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): January 3, 1997
First Mutual Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0 -26184 37-1339075
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(State or other (Commission File No.) (I.R.S. Employer
jurisdiction of) Identification No.)
Registrant's telephone number, including area code:
(217) 429-2306
Not Applicable
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On January 3, 1997, First Mutual Bancorp, Inc. (the
"Registrant"), the holding company for First Mutual Bank, S.B.
(the "Bank") completed the Bank's acquisition of three branch
offices from First of America Bank-Illinois, N.A. ("FOA"). The
branch offices, located in Lincoln, Taylorville and Pontiac,
Illinois, included an aggregate of $146 million in deposits,
certain real estate and personal property associated with the
branches, and certain loans associated with the branches. The
consideration paid to the Registrant for the acquisition was
approximately $120.8 million. The Bank intends to continue to
operate the acquired branches as banking branches in the manner
previously operated by FOA.
FOA is a national banking association with its headquarters
located in Oak Brook, Illinois.
For further information, reference is made to the
Registrant's press release dated January 3, 1997, which is
incorporated herein by reference, and the Agreement to Purchase
Assets and Assume Liabilities by and between First of America
Bank-Illinois, N.A. and First Mutual Bank, S.B., dated November
1, 1996, which is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
The following Exhibits are filed as part of this report:
Exhibit 2 Agreement to Purchase Assets and Assume
Liabilities, dated November 1, 1996.
Exhibit 99.1 Registrant's press release dated January 3,
1997.
Pro forma financial information relative to the acquisition
and prepared in accordance with Article 11 of Regulation S-X are
not included herewith, but will be filed by amendment no later
than 60 days from the date hereof.
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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.
FIRST MUTUAL BANCORP, INC.
DATE: January __, 1997 By:----------------------------------
Paul K. Reynolds, President and
Chief Executive Officer
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AGREEMENT TO PURCHASE ASSETS
AND ASSUME LIABILITIES
BY AND BETWEEN
FIRST OF AMERICA BANK-ILLINOIS,
NATIONAL ASSOCIATION
AND
FIRST MUTUAL BANK, S.B.
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TABLE OF CONTENTS
ARTICLE ONE: PURCHASE OF ASSETS, REAL ESTATE
AND ASSUMPTION OF DEPOSIT LIABILITIES...........................1
1.1 Purchased Assets......................................1
1.2 Assumption of Liabilities.............................3
ARTICLE TWO: CLOSING...........................................3
2.1 The Closing...........................................3
2.2 Purchase and Sale of Assets...........................3
2.3 Assumption of Liabilities.............................4
2.4 Payment for Assets and Assumption of Liabilities......4
2.5 Fiduciary Relationships...............................4
2.6 Names and Marks.......................................5
2.7 Prorations............................................5
2.8 Transitional Matters..................................5
2.9 Post-Closing Adjustments..............................7
ARTICLE THREE: THE BANK'S
REPRESENTATIONS AND WARRANTIES..................................7
3.1 Authority Relative to this Agreement..................7
3.2 Organization and Good Standing........................7
3.3 Governmental Notices..................................7
3.4 Litigation............................................8
3.5 Other Information.....................................8
3.6 Advice of Changes.....................................8
ARTICLE FOUR: SELLER'S
REPRESENTATIONS AND WARRANTIES..................................8
4.1 Authority Relative to this Agreement..................8
4.2 Organization and Good Standing........................8
4.3 Governmental Notices..................................9
4.4 Litigation............................................9
4.5 Proceedings Relating to Properties....................9
4.6 Taxes.................................................9
4.7 Financial Statements..................................9
4.8 Compliance with Law...................................9
4.9 Employee Contracts...................................10
4.10 Forms................................................10
4.11 Deposit Liabilities..................................10
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4.12 Title to Assets......................................10
4.13 Assigned Contracts...................................10
4.14 Purchased Loans......................................11
4.15 Other Information....................................11
4.16 Advice of Changes....................................11
ARTICLE FIVE: COVENANTS OF THE BANK...........................11
5.1 Conduct of Business; Certain Covenants...............11
5.2 Confidentiality......................................11
