Registration No. 33-58499
424(b)
MIDSOUTH BANCORP, INC.
SUGARLAND BANCSHARES, INC.
Supplement to Joint Proxy Statement and Prospectus dated June 20, 1995.
The Agreement and Plan of Merger, dated as of December 28,
1994, among Sugarland Bancshares, Inc. and Sugarland State Bank,
on the one hand, and MidSouth Bancorp, Inc. and MidSouth National
Bank, on the other hand, which is referred to in the Joint Proxy
Statement and Prospectus, is attached hereto, without exhibits.
This Supplement is dated June 20, 1995.
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made
December 28, 1994, between MidSouth Bancorp, Inc., a Louisiana
corporation ("MidSouth") and its wholly owned subsidiary,
MidSouth National Bank ("MidSouth Bank"), on the one hand; and
Sugarland Bancshares, Inc., a Louisiana corporation ("Holding"),
and its wholly owned subsidiary, Sugarland State Bank, a
Louisiana state banking association ("Bank"), on the other.
WHEREAS, the Board of Directors of MidSouth Bank and the
Board of Directors of Bank have each determined that it is
desirable and in the best interests of the institution and its
sole shareholder that Bank merge into MidSouth Bank (the "Bank
Merger") on the terms and subject to the conditions set forth in
this Agreement and in the agreement of merger attached hereto as
Exhibit A (the "Bank Merger Agreement"); and
WHEREAS, the Board of Directors of MidSouth and the Board of
Directors of Holding have each determined that it is desirable
and in the best interests of the corporation and its shareholders
that Holding merge into MidSouth (the "Company Merger" and,
together with the Bank Merger, collectively called the "Mergers")
on the terms and subject to the conditions set forth in this
Agreement and in the certificate of merger attached hereto as
Exhibit B (the "Company Merger Certificate").
NOW THEREFORE, in consideration of the representations,
warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
SECTION 1
Mergers and Closing
1.1 Bank Merger. Simultaneously with the execution of
this Agreement, MidSouth Bank and Bank will enter into the Bank
Merger Agreement, pursuant to which Bank will, subject to the
conditions stated herein and therein, merge into MidSouth Bank,
which shall be the surviving association.
1.2 Company Merger. Subject to the conditions stated in
Section 6, at the Effective Time, as defined below, Holding will
merge into MidSouth, which shall be the surviving corporation,
and the separate existence of Holding will cease. The Company
Merger will have the effects set forth in Section 115 of the
Louisiana Business Corporation Law ("BCL").
1.3 The Closing. The "Closing" of the transactions
contemplated hereby will take place in the offices of MidSouth,
102 Versailles Boulevard, Versailles Centre, Lafayette, Louisiana
70501, at 10:00 a.m., local time, on a mutually agreeable date as
soon as practicable following satisfaction of the conditions set
forth in subparagraphs (a), (b) and (d) of subsection 6.1 hereof,
or on any date specified by any party to the others upon ten
days' notice following satisfaction of such conditions. The date
on which the Closing is to occur is herein called the "Closing
Date." If all conditions set forth in Section 6 hereof are
satisfied or waived by the party entitled to grant such waiver,
at the Closing (a) MidSouth and MidSouth Bank, on the one hand,
and Holding and Bank, on the other hand, shall each provide to
the other such proof or indication of satisfaction of the
conditions set forth in Section 6 as the party whose obligations
are conditioned upon such satisfaction may reasonably request,
(b) the certificates, letters and opinions required by Section 6
shall be delivered, (c) the appropriate officers of the parties
shall execute, deliver and acknowledge the Bank Merger Agreement
and the Company Merger Certificate, and (d) the parties shall
take such further action as is required to consummate the
transactions contemplated by this Agreement and the Bank Merger
Agreement. If on any date established for the Closing all
conditions in Section 6 hereof have not been satisfied or waived
by the party entitled to grant such waiver, then any party, on
one or more occasions, may declare a delay of the Closing of such
duration, not exceeding 10 business days, as the declaring party
shall select, but no such delay shall extend beyond the date set
forth in subparagraph (c) of subsection 7.1, and no such delay
shall interfere with the right of any party to declare a
termination pursuant to Section 7.
1.4 The Effective Date and Time. The Bank Merger
Agreement shall be filed and recorded as provided by law with the
Office of the Comptroller of the Currency (the "OCC") and the
Louisiana Office of Financial Institutions (the "OFI")
immediately following or concurrently with the Closing, and the
Bank Merger will be effective at the time specified in a
certificate or other written record issued by the OCC or the OFI,
whichever date is later. The Company Merger Certificate shall be
filed with and recorded by the Secretary of State of the State of
Louisiana immediately following (or concurrently with) the
Closing, and the Company Merger shall be effective at the date
and time specified in the Company Merger Certificate. The date
on which and the time at which the Company Merger becomes
effective are herein referred to as the "Effective Date" and the
"Effective Time," respectively.
SECTION 2
Conversion of Stock of Holding
2.1 Conversion of Stock of Holding. Except for shares as
to which dissenters' rights have been perfected and not withdrawn
or otherwise forfeited under Section 131 of the BCL, on the
Effective Date, by reason of the Company Merger, each issued and
outstanding share of common stock, $1.25 par value per share, of
Holding ("Holding Common Stock") shall be converted into a number
of shares of Series A cumulative convertible preferred stock (the
"Preferred Stock") of MidSouth, having the terms set forth in the
form of Articles of Amendment attached hereto as Exhibit C, equal
to the quotient of (i) 187,286, divided by (ii) the number of
outstanding shares of Holding on the Effective Date.
2.2 Fractional Shares. In lieu of the issuance of any
fractional share of Preferred Stock to which a holder of Holding
Common Stock may be entitled (after aggregation of all fractional
shares to which such holder is entitled), each shareholder of
Holding, upon surrender of the certificate or certificates which
immediately prior to the Effective Time represented Holding
Common Stock held by such shareholder, shall be entitled to
receive a cash payment (without interest) equal to such
fractional share multiplied by the stated value of a share of
Preferred Stock.
2.3 Exchange of Certificates. After the Effective Time,
each holder of an outstanding certificate or certificates
theretofore representing shares of Holding Common Stock (other
than shares as to which dissenters' rights have been perfected
and not withdrawn or otherwise forfeited under Section 131 of the
BCL), upon surrender thereof to MidSouth, shall be entitled to
receive the shares of Preferred Stock into which such shares have
been converted as provided in Section 2.1 and cash in lieu of any
fractional share as provided in Section 2.2. Until so
surrendered, each outstanding certificate shall be deemed for all
purposes, other than as provided below with respect to the
payment of dividends or other distributions, if any, in respect
of the Preferred Stock, to represent the number of whole shares
of Preferred Stock into which the shares of Holding Common Stock
theretofore represented thereby shall have been converted.
MidSouth may, at its option, refuse to pay any dividend or other
distribution, if any, payable to the holders of shares of
Preferred Stock to the holders of certificates evidencing
unsurrendered Holding Common Stock, provided, however, that upon
surrender of such certificates there shall be paid to the record
holders of the stock certificate or certificates issued in
exchange therefor the amount, without interest, of dividends and
other distributions, if any, which have become payable with
respect to the number of whole shares of Preferred Stock into
which the shares of Holding Common Stock theretofore represented
thereby shall have been converted and which have not previously
been paid, unless such distributions have reverted to MidSouth in
full ownership pursuant to its Articles of Incorporation.
Whether or not a stock certificate representing Holding Common
Stock is surrendered, from and after the Effective Time such
certificate shall under no circumstances evidence, represent or
otherwise constitute any stock or other interest in Holding or
any other person, firm or corporation (other than MidSouth).
2.4 Shares of MidSouth. The shares of capital stock of
MidSouth outstanding immediately prior to the Effective Time
shall not be changed or converted by virtue of the Company
Merger.
SECTION 3
Representations and
Warranties of Holding and Bank
Holding and Bank represent and warrant to MidSouth and
MidSouth Bank that, except as set forth in the corresponding
subsection of the Schedule of Exceptions that Holding and Bank
have delivered to MidSouth and MidSouth Bank:
3.1 Consolidated Group; Organization; Qualification.
Holding's "consolidated group", as such term is used in this
Agreement, consists of Holding and Bank. Holding is a
corporation duly organized and validly existing under the laws of
the State of Louisiana and is a bank holding company within the
meaning of the Bank Holding Company Act of 1956, as amended (the
"Bank Holding Company Act"). Bank is a state chartered banking
association duly organized and validly existing under the laws of
the State of Louisiana. Each member of Holding's consolidated
group has all requisite corporate power and authority to own and
lease its property and to carry on its business as it is
currently being conducted and is qualified and in good standing
as a foreign corporation in all jurisdictions in which the
failure to so qualify would have a material adverse effect on
such member's financial condition, results of operations,
business or prospects.
3.2 Capital Stock; Other Interests. The authorized
capital stock of Holding consists of 400,000 shares of Holding
Common Stock, of which 187,286 shares are issued and outstanding,
and 45,000 shares are held in its treasury. The authorized
capital stock of Bank consists of 50,000 shares of common stock,
$5.00 par value per share, of which 50,000 shares are issued and
outstanding and no shares are held in its treasury. All issued
and outstanding shares of capital stock of each member of
Holding's consolidated group have been duly authorized and are
validly issued, fully paid and (except as provided in La. R.S.
6:262) non-assessable, and all of the outstanding shares of each
such member (other than Holding) are owned by Holding, free and
clear of all liens, charges, security interests, mortgages,
pledges and other encumbrances. No member of Holding's
consolidated group has outstanding any stock options or other
rights to acquire any shares of its capital stock or any security
convertible into such shares, or has any obligation or commitment
to issue, sell or deliver any of the foregoing or any shares of
its capital stock. The capital stock of each member of Holding's
consolidated group has been issued in compliance with all legal
requirements and in compliance with any pre-preemptive or similar
rights. No member of Holding's consolidated group has a
subsidiary or direct or indirect ownership interest exceeding 1%
in any corporation, partnership or other business entity except
for interests in any other such member.
3.3 Corporate Authorization; No Conflicts. Subject to
the approval of this Agreement by the shareholders of Holding in
accordance with the BCL, all corporate acts and other proceedings
required of each member of Holding's consolidated group for the
due and valid authorization, execution, delivery and performance
of this Agreement and the Bank Merger Agreement and consummation
of the Mergers have been validly and appropriately taken.
Subject to such shareholder approval and to such regulatory
approvals as are required by law, this Agreement and the Bank
Merger Agreement are legal, valid and binding obligations of the
members of Holding's consolidated group which are parties
thereto, respectively, and are enforceable against such members
in accordance with the respective terms of such instruments,
except that enforcement may be limited by bankruptcy,
reorganization, insolvency and other similar laws and court
decisions relating to or affecting the enforcement of creditors'
rights generally and by general equitable principles. With
respect to each member of Holding's consolidated group, neither
the execution, delivery or performance of this Agreement or the
Bank Merger Agreement, nor the consummation of the transactions
contemplated hereby or thereby will (i) violate, conflict with,
or result in a breach of any provisions of, (ii) constitute a
default (or event that, with notice or lapse of time or both,
would constitute a default) under, (iii) result in the
termination of or accelerate the performance required by, or (iv)
result in the creation of any lien, security interest, charge or
encumbrance upon any of its properties or assets under, any of
the terms, conditions or provisions of its articles of
incorporation or by-laws or any material note, bond, mortgage,
indenture, deed of trust, lease, license, agreement or other
instrument or obligation to or by which it or any of its assets
is bound; or violate any order, writ, injunction, decree,
statute, rule or regulation of any governmental body applicable
to it or any of its assets.
