter into an
exchange-traded or over-the-counter equity, interest rate,
foreign exchange or other swap, forward, future, option, cap,
floor or collar or any other contract that is a derivative
contract (including various combinations thereof) or owns
securities that (A) are referred to generically as "structured
notes," "high risk mortgage derivatives," "capped floating rate
notes" or "capped floating rate mortgage derivatives" or (B) are
likely to have changes in value as a result of interest or
exchange rate changes that significantly exceed normal changes in
value attributable to interest or exchange rate changes.
y) Credit Card Issuing Agreement. Neither Seller nor Seller
S&L has any credit card agreement which would prevent Buyer from
soliciting Seller S&L's customers to accept a credit card issued
by or on behalf of Buyer or an Affiliate of Buyer.
z) Indemnification. Except (i) as provided in the
certificate of incorporation or bylaws of Seller and the similar
governing documents of its Subsidiaries, or (ii) as set forth in
Seller's Disclosure Letter, neither Seller nor any Subsidiary is
a party to any indemnification agreement with any of its present
or former directors, officers, employees, agents or other persons
who serve or served in any other capacity with any other
enterprise at the request of Seller and, to the knowledge of
Seller, there are no claims for which any such person would be
entitled to indemnification under the organization certificate of
incorporation or bylaws of Seller or the similar governing
documents of any of its Subsidiaries, under any applicable law or
regulation or under any indemnification agreement.
aa) Books and Records. The books and records of Seller and
its Subsidiaries on a consolidated basis have been, and are
being, maintained in accordance with applicable legal and
accounting requirements and reflect in all material respects the
substance of events and transactions that should be included
therein.
bb) Corporate Documents. Complete and correct copies of the
certificate of incorporation, bylaws and similar governing
documents of Seller and each of Seller's Subsidiaries, as in
effect as of the date of this Agreement, have previously been
delivered to Buyer. The minute books of Seller and each of
Seller's Subsidiaries constitute a complete and correct record of
all actions taken by their respective boards of directors (and
each committee thereof) and their stockholders.
cc) Community Reinvestment Act Compliance. Seller S&L is in
material compliance with the applicable provisions of the
Community Reinvestment Act, as amended (the "CRA"), and the
regulations promulgated thereunder, and, as of its most recent
CRA examination, Seller S&L has a CRA rating of satisfactory or
better. To Seller's knowledge, there is no fact or circumstance
or set of facts or circumstances that would cause Seller S&L to
fail to comply with such provisions or cause the CRA rating of
Seller S&L to fall below satisfactory.
dd) Conduct of Business Since Due Diligence. Since the date
of information provided to Buyer during Buyer's due diligence:
Ordinary Course. The business and affairs of Seller and
Seller S&L have been conducted and carried on only in the
ordinary and regular course consistent with its past practices.
Articles and Bylaws. There has been no change, amendment or
other modification made in the Articles of Incorporation or
Bylaws of Seller or Seller S&L.
Employment Benefits. There has been no increase or other
change made in the rate or nature of compensation, including
wages, salaries, bonuses and benefits under Seller's employee
plans, which has been paid, or will be paid or payable by Seller
or Seller S&L to any officer, employee, stockholder or director
of Seller S&L, other than customary year-end increases and
bonuses consistent with Seller or Seller S&L's past practices.
No additional stock options or rights to receive any stock have
been granted or allocated to any employees.
Casualty Loss. Seller S&L has not sustained or incurred any
loss or damage, whether or not insured against, on account of
fire, flood, accident or other calamity which has materially
interfered with or affected, or may materially interfere with or
affect, the operation of its properties, assets or liabilities of
Seller S&L.
Accounting Methods. There has been no material change in
any method of accounting or accounting practice of Seller or
Seller S&L.
Waiver of Rights. Seller S&L has not waived any rights, the
result of which, individually or in the aggregate, would have a
Material Adverse Effect on its financial condition.
SECTION 3.04 REPRESENTATIONS AND WARRANTIES OF BUYER.
Subject to Section 3.01 and Section 3.02, Buyer represents and
warrants to Seller that:
a) Organization.
Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Missouri and is
registered as a bank holding company under the Bank Holding
Company Act, as amended ("BHCA"). Bank Midwest, N.A. ("Buyer
Bank") is a bank duly organized, validly existing and in good
standing under the laws of the United States of America and is a
Subsidiary of Buyer. Each Subsidiary of Buyer other than Buyer
Bank is a national bank or corporation, duly organized, validly
existing and in good standing under the laws of its jurisdiction
of incorporation or organization. Each of Buyer and its
Subsidiaries has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its
business as now being conducted.
Acquisition Sub will be a corporation, duly organized,
validly existing and in good standing under the laws of Delaware,
all of the outstanding capital stock of which will be prior to
the Effective Time, owned directly or indirectly by Buyer free
and clear of any lien, charge or other encumbrance. From and
after its incorporation, Acquisition Sub will not engage in any
activities other than in connection with or as contemplated by
this Agreement. Acquisition Sub will have prior to the Effective
Time, all corporate power and authority to consummate the
transactions contemplated hereunder and carry out all of its
obligations with respect to such transactions. The consummation
of the transactions contemplated hereby will have been prior to
the Closing, duly and validly authorized by all necessary
corporate action in respect thereof on the part of Acquisition
Sub.
Buyer and each of its Subsidiaries has the requisite
corporate power and authority and is duly qualified to do
business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its
properties makes such qualification necessary.
b) Authority. Buyer has all requisite corporate power and
authority to enter into this Agreement and, subject to receipt of
all Requisite Regulatory Approvals (as defined in Section 3.04d)
below), to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by
the Board of Directors of Buyer. This Agreement has been duly
and validly executed and delivered by Buyer and constitutes a
valid and binding obligation of Buyer, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of
equity, whether applied in a court of law or a court of equity.
c) Corporate Action. The execution, delivery and performance
of this Agreement and consummation of the transactions
contemplated herein, including the Merger, have been duly and
validly authorized by all necessary corporate action in respect
thereof on the part of Buyer, including shareholder approval, if
applicable.
d) No Violations; Consents. The execution, delivery and
performance of this Agreement by Buyer does not, and the
consummation of the transactions contemplated hereby will not,
constitute (i) assuming receipt of all Requisite Regulatory
Approvals, a breach or violation of, or a default under, any law,
rule or regulation or any judgment, decree, order, governmental
permit or license to which Buyer or any of its Subsidiaries (or
any of their respective properties) is subject, (ii) a breach or
violation of, or a default under, the certificate of
incorporation or bylaws of Buyer or the similar organizational
documents of any of its Subsidiaries or (iii) a breach or
violation of, or a default under (or an event which, with due
notice or lapse of time or both, would constitute a default
under), or result in the termination of, accelerate the
performance required by, or result in the creation of any lien,
pledge, security interest, charge or other encumbrance upon any
of the properties or assets of Buyer or any of its Subsidiaries
under, any of the terms, conditions or provisions of any note,
bond, indenture, deed of trust, loan agreement or other
agreement, instrument or obligation to which Buyer or any of its
Subsidiaries is a party, or to which any of their respective
properties or assets may be subject. The consummation by Buyer
of the transactions contemplated hereby will not require any
approval, consent or waiver under any such law, rule, regulation,
judgment, decree, order, governmental permit or license or the
approval, consent or waiver of any other party to any such
agreement, or instrument, other than (x) the approval of Buyer as
the sole shareholder of Acquisition Sub and (y) the approval of
the Board of Governors of the Federal Reserve System ("FRB")
under the BHCA and (z) approval of the Office of the Comptroller
of the Currency ("OCC") of the Related Mergers (collectively, the
"REQUISITE REGULATORY APPROVALS"). As of the date hereof, the
executive officers of Buyer know of no reason pertaining to Buyer
why any of the approvals referred to in this Section 3.04d)
should not be obtained without undue delay or the imposition of
any material condition or restriction described in the last
sentence of Section 6.01d).
e) Reports and Financial Statements.
Buyer and each of its Subsidiaries have each timely filed
all material reports and financial statements, together with any
amendments required to be made with respect thereto, that they
were required to file with (a) the FDIC, (b) the FRB, and (c) the
Comptroller of the Currency, (collectively, "Buyer's Reports")
and, to Buyer's knowledge, have paid all taxes and assessments
due and payable in connection therewith. As of their respective
dates, none of Buyer's Reports contained any untrue statement of
a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were
made, not misleading.
