SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 14,
1999
EXCHANGE NATIONAL BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
MISSOURI 0-23636 43-1626350
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
132 East High Street, Jefferson City, MO 65101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(573) 761-6100
None
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
CITIZENS STATE BANK OF CALHOUN ACQUISITION
On September 14, 1999, Exchange National Bancshares, Inc.
("Exchange"), the parent holding company of Union State Bank &
Trust of Clinton ("Union Bank") and The Exchange National Bank
of Jefferson City, entered into an agreement (the "Citizens
Agreement") to acquire Citizens State Bank of Calhoun ("Citizens
Bank"). The Citizens Agreement is filed as Exhibit 2.1 hereto
and is incorporated herein by reference. The Citizens Agreement
provides for the acquisition of Citizens Bank in a transaction
that culminates with the merger of Citizens Bank with and into
Union Bank. Pursuant to the terms of the Citizens Agreement,
shareholders of the parent holding company of Citizens Bank will
receive cash aggregating approximately $14,000,000.
Consummation of the Citizens Bank acquisition is subject to
the receipt of all requisite regulatory approvals and to various
other conditions, including the approval of the shareholders of
Citizens Bank and of the parent holding company of Citizens Bank.
A press release issued by Exchange with respect to the
Citizens Bank acquisition is filed herewith as Exhibit 99.1.
The summary of the Citizens Agreement is not complete and is
qualified in its entirety by reference to the complete text of
such document filed as an exhibit herewith and incorporated
herein by reference.
OSAGE VALLEY BANK ACQUISITION
On September 22, 1999, Exchange entered into an agreement
(the "Osage Agreement") to acquire Osage Valley Bank ("Osage
Bank"). The Osage Agreement is filed as Exhibit 2.2 hereto and
is incorporated herein by reference. The Osage Agreement
provides for Exchange's acquisition of Osage Bank through the
merger of a wholly-owned subsidiary of Exchange with and into
Osage Bank's parent holding company, which will then be owned by
Exchange. The shareholders of Osage Bank's parent holding
company will receive cash aggregating approximately $8,600,000.
It is anticipated that Osage Bank, at least initially, will
retain its separate charter, although it may later be merged with
Union Bank.
Consummation of the Osage Bank acquisition is subject to
various conditions, including the approval of the shareholders of
Osage Bank's parent holding company and the receipt of all
requisite regulatory approvals.
<PAGE>
A press release issued by Exchange with respect to the Osage
Bank acquisition is filed herewith as Exhibit 99.2.
The summary of the Osage Agreement is not complete and is
qualified in its entirety by reference to the complete text of
such document filed as an exhibit herewith and incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND OTHER EXHIBITS.
EXHIBIT NO. DESCRIPTION
Exhibit 2.1 Acquisition Agreement, dated as of
September 14, 1999, by and among
Exchange National Bancshares, Inc.,
Union State Bancshares, Inc., Union
State Bank & Trust of Clinton, USBT
Acquisition Company, Inc., Calhoun
Bancshares, Inc., and Citizens State
Bank of Calhoun.
Exhibit 2.2 Acquisition Agreement, dated as of
September 22, 1999, by and among
Exchange National Bancshares, Inc.,
ENBMCB Acquisition Company, Inc.,
Mid-Central Bancorp, Inc., and Osage
Valley Bank.
Exhibit 99.1 Press Release issued by Exchange
National Bancshares, Inc. on
September 29, 1999.
Exhibit 99.2 Press Release issued by Exchange
National Bancshares, Inc. on
October 7, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Dated: November 5, 1999
Exchange National Bancshares, Inc.
By: /s/ Donald L. Campbell
Donald L. Campbell,
Chairman of the Board and
President
<PAGE>
EXHIBIT INDEX
Exhibit 2.1 Acquisition Agreement, dated as of September
14, 1999, by and among Exchange National
Bancshares, Inc., Union State Bancshares,
Inc., Union State Bank & Trust of Clinton,
USBT Acquisition Company, Inc., Calhoun
Bancshares, Inc., and Citizens State Bank of
Calhoun.
Exhibit 2.2 Acquisition Agreement, dated as of September
22, 1999, by and among Exchange National
Bancshares, Inc., ENBMCB Acquisition Company,
Inc., Mid-Central Bancorp, Inc., and Osage
Valley Bank.
Exhibit 99.1 Press Release issued by Exchange National
Bancshares, Inc. on September 29, 1999.
Exhibit 99.2 Press Release issued by Exchange National
Bancshares, Inc. on October 7, 1999.
Exhibit 2.1
ACQUISITION AGREEMENT
This Acquisition Agreement (this "Agreement") is made
and entered into as of September 14, 1999 by and among EXCHANGE
NATIONAL BANCSHARES, INC., a Missouri corporation ("ENB"), UNION
STATE BANCSHARES, INC., a Missouri corporation ("USB"), UNION
STATE BANK & TRUST OF CLINTON, a Missouri trust company (the
"Buyer"), USBT ACQUISITION COMPANY, INC., a Missouri corporation
("Acquisition Company," and collectively with Buyer, the "Buyer
Entities"), CALHOUN BANCSHARES, INC. ("Bancshares"), CITIZENS
STATE BANK OF CALHOUN, a Missouri bank (the "Bank") and the
undersigned shareholders of Bancshares (collectively the
"Shareholders," and, together with Bancshares and the Bank, the
"Sellers").
WITNESSETH:
WHEREAS, ENB is the beneficial and record owner of one
hundred percent (100%) of the issued and outstanding shares of
the common stock of USB;
WHEREAS, USB is the beneficial and record owner of one
hundred percent (100%) of the issued and outstanding shares of
the common stock of Buyer;
WHEREAS, Buyer is the beneficial and record owner of
one hundred percent (100%) of the issued and outstanding shares
of the common stock of Acquisition Company;
WHEREAS, Bancshares is the beneficial and record owner
of one hundred percent (100%) of the 2,635 issued and outstanding
shares of the common stock of the Bank ("Bank Stock");
WHEREAS, the Shareholders are the beneficial or record
owners of not less than 1,183 of the 1,332 issued and outstanding
shares of the common stock of Bancshares ("Bancshares Stock");
WHEREAS, Buyer desires to acquire one hundred percent
(100%) of the issued and outstanding shares of Bancshares Stock;
WHEREAS, the Shareholders desire to sell their shares
of Bancshares Stock to Buyer pursuant to the terms herein set
forth and believe that all other shareholders of Bancshares would
similarly desire to sell their shares of Bancshares Stock to
Buyer;
WHEREAS, in order to provide for the acquisition of the
shares of Bancshares Stock held by the Shareholders and all other
shareholders of Bancshares, Buyer has organized <PAGE>Acquisition
Company which proposes to merge with and into Bancshares as
provided in this Agreement and the Bancshares Merger Agreement;
WHEREAS, on the same day as the merger of Acquisition
Company with and into Bancshares, Bancshares will be dissolved
and the Bank will merge with and into the Buyer as provided in
this Agreement and the Bank Merger Agreement; and
WHEREAS, the Buyer Entities and the Sellers desire to
provide for certain undertakings, conditions, representations,
warranties and covenants in connection with the transactions
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and
the representations, warranties and agreements herein contained,
the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 "Acquisition Company" means USBT Acquisition Company,
Inc., a Missouri corporation.
1.02 "Adjusted Book Value of the Bank" means an amount equal
to the sum of (i) 2.25 times the Book Value of the Bank for that
portion of the Book Value of the Bank that is less than or equal
to $6,200,000 and (ii) 1.00 times the Book Value of the Bank for
that portion (if any) of the Book Value of the Bank that exceeds
$6,200,000. In the event the Closing Date shall not occur on or
before February 1, 2000, the "Adjusted Book Value of the Bank"
means the Adjusted Book Value of the Bank as described above plus
the sum of $2,500 per day for each day, up to the maximum of 30
days, that the Closing Date is delayed after February 1, 2000.
1.03 "Bancshares" means Calhoun Bancshares, Inc., a Missouri
corporation and registered bank holding company.
1.04 "Bancshares Merger" means the merger of Acquisition
Company with and into Bancshares, with Bancshares being the
surviving corporation.
1.05 "Bancshares Merger Agreement" means the Merger
Agreement between Bancshares and Acquisition Company, attached
hereto as Exhibit A.
1.06 "Bancshares Merger Consideration" means a cash amount
computed pursuant to generally accepted accounting principles as
follows: (i) the sum of the Adjusted Book <PAGE>Value of the Bank
as of the Determination Date, PLUS (ii) the amount of any cash
held by Bancshares as of the Determination Date, and MINUS (iii)
the amount of any indebtedness or other liabilities of Bancshares
as of the Determination Date.
1.07 "Bancshares Merger Effective Time" means the date and
the time that the Missouri Secretary of State issues a
certificate of merger with respect to the Bancshares Merger.
1.08 "Bank" means Citizens State Bank of Calhoun, a Missouri
banking corporation that is not a member of the Federal Reserve
System.
1.09 "Bank Merger" means the merger of the Bank into Buyer,
with Buyer being the surviving bank.
1.10 "Bank Merger Agreement" means the Merger Agreement
between the Buyer and the Bank, attached hereto as Exhibit B.
1.11 "Bank Merger Documents" means the following documents,
each in such form as is required by the relevant provisions of
Chapter 362 of the Missouri Revised Statutes: (a) a copy of the
executed Bank Merger Agreement; (b) copies of the minutes of the
meetings of the Board of Directors of the Bank and the Buyer
approving the Bank Merger Agreement; (c) copies of the minutes of
the meetings of the stockholders of the Bank and Buyer approving
and ratifying the Bank Merger Agreement; and (d) an affidavit of
the Secretary of the Buyer stating that the Bank Merger
Agreement, the stockholder minutes and the Board minutes have
been filed with (i) the Director of Finance, (ii) the Secretary
of the Bank and (iii) the Secretary of Buyer.
1.12 "Bank Merger Effective Time" means the date and at the
time that the Bank Merger Documents are filed for recordation
with the Office of the Recorder of Deeds of St. Clair County and
the Office of the Recorder of Deeds of Henry County.
1.13 "BHC Act" means the Bank Holding Company of 1956, as
amended.
1.14 "Book Value of the Bank" means an amount, determined in
accordance with generally accepted accounting principals, that is
the sum of capital, surplus and undivided profits of the Bank,
EXCEPT THAT in calculating the Book Value of the Bank, there
shall be no adjustment made for unrealized gains or losses with
respect to the investment securities portfolio of the Bank.
1.15 "Buyer" means Union State Bank & Trust of Clinton, a
Missouri bank that is not a member of the Federal Reserve System.
<PAGE>
1.16 "Buyer Due Diligence Period" means the period of time
commencing on the date of execution of this Agreement and ending
30 days thereafter, or on such earlier date as Buyer shall have
terminated such period by notice to the Sellers.
1.17 "Buyer Due Diligence Review" means the review by Buyer
during the Buyer Due Diligence Period of Bancshares and the Bank
and their respective operations, business affairs, prospects and
financial condition, including, without limitation, those matters
which are the subject of Bancshares' and the Bank's
representations and warranties included herein.
1.18 "Closing Date" means the date as defined in Section
2.02 of this Agreement.
1.19 "Determination Date" means the last day of the month
ending prior to the Closing Date.
1.20 "Dissenting Shares" means any shares of Bancshares
Stock held by any holder who becomes entitled to payment of the
value of such shares under Section 351.455 of the Missouri
Revised Statutes.
1.21 "ENB" means Exchange National Bancshares, a Missouri
corporation that is a registered bank holding company.
1.22 "Equity Securities" means the capital stock or other
equity securities of an issuer, options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, shares of
any capital stock or other equity securities of such issuer, or
contracts, commitments, understandings or arrangements by which
such issuer is or may become bound to issue additional shares of
its capital stock or other equity securities of such issuer, or
options, warrants, scrip or rights to purchase, acquire,
subscribe to, calls on or commitments for any shares of its
capital stock or other equity securities.
1.23 "Escrow Agreement" means the Escrow Agreement, dated
the date hereof, by and among ENB, Bancshares and Escrow Agent.
1.24 "FDI Act" means the Federal Deposit Insurance Act of
1950, as amended.
1.25 "FDIC" means the Federal Deposit Insurance Corporation.
1.26 "GAAP" means generally accepted accounting principles.
<PAGE>
1.27 "Merger Agreements" means the Bank Merger Agreement and
the Bancshares Merger Agreement.
1.28 "Mergers" means the Bancshares Merger and the Bank
Merger.
1.29 "Missouri Director of Finance" means the Division of
Finance of the Missouri Department of Economic Development.
1.30 "Regulatory Authority" means any federal, state,
municipal or local government, securities, banking, insurance and
other governmental or regulatory authority, and the agencies and
staffs thereof (such entities being referred to herein
collectively as the "Regulatory Authorities").
1.31 "Surviving Bank" means Buyer, as the surviving bank of
the Bank Merger.
1.32 "Surviving Corporation" means Bancshares, as the
surviving corporation of the Bancshares Merger.
1.33 "Surviving Entities" means the Surviving Bank and the
Surviving Corporation.
1.34 "USB" means Union State Bancorporation, Inc., a
Missouri corporation and registered bank holding company.
ARTICLE II
THE ACQUISITION TRANSACTION
2.01 THE ACQUISITION TRANSACTION. Subject to the terms and
conditions of this Agreement:
(a) Acquisition Company will merge with and into
Bancshares under the terms set forth in the Bancshares Merger
Agreement to be executed prior to the Closing Date by and between
Bancshares and Acquisition Company, whereby the shareholders of
Bancshares will receive the consideration as set forth in this
Agreement and the Bancshares Merger Agreement;
(b) the shareholders of Bancshares will receive the
amount of cash that will equal their respective percentage
ownership interest in the outstanding shares of Bancshares Stock
as of the Bancshares Merger Effective Time multiplied by the
total amount of Bancshares Merger Consideration payable in the
Bancshares Merger as set forth in Section 2.07 of this Agreement.
Upon consummation of the Bancshares Merger, the separate
<PAGE>corporate existence of Acquisition Company will cease and
Bancshares will be the Surviving Corporation; and
(c) on the same day as, and promptly following, the
Bancshares Merger Effective Time, Bancshares will be dissolved
pursuant to Section 351.464 of the Missouri Revised Statutes and
the Bank will merge with and into Buyer under the terms set forth
in the Bank Merger Agreement to be executed prior to the Closing
Date by and between the Bank and the Buyer. Upon consummation of
the Bank Merger, the separate corporate existence of the Bank
will cease and Buyer will be the Surviving Bank.
2.02 CLOSING. The closing (the "Closing") of the Mergers,
unless the parties hereto shall otherwise mutually agree, shall
take place at the offices of Buyer's counsel in Kansas City,
Missouri, at 10:00 a.m., local time, on a date designated by
Buyer (the "Closing Date"), which shall be at least two (2)
business days and not more than ten (10) business days following
the last to occur of the following events: (a) the receipt of
the requisite approval of the Bancshares Merger by the
shareholders of Bancshares, as set forth in Section 3.02 of this
Agreement, (b) the receipt of the requisite approval of the Bank
Merger by the shareholders of the Bank, as set forth in Section
3.02 of this Agreement, and (c) the approval of the Bank Merger
by the FDIC, Missouri Director of Finance and any other bank
regulatory agency that may be necessary or appropriate, and the
expiration of any required waiting period. In no event
whatsoever shall the Closing occur prior to January 16, 2000 nor
subsequent to March 31, 2000.
2.03 METHOD OF EFFECTING THE MERGERS AND EFFECTIVE TIMES.
(a) On the Closing Date, the parties hereto will cause
the Bancshares Merger to be consummated by delivering to the
Missouri Secretary of State, for filing, copies of the Bancshares
Merger Agreement and related articles of merger in such form as
is required by, and executed in accordance with, the relevant
provisions of Chapter 351 of the Missouri Revised Statutes. The
Bancshares Merger shall be effective at the Bancshares Merger
Effective Time.
(b) On the Closing Date, the parties hereto will cause
the Bank Merger to be consummated by delivering, for filing, the
Bank Merger Documents to (i) the Missouri Director of Finance,
(ii) the Secretary of the Bank, (iii) the Secretary of the Buyer,
(iv) the Office of the Recorder of Deeds of St. Clair County and
(v) the Office of the Recorder of Deeds of Henry County. The
Bank Merger shall be effective at the Bank Merger Effective Time.
2.04 ARTICLES AND BYLAWS.
<PAGE>
(a) The articles of incorporation and bylaws of
Bancshares in effect immediately prior to the Bancshares Merger
Effective Time shall be the articles of incorporation and bylaws
of the Surviving Corporation, in each case until amended in
accordance with their respective provisions and applicable law.
(b) The articles of agreement and bylaws of Buyer in
effect immediately prior to the Bank Merger Effective Time shall
be the articles of agreement and bylaws of the Surviving Bank, in
each case until amended in accordance with their respective
provisions and applicable law, except that upon consummation of
the Bank Merger, (i) the name of the Surviving Bank shall be
changed to Citizens Union State Bank and Trust of Clinton and
(ii) the capital stock of the Surviving Bank shall be increased
from $2,000,000 to $3,000,000.
2.05 BOARD OF DIRECTORS AND OFFICERS.
(a) With respect to the Bancshares Merger, at the
Bancshares Merger Effective Time, (i) the members of the Board of
Directors of the Surviving Corporation and the terms of these
directors shall be as designated by Buyer immediately prior to
the Bancshares Merger Effective Time and (ii) the officers of the
Surviving Corporation shall be the persons designated by Buyer
immediately prior to the Bancshares Merger Effective Time, and
such persons will serve in their designated offices, thereafter,
until their respective successors are duly elected and qualified.
(b) With respect to the Bank Merger, at the Bank
Merger Effective Time, (i) the members of the Board of Directors
of the Surviving Bank shall be Julius F. Wall and such other
persons as designated by the Buyer immediately prior to the Bank
Merger Effective Time and (ii) the officers of the Surviving Bank
shall be (A) James E. Smith, as Chairman of the Board, (B) Robert
S. Wheeler, as President and (C) those persons who were officers
of the Buyer or of the Bank immediately prior to the Bank Merger,
who shall hold the offices designated by Buyer immediately prior
to the Bank Merger Effective Time, and such persons will serve in
their designated offices, thereafter, until their respective
successors are duly elected and qualified.
2.06 ADDITIONAL ACTIONS.
(a) If, at any time after the Bancshares Merger
Effective Time, the Surviving Corporation shall consider or be
advised that any further deeds, assignments or assurances in law
or any other acts are necessary or desirable to (a) vest, perfect
or confirm, of record or otherwise, in the Surviving Corporation
its right, title or interest in, to, or under any of the rights,
properties or assets of Bancshares, or (b) otherwise carry out
the purposes of this Agreement or the Bancshares Merger
Agreement, Bancshares and its officers and directors shall be
deemed to have granted to the Surviving Corporation an
irrevocable power of <PAGE>attorney to execute and deliver all
such deeds, assignments or assurances in law and to do all acts
necessary or proper to vest, perfect or confirm title to and
possession of such rights, properties or assets in the Surviving
Corporation and otherwise to carry out the purposes of this
Agreement or the Bancshares Merger Agreement, and the officers
and directors of the Surviving Corporation are authorized in the
name of Bancshares or otherwise to take any and all such action.
(b) If, at any time after the Bank Merger Effective
Time, the Surviving Bank shall consider or be advised that any
further deeds, assignments or assurances in law or any other acts
are necessary or desirable to (a) vest, perfect or confirm, of
record or otherwise, in the Surviving Bank its right, title or
interest in, to, or under any of the rights, properties or assets
of the Bank, or (b) otherwise carry out the purposes of this
Agreement or the Bank Merger Agreement, the Bank and its officers
and directors shall be deemed to have granted to the Surviving
Bank an irrevocable power of attorney to execute and deliver all
such deeds, assignments or assurances in law and to do all acts
necessary or proper to vest, perfect or confirm title to and
possession of such rights, properties or assets in the Surviving
Bank and otherwise to carry out the purposes of this Agreement or
the Bank Merger Agreement, and the officers and directors of the
Surviving Bank are authorized in the name of Bank or otherwise to
take any and all such action.
2.07 PAYMENT AND DELIVERY OF BANCSHARES MERGER
CONSIDERATION. At the Bancshares Merger Effective Time, on the
Closing Date, Acquisition Company shall deliver to each of the
shareholders of Bancshares such amount of cash from funds
contributed to it by ENB pursuant to Section 6.15 as such
shareholder shall be entitled to receive pursuant to Section
2.01, and each of the shareholders of Bancshares shall surrender
to the Surviving Corporation certificates representing the total
number of shares of Bancshares Stock owned by such shareholder.
2.08 DISSENTING SHARES.
(a) Any holders of Dissenting Shares shall be entitled
to payment for such shares only to the extent permitted by and in
accordance with the provisions of such law, and Buyer shall cause
the Surviving Corporation to make such payment.
(b) Each party hereto shall give the other prompt
notice of any written demands for the payment of the fair value
of such shareholder's shares, withdrawals of such objections or
demands, and any other instruments, served pursuant to Section
351.455 of the Missouri Revised Statutes, received by such party,
and Bancshares shall give Buyer the opportunity to direct all
negotiations and proceedings with respect to such objections or
demands. Bancshares shall not voluntarily make any payment with
respect to any demands for payment of value and shall not, except
with the prior written consent of Buyer, settle or <PAGE>offer to
settle any such demands.
2.09 RESERVATION OF RIGHT TO REVISE TRANSACTION. The Buyer
Entities may at any time change the method of effecting the
acquisition by the Buyer Entities (including without limitation
the provisions of this Article II) if and to the extent the Buyer
Entities deem such change to be desirable; provided, however,
that no such change shall (a) alter or change the amount or kind
of the Bancshares Merger Consideration, (b) in the reasonable
opinion of the tax counsel or tax advisor of the Sellers,
adversely affect the tax treatment to the holders of Bancshares
Stock as a result of receiving the Bancshares Merger
Consideration or (c) materially impede or delay receipt of any
approval referred to in Section 7.01(b) or the consummation of
the transactions contemplated by this Agreement, the Bancshares
Merger Agreement or any other agreement executed in connection
herewith. Notwithstanding the foregoing, the Buyer Entities
agree not to make an election under Section 338 or
Section 338(h)(10) of the Internal Revenue Code such that the
transaction shall be treated as a sale of assets for the purposes
of taxation.
2.10 ESCROW DEPOSIT BY BUYER. Pursuant to the terms of the
Escrow Agreement, substantially as set forth in Exhibit E hereto,
at the date of execution of this Agreement, ENB will deposit,
with Citizens State Bank of Calhoun, as Escrow Agent, the sum of
$200,000 (the "Escrow Deposit"). In the event that the Closing
does not occur, but ENB and the Buyer Entities are not in default
under any of the terms of this Agreement and are in compliance
with all of the terms hereof applicable to them, the Escrow
Deposit shall be returned to Buyer. In the event that there is
no Closing because ENB or the Buyer Entities are in default under
any of the terms of this Agreement applicable to them, and
Sellers are in compliance with all of the terms hereof applicable
to them, the Escrow Deposit shall be paid to the Sellers as
liquidated damages for the breach hereof by the Buyer Entities.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
As an inducement to the Buyer Entities to enter into and
perform their respective obligations under this Agreement, and
notwithstanding any examinations, inspections, audits and other
investigations made by the Buyer Entities, the Sellers hereby
jointly and severally represent and warrant to the Buyer Entities
as to the following matters, except that warranties of the Bank
shall relate only to matters pertaining to the Bank and no other
party other than a Shareholder shall be responsible for any
warranties that relate solely to that Shareholder. The following
representations and warranties are made in good faith and to the
best of Sellers' information, knowledge and belief with the
exception of the representations and warranties set forth in
Sections 3.13 and 3.23 which shall be considered absolute.
<PAGE>
3.01 ORGANIZATION AND AUTHORITY.
(a) Bancshares is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Missouri, is duly qualified to do business, and is in good
standing in all jurisdictions where its ownership, leasing of
property or the conduct of its business requires it to be so
qualified, and has the corporate power and authority to own its
properties and assets and to carry on its business as it is now
being conducted. Bancshares is registered as a bank holding
company with the Federal Reserve Board under the BHC Act. A
current and accurate list of Bancshares's shareholders, including
addresses thereof, and true and complete copies of the articles
of incorporation and bylaws of Bancshares, each as in effect on
the date of this Agreement, are included in Schedule 3.01(a)
hereof.
(b) The Bank is a bank duly organized, validly
existing and in good standing under the laws of the State of
Missouri. The deposits of the Bank are insured by the FDIC under
the FDI Act. The Bank is qualified to do business and is in good
standing in all jurisdictions where its ownership or leasing of
property or the conduct of its business requires it to be so
qualified and has the corporate power and authority to own and
operate its properties and to carry out its business as and where
the same is now being conducted. A current and accurate list of
the Bank's shareholders, including addresses thereof, and true
and complete copies of the articles of agreement and bylaws of
the Bank, each as in effect on the date of this Agreement, are
included in Schedule 3.01(b) hereof.
3.02 CORPORATE AUTHORIZATION; RECORDS.
(a) The Bank has the corporate power and authority to
enter into this Agreement and the Bank Merger Agreement, and
Bancshares has the corporate power and authority to enter into
this Agreement and the Bancshares Merger Agreement and to carry
out their respective obligations thereunder, subject to (i) the
approval of this Agreement, the Bancshares Merger and the
Bancshares Merger Agreement by the shareholders of Bancshares,
(ii) the approval of this Agreement, the Bank Merger and the Bank
Merger Agreement by the shareholders of the Bank, and (iii) such
approvals of governmental agencies and other governing boards
having regulatory authority over Bancshares and/or the Bank as
may be required by applicable law, rule or regulation.