3.4 Financial Statements, Reports and Proxy Statements.
Holding has delivered to MidSouth true and complete copies of (a)
the consolidated balance sheets as of December 31, 1993 and 1992
of Holding and its subsidiaries, the related consolidated
statements of income, shareholders' equity and changes in
financial position for the respective years then ended, the
related notes thereto, and the report of its independent public
accountants with respect thereto (collectively, the "Financial
Statements"), (b) the unaudited consolidated balance sheets as of
September 30, 1994 and September 30, 1993 of Holding and its
subsidiaries, and the related unaudited statements of income,
shareholders' equity and changes in financial position for the
nine-month periods then ended (collectively, the "Interim
Financial Statements"), (c) the annual report to the Board of
Governors of the Federal Reserve System ("Federal Reserve Board")
for the year ended December 31, 1993, of each member of Holding's
consolidated group required to file such reports, (d) all call or
similar reports made to the Federal Deposit Insurance Corporation
("FDIC") or the Federal Reserve Board, as the case may be, since
December 31, 1991, of each member of Holding's consolidated group
required to file such reports, (e) Holding's Annual Report to
Shareholders for 1993 and all subsequent Quarterly Reports to
Shareholders, and (f) all proxy statements or other reports
disseminated to Holding's shareholders or the shareholders of any
of its subsidiaries at any time since December 31, 1991. The
Financial Statements and the Interim Financial Statements have
been prepared in conformity with generally accepted accounting
principles applied on a basis consistent with prior periods,
except as disclosed therein or in the accountant's report
accompanying such statement or statements, and present fairly, in
conformity with generally accepted accounting principles, except
as disclosed therein or in the accountant's report accompanying
such statement or statements, the consolidated results of
operations of Holding's consolidated group for the respective
periods covered thereby and the consolidated financial condition
of its consolidated group as of the respective dates thereof.
All call or similar reports referred to above have been filed on
the appropriate form and prepared in accordance with such form's
instructions and the applicable rules and regulations of the
regulating federal agency. No member of Holding's consolidated
group has, nor are any of any such member's assets subject to,
any material liability, commitment, indebtedness or obligation
(of any kind whatsoever, whether absolute, accrued, contingent,
known, unknown, matured or unmatured) which is not reflected and
adequately reserved against in the latest balance sheet forming
part of the Interim Financial Statements (the "Latest Balance
Sheet"). The Financial Statements and Interim Financial
Statements are supported by and consistent with detailed trial
balances of investment securities, loans and loan commitments,
depositors' accounts and cash balances on deposit with other
institutions, copies of which have been made available to
MidSouth.
3.5 Loan and Investment Portfolios. All loans, discounts
and financing leases (in which a member of Holding's consolidated
group is lessor) reflected on the Latest Balance Sheet (a) have
been made for good, valuable and adequate consideration in the
ordinary course of business of its consolidated group, (b) are
evidenced by notes, agreements or other evidences of indebtedness
which are true, genuine and what they purport to be and (c) to
the extent secured, have been secured by valid liens and security
interests which have been perfected. Accurate lists of all such
loans, discounts and financing leases as of the date of the
Latest Balance Sheet, and of the investment portfolios of each
member of Holding's consolidated group as of such date, have been
made available to MidSouth.
3.6 Adequacy of Loan Loss Reserves. Each of the
allowances for losses on loans, financing leases and other real
estate owned shown on the Latest Balance Sheet is adequate in
accordance with applicable regulatory guidelines and generally
accepted accounting principles in all material respects, and
there are no facts or circumstances known to any executive
officer of Holding or Bank which are likely to require in
accordance with applicable regulatory guidelines or generally
accepted accounting principles a future material increase in any
provisions for such losses or a material decrease in any of the
allowances therefor reflected in the Latest Balance Sheet. Each
of the allowances for losses on loans, financing leases and other
real estate owned reflected on the books of Holding's
consolidated group at all times from and after the date of the
Latest Balance Sheet has been and will be adequate in accordance
with applicable regulatory guidelines and generally accepted
accounting principles in all material respects.
3.7 Examination Reports. To the extent permitted by
applicable law, Holding has made available to MidSouth true and
correct copies of all examination reports with respect to each
member of Holding's consolidated group made by any federal or
state bank or bank holding company regulatory authority since
December 31, 1991.
3.8 Absence of Certain Changes or Events. Since the date
of the Latest Balance Sheet, there has been no event or condition
of any character (whether actual, threatened or contemplated)
that has had, or can reasonably be anticipated to have, a
material adverse effect on the financial condition, results of
operations, business or prospects of any member of Holding's
consolidated group. No such member has, since the date of the
Latest Balance Sheet:
(a) borrowed any money except for deposits or, except in
the ordinary course of business consistent with past practices,
(i) loaned any money or pledged any of its credit in connection
with any aspect of its business, (ii) mortgaged or otherwise
subjected to any lien, encumbrance or other liability any of its
assets, (iii) sold, assigned or transferred any of its assets in
excess of $25,000 in the aggregate, or (iv) incurred any material
liability, commitment, indebtedness or obligation (of any kind
whatsoever, whether accrued, contingent, known, unknown, matured
or unmatured);
(b) suffered any material damage, destruction or loss,
whether or not covered by insurance;
(c) experienced any material change in asset concentrations
as to customers or industries or in the nature and source of its
liabilities or in the mix of interest-bearing versus non-interest
bearing deposits;
(d) received notice or had knowledge or reasonable grounds
to believe that any material labor unrest exists among any of its
employees or that any group, organization or union has attempted
to organize any of its employees;
(e) received notice or had knowledge or reasonable grounds
to believe that any of its substantial customers has terminated
or intends to terminate such customer's relationship with it;
(f) failed to operate its business in the ordinary course
consistent with past practices, or failed to preserve its
business organization intact or to preserve the goodwill of its
customers and others with whom it has business relations;
(g) incurred any material loss except for losses adequately
reserved against on the date of this Agreement or waived any
material right in connection with any aspect of its business,
whether or not in the ordinary course of business;
(h) cancelled any debt owed to it, or cancelled any of its
claims, or paid any of its noncurrent obligations or liabilities;
(i) made any capital expenditure or capital addition or
betterment in excess of $25,000 each;
(j) entered into any agreement requiring the payment,
conditionally or otherwise, of any salary, bonus, extra
compensation, pension or severance payment to any of its present
or former directors, officers or employees, except such
agreements as are terminable at will without any penalty or other
payment by it, or increased the compensation (including salaries,
fees, bonuses, profit sharing, incentive, pension, retirement or
other similar payments) of any such person whose annual
compensation would, following such increase, exceed $30,000;
(k) changed any accounting practice followed or employed in
preparing the Financial Statements or Interim Financial
Statements;
(l) made any loan, given any discount or entered into any
financing lease which has not been (i) made for good, valuable
and adequate consideration in the ordinary course of business,
(ii) evidenced by notes or other evidences of indebtedness which
are true, genuine and what they purport to be, and (iii) fully
reserved against in an amount sufficient to provide for all
charge-offs reasonably anticipated in the ordinary course of
business after taking into account all recoveries reasonably
anticipated in the ordinary course of business; or
(m) entered into any agreement, contract or commitment to
do any of the foregoing.
3.9 Taxes. Each member of Holding's consolidated group
has timely filed all federal, state, foreign and local income,
franchise, excise, real and personal property, employment and
other tax returns, tax information returns and reports required
to be filed, has paid all taxes, interest payments and penalties
which have become due, has made (and will make) adequate
provision for the payment of all taxes accruable for all periods
ending on or before the date of this Agreement (and the Closing
Date) to any city, parish, state, foreign country, the United
States or any other taxing authority, and is not delinquent in
the payment of any tax or governmental charge of any nature. The
consolidated federal income tax returns of Holding's consolidated
group have never been audited. No audit, examination or
investigation is presently being conducted or, to the best of
such member's knowledge, threatened, by any taxing authority, no
material unpaid tax deficiencies or additional liabilities of any
sort have been proposed by any governmental representative, and
no agreements for extension of time for the assessment of any tax
have been entered into by or on behalf of any member of Holding's
consolidated group. Each such member has withheld from its
employees (and timely paid to the appropriate governmental
entity) proper and accurate amounts for all periods in compliance
in all material respects with all tax withholding provisions of
applicable federal, state, foreign and local laws (including,
without limitation, income, social security and employment tax
withholding for all forms of compensation).
3.10 Title to Assets. (a) On the date of the Latest
Balance Sheet, each member of Holding's consolidated group had
and, except with respect to assets disposed of for adequate
consideration in the ordinary course of business since such date,
now has, good and merchantable title to all real property and
good and merchantable title to all other properties and assets
reflected on the Latest Balance Sheet, free and clear of all
mortgages, liens, pledges, restrictions, security interests,
charges and encumbrances of any nature except for (i) mortgages
and encumbrances which secure indebtedness which is properly
reflected in the Latest Balance Sheet; (ii) liens for taxes
accrued but not yet payable; (iii) liens arising as a matter of
law in the ordinary course of business with respect to
obligations incurred after the date of the Latest Balance Sheet,
provided that the obligations secured by such liens are not
delinquent or are being contested in good faith; (iv) such
imperfections of title and encumbrances, if any, as do not
materially detract from the value or interfere with the present
use of any of such properties or assets or the potential sale of
any of such owned properties or assets; and (v) capital leases
and leases, if any, to third parties for fair and adequate
consideration. Each member of Holding's consolidated group owns,
or has valid leasehold interests in, all material properties and
assets used in the conduct of its business. Any real property
and other material assets held under lease by any such member are
held under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use
of such property by such member.
(b) With respect to each lease of any real property or a
material amount of personal property to which any member of
Holding's consolidated group is a party, except for financing
leases in which a member of such consolidated group is lessor,
(i) such lease is in full force and effect in accordance with its
terms; (ii) all rents and other monetary amounts that have become
due and payable thereunder have been paid; (iii) there exists no
default, or event, occurrence, condition or act, which with the
giving of notice, the lapse of time or the happening of any
further event, occurrence, condition or act would become a
default under such lease; and (iv) neither the Company Merger nor
the Bank Merger will constitute a default or a cause for
termination or modification of such lease.
(c) No member of Holding's consolidated group has any legal
obligation, absolute or contingent, to any other person to sell
or otherwise dispose of any substantial part of its assets; or to
sell or dispose of any of its assets except in the ordinary
course of business consistent with past practices.
3.11 Litigation, Pending Proceedings and Compliance with
Laws. (a) There are no claims of any kind or any actions, suits,
proceedings, arbitrations or investigations pending or
threatened, nor does any member of Holding's consolidated group
have knowledge of a basis for any claim, in any court or before
any governmental agency or instrumentality or arbitration panel
or otherwise, against any member of Holding's consolidated group.