5.3 Required Approvals...................................12
5.4 Use of Seller's Name.................................12
5.5 Best Efforts to Satisfy Conditions...................12
5.6 Further Assurances...................................12
ARTICLE SIX: COVENANTS OF SELLER..............................13
6.1 Access to Records and Information; Personnel;
Customers............................................13
6.2 Conduct of Business; Certain Covenants...............13
6.3 Employee Matters.....................................13
6.4 Negative Covenants...................................14
6.5 Confidentiality......................................15
6.6 Assistance in Obtaining Regulatory Approvals.........15
6.7 Real Estate, Title, and Surveys......................15
6.8 Insurance............................................16
6.9 Assignment of Contracts..............................16
6.10 Transfer of Data.....................................16
6.11 Signs................................................17
6.12 Best Efforts to Satisfy Conditions...................17
6.13 Further Assurances...................................17
6.14 Inspection of Premises, Loans, Deposit Liabilities...17
ARTICLE SEVEN: CONDITIONS PRECEDENT TO
SELLER'S OBLIGATION............................................17
7.1 Compliance by the Bank...............................18
7.2 Renewal of Representations and Warranties............18
7.3 Delivery of Documents................................18
7.4 Litigation...........................................18
ARTICLE EIGHT: CONDITIONS PRECEDENT
TO THE BANK'S OBLIGATIONS......................................19
8.1 Regulatory Approvals.................................19
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8.2 Compliance by Seller.................................19
8.3 Renewal of Representations and Warranties............19
8.4 Documents............................................19
8.5 Absence of Certain Changes or Events.................20
8.6 Litigation...........................................20
ARTICLE NINE: TERMINATION.....................................20
9.1 Termination Provisions...............................20
ARTICLE TEN: EXPENSES.........................................21
10.1 The Bank's Expenses..................................21
10.2 Seller's Expenses....................................21
10.3 Brokers' Fees........................................21
ARTICLE ELEVEN: OTHER AGREEMENTS..............................21
11.1 Backup Withholding...................................21
11.2 IRA..................................................22
11.3 Interest Reporting...................................22
11.4 Pre-Closing Notices to Depositors and Obligors.......22
11.5 Post Closing Certification...........................23
11.6 Post Closing Access to Records.......................23
11.7 Covenant Not to Compete..............................23
ARTICLE TWELVE: INDEMNIFICATION...............................24
12.1 Indemnification of the Bank..........................24
12.2 Indemnification of Seller............................24
12.3 Indemnification of the Bank for Environmental
Matters..............................................24
ARTICLE THIRTEEN: AMENDMENT, WAIVER AND NOTICE................25
13.1 Amendment............................................25
13.2 Waiver...............................................25
13.3 Notices..............................................25
ARTICLE FOURTEEN: GENERAL.....................................26
14.1 Governing Law........................................26
14.2 Entire Agreement.....................................26
14.3 Method of Consent or Waiver..........................26
14.4 Public Announcement..................................26
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14.5 No Assignment........................................26
14.6 Counterparts.........................................26
14.7 Reliance on Headings, Etc............................26
14.8 Severability Clause..................................26
14.9 Parties in Interest..................................27
EXHIBIT A CONVEYED REAL ESTATE LEGAL DESCRIPTION
EXHIBIT B ASSIGNMENT AND ASSUMPTION OF ACCOUNTS AGREEMENT
EXHIBIT C ASSIGNMENT AND ASSUMPTION OF LOANS AND LOAN
AGREEMENTS
EXHIBIT D ASSIGNMENT AND ASSUMPTION OF CONTRACTS
EXHIBIT E ASSIGNMENT, TRANSFER AND APPOINTMENT OF SUCCESSOR
TRUSTEE FOR INDIVIDUAL RETIREMENT ACCOUNTS
EXHIBIT F BILL OF SALE
SCHEDULE I COMMERCIAL LOANS
SCHEDULE II PERSONAL PROPERTY
SCHEDULE III ASSIGNED CONTRACTS
SCHEDULE IV DEPOSITS
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AGREEMENT TO PURCHASE ASSETS
AND ASSUME LIABILITIES
THIS AGREEMENT TO PURCHASE ASSETS AND ASSUME LIABILITIES
("Agreement") is made and entered into this 1st day of November,
1996 by and between FIRST OF AMERICA BANK-ILLINOIS, NATIONAL
ASSOCIATION (the "Seller"), a national banking association with
its headquarters located at 1111 West 22nd Street, Suite 300, Oak
Brook, Illinois 60521 and FIRST MUTUAL BANK, S.B., (the "Bank"),
an Illinois savings bank with its headquarters located at 135
East Main Street, Decatur, Illinois 62523.