Each of the financial statements of Buyer included in
Buyer's Reports has been prepared in all material respects in
accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto
or, in the case of the unaudited financial statements, as
permitted by appropriate regulatory authorities). Each of the
consolidated statements of condition contained or incorporated by
reference in Buyer's Reports (including in each case any related
notes and schedules) and each of the consolidated statements of
operations, contained or incorporated by reference in Buyer's
Reports (including in each case any related notes and schedules)
fairly presented (A) the financial position of the entity or
entities to which it relates as of its date and (B) the results
of operations, stockholders' equity and cash flows, as the case
may be, of the entity or entities to which it relates for the
periods set forth therein (subject in the case of unaudited
interim statements, to normal year-end adjustments that are not
material in amount or effect), in each case in accordance with
GAAP, except as may be noted therein.
f) Absence of Certain Changes or Events. Except as
disclosed in Buyer's Reports filed on or prior to the date of
this Agreement, no event has occurred or circumstances arisen
which has had or might reasonably be expected to have a Material
Adverse Effect with respect to Buyer and its Subsidiaries.
g) Absence of Claims. No litigation, proceeding,
controversy, claim, action or suit or other legal administrative
or arbitration proceeding before any court, governmental agency
or arbitrator is pending or has been threatened against Buyer or
any of its Subsidiaries that would reasonably be expected to
prevent or adversely affect or which seeks to prohibit the
consummation of the transactions contemplated by this Agreement
or which would have a Material Adverse Effect with respect to
Buyer and its Subsidiaries taken as a whole.
h) Absence of Regulatory Actions. Neither Buyer nor any of
its Subsidiaries is a party to any cease and desist order,
written agreement or memorandum of understanding with, or any
commitment letter or similar written undertaking to, or is
subject to any action, proceeding, order or directive by, or is a
recipient of any extraordinary supervisory letter from any
Government Regulator, or has adopted any board resolutions at the
request of any Government Regulator, nor has it been advised by
any Governmental Regulator that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or
requesting) any such action, proceeding, order, directive,
written agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter, board resolutions or
similar written undertaking.
i) Compliance with Laws. Buyer and each of its Subsidiaries
have all permits, licenses, certificates of authority, orders and
approvals of, and have made all filings, applications and
registrations with, all Governmental Entities that are required
in order to permit them to carry on their business as it is
presently conducted; all such permits, licenses, certificates of
authority, orders and approvals are in full force and effect, and
to the best knowledge of Buyer no suspension or cancellation of
any of them is threatened. Since the date of its incorporation,
the corporate affairs of Buyer have not been conducted in
violation in any material respect of any law, ordinance,
regulation, order, writ, rule, decree or approval of any
Governmental Entity. Neither Buyer nor any of its Subsidiaries
is in material violation of, is, to the knowledge of Buyer, under
investigation with respect to any material violation of, or has
been given notice or been charged with any material violation of,
any law, ordinance, regulation, order, writ, rule, decree or
condition to approval of any Governmental Entity.
j) Fees. Neither Buyer nor any of its Subsidiaries, nor any
of their respective officers, directors, employees or agents, has
employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions or finder's
fees, and no broker or finder has acted directly or indirectly
for Buyer or any of its Subsidiaries in connection with this
Agreement or the transactions contemplated hereby.
k) Availability of Funds. Buyer will have sufficient funds
available to carry out its obligations under this Agreement.
ARTICLE IV. CONDUCT PENDING THE MERGER
SECTION 4.01 CONDUCT OF SELLER'S BUSINESS PRIOR TO THE EFFECTIVE
TIME. Except as contemplated by this Agreement, during the period
from the date of this Agreement to the Effective Time, Seller
shall, and shall cause its Subsidiaries to, use its commercially
reasonable efforts to (i) conduct its business in the regular,
ordinary and usual course consistent with past practice and in
accordance with sound banking practices, (ii) maintain and
preserve intact its business organization, properties, leases,
employees, goodwill of its customers, and advantageous business
relationships and retain the services of its officers and key
employees, (iii) take no action which would adversely affect or
delay the ability of Seller or Buyer to perform their respective
covenants and agreements on a timely basis under this Agreement,
(iv) take no action which would adversely affect or delay the
ability of Seller or Buyer to obtain any necessary approvals,
consents or waivers of any governmental authority required for
the transactions contemplated hereby (including the Bank Merger)
or which would reasonably be expected to result in any such
approvals, consents or waivers containing any material condition
or restriction, and (v) take no action that results in or is
reasonably likely to have a Material Adverse Effect on Seller.
Without limiting the foregoing covenants, unless the prior
written consent of Buyer shall have been obtained, and except as
otherwise expressly contemplated in this Agreement, Seller shall,
and shall cause each of its Subsidiaries to:
a) BOARD OBSERVERS. Permit, at any time after the execution
of this Agreement, two representatives of Buyer to attend
Seller's and Seller S&L's board of directors' meetings and all
Board committee meetings as observers only and shall give Buyer
notice of all such meetings concurrently with the giving of
notice to other directors and committee members; provided,
however, that such observers will not be entitled to attend the
portions of any meetings that relate to any deliberation of the
transactions contemplated by this Agreement or meetings with
attorneys on other matters who recommend that such observers not
be present in order to preserve the attorney-client privilege.
b) LOAN POLICIES. Reserve against, place on non-accrual,
and charge off loans and other assets as losses are recognized or
future losses become apparent, in accordance with Seller S&L's
past practices, which Seller warrants and represents are in
compliance in all material respects with all applicable laws and
regulations and have not been criticized in any past examinations
or audits, while maintaining a loan loss reserve of at least .75%
of total loans outstanding;
c) TAX RETURNS. Prepare, execute and file, on or before the
due date thereof if prior to the Effective Time, all federal,
state and local tax returns required of Seller or Seller S&L with
respect to its operations for any period ending before the
Effective Time and will pay the appropriate tax.
d) CUSTOMER NOTICE. Assist Buyer in drafting and preparing
for mailing a notice, the form and content of which shall be
established by mutual agreement of Buyer and Seller, to all
Seller S&L's deposit and loan customers, notifying them of the
sale of Seller S&L to Buyer. The notice shall be mailed by Buyer
after all Requisite Regulatory Approvals and Stockholders
Approvals have been obtained but no later than thirtieth day
prior to the date agreed upon by Buyer and Seller pursuant to
Section 7.01 for the data processing conversion.
e) COPIES OF REPORTS. Furnish to Buyer, until the Effective
Time, true and complete copies of the following information
within five days after preparation or receipt:
Monthly financial statements prepared with respect to Seller
and Seller S&L;
Daily statements of Seller S&L beginning on the date of the
final regulatory approval of the transactions contemplated by
this Agreement and continuing through the Effective Time;
Seller S&L's Reports of Condition and Income to regulatory
authorities at the close of business of each calendar quarter;
Seller S&L's internal watch and problem loan reports;
Any and all board reports prepared for the use of Seller
S&L's board of directors or any board committee (other than those
portions of any report which pertain to this Agreement or is
privileged information);
Any reports submitted to Seller S&L by independent certified
public accountants in connection with an examination of Seller
S&L's financial statements;
Notice of all actions, suits, and proceedings before any
court or governmental department, commission, board, bureau,
agency, or instrumentality affecting Seller or Seller S&L which,
if determined adversely, could have a Material Adverse Effect on
the financial condition, properties, or operations of Seller or
Seller S&L;
Any notices or communications received from any savings and
loan regulatory body with respect to the affairs or operations of
Seller or Seller S&L; and
Any additional information reasonably requested by Buyer for
completion of any applications for regulatory approval of the
transactions contemplated by this Agreement.
f) LIQUIDATION ACCOUNT. Cause Seller S&L to establish and
maintain on its books a true and complete record of those deposit
accounts, including names of depositors, which would have
liquidation rights by reason of the conversion of Seller S&L from
mutual to stock form of organization.
SECTION 4.02 FORBEARANCE BY SELLER. Without limiting the
covenants set forth in Section 4.01 hereof, except as otherwise
provided in this Agreement and except to the extent required by
law or regulation or any Governmental Entity, during the period
from the date of this Agreement to the Effective Time, Seller
shall not, and shall not permit any of its Subsidiaries to,
without the prior consent of Buyer, which consent shall not be
unreasonably withheld:
a) unless required by applicable law or regulation or
regulatory directive, change any provisions of the certificate of
incorporation or bylaws of Seller or the similar governing
documents of its Subsidiaries;
b) authorize, issue, deliver or sell any shares of its
capital stock or any securities or obligations convertible or
exercisable for any shares of its capital stock or change the
terms of any of its outstanding stock options or warrants or
issue, grant or sell any option, warrant, call, commitment, stock
appreciation right, right to purchase or agreement of any
character relating to the authorized or issued capital stock of
Seller except pursuant to the exercise of stock options or
warrants outstanding as of the date of this Agreement, or split,
combine, reclassify or adjust any shares of its capital stock or
otherwise change its capitalization;
c) make, declare or pay any cash or stock dividend or make
any other distribution on, or directly or indirectly redeem,
purchase or otherwise acquire, any shares of its capital stock or
any securities or obligations convertible into or exchangeable
for any shares of its capital stock, provided, however, that
Seller may pay normal quarterly cash dividends of not more than $
.15 per share of Seller Common Stock and, in the case of Seller's
1st Quarter dividend, payable in January, 2001, Seller may
accelerate payment to a date not earlier than December 15, 2000,
provided that after giving effect thereto the Adjusted
Stockholders' Equity of Seller will not be less than $40,000,000.
Subject to applicable regulatory restrictions, if any, Seller S&L
may pay a cash dividend that is, in the aggregate, sufficient to
fund any dividend by Seller permitted hereunder;
d) other than for fair value in the ordinary course of
business consistent with past practice, (i) acquire or sell,
transfer, assign, mortgage, encumber or otherwise dispose of any
material properties, leases, assets or other rights or agreements
to any individual, corporation or other entity other than a
direct or indirect wholly owned Subsidiary of Seller or (ii)
cancel, release or assign any indebtedness of any such
individual, corporation or other entity or (iii) permit Seller
S&L to waive any material right or cancel any material contract,
lease, license, obligation or commitment, or permit any lien,
encumbrance or charge of any material effect to attach to any of
Seller's or Seller S&L's assets;
e) except to the extent required by law or as specifically
provided for elsewhere herein increase in any manner the
compensation or fringe benefits of any of its employees or
directors, other than general increases in compensation for non-
executive officer employees in the ordinary course of business
consistent with past practice; pay any pension or retirement
allowance not required by any existing plan or agreement to any
employees or directors, or become a party to, amend or commit
itself to fund or otherwise establish any trust or account
related to any Seller Employee Plan (as defined in Section
3.03m)) with or for the benefit of any employee or director;
grant or award any stock options; make any discretionary
contribution to any Seller Employee Plan; hire any employee with
an annual total compensation payment in excess of $35,000; or
enter into or amend any employment contract with any employee;
f) except as contemplated by Section 5.02, change its
methods of accounting, tax or systems of internal accounting
controls, as in effect at September 30, 1999, except as required
by changes in GAAP with the concurrence of Seller's independent
auditors;
g) commence any litigation other than in the ordinary course
of business, settle any claim, action or proceeding involving any
liability of Seller or any of its Subsidiaries for money damages
in excess of $25,000 or impose material restrictions upon the
operations of Seller or any of its Subsidiaries;
h) acquire or agree to acquire, by merging or consolidating
with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any
business or any corporation, partnership, association or other
business organization or division thereof or otherwise acquire or
agree to acquire any assets, in each case which are material,
individually or in the aggregate, to Seller, except in
satisfaction of debts previously contracted;
i) establish or commit to the establishment of any new
branch or other office facilities or file any application to
relocate or terminate the operation of any banking office;
j) other than investments for Seller's portfolio made in
accordance with Section 4.02k), make any investment either by
purchase of stock or securities, contributions to capital,
property transfers, or purchase of any property or assets of any
other individual, corporation or other entity;
k) make any investment in any debt security, including
mortgage-backed and mortgage-related securities, or materially
restructure or change its investment securities portfolio,
through purchases, sales or otherwise; PROVIDED, HOWEVER, that
Seller shall be permitted to invest in the following securities
with final maturities not greater than six months: U.S.