(b) The only shareholder vote of Bancshares required
to approve the Bancshares Merger is the affirmative vote of the
holders of two thirds of the outstanding shares of Bancshares
Stock. The only shareholder vote of the Bank required to approve
the Bank Merger is the affirmative vote of Bancshares as the sole
shareholder of the Bank. The execution, delivery and performance
of this Agreement and the Bancshares Merger Agreement by
Bancshares have been duly authorized by the Board of Directors of
Bancshares. The execution, delivery and performance of this
Agreement and the Bank Merger Agreement by the Bank have been
duly authorized by the Board of Directors of the Bank. Subject
to the approvals, as aforesaid, this Agreement and the Bank
<PAGE>Merger Agreement are the valid and binding obligations of
the Bank, and this Agreement and the Bancshares Merger Agreement
are the valid and binding obligations of Bancshares, enforceable
against each in accordance with their respective terms.
(c) Except as set forth on Schedule 3.02(c), neither
the execution, delivery and performance by Bancshares of this
Agreement or the Bancshares Merger Agreement, nor the
consummation of the transactions contemplated thereby, nor
compliance by Bancshares with any of the provisions thereof will
(i) violate, conflict with or result in a breach of any
provisions of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or
acceleration of, or result in the creation of, any lien, security
interest, charge or encumbrance upon any of the properties or
assets of Bancshares under any of the terms, conditions or
provisions of (A) its articles of incorporation or bylaws, or (B)
any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which
Bancshares is a party or by which it may be bound, or to which
Bancshares or any of their respective properties or assets may be
subject, or (ii) subject to compliance with the statutes and
regulations referred to in subsection (d) of this Section 3.02,
violate any judgment, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to Bancshares or any of
its properties or assets.
(d) Except as set forth on Schedule 3.02(d), neither
the execution, delivery and performance by the Bank of this
Agreement or the Bank Merger Agreement, nor the consummation of
the transactions contemplated thereby, nor compliance by Bank
with any of the provisions thereof will (i) violate, conflict
with or result in a breach of any provisions of, or constitute a
default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a
right of termination or acceleration of, or result in the
creation of, any lien, security interest, charge or encumbrance
upon any of the properties or assets of the Bank under any of the
terms, conditions or provisions of (A) its articles of agreement
or bylaws, or (B) any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or
obligation to which Bank is a party or by which it may be bound,
or to which the Bank or any of their respective properties or
assets may be subject, or (ii) subject to compliance with the
statutes and regulations referred to in subsection (d) of this
Section 3.02, violate any judgment, ruling, order, writ,
injunction, decree, statute, rule or regulation applicable to the
Bank or any of its properties or assets.
<PAGE>
(e) The minute books and stock records of Bancshares
and the Bank are complete and correct in all respects and
accurately reflect in all respects all meetings, consents and
other actions of the shareholders, Board of Directors and
committees of the Board of Directors occurring since the
organization of each.
3.03 SUBSIDIARIES. Bancshares has no subsidiaries other
than the Bank and the Bank has no subsidiaries and does not
control, or have any equity ownership interest in, any other
corporation, partnership, joint venture or other business
association, other than any interest pledged to the Bank in the
ordinary course of its business as security for the obligations
of third parties to the Bank or held by the Bank as a consequence
of its exercise of rights and remedies in respect of any interest
pledged as security in respect of such obligation.
3.04 CAPITALIZATION OF THE BANK AND BANCSHARES. The capital
stock of the Bank consists of 2,635 shares of common stock, $50
par value, all of which are issued and outstanding as of the date
hereof. The authorized capital stock of Bancshares consists of
2,750 shares of common stock, no par value, 1,332 shares of which
are issued and outstanding as of the date hereof. Except as set
forth on Schedule 3.04, Bancshares has and will have as of the
Bancshares Merger Effective Time good and marketable title to
2,635 shares, or 100% of the then issued and outstanding shares
of the Bank Stock, free and clear of any liens, claims, charges,
encumbrances and assessments of any kind or nature whatsoever.
There are no other shares of capital stock or other Equity
Securities of Bancshares or the Bank outstanding. All of the
issued and outstanding shares of the common stock of Bancshares
and the Bank are validly issued, fully paid and nonassessable.
3.05 FINANCIAL STATEMENTS.
(a) Delivered herewith as Schedule 3.05(a) are copies
of the following financial statements:
(i) Balance sheets of Bancshares as of December
31, 1998 and 1997, and related statements of income for
the two (2) years ended December 31, 1998;
(ii) Balance sheet of Bancshares as of June 30,
1999 and related statement of income for the six-month
period ended June 30, 1999;
(iii) Form FR Y-6 reports of Bancshares as of
December 31, 1998 and 1997, and Form FR Y-9LP and Form
FR Y-9C reports filed during such periods, as furnished
by Bancshares to the Federal Reserve Board; and
<PAGE>
(iv) The Consolidated Reports of Condition and
Income of the Bank as of and for the years ended
December 31, 1998 and 1997, and as of and for the
three-month periods ended March 31, 1999 and June 30,
1999, as filed by the Bank with the FDIC.
(b) The financial statements referenced in subsection
(a) of this Section 3.05 are referred to collectively as the
"Bancshares Financial Statements." The Bancshares Financial
Statements have been prepared in accordance with the books and
records of Bancshares and the Bank in accordance with GAAP or, as
to the financial statements referenced in subsection (a)(iii) and
(a)(iv) above, regulatory accounting principles, consistently
applied in both cases as applied to financial institutions, and
present fairly the consolidated financial positions of Bancshares
and the Bank, respectively, at the dates thereof and the
consolidated results of their respective operations (subject, in
the case of interim financial statements, to normal recurring
year-end adjustments, none of which will be material).
(c) Bancshares and the Bank have each prepared, kept
and maintained through the date hereof true, correct and complete
financial and other books and records of their affairs which
fairly reflect their respective financial conditions, results of
operations, businesses, assets, prospects or operations.
3.06 REPORTS. Since January 1, 1996, Bancshares and the
Bank have filed all reports, registrations and statements,
together with any required amendments thereto, that were required
to be filed with any Regulatory Authority, having jurisdiction
over the affairs of each. All such reports and statements filed
with any such Regulatory Authority are collectively referred to
herein as the "Bancshares and Bank Reports." As of their
respective dates, the Bancshares and Bank Reports complied in all
respects with all the rules and regulations promulgated by the
applicable Regulatory Authority. With respect to the Bancshares
and Bank Reports filed with the Regulatory Authorities, there is
no material unresolved violation, criticism or exception by any
Regulatory Authority with respect to any report or statement
filed by, or any examination of, the Bank or Bancshares.
3.07 TITLE TO AND CONDITION OF ASSETS.
(a) Except as may be reflected in the Bancshares
Financial Statements or set forth on Schedule 3.07(a) and
excepting all real property (which is the subject of Section
3.08), Bancshares and the Bank have, and at the Closing Date will
have, good and marketable title to their respective properties
and assets, including, without limitation, those reflected on the
Bancshares Financial Statements, free and clear of any liens,
charges, pledges, encumbrances, defects, claims or rights of
third parties, except for liens for taxes, assessments or other
governmental charges not yet delinquent.
<PAGE>
(b) No assets reflected on the Bancshares Financial
Statements, which in the aggregate exceed $10,000, have been
sold, leased, transferred, assigned or otherwise disposed of
since June 30, 1999 except in the ordinary course of business or
as set forth in Schedule 3.07(b). All dispositions of assets
since June 30, 1999, regardless of amount, have been made at fair
value.
(c) All furniture, fixtures, vehicles, machinery and
equipment and computer software owned or used by Bancshares or
the Bank, including any of such items leased as a lessee and all
facilities and improvements comprising part of any owned or
leased real property, taken as a whole, with no single such item
being deemed of importance, are in good order and repair, free of
defects and in good operating condition, subject only to normal
wear and tear. The operation by Bancshares or the Bank of such
assets is in compliance in all material respects with all
applicable laws, ordinances and rules and regulations of any
governmental authorities having jurisdiction.
3.08 REAL PROPERTY.
(a) Bancshares owns no real property and neither
Bancshares nor the Bank is a lessee of real property, except as
set forth in Schedule 3.08(a). The legal description of each
parcel of real property owned by the Bank (other than real
property acquired in foreclosures or in lieu of foreclosure in
the course of collection of its loans and being held by the Bank
for disposition as required by law) is set forth in Schedule
3.08(a) attached hereto (such real property being herein referred
to as the "Real Property").
(b) There is no pending dispute involving the Bank as
to the title of or the right to use any of its Real Property.
(c) The Bank has no interest in any other real
property except interests as a mortgagee, and except for real
property acquired in foreclosures or in lieu of foreclosure and
being held for disposition as required by law.
(d) None of the buildings, structures or other
improvements located on the Real Property encroaches upon or over
any adjoining parcel or real estate or any easement or right-of-way
or "setback" line and all such buildings, structures and
improvements are located and constructed in conformity with all
applicable zoning ordinances and building codes.
(e) None of the buildings, structures or improvements
located on the Real Property are the subject of any official
complaint or notice by any governmental authority of violation of
any applicable zoning ordinance or building code, and there is no
zoning ordinance, building code, use or occupancy restriction or
condemnation action or proceeding <PAGE>pending, or, to the best
knowledge of the Sellers, threatened, with respect to any such
building, structure or improvement. The Real Property is in
generally good condition, reasonable wear and tear excepted, and
has been maintained in accordance with reasonable and prudent
business practices applicable to like facilities.
(f) Except as may be reflected on the Bancshares
Financial Statements or with respect to such easements, liens,
defects or encumbrances of record, which to the best knowledge of
Sellers, do not individually or in the aggregate adversely affect
the use or value of the parcel of Real Property, the Bank has,
and at the Closing Date will have, good and marketable title to
its Real Property, free and clear of any liens, charges, pledges,
encumbrances, defects, claims or rights of third parties, except
as set forth in Schedule 3.08(f).
3.09 LOANS, COMMITMENTS AND CONTRACTS.
(a) Bancshares has no outstanding loans receivable nor
any commitments to lend. Schedule 3.09(a) contains a complete
and accurate listing of all contracts entered into with respect
to deposits of $250,000 or more, by account or other identifying
number, and all loan agreements and commitments, notes, security
agreements, repurchase agreements, bankers' acceptances,
outstanding letters of credit and commitments to issue letters of
credit, participation agreements and other documents relating to
or involving extensions of credit or other commitments to extend
credit by the Bank with respect to any one entity or related
group of entities in excess of $250,000, to which any of the
foregoing is a party or by which it is bound, by account or other
identifying number, and, where applicable, such other information
as shall be necessary to identify any related group of entities.
(b) Except for the contracts and agreements required
to be listed on Schedule 3.09(a) and except as set forth in
Schedule 3.09(b) hereto, neither Bancshares nor the Bank is a
party to or bound by any:
(i) agreement, contract, arrangement,
understanding or commitment with any labor union;
(ii) franchise or license agreement;
(iii) written employment, severance or
termination pay, agency, consulting or similar
agreement, contract, arrangement, understanding or
commitment in respect of personal services;
(iv) material agreement, arrangement or commitment
(A) not made in the ordinary course of business, or (B)
pursuant to which Bancshares or the <PAGE>Bank is or
may become obligated to invest in or contribute other
than pursuant to the Sellers Employee Plans (as that
term is defined in Section 3.18 hereof);
(v) agreement, indenture or other instrument not
disclosed in the Bancshares Financial Statements
relating to the borrowing of money by the Bank or
Bancshares or the guarantee by the Bank or Bancshares
of any such obligation (other than trade payables or
instruments related to transactions entered into in the
ordinary course of business by the Bank or Bancshares
such as deposits, Fed Funds borrowings, Federal Home
Loan Bank Board advances and repurchase and reverse
repurchase agreements), other than such agreements,
indentures or instruments providing for annual payments
of less than $50,000;
(vi) contract containing covenants which limit the
ability of the Bank or Bancshares to compete in any
line of business or with any person or which involves
any restrictions on the geographical area in which, or
method by which, the Bank or Bancshares may carry on
their respective businesses (other than as may be
required by law or any applicable Regulatory
Authority);
(vii) lease of personal property with annual
rental payments aggregating $25,000 or more;
(viii) loans or other obligations payable or
owing to any officer, director or employee except (A)
salaries, wages and directors' fees incurred and
accrued in the ordinary course of business and (B)
obligations due in respect of any depository accounts
maintained by any of the foregoing at the Bank in the
ordinary course of business;
(ix) loans or debts payable or owing by any
executive officer or director of the Bank or Bancshares
or any other person or entity deemed an "executive
officer" or a "related interest" of the Bank or
Bancshares, as such terms are defined by the FDIC in 12
C.F.R. Part 349;
(x) other agreements, contracts, arrangements,
understandings or commitments that involve obligations
by the Bank or Bancshares of more than $25,000 in the
aggregate that extend beyond six months from the date
hereof and cannot be canceled without cost or penalty
upon notice of 30 days or less, other than contracts
entered into in respect of deposits, loan agreements
and commitments, notes, security agreements, repurchase
and reverse repurchase agreements, bankers'
acceptances, outstanding letters of credit and
<PAGE>commitments to issue letters of credit,
participation agreements and other documents relating
to transactions entered into by the Bank or Bancshares
in the ordinary course of business and not involving
extensions of credit with respect to any one entity or
related group of entities in excess of $250,000.
(c) The Bank and Bancshares carry property, casualty,
liability, directors and officer errors and omissions, products
liability and other insurance coverages as set forth in
Schedule 3.09(c).
(d) True, correct and complete copies of the
agreements, contracts, leases, insurance policies and other
documents referred to in Schedule 3.09(a), Schedule 3.09(b), and
Schedule 3.09(c) shall be furnished or made available to the
Buyer Entities.
(e) Each of the agreements, contracts, leases,
insurance policies and other documents referred to in Schedule
3.09(a), Schedule 3.09(b) and Schedule 3 09(c) is a valid,
binding and enforceable obligation of the parties sought to be
bound thereby, except as the enforceability thereof against the
parties thereto (other than the Bank or Bancshares) may be
limited by bankruptcy, insolvency, reorganization, moratorium and
other laws now or hereafter in effect relating to the enforcement
of creditors' rights generally, and except that equitable
principles may limit the right to obtain specific performance or
other equitable remedies.
(f) Schedule 3.09(f) contains a true, correct and
complete listing, as of the date of this Agreement, by account or
other identifying number, of (i) all loans in excess of $100,000
of the Bank which have been accelerated during the past twelve
months which have not, to date, been repaid or written off, (ii)
all loan commitments or lines of credit of the Bank in excess of
$100,000 which have been terminated by the Bank during the past
twelve months by reason of default or adverse developments in the
condition of the borrower or other events or circumstances
affecting the credit of the borrower which have not, to date,
been repaid or written off, (iii) all loans, lines of credit and
loan commitments in excess of $100,000 as to which the Bank has
given written notice to the borrower or customer of the Bank's
intent to terminate during the past twelve months which have not,
to date, been repaid or written off, (iv) with respect to all
loans in excess of $100,000, all notification letters and other
written communications from the Bank to any of its borrowers,
customers or other parties during the past twelve months wherein
the Bank has requested or demanded that actions be taken to
correct existing material defaults or material facts or
circumstances which may become defaults, (v) each borrower,
customer or other party which has notified the Bank during the
past twelve months of, or asserted against the Bank, in writing,
any "lender liability" or similar claim, and each borrower,
customer or other party which has given the Bank any oral
notification of, or asserted against the Bank, any such claim,
and (vi) all loans in excess of $50,000 (1) that are
contractually past due 90 days or more in the payment of
principal and/or <PAGE>interest, (2) that are on non-accrual
status, (3) where a reasonable doubt exists as to the timely
future collectibility of future principal and interest, whether
or not interest is still accruing or the loan is less than 90
days past due, (4) the interest rate terms have been reduced
and/or the maturity dates have been extended subsequent to the
agreement under which the loan was originally created due to
concerns regarding the borrower's ability to pay in accordance
with such initial terms, (5) where a specific reserve allocation
exists in connection therewith, or (6) that have been classified
"substandard," "doubtful" or "loss" or the equivalent thereof by
any Regulatory Authority.
3.10 ABSENCE OF DEFAULTS. Except as set forth in Schedule
3.10, there are no pending disputes between the Bank or
Bancshares and the other parties to the agreements, contracts,
leases, insurance policies and other documents referred to in
Schedule 3.09(a), Schedule 3.09(b), and Schedule 3.09(c), and to
the best knowledge of the Sellers, all such agreements,
contracts, leases, insurance policies and other documents are in
full force and effect and not in default with respect to the Bank
or Bancshares or any other party thereto, and will continue in
full force and effect immediately after the Closing Date.
3.11 ABSENCE OF UNDISCLOSED LIABILITIES. Except as
disclosed in Schedule 3.11 or in any other Schedule delivered
herewith:
(a) As of the date hereof, neither the Bank nor
Bancshares has any debts, liabilities or obligations, equal to or
exceeding $25,000, individually, or $50,000, in the aggregate,
whether accrued, absolute, contingent or otherwise and whether
due or to become due, which are required to be reflected in the
Bancshares Financial Statements or the notes thereto in
accordance with GAAP consistently applied except:
(i) liabilities reflected in the Bancshares
Financial Statements;
(ii) deposits, debts, liabilities or obligations
incurred since June 30, 1999 in the ordinary and usual
course of its businesses, none of which are for breach
of contract, breach of warranty, torts, infringements
or lawsuits, and none of which adversely affect their
respective financial positions or results of
operations, businesses, assets, prospects or
operations; and
(iii) liabilities incurred for legal,
accounting, financial advising fees and out-of-pocket
expenses in connection with the Mergers and the
transactions related thereto.
(b) Neither the Bank nor Bancshares was, as of June
30, 1999, and since such date to the date hereof has become a
party to, any contract or agreement, excluding deposits, loan
agreements and commitments, notes, security agreements,
repurchase and <PAGE>reverse repurchase agreements, bankers'
acceptances, outstanding letters of credit and commitments to
issue letters of credit, participation agreements and other
documents relating to transactions entered into by the Bank or
Bancshares in the ordinary course of business which affected,
affects or may reasonably be expected to affect, materially and
adversely, its financial position, results of operations,
business, assets or operations.
3.12 ALLOWANCE FOR LOAN AND LEASE LOSSES; NON-PERFORMING
ASSETS.
(a) All of the accounts, notes and other receivables
which are reflected in the balance sheet of the Bank as of June
30, 1999 were acquired in the ordinary course of business and are
to the best knowledge of Sellers collectible in full in the
ordinary course of business, except for possible loan and lease
losses for which reserves have been made on the financial
statements in accordance with regulatory requirements in the
allowance for loan and lease losses in such balance sheet.
(b) The allowance for loan losses contained in the
balance sheet of the Bank as of June 30, 1999 was established in
accordance with the past practices and experiences of the Bank
and such allowance was adequate in all material respects under
applicable regulatory requirements to provide for possible losses
on loans and leases (including, without limitation, accrued
interest receivable) and credit commitments (including, without
limitation, stand-by letters of credit) as of the date of such
balance sheet. The reserve for loan losses as of the Closing
Date shall be equal to or greater than the amount of the reserve
for loan losses reflected on the financial statements of
Bancshares as of June 30, 1999.
(c) Schedule 3.12(c) sets forth as of the date of this
Agreement all assets classified as real estate acquired through
foreclosure, including in-substance foreclosed real estate
("Non-Performing Assets").
3.13 TAXES. Each of Bancshares and the Bank has timely
filed or will timely file (including all extensions) all tax
returns required to be filed at or prior to the Closing Date
("Bancshares Returns"). Each of Bancshares and the Bank has
paid, or has set up adequate reserves on the Bancshares Financial
Statements for the payment of, all taxes required to be paid in
respect of the periods covered by such returns and has set up
adequate reserves on the Bancshares Financial Statements for the
payment of all taxes anticipated to be payable in respect of the
period subsequent to the last of said periods (treating for this
purpose the Closing Date as the last day of an applicable period,
whether or not it is in fact the last day of a taxable period).
Neither Bancshares nor the Bank will have any liability for any
such taxes in excess of the amounts so paid or reserves so
established, and no deficiencies for any tax, assessment or
<PAGE>governmental charge have been proposed, asserted or
assessed (tentatively or definitively) against Bancshares or the
Bank which would not be covered by existing reserves. Neither
Bancshares nor the Bank is delinquent in the payment of any tax,
assessment or governmental charge, nor has it requested any
extension of time within which to file any tax returns in respect
of any fiscal year which have not since been filed and no
requests for waivers of the time to assess any tax are pending.
The federal, state and foreign income tax returns of each of
Bancshares and the Bank have not been audited by the Internal
Revenue Service (the "IRS") or the state or foreign taxing
authority during the previous seven years. Neither Bancshares
nor the Bank has made any election under Income Tax Regulation
Sections 1.1502-33(d)(3) or 1.1552-1(c), each of which relates to
the allocation of the consolidated federal income tax liability,
and, except as set forth in Schedule 3.13, neither Bancshares nor
the Bank is a party to or bound by any tax indemnity, tax sharing
or tax allocation agreement, or any other contractual obligation
to pay or contribute to the tax obligations of any other person.
There is no deficiency or presently pending refund litigation or
matter in controversy with respect to Bancshares Returns.
Neither Bancshares nor the Bank has extended or waived any
statute of limitations on the assessment of any tax due that is
currently in effect.
3.14 MATERIAL ADVERSE CHANGE. Since June 30, 1999, there
has been no material adverse change in the financial condition,
results of operations, business, assets, prospects or operations
of Bancshares or the Bank taken as a whole, other than changes in
banking laws or regulations, or interpretations thereof, or other
conditions that affect the banking industry generally, or changes
in the general level of interest rates.
3.15 LITIGATION AND OTHER PROCEEDINGS. Except as set forth
in Schedule 3.15, neither Bancshares nor the Bank is a party to
any pending or, to the best knowledge of the Sellers, threatened,
claim, action, suit, investigation or proceeding, or is subject
to any order, judgment or decree, except for matters which, in
the aggregate, will not have, or cannot reasonably be expected to
have, a material adverse effect on the business, financial
condition, results of operations or prospects of Bancshares or
the Bank. Without limiting the generality of the foregoing,
except as set forth in Schedule 3.15, there are no actions, suits
or proceedings pending or, to the best knowledge of the Sellers,
threatened against Bancshares or the Bank or any of their
respective officers or directors by any shareholder of Bancshares
or the Bank (or any former shareholder) or involving claims under
the Community Reinvestment Act of 1977, Bank Secrecy Act, the
fair lending laws or any other laws applicable to the Bank.
3.16 COMPLIANCE WITH LAWS.
(a) Bancshares and the Bank have all permits,
licenses, authorizations, orders and approvals of, and have made
all filings, applications and registrations with, all Regulatory
Authorities that are required in order to permit them to own or
lease their respective properties and assets and to carry on
their respective businesses as presently conducted; all such
permits, licenses, certificates of authority, orders and
approvals are in full force and effect and no suspension or
cancellation of any of them is threatened; and, to the <PAGE>best
knowledge of Sellers, all such filings, applications and
registrations are current; in each case except for permits,
licenses, authorizations, orders, approvals, filings,
applications and registrations the failure to have (or have made)
would not have a material adverse effect on the financial
condition, results of operations, business or prospects of
Bancshares or the Bank.
(b) Each of Bancshares and the Bank has complied with
all laws, regulations and orders (including, without limitation,
zoning ordinances, building codes, the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and securities, tax,
environmental, civil rights and occupational health and safety
laws and regulations and including, without limitation, in the
case of the Bank, all statutes, rules, regulations and policy
statements pertaining to the conduct of a banking, deposit-taking,
lending or related business, or to the exercise of trust
powers) and governing instruments applicable to it and to the
conduct of its business, the violation of which could reasonably
be expected to have a material adverse effect on the financial
condition, results of operations, business or prospects of
Bancshares or the Bank, and neither Bancshares nor the Bank is in
default under, and no event has occurred which, with the lapse of
time or notice or both, could result in the default under, the
terms of any judgment, order, writ, decree, permit or license of
any Regulatory Authority or court, whether federal, state,
municipal or local and whether at law or in equity.
(c) Except as set forth in Schedule 3.16, and to the
best knowledge of Sellers, neither Bancshares nor the Bank is
subject to or reasonably likely to incur a material liability as
a result of its ownership, operation or use of any Property (as
defined below) of Bancshares or the Bank (whether directly or as
a consequence of such Property being part of the investment
portfolio of the Bank) (A) that contains any hazardous waste,
toxic substance or related materials, including, without
limitation, asbestos, PCBs, pesticides, herbicides and any other
substance or waste that is hazardous to human health or the
environment (collectively, a "Hazardous Substance"), or (B) on
which any Hazardous Substance has been stored, disposed of,
placed, or used in the construction thereof. "Property" shall
include all property (real or personal, tangible or intangible)
owned or controlled by Bancshares or the Bank, including, without
limitation, property under foreclosure and property in which any
venture capital or similar unit of the Bank has an ownership or
possessory interest. No claim, action, suit or proceeding is
pending against Bancshares or the Bank relating to the Property
before any court or other Regulatory Authority or arbitration
tribunal relating to Hazardous Substances, pollution or the
environment, and there is no outstanding judgment, order, writ,
injunction, decree or award against or affecting Bancshares or
the Bank with respect to the same. Except for statutory or
regulatory restrictions of general application, no Regulatory
Authority has placed any restriction on the business of
Bancshares or the Bank which reasonably could be expected to have
a material adverse effect on the condition of Bancshares or the
Bank.