WITNESSETH
WHEREAS, Seller owns and operates branch offices located at
122 North McLean Street, Lincoln, Illinois (the "Lincoln
Branch"), 110 West Water Street, Pontiac, Illinois (the "Pontiac
Branch") and 725 West Spresser Street, Taylorville, Illinois (the
"Taylorville Branch"). The Lincoln Branch, the Pontiac Branch
and the Taylorville Branch are sometimes hereinafter collectively
referred to as the "Branch Offices."
WHEREAS, Seller desires to sell and the Bank desires to
acquire and operate the Branch Offices, and, in that regard,
Seller desires to sell and the Bank desires to acquire certain
assets related thereto, including certain loans maintained at the
Branch Offices.
WHEREAS, Seller desires to transfer and the Bank desires to
assume certain deposit accounts maintained at or for the Branch
Offices and certain other liabilities pertaining to the
continuing operations of the Branch Offices.
NOW, THEREFORE, in consideration of the premises and
agreements herein contained, and for other consideration the
receipt and sufficiency of which are hereby acknowledged, the
Bank and Seller agree as follows:
ARTICLE ONE: PURCHASE OF ASSETS, REAL ESTATE
AND ASSUMPTION OF DEPOSIT LIABILITIES
1.1 Purchased Assets. For the consideration, in the
manner and upon the terms and conditions hereinafter set forth,
Seller hereby agrees to sell, convey, transfer and assign to the
Bank and the Bank hereby agrees to accept and assume from Seller,
as of the Effective Time (as hereinafter defined), all of the
following assets relating to the Branch Offices (collectively the
"Assets"), as follows:
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(a) Real Estate. All of Seller's interest in the
real estate located 122 North McLean Street, Lincoln, Illinois,
110 West Water Street, Pontiac, Illinois and 725 West Spresser
Street, Taylorville, Illinois, more particularly described in
Exhibit A hereto (the "Real Estate").
(b) Cash. All cash on hand at the Branch Offices as
of the close of business on the Closing Date ("Cash on Hand").
(c) Loans. All commercial loans identified in Schedule
I hereto and all consumer loans associated with the Branch
Offices, including all loans secured by Deposits (as hereinafter
defined) and all overdraft checking account loans associated with
the Branch Offices, as the Bank shall elect to accept (the Bank
shall have the right to reject loans which are more than thirty
(30) days past due or loans which have been classified as
substandard, doubtful or loss by Seller or by appropriate
regulatory authorities but shall not have the right to reject
loans which are not so classified or which are not more than
thirty (30) days past due). The Bank shall notify Seller in
writing not less than fifteen (15) days prior to the Closing Date
of its election hereunder. Failure of the Bank to provide timely
notice to Seller hereunder shall constitute acceptance thereof by
the Bank. All such loans as are accepted by the Bank are
hereinafter referred to as the "Purchased Loans." The Purchased
Loans shall not include such loans as are identified in writing
by Seller to the Bank, not less than fifteen (15) days prior to
the Closing Date, as being incapable or impractical of being
transferred to the Bank for reasons associated with the internal
operations of Seller (as determined at Seller's sole discretion).
(d) Personal Property. All furniture, equipment,
fixtures, and other tangible personal property (excluding signage
and other property that identifies Seller by name or logo or any
data processing equipment which is not compatible with the data
processing equipment or system used by the Bank) located at the
Branch Offices and any on-site or off-site automated teller
machines ("ATMs") maintained by Seller within the communities
served by the Branch Offices, all as described in Schedule II to
this Agreement (the "Personal Property").