(b) Each member of Holding's consolidated group has
complied with and is not in default in any material respect under
(and has not been charged or threatened with or come under
investigation with respect to any charge concerning any material
violation of any provision of) any federal, state or local law,
regulation, ordinance, rule or order (whether executive,
judicial, legislative or administrative) or any order, writ,
injunction or decree of any court, agency or instrumentality.
(c) There are no material uncured violations, or violations
with respect to which material refunds or restitution may be
required, cited in any compliance report to any member of
Holding's consolidated group as a result of examination by any
bank or bank holding company regulatory authority.
(d) No member of Holding's consolidated group is subject to
any written agreement, memorandum or order with or by any bank or
bank holding company regulatory authority.
3.12 Employee Benefit Plans. (a) Neither Holding nor
Bank sponsors, maintains or contributes to, and neither has at
any time sponsored, maintained or contributed to, any employee
benefit plan or arrangement.
(b) Except as contemplated by Section 5.15 hereof, the
consummation of the transactions contemplated hereunder will not
(i) result in the imposition of any obligation or liability on
Holding, Bank, MidSouth or MidSouth Bank to any employee or
former employee of Holding or Bank, or (ii) result in a
prohibited transaction as such term is used in Code Section 4975
or ERISA Section 406.
3.13 Insurance Policies. Each member of Holding's
consolidated group maintains in force insurance policies and
bonds in such amounts and against such liabilities and hazards as
are considered adequate. An accurate list of all such insurance
policies has been delivered to MidSouth and MidSouth Bank. No
member of Holding's consolidated group is now liable, nor will
any such member become liable, for any material retroactive
premium adjustment. All policies are valid and enforceable and
in full force and effect, and no member of Holding's consolidated
group has received any notice of a material premium increase or
cancellation with respect to any of its insurance policies or
bonds. Within the last three years, no member of Holding's
consolidated group has been refused any insurance coverage sought
or applied for, and no such member has reason to believe that its
existing insurance coverage cannot be renewed as and when the
same shall expire, upon terms and conditions as favorable as
those presently in effect.
3.14 Agreements. No member of Holding's consolidated
group is a party to:
(a) any collective bargaining agreement;
(b) any employment or other agreement or contract with or
commitment to any employee except such agreements as are
terminable at will without penalty by the employer;
(c) any obligation of guaranty or indemnification except,
if entered into in the ordinary course of business with respect
to customers or any member of Holding's consolidated group,
letters of credit, guaranties of endorsements and guaranties of
signatures;
(d) any agreement, contract or commitment which is or may
be materially adverse to the financial condition, results of
operations, business or prospects of any member of Holding's
consolidated group; or
(e) any agreement, contract or commitment containing any
covenant limiting the freedom of any member of Holding's
consolidated group to engage in any line of business or to
compete with any person.
The subsection of the Schedule of Exceptions that
corresponds to this subsection contains a list of each material
agreement, contract or commitment (except those entered into in
the ordinary course of business with respect to loans, lines of
credit, letters of credit, depositor agreements, certificates of
deposit and similar banking activities) to which any member of
Holding's consolidated group is a party or which affects any such
member. No member of Holding's consolidated group has in any
material respect breached, nor is there any pending or threatened
claims that it has materially breached, any of the terms or
conditions of any of its agreements, contracts or commitments.
3.15 Licenses, Franchises and Governmental
Authorizations. Each member of Holding's consolidated group
possesses all licenses, franchises, permits and other
governmental authorizations necessary for the continued conduct
of its business without interference or interruption. The
deposits of each such member are insured by the FDIC to the
extent provided by applicable law, and there are no pending or
threatened proceedings to revoke or modify that insurance or for
relief under 12 U.S.C. Section 1818.
3.16 Corporate Documents. Holding has delivered to
MidSouth and MidSouth Bank, with respect to each member of
Holding's consolidated group, true and correct copies of its
articles of incorporation or articles of association, and its by-
laws, all as amended. All of the foregoing and all of the
corporate minutes and stock transfer records of each member of
Holding's consolidated group are current, complete and correct in
all material respects.
3.17 Certain Transactions. No past or present director,
executive officer or five percent shareholder of any member of
Holding's consolidated group has, since January 1, 1991, engaged
in any transaction or series of transactions which, if such
member had been subject to Section 14(a) of the Exchange Act at
all times since that date, would be required to be disclosed in
its proxy materials pursuant to Item 404 of Regulation S-K of the
Rules and Regulations of the Securities and Exchange Commission
("SEC") without regard to the amount limitations of Item 404.
3.18 Brokers' or Finders' Fees. No agent, broker,
investment banker, investment or financial advisor or other
person acting on behalf of any member of Holding's consolidated
group is entitled to any commission, broker's or finder's fee
from any of the parties hereto in connection with any of the
transactions contemplated by this Agreement, except for the
financial advisor retained by Holding pursuant to a written
agreement which has been delivered to MidSouth and MidSouth Bank.
3.19 Environmental Matters.
(a) (i) Holding and each member of Holding's consolidated
group has obtained all material permits, licenses and other
authorizations that are required to be obtained by it under any
applicable Environmental Law Requirements (as hereinafter
defined) in connection with the operation of its businesses and
ownership of its properties (collectively, the "Subject
Properties"), including without limitation properties acquired by
foreclosure or in settlement of loans;
(ii) Holding and each member of its consolidated group
is in compliance in all material respects with all terms and
conditions of such permits, licenses and authorizations and with
all applicable Environmental Law Requirements;
(iii)There are no past or present events, conditions,
circumstances, activities or plans by any member of Holding's
consolidated group related in any manner to Holding or any member
of its consolidated group or the Subject Properties that did or
would, in any material respect, violate or prevent compliance or
continued compliance with any of the Environmental Law
Requirements, or give rise to any Environmental Liability, as
hereinafter defined;
(iv) There is no civil, criminal or administrative
action, suit, demand, claim, order, judgment, hearing, notice or
demand letter, notice of violation, investigation or proceeding
pending or, to the knowledge of any executive officer of Holding
or Bank, threatened by any person against Holding or any member
of its consolidated group, or any prior owner of any of the
Subject Properties and relating to the Subject Properties, and
relating in any way to any Environmental Law Requirement or
seeking to impose any Environmental Liability; and
(v) No member of Holding's consolidated group is
subject to or responsible for any material Environmental
Liability that is not set forth and adequately reserved against
on the Latest Balance Sheet.
(b) "Environmental Law Requirement" means all applicable
statutes, regulations, rules, ordinances, codes, licenses,
permits, orders, approvals, plans, authorizations, concessions,
franchises, and similar items, of all governmental agencies,
departments, commissions, boards, bureaus, or instrumentalities
of the United States, states and political subdivisions thereof
and all applicable judicial, administrative, and regulatory
decrees, judgments and orders relating to the protection of human
health or the environment, including without limitation: (A) all
requirements, including but not limited to those (i) pertaining
to reporting, licensing, permitting, investigation, and
remediation of emissions, discharges, releases, or threatened
releases of Hazardous Materials (as such term is defined below),
chemical substances, pollutants, contaminants, or hazardous or
toxic substances, materials or wastes whether solid, liquid, or
gaseous in nature, into the air, surface water, groundwater, or
land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of
Hazardous Materials, chemical substances, pollutants,
contaminants, or hazardous or toxic substances, materials or
wastes, whether solid, liquid, or gaseous in nature; (B) all
requirements pertaining to protection of the health and safety of
employees or the public; and (C) all requirements pertaining to
the (i) drilling, production, and abandonment of oil and gas
wells, (ii) the transportation of produced oil and gas, and (iii)
the remediation of sites related to that drilling, production or
transportation.
(c) "Hazardous Materials" shall mean: (A) Any "hazardous
substance" as defined by either the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 USC Section
9601, et seq.) ("CERCLA") as amended from time to time, or
regulations promulgated thereunder; (B) asbestos; (C)
polychlorinated biphenyls; (D) any "regulated substance" as
defined by 40 C.F.R. Section 280.12, or La. Admin. Code 33:XI.
103; (E) any naturally occurring radioactive material ("NORM"),
as defined by La. Admin. Code 33:XV, Chapter 14, as amended
from time to time, irrespective of whether the NORM is
located in Louisiana or another jurisdiction; (F) any non-hazardous
oilfield wastes ("NOW") defined under La. R.S. 30:1, et seq.,
and regulations promulgated thereunder, irrespective of whether
those wastes are located in Louisiana or another jurisdiction;
(G) any substance the presence of which on the Subject Properties
is prohibited by any lawful rules and regulations of legally
constituted authorities from time to time in force and effect
relating to the Subject Properties; and (H) any other substance
which by any such rule or regulation requires special handling in
its collection, storage, treatment or disposal.
(d) "Environmental Liability" shall mean (i) any liability
or obligation (of any kind whatsoever, whether absolute or
contingent, accrued or unaccrued, known or unknown) arising under
any Environmental Law Requirement, or (ii) any liability or
obligation (of any kind whatsoever, whether absolute or
contingent, accrued or unaccrued, known or unknown) under any
other theory of law or equity (including without limitation any
liability for personal injury, property damage or remediation)
that results from, or is based upon or related to, the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge,
release or threatened release into the environment, of any
Hazardous Materials, pollutant, contaminant, chemical, or
industrial, toxic or hazardous substance or waste.
3.20 Community Reinvestment Act; Fair Lending. Bank has
complied in all material respects with the provisions of the
Community Reinvestment Act ("CRA") and the rules and regulations
thereunder, has a CRA rating of not less than "satisfactory", and
has received no material criticism from regulators with respect
to discriminatory lending practices.
3.21 Accuracy of Statements. No warranty or
representation made or to be made by any member of Holding's
consolidated group in this Agreement, and no information
furnished by any such member pursuant to this Agreement, contains
or will contain, as of the date of this Agreement, the effective
date of the Registration Statement (as defined in subsection 5.16
hereof) and the Closing Date, an untrue statement of a material
fact or an omission of a material fact necessary to make the
statements contained herein and therein, in light of the
circumstances in which they are made, not misleading.
SECTION 4
Representations and Warranties
of MidSouth and MidSouth Bank
MidSouth and MidSouth Bank represent and warrant to Holding
and Bank that, except as set forth in the corresponding
subsection of the Schedule of Exceptions that MidSouth has
delivered to Holding:
4.1 Organization and Qualification. MidSouth's
"consolidated group" consists of MidSouth and MidSouth Bank.
MidSouth is a corporation duly organized and validly existing
under the laws of the State of Louisiana and is a bank holding
company within the meaning of the Bank Holding Company Act.
MidSouth Bank is a national banking association duly organized
and validly existing under the laws of the United States. Each
of MidSouth and MidSouth Bank has all requisite corporate power
and authority to own and lease its property and to carry on its
business as it is currently being conducted and is qualified and
in good standing as a foreign corporation in all jurisdictions in
which the failure to so qualify would have a material adverse
effect on its financial condition, results of operations,
business or prospects.