(d) Since December 31, 1995, neither Bancshares nor
the Bank has <PAGE>received any notification or communication
which has not been favorably resolved from any Regulatory
Authority (i) asserting that Bancshares or the Bank is not in
substantial compliance with any of the statutes, regulations or
ordinances that such Regulatory Authority enforces, except with
respect to matters which (A) are set forth on Schedule 3.16 or in
any writing previously furnished to the Buyer Entities and (B)
reasonably could not be expected to have a material adverse
effect on the condition of the Bank, (ii) threatening to revoke
any license, franchise, permit or governmental authorization that
is material to the condition of the Bank including, without
limitation, the Bank's status as an insured depository
institution under the FDI Act, (iii) requiring or threatening to
require Bancshares or the Bank, or indicating that Bancshares or
the Bank may be required, to enter into a cease and desist order,
agreement or memorandum of understanding or any other agreement
restricting or limiting or purporting to direct, restrict or
limit in any manner the operations of Bancshares or the Bank,
including, without limitation, any restriction on the payment of
dividends. No such cease and desist order, agreement or
memorandum of understanding or other agreement is currently in
effect.
(e) Neither Bancshares nor the Bank is required by
Section 32 of the FDI Act to give prior notice to any federal
banking agency of the proposed addition of an individual to its
board of directors or the employment of an individual as a senior
executive officer.
3.17 LABOR. No work stoppage involving Bancshares or the
Bank is pending or, to the best knowledge of Sellers, threatened.
Neither Bancshares nor the Bank is involved in, or threatened
with or affected by, any labor dispute, arbitration, lawsuit or
administrative proceeding which could adversely affect the
business of Bancshares or the Bank. Employees of Bancshares and
the Bank are not represented by any labor union nor are any
collective bargaining agreements otherwise in effect with respect
to such employees.
3.18 EMPLOYEE BENEFIT PLANS.
(a) Schedule 3.18(a) lists all pension, retirement,
supplemental retirement, stock option, stock purchase, stock
ownership, savings, stock appreciation right, profit sharing,
deferred compensation, consulting, bonus, medical, disability,
workers' compensation, vacation, group insurance, severance and
other employee benefit, incentive and welfare policies,
contracts, plans and arrangements, and all trust agreements
related thereto, maintained by or contributed to by Bancshares or
the Bank in respect of any of the present or former directors,
officers or other employees of and/or consultants to Bancshares
or the Bank (collectively, the "Sellers Employee Plans"). The
Sellers have furnished the Buyer Entities with the following
documents with respect to each of the Sellers Employee Plans:
(i) a true and complete copy of all written documents comprising
such Sellers Employee Plan (including amendments and individual
agreements relating thereto) or, if there is no such written
document, an accurate and complete description of the Sellers
Employee Plan; (ii) the <PAGE>most recently filed Form 5500 or
Form 5500-C (including all schedules thereto), if applicable;
(iii) the most recent financial statements and actuarial reports,
if any; (iv) the summary plan description currently in effect and
all material modifications thereof, if any; and (v) the most
recent IRS determination letter, if any.
(b) All of the Sellers Employee Plans have been
maintained and operated in all material respects in accordance
with their terms and the requirements of all applicable statutes,
orders, rules and final regulations, including, without
limitation, to the extent applicable, ERISA and the Internal
Revenue Code (the "Code"). All contributions required to be made
to the Sellers Employee Plans have been made.
(c) Sellers have no pension plan (as defined in
Section 3(2) of ERISA).
(d) Except as set forth on Schedule 3.18(d), neither
Bancshares nor the Bank has any liability for any post-retirement
health, medical or similar benefit of any kind whatsoever, except
as required by statute or regulation.
(e) Neither Bancshares nor the Bank has any material
liability under ERISA or the Code as a result of its being a
member of a group described in Sections 414(b), (c), (m) or (o)
of the Code.
(f) Except as set forth on Schedule 3.18(f), neither
the execution nor delivery of this Agreement or the Merger
Agreements, nor the consummation of any of the transactions
contemplated hereby and thereby, nor the termination of any of
the Sellers Employee Plans which may occur as a result of the
consummation of any of the transactions so contemplated, will (i)
result in any payment (including, without limitation, severance,
unemployment compensation or golden parachute payment) becoming
due from Bancshares or the Bank to any director or employee of
Bancshares or the Bank, (ii) increase any benefit otherwise
payable under any of the Sellers Employee Plans or (iii) result
in the acceleration of the time of payment of any such benefit.
3.19 CONDUCT OF BANCSHARES'S AND THE BANK'S BUSINESSES TO
DATE. Except as set forth in Schedule 3.19 or otherwise in this
Agreement, from and after June 30, 1999: (a) Bancshares and the
Bank have carried on their respective business in the ordinary
and usual course consistent with past practices, (b) neither
Bancshares nor the Bank has issued or sold any of its capital
stock or any corporate debt securities which would be classified
as long-term debt on its balance sheet, (c) neither Bancshares
nor the Bank has granted any option for the purchase of its
capital stock, effected any stock split or otherwise changed its
capitalization, (d) neither Bancshares nor the Bank has, directly
or indirectly, redeemed or <PAGE>otherwise acquired any of its
capital stock, (e) neither Bancshares nor the Bank has incurred
any obligation or liability (absolute or contingent), except
normal trade or business obligations or liabilities incurred in
the ordinary course of business, or mortgaged, pledged or
subjected to lien, claim, security interest, charge, encumbrance
or restriction any of its assets or properties, (f) neither
Bancshares nor the Bank has discharged or satisfied any lien,
mortgage, pledge, claim, security interest, charge, encumbrance,
or restriction or paid any obligation or liability (absolute or
contingent), other than in the ordinary course of business,
(g) neither Bancshares nor the Bank has sold, assigned,
transferred, leased, exchanged or otherwise disposed of any of
its properties or assets other than for a fair consideration in
the ordinary course of business, (h) neither Bancshares nor the
Bank has increased the rate of compensation of, or paid any bonus
to, any of its directors, officers or other employees, except
merit or promotion increases in accordance with existing policy,
entered into any new, or amended or supplemented any existing,
employment, management, consulting, deferred compensation,
severance or other similar contract, entered into, terminated or
substantially modified any of the Sellers Employee Plans in
respect of any of its present or former directors, officers or
other employees, or agreed to do any of the foregoing,
(i) neither Bancshares nor the Bank has suffered any damage,
destruction or loss, whether as the result of fire, explosion,
earthquake, accident, casualty, labor trouble, requisition or
taking of property by any government or any agency of any
government, flood, windstorm, embargo, riot, act of God or the
enemy or other similar or dissimilar casualty or event or
otherwise, and whether or not covered by insurance, and
(j) neither Bancshares nor the Bank has entered into any
transaction, contract or commitment outside the ordinary course
of its business.
3.20 FULL DISCLOSURE. No representation or warranty of the
Sellers contains any untrue statement of a material fact or omits
to state a material fact necessary in order to (i) make the
statements contained herein not materially misleading or
(ii) provide a prospective purchaser of the Bancshares Stock with
all material information as to the properties and business of
Bancshares or the Bank.
3.21 BROKERS AND FINDERS; OTHER LIABILITIES. Except as set
forth on Schedule 3.21, neither Bancshares nor the Bank nor any
of their respective officers, directors or employees has employed
any broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions or finder's fees, and
no broker or finder has acted directly or indirectly for
Bancshares and/or the Bank in connection with this Agreement, the
Merger Agreements or the transactions contemplated hereby and
thereby.
Sellers have retained the services of E.L. Burch &
Associates to serve as its brokers in this transaction and it
shall be paid a brokerage fee of $15,000 at Closing from funds
payable to Sellers.
3.22 INTEREST RATE RISK MANAGEMENT INSTRUMENTS. Except for
caps on interest rates <PAGE>made on loans in the ordinary course
of its business, the Bank is not a party to, nor are any of its
properties or assets bound by, interest rate swaps, caps, floors
and option agreements and other interest rate risk management
arrangements.
3.23 REPRESENTATIONS CONCERNING SHAREHOLDERS.
(a) OWNERSHIP. Each Shareholder is the owner,
beneficially and of record, of the number of shares of Bancshares
Stock as set forth in Schedule 3.23(a).
(b) POWER. Each Shareholder has complete and
unrestricted power to enter into this Agreement and all other
agreements to be executed and delivered by Shareholders
hereunder, to transfer their shares pursuant to the Merger, and
to perform their obligations hereunder and thereunder.
(c) BINDING OBLIGATION. This Agreement has been, and
all other agreements and documents to be executed and delivered
by Shareholders hereunder will be at or prior to the Closing,
duly authorized, executed and delivered by Shareholders and
constitute the legal, valid and binding obligations of all
Shareholders enforceable against each Shareholder in accordance
with its terms.
(d) NO VIOLATIONS OR DEFAULTS. The execution and
delivery of this Agreement and all other agreements to be
executed and delivered by Shareholders hereunder, and the
consummation of the transactions contemplated hereby and thereby,
by Shareholders will not violate any provision of, or constitute
a default under, any law, regulation, order or judgment or any
contract or other agreement to which any of Shareholders is a
party or by which any of them is bound or result in the creation
or imposition of any lien, claim, charge or encumbrance of any
nature whatsoever upon the outstanding capital stock of
Bancshares or the Bank.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER ENTITIES
As an inducement to the Sellers to enter into and perform
their respective obligations under this Agreement, and
notwithstanding any examinations, inspections, audits or other
investigations made by the Sellers, the Buyer Entities hereby
jointly and severally represent and warrant to the Sellers as to
the following matters:
4.01 ORGANIZATION AND AUTHORITY. Buyer and Acquisition
Company are each corporations duly organized, validly existing
and in good standing under the laws of the State of Missouri.
<PAGE>
4.02 CORPORATE AUTHORIZATION.
(a) Buyer and Acquisition Company each have the
corporate power and authority to enter into this Agreement and to
carry out their respective obligations hereunder. The execution,
delivery and performance of this Agreement by Buyer and
Acquisition Company and the consummation of the transactions
contemplated hereby have been duly authorized by the Board of
Directors of Buyer and the Board of Directors of Acquisition
Company, and no other approval of their respective Boards or
shareholders or any committees thereof is required. Subject to
such approvals of governmental agencies and other governing
boards having regulatory authority over Buyer and Acquisition
Company as may be required by statute or regulation, this
Agreement is a valid and binding obligation of Buyer and
Acquisition Company, enforceable against each in accordance with
its terms.
(b) Neither the execution, delivery and performance by
Buyer or Acquisition Company of this Agreement, nor the
consummation of the transactions contemplated hereby, nor
compliance by Buyer or Acquisition Company with any of the
provisions hereof, will (a) violate, conflict with or result in a
breach of any provisions of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate
the performance required by, or result in a right of termination
or acceleration of, or result in the creation of, any lien,
security interest, charge or encumbrance upon any of the
properties or assets of Buyer or Acquisition Company under any of
the terms, conditions or provisions of (i) their respective
Articles of Incorporation or Bylaws or (ii) any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which Buyer or Acquisition
Company is a party or by which it may be bound, or to which Buyer
or Acquisition Company or any of its properties or assets may be
subject.
4.03 MATERIAL ADVERSE CHANGE. Since December 31, 1998,
there has been no material adverse change in the financial
condition, results of operations or prospects or Buyer, other
than changes in banking laws or regulations, or interpretations
thereof, or other conditions that affect the banking industry
generally, or changes in the general level of interest rates.
4.04 FULL DISCLOSURE. No representation or warranty of the
Buyer Entities contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the
statements contained herein not materially misleading.
<PAGE>
ARTICLE V
CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME
5.01 CONDUCT OF BUSINESSES PRIOR TO THE CLOSING DATE.
During the period from the date of this Agreement to the Closing
Date, Bancshares and the Bank shall (i) conduct their respective
businesses according to the ordinary and usual course consistent
with past and current practices, (ii) conduct their respective
businesses in accordance with the budgets delivered to Buyer,
provided, however, that no additional provisions for loan losses,
shall be made except as may be necessary to maintain the reserve
for loan losses in accordance with Section 3.12(b) of this
Agreement, (iii) seek to keep the expenses of their respective
businesses at levels consistent with past practices, and (iv) use
their best efforts to maintain and preserve their respective
business organizations, value of their franchise, employees and
advantageous business relationships and retain the services of
their officers and key employees.
5.02 FORBEARANCES OF BANCSHARES AND THE BANK. Except as set
forth on Schedule 5.02, during the period from the date of this
Agreement to the Closing Date, neither Bancshares nor the Bank
shall, without the prior written consent of the Buyer Entities:
(a) declare, set aside or pay any dividends or other
distributions, directly or indirectly, in respect of its capital
stock, except that the Bank may declare and pay dividends
required to pay the expenses and indebtedness of Bancshares;
(b) enter into or amend any employment, severance or
similar agreement or arrangement with any director or officer or
employee, or materially modify any of the Sellers Employee Plans
or grant any salary or wage increase or materially increase any
employee benefit (including incentive or bonus payments), except
(i) normal individual increases in compensation to employees
consistent with past practice, (ii) as required by law or
contract and (iii) such increase of which the Sellers notify the
Buyer Entities in writing and which the Buyer Entities do not
disapprove within 10 days of the receipt of such notice.
Notwithstanding the foregoing, Sellers may pay employee bonuses
between the date hereof and month end prior to Closing as Sellers
deem appropriate;
(c) propose or adopt any amendments to its articles of
incorporation or other charter document or bylaws;
<PAGE>
(d) issue, sell, grant, confer or award any of its
Equity Securities or effect any contribution to capital, stock
split or adjust, combine, reclassify or otherwise change its
capitalization as it existed on the date of this Agreement;
(e) purchase, redeem, retire, repurchase or exchange,
or otherwise acquire or dispose of, directly or indirectly, any
of its Equity Securities, whether pursuant to the terms of such
Equity Securities or otherwise;
(f) without first consulting with Buyer, enter into,
renew or increase any loan or credit commitment (including
stand-by letters or credit) to, or invest or agree to invest in any
person or entity or modify any of the material provisions or
renew or otherwise extend the maturity date of any existing loan
or credit commitment (collectively, "Lend to") in an amount in
excess of $100,000 or in any amount which, when aggregated with
any and all loans or credit commitments of the Bank to such
person or entity, would be in excess of $100,000; or Lend to any
person other than in accordance with the Bank's lending policies
as in effect on the date hereof; provided, however, that the Bank
shall give Buyer prior written notice of its request to act
contrary hereto and if Buyer has not responded within twenty-four
(24) hours of such request Bank may proceed in accordance with
its good faith business judgment. In the event Buyer objects to
the proposed transaction and the Bank proceeds with the same,
then such loan shall be excluded from the Adjusted Book Value of
the Bank unless Sellers, at Sellers' option, elect to do one of
the following: (i) such loan, if made and any OREO or other
collateral which is owned by the Bank on the Closing Date as a
result of the loan, may be purchased by the Sellers on or before
the Closing Date for a price which is the amount originally
loaned, plus any new advance, plus all accrued interest from the
date of the loan to the Closing Date, and less only payments
actually received from any person with respect to the Loan; or
(ii) Sellers agree to set up a reserve for the loan out of the
consideration paid at Closing and upon payment being made on the
loan by the borrower as agreed, the reserve shall be reduced and
the funds released to Sellers, or (iii) Sellers exercise their
right, which is hereby granted, to terminate this Agreement and
refund the Escrow Deposit made by Buyer.
Buyer shall have no right to object to, and the Sellers
shall have no obligation to purchase any loan or new advance made
under the terms of a valid multiple disbursement note or binding
written loan commitment which in either case was in existence and
disclosed to Buyer during its due diligence examination of the
Bank;
(g) except as directed by any Regulatory Authority on
its own motion or otherwise required by applicable law, take any
action that would materially impede or delay the consummation of
the transactions contemplated by this Agreement or the
<PAGE>Merger Agreements or the ability of the Buyer Entities and
the Sellers to obtain any approval of any Regulatory Authority
required for the transactions contemplated by this Agreement or
the Merger Agreements or to perform its covenants and agreements
under this Agreement or the Merger Agreements.
(h) other than in the ordinary course of business
consistent with past practice, incur any indebtedness for
borrowed money or assume, guarantee, endorse or otherwise as an
accommodation become responsible or liable for the obligations of
any other individual, corporation or other entity;
(i) in the case of the Bank, materially restructure or
change its investment securities portfolio, through purchases,
sales or otherwise, or the manner in which the portfolio is
classified or reported, or execute individual investment
transactions which would materially extend the average maturity
of the portfolio or which are greater than $500,000 for U.S.
Treasury Securities and Federal Agency securities and $100,000
for all other investment instruments, provided that for purposes
of this subsection (k), such consent shall not be unreasonably
withheld;
(j) agree in writing or otherwise take any of the
foregoing actions or engage in any activity, enter into any
transaction or intentionally take or omit to take any other act
which would make any of the representations and warranties in
Article II of this Agreement untrue or incorrect in any material
respect if made anew after engaging in such activity, entering
into such transaction, or taking or omitting such other act;
(k) enter into or increase any loan or credit
commitment (including standby letters of credit) to any executive
officer or director of Bancshares or the Bank, any shareholder of
Bancshares or the Bank, or any entity controlled, directly or
indirectly, by any of the foregoing, without first obtaining the
prior written consent of Buyer, which consent shall not be
unreasonably withheld;
(l) other than in the ordinary course of business
consistent with past practice, acquire, mortgage or dispose of
any material assets;
(m) make any capital investments in excess of $25,000
individually or $75,000 in the aggregate;
(n) excluding loans in the ordinary course of its
business, enter into any individual contract under which the
liability of Bancshares or the Bank is in excess of $25,000, or
enter into any contracts under which, in the aggregate, the
liability of Bancshares or the Bank is in excess of $50,000;
(o) other than in the ordinary course of business
consistent with past practice, enter into any other material
agreements; or
<PAGE>
(p) engage in any negotiations or discussions with, or
consider proposals from, any person not a party to this Agreement
respecting the sale of Bancshares or the Bank to, or the merger
of the Bank or Bancshares with, any other person or organization.
ARTICLE VI
ADDITIONAL COVENANTS
6.01 ACCESS AND INFORMATION; DUE DILIGENCE.
(a) Bancshares and the Bank each shall afford to the
Buyer Entities, and to the Buyer Entities' accountants, counsel
and other representatives, full access during normal business
hours, during the Buyer Due Diligence Period and during any six
(6) business days per month (and upon reasonable request for such
additional time as may be required, provided such request shall
not disrupt the normal operation of the Bank) during the period
from the expiration of the Buyer Due Diligence Period to the
Closing Date, to all its properties, books, contracts,
commitments and records and, during such period, shall furnish
promptly to the Buyer Entities (i) a copy of each report,
schedule and other document filed or received by it during such
period pursuant to the requirements of federal and state banking
laws and (ii) all other information concerning its business,
properties and personnel as the Buyer Entities may reasonably
request. In the event of the termination of this Agreement, the
Buyer Entities shall, and shall cause their respective advisors
and representatives to, (1) hold confidential all information
obtained in connection with any transaction contemplated hereby
with respect to the other party which is not otherwise public
knowledge, (2) return to Bancshares and the Bank all documents
(including copies thereof) obtained hereunder from Bancshares and
the Bank and (3) use their best efforts to cause all information
obtained pursuant to this Agreement or in connection with the
negotiation hereof to be treated as confidential and not use, or
knowingly permit others to use, any such information unless such
information becomes generally available to the public.
(b) Buyer, promptly following the date of this
Agreement, shall commence the Buyer Due Diligence Review, which
it shall conclude no later than the end of the Buyer Due
Diligence Period. Buyer shall advise Bancshares and the Bank of
any situation, event, circumstance or other matter which first
came to the attention of Buyer during the Buyer Due Diligence
Review which could result in the termination of this Agreement by
Buyer pursuant to Section 8.01(d) hereof, or, if applicable, of
the absence of any situation, event, circumstance or other
matter, it being the intention of Buyer to provide notice to
Bancshares and the Bank, as promptly as possible, of any
perceived impediment to the consummation of either the Bancshares
Merger or the Bank Merger. Notwithstanding anything hereinabove
contained or implied to the contrary, the Buyer Due Diligence
Review shall not limit, restrict <PAGE>or preclude, or be
construed to limit, restrict or preclude, Buyer, at any time or
from time to time thereafter, from conducting further such
reviews or from exercising any rights available to it hereunder
as a result of the existence or occurrence prior to the Buyer Due
Diligence Period of any event or condition which was not detected
in the Buyer Due Diligence Review by Buyer and which would
constitute a breach of any material representation, warranty or
agreement of Bancshares or the Bank under this Agreement.
6.02 REGULATORY MATTERS. Each of the parties hereto shall
cooperate and use their respective best efforts to prepare all
documentation, to effect all filings, and to obtain all permits,
consents, approvals and authorizations of all third parties and
governmental bodies necessary to consummate the transactions
contemplated by this Agreement and the Merger Agreements as soon
as is reasonably practicable after the date of this Agreement,
including, without limitation, Buyer filing the necessary
applications and notices with the FDIC and the Missouri Director
of Finance.
6.03 SHAREHOLDER APPROVALS.
(a) Bancshares shall call a special meeting of its
shareholders to be held as soon as is reasonably practicable for
the purpose of voting upon this Agreement and the Bancshares
Merger Agreement and related matters. The Board of Directors of
Bancshares shall submit and recommend for approval of their
respective shareholders the matters to be voted upon at such
meetings. The Board of Directors of Bancshares hereby does and
will recommend this Agreement, the Bancshares Merger Agreement
and the transactions contemplated hereby and thereby to its
shareholders and use its best efforts to obtain the votes and
approvals of its shareholders necessary for the approval and
adoption of the matters contemplated hereby. Each of the
Shareholders agrees to vote all shares of Bancshares Stock that
he owns of record for the approval of this Agreement and the
Bancshares Merger Agreement at the special meeting of
shareholders of Bancshares, or if the transaction is altered by
Buyer to a direct purchase of stock pursuant to Section 2.09, to
sell his shares of Bancshares for a purchase price equal to that
portion of the Bancshares Merger Consideration that such
Shareholder would be entitled to receive under this Agreement.
(b) The Bank shall call a special meeting of its
shareholders to be held as soon as is reasonably practicable for
the purpose of voting upon this Agreement and the Bank Merger
Agreement and related matters. The Board of Directors of the
Bank shall submit and recommend for approval of their respective
shareholders the matters to be voted upon at such meetings. The
Board of Directors of the Bank hereby does and will recommend
this Agreement, the Bank Merger Agreement and the transactions
contemplated hereby and thereby to its shareholders and use its
best efforts to obtain the votes and approvals of its
shareholders necessary for the approval and adoption of the
matters contemplated hereby. Bancshares agrees to vote all
shares of Bank Stock that it owns of record for the approval of
<PAGE>this Agreement and the Bank Merger Agreement at the special
meeting of shareholders of the Bank.
6.04 CURRENT INFORMATION. During the period from the date
of this Agreement to the Closing Date, each party will promptly
furnish all other parties with copies of all relevant interim
financial statements (monthly in the case of Bancshares and the
Bank and quarterly in the case of Buyer) as the same become
available and shall cause one or more of its designated
representatives to confer on a regular and frequent basis with
representatives of the other party. Each party shall promptly
notify the other parties of the following events immediately upon
learning of the occurrence thereof, describing the same and, if
applicable, the steps being taken by the affected party with
respect thereto: (a) the occurrence of any event which could
cause any representation or warranty of such party or any
schedule, statement, report, notice, certificate or other writing
furnished by such party to be untrue or misleading in any
respect; (b) any material change in its business, financial
condition, results of operations or prospects; (c) the issuance
or commencement of any governmental and/or regulatory agency
complaint, investigation or hearing or any communications
indicating that the same may be contemplated and, as to any such
matter which shall now or hereafter be in effect, any
communications pertaining thereto; or (d) the institution or the
threat of any material litigation involving such party.
6.05 ENVIRONMENTAL REPORTS. The Bank shall provide to the
Buyer within twenty (20) days after request, with respect to all
Real Property presently owned by the Bank, and as soon as
reasonably practicable, but not later than twenty (20) business
days, after the acquisition or leasing, foreclosure or
repossession by the Bank of any Real Property subsequent to the
date hereof, a report of a phase one environmental investigation
of such Real Property consistent with ASTM practices (excluding
space in retail or similar establishments leased by the Bank for
automatic teller machines or bank branch facilities where the
space leased comprises less than 20% of the total space leased to
all tenants of such property). If required by the phase one
report with respect to any parcel of real property referred to
above, in the reasonable opinion of the Buyer, the Buyer shall be
permitted to obtain, at its expense, a phase two investigation
report on such designated parcels as soon as practicable. The
Buyer shall have fifteen (15) business days from the receipt of
any such phase two investigation report to notify the Sellers of
any dissatisfaction with the contents of such report. If the
Buyer is dissatisfied with the contents of such report due to the
fact that: (i) the estimated costs of all remedial or other
corrective actions or measures with regard to the real property
referred to above required by applicable law (the "Remediation
Costs") exceed $150,000 in the aggregate, as reasonably estimated
by an environmental expert retained for such purpose by the
Buyer, or (ii) the costs of such remedial or other corrective
actions cannot be reasonably estimated by such expert to be
$100,000 or less with any reasonable degree of certainty, then
the Buyer, at its sole discretion, shall have the right to
terminate this Agreement upon fifteen (15) days' notice to
Sellers unless Sellers, upon receipt of such notice, elect
<PAGE>within fifteen (15) days thereafter to reduce the
Bancshares Merger Consideration by an amount equal to the
Remediation Costs (or in the case of an inability to estimate
such costs, by an amount equal to the actual costs of such
required remedial or other corrective actions), in which case the
Bancshares Merger Consideration shall be so reduced and this
Agreement shall not be terminated pursuant to this Section.