government and U.S. government agency securities, or securities
of the FHLB;
l) enter into, renew, amend or terminate any contract or
agreement, or make any change in any of its leases or contracts,
other than with respect to those involving aggregate payments of
less than, or the provision of goods or services with a market
value of less than, $50,000 per annum over a term not exceeding
three years and other than contracts or agreements covered by
Section 4.02o);
m) make, renegotiate, renew, increase, extend, modify or
purchase any loan, lease (credit equivalent), advance, credit
enhancement or other extension of credit, or make any commitment
in respect of any of the foregoing, except (i) in conformity with
existing safe and sound lending and pricing practices; (ii) loans
or advances as to which Seller has a binding obligation to make
such loan or advances as of the date hereof; and (iii) with
respect to any loan or additional advance resulting in an
aggregate indebtedness to any individual borrower of $150,000 or
more secured or $25,000 or more unsecured, unless such loan has
been approved in a loan committee or Board meeting of which an
authorized representative of Buyer was given at least 24 hours
written notice or oral notification and at which such
representative did not object, PROVIDED, however, that renewals
(or extensions) of loans of no more than six months, or one year
in the case of construction loans that have been outstanding one
year or less, may be made at the time such loans are due for
renewal, if consistent with past practices, notwithstanding such
objection if the Board of Directors or Loan and Discount
Committee determines after taking into account such objection
that such renewal is necessary to protect Seller S&L's interest
and such loan is current, is not a classified asset and is not on
Seller S&L's watch list;
n) except as provided in subparagraph 4.02m, extend or
renew loans, or advance additional sums to a borrower whose
loans, in whole or in part, have been classified or listed as
special mention by any regulatory authority or included on Seller
S&L's watch list unless such extension, renewal or advance shall
have been approved in advance by the Board of Directors of Seller
S&L or Seller S&L's Loan and Discount Committee, and only if such
extension, renewal or advance was found by such Board or
Committee to be necessary in order to protect Seller S&L's
interests and in accordance with sound banking practices at a
loan committee or Board meeting of which Buyer was given at least
24 hours written notice or oral notification and at which such
representative did not object;
o) incur any additional borrowings other than purchases of
Federal Funds or short-term (six months or less) FHLB borrowings
and reverse repurchase agreements at reasonable market interest
rates consistent with past practice, or pledge any of its assets
to secure any borrowings other than as required pursuant to the
terms of borrowings of Seller or any Subsidiary in effect at the
date hereof or in connection with borrowings or reverse
repurchase agreements permitted hereunder;
p) accept any deposits from any person on terms materially
more favorable in any respect than those available to the general
public in Seller's market area, unless such deposits are accepted
in accordance with a safe and sound program or practice in
existence at Seller S&L prior to the date of this Agreement;
q) establish or impose a schedule of service charges or fees
which applies charges either substantially more or substantially
less than similar service charges and fees charged by other banks
in Seller's market areas;
r) make any capital expenditures in excess of $10,000 per
expenditure, or $200,000 in the aggregate, other than pursuant to
binding commitments existing on the date hereof disclosed in the
Seller Disclosure Schedule and other than expenditures necessary
to maintain existing assets in good repair or to make payment of
necessary taxes;
s) organize, capitalize, lend to or otherwise invest in any
Subsidiary;
t) elect to any senior executive office any person who is
not a member of the senior executive officer team of Seller as of
the date of this Agreement or elect to the Board of Directors of
Seller any person who is not a member of the Board of Directors
of Seller as of the date of this Agreement;
u) enter into any agreements or transactions after the date
of this Agreement with any officer, director, stockholder or
employee of Seller or Seller S&L, or any Affiliate or Subsidiary
thereof, directly or indirectly, in an amount of $5,000 or more
in each case or $25,000 in the aggregate; or
v) agree or make any commitment to take any action that is
prohibited by this Section 4.02.
In the event that Buyer does not respond in writing to
Seller within three (3) business days of receipt by Buyer of a
written request for Seller to engage in any of the actions for
which Buyer's prior written consent is required pursuant to this
Section 4.02., Buyer shall be deemed to have denied such action.
Any request by Seller or response thereto by Buyer shall be made
in accordance with the notice provisions of Section 11, and shall
note that it is a request pursuant to this Section 4 and shall
state that a failure to respond within three (3) business days
shall constitute denial of the request.
SECTION 4.03 CONDUCT OF BUYER'S BUSINESS PRIOR TO THE EFFECTIVE
TIME. Except as expressly provided in this Agreement, during
the period from the date of this Agreement to the Effective Time,
Buyer shall, and shall cause its Subsidiaries to, use its
commercially reasonable efforts to (i) conduct its business in
the regular, ordinary and usual course consistent with past
practice; (ii) maintain and preserve intact its business
organization, properties, leases, employees and advantageous
business relationships; (iii) take no action which would
materially adversely affect or delay the ability of Seller or
Buyer to perform their respective covenants and agreements on a
timely basis under this Agreement and (iv) take no action which
would adversely affect or delay the ability of Seller or Buyer to
obtain any necessary approvals, consents or waivers of any
governmental authority required for the transactions contemplated
hereby or which would reasonably be expected to result in any
such approvals, consents or waivers containing any material
condition or restriction.
ARTICLE V. COVENANTS
SECTION 5.01 ACQUISITION PROPOSALS. From and after the date
hereof until the termination of this Agreement, neither Seller
nor Seller S&L, nor any of their respective officers, directors,
employees, representatives, agents or affiliates (including,
without limitation, any investment banker, attorney or accountant
retained by Seller or any of its Subsidiaries), will, directly or
indirectly, initiate, solicit or knowingly encourage (including
by way of furnishing non-public information or assistance), or
facilitate knowingly, any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal (as defined below), or enter into or
maintain or continue discussions or negotiate with any person or
entity in furtherance of such inquiries or to obtain an
Acquisition Proposal or agree to or endorse any Acquisition
Proposal, or authorize or permit any of its officers, directors
or employees or any of its subsidiaries or any investment banker,
financial advisor, attorney, accountant or other representative
retained by any of its Subsidiaries to take any such action;
provided, however, that nothing contained in this Section 5.01
shall prohibit the Board of Directors of Seller from (i)
furnishing information to, or entering into discussions or
negotiations with any, person or entity that makes an unsolicited
written, bona fide proposal to acquire Seller pursuant to a
merger, consolidation, share exchange, business combination,
tender or exchange offer or other similar transaction, if, and
only to the extent that the Board of Directors of Seller
concludes in good faith, after consultation with its financial
advisors and legal counsel and taking into account, among other
things, all legal, financial, regulatory and other aspects of
such Acquisition Proposal, and the nature of the person making
the Acquisition Proposal, that such proposal, would, if
consummated, result in a transaction that is more favorable to
its stockholders (in their capacities as stockholders), from a
financial point of view, than the transactions contemplated by
this Agreement and is reasonably capable of being completed (a
"SUPERIOR PROPOSAL") and prior to furnishing such information to,
or entering into discussions or negotiations with, such person or
entity, Seller (x) provides reasonable notice to Buyer to the
effect that it is furnishing information to, or entering into
discussions or negotiations with, such person or entity and (y)
receives from such person or entity an executed confidentiality
agreement in reasonably customary form; (ii) complying with Rule
14e-2 promulgated under the Exchange Act with regard to a tender
or exchange offer; or (iii) failing to make or withdrawing or
modifying its recommendation, or (iv) entering into an agreement
with respect to a Superior Proposal. For purposes of this
Agreement, "ACQUISITION PROPOSAL" shall mean any of the following
(other than the transactions contemplated hereunder) involving
Seller or any of its Subsidiaries: (i) any merger, consolidation,
share exchange, business combination, recapitalization,
liquidation, dissolution, or other similar transaction; (ii) any
sale, lease, exchange, mortgage, pledge, transfer or other
disposition of 25% or more of the assets of Seller or Seller S&L,
taken as a whole, in a single transaction or series of
transactions; (iii) any tender offer or exchange offer for 25% or
more of the outstanding shares of capital stock of Seller or the
filing of a registration statement under the Securities Act of
1933, as amended (the "SECURITIES ACT"), in connection therewith;
or (iv) any public announcement of a proposal, plan or intention
to do any of the foregoing or any agreement to engage in any of
the foregoing.