4.2 Capital Stock; Other Interests. The authorized
capital stock of MidSouth consisted at September 30, 1994, of
5,000,000 shares of common stock, $0.10 par value per share, of
which at such date 709,687 shares were issued and outstanding and
no shares were held in its treasury; and 5,000,000 shares of
preferred stock, no par value per share, of which at such date no
shares were issued and outstanding and no shares were held in its
treasury. All issued and outstanding shares of capital stock of
each member of MidSouth's consolidated group have been duly
authorized and are validly issued, fully paid and (except as
provided in 12 U.S.C. 62) non-assessable, and all of the
outstanding shares of each such member (other than MidSouth) are
owned by MidSouth, free and clear of all liens, charges, security
interests, mortgages, pledges and other encumbrances. Except
with respect to stock options pursuant to MidSouth's stock option
plan, the shares of Preferred Stock to be issued pursuant to this
Agreement and the shares of MidSouth Common Stock that may be
issued upon conversion of the Preferred Stock, as of the date of
this Agreement no member of MidSouth's consolidated group has
outstanding any stock options or other rights to acquire any
shares of its capital stock or any security convertible into such
shares, or has any obligation or commitment to issue, sell or
deliver any of the foregoing or any shares of its capital stock.
The capital stock of each member of MidSouth's consolidated group
has been issued in compliance with all legal requirements and in
compliance with any pre-preemptive or similar rights. No member
of MidSouth's consolidated group has a subsidiary or direct or
indirect ownership interest exceeding 1% in any corporation,
partnership or other business entity except for interests in any
other such member.
4.3 Corporate Authorization; No Conflicts. Subject to
the approval of this Agreement by the shareholders of MidSouth in
accordance with the BCL or the rules of the American Stock
Exchange, if required, and to the approval of this Agreement and
the Bank Merger Agreement by MidSouth as sole shareholder of
MidSouth Bank, all corporate acts and other proceedings required
of MidSouth and MidSouth Bank for the due and valid
authorization, execution, delivery and performance of this
Agreement and the Bank Merger Agreement and consummation of the
Mergers have been validly and appropriately taken. Subject to
such shareholder approvals and to such regulatory approvals as
are required by law, this Agreement and the Bank Merger Agreement
are legal, valid and binding obligations of MidSouth and MidSouth
Bank, as the case may be, and are enforceable against them in
accordance with the respective terms of such instruments, except
that enforcement may be limited by bankruptcy, reorganization,
insolvency and other similar laws and court decisions relating to
or affecting the enforcement of creditors' rights generally and
by general equitable principles. With respect to each of
MidSouth and MidSouth Bank, neither the execution, delivery or
performance of this Agreement or the Bank Merger Agreement, nor
the consummation of the transactions contemplated hereby or
thereby will (i) violate, conflict with, or result in a breach of
any provision of, (ii) constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default)
under, (iii) result in the termination of or accelerate the
performance required by, or (iv) result in the creation of any
lien, security interest, charge or encumbrance upon any of its
properties or assets under, any of the terms, conditions or
provisions of its articles of incorporation or by-laws or any
material note, bond, mortgage, indenture, deed of trust, lease,
license, agreement or other instrument or obligation to or by
which it or any of its assets is bound; or violate any order,
writ, injunction, decree, statute, rule or regulation of any
governmental body applicable to it or any of its assets.
4.4 MidSouth Corporate Documents. MidSouth and MidSouth
Bank have delivered to Holding true and correct copies of their
articles of incorporation or association, as amended, and by-
laws, as amended.
4.5 Financial Statements, Reports and Proxy Statements.
MidSouth has delivered to Holding true and complete copies of (a)
the consolidated balance sheets as of December 31, 1993 and 1992
of MidSouth and its subsidiaries, the related consolidated
statements of income, shareholders' equity and changes in
financial position for the respective years then ended, the
related notes thereto, and the report of its independent public
accountants with respect thereto (collectively, the "Financial
Statements"), (b) the unaudited consolidated balance sheets as of
September 30, 1994 and September 30, 1993 of MidSouth and its
subsidiaries, and the related unaudited statements of income,
shareholders' equity and changes in financial position for the
nine-month periods then ended (collectively, the "Interim
Financial Statements"), (c) the annual report to the Board of
Governors of the Federal Reserve System ("Federal Reserve Board")
for the year ended December 31, 1993, of each member of
MidSouth's consolidated group required to file such reports, (d)
all call or similar reports made to the OCC or the Federal
Reserve Board, as the case may be, since December 31, 1991, of
each member of MidSouth's consolidated group required to file
such reports, (e) MidSouth's Annual Report to Shareholders for
1993 and all subsequent Quarterly Reports to Shareholders, and
(f) all proxy statements or other reports disseminated to
MidSouth's shareholders or the shareholders of any of its
subsidiaries at any time since December 31, 1991. The Financial
Statements and the Interim Financial Statements have been
prepared in conformity with generally accepted accounting
principles applied on a basis consistent with prior periods, and
present fairly, in conformity with generally accepted accounting
principles, except as disclosed therein or in the accountant's
report accompanying such statement or statements, the
consolidated results of operations of MidSouth's consolidated
group for the respective periods covered thereby and the
consolidated financial condition of its consolidated group as of
the respective dates thereof. All call or similar reports
referred to above have been filed on the appropriate form and
prepared in accordance with such form's instructions and the
applicable rules and regulations of the regulating federal
agency. No member of MidSouth's consolidated group has, nor are
any of any such member's assets subject to, any material
liability, commitment, indebtedness or obligation (of any kind
whatsoever, whether absolute, accrued, contingent, known,
unknown, matured or unmatured) which is not reflected and
adequately reserved against in the latest balance sheet forming
part of the Interim Financial Statements (the "Latest Balance
Sheet"). The Financial Statements and Interim Financial
Statements are supported by and consistent with detailed trial
balances of investment securities, loans and loan commitments,
depositors' accounts and cash balances on deposit with other
institutions, copies of which have been made available to
Holding.
4.6 Loan and Investment Portfolios. All loans, discounts
and financing leases (in which a member of MidSouth's
consolidated group is lessor) reflected on the Latest Balance
Sheet (a) have been made for good, valuable and adequate
consideration in the ordinary course of business of its
consolidated group, (b) are evidenced by notes, agreements or
other evidences of indebtedness which are true, genuine and what
they purport to be and (c) to the extent secured, have been
secured by valid liens and security interests which have been
perfected.
4.7 Adequacy of Loan Loss Reserves. Each of the
allowances for losses on loans, financing leases and other real
estate owned shown on the Latest Balance Sheet is adequate in
accordance with applicable regulatory guidelines and generally
accepted accounting principles in all material respects, and
there are no facts or circumstances known to any executive
officer of MidSouth or MidSouth Bank which are likely to require
in accordance with applicable regulatory guidelines or generally
accepted accounting principles a future material increase in any
provisions for such losses or a material decrease in any of the
allowances therefor reflected in the Latest Balance Sheet. Each
of the allowances for losses on loans, financing leases and other
real estate owned reflected on the books of MidSouth's
consolidated group at all times from and after the date of the
Latest Balance Sheet has been and will be adequate in accordance
with applicable regulatory guidelines and generally accepted
accounting principles in all material respects.
4.8 Examination Reports. To the extent permitted by
applicable law, MidSouth has made available to Holding true and
correct copies of all examination reports with respect to each
member of MidSouth's consolidated group made by any federal or
state bank or bank holding company regulatory authority since
December 31, 1991.
4.9 Absence of Certain Changes or Events. Since the date
of the Latest Balance Sheet, there has been no event or condition
of any character (whether actual, threatened or contemplated)
that has had, or can reasonably be anticipated to have, a
material adverse effect on the financial condition, results of
operations, business or prospects of any member of MidSouth's
consolidated group. No such member has, since the date of the
Latest Balance Sheet:
(a) borrowed any money except for deposits or, except in
the ordinary course of business consistent with past practices,
(i) loaned any money or pledged any of its credit in connection
with any aspect of its business, (ii) mortgaged or otherwise
subjected to any lien, encumbrance or other liability any of its
assets, (iii) sold, assigned or transferred any of its assets in
excess of $150,000 in the aggregate, or (iv) incurred any
material liability, commitment, indebtedness or obligation (of
any kind whatsoever, whether accrued, contingent, known, unknown,
matured or unmatured);
(b) suffered any material damage, destruction or loss,
whether or not covered by insurance;
(c) experienced any material change in asset concentrations
as to customers or industries or in the nature and source of its
liabilities or in the mix of interest-bearing versus non-interest
bearing deposits;
(d) received notice or had knowledge or reasonable grounds
to believe that any material labor unrest exists among any of its
employees or that any group, organization or union has attempted
to organize any of its employees;
(e) received notice or had knowledge or reasonable grounds
to believe that any of its substantial customers has terminated
or intends to terminate such customer's relationship with it;
(f) failed to operate its business in the ordinary course
consistent with past practices, or failed to preserve its
business organization intact or to preserve the goodwill of its
customers and others with whom it has business relations;
(g) incurred any material loss except for losses adequately
reserved against on the date of this Agreement or waived any
material right in connection with any aspect of its business,
whether or not in the ordinary course of business;
(h) cancelled any debt owed to it, or cancelled any of its
claims, or paid any of its noncurrent obligations or liabilities;
(i) made any capital expenditure or capital addition or
betterment in excess of $150,000 each;
(j) changed any accounting practice followed or employed in
preparing the Financial Statements or Interim Financial
Statements;
(k) made any loan, given any discount or entered into any
financing lease which has not been (i) made for good, valuable
and adequate consideration in the ordinary course of business,
(ii) evidenced by notes or other evidences of indebtedness which
are true, genuine and what they purport to be, and (iii) fully
reserved against in an amount sufficient to provide for all
charge-offs reasonably anticipated in the ordinary course of
business after taking into account all recoveries reasonably
anticipated in the ordinary course of business; or
(l) entered into any agreement, contract or commitment to
do any of the foregoing.
4.10 Taxes. Each member of MidSouth's consolidated group
has timely filed all federal, state, foreign and local income,
franchise, excise, real and personal property, employment and
other tax returns, tax information returns and reports required
to be filed, has paid all taxes, interest payments and penalties
which have become due, has made (and will make) adequate
provision for the payment of all taxes accruable for all periods
ending on or before the date of this Agreement (and the Closing
Date) to any city, parish, state, foreign country, the United
States or any other taxing authority, and is not delinquent in
the payment of any tax or governmental charge of any nature. The
consolidated federal income tax returns of MidSouth's
consolidated group have never been audited. No audit,
examination or investigation is presently being conducted or, to
the best of such member's knowledge, threatened, by any taxing
authority, no material unpaid tax deficiencies or additional
liabilities of any sort have been proposed by any governmental
representative, and no agreements for extension of time for the
assessment of any tax have been entered into by or on behalf of
any member of MidSouth's consolidated group. Each such member
has withheld from its employees (and timely paid to the
appropriate governmental entity) proper and accurate amounts for
all periods in compliance in all material respects with all tax
withholding provisions of applicable federal, state, foreign and
local laws (including, without limitation, income, social
security and employment tax withholding for all forms of
compensation).