6.06 EXPENSES. Each party hereto shall bear its own costs
and expenses incident to preparing, entering into and carrying
out this Agreement, the Merger Agreements and the transactions
contemplated hereby and thereby, whether or not the Mergers shall
be consummated or this Agreement shall subsequently be
terminated.
6.07 MISCELLANEOUS AGREEMENTS AND CONSENTS. Subject to the
terms and conditions herein provided, each of the parties hereto
agrees to use its best efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by
this Agreement and the Merger Agreements as expeditiously as
possible, including, without limitation, using their respective
best efforts to lift or rescind any injunction or restraining
order or other order adversely affecting the ability of the
parties to consummate the transactions contemplated hereby and
thereby. The Sellers and the Buyer Entities shall use their best
efforts to obtain consents of all third parties and governmental
bodies necessary or, in the opinion of any of the foregoing,
desirable for the consummation of the transactions contemplated
by this Agreement and the Merger Agreements.
6.08 PRESS RELEASES AND DISCLOSURE OF AGREEMENT. The
Sellers and the Buyer Entities shall consult with each other as
to the form and substance of any proposed press release or other
proposed public disclosure of matters related to this Agreement,
the Merger Agreements or any of the transactions contemplated
hereby or thereby. Unless in the reasonable opinion of Buyer's
counsel an announcement is required by the securities laws, no
announcement shall be made by either party without the consent of
the other party unless and until either: (i) the Buyer Due
Diligence Period shall have expired or (ii) Buyer has notified
Bancshares that Buyer waives its termination right pursuant to
Section 8.01(d) and Section 8.01(f). The Buyer Entities shall
cooperate with Sellers during the Due Diligence Period to prevent
the knowledge of the existence of the Agreement and the propose
transaction to become known to Sellers' employees and the general
public.
<PAGE>
6.09 INDEMNIFICATION OF BANCSHARES' AND THE BANK'S
DIRECTORS, OFFICERS AND EMPLOYEES.
(a) Buyer agrees that the Mergers shall not affect or
diminish any of the duties and obligations of indemnification of
the Surviving Entities (with respect to the Bank and Bancshares)
existing at the Bancshares Merger Effective Time and the Bank
Merger Effective Time in favor of employees, agents, director or
officers of the Surviving Entities arising by virtue of its
charter or Bylaws in the form in effect at the date hereof or
arising by operation of law or arising by virtue of any contract,
resolution, or other agreement or document existing at the date
hereof, and such duties and obligations shall continue in full
force and effect for so long as they would otherwise survive and
continue in full force and effect. To the extent that the
Surviving Entities' existing directors' and officers' liability
insurance policy would provide coverage for any action or
omission occurring prior to the Bancshares Merger Effective Time
or the Bank Merger Effective Time, the Sellers agree to give
proper notice to the insurance carrier and to the Buyer Entities
of a potential claim thereunder so as to preserve the Surviving
Entities' rights to such insurance coverage.
(b) If after the Bancshares Merger Effective Time or
the Bank Merger Effective Time, the Surviving Entities or any of
their respective successors or assigns (i) shall consolidate with
or merge into any other corporation or entity and shall not be
the continuing or surviving corporation or entity of such
consolidation or merger or (ii) shall transfer all or
substantially all of its properties and assets to any individual,
corporation or entity, that in each such case, proper provisions
shall be made so that the successors and assigns of the Surviving
Entities shall assume any remaining obligations of such surviving
corporation or bank set forth in this Section 6.09. If the
Surviving Entities shall liquidate, dissolve or otherwise wind up
either of their businesses, then ENB shall indemnify, defend and
hold harmless each Indemnified Party to the same extent and on
the same terms that the Surviving Entities were so obligated
pursuant to this Section 6.09.
6.10 EMPLOYMENT AGREEMENTS. At the Closing, ENB and Robert
S. Wheeler will enter into a three-year employment agreement, in
the form attached hereto as Exhibit C.
6.11 APPOINTMENT TO BUYER ADVISORY BOARD. ENB agrees that
following the Closing, Julius F. Wall will be appointed as an
Advisory Director of ENB and will be allowed to attend all
official board meetings of ENB. Although as an Advisory
Director, Julius F. Wall will not be entitled to vote on matters
coming before the Board, he will be allowed to express his
opinion regarding Board matters and furthermore will receive
compensation as an Advisory Director which shall be equal to the
compensation received by regular Directors of ENB.
<PAGE>
6.12 MERGER AGREEMENTS. At a time determined by the Buyer
after the expiration of the Buyer Due Diligence Period,
Bancshares shall execute the Bancshares Merger Agreement and the
Bank shall execute the Bank Merger Agreement.
6.13 REGULATORY APPROVALS. The Buyer Entities shall use
their best efforts to file within ten (10) business days
following the expiration of the Buyer Due Diligence Period, and
to diligently prosecute, all regulatory applications required to
be filed by it in order to consummate the Mergers. The Buyer
Entities shall use their reasonable best efforts to obtain all
legally required approvals for the consummation of the Mergers
and the other transactions contemplated hereby. The Buyer
Entities shall keep Sellers reasonably informed as to the status
of such applications and make available to Sellers, upon
reasonable request by Sellers from time to time, copies of such
applications and any supplementally filed materials.
6.14 BREACHES. Each of Buyer and Acquisition Company shall,
in the event it has knowledge of the occurrence, or impending or
threatened occurrence, of any event or condition which would
cause or constitute a breach (or would have caused or constituted
a breach had such event occurred or been known prior to the date
hereof) of any of its representations or agreements contained or
referred to herein, give prompt written notice thereof to Sellers
and use its best efforts to prevent or promptly remedy the same.
6.15 CONSUMMATION OF AGREEMENT. ENB and the Buyer Entities
shall perform and fulfill all conditions and obligations on their
part to be performed or fulfilled under this Agreement and to
effect the Mergers in accordance with the terms and conditions of
this Agreement, including, but not limited to, (i) ENB delivering
cash in the amount of the Bancshares Merger Consideration to
Acquisition Company prior to the Bancshares Effective Time and
(ii) Acquisition Company paying cash in the amount of the
Bancshares Merger Consideration to the shareholders of Bancshares
on the Closing Date.
ARTICLE VII
CONDITIONS
7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGERS. The respective obligations of each party to effect the
Mergers shall be subject to the fulfillment or waiver at or prior
to the Closing Date of the following conditions:
(a) The approval of the Bancshares Merger, this
Agreement and the Bancshares Merger Agreement shall have received
the approval of the Board of Directors of Buyer and the requisite
vote of shareholders of Bancshares at the special meeting of
shareholders called pursuant to Section 6.03 hereof.
<PAGE>
(b) This Agreement, the Bank Merger Agreement and the
transactions contemplated hereby and thereby shall have been
approved by the FDIC, the Missouri Director of Finance and any
other federal and/or state regulatory agencies whose approval is
required for consummation of the transactions contemplated
hereby, and such approvals shall be continuing in effect.
(c) Neither Bancshares, the Bank, Buyer nor
Acquisition Company shall be subject to any order, decree or
injunction of a court or agency of competent jurisdiction which
enjoins or prohibits the consummation of the Bancshares Merger or
the Bank Merger.
(d) No litigation challenging the Bancshares Merger or
the Bank Merger shall be pending or have been threatened.
7.02 CONDITIONS TO OBLIGATIONS OF THE SELLERS. The
obligations of the Sellers to effect the Bancshares Merger or the
Bank Merger shall be subject to the fulfillment or waiver at or
prior to the Bancshares Merger Effective Time and the Bank Merger
Effective Time of the following additional conditions:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Buyer Entities set forth in
Article IV hereof shall be true and correct in all material
respects, except such as are not of a magnitude as to be
materially adverse to the business, financial condition, results
of operations or prospects of Buyer and its subsidiaries, taken
as a whole, as of the date of this Agreement and as of the
Closing Date (as though made on and as of the Closing Date except
(i) to the extent such representations and warranties are by
their express provisions made as of a specified date, (ii) where
the facts which caused the failure of any representation or
warranty to be so true and correct have not resulted, and are not
likely to result, in a material adverse effect on the condition
of Buyer and its subsidiaries taken as a whole and (iii) for the
effect of transactions contemplated by this Agreement) and the
Sellers shall have received a signed certificate which is to the
best knowledge of the Chairman of the Board and President of
Buyer, signing solely in his capacity as an officer of Buyer, and
is to that effect and also states that all of the conditions set
forth in Sections 7.01 and 7.03 shall have been satisfied or
waived as provided therein.
(b) PERFORMANCE OF OBLIGATIONS. The Buyer Entities
shall have performed in all material respects all obligations
required to be performed by each under this Agreement prior to
the Bancshares Merger Effective Time and the Bank Merger
Effective Time, and the Sellers shall have received a signed
certificate which is to the knowledge of the Chairman of the
Board and President of Buyer, signing solely in his capacity as
an officer of Buyer, and is to that effect.
<PAGE>
(c) PERMITS, AUTHORIZATIONS, ETC.. The Buyer Entities
shall have obtained any and all material permits, authorizations,
consents, waivers and approvals required for the lawful
consummation by them of the Mergers and all waiting periods
required by law shall have expired.
(d) NO MATERIAL ADVERSE CHANGE. Since the date of
this Agreement, there shall have been no material adverse change
in the business, financial condition, results of operations or
prospects of Buyer and its subsidiaries, taken as a whole.
7.03 CONDITIONS TO OBLIGATIONS OF THE BUYER ENTITIES. The
obligations of the Buyer Entities to effect the Bancshares Merger
and the Bank Merger shall be subject to the fulfillment or waiver
at or prior to the Bancshares Merger Effective Time and the Bank
Merger Effective Time of the following additional conditions:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Sellers set forth in
Article III hereof shall be true and correct in all material
respects, except such as are not of a magnitude as to be
materially adverse to the business, financial condition, results
of operations or prospects of Bancshares or the Bank, as of the
date of this Agreement and as of the Closing Date (as though made
on and as of the Closing Date except (i) to the extent such
representations and warranties are by their express provisions
made as of a specific date, (ii) where the facts which caused the
failure of any representation or warranty to be so true and
correct have not resulted, and are not likely to result, in a
material adverse effect on the condition of Bancshares or the
Bank and (iii) for the effect of transactions contemplated by
this Agreement) and Buyer shall have received a signed
certificate which is to the best knowledge of the Chairman of the
Board and President of each of Bancshares and the Bank and is to
that effect.
(b) PERFORMANCE OF OBLIGATIONS. The Sellers shall
have performed in all material respects all obligations required
to be performed by them under this Agreement prior to the Closing
Date, and Buyer shall have received a signed certificate which is
to the knowledge of the Chairman of the Board and President of
each of Bancshares and the Bank and is to that effect.
(c) PERMITS, AUTHORIZATIONS, ETC. The Sellers shall
have obtained any and all material consents or waivers from other
parties to loan agreements, leases or other contracts material to
Bancshares or the Bank's businesses required for the consummation
of the Bancshares Merger and the Bank Merger, and the Sellers
shall have obtained any and all material permits, authorizations,
consents, waivers and approvals required for the lawful
consummation by it of the Bancshares Merger and the Bank Merger.
<PAGE>
(d) NO MATERIAL ADVERSE CHANGE. Since the date of
this Agreement, there shall have been no material adverse change
in the business, assets (real, personal or mixed), financial
condition or results of operations of Bancshares or the Bank.
(e) OPINION OF COUNSEL. The Sellers shall have
delivered to Buyer an opinion of counsel to the Sellers dated as
of the Closing Date or a mutually agreeable earlier date in
substantially the form set forth as Exhibit D to this Agreement.
(f) PROCEEDINGS AND INSTRUMENTS SATISFACTORY. All
proceedings, corporate or other, to be held or taken in
connection with the transactions contemplated by this Agreement,
and all documents incident thereto, shall be reasonably
satisfactory in form and substance to counsel to Buyer, and
Sellers shall have made available to Buyer and its authorized
representatives for examination the originals or true and correct
copies of all documents relating to the business and affairs of
Bancshares and the Bank which Buyer and its authorized
representatives may reasonably request.
(g) EMPLOYMENT OF WHEELER. Buyer and Robert S.
Wheeler shall have entered into an employment agreement on terms
satisfactory to Buyer and as described in Section 6.10.
(h) TOTAL ASSETS OF THE BANK. As of the Closing Date,
the total assets of the Bank shall be equal to or greater than
$65,000,000, and the tangible equity capital of the Bank shall be
equal to or greater than $6,000,000, excluding unrealized
securities gains or losses and realized securities gains during
calendar year 1999.
(i) INDEBTEDNESS OF BANCSHARES. As of the Closing
Date, the principal amount of the total indebtedness of
Bancshares shall not exceed the principal amount of the total
indebtedness of Bancshares as of June 30, 1999.
(j) LIMITATION ON CERTAIN LOANS AND NON-PERFORMING
ASSETS. The aggregate amount of all loans described by Section
3.09(f)(vi) and all Non-Performing Assets pursuant to Section
3.12(c) shall not exceed $250,000.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01 TERMINATION. This Agreement may be terminated at any
time prior to the Closing Date, whether before or after approval
by the shareholders of Bancshares,
<PAGE>
(a) by mutual consent by the Board of Directors of
Buyer and the Board of Directors of Bancshares;
(b) by the Board of Directors of Buyer or the Board of
Directors of Bancshares hereto at any time after March 31, 2000,
if the Mergers shall not theretofore have been consummated;
(c) by the Board of Directors of Buyer or the Board of
Directors of Bancshares if the FDIC, the Missouri Director of
Finance or any other federal and/or state regulatory agency whose
approval is required for the consummation of the Mergers shall
have denied approval of such transaction;
(d) by the Board of Directors of Buyer, at any time
prior to the completion of the Buyer Due Diligence Period, in the
event the Buyer, in good faith, determines in the course of its
due diligence examination of Bancshares and the Bank that the
Book Value thereof is not accurately stated on its books and
records, that the loan loss reserve is inadequate, or that there
has been a material breach of warranties on the part of Sellers
and further that Sellers have not agreed to financial statement
adjustments proposed in good faith by Buyer based upon its due
diligence or otherwise cured any breach of warranty.
(e) by the Board of Directors of Buyer or Bancshares
at any time prior to the expiration of the Buyer Due Diligence
Period, if, based on communications received from a Regulatory
Authority having jurisdiction over the transactions contemplated
by this Agreement, such Board of Directors concludes, in
consultation with its counsel, that the Regulatory Authority's
disapproval of the transactions contemplated by this Agreement is
more likely than its approval thereof;
(f) by the Board of Directors of Buyer, on the one
hand, or by the Board of Directors of Bancshares, on the other
hand, in the event of a breach by the other of any
representation, warranty or agreement contained in this
Agreement, which breach is of such a magnitude as to be
materially adverse to the business, financial condition, results
of operations or prospects of the breaching party and its
subsidiaries taken as a whole and is not cured after 30 days'
written notice thereof is given to the party committing such
breach or waived by such other party or parties;
(g) by the Board of Directors of Buyer pursuant to and
in accordance with the provisions of Section 6.05 hereof; or
(h) by the Board of Directors of Buyer in the event
that it reasonably determines that a material adverse change in
the financial position or business of Bancshares or the Bank
shall have occurred or if Bancshares or the Bank shall have
suffered a material <PAGE>loss or damage to any of their
properties or assets, which loss or damage materially adversely
affects or impairs their ability to conduct their businesses, or
if any suit or similar proceeding shall be instituted or
threatened by any party which in the opinion of counsel to Buyer
may result in the restraint, prohibition or obtaining of damages
or other relief in connection with this Agreement or the
consummation of the transactions contemplated thereby; or
8.02 EFFECT OF TERMINATION. In the event of termination of
this Agreement as provided in Section 8.01 above, this Agreement
shall forthwith become void and without further effect and there
shall be no liability on the part of any party hereto or the
respective officers and directors of each, except as set forth in
the second sentence of Section 6.01(a), Section 6.06 and Article
IX, and, except that no termination of this Agreement pursuant to
subsection (e) of Section 8.01 shall relieve the non-performing
party of any liability to any other party hereto arising from the
breach or non-performance of any warranty or covenant herein,
after the giving of notice and the opportunity to cure. The
parties recognize that the remedies at law of Buyer for a breach
by any Seller are inadequate and that in addition to other
remedies, Buyer shall be entitled to specific performance and
other equitable remedies. Notwithstanding the foregoing, in the
event that this Agreement is terminated pursuant to Section
8.01(e) hereof on the account of a willful breach of any of the
representations and warranties set forth herein or any breach of
any of the agreements set forth herein, then the non-breaching
party shall be entitled to recover actual damages or liquidated
damages, as appropriate, from the breaching party; provided,
however, that no party shall be liable for a breach of any
representation or warranty unless such party had actual knowledge
of the inaccuracy or breach of such representation or warranty
which results in the termination of this Agreement prior to the
Closing Date at the time that it was made. For the purposes of
the foregoing, "actual knowledge" in the case of Sellers shall
mean the knowledge of any director, Chief Executive Officer or
Chief Financial Officer of the Bank or Bancshares.
8.03 AMENDMENT. This Agreement, the Exhibits and the
Schedules hereto may be amended by the parties hereto, by action
taken by or on behalf of the respective Boards of Directors of
Buyer and Bancshares, at any time before or after approval of
this Agreement and the Bancshares Merger Agreement by the
shareholders of Bancshares; provided, however, that no such
modification shall (a) alter the amount or change the form of the
Bancshares Merger Consideration contemplated by this Agreement to
be received by the shareholders of Bancshares, (b) adversely
affect the tax treatment of the Shareholders, (c) alter or change
any of the terms of this Agreement if such alteration or change
would adversely affect the shareholders of Bancshares or (d)
impede or delay receipt of any approvals referred to in Section
7.01(b) or the consummation of the transactions contemplated by
this Agreement and the Bancshares Merger Agreement. This
Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
<PAGE>
8.04 WAIVER. Any term, condition or provision of this
Agreement may be waived in writing at any time by the party which
is, or whose shareholders are, entitled to the benefits thereof.
ARTICLE IX
INDEMNIFICATION
9.01 INDEMNIFICATION. The Shareholders, jointly and
severally, and Buyer (individually, the "Indemnifying Party")
agree to defend, indemnify and hold harmless the other party or
parties (the "Indemnitee") and its or their officers, directors,
employees, agents, representatives, successors and assigns from,
against and in respect of any and all loss, liability and expense
resulting from:
(a) Any and all loss, diminution in value, damage or
deficiency resulting from any misrepresentation or breach of
warranty or nonfulfillment of any obligation by Indemnifying
Party under this Agreement or from any misrepresentation in or
omission from any certificate or other instrument furnished or to
be furnished by Indemnifying Party pursuant to this Agreement;
and
(b) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses (including
legal expenses) incident to any of the foregoing provisions.
9.02 CLAIMS. If any Indemnitee receives notice of any claim
or the commencement of any action or proceeding with respect to
which the Indemnifying Party is obligated to provide
indemnification pursuant to Section 9.01, the Indemnitee shall
promptly give the Indemnifying Party notice thereof. Such notice
shall be a condition precedent to any liability of the
Indemnifying Party under the provisions for indemnification
contained in this Agreement and shall describe the claim in
reasonable detail and shall indicate the amount (estimated if
necessary) of the loss that has been or may be sustained by the
Indemnitee. The Indemnifying Party may elect to compromise or
defend, at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any such matter involving the
asserted liability of the Indemnitee; provided, however, that to
the satisfaction of the Indemnitee, the Indemnifying Party shall
indemnify and secure the Indemnitee against such contested claims
and for the expenses of contesting and defending the claims. If
the Indemnifying Party elects to compromise or defend such
asserted liability, it shall within 30 days (or sooner, if the
nature of the asserted liability so requires) notify the
Indemnitee of its intent to do so, and the Indemnitee shall
cooperate, at the expense of the Indemnifying Party, in the
compromise of, or defense against, any such asserted liability.
If the Indemnifying Party elects not to notify the Indemnitee of
its election as herein provided, the Indemnitee may, if acting in
accordance with its good faith business judgment, pay, compromise
or defend such asserted liability, and such settlement shall be
binding on the <PAGE>Indemnifying Party for purposes of this
Article IX. Notwithstanding the foregoing, neither the
Indemnifying Party nor the Indemnitee may settle or compromise
any claim over the objection of the other; provided, however,
that consent to settlement or compromise shall not be
unreasonably withheld. In any event, the Indemnitee and the
Indemnifying Party may each participate, at its own expense, in
the defense of such asserted liability. If the Indemnifying
Party chooses to defend any claim, the Indemnitee shall make
available to the Indemnifying Party any books, records or other
documents within its control that are necessary or appropriate
for such defense.
9.03 COSTS. If any legal action or other proceeding is
brought by any party to this Agreement against any other party to
this Agreement for the enforcement or interpretation of any of
the rights or provisions of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Agreement, the
successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and all other costs and expenses
incurred in that action or proceeding, in addition to any other
relief to which it may be entitled.
9.04 REIMBURSEMENT. Subject to the provisions of
Section 8.03, the Indemnitee shall be reimbursed on demand for
loss, damage, cost or expense suffered by such party at any time
after the Closing Date in respect to any liability to which the
foregoing indemnity relates.
9.05 NET LOSS AND DE MINIMIS. Except for any knowing and
intentional breach hereof by any party, no indemnity shall be due
hereunder until such time as the actual net loss or damage (i.e.,
reduced by any recovery from any third party, such as an insurer)
suffered by the Indemnitee exceeds a cumulative aggregate amount
(as to all indemnifiable claims to the date of determination
combined) equal to $15,000. After cumulative aggregate losses
equal $15,000, Indemnitee shall be entitled to full and complete
recovery of all losses incurred, including the first $15,000.
9.06 LIMITATIONS. Notwithstanding any provision of this
Article IX to the contrary, the extent of indemnification herein
to an Indemnitee by each Indemnifying Party who is also a
Shareholder shall be limited to that portion of the Bancshares
Merger Consideration that such Shareholder would be entitled to
received under this Agreement. Notwithstanding any provision of
this Agreement, no Indemnitee shall be entitled to any
reimbursement hereunder from an Indemnifying Party with respect
to any claim initially made against such Indemnifying Party more
than 12 months after the Closing Date.
ARTICLE X
GENERAL PROVISIONS
10.01 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. No investigation by the parties hereto made
heretofore or hereafter shall affect the representations and
warranties of the parties which are contained herein and each
such representation and warranty shall <PAGE>survive such
investigation until the first anniversary of the Closing Date,
except that the agreements set forth in Section 8.02 shall
survive the Bancshares Merger Effective Time and the Bank Merger
Effective Time or the earlier termination of this Agreement.
10.02 NO ASSIGNMENT; SUCCESSORS AND ASSIGNS. This
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, but
neither this Agreement nor any right or obligation set forth in
any provision hereof may be transferred or assigned by any party
hereto without the prior written consent of all other parties,
and any purported transfer or assignment in violation of this
Section 10.02 shall be void and of no effect. There shall not be
any third party beneficiaries of any provisions hereof.
10.03 SEVERABILITY. Whenever possible, each provision
of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement shall be held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating
the remaining provisions of this Agreement.
10.04 NO IMPLIED WAIVER. No failure or delay on the
part of either party hereto to exercise any right, power or
privilege hereunder or under any instrument executed pursuant
hereto shall operate as a waiver nor shall any single or partial
exercise of any right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege.
10.05 HEADINGS. Article, section, subsection and
paragraph titles, captions and headings herein are inserted only
as a matter of convenience and for reference, and in no way
define, limit, extend or describe the scope of this Agreement or
the intent or meaning of any provision hereof.
10.06 ENTIRE AGREEMENT. This Agreement and the
Appendices and Schedules hereto constitutes the entire agreement
between the parties with respect to the subject matter hereof,
supersedes all prior negotiations, representations, warranties,
commitments, offers, letters of interest or intent, proposal
letters, contracts, writings or other agreements or
understandings with respect thereto. No waiver, and no
modification or amendment of any provision of this Agreement
shall be effective unless specifically made in writing and duly
signed by all parties thereto.
10.07 COUNTERPARTS. This Agreement may be executed in
one or more counterparts, and any party to this Agreement may
execute and deliver this Agreement by executing and delivering
any of such counterparts, each of which when executed and
delivered shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
<PAGE>
10.08 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to be duly
received (a) on the date given if delivered personally or by
cable, telegram or telex or (b) on the date received if mailed by
registered or certified mail <PAGE>(return receipt requested), to
the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(i) if to the Buyer Entities:
Union State Bank & Trust of Clinton
102 N. Second Street
P.O. Box 646
Clinton, Missouri 64735-0646
Attention: James E. Smith
President
Telecopy: (816) 885-6820
and copy to:
Stinson, Mag & Fizzell, P.C.
1201 Walnut Street, Suite 2800
Kansas City, MO 64106
Attention: Howard H. Mick
Telecopy: 816-691-3495
(ii) if to Sellers:
Julius F. Wall
Box 226
Clinton, MO 64735-2356
Telecopy: (660) 885-2792
and copy to:
E. L. Burch
E.L. Burch & Associates
Platte Valley Bank of Missouri
2400 Prairie View Road
Platte City, Missouri 64079
Telecopy: (816) 858-2905
Keith W. Hicklin
Witt & Hicklin, P.C.