SECTION 5.02 CERTAIN POLICIES AND ACTIONS OF SELLER.
a) At the request of Buyer, Seller shall use reasonable
efforts to cause Seller S&L to modify and change its loan,
litigation and real estate valuation policies and practices
(including loan classifications and levels of reserves) and
investment and asset/liability management policies and practices
after the date on which all Requisite Regulatory Approvals and
stockholder approvals are received, and after receipt of written
confirmation from Buyer that it is not aware of any fact or
circumstance that would prevent completion of the Merger, and
prior to the Effective Time so as to be consistent on a mutually
satisfactory basis with those of Buyer Bank; provided, however,
that Seller shall not be required to take such action more than
30 days prior to the Effective Time; and provided, further, that
such policies and procedures are not prohibited by GAAP or any
applicable laws and regulations or, in the view of the Board of
Directors of Seller S&L not in the best interests of Seller S&L.
b) Seller'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 5.02. Buyer agrees to hold harmless, indemnify and
defend Seller and its Subsidiaries, and their respective
directors, officers and employees, for any loss, claim, liability
or other damage caused by or resulting from compliance with this
Section 5.02.
SECTION 5.03 ACCESS AND INFORMATION. Upon reasonable notice,
Seller shall (and shall cause its Subsidiaries to) afford to
Buyer and its representatives (including, without limitation,
directors, officers and employees of Buyer and its affiliates and
counsel, accountants and other professionals retained by Buyer)
such reasonable 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), contracts, properties, personnel, advisors
and to such other information relating to Seller and its
Subsidiaries as Buyer may reasonably request and shall permit
Buyer and its authorized representatives to make such copies
thereof as they may reasonably request; provided, however, that
no investigation pursuant to this Section 5.03 shall affect or be
deemed to modify any representation or warranty made herein. In
furtherance, and not in limitation of the foregoing, Seller shall
make available to Buyer all information necessary or appropriate
for the preparation and filing of all real property and real
estate transfer tax returns and reports required by reason of the
Merger. Upon reasonable notice, Buyer shall (and shall cause its
Subsidiaries to) provide to Seller and its representatives
(including, without limitation, directors, officers and employees
of Seller and its affiliates and counsel, accountants and other
professionals retained by Seller) such books, records and such
other information relating to Buyer and its Subsidiaries as
Seller may reasonably request, but only to the extent such access
and information is reasonably required for the preparation of
Seller's Fairness Opinion, for Seller to determine Buyer's
ability to perform its obligations under this Agreement or for
inclusion in the Proxy Statement to be mailed to Seller's
stockholders. Buyer and Seller will not, and will cause their
respective representatives not to, use any information obtained
pursuant to this Section 5.03 for any purpose unrelated to the
consummation of the transactions contemplated by this Agreement.
Subject to the requirements of applicable law, Buyer and Seller
will keep confidential, and will cause their respective
representatives to keep confidential, all information and
documents obtained pursuant to this Section 5.03 unless such
information (i) was already known to such party or an affiliate
of such party, other than pursuant to a confidentiality agreement
or other confidential relationship, (ii) becomes available to
such party or an affiliate of such party from other sources not
known by such party to be bound by a confidentiality agreement or
other obligation of secrecy, (iii) is disclosed with the prior
written approval of the other party 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 or extracts thereof containing information and data as
to another party hereto (or an affiliate of any party hereto) to
be returned to the party that furnished the same.
SECTION 5.04 CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS. Except
as otherwise specifically designated to Seller by this Section,
Buyer shall as soon as practicable and in cooperation with Seller
(and in any event within 30 days after the date hereof) make, or
cause to be made, any filings and applications and provide any
notices required to be filed or provided in order to obtain all
approvals, consents and waivers of Governmental Entities and
third parties necessary or appropriate for the consummation of
the transactions contemplated hereby. Buyer shall provide Seller
and its counsel with copies of the public portion of all filings,
applications and notices submitted to any Governmental Entity at
the time of filing, provided, however, that Buyer shall provide
Seller and its counsel with a reasonable opportunity to review
any such filings requiring the signature of Seller or Seller S&L
in advance of filing. Seller shall as soon as practicable and in
cooperation with Buyer (and in any event within 15 days after
Buyer's filings with Government Entities) make, or cause to be
made, any filings and applications and provide any notices
required to be filed or provided in order to obtain all
approvals, consents and waivers of the Office of Thrift
Supervision which are required to effect the transactions
contemplated by this Agreement, such applications to be filed at
Seller's expense. Seller shall provide Buyer with copies of any
such filings, applications and notices filed with the Office of
Thrift Supervision at the time of filing. Buyer and Seller agree
that time is of the essence in pursuing the Requisite Regulatory
Approvals.
SECTION 5.05 ADDITIONAL ACTIONS. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to
use all commercially reasonable efforts to take promptly, or
cause to be taken promptly, all actions and to do promptly, or
cause to be done promptly, all things necessary, proper or
advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement,
including the Merger, as expeditiously as possible, including
using efforts to obtain all necessary actions or non-actions,
extensions, waivers, consents and approvals from all applicable
Governmental Entities, effecting all necessary registrations,
applications and filings (including, without limitation, filings
under any applicable state securities laws) and obtaining any
required contractual consents and regulatory approvals.
SECTION 5.06 PUBLICITY. Seller and Buyer shall consult with each
other in issuing any press releases or otherwise making public
statements with respect to the Merger and any other transaction
contemplated hereby and in making any filings with any
Governmental Entity or with any national securities exchange or
the NASD with respect thereto.
SECTION 5.07 STOCKHOLDERS MEETING. Seller shall take all action
necessary, in accordance with applicable law and its Certificate
of Incorporation and Bylaws, to convene a meeting of its
stockholders ("STOCKHOLDER MEETING") as promptly as practicable
for the purpose of considering and voting on approval and
adoption of this Agreement, the Merger and the other transactions
provided for in this Agreement. Except as otherwise provided in
Section 5.01, the Board of Directors of Seller shall (a)
recommend at its Stockholder Meeting that the stockholders vote
in favor of and approve the transactions provided for in this
Agreement and (b) use its commercially reasonable efforts to
solicit such approvals. Seller may employ professional proxy
solicitors to assist in contacting stockholders in connection
with soliciting favorable votes on the Merger.
SECTION 5.08 PROXY STATEMENT. For the purposes of holding the
Seller Stockholders Meeting, Seller shall prepare a proxy
statement satisfying in all material respects all applicable
requirements of the Exchange Act, and the rules and regulations
thereunder. Buyer agrees to provide for inclusion in such proxy
statement all information reasonably necessary to satisfy the
requirements of the Exchange Act and the rules and regulations
thereunder and such information shall not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated in such proxy statement with respect to
Buyer or its Subsidiaries or to make the statements therein with
respect to Buyer or its Subsidiaries not misleading.
SECTION 5.09 NOTIFICATION OF CERTAIN MATTERS. Each party shall
give prompt notice to the other of: (a) any event or notice of,
or other communication relating to, a default or event that, with
notice or lapse of time or both, would become a default, received
by it or any of its Subsidiaries subsequent to the date of this
Agreement and prior to the Effective Time, under any contract
material to the financial condition, properties, businesses or
results of operations of each party and its Subsidiaries taken as
a whole to which each party or any Subsidiary is a party or is
subject; and (b) any event, condition, change or occurrence which
individually or in the aggregate has, or which, so far as
reasonably can be foreseen at the time of its occurrence, is
reasonably likely to result in a Material Adverse Effect with
respect to such party and its Subsidiaries taken as a whole, each
of Seller and Buyer shall give prompt notice to the other party
of any notice or other communication from any third party
alleging that the consent of such third party is or may be
required in connection with any of the transactions contemplated
by this Agreement.
SECTION 5.10 EMPLOYEES.
a) All persons who are employees of Seller or any of its
Subsidiaries immediately prior to the Effective Time and whose
employment is not specifically terminated at or prior to the
Effective Time (a "CONTINUING EMPLOYEE") shall, at the Effective
Time, remain employees of the Surviving Corporation or any of its
Subsidiaries. All of the Continuing Employees shall be employed
at the will of Buyer and no contractual right to employment shall
inure to such employees because of this Agreement. At any time
after the receipt of the Requisite Regulatory Approvals and
Stockholder approval for the transactions contemplated by this
Agreement, or by mutual consent prior thereto, Seller shall (i)
allow Buyer to conduct interviews with the existing employees of
Seller and Seller S&L and to communicate with the employees
regarding the terms of their employment which will be in effect
on or after the Effective Time and (ii) allow Buyer to conduct
training sessions for employees of Seller and its Subsidiaries at
Buyer's or Seller S&L's facilities. All such training sessions
shall be scheduled so as to have minimal impact upon the
employees' performance of their normal daily duties.
b) Immediately following the Effective Time, each Continuing
Employee shall be eligible to participate in Buyer's benefit
plans on the same basis as a new employee of Buyer (it being
understood that inclusion of Continuing Employees in Buyer's
benefit plans may occur at different times with respect to
different plans). Service with Seller or its Subsidiaries shall
be treated as service with Buyer for purposes of satisfying any
waiting periods, evidence of insurability requirements, or the
application of any preexisting condition limitation with respect
to any Buyer "welfare benefit plan", as defined in Section 3(1)
of ERISA. Each Continuing Employee shall receive credit for
service with Seller or its Subsidiaries for purposes of any
employee benefit plans or computing vacation pay benefits.
c) At or immediately prior to the Effective Time, Seller
shall cash out or sell for the amount of the cash surrender value
of existing life insurance policies owned by Seller, other than
any policies Buyer shall request Seller to retain.
d) Seller shall not encourage the further exercise of any
Seller Options and shall advise optionees as to the payments to
which they will be entitled hereunder.
e) Prior to December 15, 2000, Seller shall make to the
Seller Employee Stock ownership Plan ("ESOP") a contribution of
$406,340.31, which shall be allocated for the plan year for the
fiscal year ended September 30, 2000. Seller shall also be
permitted to make a contribution equal to the lesser of 25% of
eligible payroll as determined pursuant to such plan or the
maximum contribution permitted by Section 415 of the Internal
Revenue Code ("IRC") in each case covering the period from
October 1, 2000 to the close of business on the day prior to the
Effective time. Seller represents and warrants that no
contributions made pursuant to this paragraph will exceed the
limitations of Section 415 of the IRC. However, (i) the amount
of the contributions made pursuant to the preceding two sentences
shall be used by the ESOP only to make payments on the then
remaining unpaid loan balance owed by the ESOP only to Seller,
and (ii) the amount of the foregoing contributions shall in no
event exceed the then remaining unpaid loan balance.
f) Prior to the Effective Time, the Seller ESOP shall be
amended to state that any Merger Consideration remaining after
repayment of the loan between Seller and the ESOP shall be
allocated as investment earnings of the ESOP to the ESOP accounts
of employees of Seller or any of its Subsidiaries who are ESOP
participants and beneficiaries (the "ESOP Participants") in
accordance with the terms of the ESOP as amended with respect to
such termination and as in effect on the Effective Time. All
ESOP Participants shall fully vest and have a nonforfeitable
interest in their accounts under the ESOP determined as of the
Effective Time. As soon as practicable after the Effective Time,
any loan between Seller and the ESOP shall be repaid in full from
the Merger Consideration received by the ESOP for unallocated
shares of Seller Common Stock held by the ESOP upon the
conversion of such shares into cash pursuant to this Agreement.