4.11 Title to Assets. (a) On the date of the Latest
Balance Sheet, each member of MidSouth's consolidated group had
and, except with respect to assets disposed of for adequate
consideration in the ordinary course of business since such date,
now has, good and merchantable title to all real property and
good and merchantable title to all other properties and assets
reflected on the Latest Balance Sheet, free and clear of all
mortgages, liens, pledges, restrictions, security interests,
charges and encumbrances of any nature except for (i) mortgages
and encumbrances which secure indebtedness which is properly
reflected in the Latest Balance Sheet; (ii) liens for taxes
accrued but not yet payable; (iii) liens arising as a matter of
law in the ordinary course of business with respect to
obligations incurred after the date of the Latest Balance Sheet,
provided that the obligations secured by such liens are not
delinquent or are being contested in good faith; (iv) such
imperfections of title and encumbrances, if any, as do not
materially detract from the value or interfere with the present
use of any of such properties or assets or the potential sale of
any of such owned properties or assets; and (v) capital leases
and leases, if any, to third parties for fair and adequate
consideration. Each member of MidSouth's consolidated group
owns, or has valid leasehold interests in, all material
properties and assets used in the conduct of its business. Any
real property and other material assets held under lease by any
such member are held under valid, subsisting and enforceable
leases with such exceptions as are not material and do not
interfere with the use of such property by such member.
(b) With respect to each lease of any real property or a
material amount of personal property to which any member of
MidSouth's consolidated group is a party, except for financing
leases in which a member of such consolidated group is lessor,
(i) such lease is in full force and effect in accordance with its
terms; (ii) all rents and other monetary amounts that have become
due and payable thereunder have been paid; (iii) there exists no
default, or event, occurrence, condition or act, which with the
giving of notice, the lapse of time or the happening of any
further event, occurrence, condition or act would become a
default under such lease; and (iv) neither the Company Merger nor
the Bank Merger will constitute a default or a cause for
termination or modification of such lease.
(c) No member of MidSouth's consolidated group has any
legal obligation, absolute or contingent, to any other person to
sell or otherwise dispose of any substantial part of its assets;
or to sell or dispose of any of its assets except in the ordinary
course of business consistent with past practices.
4.12 Litigation, Pending Proceedings and Compliance with
Laws. (a) Except as described in the list referred to in
subparagraph (e) below, there are no claims of any kind or any
actions, suits, proceedings, arbitrations or investigations
pending or threatened, nor does any member of MidSouth's
consolidated group have knowledge of a basis for any claim, in
any court or before any governmental agency or instrumentality or
arbitration panel or otherwise, against any member of MidSouth's
consolidated group.
(b) Each member of MidSouth's consolidated group has
complied with and is not in default in any material respect under
(and has not been charged or threatened with or come under
investigation with respect to any charge concerning any material
violation of any provision of) any federal, state or local law,
regulation, ordinance, rule or order (whether executive,
judicial, legislative or administrative) or any order, writ,
injunction or decree of any court, agency or instrumentality.
(c) There are no material uncured violations, or violations
with respect to which material refunds or restitution may be
required, cited in any compliance report to any member of
MidSouth's consolidated group as a result of examination by any
bank or bank holding company regulatory authority.
(d) No member of MidSouth's consolidated group is subject
to any written agreement, memorandum or order with or by any bank
or bank holding company regulatory authority.
(e) The subsection of the Schedule of Exceptions that
corresponds to this subsection lists each claim, action, suit,
proceeding, arbitration, or investigation, pending or known to be
threatened, in which any material claim or demand is made or
threatened to be made against any member of MidSouth's
consolidated group.
4.13 Employee Benefit Plans. With respect to any
employee benefit plans covered by ERISA ("Erisa Plans") all
contributions required to be made by MidSouth or MidSouth Bank
have been made, all insurance premiums required have been paid
and each of the ERISA Plans has been maintained and administered
in all material respects in compliance with its terms, the
provisions of ERISA and all other applicable laws, and, where
applicable, the provisions of the Internal Revenue Code of 1986,
as amended (the "Code"). With respect to each of the ERISA
Plans, no transaction has occurred that could result in the
imposition of a tax or penalty on prohibited transactions or
party-in-interest transactions pursuant to Section 4975 of the
Code or Section 502(i) of ERISA; there is no matter relating to
any of the ERISA Plans pending or, to the knowledge of Holding or
Bank, threatened, nor, to the knowledge of MidSouth or MidSouth
Bank, are there any facts or circumstances existing that could
lead to (other than routine filings such as qualification
determination filings) proceedings before, or administrative
actions by, any governmental agency; there are no actions, suits
or claims pending or, to the knowledge of MidSouth or MidSouth
Bank, threatened (including, without limitation, breach of
fiduciary duty actions, but excluding routine uncontested claims
for benefits) against any of the ERISA Plans or the assets
thereof, where applicable. MidSouth and MidSouth Bank have
complied in all material respects with the reporting and
disclosure requirements of ERISA and the Code. None of the ERISA
Plans are multi-employer plans within the meaning of Section
3(37) of ERISA. Except as set forth on the Schedule of
Exceptions, a favorable determination letter has been issued by
the Internal Revenue Service with respect to each ERISA Plan that
is intended to be qualified under Section 401(a) of the Code, the
Internal Revenue Service has taken no action to revoke any such
letter and nothing has occurred, whether by action or failure to
act, which would cause the loss of such qualification. Neither
MidSouth nor MidSouth Bank has sponsored, maintained or made
contributions to any plan, fund or arrangement subject to Title
IV of ERISA or the requirements of Section 412 of the Code or
providing for post-retirement medical benefits.
(b) All group health plans of MidSouth and MidSouth Bank to
which Section 4980B(f) of the Code or Section 601 of ERISA
applies are in full compliance in all material respects with the
continuation coverage requirements of Section 4980B(f) of the
Code and Section 601 of ERISA and any prior violations of such
Sections have been cured prior to the date hereof.
(c) Except as contemplated by Section 5.15 hereof, the
consummation of the transactions contemplated hereunder will not
(i) result in the imposition of any obligation or liability on
Holding, Bank, MidSouth or MidSouth Bank to any employee benefit
plan, fund or arrangement of, or to any employee or former
employee of, MidSouth or MidSouth Bank, or (ii) result in a
prohibited transaction as such term is used in Code Section 4975
or ERISA Section 406.
(d) Each plan, fund or arrangement previously sponsored or
maintained by MidSouth or MidSouth Bank or to which MidSouth or
MidSouth Bank previously made contributions which has been
terminated by MidSouth or MidSouth Bank was terminated in
accordance with ERISA, the Code and the terms of such plan, fund
or arrangement and no event has occurred and no condition exists
that would subject Holding, Bank, MidSouth or MidSouth Bank to
any tax, penalty, fine or other liability as a result of,
directly or indirectly, the termination of such plan, fund or
arrangement.
4.14 Insurance Policies. Each member of MidSouth's
consolidated group maintains in force insurance policies and
bonds in such amounts and against such liabilities and hazards as
are considered adequate. No member of Holding's consolidated
group is now liable, nor will any such member become liable, for
any material retroactive premium adjustment. All policies are
valid and enforceable and in full force and effect, and no member
of MidSouth's consolidated group has received any notice of a
material premium increase or cancellation with respect to any of
its insurance policies or bonds. Within the last three years, no
member of MidSouth's consolidated group has been refused any
insurance coverage sought or applied for, and no such member has
reason to believe that its existing insurance coverage cannot be
renewed as and when the same shall expire, upon terms and
conditions as favorable as those presently in effect.
4.15 Agreements. No member of MidSouth's consolidated
group is a party to:
(a) any collective bargaining agreement;
(b) any obligation of guaranty or indemnification except,
if entered into in the ordinary course of business with respect
to customers or any member of MidSouth's consolidated group,
letters of credit, guaranties of endorsements and guaranties of
signatures;
(c) any agreement, contract or commitment which is or may
be materially adverse to the financial condition, results of
operations, business or prospects of any member of MidSouth's
consolidated group; or
(d) any agreement, contract or commitment containing any
covenant limiting the freedom of any member of MidSouth's
consolidated group to engage in any line of business or to
compete with any person.
No member of MidSouth's consolidated group has in any
material respect breached, nor is there any pending or threatened
claims that it has materially breached, any of the terms or
conditions of any of its agreements, contracts or commitments.
4.16 Licenses, Franchises and Governmental
Authorizations. Each member of MidSouth's consolidated group
possesses all licenses, franchises, permits and other
governmental authorizations necessary for the continued conduct
of its business without interference or interruption. The
deposits of each such member are insured by the FDIC to the
extent provided by applicable law, and there are no pending or
threatened proceedings to revoke or modify that insurance or for
relief under 12 U.S.C. Section 1818.
4.17 Environmental Matters.
(a) (i) MidSouth and each member of MidSouth's
consolidated group has obtained all material permits, licenses
and other authorizations that are required to be obtained by it
under any applicable Environmental Law Requirements (as
hereinafter defined) in connection with the operation of its
businesses and ownership of its properties (collectively, the
"Subject Properties"), including without limitation properties
acquired by foreclosure or in settlement of loans;
(ii) MidSouth and each member of its consolidated group
is in compliance in all material respects with all terms and
conditions of such permits, licenses and authorizations and with
all applicable Environmental Law Requirements;
(iii)There are no past or present events, conditions,
circumstances, activities or plans by any member of MidSouth's
consolidated group related in any manner to MidSouth or any
member of its consolidated group or the Subject Properties that
did or would, in any material respect, violate or prevent
compliance or continued compliance with any of the Environmental
Law Requirements, or give rise to any Environmental Liability, as
hereinafter defined;
(iv) There is no civil, criminal or administrative
action, suit, demand, claim, order, judgment, hearing, notice or
demand letter, notice of violation, investigation or proceeding
pending or, to the knowledge of any executive officer of MidSouth
or MidSouth Bank, threatened by any person against MidSouth or
any member of its consolidated group, or any prior owner of any
of the Subject Properties and relating to the Subject Properties,
and relating in any way to any Environmental Law Requirement or
seeking to impose any Environmental Liability; and
(v) No member of MidSouth's consolidated group is
subject to or responsible for any material Environmental
Liability that is not set forth and adequately reserved against
on the Latest Balance Sheet.
(b) "Environmental Law Requirement" means all applicable
statutes, regulations, rules, ordinances, codes, licenses,
permits, orders, approvals, plans, authorizations, concessions,
franchises, and similar items, of all governmental agencies,
departments, commissions, boards, bureaus, or instrumentalities
of the United States, states and political subdivisions thereof
and all applicable judicial, administrative, and regulatory
decrees, judgments and orders relating to the protection of human
health or the environment, including without limitation: (A) all
requirements, including but not limited to those (i) pertaining
to reporting, licensing, permitting, investigation, and
remediation of emissions, discharges, releases, or threatened
releases of Hazardous Materials (as such term is defined below),
chemical substances, pollutants, contaminants, or hazardous or
toxic substances, materials or wastes whether solid, liquid, or
gaseous in nature, into the air, surface water, groundwater, or
land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of
Hazardous Materials, chemical substances, pollutants,
contaminants, or hazardous or toxic substances, materials or
wastes, whether solid, liquid, or gaseous in nature; (B) all
requirements pertaining to protection of the health and safety of
employees or the public; and (C) all requirements pertaining to
the (i) drilling, production, and abandonment of oil and gas
wells, (ii) the transportation of produced oil and gas, and (iii)
the remediation of sites related to that drilling, production or
transportation.