4th and Main, P.O. Box 1517
Platte City, MO 64079
Telecopy: (816) 858-3009
10.09 GOVERNING LAW. This Agreement shall be governed
by and controlled as to validity, enforcement, interpretation,
effect and in all other respects by the internal laws of the
State of Missouri applicable to contracts made in that state.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this
Agreement to be signed by their respective officers thereunto
duly authorized and their respective corporate seals to be
affixed hereto, all as of the date first written above.
"BUYER ENTITIES"
EXCHANGE NATIONAL BANCSHARES, INC.
ATTEST:
By: ___________________________________
Name:
Title:
____________________
Secretary
UNION STATE BANCSHARES, INC.
ATTEST:
By: __________________________________
Name:
Title:
_____________________
Secretary
<PAGE>
UNION STATE BANK & TRUST OF CLINTON
ATTEST:
By: ___________________________________
Name:
Title:
____________________
Secretary
USBT ACQUISITION COMPANY, INC.
ATTEST:
By: ________________________________
Name:
Title:
___________________
Secretary
"SELLERS"
CALHOUN BANCSHARES, INC.
ATTEST:
By: ________________________________
Name:
______________________ Title:
Secretary
CITIZENS STATE BANK OF CALHOUN
ATTEST:
By: ________________________________
Name:
_______________________ Title:
Secretary
<PAGE>
"SHAREHOLDERS"
_______________________________________
Julius F. Wall
_______________________________________
Sara M. Wall
_______________________________________
Robert S. Wheeler
Exhibit 2.2
ACQUISITION AGREEMENT
This Acquisition Agreement (this "Agreement") is made
and entered into as of September 22, 1999 by and among
EXCHANGE NATIONAL BANCSHARES, INC., a Missouri corporation
("Buyer"), ENBMCB ACQUISITION COMPANY, INC., a Missouri
corporation ("Acquisition Company," and collectively with
Buyer, the "Buyer Entities"), MID-CENTRAL BANCORP, INC.
("Bancshares"), OSAGE VALLEY BANK, a Missouri bank (the
"Bank") and the undersigned shareholders of Bancshares
(collectively the "Shareholders," and, together with
Bancshares and the Bank, the "Sellers").
WITNESSETH:
WHEREAS, Buyer is the beneficial and record owner of
one hundred percent (100%) of the issued and outstanding
shares of the common stock of Acquisition Company;
WHEREAS, Bancshares is the beneficial and record
owner of the one (1) issued and outstanding share of the
common stock of the Bank, par value $50,000 ("Bank Stock");
WHEREAS, the Shareholders are the beneficial and/or
record owners of two thirds or more of the 4,364 issued and
outstanding shares of the common stock of Bancshares
("Bancshares Stock");
WHEREAS, Buyer desires to acquire one hundred percent
(100%) of the issued and outstanding shares of Bancshares
Stock;
WHEREAS, the Shareholders desire to sell their shares
of Bancshares Stock to Buyer pursuant to the terms herein set
forth and believe that all other shareholders of Bancshares
would similarly desire to sell their shares of Bancshares
Stock to Buyer;
WHEREAS, in order to provide for the acquisition of
the shares of Bancshares Stock held by the Shareholders and
all other shareholders of Bancshares, Buyer has organized
Acquisition Company which proposes to merge with and into
Bancshares as provided in this Agreement and the Bancshares
Merger Agreement;
WHEREAS, the Buyer Entities and the Sellers desire to
provide for certain undertakings, conditions, representations,
warranties and covenants in connection with the transactions
contemplated by this Agreement.
<PAGE>
NOW, THEREFORE, in consideration of the premises and
the representations, warranties and agreements herein
contained, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 "Acquisition Company" means ENBMCB Acquisition
Company, Inc., a Missouri corporation.
1.02 "Bancshares" means Mid-Central Bancorp, Inc., a
Missouri corporation and registered bank holding company.
1.03 "Bancshares Merger" means the merger of
Acquisition Company with and into Bancshares, with Bancshares
being the surviving corporation.
1.04 "Bancshares Merger Agreement" means the Merger
Agreement between Bancshares and Acquisition Company, attached
hereto as Exhibit A.
1.05 "Bancshares Merger Consideration" means a cash
amount computed pursuant to generally accepted accounting
principles as follows: (i) the sum of $8,565,000, (ii) plus
(minus) the amount, if any that the Tangible Equity Capital of
the Bank shall be greater (less) than $4,500,000 as of the
Determination Date MINUS (iii) the amount of any indebtedness
or other liabilities of Bancshares as of the Determination
Date; provided, however, if the Closing occurs after January
3, 2000, the Bancshares Merger Consideration shall also
include the combined pretax income of the Bank and Bancshares
for the month in which the Closing occurs through the last
business day prior to the Closing, and such amount shall be
determined by allocation of the total pretax income for such
month based on the number of days of such month which
transpire prior to the Closing Date.
1.06 "Bancshares Merger Effective Time" means the
date and the time that the Missouri Secretary of State issues
a certificate of merger with respect to the Bancshares Merger.
1.07 "Bank" means Osage Valley Bank, a Missouri
banking corporation that is not a member of the Federal
Reserve System.
1.08 "BHC Act" means the Bank Holding Company of
1956, as amended.
1.09 "Buyer" means Exchange National Bancshares,
Inc., a Missouri corporation that is a registered bank holding
company.
<PAGE>
1.10 "Buyer Due Diligence Period" means the period of
time commencing on the date of execution of this Agreement
and ending 30 days thereafter, or on such earlier date as
Buyer shall have terminated such period by notice to the
Sellers.
1.11 "Buyer Due Diligence Review" means the review by
Buyer during the Buyer Due Diligence Period of Bancshares and
the Bank and their respective operations, business affairs,
prospects and financial condition, including, without
limitation, those matters which are the subject of Bancshares'
and the Bank's representations and warranties included herein.
1.12 "Closing Date" means the date as defined in
Section 2.02 of this Agreement.
1.13 "Determination Date" means the last day of the
month ending prior to the Closing Date.
1.14 "Dissenting Shares" means any shares of
Bancshares Stock held by any holder who becomes entitled to
payment of the value of such shares under Section 351.455 of
the Missouri Revised Statutes.
1.15 "Equity Securities" means the capital stock or
other equity securities of an issuer, options, warrants,
scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights
convertible into, shares of any capital stock or other equity
securities of such issuer, or contracts, commitments,
understandings or arrangements by which such issuer is or may
become bound to issue additional shares of its capital stock
or other equity securities of such issuer, or options,
warrants, scrip or rights to purchase, acquire, subscribe to,
calls on or commitments for any shares of its capital stock or
other equity securities.
1.16 "FDI Act" means the Federal Deposit Insurance
Act of 1950, as amended.
1.17 "FDIC" means the Federal Deposit Insurance
Corporation.
1.18 "GAAP" means generally accepted accounting
principles.
1.19 "Missouri Director of Finance" means the
Division of Finance of the Missouri Department of Economic
Development.
1.20 "Regulatory Authority" means any federal,
state, municipal or local government, securities, banking,
insurance and other governmental or regulatory authority, and
the agencies and staffs thereof (such entities being referred
to herein collectively as the "Regulatory Authorities").
<PAGE>
1.21 "Surviving Corporation" means Bancshares, as the
surviving corporation of the Bancshares Merger.
1.22 "Tangible Equity Capital of the Bank" means the
capital, surplus and undivided profits of the Bank, determined
in accordance with GAAP, but excluding any goodwill and other
intangible and unrealized securities gains and losses
reflected on the Bank's financial statements.
ARTICLE II
THE ACQUISITION TRANSACTION
2.01 THE ACQUISITION TRANSACTION. Subject to the
terms and conditions of this Agreement:
(a) Acquisition Company will merge with and into
Bancshares under the terms set forth in the Bancshares Merger
Agreement to be executed prior to the Closing Date by and
between Bancshares and Acquisition Company, whereby the
shareholders of Bancshares will receive the consideration as
set forth in this Agreement and the Bancshares Merger
Agreement; and
(b) the shareholders of Bancshares will receive the
amount of cash that will equal their respective percentage
ownership interest in the outstanding shares of Bancshares
Stock as of the Bancshares Merger Effective Time multiplied by
the total amount of Bancshares Merger Consideration payable in
the Bancshares Merger as set forth in Section 2.07 of this
Agreement. Upon consummation of the Bancshares Merger, the
separate corporate existence of Acquisition Company will cease
and Bancshares will be the Surviving Corporation.
2.02 CLOSING. The closing (the "Closing") of the
Bancshares Merger, unless the parties hereto shall otherwise
mutually agree, shall take place at the offices of Buyer's
counsel in Kansas City, Missouri, on January 3, 2000 at 10:00
a.m., local time, or a date thereafter designated by Buyer
(the "Closing Date"), which shall be at least two (2) business
days and not more than ten (10) business days following the
last to occur of the following events: (a) the receipt of the
requisite approval of the Bancshares Merger by the
shareholders of Bancshares, as set forth in Section 3.02 of
this Agreement and (b) the approval of the Bancshares Merger
by the Federal Reserve Board and any other bank regulatory
agency that may be necessary or appropriate, and the
expiration of any required waiting period.
<PAGE>
2.03 METHOD OF EFFECTING THE BANCSHARES MERGER AND
EFFECTIVE TIME. On the Closing Date, the parties hereto will
cause the Bancshares Merger to be consummated by delivering to
the Missouri Secretary of State, for filing, copies of the
Bancshares Merger Agreement and related articles of merger in
such form as is required by, and executed in accordance with,
the relevant provisions of Chapter 351 of the Missouri Revised
Statutes. The Bancshares Merger shall be effective at the
Bancshares Merger Effective Time.
2.04 ARTICLES AND BYLAWS. The articles of
incorporation and bylaws of Bancshares in effect immediately
prior to the Bancshares Merger Effective Time shall be the
articles of incorporation and bylaws of the Surviving
Corporation, in each case until amended in accordance with
their respective provisions and applicable law.
2.05 BOARD OF DIRECTORS AND OFFICERS. With respect
to the Bancshares Merger, at the Bancshares Merger Effective
Time, (i) the members of the Board of Directors of the
Surviving Corporation and the terms of these directors shall
be as designated by Buyer immediately prior to the Bancshares
Merger Effective Time and (ii) the officers of the Surviving
Corporation shall be the persons designated by Buyer
immediately prior to the Bancshares Merger Effective Time, and
such persons will serve in their designated offices,
thereafter, until their respective successors are duly elected
and qualified.
2.06 ADDITIONAL ACTIONS. If, at any time after the
Bancshares Merger Effective Time, the Surviving Corporation
shall consider or be advised that any further deeds,
assignments or assurances in law or any other acts are
necessary or desirable to (a) vest, perfect or confirm, of
record or otherwise, in the Surviving Corporation its right,
title or interest in, to, or under any of the rights,
properties or assets of Bancshares, or (b) otherwise carry out
the purposes of this Agreement or the Bancshares Merger
Agreement, Bancshares and its officers and directors shall be
deemed to have granted to the Surviving Corporation an
irrevocable power of attorney to execute and deliver all such
deeds, assignments or assurances in law and to do all acts
necessary or proper to vest, perfect or confirm title to and
possession of such rights, properties or assets in the
Surviving Corporation and otherwise to carry out the purposes
of this Agreement or the Bancshares Merger Agreement, and the
officers and directors of the Surviving Corporation are
authorized in the name of Bancshares or otherwise to take any
and all such action.
2.07 PAYMENT AND DELIVERY OF BANCSHARES MERGER
CONSIDERATION. At the Bancshares Merger Effective Time, on
the Closing Date, Acquisition Company shall deliver to each of
the shareholders of Bancshares such amount of cash from funds
contributed to it by Buyer pursuant to Section 6.13 as such
shareholder shall be entitled to receive pursuant to Section
2.01, and each of the shareholders of Bancshares shall
surrender to the Surviving Corporation certificates
representing the total number of shares of Bancshares Stock
owned by such shareholder.
<PAGE>
2.08 DISSENTING SHARES.
(a) Any holders of Dissenting Shares shall be
entitled to payment for such shares only to the extent
permitted by and in accordance with the provisions of such
law, and Buyer shall cause the Surviving Corporation to make
such payment.
(b) Each party hereto shall give the other prompt
notice of any written demands for the payment of the fair
value of such shareholder's shares, withdrawals of such
objections or demands, and any other instruments, served
pursuant to Section 351.455 of the Missouri Revised Statutes,
received by such party, and Bancshares shall give Buyer the
opportunity to direct all negotiations and proceedings with
respect to such objections or demands. Bancshares shall not
voluntarily make any payment with respect to any demands for
payment of value and shall not, except with the prior written
consent of Buyer, settle or offer to settle any such demands.
2.09 RESERVATION OF RIGHT TO REVISE TRANSACTION. The
Buyer Entities may at any time change the method of effecting
the acquisition by the Buyer Entities (including without
limitation the provisions of this Article II) if and to the
extent the Buyer Entities deem such change to be desirable;
provided, however, that no such change shall (a) alter or
change the amount or kind of the Bancshares Merger
Consideration, (b) in the reasonable opinion of the tax
counsel or tax advisor of the Sellers, adversely affect the
tax treatment to the holders of Bancshares Stock as a result
of receiving the Bancshares Merger Consideration or (c)
materially impede or delay receipt of any approval referred to
in Section 7.01(b) or the consummation of the transactions
contemplated by this Agreement, the Bancshares Merger
Agreement or any other agreement executed in connection
herewith. Notwithstanding the foregoing, the Buyer Entities
agree not to make an election under Section 338 or
Section 338(h)(10) of the Internal Revenue Code such that the
transaction shall be treated as a sale of assets for the
purposes of taxation.
2.10 ESCROW DEPOSITS BY BUYER.
(a) Promptly following the end of the Buyer Due
Diligence Period, Buyer will deposit, with a mutually
acceptable bank or trust company, as escrow agent, the sum of
$200,000 (the "Escrow Deposit") pursuant to an Escrow
Agreement substantially set forth as Exhibit B hereto. In the
event that the Closing does not occur, but Buyer and the Buyer
Entities are not in default under any of the terms of this
Agreement, the Escrow Deposit shall be returned to Buyer. In
the event that there is no Closing because Buyer or the Buyer
Entities are in default under any of the terms of this
Agreement applicable to them, and Sellers are in compliance
with all of the terms hereof applicable to them, the Escrow
Deposit shall be paid to the Sellers as liquidated damages for
the breach hereof by the Buyer Entities.
<PAGE>
(b) Concurrently with the Closing, Buyer will deduct
from the Bancshares Merger Consideration the sum of $100,000
in cash (the "Second Escrow Deposit") and pay such amount to
Larry L. Beach ("Beach"), the Seller's agent and
representative pursuant to Section 10.03 hereof. Such funds
shall be used by Beach to pay any (i) costs and expenses
related to any post closing adjustments to the Bancshares
Merger Consideration, (ii) any expenses of preparation of the
final tax return pursuant to Section 6.15 hereof, or (iii) any
other costs and expenses incurred by the Sellers with respect
to the Closing after the Determination Date, including any
liability for breach of warranty. If an additional payment is
required to compensate the Shareholders for any partial month
income, such amount will be paid by the Buyer to Beach to be
held and distributed as part of the Second Escrow Deposit.
Any funds remaining from the Second Escrow Deposit after
payment of the foregoing shall be disbursed to all
shareholders of Bancshares in proportion to their interests as
of the Bancshares Merger Effective Time. Buyer shall have no
responsibility to monitor or otherwise account for any funds
in the Second Escrow Deposit.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
As an inducement to the Buyer Entities to enter into and
perform their respective obligations under this Agreement, and
notwithstanding any examinations, inspections, audits and
other investigations made by the Buyer Entities, the Sellers
hereby jointly and severally represent and warrant to the
Buyer Entities as to the following matters, except that
warranties of the Bank shall relate only to matters pertaining
to the Bank and no party other than a Shareholder shall be
responsible for any warranties that relate solely to that
Shareholder:
3.01 ORGANIZATION AND AUTHORITY.
(a) Bancshares is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Missouri, is duly qualified to do business, and is in
good standing in all jurisdictions where its ownership,
leasing of property or the conduct of its business requires it
to be so qualified, and has the corporate power and authority
to own its properties and assets and to carry on its business
as it is now being conducted. Bancshares is registered as a
bank holding company with the Federal Reserve Board under the
BHC Act. A current and accurate list of Bancshares's
shareholders, including addresses thereof, and true and
complete copies of the articles of incorporation and bylaws of
Bancshares, each as in effect on the date of this Agreement,
are included in Schedule 3.01(a) hereof.
(b) The Bank is a bank duly organized, validly
existing and in good standing under the laws of the State of
Missouri. The deposits of the Bank are insured by the FDIC
under the FDI Act. The Bank is qualified to do business and is
in good standing in all jurisdictions where its ownership or
leasing of property or the conduct of its business requires
<PAGE>it to be so qualified and has the corporate power and
authority to own and operate its properties and to carry out
its business as and where the same is now being conducted. A
current and accurate list of the Bank's shareholders,
including addresses thereof, and true and complete copies of
the articles of agreement and bylaws of the Bank, each as in
effect on the date of this Agreement, are included in Schedule
3.01(b) hereof.
3.02 CORPORATE AUTHORIZATION; RECORDS.
(a) The Bank has the corporate power and authority
to enter into this Agreement and Bancshares has the corporate
power and authority to enter into this Agreement and the
Bancshares Merger Agreement and to carry out their respective
obligations thereunder, subject to (i) the approval of this
Agreement, the Bancshares Merger and the Bancshares Merger
Agreement by the shareholders of Bancshares, (ii) the approval
of this Agreement by the Board of Directors of the Bank, and
(iii) such approvals of governmental agencies and other
governing boards having regulatory authority over Bancshares
as may be required by applicable law, rule or regulation.
(b) The only shareholder vote of Bancshares required
to approve the Bancshares Merger is the affirmative vote of
the holders of two thirds of the outstanding shares of
Bancshares Stock. The execution, delivery and performance of
this Agreement and the Bancshares Merger Agreement by
Bancshares have been duly authorized by the Board of Directors
of Bancshares. The execution, delivery and performance of
this Agreement by the Bank is subject only to the approval of
the Board of Directors of the Bank. Subject to the approvals,
as aforesaid, this Agreement is the valid and binding
obligation of the Bank, and this Agreement and the Bancshares
Merger Agreement are the valid and binding obligations of
Bancshares, enforceable against each in accordance with their
respective terms.
(c) Except as set forth on Schedule 3.02(c), neither
the execution, delivery and performance by Bancshares of this
Agreement or the Bancshares Merger Agreement, nor the
consummation of the transactions contemplated thereby, nor
compliance by Bancshares with any of the provisions thereof
will (i) violate, conflict with or result in a breach of any
provisions of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate
the performance required by, or result in a right of
termination or acceleration of, or result in the creation of,
any lien, security interest, charge or encumbrance upon any of
the properties or assets of Bancshares under any of the terms,
conditions or provisions of (A) its articles of incorporation
or bylaws, or (B) any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or
obligation to which Bancshares is a party or by which it may
be bound, or to which Bancshares or any of their respective
properties or assets may be subject, or (ii) subject to
compliance with the statutes and regulations referred to in
subsection (d) of this Section 3.02, violate any judgment,
ruling, order, writ, injunction, decree, statute, <PAGE>rule
or regulation applicable to Bancshares or any of its
properties or assets.
(d) Except as set forth on Schedule 3.02(d), neither
the execution, delivery and performance by the Bank of this
Agreement, nor the consummation of the transactions
contemplated thereby, nor compliance by Bank with any of the
provisions thereof will (i) violate, conflict with or result
in a breach of any provisions of, or constitute a default (or
an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of,
or accelerate the performance required by, or result in a
right of termination or acceleration of, or result in the
creation of, any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Bank
under any of the terms, conditions or provisions of (A) its
articles of agreement or bylaws, or (B) any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement
or other instrument or obligation to which Bank is a party or
by which it may be bound, or to which the Bank or any of their
respective properties or assets may be subject, or (ii)
subject to compliance with the statutes and regulations
referred to in subsection (d) of this Section 3.02, violate
any judgment, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to the Bank or any of
its properties or assets.
(e) The minute books and stock records of Bancshares
and the Bank are complete and correct in all respects and
accurately reflect in all respects all meetings, consents and
other actions of the shareholders, Board of Directors and
committees of the Board of Directors occurring since the
organization of each.
3.03 SUBSIDIARIES. Except as set forth on Schedule
3.03, Bancshares has no subsidiaries other than the Bank and
the Bank has no subsidiaries and does not control, or have any
equity ownership interest in, any other corporation,
partnership, joint venture or other business association,
other than any interest pledged to the Bank in the ordinary
course of its business as security for the obligations of
third parties to the Bank or held by the Bank as a consequence
of its exercise of rights and remedies in respect of any
interest pledged as security in respect of such obligation.
3.04 CAPITALIZATION OF THE BANK AND BANCSHARES. The
capital stock of the Bank consists of 1 share of common stock,
$50,000 par value, which is issued and outstanding as of the
date hereof. The authorized capital stock of Bancshares
consists of 30,000 shares of common stock, $1 par value, 4,364
shares of which are issued and outstanding as of the date
hereof. Except as set forth on Schedule 3.04, Bancshares has
and will have as of the Bancshares Merger Effective Time good
and marketable title to 1 share, or 100% of the then issued
and outstanding shares of the Bank Stock, free and clear of
any liens, claims, charges, encumbrances and assessments of
any kind or nature whatsoever. There are no other shares of
capital stock or other Equity Securities of Bancshares or the
Bank outstanding. All of the <PAGE>issued and outstanding
shares of the common stock of Bancshares and the Bank are
validly issued, fully paid and nonassessable.
3.05 FINANCIAL STATEMENTS.
(a) Delivered herewith as Schedule 3.05(a) are
copies of the following financial statements:
(i) Balance sheets of Bancshares as of December
31, 1998, 1997 and 1996, and related statements of
income for the three (3) years ended December 31,
1998;
(ii) Balance sheet of Bancshares as of June
30, 1999 and related statement of income for the
six-month period ended June 30, 1999;
(iii) Form FR Y-6 reports of Bancshares as
of December 31, 1998, 1997 and 1996, and Form FR Y-9LP
and Form FR Y-9C reports filed during such
periods, as furnished by Bancshares to the Federal
Reserve Board; and
(iv) The Consolidated Reports of Condition
and Income of the Bank as of and for the years ended
December 31, 1998, 1997 and 1996, and as of and for
the three-month periods ended March 31, 1999 and June
30, 1999, as filed by the Bank with the FDIC.
(b) The financial statements referenced in
subsection (a) of this Section 3.05 are referred to
collectively as the "Bancshares Financial Statements." The
Bancshares Financial Statements have been prepared in
accordance with the books and records of Bancshares and the
Bank in accordance with GAAP or, as to the financial
statements referenced in subsection (a)(iii) and (a)(iv)
above, regulatory accounting principles, consistently applied
in both cases as applied to financial institutions, and
present fairly the consolidated financial positions of
Bancshares and the Bank, respectively, at the dates thereof
and the consolidated results of their respective operations
(subject, in the case of interim financial statements, to
normal recurring year-end adjustments, none of which will be
material).
(c) Bancshares and the Bank have each prepared, kept
and maintained through the date hereof true, correct and
complete financial and other books and records of their
affairs which fairly reflect their respective financial
conditions, results of operations, businesses, assets,
prospects or operations.
<PAGE>
3.06 REPORTS. Since January 1, 1996, Bancshares and
the Bank have filed all reports, registrations and statements,
together with any required amendments thereto, that were
required to be filed with any Regulatory Authority, having
jurisdiction over the affairs of each. All such reports and
statements filed with any such Regulatory Authority are
collectively referred to herein as the "Bancshares and Bank
Reports." As of their respective dates, the Bancshares and
Bank Reports complied in all respects with all the rules and
regulations promulgated by the applicable Regulatory
Authority. With respect to the Bancshares and Bank Reports
filed with the Regulatory Authorities, there is no material
unresolved violation, criticism or exception by any Regulatory
Authority with respect to any report or statement filed by, or
any examination of, the Bank or Bancshares.
3.07 TITLE TO AND CONDITION OF ASSETS.
(a) Except as may be reflected in the Bancshares
Financial Statements or set forth on Schedule 3.07(a) and
excepting all real property (which is the subject of Section
3.08) and any liens on any of the assets of the Bank securing
advances to the Bank by the Federal Home Loan Bank of Des
Moines, Bancshares and the Bank have, and at the Closing Date
will have, good and marketable title to their respective
properties and assets, including, without limitation, those
reflected on the Bancshares Financial Statements, free and
clear of any liens, charges, pledges, encumbrances, defects,
claims or rights of third parties, except for liens for taxes,
assessments or other governmental charges not yet delinquent.
(b) No assets reflected on the Bancshares Financial
Statements, which in the aggregate exceed $10,000, have been
sold, leased, transferred, assigned or otherwise disposed of
since June 30, 1999 except in the ordinary course of business
or as set forth in Schedule 3.07(b). All dispositions of
assets since June 30, 1999, regardless of amount, have been
made at fair value.
(c) All furniture, fixtures, vehicles, machinery and
equipment and computer software owned or used by Bancshares or
the Bank, including any of such items leased as a lessee and
all facilities and improvements comprising part of any owned
or leased real property, taken as a whole, with no single such
item being deemed of importance, are fit for the purposes for
which they were intended, are in good order and repair, free
of defects and in good operating condition, subject only to
normal wear and tear. The operation by Bancshares or the Bank
of such assets is in compliance in all material respects with
all applicable laws, ordinances and rules and regulations of
any governmental authorities having jurisdiction.