As soon as reasonably practicable after the ESOP loan has been
repaid, Buyer shall terminate the ESOP and shall file an
application for determination with the Internal Revenue Service
("IRS") as to the tax qualified status of the ESOP upon its
termination under Section 401(a) and 4975(e)(7) of the IRC (the
"Determination Letter"). As soon as reasonably practicable after
the receipt of a favorable Determination Letter from the IRS,
Buyer shall instruct the ESOP Trustee to make distributions of
the benefits under the ESOP to the ESOP Participants in
accordance with the provisions of the ESOP.
g) Buyer agrees to honor the Cameron Financial Corporation
Severance Plan, a copy of which is attached to Seller's
Disclosure Letter.
SECTION 5.11 INDEMNIFICATION. Unless prohibited by law or
regulation in effect at the time a Claim (as defined below) is
pending and except as provided in Section 5.11a) below, from the
Effective Time through six (6) years after the Effective Time,
Buyer (and any successor) agrees to indemnify each director,
officer and employee of Seller and Seller S&L serving in such
capacities as of the date of this Agreement (each, an
"Indemnified Party"), from and against Indemnified Payments and
Indemnified Expenses (as both terms are defined below) incurred
in connection with Claims brought against any Indemnified Party,
arising out of matters existing or occurring at or prior to the
Effective Time (including the transactions contemplated by this
Agreement), whether asserted or claimed prior to, at or after the
Effective Time, provided that in the case of any Claims asserted
prior to the Effective Time Buyer has been notified of such
Claims prior to Closing. Buyer further agrees, subject to
applicable regulatory restrictions, to advance any reasonable
Indemnified Expenses to such Indemnified Party as they are from
time to time incurred provided that the Indemnified Party to whom
expenses are being advanced provides a written undertaking to
repay such expenses if it is ultimately determined that such
person is not entitled to Indemnification.
As used herein, the foregoing terms have the following
meanings:
A "Claim" is any threatened, pending or completed action,
suit, investigation or proceeding (whether civil, criminal,
administrative or investigative) which relates to services
rendered prior to the Effective Time by an Indemnified Party on
behalf of Seller or its Subsidiaries.
"Indemnified payments" shall mean judgments, fines and
amounts paid in settlement of Claims.
"Indemnified expenses" shall mean all costs and expenses
(including but not limited to attorneys' fees) actually and
reasonably incurred by an Indemnified Party in connection with
defending against such Claims.
a) Buyer shall not be required to indemnify any Indemnified
Party from and against Indemnified expenses and/or Indemnified
payments if i) a final non-appealable order is entered by a court
or administrative tribunal having jurisdiction pursuant to a
Claim brought by a person other than the Office of Thrift
Supervision ("OTS") that such Indemnified Party's conduct was
knowingly fraudulent, deliberately dishonest, or willful
misconduct and the Claim giving rise to the entry of such order
was brought by a third party; or ii) a final non-appealable
order is issued by an administrative tribunal or court having
jurisdiction pursuant to a Claim brought by the OTS or a
settlement agreement is entered into between the Indemnified
Party and the OTS: x) imposing a civil money penalty against the
Indemnified Party; y) removing the Indemnified Party from office
or prohibiting such person from participating in the conduct of
Buyer; or z) directing the Indemnified Party to cease and desist
taking any of the actions set forth in Section 8(b) of the
Federal Deposit Insurance Act (12 U.S.C. Section 1818(b)).
b) Any Indemnified Party wishing to claim indemnification
under Section 5.11, must (i) upon learning of any such Claim,
promptly notify Buyer thereof and provide to Buyer copies of all
written materials related to the Claim and any other information
related to such Claim; (ii) consent to the defense of any such
Claim by competent counsel chosen by Buyer; and (iii) cooperate
in the defense of any such matter by offering testimony and by
complying with all reasonable requests made by Buyer or by
counsel hired by Buyer. Buyer shall not be liable for any
settlement effected by an Indemnified Party without its prior
written consent, which consent may not be withheld unless such
settlement is unreasonable in light of such Claims against, or
defenses available to, such Indemnified Party. If Buyer assumes
the defense of any such Claim pursuant to this Section 5.11b),
Buyer shall not be liable to such Indemnified Party for any legal
expenses of additional counsel subsequently incurred by such
Indemnified Party in connection with the defense thereof. If
Buyer does not elect to assume such defense within thirty days
from the date Buyer receives notice of the Claim, the Indemnified
Party may retain counsel satisfactory to such Indemnified Party,
and Buyer shall remain responsible for the reasonable fees and
expenses of such counsel as set forth above.
c) Buyer shall pay all reasonable Costs, including
attorneys' fees and expenses, that may be incurred by any
Indemnified Party in successfully enforcing the indemnity and
other obligations provided for in this Section 5.11 to the
fullest extent permitted by law. The rights of each Indemnified
Party under this paragraph (c) shall be in addition to any other
right of indemnification under this Section 5.11.
d) If Buyer or any of its successors or assigns (i)
consolidates with or merges into any other person or entity and
shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any person or
entity, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns
of Buyer assume the obligations set forth in this Section 5.11.
e) The provisions of this Section 5.11 are intended to be
for the benefit of, and shall be enforceable by, each Indemnified
Party and the heirs, executors, and administrators of such
Indemnified Party.
SECTION 5.12 ACQUISITION SUB. Prior to the Effective Time, Buyer
will take any and all necessary action to cause (i) Acquisition
Sub to become a direct wholly-owned subsidiary of Buyer and (ii)
the directors and the stockholder of Acquisition Sub to approve
the transactions contemplated by this Agreement.
ARTICLE VI. CONDITIONS TO CONSUMMATION
SECTION 6.01 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The
respective obligations of each party to effect the Merger and any
other transactions contemplated by this Agreement shall be
subject to the satisfaction of the following conditions:
a) This Agreement shall have been approved by the requisite
vote of Seller's stockholders in accordance with applicable laws
and regulations.
b) The Requisite Regulatory Approvals, the consent of the
OTS and any other required waivers with respect to this Agreement
and the transactions contemplated hereby shall have been obtained
and shall remain in full force and effect, and all statutory
waiting periods shall have expired; and all other consents,
waivers and approvals of any third parties which are necessary to
permit the consummation of the Merger and the other transactions
contemplated hereby shall have been obtained or made except for
those the failure to obtain would not have a Material Adverse
Effect (i) on Seller and its Subsidiaries taken as a whole or
(ii) on Buyer and its Subsidiaries taken as a whole. No such
approval or consent shall have imposed any condition or
requirement that would so materially and adversely impact the
economic or business benefits to Buyer or Seller of the
transactions contemplated hereby that, had such condition or
requirement been known, such party would not, in its reasonable
judgment, have entered into this Agreement.
c) No party hereto shall be subject to any order, decree,
ruling or injunction of a court or agency of competent
jurisdiction which enjoins or prohibits the consummation of the
Merger or any other transactions contemplated by this Agreement
and no Governmental Entity shall have instituted any proceeding
for the purpose of enjoining or prohibiting the consummation of
the Merger or any transactions contemplated by this Agreement.
d) No statute, rule or regulation shall have been enacted,
entered, promulgated, interpreted, applied or enforced by any
governmental authority which prohibits, restricts or makes
illegal consummation of the Merger or any other transactions
contemplated by this Agreement.
SECTION 6.02 CONDITIONS TO THE OBLIGATIONS OF BUYER. The
obligations of Buyer to effect the Merger and any other
transactions contemplated by this Agreement shall be further
subject to the satisfaction of the following additional
conditions:
a) The obligations of Seller required to be performed by it
at or prior to the Closing pursuant to the terms of this
Agreement shall have been duly performed and complied with in all
material respects and the representations and warranties of
Seller contained in this Agreement shall be true and correct,
subject to Section 3.01 and Section 3.02, as of the date of this
Agreement and as of the Effective Time as though made at and as
of the Effective Time (except as to any representation or
warranty which specifically relates to an earlier date), and
Buyer shall have received a certificate to the foregoing effect
signed by the president and the chief financial officer of
Seller.
b) Buyer shall have received the opinion of counsel of
Seller with respect to those matters set forth on EXHIBIT B
hereto in form and substance reasonably satisfactory to Buyer.
c) Seller's Adjusted Stockholders' Equity shall be not less
than $39,500,000.