(c) "Hazardous Materials" shall mean: (A) Any "hazardous
substance" as defined by either the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 USC Section
9601, et seq.) ("CERCLA") as amended from time to time, or re-
gulations promulgated thereunder; (B) asbestos; (C)
polychlorinated biphenyls; (D) any "regulated substance" as
defined by 40 C.F.R. Section 280.12, or La. Admin. Code
33:XI.103; (E) any naturally occurring radioactive material
("NORM"), as defined by La. Admin. Code 33:XV, Chapter 14, as
amended from time to time, irrespective of whether the
NORM is located in Louisiana or another jurisdiction; (F) any
non-hazardous oilfield wastes ("NOW") defined under La. R.S. 30
:1, et seq., and regulations promulgated thereunder, irrespec-
tive of whether those wastes are located in Louisiana or another
jurisdiction; (G) any substance the presence of which on the
Subject Properties is prohibited by any lawful rules and re-
gulations of legally constituted authorities from time to time
in force and effect relating to the Subject Properties; and (H)
any other substance which by any such rule or regulation requires
special handling in its collection, storage, treatment or
disposal.
(d) "Environmental Liability" shall mean (i) any liability
or obligation (of any kind whatsoever, whether absolute or
contingent, accrued or unaccrued, known or unknown) arising under
any Environmental Law Requirement, or (ii) any liability or
obligation (of any kind whatsoever, whether absolute or
contingent, accrued or unaccrued, known or unknown) under any
other theory of law or equity (including without limitation any
liability for personal injury, property damage or remediation)
that results from, or is based upon or related to, the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge,
release or threatened release into the environment, of any
Hazardous Materials, pollutant, contaminant, chemical, or
industrial, toxic or hazardous substance or waste.
4.18 Community Reinvestment Act; Fair Lending. MidSouth
Bank has complied in all material respects with the provisions of
the Community Reinvestment Act ("CRA") and the rules and
regulations thereunder, has a CRA rating of not less than
"satisfactory", and has received no material criticism from
regulators with respect to discriminatory lending practices.
4.19 Legality of MidSouth Securities. All shares of
Preferred Stock to be issued pursuant to this Agreement have been
duly authorized and, when issued pursuant to this Agreement will
be validly issued, fully paid and non-assessable.
4.20 Brokers' or Finders' Fees. No agent, broker,
investment banker, investment or financial advisor or other
person acting on behalf of MidSouth or MidSouth Bank is entitled
to any commission, broker's or finder's fee from any of the
parties hereto in connection with any of the transactions
contemplated by this Agreement.
4.21 Accuracy of Statements. No warranty or
representation made or to be made by any member of Holding's
consolidated group in this Agreement, and no information
furnished by any such member pursuant to this Agreement, contains
or will contain, as of the date of this Agreement, the effective
date of the Registration Statement (as defined in subsection 5.16
hereof) and the Closing Date, an untrue statement of a material
fact or an omission of a material fact necessary to make the
statements contained herein and therein, in light of the
circumstances in which they are made, not misleading.
SECTION 5
Covenants and Conduct of Parties
Prior to the Effective Date
The parties covenant and agree with each other as follows:
5.1 Cooperation and Best Efforts. Each of the parties
will cooperate with the other parties and use its best efforts to
(a) procure all necessary consents and approvals, (b) complete
all necessary filings, registrations and certificates, (c)
satisfy all requirements prescribed by law for, and all
conditions set forth in this Agreement to, the consummation of
the Mergers and the transactions contemplated hereby and by the
Bank Merger Agreement, and (d) effect the transactions
contemplated by this Agreement and the Bank Merger Agreement at
the earliest practicable date.
5.2 Information for, and Preparation of, Proxy Statement.
(a) Each of the parties will cooperate in the preparation of the
Registration Statement referred to in subsection 5.16 and a proxy
statement of Holding (the "Proxy Statement"), which complies with
the requirements of the Securities Act of 1933 (the "Securities
Act"), for the purpose of submitting this Agreement and the
transactions contemplated hereby to MidSouth's and Holding's
shareholders for approval. Each of the parties will as promptly
as practicable after the date hereof furnish all such data and
information relating to it and its subsidiaries as any of the
other parties may reasonably request for the purpose of including
such data and information in the Proxy Statement and the
Registration Statement.
(b) MidSouth will indemnify Holding and Bank, each of their
directors and officers, and each controlling person of Holding
within the meaning of the Securities Act against any claims
insofar as they arise out of or are based upon an untrue
statement or omission or alleged untrue statement or omission of
material fact in the Registration Statement or the Proxy
Statement, and will reimburse each such person for expenses
reasonably incurred in connection with investigating or defending
any such claim; provided, that MidSouth will not be liable to the
extent that any such claim arises out of or is based upon any
untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information
furnished to MidSouth by Holding.
(c) Any indemnified person wishing to claim indemnification
under paragraph (b), upon learning of any claim, shall promptly
notify MidSouth thereof. MidSouth shall have the right to assume
the defense thereof and shall not be liable for any expenses
subsequently incurred by such indemnified person in connection
with the defense thereof, except that if MidSouth does not assume
such defense, or counsel for the indemnified person advises in
writing that there are material substantive issues that raise
conflicts of interest between MidSouth and the indemnified
person, the indemnified person may retain counsel satisfactory to
him, and MidSouth shall pay all reasonable fees and expenses of
such counsel, provided that (i) MidSouth shall be obligated to
pay for only one counsel for all indemnified persons in any
jurisdiction, (ii) the indemnified persons will cooperate in the
defense of any such claim, and (iii) MidSouth shall not be liable
for any settlement effected without its prior written consent.
5.3 Approval of Bank Merger Agreement. MidSouth, as the
sole shareholder of MidSouth Bank, and Holding, as the sole
shareholder of Bank, shall take all action necessary to effect
shareholder approval of the Bank Merger Agreement.
5.4 Press Releases. MidSouth and Holding will cooperate
with each other in the preparation of any press releases
announcing the execution of this Agreement or the consummation of
the transactions contemplated hereby. Without the prior written
consent of the chief executive officer of MidSouth, no member of
Holding's consolidated group will issue any press release or
other written statement for general circulation relating to the
transactions contemplated hereby, except as may otherwise be
required by law.
5.5 [LEFT BLANK INTENTIONALLY]
5.6 Investigations; Planning. The parties shall continue
to provide to each other and to their authorized representatives
full access during all reasonable times to their premises,
properties, books and records (including, without limitation, all
corporate minutes and stock transfer records), and to furnish
such financial and operating data and other information of any
kind respecting their business and properties as the others shall
from time to time reasonably request. Any investigation shall be
conducted in a manner which does not unreasonably interfere with
the operation of the business of a party. Each member of
Holding's consolidated group agrees to cooperate with MidSouth
and MidSouth Bank in connection with planning for the efficient
and orderly combination of the parties and the operation of
MidSouth and MidSouth Bank after consummation of the Mergers. In
the event of termination of this Agreement prior to the Effective
Date, each party shall return, without retaining copies thereof,
all confidential or non-public documents, work papers and other
materials obtained from the others in connection with the
transactions contemplated hereby and, for a period of not less
than two years following such termination, shall keep such
information confidential, not disclose such information to any
other person or entity except as may be required by legal
process, and not use such information in connection with its
business, in each case unless and until such information shall
come into the public domain through no fault of such party.
5.7 Preservation of Business. Each party will use its
best efforts to preserve the possession and control of all of its
assets other than those consumed or disposed of for value in the
ordinary course of business, to preserve the goodwill of
customers and others having business relations with it and to do
nothing knowingly to impair its ability to keep and preserve its
business as it exists on the date of this Agreement.
5.8 Conduct of Business in the Ordinary Course. Each
member of Holding's consolidated group shall conduct its business
only in the ordinary course and, except as otherwise provided
herein, it shall not, without the prior written consent of the
chief executive officer of MidSouth or his duly authorized
designee:
(a) declare, set aside, increase or pay any dividend, or
declare or make any distribution on, or directly or indirectly
combine, redeem, reclassify, purchase, or otherwise acquire, any
shares of its capital stock or authorize the creation or issuance
of or issue any additional shares of its capital stock or any
securities or obligations convertible into or exchangeable for
its capital stock, provided that this subparagraph shall not
apply to prevent dividends or distributions from any member of
Holding's consolidated group to any other member of such
consolidated group;
(b) amend its articles of incorporation or association or
by-laws or adopt or amend any resolution or agreement concerning
indemnification of its directors or officers;
(c) enter into or modify any agreement so as to require the
payment, conditionally or otherwise, of any salary, bonus, extra
compensation, pension or severance payment to any of its present
or former directors, officers or employees or increase the
compensation (including salaries, fees, bonuses, profit sharing,
incentive, pension, retirement or other similar benefits and
payments) of any such person except for budgeted bonuses or other
incentive payments in amounts previously disclosed to the Chief
Executive office of MidSouth;
(d) except in the ordinary course of business consistent
with past practices, place or suffer to exist on any of its
assets or properties any mortgage, pledge, lien, charge or other
encumbrance, except those of the character described in
subsection 3.10 hereof, or cancel any material indebtedness owing
to it or any claims which it may have possessed, or waive any
right of substantial value or discharge or satisfy any material
noncurrent liability;
(e) merge or consolidate with another entity, or sell or
otherwise dispose of a substantial part of its assets or, except
in the ordinary course of business consistent with past
practices, sell any of its assets;
(f) commit or omit to do any act which act or omission
would cause a breach of any covenant of Holding or Bank contained
in this Agreement or would cause any representation or warranty
of Holding or Bank contained in this Agreement to become untrue,
as if each such representation and warranty were continuously
made from and after the date hereof;
(g) violate in any material respect any law, statute, rule,
governmental regulation or order;
(h) fail to maintain its books, accounts and records in the
usual manner on a basis consistent with that heretofore employed;
(i) fail to pay, or to make adequate provision for the
payment of, all taxes, interest payments and penalties due and
payable (and/or accruable for all periods up to the Effective
Date, including that portion of its fiscal year to and including
the Effective Date) to any city, parish, state, foreign country,
the United States or any other taxing authority, except those
being contested in good faith by appropriate proceedings and for
which sufficient reserves have been established;
(j) acquire or dispose of investment securities having an
aggregate market value greater than 10% of the aggregate book
value of its investment securities portfolio on the date of the
Latest Balance Sheet; acquire any investment securities that are
less than investment grade; or acquire or dispose of investment
securities except in the ordinary course of business;
(k) enter into any new line of business;
(l) charge off (except as may otherwise be required by law
or by regulatory authorities or by generally accepted accounting
principles consistently applied) or sell (except for a price not
less than the book value thereof) any of the its portfolio of
loans, discounts or financing leases; or sell any asset held as
other real estate or other foreclosed assets for an amount less
than 100% of its book value at the date of the Latest Balance
Sheet; or sell any asset held as other real estate or other
foreclosed assets that had a book value at the date of the Latest
Balance Sheet in excess of $25,000; or
(m) make any extension of credit which, when added to all
other extensions of credit to the borrower and its affiliates,
would exceed $100,000 or, unless reasonable prior notice is
provided to the chief executive officer of MidSouth or his
authorized designee, commit or otherwise become obligated to make
any extension of credit in excess of $50,000.