3.08 REAL PROPERTY.
(a) Bancshares owns no real property and neither
Bancshares nor the Bank is a lessee of real property, except
as set forth in Schedule 3.08(a). The legal description of
<PAGE>each parcel of real property owned by the Bank (other
than real property acquired in foreclosures or in lieu of
foreclosure in the course of collection of its loans and being
held by the Bank for disposition as required by law) is set
forth in Schedule 3.08(a) attached hereto (such real property
being herein referred to as the "Real Property").
(b) There is no pending dispute involving the Bank
as to the title of or the right to use any of its Real
Property.
(c) The Bank has no interest in any other real
property except interests as a mortgagee, and except for real
property acquired in foreclosures or in lieu of foreclosure
and being held for disposition as required by law.
(d) To the best of knowledge of Sellers, none of the
buildings, structures or other improvements located on the
Real Property encroaches upon or over any adjoining parcel or
real estate or any easement or right-of-way or "setback" line
and all such buildings, structures and improvements are
located and constructed in conformity with all applicable
zoning ordinances and building codes.
(e) To the best of knowledge of Sellers, none of the
buildings, structures or improvements located on the Real
Property are the subject of any official complaint or notice
by any governmental authority of violation of any applicable
zoning ordinance or building code, and there is no zoning
ordinance, building code, use or occupancy restriction or
condemnation action or proceeding pending, or, to the best
knowledge of the Sellers, threatened, with respect to any such
building, structure or improvement. The Real Property is in
generally good condition, reasonable wear and tear excepted,
and has been maintained in accordance with reasonable and
prudent business practices applicable to like facilities.
(f) Except as may be reflected on the Bancshares
Financial Statements or with respect to such easements, liens,
defects or encumbrances of record, which to the best knowledge
of Sellers, do not individually or in the aggregate adversely
affect the use or value of the parcel of Real Property, the
Bank has, and at the Closing Date will have, good and
marketable title to its Real Property, free and clear of any
liens, charges, pledges, encumbrances, defects, claims or
rights of third parties, except for those liens on the assets
of the Bank securing advances to the Bank by the Federal Home
Loan Bank of Des Moines and except as set forth in Schedule
3.08(f).
3.09 LOANS, COMMITMENTS AND CONTRACTS.
(a) Bancshares has no outstanding loans receivable
nor any commitments to lend. Schedule 3.09(a) contains a
complete and accurate listing of all contracts entered into
with respect to deposits of $250,000 or more, by account or
other identifying number, and all <PAGE>loan agreements and
commitments, notes, security agreements, repurchase
agreements, bankers' acceptances, outstanding letters of
credit and commitments to issue letters of credit,
participation agreements and other documents relating to or
involving extensions of credit or other commitments to extend
credit by the Bank with respect to any one entity or related
group of entities in excess of $250,000, to which any of the
foregoing is a party or by which it is bound, by account or
other identifying number, and, where applicable, such other
information as shall be necessary to identify any related
group of entities.
(b) Except for the contracts and agreements required
to be listed on Schedule 3.09(a) and except as set forth in
Schedule 3.09(b) hereto, neither Bancshares nor the Bank is a
party to or bound by any:
(i) agreement, contract, arrangement,
understanding or commitment with any labor union;
(ii) franchise or license agreement;
(iii) written employment, severance or
termination pay, agency, consulting or similar
agreement, contract, arrangement, understanding or
commitment in respect of personal services;
(iv) material agreement, arrangement or
commitment (A) not made in the ordinary course of
business, or (B) pursuant to which Bancshares or the
Bank is or may become obligated to invest in or
contribute other than pursuant to the Sellers
Employee Plans (as that term is defined in Section
3.18 hereof);
(v) agreement, indenture or other instrument
not disclosed in the Bancshares Financial Statements
relating to the borrowing of money by the Bank or
Bancshares or the guarantee by the Bank or Bancshares
of any such obligation (other than trade payables or
instruments related to transactions entered into in
the ordinary course of business by the Bank or
Bancshares such as deposits, Fed Funds borrowings,
Federal Home Loan Bank Board advances and repurchase
and reverse repurchase agreements), other than such
agreements, indentures or instruments providing for
annual payments of less than $50,000;
(vi) contract containing covenants which
limit the ability of the Bank or Bancshares to
compete in any line of business or with any person or
which involves any restrictions on the geographical
area in which, or method by which, the Bank or
Bancshares may carry on their respective businesses
(other than as may be required by law or any
applicable Regulatory Authority);
<PAGE>
(vii) lease of personal property with annual
rental payments aggregating $25,000 or more;
(viii) loans or other obligations payable or
owing to any officer, director or employee except (A)
salaries, wages and directors' fees incurred and
accrued in the ordinary course of business and (B)
obligations due in respect of any depository accounts
maintained by any of the foregoing at the Bank in the
ordinary course of business;
(ix) loans or debts payable or owing by any
executive officer or director of the Bank or
Bancshares or any other person or entity deemed an
"executive officer" or a "related interest" of the
Bank or Bancshares, as such terms are defined by the
Federal Reserve Board in Regulation O (12 C.F.R. Part
215);
(x) other agreements, contracts, arrangements,
understandings or commitments that involve
obligations by the Bank or Bancshares of more than
$25,000 in the aggregate that extend beyond six
months from the date hereof and cannot be canceled
without cost or penalty upon notice of 30 days or
less, other than contracts entered into in respect of
deposits, loan agreements and commitments, notes,
security agreements, repurchase and reverse
repurchase agreements, bankers' acceptances,
outstanding letters of credit and commitments to
issue letters of credit, participation agreements and
other documents relating to transactions entered into
by the Bank or Bancshares in the ordinary course of
business and not involving extensions of credit with
respect to any one entity or related group of
entities in excess of $250,000.
(c) The Bank and Bancshares carry property,
casualty, liability, directors and officer errors and
omissions, products liability and other insurance coverages as
set forth in Schedule 3.09(c).
(d) True, correct and complete copies of the
agreements, contracts, leases, insurance policies and other
documents referred to in Schedule 3.09(a), Schedule 3.09(b),
and Schedule 3.09(c) shall be furnished or made available to
the Buyer Entities.
(e) Each of the agreements, contracts, leases,
insurance policies and other documents referred to in Schedule
3.09(a), Schedule 3.09(b) and Schedule 3 09(c) is a valid,
binding and enforceable obligation of the parties sought to be
bound thereby, except as the enforceability thereof against
the parties thereto (other than the Bank or Bancshares) may be
limited by bankruptcy, insolvency, reorganization, moratorium
and other laws now or <PAGE>hereafter in effect relating to
the enforcement of creditors' rights generally, and except
that equitable principles may limit the right to obtain
specific performance or other equitable remedies.
(f) Schedule 3.09(f) contains a true, correct and
complete listing, as of the date of this Agreement, by account
or other identifying number, of (i) all loans in excess of
$100,000 of the Bank which have been accelerated during the
past twelve months which have not, to date, been repaid or
written off, (ii) all loan commitments or lines of credit of
the Bank in excess of $100,000 which have been terminated by
the Bank during the past twelve months by reason of default or
adverse developments in the condition of the borrower or other
events or circumstances affecting the credit of the borrower
which have not, to date, been repaid or written off, (iii) all
loans, lines of credit and loan commitments in excess of
$100,000 as to which the Bank has given written notice to the
borrower or customer of the Bank's intent to terminate during
the past twelve months which have not, to date, been repaid or
written off, (iv) with respect to all loans in excess of
$100,000, all notification letters and other written
communications from the Bank to any of its borrowers,
customers or other parties during the past twelve months
wherein the Bank has requested or demanded that actions be
taken to correct existing material defaults or material facts
or circumstances which may become defaults, (v) each borrower,
customer or other party which has notified the Bank during the
past twelve months of, or asserted against the Bank, in
writing, any "lender liability" or similar claim, and each
borrower, customer or other party which has given the Bank any
oral notification of, or asserted against the Bank, any such
claim, and (vi) all loans in excess of $50,000 (1) that are
contractually past due 90 days or more in the payment of
principal and/or interest, (2) that are on non-accrual status,
(3) where a reasonable doubt exists as to the timely future
collectibility of future principal and interest, whether or
not interest is still accruing or the loan is less than 90
days past due, (4) the interest rate terms have been reduced
and/or the maturity dates have been extended subsequent to the
agreement under which the loan was originally created due to
concerns regarding the borrower's ability to pay in accordance
with such initial terms, (5) where a specific reserve
allocation exists in connection therewith, or (6) that have
been classified "substandard," "doubtful" or "loss" or the
equivalent thereof by any Regulatory Authority.
3.10 ABSENCE OF DEFAULTS. Except as set forth in
Schedule 3.10, there are no pending disputes between the Bank
or Bancshares and the other parties to the agreements,
contracts, leases, insurance policies and other documents
referred to in Schedule 3.09(a), Schedule 3.09(b), and
Schedule 3.09(c), and to the best knowledge of the Sellers,
all such agreements, contracts, leases, insurance policies and
other documents are in full force and effect and not in
default with respect to the Bank or Bancshares or any other
party thereto, and will continue in full force and effect
immediately after the Closing Date.
<PAGE>
3.11 ABSENCE OF UNDISCLOSED LIABILITIES. Except as
disclosed in Schedule 3.11 or in any other Schedule delivered
herewith:
(a) As of the date hereof, neither the Bank nor
Bancshares has any debts, liabilities or obligations, equal to
or exceeding $25,000, individually, or $50,000, in the
aggregate, whether accrued, absolute, contingent or otherwise
and whether due or to become due, which are required to be
reflected in the Bancshares Financial Statements or the notes
thereto in accordance with GAAP consistently applied except:
(i) liabilities reflected in the Bancshares
Financial Statements;
(ii) deposits, debts, liabilities or
obligations incurred since June 30, 1999 in the
ordinary and usual course of its businesses, none of
which are for breach of contract, breach of warranty,
torts, infringements or lawsuits, and none of which
adversely affect their respective financial positions
or results of operations, businesses, assets,
prospects or operations; and
(iii) liabilities incurred for legal,
accounting, financial advising fees and out-of-pocket
expenses in connection with the Bancshares Merger and
the transactions related thereto.
(b) Neither the Bank nor Bancshares was, as of June
30, 1999, and since such date to the date hereof has become a
party to, any contract or agreement, excluding deposits, loan
agreements and commitments, notes, security agreements,
repurchase and reverse repurchase agreements, bankers'
acceptances, outstanding letters of credit and commitments to
issue letters of credit, participation agreements and other
documents relating to transactions entered into by the Bank or
Bancshares in the ordinary course of business which affected,
affects or may reasonably be expected to affect, materially
and adversely, its financial position, results of operations,
business, assets or operations.
3.12 ALLOWANCE FOR LOAN AND LEASE LOSSES; NON-PERFORMING ASSETS.
(a) All of the accounts, notes and other receivables
which are reflected in the balance sheet of the Bank as of
June 30, 1999 were acquired in the ordinary course of business
and are to the best knowledge of Sellers collectible in full
in the ordinary course of business, except for possible loan
and lease losses for which reserves have been made on the
financial statements in accordance with regulatory
requirements in the allowance for loan and lease losses in
such balance sheet.
(b) The allowance for loan losses contained in the
balance sheet of the Bank as of June 30, 1999 was established
in accordance with the past practices and <PAGE>experiences of
the Bank and such allowance was adequate in all material
respects under applicable regulatory requirements to provide
for possible losses on loans and leases (including, without
limitation, accrued interest receivable) and credit
commitments (including, without limitation, stand-by letters
of credit) as of the date of such balance sheet. The reserve
for loan losses as of the Closing Date shall be equal to or
greater than the amount of the reserve for loan losses
reflected on the financial statements of Bancshares as of June
30, 1999.
(c) Schedule 3.12(c) sets forth as of the date of
this Agreement all assets classified as real estate acquired
through foreclosure, including in-substance foreclosed real
estate ("Non-Performing Assets").
3.13 TAXES. Each of Bancshares and the Bank has
timely filed or will timely file (including all extensions)
all tax returns required to be filed at or prior to the
Closing Date ("Bancshares Returns"). Each of Bancshares and
the Bank has paid, or has set up adequate reserves on the
Bancshares Financial Statements for the payment of, all taxes
required to be paid in respect of the periods covered by such
returns and has set up adequate reserves on the Bancshares
Financial Statements for the payment of all taxes anticipated
to be payable in respect of the period subsequent to the last
of said periods (treating for this purpose the Closing Date as
the last day of an applicable period, whether or not it is in
fact the last day of a taxable period). Neither Bancshares
nor the Bank will have any liability for any such taxes in
excess of the amounts so paid or reserves so established, and
no deficiencies for any tax, assessment or governmental charge
have been proposed, asserted or assessed (tentatively or
definitively) against Bancshares or the Bank which would not
be covered by existing reserves. Neither Bancshares nor the
Bank is delinquent in the payment of any tax, assessment or
governmental charge, nor has it requested any extension of
time within which to file any tax returns in respect of any
fiscal year which have not since been filed and no requests
for waivers of the time to assess any tax are pending. The
federal, state and foreign income tax returns of each of
Bancshares and the Bank have not been audited by the Internal
Revenue Service (the "IRS") or the state or foreign taxing
authority during the previous seven years. Neither Bancshares
nor the Bank has made any election under Income Tax Regulation
Sections 1.1502-33(d)(3) or 1.1552-1(c), each of which relates
to the allocation of the consolidated federal income tax
liability, and, other than tax sharing agreements from time to
time in effect affecting solely such parties by and between
Bancshares and the Bank, neither Bancshares nor the Bank is a
party to or bound by any tax indemnity, tax sharing or tax
allocation agreement, or any other contractual obligation to
pay or contribute to the tax obligations of any other person.
There is no deficiency or presently pending refund litigation
or matter in controversy with respect to Bancshares Returns.
Neither Bancshares nor the Bank has extended or waived any
statute of limitations on the assessment of any tax due that
is currently in effect.
3.14 MATERIAL ADVERSE CHANGE. Since June 30, 1999,
there has been no material adverse change in the financial
condition, results of operations, business, assets, prospects
or <PAGE>operations of Bancshares or the Bank taken as a
whole, other than changes in banking laws or regulations, or
interpretations thereof, or other conditions that affect the
banking industry generally, or changes in the general level of
interest rates.
3.15 LITIGATION AND OTHER PROCEEDINGS. Except as set
forth in Schedule 3.15, neither Bancshares nor the Bank is a
party to any pending or, to the best knowledge of the Sellers,
threatened, claim, action, suit, investigation or proceeding,
or is subject to any order, judgment or decree, except for
matters which, in the aggregate, will not have, or cannot
reasonably be expected to have, a material adverse effect on
the business, financial condition, results of operations or
prospects of Bancshares or the Bank. Without limiting the
generality of the foregoing, except as set forth in Schedule
3.15, there are no actions, suits or proceedings pending or,
to the best knowledge of the Sellers, threatened against
Bancshares or the Bank or any of their respective officers or
directors by any shareholder of Bancshares or the Bank (or any
former shareholder) or involving claims under the Community
Reinvestment Act of 1977, Bank Secrecy Act, the fair lending
laws or any other laws applicable to the Bank.
3.16 COMPLIANCE WITH LAWS.
(a) To the best knowledge of Sellers, Bancshares and
the Bank have all permits, licenses, authorizations, orders
and approvals of, and have made all filings, applications and
registrations with, all Regulatory Authorities that are
required in order to permit them to own or lease their
respective properties and assets and to carry on their
respective businesses as presently conducted; all such
permits, licenses, certificates of authority, orders and
approvals are in full force and effect and no suspension or
cancellation of any of them is threatened; and, to the best
knowledge of Sellers, all such filings, applications and
registrations are current; in each case except for permits,
licenses, authorizations, orders, approvals, filings,
applications and registrations the failure to have (or have
made) would not have a material adverse effect on the
financial condition, results of operations, business or
prospects of Bancshares or the Bank.
(b) Each of Bancshares and the Bank has complied
with all laws, regulations and orders (including, without
limitation, zoning ordinances, building codes, the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
and securities, tax, environmental, civil rights and
occupational health and safety laws and regulations and
including, without limitation, in the case of the Bank, all
statutes, rules, regulations and policy statements pertaining
to the conduct of a banking, deposit-taking, lending or
related business, or to the exercise of trust powers) and
governing instruments applicable to it and to the conduct of
its business, the violation of which could reasonably be
expected to have a material adverse effect on the financial
condition, results of operations, business or prospects of
Bancshares or the Bank, and neither Bancshares nor the Bank is
in default under, and no <PAGE>event has occurred which, with
the lapse of time or notice or both, could result in the
default under, the terms of any judgment, order, writ, decree,
permit or license of any Regulatory Authority or court,
whether federal, state, municipal or local and whether at law
or in equity.
(c) Except as set forth in Schedule 3.16, and to the
best knowledge of Sellers, neither Bancshares nor the Bank is
subject to or reasonably likely to incur a material liability
as a result of its ownership, operation or use of any Property
(as defined below) of Bancshares or the Bank (whether directly
or as a consequence of such Property being part of the
investment portfolio of the Bank) (A) that contains any
hazardous waste, toxic substance or related materials,
including, without limitation, asbestos, PCBs, pesticides,
herbicides and any other substance or waste that is hazardous
to human health or the environment (collectively, a "Hazardous
Substance"), or (B) on which any Hazardous Substance has been
stored, disposed of, placed, or used in the construction
thereof. "Property" shall include all property (real or
personal, tangible or intangible) owned or controlled by
Bancshares or the Bank, including, without limitation,
property under foreclosure and property in which any venture
capital or similar unit of the Bank has an ownership or
possessory interest. No claim, action, suit or proceeding is
pending against Bancshares or the Bank relating to the
Property before any court or other Regulatory Authority or
arbitration tribunal relating to Hazardous Substances,
pollution or the environment, and there is no outstanding
judgment, order, writ, injunction, decree or award against or
affecting Bancshares or the Bank with respect to the same.
Except for statutory or regulatory restrictions of general
application, no Regulatory Authority has placed any
restriction on the business of Bancshares or the Bank which
reasonably could be expected to have a material adverse effect
on the condition of Bancshares or the Bank.
(d) Since December 31, 1995, neither Bancshares nor
the Bank has received any notification or communication which
has not been favorably resolved from any Regulatory Authority
(i) asserting that Bancshares or the Bank is not in
substantial compliance with any of the statutes, regulations
or ordinances that such Regulatory Authority enforces, except
with respect to matters which (A) are set forth on Schedule
3.16 or in any writing previously furnished to the Buyer
Entities and (B) reasonably could not be expected to have a
material adverse effect on the condition of the Bank, (ii)
threatening to revoke any license, franchise, permit or
governmental authorization that is material to the condition
of the Bank including, without limitation, the Bank's status
as an insured depository institution under the FDI Act, (iii)
requiring or threatening to require Bancshares or the Bank,
or indicating that Bancshares or the Bank may be required, to
enter into a cease and desist order, agreement or memorandum
of understanding or any other agreement restricting or
limiting or purporting to direct, restrict or limit in any
manner the operations of Bancshares or the Bank, including,
without limitation, any restriction on the payment of
dividends. No such cease and desist order, agreement or
memorandum of understanding or other agreement is currently in
effect.
<PAGE>
(e) Neither Bancshares nor the Bank is required by
Section 32 of the FDI Act to give prior notice to any federal
banking agency of the proposed addition of an individual to
its board of directors or the employment of an individual as a
senior executive officer.
3.17 LABOR. No work stoppage involving Bancshares or
the Bank is pending or, to the best knowledge of Sellers,
threatened. Neither Bancshares nor the Bank is involved in,
or threatened with or affected by, any labor dispute,
arbitration, lawsuit or administrative proceeding which could
adversely affect the business of Bancshares or the Bank.
Employees of Bancshares and the Bank are not represented by
any labor union nor are any collective bargaining agreements
otherwise in effect with respect to such employees.
3.18 EMPLOYEE BENEFIT PLANS.
(a) Schedule 3.18(a) lists, to the best knowledge of
Sellers, all pension, retirement, supplemental retirement,
stock option, stock purchase, stock ownership, savings, stock
appreciation right, profit sharing, deferred compensation,
consulting, bonus, medical, disability, workers' compensation,
vacation, group insurance, severance and other employee
benefit, incentive and welfare policies, contracts, plans and
arrangements, and all trust agreements related thereto,
maintained by or contributed to by Bancshares or the Bank in
respect of any of the present or former directors, officers or
other employees of and/or consultants to Bancshares or the
Bank (collectively, the "Sellers Employee Plans"). The
Sellers have furnished the Buyer Entities with the following
documents with respect to each of the Sellers Employee Plans:
(i) a true and complete copy of all written documents
comprising such Sellers Employee Plan (including amendments
and individual agreements relating thereto) or, if there is no
such written document, an accurate and complete description of
the Sellers Employee Plan; (ii) the most recently filed Form
5500 or Form 5500-C (including all schedules thereto), if
applicable; (iii) the most recent financial statements and
actuarial reports, if any; (iv) the summary plan description
currently in effect and all material modifications thereof, if
any; and (v) the most recent IRS determination letter, if any.
(b) All of the Sellers Employee Plans have been
maintained and operated in all material respects in accordance
with their terms and the requirements of all applicable
statutes, orders, rules and final regulations, including,
without limitation, to the extent applicable, ERISA and the
Internal Revenue Code (the "Code"). All contributions
required to be made to the Sellers Employee Plans have been
made.
(c) Seller has no pension plan as defined in Section
3(2) of ERISA.
(d) Except as set forth on Schedule 3.18(d), neither
Bancshares nor the Bank has any liability for any post-retirement health,
medical or similar benefit of any kind
<PAGE>whatsoever, except as required by statute or regulation.
(e) Neither Bancshares nor the Bank has any material
liability under ERISA or the Code as a result of its being a
member of a group described in Sections 414(b), (c), (m) or
(o) of the Code.
(f) Except as set forth on Schedule 3.18(f), neither
the execution nor delivery of this Agreement or the Merger
Agreements, nor the consummation of any of the transactions
contemplated hereby and thereby, nor the termination of any of
the Sellers Employee Plans which may occur as a result of the
consummation of any of the transactions so contemplated, will
(i) result in any payment (including, without limitation,
severance, unemployment compensation or golden parachute
payment) becoming due from Bancshares or the Bank to any
director or employee of Bancshares or the Bank, (ii) increase
any benefit otherwise payable under any of the Sellers
Employee Plans or (iii) result in the acceleration of the time
of payment of any such benefit.
3.19 CONDUCT OF BANCSHARES'S AND THE BANK'S
BUSINESSES TO DATE. Except as set forth in Schedule 3.19 or
otherwise in this Agreement, from and after June 30, 1999:
(a) Bancshares and the Bank have carried on their respective
business in the ordinary and usual course consistent with past
practices, (b) neither Bancshares nor the Bank has issued or
sold any of its capital stock or any corporate debt securities
which would be classified as long-term debt on its balance
sheet, (c) neither Bancshares nor the Bank has granted any
option for the purchase of its capital stock, effected any
stock split or otherwise changed its capitalization,
(d) neither Bancshares nor the Bank has, directly or
indirectly, redeemed or otherwise acquired any of its capital
stock, (e) neither Bancshares nor the Bank has incurred any
obligation or liability (absolute or contingent), except
normal trade or business obligations or liabilities incurred
in the ordinary course of business, or mortgaged, pledged or
subjected to lien, claim, security interest, charge,
encumbrance or restriction any of its assets or properties,
(f) neither Bancshares nor the Bank has discharged or
satisfied any lien, mortgage, pledge, claim, security
interest, charge, encumbrance, or restriction or paid any
obligation or liability (absolute or contingent), other than
in the ordinary course of business, (g) neither Bancshares nor
the Bank has sold, assigned, transferred, leased, exchanged or
otherwise disposed of any of its properties or assets other
than for a fair consideration in the ordinary course of
business, (h) neither Bancshares nor the Bank has increased
the rate of compensation of, or paid any bonus to, any of its
directors, officers or other employees, except merit or
promotion increases in accordance with existing policy,
entered into any new, or amended or supplemented any existing,
employment, management, consulting, deferred compensation,
severance or other similar contract, entered into, terminated
or substantially modified any of the Sellers Employee Plans in
respect of any of its present or former directors, officers or
other employees, or agreed to do any of the foregoing,
(i) neither Bancshares nor the Bank has suffered any damage,
destruction or loss, whether as the result of fire, explosion,
earthquake, <PAGE>accident, casualty, labor trouble,
requisition or taking of property by any government or any
agency of any government, flood, windstorm, embargo, riot, act
of God or the enemy or other similar or dissimilar casualty or
event or otherwise, and whether or not covered by insurance,
and (j) neither Bancshares nor the Bank has entered into any
transaction, contract or commitment outside the ordinary
course of its business.
3.20 FULL DISCLOSURE. No representation or warranty
of the Sellers contains any untrue statement of a material
fact or omits to state a material fact necessary in order to
(i) make the statements contained herein not materially
misleading or (ii) provide a prospective purchaser of the
Bancshares Stock with all material information as to the
properties and business of Bancshares or the Bank.
3.21 BROKERS AND FINDERS; OTHER LIABILITIES. Except
as set forth on Schedule 3.21, neither Bancshares nor the Bank
nor any of their respective officers, directors or employees
has employed any broker or finder or incurred any liability
for any financial advisory fees, brokerage fees, commissions
or finder's fees, and no broker or finder has acted directly
or indirectly for Bancshares and/or the Bank in connection
with this Agreement, the Bancshares Merger Agreement or the
transactions contemplated hereby and thereby.