SECTION 6.03 CONDITIONS TO THE OBLIGATIONS OF SELLER. The
obligations of Seller to effect the Merger, and any other
transactions contemplated by this Agreement shall be further
subject to the satisfaction of the following additional
conditions:
a) The obligations of Buyer required to be performed by it
at or prior to the Closing pursuant to the terms of this
Agreement shall have been duly performed and complied with in all
material respects and the representations and warranties of Buyer
contained in this Agreement shall be true and correct, subject to
Section 3.01 and Section 3.02, as of the date of this Agreement
and as of the Effective Time as though made at and as of the
Effective Time (except as to any representation or warranty which
specifically relates to an earlier date), and Seller shall have
received a certificate to the foregoing effect signed by the
president and the chief financial officer of Buyer.
b) Buyer shall have demonstrated to the satisfaction of the
Seller that Buyer has set aside sufficient cash to pay the
aggregate Merger Consideration and the amounts payable to holders
of stock options and unvested restricted shares.
ARTICLE VII. DATA PROCESSING
SECTION 7.01 SAMPLE DATA. Seller shall provide to Buyer, a
machine-readable data tape of all of Seller S&L's loan and
deposit accounts, together with a written description of the
file, record, and field data types and formats, to allow Buyer to
prepare for a data processing conversion, at a date prior to
Closing agreed upon between Buyer and Seller. The data tape
shall include summary interest accrual and payment information
for the current year to date, except that the name and address
information may, at Seller's option, be encoded in such a way
that the actual identities of Seller S&L's customers cannot be
determined.
SECTION 7.02 INFORMATION FOR CHECK ORDERING. After receipt of
the Requisite Regulatory Approvals of the transactions
contemplated by this Agreement, Seller shall provide to Buyer a
machine-readable data tape of all of Seller S&L's deposits,
including all customer name and address information, to enable
Buyer to begin ordering checks, deposit slips, and other
transaction items for use by its customers.
SECTION 7.03 INSTALLATION OF DATA CIRCUITS. After the effective
date of this Agreement, Seller shall cause Seller S&L to give
Buyer reasonable access to Seller S&L's locations during normal
business hours for the purposes of installing and testing data
circuits and data processing equipment, provided that the
location, installation, and testing of said circuits and
equipment shall not be permitted to disrupt Seller S&L's normal
daily functions and operation. In the event that this Agreement
is terminated without consummation of the planned transactions,
Buyer shall remove its data processing equipment and circuits
within 30 days after the termination and shall repair promptly
any damage done to Seller S&L's property during the installation
or removal, all at Buyer's sole expense.
ARTICLE VIII. TERMINATION
SECTION 8.01 TERMINATION. This Agreement may be terminated, and
the Merger abandoned, at or prior to the Effective Time, either
before or after any requisite stockholder approval:
a) by the mutual consent of Buyer and Seller in a written
instrument, if the Board of Directors of each so determines by
vote of a majority of the members of its entire Board; or
b) by Buyer or Seller, if its Board of Directors so
determines by vote of a majority of the members of its entire
Board, in the event of the failure of the stockholders of Seller
to approve the Agreement at the Stockholder Meeting; or
c) by Buyer or Seller, by written notice to the other party,
if either (i) any approval, consent or waiver of a governmental
agency required to permit consummation of the transactions
contemplated hereby shall have been unappealably denied or (ii)
any governmental authority of competent jurisdiction shall have
issued a final, unappealable order enjoining or otherwise
prohibiting consummation of the transactions contemplated by this
Agreement; or
d) by Buyer or Seller, if its Board of Directors so
determines by vote of a majority of the members of its entire
Board, in the event that the Merger is not consummated by April
30, 2001, unless the failure to so consummate by such time is due
to the material breach of any representation, warranty or
covenant contained in this Agreement by the party seeking to
terminate; or
e) by Buyer or Seller (provided that the party seeking
termination is not then in material breach of any representation,
warranty, covenant or other agreement contained herein), in the
event of (i) a failure to perform or comply by the other party
with any covenant or agreement of such other party contained in
this Agreement, which failure or non-compliance is material in
the context of the transactions contemplated by this Agreement,
or (ii) subject to Section 3.02a), any inaccuracies, omissions or
breach in the representations, warranties, covenants or
agreements of the other party contained in this Agreement the
circumstances as to which either individually or in the aggregate
have, or reasonably could be expected to have, a Material Adverse
Effect on such other party; in either case which has not been or
cannot be cured within 30 calendar days after written notice
thereof is given by the party seeking to terminate to such other
party; or
f) by Seller, if the Board of Directors of Seller reasonably
determines by vote of a majority of the members of its entire
Board that an Acquisition Proposal is a Superior Proposal.
g) by Buyer, if more than 10% of Seller's stockholders
exercise dissenters' or appraisal rights under applicable law by
delivering a written demand for appraisal of their shares to
Seller prior to the stockholders vote on the Merger.
h) by Buyer, if there shall have been a change in the
condition of Seller between the date of Buyer's initial due
diligence and the closing date which constitutes a Material
Adverse Effect and Buyer shall have given written notice thereof
to the Seller and within 30 days thereafter Seller shall have
failed to cure such change. Buyer shall be entitled to a final
due diligence review, on site, at Seller S&L's locations, during
the last five days prior to the Effective Time, solely for the
purpose of confirming that there have been no changes since the
date of Buyer's initial due diligence having a Material Adverse
Effect in the condition of Seller.
i) by Buyer, if the Requisite Regulatory Approvals are
subject to conditions reasonably unacceptable to Buyer.
SECTION 8.02 TERMINATION FEE. In the event that Seller
terminates this Agreement pursuant to Section 8.01f) and, within
12 months after the termination of this Agreement, Seller or
Seller S&L enters into a definitive agreement with the person
that made the Superior Proposal then Seller shall, within 10
business days following written demand by Buyer, pay to Buyer
$500,000.
SECTION 8.03 EFFECT OF TERMINATION. In the event of termination
of this Agreement by either Buyer or Seller prior to the
consummation of the Merger as provided in Section 8.01, this
Agreement shall forthwith become void and have no effect except
(i) the obligations of the parties under Section 5.03 (with
respect to confidentiality and the return of information),
Section 8.02 and Section 10.06 shall survive any termination of
this Agreement and (ii) that notwithstanding anything to the
contrary contained in this Agreement, no party shall be relieved
or released from any liabilities or damages arising out of its
willful breach of any provision of this Agreement.
ARTICLE IX. CLOSING AND EFFECTIVE TIME
SECTION 9.01 EFFECTIVE TIME. The closing of the transactions
contemplated hereby ("CLOSING") shall take place at the offices
of Buyer, unless another place is agreed to by Buyer and Seller,
on a date agreed to by Buyer and Seller ("CLOSING DATE") that is
no later than 30 days following the date on which the expiration
of the last applicable waiting period in connection with notices
to and approvals of governmental authorities shall occur and all
conditions to the consummation of this Agreement are satisfied or
waived, or on such other date as may be agreed to by the parties.
Prior to the Closing Date, Acquisition Sub and Seller shall
execute a Certificate of Merger in accordance with all
appropriate legal requirements, which shall be filed as required
by law on the Closing Date, and the Merger provided for therein
shall become effective on the date and at the time the
Certificate of Merger reflecting the Merger shall become
effective with the Secretary of the State of Delaware (the
"EFFECTIVE TIME").
SECTION 9.02 DELIVERIES AT THE CLOSING. Subject to the
provisions of Article VI and Article VIII, on the Closing Date
there shall be delivered to Buyer and Seller the documents and
instruments required to be delivered under Article VI.
ARTICLE X. CERTAIN OTHER MATTERS
SECTION 10.01 CERTAIN DEFINITIONS; INTERPRETATION. As used in
this Agreement, the following terms shall have the meanings
indicated:
"AFFILIATE" means any person (a) which directly or
indirectly controls, or is controlled by, or is under common
control with any other person or any Subsidiary of that other
person; (b) which directly or beneficially owns or controls 5% or
more of any class of voting stock of another person or any
Subsidiary of that other person; or (c) of which 5% or more of
any class of voting stock is owned directly or beneficially by
any other person or any Subsidiary of that other person.
"PERSON" includes an individual, corporation, limited
liability company, partnership, association, trust or
unincorporated organization.
When a reference is made in this Agreement to Sections,
Exhibits or Schedules, such reference shall be to a Section of,
Exhibit or Schedule to, this Agreement unless otherwise indicated
the table of contents and headings contained in this Agreement
are for ease of reference only and shall not affect the meaning
or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement,
they shall be deemed followed by the words "without limitation."
Any singular term in this Agreement shall be deemed to include
the plural, and any plural term the singular. Any reference to
gender in this Agreement shall be deemed to include any other
gender.
SECTION 10.02 SURVIVAL. Only those agreements and covenants of
the parties that are by their terms applicable in whole or in
part after the Effective Time, including Section 5.03, Section
5.10 and Section 5.11 of this Agreement, shall survive the
Effective Time. All other representations, warranties,
agreements and covenants shall be deemed to be conditions of the
Agreement and shall not survive the Effective Time.
SECTION 10.03 WAIVER; AMENDMENT. Prior to the Effective Time,
any provision of this Agreement may be (i) waived in writing by
the party benefited by the provision or (ii) amended or modified
at any time by an agreement in writing between the parties hereto
except that, after the vote by the stockholders of Seller, no
amendment or modification may be made that would reduce the
amount or alter or change the kind of consideration to be
received by holders of Seller Common Stock or contravene any
provision of the DGCL or the federal banking laws, rules and
regulations.
SECTION 10.04 COUNTERPARTS. This Agreement may be executed in
counterparts each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the
same instrument.
SECTION 10.05 GOVERNING LAW. This Agreement shall be governed
by, and interpreted in accordance with, the laws of the State of
Delaware, without regard to conflicts of laws principles.