5.9 Additional Information. Each party will provide the
other (a) with prompt written notice of any material adverse
change in the financial condition, results of operations,
business or prospects of any member of its consolidated group,
(b) as soon as they become available, copies of any financial
statements, reports and other documents of the type referred to
in Section 3 or 4 with respect to each member of its consolidated
group, and (c) promptly upon its dissemination, any report
disseminated to its shareholders.
5.10 Holding Shareholder Approval. Holding's Board of
Directors shall submit this Agreement to its shareholders for
approval in accordance with the BCL at a special meeting of
shareholders duly called and convened for that purpose as soon as
practicable.
5.11 Loan Policy. No member of Holding's consolidated
group will make any loans, or enter into any commitments to make
loans, which vary from its written loan policies, a true and
correct copy of which loan policies have been provided to
MidSouth, provided that this covenant shall not prohibit Bank
from extending or renewing credit or loans in connection with the
workout or renegotiation of loans currently in its loan
portfolio.
5.12 Prohibited Negotiations. (a) Prior to the Effective
Date or until the termination of this Agreement, no member of
Holding's consolidated group shall, without the prior approval of
the chief executive officer of MidSouth or his designee, directly
or indirectly, solicit, initiate or encourage inquiries or
proposals with respect to, or furnish any information relating
to, or participate in any negotiations or discussions concerning,
any transaction of the type that is referred to in clauses
(B)(i)(ii) and (iii) of subparagraph (e) of subsection 7.01 of
this Agreement (and in no event will any such information be
supplied except pursuant to a confidentiality agreement), and
each such member shall instruct its officers, directors, agents
and affiliates to refrain from doing any of the above, and will
notify MidSouth immediately if any such inquiries or proposals
are received by, any such information is requested from, or any
such negotiations or discussions are sought to be initiated with,
it or any of its officers directors, agents and affiliates;
provided, however, that nothing contained herein shall be deemed
to prohibit any officer or director of Holding or Bank from
taking any action that in the written opinion of counsel is
required by law or is required to discharge his fiduciary duties
to Holding's consolidated group and its shareholders.
(b) Neither the Board of Directors of Holding nor any
committee thereof shall (i) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to MidSouth, the approval
or recommendation to shareholders of this Agreement or the
Mergers, (ii) approve or recommend, or propose to recommend, any
takeover proposal with respect to Holding or Bank, except such
action that is required in the written opinion of its counsel to
discharge his or her fiduciary duties to Holding's shareholders,
or (iii) modify or waive or release any party from any provision
of, or fail to enforce any provision of, if MidSouth requests
such enforcement, any confidentiality agreement entered into by
Holding or Bank with any prospective acquiror after the date of
this Agreement or within two years prior to such date.
5.13 Operating Functions. Each member of Holding's
consolidated group agrees to cooperate in the consolidation of
appropriate operating functions with MidSouth and MidSouth Bank
to be effective on the Effective Date, provided that the
foregoing shall not be deemed to require any action which, in the
opinion of such member's Board of Directors, would adversely
affect its operations if the Mergers were not consummated.
5.14 Application to Regulatory Authorities. MidSouth
shall prepare, as promptly as practicable, all regulatory
applications and filings which are required to be made with
respect to the Mergers.
5.15 Benefits Provided to Employees of Holding's
Consolidated Group. From and after the Effective Date, MidSouth
and MidSouth Bank shall offer to all persons who were employees
of Holding or Bank immediately prior to the Effective Date and
who become employees of MidSouth or MidSouth Bank immediately
following the Effective Date, the same employee benefits
(including benefits under MidSouth's retirement, 401(k), flexible
benefit, vacation, severance and sick leave plans or policies) as
are offered by MidSouth or MidSouth Bank, as the case may be, to
its employees, except that there shall be no waiting period for
coverage under any of its plans and no employee who is in an
active employee on the Effective Date shall be denied benefits
under such plans for a pre-existing condition. Full credit shall
be given for prior service by such employees with Holding or Bank
for eligibility and vesting purposes under all of their benefit
plans and policies, except that credit for prior service shall
not be given for eligibility, vesting or benefit accrual purposes
under MidSouth's Retirement Plan. All benefits accrued through
the Effective Date under benefit plans of Holding or Bank shall
be paid by MidSouth or MidSouth Bank, as the case may be, to the
extent such benefits are not otherwise provided to such employees
through the benefit plans of MidSouth or MidSouth Bank, as the
case may be. MidSouth and MidSouth Bank shall not be obligated
to continue any employee benefit or ERISA Plan maintained by
Holding or Bank.
5.16 MidSouth Registration Statement and Listing of
Preferred Stock. MidSouth will prepare and file on Form S-4 a
registration statement (the "Registration Statement") under the
Securities Act (which will include the Proxy Statement) complying
with all the requirements of the Securities Act applicable
thereto, for the purpose, among other things, of registering the
Preferred Stock which will be issued to the holders of Holding
Common Stock pursuant to the Company Merger. MidSouth shall use
its best efforts to cause the Registration Statement to become
effective as soon as practicable, to qualify the Preferred Stock
under the securities or blue sky laws of such jurisdictions as
may be required and to keep the Registration Statement and such
qualifications current and in effect for so long as is necessary
to consummate the transactions contemplated hereby. MidSouth
will use its best efforts to cause the Preferred Stock to be
listed for trading on the American Stock Exchange Emerging
Companies market.
SECTION 6
Conditions of Closing
6.1 Conditions of All Parties. The obligations of each
of the parties hereto to consummate the Mergers are subject to
the satisfaction of the following conditions at or prior to the
Closing:
(a) Shareholder Approval. This Agreement shall have been
duly approved by the shareholders of MidSouth and Holding, and
this Agreement and the Bank Merger Agreement shall have been duly
approved by Holding, as the sole shareholder of Bank and by
MidSouth as sole shareholder of MidSouth Bank.
(b) Effective Registration Statement. The Registration
Statement shall have become effective prior to the mailing of the
Proxy Statement, no stop order suspending the effectiveness of
the Registration Statement shall have been issued, and no
proceedings for that purpose shall have been instituted or, to
the knowledge of any party, shall be contemplated, and MidSouth
shall have received all state securities law permits and
authorizations necessary to consummate the transactions
contemplated hereby.
(c) No Restraining Action. No action or proceeding shall
have been threatened or instituted before a court or other
governmental body to restrain or prohibit the transactions
contemplated by the Bank Merger Agreement or this Agreement or to
obtain damages or other relief in connection with the execution
of such agreements or the consummation of the transactions
contemplated hereby or thereby; and no governmental agency shall
have given notice to any party hereto to the effect that
consummation of the transactions contemplated by the Bank Merger
Agreement or this Agreement would constitute a violation of any
law or that it intends to commence proceedings to restrain
consummation of either of the Mergers.
(d) Statutory Requirements and Regulatory Approval. All
statutory requirements for the valid consummation of the
transactions contemplated by the Bank Merger Agreement and this
Agreement shall have been fulfilled; all appropriate orders,
consents and approvals from all regulatory agencies and other
governmental authorities whose order, consent or approval is
required by law for the consummation of the transactions
contemplated by this Agreement and the Bank Merger Agreement
shall have been received; and the terms of all requisite orders,
consents and approvals shall then permit the effectuation of the
Mergers without imposing any material conditions with respect
thereto except for any such conditions that are acceptable to
MidSouth and MidSouth Bank.
(e) Accountant's Letters. The parties shall have received
an opinion from DeLoitte & Touche, dated as of the Closing Date,
to the effect that the Mergers will constitute a reorganization
within the meaning of Section 368(c) of the Code and that the
shareholders of Holding will recognize no gain or loss with
respect to the shares of Preferred Stock received on consummation
of the Company Merger.
6.2 Additional Conditions of MidSouth and MidSouth Bank.
The obligation of MidSouth and MidSouth Bank to consummate the
Mergers are also subject to the satisfaction of the following
additional conditions at or prior to the Closing:
(a) Representations, Warranties and Covenants. Each of the
representations and warranties of Holding and Bank contained in
this Agreement shall be true and correct on the Closing Date,
with the same effect as though made at such date, except to the
extent of changes permitted by the terms of this Agreement, and
each of Holding and Bank shall have performed all obligations and
complied with all covenants required by this Agreement and the
Bank Merger Agreement to be performed or complied with by it at
or prior to the Closing. In addition, each of Holding and Bank
shall have delivered to MidSouth and MidSouth Bank its
certificate dated as of the Closing Date and signed by its chief
executive officer and chief financial officer to the effect that,
except as specified in such certificate, such persons do not
know, and have no reasonable grounds to know, of any material
failure or breach of any representation, warranty or covenant
made by it in this Agreement.
(b) No Material Adverse Change. There shall not have
occurred any material adverse change from the date of the Latest
Balance Sheet to the Closing Date in the financial condition,
results of operations, business or prospects of Holding's
consolidated group.
(c) Opinion of Counsel. MidSouth shall have received from
McGlinchey Stafford Lang, A Law Corporation, counsel for
Holding's consolidated group, an opinion dated as of the Closing
Date, in form and substance satisfactory to MidSouth and MidSouth
Bank, to the effect set forth in Exhibit D to this Agreement.
(d) Joinder of Shareholders; Confirmation. Within 5 days
prior to the mailing of the Proxy Statement a Joinder of
Shareholders in the form of Exhibit E annexed hereto ("Joinder of
Shareholders") shall have been executed by each person who serves
as an executive officer or director of Holding or Bank or who
owns 5% or more of the Holding Common Stock outstanding; and
MidSouth shall have received from each person who executes a
Joinder of Shareholders a written confirmation dated not earlier
than 5 days prior to the Closing Date to the effect that each
representation made by such person in the Joinder of Shareholders
is true and correct as of the date of such confirmation and that
such person has complied with all of his or her covenants therein
through the date of such confirmation.
(e) Accountants' Letters. MidSouth and MidSouth Bank shall
have received letters from Mixon, Roy, Metz & Mixon, independent
public accountants for Holding, dated, respectively, the date of
the Proxy Statement and immediately prior to the Closing Date, in
form and substance satisfactory to MidSouth and MidSouth Bank, to
the effect set forth in Exhibit F to this Agreement.
(f) Tier 1 Capital. MidSouth shall have received
satisfactory assurances from the Federal Reserve Board or
delegated authority that the Series A Preferred Stock will be
treated as Tier 1 Capital of MidSouth for purposes of the capital
adequacy guidelines of the Federal Reserve Board, provided that
if this condition is not met as a result of any term or provision
of the Series A Preferred Stock, MidSouth shall propose a
revision of such term or provision that would cause the Series A
Preferred Stock to be treated as Tier 1 Capital and Holding shall
have 15 days from receipt of such proposal to accept it and
permit this condition to be met.
6.3 Additional Conditions of Holding and Bank. The
obligations of Holding and Bank to consummate the Mergers are
also subject to the satisfaction of the following additional
conditions at a prior to the Closing:
(a) Representations, Warranties and Covenants. Each of the
representations and warranties of MidSouth and MidSouth Bank
contained in this Agreement shall be true and correct on the
Closing Date, with the same effect as though made at such date,
except to the extent of changes permitted by the terms of this
Agreement, and MidSouth and MidSouth Bank shall have performed
all obligations and complied with all covenants required by this
Agreement and the Bank Merger Agreement to be performed or
complied with by it at or prior to the Closing. In addition,
MidSouth and MidSouth Bank shall have delivered to Holding and
Bank its certificate dated as of the Closing Date and signed by
its chief executive officer and chief financial officer to the
effect that, except as specified in such certificate, such
persons so not know, and have no reasonable grounds to know, of
any material failure or breach of any representation, warranty or
covenant made by it in this Agreement.