3.22 INTEREST RATE RISK MANAGEMENT INSTRUMENTS.
Except for caps on interest rates made on loans in the
ordinary course of its business, the Bank is not a party to,
nor are any of its properties or assets bound by, interest
rate swaps, caps, floors and option agreements and other
interest rate risk management arrangements.
3.23 REPRESENTATIONS CONCERNING SHAREHOLDERS.
(a) OWNERSHIP. Each Shareholder is the owner,
beneficially and of record, of the number of shares of
Bancshares Stock as set forth in Schedule 3.23(a).
(b) POWER. Each Shareholder has complete and
unrestricted power to enter into this Agreement and all other
agreements to be executed and delivered by Shareholders
hereunder, to transfer their shares pursuant to the Merger,
and to perform their obligations hereunder and thereunder.
(c) BINDING OBLIGATION. This Agreement has been,
and all other agreements and documents to be executed and
delivered by Shareholders hereunder will be at or prior to the
Closing, duly authorized, executed and delivered by
Shareholders and constitute the legal, valid and binding
obligations of all Shareholders enforceable against each
Shareholder in accordance with its terms.
(d) NO VIOLATIONS OR DEFAULTS. The execution and
delivery of this <PAGE> Agreement and all other agreements to
be executed and delivered by Shareholders hereunder, and the
consummation of the transactions contemplated hereby and
thereby, by Shareholders will not violate any provision of, or
constitute a default under, any law, regulation, order or
judgment or any contract or other agreement to which any of
Shareholders is a party or by which any of them is bound or
result in the creation or imposition of any lien, claim,
charge or encumbrance of any nature whatsoever upon the
outstanding capital stock of Bancshares or the Bank.
3.24 SUBCHAPTER S ELECTION OF BANCSHARES. Bancshares
has duly filed an election, in accordance with Section 1362 of
the Internal Revenue Code (the "Code"), to be a Subchapter
S corporation and such election has not been terminated by
Bancshares or revoked by the Internal Revenue Service (the
"IRS"). Bancshares has duly filed an election to treat the
Bank as a qualified Subchapter S subsidiary under Section
1361(b)(3) of the Code., and such election has not been
terminated by Bancshares or the Bank or revoked by the IRS.
No shareholder of the Bank or Bancshares has sold, donated,
transferred pledged, hypothecated or otherwise disposed of any
of the shares of Bancshares or the Bank to any corporation,
partnership or nonresident alien or any other person, estate,
trust or other entity or organization whose ownership of such
shares would cause, or take any other action which would
cause, a termination of the Subchapter S election of
Bancshares.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER ENTITIES
As an inducement to the Sellers to enter into and perform
their respective obligations under this Agreement, and
notwithstanding any examinations, inspections, audits or other
investigations made by the Sellers, the Buyer Entities hereby
jointly and severally represent and warrant to the Sellers as
to the following matters:
4.01 ORGANIZATION AND AUTHORITY. Buyer and
Acquisition Company are each corporations duly organized,
validly existing and in good standing under the laws of the
State of Missouri.
4.02 CORPORATE AUTHORIZATION.
(a) Buyer and Acquisition Company each have the
corporate power and authority to enter into this Agreement and
to carry out their respective obligations hereunder. The
execution, delivery and performance of this Agreement by Buyer
and Acquisition Company and the consummation of the
transactions contemplated hereby have been duly authorized by
the Board of Directors of Buyer and the Board of Directors of
Acquisition Company, and no other approval of their respective
Boards or shareholders or any committees thereof is required.
Subject to such approvals of governmental agencies and other
governing <PAGE>boards having regulatory authority over Buyer
and Acquisition Company as may be required by statute or
regulation, this Agreement is a valid and binding obligation
of Buyer and Acquisition Company, enforceable against each in
accordance with its terms.
(b) Neither the execution, delivery and performance
by Buyer or Acquisition Company of this Agreement, nor the
consummation of the transactions contemplated hereby, nor
compliance by Buyer or Acquisition Company with any of the
provisions hereof, will (a) violate, conflict with or result
in a breach of any provisions of, or constitute a default (or
an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of,
or accelerate the performance required by, or result in a
right of termination or acceleration of, or result in the
creation of, any lien, security interest, charge or
encumbrance upon any of the properties or assets of Buyer or
Acquisition Company under any of the terms, conditions or
provisions of (i) their respective Articles of Incorporation
or Bylaws or (ii) any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or
obligation to which Buyer or Acquisition Company is a party or
by which it may be bound, or to which Buyer or Acquisition
Company or any of its properties or assets may be subject.
4.03 MATERIAL ADVERSE CHANGE. Since December 31,
1998, there has been no material adverse change in the
financial condition, results of operations or prospects or
Buyer, other than changes in banking laws or regulations, or
interpretations thereof, or other conditions that affect the
banking industry generally, or changes in the general level of
interest rates.
4.04 FULL DISCLOSURE. No representation or warranty
of the Buyer Entities contains any untrue statement of a
material fact or omits to state a material fact necessary in
order to make the statements contained herein not materially
misleading.
ARTICLE V
CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME
5.01 CONDUCT OF BUSINESSES PRIOR TO THE CLOSING DATE.
During the period from the date of this Agreement to the
Closing Date, Bancshares and the Bank shall (i) conduct their
respective businesses according to the ordinary and usual
course consistent with past and current practices, (ii) seek
to keep the expenses of their respective businesses at levels
consistent with past practices, and (iii) use their best
efforts to maintain and preserve their respective business
organizations, value of their franchise, employees and
advantageous business relationships and retain the services of
their officers and key employees.
5.02 FORBEARANCES OF BANCSHARES AND THE BANK. Except
as set forth on Schedule 5.02, during the period from the date
of this Agreement to the Closing Date, neither
<PAGE>Bancshares nor the Bank shall, without the prior written
consent of the Buyer Entities:
(a) declare, set aside or pay any dividends or other
distributions, directly or indirectly, in respect of its
capital stock, except that the Bank may declare and pay
dividends prior to the Determination Date required to pay the
expenses, including holding company debt service in the last
quarter of 1999 and normal and customary operating expenses,
and permitted dividends of Bancshares and Bancshares may pay
dividends prior to the Determination Date in an amount
reasonably necessary to enable its shareholders to pay their
share of the income tax on Bancshares and the Bank's income;
(b) enter into or amend any employment, severance or
similar agreement or arrangement with any director or officer
or employee, or materially modify any of the Sellers Employee
Plans or grant any salary or wage increase or materially
increase any employee benefit (including incentive or bonus
payments), except (i) normal individual increases in
compensation to employees consistent with past practice, (ii)
as required by law or contract and (iii) such increase of
which the Sellers notify the Buyer Entities in writing and
which the Buyer Entities do not disapprove within 10 days of
the receipt of such notice;
(c) propose or adopt any amendments to its articles
of incorporation or other charter document or bylaws;
(d) issue, sell, grant, confer or award any of its
Equity Securities or effect any contribution to capital, stock
split or adjust, combine, reclassify or otherwise change its
capitalization as it existed on the date of this Agreement;
(e) purchase, redeem, retire, repurchase or
exchange, or otherwise acquire or dispose of, directly or
indirectly, any of its Equity Securities, whether pursuant to
the terms of such Equity Securities or otherwise;
(f) without first consulting with Buyer, enter into,
renew or increase any loan or credit commitment (including
stand-by letters or credit) to, or invest or agree to invest
in any person or entity or modify any of the material
provisions or renew or otherwise extend the maturity date of
any existing loan or credit commitment (collectively, "Lend
to") in an amount in excess of $100,000 or in any amount
which, when aggregated with any and all loans or credit
commitments of the Bank to such person or entity, would be in
excess of $100,000; or Lend to any person other than in
accordance with the Bank's lending policies as in effect on
the date hereof; provided, however, that Bank shall give Buyer
prior written notice of its request to act contrary hereto and
if Buyer has not responded within five (5) days of such
request Bank may proceed in accordance with its good faith
business judgment;
(g) except as directed by any Regulatory Authority
on its own motion or <PAGE>otherwise required by applicable
law, take any action that would materially impede or delay the
consummation of the transactions contemplated by this
Agreement or the Bancshares Merger Agreement or the ability of
the Buyer Entities and the Sellers to obtain any approval of
any Regulatory Authority required for the transactions
contemplated by this Agreement or the Bancshares Merger
Agreement or to perform its covenants and agreements under
this Agreement or the Bancshares Merger Agreement.
(h) other than in the ordinary course of business
consistent with past practice, incur any indebtedness for
borrowed money or assume, guarantee, endorse or otherwise as
an accommodation become responsible or liable for the
obligations of any other individual, corporation or other
entity;
(i) in the case of the Bank, materially restructure
or change its investment securities portfolio, through
purchases, sales or otherwise, or the manner in which the
portfolio is classified or reported, or execute individual
investment transactions which would materially extend the
average maturity of the portfolio or which are greater than
$500,000 for U.S. Treasury Securities and Federal Agency
securities and $100,000 for all other investment instruments,
provided that for purposes of this subsection (k), such
consent shall not be unreasonably withheld;
(j) agree in writing or otherwise take any of the
foregoing actions or engage in any activity, enter into any
transaction or intentionally take or omit to take any other
act which would make any of the representations and warranties
in Article II of this Agreement untrue or incorrect in any
material respect if made anew after engaging in such activity,
entering into such transaction, or taking or omitting such
other act;
(k) enter into or increase any loan or credit
commitment (including standby letters of credit) to any
executive officer or director of Bancshares or the Bank, any
shareholder of Bancshares or the Bank, or any entity
controlled, directly or indirectly, by any of the foregoing,
without first obtaining the prior written consent of Buyer,
which consent shall not be unreasonably withheld;
(l) other than in the ordinary course of business
consistent with past practice, acquire, mortgage or dispose of
any material assets;
(m) make any capital investments in excess of
$25,000 individually or $75,000 in the aggregate;
(n) excluding loans in the ordinary course of its
business, enter into any individual contract under which the
liability of Bancshares or the Bank is in excess of
<PAGE>$25,000, or enter into any contracts under which, in the
aggregate, the liability of Bancshares or the Bank is in
excess of $50,000;
(o) other than in the ordinary course of business
consistent with past practice, enter into any other material
agreements; or
(p) engage in any negotiations or discussions with,
or consider proposals from, any person not a party to this
Agreement respecting the sale of Bancshares or the Bank to, or
the merger of the Bank or Bancshares with, any other person or
organization.
ARTICLE VI
ADDITIONAL COVENANTS
6.01 ACCESS AND INFORMATION; DUE DILIGENCE.
(a) Bancshares and the Bank each shall afford to the
Buyer Entities, and to the Buyer Entities' accountants,
counsel and other representatives, full access during normal
business hours, during the Buyer Due Diligence Period and
during any six (6) business days per month (and upon
reasonable request for such additional time as may be
required, provided such request shall not disrupt the normal
operation of the Bank) during the period from the expiration
of the Buyer Due Diligence Period to the Closing Date, to all
its properties, books, contracts, commitments and records and,
during such period, shall furnish promptly to the Buyer
Entities (i) a copy of each report, schedule and other
document filed or received by it during such period pursuant
to the requirements of federal and state banking laws and (ii)
all other information concerning its business, properties and
personnel as the Buyer Entities may reasonably request. In
the event of the termination of this Agreement, the Buyer
Entities shall, and shall cause their respective advisors and
representatives to, (1) hold confidential all information
obtained in connection with any transaction contemplated
hereby with respect to the other party which is not otherwise
public knowledge, (2) return to Bancshares and the Bank all
documents (including copies thereof) obtained hereunder from
Bancshares and the Bank and (3) use their best efforts to
cause all information obtained pursuant to this Agreement or
in connection with the negotiation hereof to be treated as
confidential and not use, or knowingly permit others to use,
any such information unless such information becomes generally
available to the public.
(b) Buyer, promptly following the date of this
Agreement, shall commence the Buyer Due Diligence Review,
which it shall conclude no later than the end of the Buyer Due
Diligence Period. Buyer shall advise Bancshares and the Bank
of any situation, event, circumstance or other matter which
first came to the attention of Buyer during the Buyer Due
Diligence Review which could result in the termination of this
Agreement by Buyer pursuant <PAGE>to Section 8.01(d) hereof,
or, if applicable, of the absence of any situation, event,
circumstance or other matter, it being the intention of Buyer
to provide notice to Bancshares and the Bank, as promptly as
possible, of any perceived impediment to the consummation of
the Bancshares Merger. Notwithstanding anything hereinabove
contained or implied to the contrary, the Buyer Due Diligence
Review shall not limit, restrict or preclude, or be construed
to limit, restrict or preclude, Buyer, at any time or from
time to time thereafter, from conducting further such reviews
or from exercising any rights available to it hereunder as a
result of the existence or occurrence prior to the Buyer Due
Diligence Period of any event or condition which was not
detected in the Buyer Due Diligence Review by Buyer and which
would constitute a breach of any material representation,
warranty or agreement of Bancshares or the Bank under this
Agreement.
6.02 REGULATORY MATTERS. Each of the parties hereto
shall cooperate and use their respective best efforts to
prepare all documentation, to effect all filings, and to
obtain all permits, consents, approvals and authorizations of
all third parties and governmental bodies necessary to
consummate the transactions contemplated by this Agreement and
the Bancshares Merger Agreement as soon as is reasonably
practicable after the date of this Agreement, including,
without limitation, Buyer filing the necessary applications
and notices with the Federal Reserve Board.
6.03 SHAREHOLDER APPROVALS. Bancshares shall call a
special meeting of its shareholders to be held as soon as is
reasonably practicable for the purpose of voting upon this
Agreement and the Bancshares Merger Agreement and related
matters. The Board of Directors of Bancshares shall submit
and recommend for approval of their respective shareholders
the matters to be voted upon at such meetings. The Board of
Directors of Bancshares hereby does and will recommend this
Agreement, the Bancshares Merger Agreement and the
transactions contemplated hereby and thereby to its
shareholders and use its best efforts to obtain the votes and
approvals of its shareholders necessary for the approval and
adoption of the matters contemplated hereby. Each of the
Shareholders agrees to vote all shares of Bancshares Stock
that he owns of record for the approval of this Agreement and
the Bancshares Merger Agreement at the special meeting of
shareholders of Bancshares, or if the transaction is altered
by Buyer to a direct purchase of stock pursuant to Section
2.09, to sell his shares of Bancshares for a purchase price
equal to that portion of the Bancshares Merger Consideration
that such Shareholder would be entitled to receive under this
Agreement.
6.04 CURRENT INFORMATION. During the period from the
date of this Agreement to the Closing Date, each party will
promptly furnish all other parties with copies of all relevant
interim financial statements (monthly in the case of
Bancshares and the Bank and quarterly in the case of Buyer) as
the same become available and shall cause one or more of its
designated representatives to confer on a regular and frequent
basis with representatives of the other party. Each party
shall promptly notify the other parties of the following
events immediately <PAGE>upon learning of the occurrence
thereof, describing the same and, if applicable, the steps
being taken by the affected party with respect thereto: (a)
the occurrence of any event which could cause any
representation or warranty of such party or any schedule,
statement, report, notice, certificate or other writing
furnished by such party to be untrue or misleading in any
respect; (b) any material change in its business, financial
condition, results of operations or prospects; (c) the
issuance or commencement of any governmental and/or regulatory
agency complaint, investigation or hearing or any
communications indicating that the same may be contemplated
and, as to any such matter which shall now or hereafter be in
effect, any communications pertaining thereto; or (d) the
institution or the threat of any material litigation involving
such party.
6.05 ENVIRONMENTAL REPORTS. The Bank shall provide
to the Buyer, at the Bank's expense, but such expenses are not
to exceed a total amount of $2,000, within thirty (30) days
after request, with respect to all Real Property presently
owned by the Bank, and as soon as reasonably practicable, but
not later than thirty (30) business days, after the
acquisition or leasing, foreclosure or repossession by the
Bank of any Real Property subsequent to the date hereof, a
report of a phase one environmental investigation of such Real
Property consistent with ASTM practices (excluding space in
retail or similar establishments leased by the Bank for
automatic teller machines or bank branch facilities where the
space leased comprises less than 20% of the total space leased
to all tenants of such property). If required by the phase
one report with respect to any parcel of real property
referred to above, in the reasonable opinion of the Buyer, the
Buyer shall be permitted to obtain, at its expense, a phase
two investigation report on such designated parcels as soon as
practicable. The Buyer shall have fifteen (15) business days
from the receipt of any such phase two investigation report to
notify the Sellers of any dissatisfaction with the contents of
such report. If the Buyer is dissatisfied with the contents
of such report due to the fact that: (i) the estimated costs
of all remedial or other corrective actions or measures with
regard to the real property referred to above required by
applicable law (the "Remediation Costs") exceed $150,000 in
the aggregate, as reasonably estimated by an environmental
expert retained for such purpose by the Buyer, or (ii) the
costs of such remedial or other corrective actions cannot be
reasonably estimated by such expert to be $100,000 or less
with any reasonable degree of certainty, then the Buyer, at
its sole discretion, shall have the right to terminate this
Agreement upon fifteen (15) days' notice to Sellers unless
Sellers, upon receipt of such notice, elect within fifteen
(15) days thereafter to reduce the Bancshares Merger
Consideration by an amount equal to the Remediation Costs (or
in the case of an inability to estimate such costs, by an
amount equal to the actual costs of such required remedial or
other corrective actions), in which case the Bancshares Merger
Consideration shall be so reduced and this Agreement shall not
be terminated pursuant to this Section.
6.06 EXPENSES. Each party hereto shall bear its own
costs and expenses incident to preparing, entering into and
carrying out this Agreement, the Bancshares Merger Agreement
<PAGE>and the transactions contemplated hereby and thereby,
whether or not the Bancshares Merger shall be consummated or
this Agreement shall subsequently be terminated.
6.07 MISCELLANEOUS AGREEMENTS AND CONSENTS. Subject
to the terms and conditions herein provided, each of the
parties hereto agrees to use its best efforts to take, or
cause to be taken, all action, and to do, or cause to be done,
all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the
transactions contemplated by this Agreement and the Bancshares
Merger Agreement as expeditiously as possible, including,
without limitation, using their respective best efforts to
lift or rescind any injunction or restraining order or other
order adversely affecting the ability of the parties to
consummate the transactions contemplated hereby and thereby.
The Sellers and the Buyer Entities shall use their best
efforts to obtain consents of all third parties and
governmental bodies necessary or, in the opinion of any of the
foregoing, desirable for the consummation of the transactions
contemplated by this Agreement and the Bancshares Merger
Agreement.
6.08 PRESS RELEASES. The Sellers and the Buyer
Entities shall consult with each other as to the form and
substance of any proposed press release or other proposed
public disclosure of matters related to this Agreement, the
Bancshares Merger Agreement or any of the transactions
contemplated hereby or thereby. Unless in the reasonable
opinion of Buyer's counsel an announcement is required by the
securities laws, no announcement shall be made by either party
without the consent of the other party unless and until
either: (i) the Buyer Due Diligence Period shall have expired
or (ii) Buyer has notified Bancshares that Buyer waives its
termination right pursuant to Section 8.01(d) and Section
8.01(f).
6.09 INDEMNIFICATION OF BANCSHARES' AND THE BANK'S
DIRECTORS, OFFICERS AND EMPLOYEES.
(a) Buyer agrees that the Bancshares Merger shall
not affect or diminish any of the duties and obligations of
indemnification of the Surviving Corporation (with respect to
Bancshares) existing at the Bancshares Merger Effective Time
in favor of employees, agents, director or officers of the
Surviving Corporation arising by virtue of its charter or
Bylaws in the form in effect at the date hereof or arising by
operation of law or arising by virtue of any contract,
resolution, or other agreement or document existing at the
date hereof, and such duties and obligations shall continue in
full force and effect for so long as they would otherwise
survive and continue in full force and effect. To the extent
that the Surviving Entities' existing directors' and officers'
liability insurance policy would provide coverage for any
action or omission occurring prior to the Bancshares Merger
Effective Time, the Sellers agree to give proper notice to the
insurance carrier and to the Buyer Entities of a potential
claim thereunder so as to preserve the Surviving Corporation's
rights to such insurance coverage.
<PAGE>
(b) If, after the Bancshares Merger Effective Time,
the Surviving Corporation or any of their respective
successors or assigns (i) shall consolidate with or merge into
any other corporation or entity and shall not be the
continuing or surviving corporation or entity of such
consolidation or merger or (ii) shall transfer all or
substantially all of its properties and assets to any
individual, corporation or entity, that in each such case,
proper provisions shall be made so that the successors and
assigns of the Surviving Entities shall assume any remaining
obligations of such surviving corporation or bank set forth in
this Section 6.09. If the Surviving Corporation shall
liquidate, dissolve or otherwise wind up either of their
businesses, then Buyer shall indemnify, defend and hold
harmless each indemnified party to the same extent and on the
same terms that the Surviving Corporation were so obligated
pursuant to this Section 6.09.
6.10 MERGER AGREEMENT. At a time determined by the
Buyer after the expiration of the Buyer Due Diligence Period,
Bancshares shall execute the Bancshares Merger Agreement.
6.11 REGULATORY APPROVALS. The Buyer Entities shall
use their best efforts to file within five (5) business days
following the expiration of the Buyer Due Diligence Period,
and to diligently prosecute, all regulatory applications
required to be filed by it in order to consummate the
Bancshares Merger. The Buyer Entities shall use their
reasonable best efforts to obtain all legally required
approvals for the consummation of the Bancshares Merger and
the other transactions contemplated hereby. The Buyer
Entities shall keep Sellers reasonably informed as to the
status of such applications and make available to Sellers,
upon reasonable request by Sellers from time to time, copies
of such applications and any supplementally filed materials.
6.12 BREACHES. Each of Buyer and Acquisition Company
shall, in the event it has knowledge of the occurrence, or
impending or threatened occurrence, of any event or condition
which would cause or constitute a breach (or would have caused
or constituted a breach had such event occurred or been known
prior to the date hereof) of any of its representations or
agreements contained or referred to herein, give prompt
written notice thereof to Sellers and use its best efforts to
prevent or promptly remedy the same.
6.13 CONSUMMATION OF AGREEMENT. The Buyer Entities
shall perform and fulfill all conditions and obligations on
their part to be performed or fulfilled under this Agreement
and to effect the Bancshares Merger in accordance with the
terms and conditions of this Agreement, including, but not
limited to, (i) Buyer delivering cash in the amount of the
Bancshares Merger Consideration to Acquisition Company prior
to the Bancshares Effective Time and (ii) Acquisition Company
paying cash in the amount of the Bancshares Merger
Consideration to the shareholders of Bancshares on the Closing
Date.
<PAGE>
6.14 POST CLOSING ADJUSTMENTS. The parties recognize
that following the Closing Date, Beach intends to have the
Bank's accounting firm review the final balance sheets of the
Bank and Bancshares used in computing the Bancshares Merger
Consideration. If (a) such review indicates that the
Bancshares Merger consideration was computed incorrectly and
(b) Buyer's accounting firm agrees with such determination, an
appropriate payment will be made by Buyer to the Second Escrow
Deposit or to Buyer out of the Second Escrow Deposit. If the
two accounting firms shall disagree, they shall appoint a
third independent accounting firm to make such determination
which shall be binding on all parties. The expenses of such
third accounting firm shall be paid by the party whose
requested adjustment was the farthest from that made by the
third independent accounting firm.
6.15 FINAL TAX RETURN. Beach, as Agent, shall have
the right and obligation to file any income tax returns
required to be filed by Bancshares for periods ending on or
before the Closing Date. Such returns will be prepared in
accordance with applicable law and regulations and shall be
submitted to Buyer for review and approval not less than 15
days prior to the due date.
ARTICLE VII
CONDITIONS
7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT
THE MERGER. The respective obligations of each party to
effect the Bancshares Merger shall be subject to the
fulfillment or waiver at or prior to the Closing Date of the
following conditions:
(a) The approval of the Bancshares Merger, this
Agreement and the Bancshares Merger Agreement shall have
received the approval of the Board of Directors of Buyer and
the requisite vote of shareholders of Bancshares at the
special meeting of shareholders called pursuant to Section
6.03 hereof.
(b) Neither Bancshares, the Bank, Buyer nor
Acquisition Company shall be subject to any order, decree or
injunction of a court or agency of competent jurisdiction
which enjoins or prohibits the consummation of the Bancshares
Merger.
(c) No litigation challenging the Bancshares Merger
shall be pending or have been threatened.
7.02 CONDITIONS TO OBLIGATIONS OF THE SELLERS. The
obligations of the Sellers to effect the Bancshares Merger
shall be subject to the fulfillment or waiver at or prior to
the Bancshares Merger Effective Time of the following
additional conditions:
<PAGE>
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Buyer Entities set forth
in Article IV hereof shall be true and correct in all material
respects, except such as are not of a magnitude as to be
materially adverse to the business, financial condition,
results of operations or prospects of Buyer and its
subsidiaries, taken as a whole, as of the date of this
Agreement and as of the Closing Date (as though made on and as
of the Closing Date except (i) to the extent such
representations and warranties are by their express provisions
made as of a specified date, (ii) where the facts which caused
the failure of any representation or warranty to be so true
and correct have not resulted, and are not likely to result,
in a material adverse effect on the condition of Buyer and its
subsidiaries taken as a whole and (iii) for the effect of
transactions contemplated by this Agreement) and the Sellers
shall have received a signed certificate which is to the best
knowledge of the Chairman of the Board and President of Buyer,
signing solely in his capacity as an officer of Buyer, and is
to that effect and also states that all of the conditions set
forth in Sections 7.01 and 7.03 shall have been satisfied or
waived as provided therein.