SECTION 10.06 EXPENSES. Each party hereto will bear all expenses
incurred by it in connection with this Agreement and the
transactions contemplated hereby.
SECTION 10.07 NOTICES. All notices, requests, acknowledgments
and other communications hereunder to a party shall be in writing
and shall be deemed to have been duly given when delivered by
hand, overnight courier or facsimile transmission (confirmed in
writing) to such party at its address or facsimile number set
forth below or such other address or facsimile transmission as
such party may specify by notice (in accordance with this
provision) to the other party hereto.
If to Seller, to:
Cameron Financial Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇▇, Mag & Fizzell, P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer, to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Co-CEO and President
▇▇▇▇▇▇▇▇▇ Financial Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Co-CEO
▇▇▇▇▇▇▇▇▇ Financial Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇ Financial Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 10.08 ENTIRE AGREEMENT, ETC. This Agreement, together
with the Disclosure Letters, represents the entire understanding
of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or
written agreements heretofore made. All terms and provisions of
this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and
assigns. Except for Sections 5.10 and 5.11 which confer rights
on the parties described therein, nothing in this Agreement is
intended to confer upon any other person any rights or remedies
of any nature whatsoever under or by reason of this Agreement.
SECTION 10.09 SPECIFIC PERFORMANCE. Buyer and Seller agree that
the franchise value of Seller S&L represents a unique asset and
that the failure of either party to perform the terms of this
Agreement would cause irreparable harm for which monetary damages
would be totally inadequate. Therefore, either party shall be
entitled to specific performance of the terms of this Agreement.
Nothing contained in this Agreement, however, shall be deemed as
granting to Buyer control over Seller or Seller S&L prior to the
Effective Time. Until the Requisite Regulatory Approvals and
Seller's Stockholders Approvals have been received, a breach of
this Agreement by either party may be remedied only by an action
for money damages.
SECTION 10.10 SUCCESSORS AND ASSIGNS; ASSIGNMENT. This Agreement
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns; provided,
however, that this Agreement may not be assigned by either party
hereto without the written consent of the other party.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of
the date first above written.
▇▇▇▇▇▇▇▇▇ FINANCIAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
CAMERON FINANCIAL CORPORATION
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇. ▇. ▇▇▇▇▇▇
President
DFC ACQUISITION CORPORATION FOUR
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇ Holewinski
President
EXHIBIT A
DIRECTORS AND OFFICERS OF SURVIVING CORPORATION
NAME POSITION
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Chairman and Director
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Vice Chairman, General Counsel &
Director
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ President, Co-CEO, COO & Director
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Executive Vice President, Co-CEO &
Director
▇▇▇ ▇▇▇▇▇▇▇▇▇ Holewinski Vice President and Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Vice President and Director
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Secretary
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Treasurer
EXHIBIT B
LEGAL OPINION OF COUNSEL TO SELLER[FN]
1. Seller is a corporation validly existing and in good
standing under the laws of the State of Delaware and is
registered as a savings and loan holding company under the Home
Owners' Loan Act, as amended.
2. Seller S&L is a stock savings association validly existing
and in good standing under the laws of the United States of
America.
3. (i) The authorized capital stock of Seller consists of
10,000,000 shares of Seller Common Stock, par value $.01 per
share, and 2,000,000 shares of preferred stock, par value $.01
per share. As of the date of this Agreement (A) 3,026,928 shares
of Seller Common Stock had been issued, of which 1,914,049 shares
issued and outstanding, (B) no shares of Seller preferred stock
were issued and outstanding, (C) no shares of Seller Common Stock
were reserved for issuance, except that 185,130 shares of Seller
Common Stock were reserved for issuance pursuant to the Seller
Option Plan, (D) no shares of Seller preferred stock were
reserved for issuance and (E) 1,113,279 shares of Seller Common
Stock were held by Seller in its treasury or by its Subsidiaries.
The authorized capital stock of Seller S&L consists of 10,000,000
shares of common stock, par value $.01 per share, and 2,000,000
shares of preferred stock. As of the date of this Agreement,
3,026,928 shares of such common stock were outstanding, no shares
of such preferred stock were outstanding and all outstanding
shares of such common stock were, and as of the Effective Time
will be, owned of record and, both legally and beneficially by
Seller. All outstanding shares of capital stock of Seller are
duly authorized and validly issued, fully paid and nonassessable
and not subject to any preemptive rights and, with respect to
shares of Seller held by Seller in its treasury or by its
Subsidiaries and shares of Seller S&L, are free and clear of all
liens, claims, encumbrances or restrictions (other than those
imposed by applicable federal and state securities laws), and
there are no agreements or understandings with respect to the
voting or disposition of any such shares. Seller's Disclosure
Letter sets forth a complete and accurate list of all outstanding
options to purchase Seller Common Stock that have been granted
pursuant to the Seller Option Plan, including the names of the
optionees, dates of grant, exercise prices, dates of vesting,
dates of termination and shares subject to each grant.
(ii) No bonds, debentures, notes or other indebtedness
having the right to vote on any matters on which stockholders may
vote of Seller are issued or outstanding.
(iii) As of the date of this Agreement, except for
options granted pursuant to the Seller Option Plan, neither
Seller nor any of its Subsidiaries has or is bound by any
outstanding subscriptions, options, warrants, calls, rights,
convertible securities, commitments or agreements of any
character obligating Seller or any of its Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, any
additional shares of capital stock of Seller or any of its
Subsidiaries or obligating Seller or any of its Subsidiaries to
grant, extend or enter into any such option, warrant, call,
right, convertible security, commitment or agreement. To
counsel's knowledge, as of the date hereof, there are no
outstanding contractual obligations of Seller or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any
shares of capital stock of Seller or any of its Subsidiaries.
4. The execution, delivery and performance by Seller of the
Merger Agreement is within Seller's corporate power and authority
and have been duly authorized by all necessary actions in the
part of Seller, Seller's shareholders, and the Office of Thrift
Supervision.
[FN] Opinion to be subject to customary extensions, conditions
and limitations as reasonably agreed upon by Buyer's and
Seller's respective attorneys.
5. The Merger Agreement constitutes the valid and binding
obligation of Seller, enforceable against Seller in accordance
with its terms (subject to customary qualifications).
6. The execution, delivery and performance of the Merger
Agreement by Seller will not constitute (i) a violation of
applicable provisions of statutory law or regulation or any
judgment, decree or order disclosed in Seller's Disclosure Letter
to which Seller or any of its Subsidiaries is subject or (ii) a
violation of the certificate of incorporation or bylaws of Seller
or the similar organizational documents of any of its
Subsidiaries or (iii) to counsel's knowledge, a breach or
violation of, or default under (or an event which, with due
notice or lapse of time or both, would constitute a default
under) under any of the terms, conditions or provisions of any
note, bond, indenture, deed of trust, loan agreement or other
agreement, instrument or obligation to which Seller or any of its
Subsidiaries is a party, or to which any of their respective
properties or assets may be subject.
EXHIBIT C
AGREEMENT TO MERGE
BETWEEN
BANK MIDWEST, NATIONAL ASSOCIATION
AND
THE CAMERON SAVINGS AND LOAN ASSOCIATION, F.A.
UNDER THE CHARTER OF
BANK MIDWEST, NATIONAL ASSOCIATION (NO. 22015)
UNDER THE TITLE OF
BANK MIDWEST, NATIONAL ASSOCIATION
DATED AS OF: _______________ ___, 2000
THIS AGREEMENT TO MERGE (this "Agreement") is entered into
by the following associations:
BANK MIDWEST, NATIONAL ASSOCIATION ("Buyer Bank"), a banking
association organized under the laws of the United States of
America, located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a capital of $30 million, divided
into 300,000 shares of common stock, each of $100 par value,
surplus of $________ million, undivided profits and capital
reserves of $_______ million, as of ____________, 2000;
THE CAMERON SAVINGS AND LOAN ASSOCIATION, F.A. ("Seller
S&L"), a savings association organized under the laws of the
United States of America, located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a capital of
$30,269.28, divided into 3,026,928 shares of common stock, each
of $.01 par value, surplus of $__________, undivided profits and
capital reserves of $_________, as of _____________, 2000;
Each of the constituent associations is acting pursuant to a
resolution of its board of directors, adopted by the vote of a
majority of its directors, pursuant to the authority given by and
in accordance with the provisions of the Act of November 7, 1918,
as amended (12 USC Section 215c).
IN CONSIDERATION of the recitals above, of the mutual
covenants and agreements set forth below, and of other good and
valuable consideration, the receipt and sufficiency of which is
acknowledged by each party, the parties agree as follows,
intending to be legally bound:
1. NATURE OF TRANSACTION. Subject to all the terms and
conditions of this Agreement, Seller S&L will be merged into
Buyer Bank under the charter of the Buyer Bank (the "Bank
Merger") at the Bank Merger Effective Date (as defined in Section
10 hereof).
2. NAME OF RESULTING ASSOCIATION. The name of the
resulting national banking association (the "Association") shall
be Bank Midwest, National Association.
3. BUSINESS OF ASSOCIATION. The business of the Association
shall be that of a national banking association. This business
shall be conducted by the Association at its main office, which
shall be located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, and at its legally established branches.
4. CAPITAL STOCK. The amount of the capital stock of
the Association after consummation of the Bank Merger shall be
$____ million, divided into 300,000 shares of common stock, each
of $100 par value, and on the Bank Merger Effective Date, the
Association shall have surplus of not less than $___ million, and
undivided profits, including capital reserves, which when
combined with the capital and surplus will be equal to the
combined capital structures of Buyer Bank and Seller S&L as
stated in the preamble of this Agreement, adjusted however, for
normal earnings and expenses (and if applicable, any purchase
accounting adjustments) between ________, 2000 and the Bank
Merger Effective Date.