(b) Opinion of Counsel. Holding shall have received from
Correro, Fishman & Casteix, counsel for MidSouth and MidSouth
Bank, an opinion, dated as of the Closing Date, in form and
substance satisfactory to Holding and Bank, to the effect set
forth in Exhibit G to annexed to this Agreement.
6.4 Waiver of Conditions. Any condition to a party's
obligations hereunder may be waived by that party, other than the
conditions specified in subparagraphs (a), (b) and (d) of
subsection 6.1. The failure to waive any condition hereunder
shall not be deemed a breach of subsection 5.2 hereof.
SECTION 7
Termination
7.1 Termination. This Agreement may be terminated at any
time before the time at which the Mergers become effective:
(a) Mutual Consent. By the mutual consent of the Boards of
Directors of MidSouth and Holding.
(b) Material Breach. By the Board of Directors of either
MidSouth or Holding in the event of a material breach by any
member of the consolidated group of the other of them of any
representation or warranty contained in this Agreement or of any
covenant contained in this Agreement, which in either case cannot
be cured within 10 days after written notice of such breach is
given to the entity committing such breach, provided that the
right to effect such cure shall not extend beyond the date set
forth in subparagraph (c) below.
(c) Abandonment. By the Board of Directors of either
MidSouth or Holding if (i) all conditions to Closing required by
Section 6 have not been met or waived by June 30, 1995, or (ii)
any such condition cannot be met by such date and has not been
waived by each party in whose favor such condition runs or (iii)
the Mergers have not occurred by such date.
(d) Dissenting Shareholders. By the Board of Directors of
MidSouth, if the number of shares of Holding Common Stock as to
which the holders thereof are, at the time of the Closing,
legally entitled to assert dissenting shareholder's rights
exceeds 5% of the total number of shares of Holding Common Stock
issued and outstanding on the Closing Date.
(e) Holding Recommendation. By the Board of Directors of
MidSouth if the Board of Directors of Holding (A) shall withdraw,
modify or change its recommendation to its shareholders of this
Agreement or the Mergers or shall have resolved to do any of the
foregoing; (B) shall have recommended to the shareholders of
Holding (i) any merger, consolidation, share exchange, business
combination or other similar transaction (other than the
transactions contemplated by this Agreement), (ii) any sale,
lease, transfer or other disposition of all or substantially all
of the assets of any member of Holding's consolidated group, or
(iii) any acquisition, by any person or group, of the beneficial
ownership of one-third or more of any class of Holding capital
stock; or (C) shall have made any announcement of a proposal,
plan or intention to do any of the foregoing or agreement to
engage in any of the foregoing.
7.2 Effect of Termination; Survival. Upon termination of
this Agreement pursuant to this Section 7, the Bank Merger
Agreement shall also terminate, and this Agreement and the Bank
Merger Agreement shall be void and of no effect, and there shall
be no liability by reason of this Agreement or the Bank Merger
Agreement, or the termination thereof, on the part of any party
or their respective directors, officers, employees, agents or
shareholders except for any liability of a party hereto arising
out of a breach of any representation, warranty or covenant in
this Agreement prior to the date of termination or any covenant
that survives pursuant to the following sentence. The following
provisions shall survive any termination of this Agreement: the
last sentence of subsection 5.6; subsection 7.2; and subsection
9.3.
SECTION 8
Indemnification of Directors and Officers of Holding and Bank
8.1 From and after the Effective Time of the Mergers,
MidSouth and MidSouth Bank agree to indemnify and hold harmless
each person who is or was at any time since December 31, 1992 an
officer or director of Holding or Bank (an "Indemnified Person")
from and against all damages, liabilities, judgments and claims
(and related expenses, including, but not limited to, attorneys'
fees and amounts paid in settlement) based upon or arising from
his capacity as an officer or director of Holding or Bank, to the
same extent as he would have been indemnified under the articles
of association (or articles of incorporation) or bylaws of
Holding or Bank, as appropriate, as such articles of association
(or articles of incorporation) or bylaws were in effect on the
date of execution of this Agreement.
8.2 The rights granted to the Indemnified Persons hereby
will be contractual rights inuring to the benefit of all
Indemnified Persons and shall survive this Agreement and any
merger, consolidation or reorganization of MidSouth or MidSouth
Bank.
8.3 The rights to indemnification granted by this Section
8 are subject to the following limitations: (a) the total
aggregate indemnification to be provided by MidSouth and MidSouth
Bank pursuant to Section 8.1 hereof will not exceed, as to all of
the Indemnified Persons described herein as a group, the sum of
$1.2 million and MidSouth and MidSouth Bank will have no
responsibility to any Indemnified Person for the manner in which
such sum is allocated among that group (but the Indemnified
Persons may seek reallocation among themselves); (b) a director
of officer who would otherwise be an Indemnified Person under
this Section 8 shall not be entitled to the benefits hereof
unless such director or officer has executed a Joinder of
Shareholders; (c) amounts otherwise required to be paid by
MidSouth or MidSouth Bank to an Indemnified Person pursuant to
this Section 8 will be reduced by any amounts that such
Indemnified Person recovers by virtue of the claim for which
indemnification is sought; (d) no Indemnified Person shall be
entitled to indemnification for any claim made or threatened
prior to the Closing Date of which such Indemnified Person,
Holding or Bank was aware but did not disclose to MidSouth prior
to the execution of this Agreement, if the claim or threatened
claim was known on or before such time, or prior to the Closing
Date, if such claim became known after execution of this
Agreement; and (e) any claim for indemnification pursuant to this
Section 8 must be submitted in writing to the Chief Executive
Officer of MidSouth within five years of the date of this
Agreement.
8.4 MidSouth and MidSouth Bank agree that the
indemnification limits set forth in Section 8.3(a) will not apply
to any damages, liabilities, judgments and claims (and related
expenses, including, but not limited to, attorney's fees and
amounts paid in settlement) insofar as they are subject to the
provisions of subsections 5.2(b) and (c).
SECTION 9
Miscellaneous
9.1 Notices. Any notice, communication, request, reply,
advice or disclosure (hereinafter severally and collectively
called "notice") required or permitted to be given or made by any
party to another in connection with this Agreement or the Bank
Merger Agreement or the transactions herein or therein
contemplated must be in writing and may be given or served by
depositing the same in the United States mail, postage prepaid
and registered or certified with return receipt requested, or by
delivering the same to the address of the person or entity to be
notified, or by sending the same by a national commercial courier
service (such as Federal Express, Emery Air Freight, Network
Courier, Purolator or the like) for next-day delivery, provided
such delivery is confirmed in writing by such courier. Notice
deposited in the mail in the manner hereinabove described shall
be effective 48 hours after such deposit, and notice delivered in
person or by commercial courier shall be effective at the time of
delivery. A party delivering notice shall endeavor to obtain a
receipt therefor. For purposes of notice, the addresses of the
parties shall, until changed as hereinafter provided, be as
follows:
If to MidSouth or MidSouth Bank:
MidSouth Bancorp, Inc.
102 Versailles Boulevard
Versailles Centre
Lafayette, Louisiana 70501
Attention: C. R. Cloutier
With copies to:
Correro, Fishman & Casteix, L.L.P.
47th Floor Place St. Charles
New Orleans, Louisiana 70170
Attention: Anthony J. Correro, III
If to Holding or Bank:
Sugarland Bancshares, Inc.
1527 W. Main Street
Jeanerette, Louisiana 70544
Attention: D. J. Tranchina
With copies to:
McGlinchey Stafford Lang
643 Magazine Street
New Orleans, Louisiana 70130
Attention: Bennet S. Koren
or such substituted persons or addresses of which any of the
parties may give notice to the other in writing.
9.2 Waiver. The failure by any party to enforce any of
its rights hereunder shall not be deemed to be a waiver of such
rights, unless such waiver is an express written waiver which has
been signed by the waiving party and expressly approved by its
Board of Directors. Waiver of any one breach shall not be deemed
to be a waiver of any other breach of the same or any other
provision hereof.
9.3 Expenses. Regardless of whether the Mergers are
consummated, all expenses incurred in connection with this
Agreement and the Bank Merger Agreement and the transactions
contemplated hereby and thereby shall be borne by the party
incurring them, except as otherwise provided herein.
9.4 Headings. The headings in this Agreement have been
included solely for reference and shall not be considered in the
interpretation or construction of this Agreement.
9.5 Exhibits and Schedules. The exhibits and schedules
to this Agreement are incorporated herein by this reference and
expressly made a part hereof.
9.6 Integrated Agreement. This Agreement, the Bank
Merger Agreement, the exhibits and schedules hereto and all other
documents and instruments delivered in accordance with the terms
hereon constitute the entire understanding and agreement among
the parties hereto with respect to the subject matter hereof, and
there are no agreements, understanding, restrictions,
representations or warranties among the parties other than those
set forth herein or therein or herein or therein provided for,
all prior agreements and understandings being superseded hereby.
9.7 Choice of Law. The validity of this Agreement and
the Bank Merger Agreement, the construction of their terms and
the determination of the rights and duties of the parties hereto
in accordance therewith shall be governed by and construed in
accordance with the laws of the United States and those of the
State of Louisiana applicable to contracts made and to be
performed wholly within such State.
9.8 Parties in Interest. This Agreement shall bind and
inure to the benefit of the parties hereto and their respective
successors and assigns, except that this Agreement may not be
transferred or assigned by any member of Holding's consolidated
group without the prior written consent of MidSouth, including
any transfer or assignment by operation of law. Nothing in this
Agreement or the Bank Merger Agreement is intended or shall be
construed to confer upon or to give any person other than the
parties hereto any rights or remedies under or by reason of this
Agreement or the Bank Merger Agreement, except as expressly
provided for herein and therein.
9.9 Amendment. The parties may, by mutual agreement of
their respective Boards of Directors, amend, modify or supplement
this Agreement, the Bank Merger Agreement, or any exhibit or
schedule of any of them, in such manner as may be agreed upon by
the parties in writing, at any time before or after approval of
this Agreement and the Bank Merger Agreement and the transactions
contemplated hereby and thereby by the shareholders of the
parties hereto. This Agreement and any exhibit or schedule to
this Agreement may be amended at any time and, as amended,
restated by the chief executive officers of the respective
parties (or their respective designees) without the necessity for
approval by their respective Boards of Directors or shareholders,
to correct typographical errors or to change erroneous references
or cross references, or in any other manner which is not material
to the substance of the transactions contemplated hereby.
9.10 Counterparts. This Agreement may be executed by the
parties in one or more counterparts, all of which shall be deemed
an original, but all of which taken together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
MIDSOUTH BANCORP, INC. SUGARLAND BANCSHARES, INC.
By: By:
C. R. Cloutier D. J. Tranchina
President President
MIDSOUTH NATIONAL BANK SUGARLAND STATE BANK
By: By:
C. R. Cloutier D. J. Tranchina
President President