(b) PERFORMANCE OF OBLIGATIONS. The Buyer Entities
shall have performed in all material respects all obligations
required to be performed by each under this Agreement prior to
the Bancshares Merger Effective Time, and the Sellers shall
have received a signed certificate which is to the knowledge
of the Chairman of the Board and President of Buyer, signing
solely in his capacity as an officer of Buyer, and is to that
effect.
(c) PERMITS, AUTHORIZATIONS, ETC.. The Buyer
Entities shall have obtained any and all material permits,
authorizations, consents, waivers and approvals required for
the lawful consummation by them of the Bancshares Merger and
all waiting periods required by law shall have expired.
(d) NO MATERIAL ADVERSE CHANGE. Since the date of
this Agreement, there shall have been no material adverse
change in the business, financial condition, results of
operations or prospects of Buyer and its subsidiaries, taken
as a whole.
7.03 CONDITIONS TO OBLIGATIONS OF THE BUYER ENTITIES.
The obligations of the Buyer Entities to effect the Bancshares
Merger shall be subject to the fulfillment or waiver at or
prior to the Bancshares Merger Effective Time of the following
additional conditions:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Sellers set forth in
Article III hereof shall be true and correct in all material
respects, except such as are not of a magnitude as to be
materially adverse to the business, financial condition,
results of operations or prospects of Bancshares or the Bank,
as of the date of this Agreement and as of the Closing Date
(as though made on and as of the Closing Date except (i) to
the extent such representations and warranties are by their
express provisions made as of a specific date, (ii) where the
facts which caused the failure of any representation or
warranty <PAGE>to be so true and correct have not resulted,
and are not likely to result, in a material adverse effect on
the condition of Bancshares or the Bank and (iii) for the
effect of transactions contemplated by this Agreement) and
Buyer shall have received a signed certificate which is to the
best knowledge of the Chairman of the Board and President of
each of Bancshares and the Bank and is to that effect.
(b) PERFORMANCE OF OBLIGATIONS. The Sellers shall
have performed in all material respects all obligations
required to be performed by them under this Agreement prior to
the Closing Date, and Buyer shall have received a signed
certificate which is to the knowledge of the Chairman of the
Board and President of each of Bancshares and the Bank and is
to that effect.
(c) PERMITS, AUTHORIZATIONS, ETC. The Sellers shall
have obtained any and all material consents or waivers from
other parties to loan agreements, leases or other contracts
material to Bancshares or the Bank's businesses required for
the consummation of the Bancshares Merger, and the Sellers
shall have obtained any and all material permits,
authorizations, consents, waivers and approvals required for
the lawful consummation by it of the Bancshares Merger.
(d) NO MATERIAL ADVERSE CHANGE. Since the date of
this Agreement, there shall have been no material adverse
change in the business, assets (real, personal or mixed),
financial condition or results of operations of Bancshares or
the Bank.
(e) OPINION OF COUNSEL. The Sellers shall have
delivered to Buyer an opinion of counsel to the Sellers dated
as of the Closing Date or a mutually agreeable earlier date in
substantially the form set forth as Exhibit C to this
Agreement.
(f) PROCEEDINGS AND INSTRUMENTS SATISFACTORY. All
proceedings, corporate or other, to be held or taken in
connection with the transactions contemplated by this
Agreement, and all documents incident thereto, shall be
reasonably satisfactory in form and substance to counsel to
Buyer, and Sellers shall have made available to Buyer and its
authorized representatives for examination the originals or
true and correct copies of all documents relating to the
business and affairs of Bancshares and the Bank which Buyer
and its authorized representatives may reasonably request.
(g) NO DISSENTING SHAREHOLDER. No shareholder of
Bancshares shall have taken or threatened to take any action
which could result in such shareholder seeking to exercise
dissenter's appraisal rights under the Missouri statutes.
<PAGE>
(h) TOTAL ASSETS OF THE BANK. As of the Closing
Date, the total assets of the Bank shall be equal to or
greater than $50,000,000 and the Tangible Equity Capital of
the Bank shall be equal to or greater than $4,500,000.
(i) INDEBTEDNESS OF BANCSHARES. As of the Closing
Date, the principal amount of the total indebtedness of
Bancshares shall not exceed the principal amount of the total
indebtedness of Bancshares as of June 30, 1999.
(j) LIMITATION ON CERTAIN LOANS AND NON-PERFORMING
ASSETS. The aggregate amount of all loans described by
Section 3.09(f)(vi) and all Non-Performing Assets pursuant to
Section 3.12(c) shall not exceed $250,000.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01 TERMINATION. This Agreement may be terminated
at any time prior to the Closing Date, whether before or after
approval by the shareholders of Bancshares,
(a) by mutual consent by the Board of Directors of
Buyer and the Board of Directors of Bancshares;
(b) by the Board of Directors of Buyer or the Board
of Directors of Bancshares hereto at any time after January
31, 2000, if the Bancshares Merger shall not theretofore have
been consummated;
(c) by the Board of Directors of Buyer or the Board
of Directors of Bancshares if the Federal Reserve Board or any
other federal and/or state regulatory agency whose approval is
required for the consummation of the Bancshares Merger shall
have denied approval of such transaction;
(d) by the Board of Directors of Buyer, at any time
prior to the completion of the Buyer Due Diligence Period, in
the event any situation, event, circumstance or other matter
shall come to the attention of Buyer during the course of
Buyer Due Diligence Review conducted pursuant to Section
6.01(b) hereof which Buyer shall, in its sole discretion,
determine to be of a type or nature which causes it to believe
that proceeding with the Merger is not in the best interests
of Buyer or its shareholders;
(e) by the Board of Directors of Buyer, on the one
hand, or by the Board of Directors of Bancshares, on the other
hand, in the event of a breach by the other of any
representation, warranty or agreement contained in this
Agreement, which breach is of such a magnitude as to be
materially adverse to the business, financial condition,
results of <PAGE>operations or prospects of the breaching
party and its subsidiaries taken as a whole and is not cured
after 30 days' written notice thereof is given to the party
committing such breach or waived by such other party or
parties;
(f) by the Board of Directors of Buyer pursuant to
and in accordance with the provisions of Section 6.05 hereof;
or
(g) by the Board of Directors of Buyer in the event
that it reasonably determines that a material adverse change
in the financial position or business of Bancshares or the
Bank shall have occurred or if Bancshares or the Bank shall
have suffered a material loss or damage to any of their
properties or assets, which loss or damage materially
adversely affects or impairs their ability to conduct their
businesses, or if any suit or similar proceeding shall be
instituted or threatened by any party which in the opinion of
counsel to Buyer may result in the restraint, prohibition or
obtaining of damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated
thereby; or
8.02 EFFECT OF TERMINATION. In the event of
termination of this Agreement as provided in Section 8.01
above, this Agreement shall forthwith become void and without
further effect and there shall be no liability on the part of
any party hereto or the respective officers and directors of
each, except as set forth in the second sentence of Section
6.01(a), Section 6.06 and Article IX, and, except that no
termination of this Agreement pursuant to subsection (e) of
Section 8.01 shall relieve the non-performing party of any
liability to any other party hereto arising from the breach or
non-performance of any warranty or covenant herein, after the
giving of notice and the opportunity to cure. The parties
recognize that the remedies at law of Buyer for a breach by
any Seller are inadequate and that in addition to other
remedies, Buyer shall be entitled to specific performance and
other equitable remedies. Notwithstanding the foregoing, in
the event that this Agreement is terminated pursuant to
Section 8.01(e) hereof on the account of a willful breach of
any of the representations and warranties set forth herein or
any breach of any of the agreements set forth herein, then the
non-breaching party shall be entitled to recover actual
damages or liquidated damages, as appropriate, from the
breaching party; provided, however, that no party shall be
liable for a breach of any representation or warranty which
results in a termination of this Agreement unless such party
had actual knowledge of the inaccuracy or breach of such
representation or warranty which results in the termination of
this Agreement prior to the Closing Date at the time that it
was made.
8.03 AMENDMENT. This Agreement, the Exhibits and the
Schedules hereto may be amended by the parties hereto, by
action taken by or on behalf of the respective Boards of
Directors of Buyer and Bancshares, at any time before or after
approval of this Agreement and the Bancshares Merger Agreement
by the shareholders of Bancshares; provided, however, that no
such modification shall (a) alter the amount or change the
form of the Bancshares <PAGE>Merger Consideration contemplated
by this Agreement to be received by the shareholders of
Bancshares, (b) adversely affect the tax treatment of the
Shareholders, (c) alter or change any of the terms of this
Agreement if such alteration or change would adversely affect
the shareholders of Bancshares or (d) impede or delay receipt
of any approvals referred to in Section 7.01(b) or the
consummation of the transactions contemplated by this
Agreement and the Bancshares Merger Agreement. This Agreement
may not be amended except by an instrument in writing signed
on behalf of each of the parties hereto.
8.04 WAIVER. Any term, condition or provision of
this Agreement may be waived in writing at any time by the
party which is, or whose shareholders are, entitled to the
benefits thereof.
ARTICLE IX
INDEMNIFICATION
9.01 INDEMNIFICATION. The Shareholders, jointly and
severally, and Buyer (individually, the "Indemnifying Party")
agree to defend, indemnify and hold harmless the other party
or parties (the "Indemnitee") and its or their officers,
directors, employees, agents, representatives, successors and
assigns from, against and in respect of any and all loss,
liability and expense resulting from:
(a) Any and all loss, diminution in value, damage or
deficiency resulting from any misrepresentation or breach of
warranty or nonfulfillment of any obligation by Indemnifying
Party under this Agreement or from any misrepresentation in or
omission from any certificate or other instrument furnished or
to be furnished by Indemnifying Party pursuant to this
Agreement; and
(b) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses (including
legal expenses) incident to any of the foregoing provisions.
9.02 CLAIMS. If any Indemnitee receives notice of
any claim or the commencement of any action or proceeding with
respect to which the Indemnifying Party is obligated to
provide indemnification pursuant to Section 9.01, the
Indemnitee shall promptly give the Indemnifying Party notice
thereof. Such notice shall be a condition precedent to any
liability of the Indemnifying Party under the provisions for
indemnification contained in this Agreement and shall describe
the claim in reasonable detail and shall indicate the amount
(estimated if necessary) of the loss that has been or may be
sustained by the Indemnitee. The Indemnifying Party may elect
to compromise or defend, at such Indemnifying Party's own
expense and by such Indemnifying Party's own counsel, any such
matter involving the asserted liability of the Indemnitee;
provided, however, that to the satisfaction of the
<PAGE>Indemnitee, the Indemnifying Party shall indemnify and
secure the Indemnitee against such contested claims and for
the expenses of contesting and defending the claims. If the
Indemnifying Party elects to compromise or defend such
asserted liability, it shall within 30 days (or sooner, if the
nature of the asserted liability so requires) notify the
Indemnitee of its intent to do so, and the Indemnitee shall
cooperate, at the expense of the Indemnifying Party, in the
compromise of, or defense against, any such asserted
liability. If the Indemnifying Party elects not to notify the
Indemnitee of its election as herein provided, the Indemnitee
may, if acting in accordance with its good faith business
judgment, pay, compromise or defend such asserted liability,
and such settlement shall be binding on the Indemnifying Party
for purposes of this Article IX. Notwithstanding the
foregoing, neither the Indemnifying Party nor the Indemnitee
may settle or compromise any claim over the objection of the
other; provided, however, that consent to settlement or
compromise shall not be unreasonably withheld. In any event,
the Indemnitee and the Indemnifying Party may each
participate, at its own expense, in the defense of such
asserted liability. If the Indemnifying Party chooses to
defend any claim, the Indemnitee shall make available to the
Indemnifying Party any books, records or other documents
within its control that are necessary or appropriate for such
defense.
9.03 COSTS. If any legal action or other proceeding
is brought by any party to this Agreement against any other
party to this Agreement for the enforcement or interpretation
of any of the rights or provisions of this Agreement, or
because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of
this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and all other
costs and expenses incurred in that action or proceeding, in
addition to any other relief to which it may be entitled.
9.04 REIMBURSEMENT. Subject to the provisions of
Section 8.03, the Indemnitee shall be reimbursed on demand for
loss, damage, cost or expense suffered by such party at any
time after the Closing Date in respect to any liability to
which the foregoing indemnity relates.
9.05 NET LOSS AND DE MINIMIS. Except for any knowing
and intentional breach hereof by any party, no indemnity shall
be due hereunder until such time as the actual net loss or
damage (i.e., reduced by any recovery from any third party,
such as an insurer) suffered by the Indemnitee exceeds a
cumulative aggregate amount (as to all indemnifiable claims to
the date of determination combined) equal to $15,000. After
cumulative aggregate losses equal $15,000, Indemnitee shall be
entitled to full and complete recovery of all losses incurred,
including the first $15,000.
9.06 LIMITATIONS. Notwithstanding any provision of
this Article IX to the contrary, the extent of indemnification
herein to an Indemnitee by each Indemnifying Party who is also
a Shareholder shall be limited to that portion of the
Bancshares Merger Consideration that <PAGE>such Shareholder
would be entitled to received under this Agreement.
Notwithstanding any provision of this Agreement, no Indemnitee
shall be entitled to any reimbursement hereunder from an
Indemnifying Party with respect to any claim initially made
against such Indemnifying Party more than 12 months after the
Closing Date.
ARTICLE X
GENERAL PROVISIONS
10.01 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. No investigation by the parties hereto made
heretofore or hereafter shall affect the representations and
warranties of the parties which are contained herein and each
such representation and warranty shall survive such
investigation until the first anniversary of the Closing Date,
except that the agreements set forth in Section 8.02 shall
survive the Bancshares Merger Effective Time or the earlier
termination of this Agreement.
10.02 NO ASSIGNMENT; SUCCESSORS AND ASSIGNS. This
Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and
assigns, but neither this Agreement nor any right or
obligation set forth in any provision hereof may be
transferred or assigned by any party hereto without the prior
written consent of all other parties, and any purported
transfer or assignment in violation of this Section 10.02
shall be void and of no effect. There shall not be any third
party beneficiaries of any provisions hereof.
10.03 SELLERS' REPRESENTATIVE. Sellers and each of
them hereby appoint and designate Larry L. Beach as Sellers'
agent and representative with full authority on behalf of each
Seller to receive any notice or demand pursuant to Article IX,
to approve on behalf of the Sellers the final amount of the
Bancshares Merger Consideration, to pay from the Second Escrow
Deposit any costs and expenses of the Sellers which are
incurred after the Determination Date, and to agree to any
settlement of any claim for indemnification pursuant to
Article IX which does not obligate any Seller for more than
such Seller's proportionate share of such liability based on
the number of shares of Bancshares stock held by such Seller
in relation to all Sellers who are parties hereto.
10.04 FAILURE OF ALL NAMED PARTIES TO SIGN OR APPROVE
AGREEMENT. In the event that all persons whose names appear
at the end of this Agreement as Sellers do not sign this
Agreement, this Agreement shall, nevertheless, be binding on
those named Sellers who do sign, provided that no party to
this Agreement shall have any obligation unless and until the
Buyer Entities and the holders of at least two thirds of the
outstanding common stock of Bancshares have signed.
Irrespective of whether the Board of Directors of the Bank
shall approve this Agreement, it will be binding on all other
parties.
<PAGE>
10.05 SEVERABILITY. Whenever possible, each provision
of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision
of this Agreement shall be held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only
to the extent of such prohibition or invalidity, without
invalidating the remaining provisions of this Agreement.
10.06 NO IMPLIED WAIVER. No failure or delay on the
part of either party hereto to exercise any right, power or
privilege hereunder or under any instrument executed pursuant
hereto shall operate as a waiver nor shall any single or
partial exercise of any right, power or privilege preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege.
10.07 HEADINGS. Article, section, subsection and
paragraph titles, captions and headings herein are inserted
only as a matter of convenience and for reference, and in no
way define, limit, extend or describe the scope of this
Agreement or the intent or meaning of any provision hereof.
10.08 ENTIRE AGREEMENT. This Agreement and the
Appendices and Schedules hereto constitutes the entire
agreement between the parties with respect to the subject
matter hereof, supersedes all prior negotiations,
representations, warranties, commitments, offers, letters of
interest or intent, proposal letters, contracts, writings or
other agreements or understandings with respect thereto. No
waiver, and no modification or amendment of any provision of
this Agreement shall be effective unless specifically made in
writing and duly signed by all parties thereto.
10.09 COUNTERPARTS. This Agreement may be executed in
one or more counterparts, and any party to this Agreement may
execute and deliver this Agreement by executing and delivering
any of such counterparts, each of which when executed and
delivered shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
10.10 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to be duly
received (a) on the date given if delivered personally or by
cable, telegram or telex or (b) on the date received if mailed
by registered or certified mail (return receipt requested), to
the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(i) if to the Buyer Entities:
Exchange National Bancshares, Inc.
132 E. High Street
<PAGE> P.O. Box 688
Jefferson City, Missouri 65102-0688
Attention: Donald L. Campbell
Telecopy: (573) 761-5745
and copy to:
Stinson, Mag & Fizzell, P.C.
1201 Walnut Street, Suite 2800
Kansas City, MO 64106
Attention: Howard H. Mick
Telecopy: (816) 691-3495
and copy to:
Union State Bank & Trust of Clinton
102 N. Second Street
P. O. Box 646
Clinton, Missouri 64735-0646
Attention: James E. Smith
Telecopy: (816) 885-6820
(ii) if to Sellers:
Larry L. Beach
200 Main Street
Warsaw, Missouri 65355
Telecopy: (660) 438-7143
and copy to:
Schulz, Bender, Maher, Lee, Sexton &
Hill, P.C.
2900 Breakthrough Lane, Suite 100
Gladstone, Missouri 64119
Attention: Michael H. Maher
Telecopy: (816) 455-2775
10.11 GOVERNING LAW. This Agreement shall be governed
by and controlled as to validity, enforcement, interpretation,
effect and in all other respects by the internal laws of the
State of Missouri applicable to contracts made in that state.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this
Agreement to be signed by their respective officers thereunto
duly authorized and their respective corporate seals to be
affixed hereto, all as of the date first written above.
"BUYER ENTITIES"
EXCHANGE NATIONAL BANCSHARES, INC.
ATTEST:
By: _______________________________
Name:
Title:
____________________
Secretary
ENBMCB ACQUISITION COMPANY, INC.
ATTEST:
By: ________________________________
Name:
Title:
____________________
Secretary
<PAGE>
"SELLERS"
MID-CENTRAL BANCORP, INC.
ATTEST:
By: ________________________________
Name:
__________________ Title:
Secretary
OSAGE VALLEY STATE BANK
ATTEST:
By: ________________________________
Name:
___________________ Title:
Secretary
<PAGE>
"SHAREHOLDERS"
NAME NO. OF SHARES SIGNATURE
Larry L. Beach 1,022 ___________________
David W. Bentele 219 ___________________
David W. Bentele and 207 ___________________
Susan L. Bentele ___________________
Larry A. Gerken 353 ___________________
Gene F. Kratschmer
TTEE U/TR DTD
10/15/86 or His
SUCC/TTEE 132 __________________
Mark E. Kratschmer 4 __________________
Mark E. and Mary Jo Kratschmer 535 __________________
__________________
Germantown Trust & Savings Bank, 509 GERMANTOWN TRUST &
Trustee for Trust #11-13 SAVINGS BANK,
(James R. Lampe) as Trustee for
Trust #11-13
(James R. Lampe)
By: ______________
William J. Glaser 1 __________________
William J. Glaser and 81 __________________
Julie M. Glaser __________________
Richard Meyer 427 __________________
William R. Montgomery 548 __________________
Gary Metzer 49 __________________
Dorothy B. Meyer 277 __________________
Exhibit 99.1
For Immediate Release Contact: Kathleen Bruegenhemke
Senior Vice President, Investor
Relations
(573) 761-6179
EXCHANGE NATIONAL BANCSHARES TO ACQUIRE
CITIZENS STATE BANK OF CALHOUN
THROUGH MERGER WITH UNION STATE BANK & TRUST
JEFFERSON CITY, MO - September 29, 1999 - Exchange
National Bancshares, Inc., parent company of Exchange National
Bank of Jefferson City and Union State Bank & Trust of Clinton,
has entered into an agreement to acquire Citizens State Bank of
Calhoun. Immediately following the acquisition, which is subject
to regulatory approval, Union State Bank & Trust and Citizens
State Bank will merge to form Citizens Union State Bank & Trust.
The proposed acquisition and merger transaction was
made public today in a joint announcement by Donald L. Campbell,
Chairman and CEO of Exchange National Bancshares, Inc., James E.
Smith, CEO of Union State Bank & Trust and Julius F. Wall,
Chairman of the Board of Citizens State Bank. In the
acquisition, the shareholders of Calhoun Bancshares, Inc., the
parent holding company of Citizens State Bank will be paid cash
of approximately $14,000,000.
Exchange National Bancshares, Inc., a bank holding
company headquartered in Jefferson City, Missouri acquired Union
State Bank & Trust in 1997. As of June 30, 1999, Exchange
National Bancshares had total consolidated assets of $475
million, deposits of $374 million and shareholders' equity of $47
million.
Union State Bank & Trust, which had approximately $150
million in assets at June 30, has four offices in Clinton and
single offices in Osceola and Collins. Citizens State Bank,
which has about $70 million in assets has offices in Clinton and
Calhoun. The communities served by the banks are in Henry County
and adjoining St. Clair County, located in west central Missouri.
Citizens Union State Bank & Trust will continue to serve
customers of both banks at all existing offices and through all
existing ATM locations. The $225 million in assets of the merged
institutions will include approximately $120 million in loans.
In commenting on the proposal, Mr. Campbell said ...
"The acquisition of Citizens State Bank fits well within our
strategy to expand our base in and near existing markets where we
<PAGE>
can do so through the acquisition of quality, well managed banks.
We are particularly enthused about adding the fine staff of the
Citizens State Bank to that of Union State Bank & Trust to create
a strong locally managed bank for the benefit of the communities
they serve."
Jim Smith will become Chairman and CEO of Citizens
Union State Bank & Trust following the merger. Robert Wheeler,
current President and CEO of Citizens State Bank will be the
President and Chief Operating Officer. The Board of Directors of
Citizens Union State Bank & Trust will consist of Board members
drawn from both banks.
Smith said this is an exciting day for the citizens of
Henry and St. Clair Counties. "Making all decisions locally
leads to a better local environment" said Smith. "We at Union
State Bank & Trust look forward to joining with the fine staff of
Citizens State Bank in serving our communities. We very much
admire Citizen State's active community involvement and its
dedication to customers. The progress and growth of our two
institutions is the result of both banks taking care of their
customers quickly, efficiently and with competitive products and
services. The merger will enable us to expand the banking
options and services for the betterment of the customers of both
banks."
Wheeler also expressed enthusiasm about the
transaction, making particular reference to the substantially
greater financial resources and higher lending limits which would
become available to Citizens' customers as well as the greater
opportunity for professional growth which he believes will be
provided to his Bank's staff as part of the merged institutions.
Officials of the two banks indicated that the
regulatory approval process should be completed by early next
year and that the merger should take place some time during the
first quarter of the year 2000.
Exhibit 99.2
For Immediate Release Contact: Kathleen Bruegenhemke
Senior Vice President, Investor
Relations
(573) 761-6179
EXCHANGE NATIONAL BANCSHARES, INC.
OF JEFFERSON CITY, MISSOURI TO ACQUIRE
OSAGE VALLEY BANK OF WARSAW
JEFFERSON CITY, MO. - Donald L. Campbell, Chairman and CEO
of Exchange National Bancshares, Inc., and Larry L. Beach,
President of Osage Valley Bank of Warsaw today (October 7, 1999)
announced the signing of a definitive agreement for the
acquisition of Mid-Central Bancorp, Inc., by Exchange National
Bancshares, Inc.
Mid-Central Bancorp is a single-bank holding company that
owns Osage Valley Bank of Warsaw. Osage Valley Bank is a
community bank with approximately $51 million in assets as of
June 30, 1999 with two facilities in Warsaw.
"We're glad to welcome Osage Valley Bank to our
organization. It fits well within our strategy to expand our
base in and near existing markets where we can do so through the
acquisition of quality well managed banks" said Donald Campbell.
He also stated that we are particularly enthused about the fine
staff of the Osage Valley Bank that will continue to serve their
customers as they have in the past.
In commenting on the proposal, Larry Beach, President of
Osage Valley Bank said "We feel the two organizations are a
perfect match and we are excited to unite with Exchange National
Bancshares as this will allow Osage Valley Bank to maintain its
strong community banking relationships."
Chairman Campbell stated that the bank will remain a
separate charter for the present time, and that Jim Smith,
current President and CEO of Union State Bank & Trust of Clinton
will assume responsibilities of President of Osage Valley Bank.
Larry Beach will become Vice Chairman of Osage Valley Bank.
Exchange National Bancshares, Inc., a multi bank holding
company, is the parent holding company of both the Exchange
<PAGE>
National Bank of Jefferson City and Union State Bank and Trust of
Clinton. Last month, September, 1999, Exchange National
Bancshares also announced the purchase of Citizens State Bank of
Calhoun through a merger with Union State Bank and Trust of
Clinton. Upon completion of these acquisitions, Exchange
National Bancshares will have total assets of approximately $600
million.