5. VESTING OF ASSETS AND LIABILITIES. Upon the Bank Merger
Effective Date, and subject to all the terms and conditions of
this Agreement, all assets of Seller S&L as they exist on the
Bank Merger Effective Date shall pass to and vest in Buyer Bank
without any conveyance or other transfer, and Buyer Bank shall be
responsible thereafter for all of the liabilities of Seller S&L
of every kind and description, as they exist on the Bank Merger
Effective Date.
6. LIQUIDATION ACCOUNT. For purposes of granting a
limited priority claim to the assets of the Association in the
unlikely event (and only upon such event) of a complete
liquidation of the Association to persons who continue to
maintain savings accounts with the Association after the Bank
Merger, and who, immediately prior to the Bank Merger had a
subaccount balance (as described in 12 C.F.R. Section 563b.3(f)(4))
with respect to any liquidation account of Seller S&L, the
Association shall, at the time of the Bank Merger, establish a
liquidation account(s) in an amount equal to the liquidation
account(s) of Seller S&L immediately prior to the Bank Merger
Effective Date, which liquidation account(s) shall participate
pari passu with any other liquidation accounts of the
Association. If the balance in any savings account to which a
subaccount balance relates at the close of business on the last
day of any fiscal year of the Association after the Bank Merger
Effective Date is less than the balance in such savings account
at the Bank Merger Effective Date or at the close of business on
the last day of any other fiscal year of the Association after
the Bank Merger Effective Date, such subaccount balance shall be
reduced in an amount proportionate to the reduction in such
savings account balance. No subaccount balance shall be
increased, notwithstanding any increase in the balance of the
related savings account. If such related savings account is
closed, such subaccount shall be reduced to zero upon such
closing. In the event of a complete liquidation of the
Association, and only in such event, the amount distributable to
each account holder will be determined in accordance with the
rules and regulations of the Office of Thrift Supervision
pertaining to conversions by savings associations from mutual to
stock form of organization, on the basis of such account holder's
subaccount balance with the Association at the time of its
liquidation. No merger, consolidation, purchase of bulk assets
with assumption of savings accounts and other liabilities, or
similar transaction, whether or not the Association is the
surviving institution, will be deemed to be a complete
liquidation for this purpose, and, in any such transaction, the
liquidation account shall be assumed by the surviving
institution.
7. CONVERSION OF SHARES-BANK MERGER. Upon the Bank Merger
Effective Date, subject to all the terms and conditions of this
Agreement, the existing common stock of Buyer Bank and Seller S&L
shall be converted into new stock of Buyer Bank on a book value
to book value basis, adjusted to result in 300,000 shares of the
Association outstanding, as follows:
7.1 SELLER S&L SHARES. Each outstanding share of
Seller S&L shall be converted into _________ new shares of the
Association, rounded to the nearest whole share without payment
for any fractional shares upon consummation of the Bank Merger.
7.2 BUYER BANK SHARES. Each share of Buyer Bank shall
be converted into ____________ new shares of the Association,
rounded to the nearest whole share without payment for any
fractional shares upon consummation of the Bank Merger.
8. BOARD OF DIRECTORS. The present board of directors of
Buyer Bank (named on Exhibit A) shall serve as the board of
directors of the Association until the next annual meeting or
until such time as their successors have been elected and have
qualified.
9. ARTICLES OF ASSOCIATION. The Articles of
Association attached as Exhibit B shall be the Articles of
Association of the Association.
10. EFFECTIVE DATE OF MERGER. The Bank Merger shall
become effective on the date specified by the Office of the
Comptroller of the Currency in its official certification of the
Bank Merger (the "Bank Merger Effective Date").
11. CONDITIONS PRECEDENT. The respective obligations
of each party to effect the Bank Merger shall be subject to the
satisfaction of the following conditions:
(a) CONSUMMATION OF THE MERGER. A merger between
Cameron Financial Corporation, a Delaware corporation ("Seller")
and DFC Acquisition Corporation Four, a Delaware corporation
("Acquisition Sub"), shall have been consummated in accordance
with the terms and conditions of the Agreement and Plan of
Merger, dated as of October 6, 2000 (the "Holding Company Merger
Agreement"), by and between Seller, Acquisition Sub and ▇▇▇▇▇▇▇▇▇
Financial Corporation, a Missouri corporation.
(b) STOCKHOLDER APPROVALS. This Agreement and
the transactions contemplated hereby shall have been duly
approved, ratified and confirmed by the unanimous written consent
of the stockholders of Buyer Bank and Seller S&L. No statute,
rule, regulation, order, injunction or decree shall have been
enacted, entered, promulgated or enforced by any governmental
entity which prohibits, restricts or makes illegal the
consummation of the Bank Merger.
(c) OTHER APPROVALS AND NOTIFICATIONS. The
enforceability of all aspects of this Agreement are subject to
the express condition precedent that the required approvals and
clearances of all state and federal regulatory agencies must be
received regarding all transactions contemplated by or associated
with this Agreement, or any other applicable federal or state
regulators, and all applicable waiting periods must have expired.
(d) NO INJUNCTIONS OR RESTRAINTS;
ILLEGALITY. No order, injunction or decree issued by any court
or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Bank Merger shall
be in effect.
12. TERMINATION OF AGREEMENT. This Agreement may be
terminated as follows:
12.1 TERMINATION OF HOLDING COMPANY MERGER AGREEMENT.
This Agreement shall be terminated immediately and without any
further action on the part of Seller S&L or Buyer Bank upon any
termination of the Holding Company Merger Agreement.
12.2 Mutual Agreement. The parties to this Agreement
may terminate this Agreement by mutual agreement of Seller S&L
and Buyer Bank at any time.
12.3 REGULATORY DISAPPROVAL. Either party may
terminate this Agreement by written notice to the other party if
any regulatory agency whose approval is required disapproves this
transaction, unless an appropriate appeal or challenge to the
disapproval is initiated within 30 days after the disapproval and
pursued diligently, to a conclusion.
12.4 LAPSE OF TIME. Either party may terminate this
Agreement by written notice to the other party if the
transactions contemplated herein have not been approved on or
before April 30, 2001.
12.5 EFFECT OF TERMINATION. In the event of
termination of this Agreement as provided herein, this Agreement
shall forthwith become void and there shall be no liability or
obligation under this Agreement on the part of Seller S&L, Buyer
Bank or their respective officers, directors or affiliates,
except that no party shall be relieved or released from any
damages or liabilities arising out of any willful breach of this
Agreement.
13. AMENDMENT. This Agreement may be amended by the
parties hereto in writing signed on behalf of each of the parties
hereto.
14. MISCELLANEOUS. A) Neither this Agreement or any of the
rights, interests or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of
the other party. B) This Agreement may be executed in one or
more counterparts, all of which together shall constitute one and
the same instrument. C) Headings are inserted into this
Agreement for convenience only and shall not be considered in
construing any provision. D) This Agreement has been negotiated
and executed in, and shall be performed in, the State of Missouri
and shall be governed by its internal laws, except to the extent
that federal law controls. E) Except as provided herein, each
party shall pay its own professional expenses for any advisers
required for the execution of this Agreement. F) Any notice
required by this Agreement shall have been properly given if, and
shall be effective when, personally delivered, sent by certified
mail (return receipt requested) or nationally-known private
overnight carrier, or transmitted by facsimile (with
confirmation), postage or transmission costs pre-paid, to the
address of the party to receive the notice as given at the
beginning of this Agreement. G) This Agreement constitutes the
entire agreement of the parties and supercedes all prior
agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof. H) Time
shall be of the essence in the performance of this Agreement, but
no delay in enforcing any right or remedy under this Agreement
shall be construed to be a waiver of that or any other right or
remedy. I) The provisions of this Agreement are separable. The
invalidity or illegality of any provision shall not be a bar to
the enforcement of any other provision. J) In the event of any
litigation regarding the negotiation, execution, terms or
performance of this Agreement, the prevailing party shall be
entitled to receive its costs, expenses and reasonable attorneys'
fees. K) All exhibits and attachments to this Agreement are
incorporated into this Agreement by reference as if fully set
forth herein. L) This Agreement may be adopted, certified and
executed in separate counterparts, each of which shall be
considered one and the same agreement and shall become effective
when all counterparts have been signed by each of the parties and
delivered to the other party, it being understood that both
parties need not sign the same counterpart.
IN WITNESS WHEREOF, Buyer Bank and Seller S&L have caused
this Agreement to Merge to be executed by their duly authorized
officers as of the ____ day of ________, 2000.
BANK MIDWEST, NATIONAL ASSOCIATION
By:__________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Attest:
_________________________
[NAME], Secretary
THE CAMERON SAVINGS AND LOAN ASSOCIATION,
F.A.
By:__________________________________
▇▇▇ ▇. ▇▇▇▇▇▇, [TITLE]
Attest:
__________________
[NAME], Secretary
STATE OF ________________)
)ss:
COUNTY OF ______________)
On this ______ day of ________, 2000, before me, a notary
public for this state and county, personally came ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, as President, and __________________ as Secretary, of
Bank Midwest, National Association, and each in his/her capacity
acknowledged this instrument to be the act and deed of the
association.
WITNESS my official seal and signature this day and year
aforesaid.
_______________________________
(Seal of Notary) Notary Public, ___________ County
My commission expires ___________
STATE OF ________________)
)ss:
COUNTY OF ______________)
On this ______ day of ________, 2000, before me, a notary
public for this state and county, personally came ▇▇▇ ▇. ▇▇▇▇▇▇,
as ______________, and __________ as Secretary, of The Cameron
Savings and Loan Association, F.A., and each in his/her capacity
acknowledged this instrument to be the act and deed of the
association.
WITNESS my official seal and signature this day and year
aforesaid.
_______________________________
(Seal of Notary) Notary Public, ___________ County
My commission expires ____________