(e) Books and Records. All books, records, files and
other documentation in the possession of Seller directly relating
to the Assets and Assumed Liabilities (as hereinafter defined),
including, without limitation, all records of deposit balances
carried with other banks, bankers or trust companies; all
certificates and title documents for the Real Estate and the
Personal Property; all signature cards and contracts between
Seller and the Depositors, as hereafter defined, and records of
similar character; all passbooks of Depositors held by Seller;
deposit slips; and cancelled checks and withdrawal orders
representing charges to accounts of Depositors.
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(f) Assigned Contracts. All of Seller's interest under
any and all contracts relating to the operation or maintenance of
the Branch Offices that are assignable by Seller to the Bank and
are identified in Schedule III hereto, or which may be identified
by Seller at any time prior to the date which is fifteen (15)
days prior to the Closing Date, provided that all necessary
consents to assignment thereof to the Bank are obtained in
accordance with Section 6.9 hereof, and provided further that the
Bank has not notified Seller, at least five (5) days prior to the
Closing Date, of the Bank's refusal to accept the assignment of
any such contract (the "Assigned Contracts").
1.2 Assumption of Liabilities. Upon the terms and subject
to the conditions hereinafter set forth and except as otherwise
provided herein, Seller hereby agrees to transfer and assign, and
the Bank hereby agrees to accept and assume from Seller, certain
liabilities relating to the Branch Offices accruing from and
after the Effective Time, as hereinafter defined (the "Assumed
Liabilities"), as follows:
(a) Deposit Liabilities. All liabilities for payment
of deposits maintained at the Branch Offices as of the Effective
Time, as hereinafter defined, together with unpaid accrued
interest thereon through the Closing Date (whether or not such
interest has been posted through the Closing Date), except for
(i) deposits which cannot lawfully be transferred; (ii) deposits
relating to loans that the Bank shall not elect to accept or
which Seller identifies as not being Purchased Loans; (iii)
deposits which are negotiated certificates of deposit of $100,000
or more with governmental or other institutional or commercial
customers; (iv) deposits which are the subject of, or involved
in, litigation; and (v) deposits obtained through a deposit
broker, as defined in 12 C.F.R. Section 337.6(a)(5). The
deposits to be transferred to the Bank hereunder (including all
unpaid accrued interest thereon as of the Effective Time) are
collectively referred to herein as the "Deposits" or the "Deposit
Liabilities."
(b) Assigned Contracts and Purchased Loans. All
obligations of Seller under the Assigned Contracts and the
Purchased Loans.
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ARTICLE TWO: CLOSING
2.1 The Closing. The purchase and sale of the Assets, and
transfer and assumption of the Assumed Liabilities by the Bank
hereunder shall be consummated and become effective, subject to
the terms and conditions of this Agreement, immediately following
a closing (the "Closing") to be held at the offices of Seller, or
such other location as the parties may agree, on such date as the
parties shall mutually agree upon (the "Closing Date"), but not
later than thirty (30) days following the receipt of all
approvals from all required regulatory authorities and the
satisfaction of all conditions associated therewith. The
transactions contemplated hereby shall become effective at 11:59
p.m. Central Time on the Closing Date (the "Effective Time").
2.2 Purchase and Sale of Assets. As of the Effective Time
and subject to the terms and conditions set forth in this
Agreement, Seller shall convey, assign, and transfer to the Bank
and the Bank shall purchase from Seller all of Seller's right,
title, and interest in the Assets.
2.3 Assumption of Liabilities.
(a) As of the Effective Time, subject to the terms and
conditions set forth in this Agreement, the Bank shall assume
liability for the payment and performance of Seller's obligations
accruing on or after the Effective Time for the Deposit
Liabilities in accordance with the terms of such Deposit
Liabilities in effect on the Closing Date, provided, however,
nothing herein shall preclude the Bank from thereafter changing
the terms and conditions of such Deposit Liabilities to the
extent that it can do so in accordance with the terms of the
agreements with customers creating the Deposit Liabilities and in
accordance with applicable law.
(b) As of the Effective Time, the Bank will assume the
obligations of Seller with respect to the Purchased Loans and the
Assigned Contracts accruing on or after the Effective Time in
accordance with the terms thereof.
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2.4 Payment for Assets and Assumption of Liabilities. On
the Closing Date, Seller shall pay to the Bank, by wire transfer
in immediately available funds to an account designated by the
Bank, the amount of the Deposit Liabilities as estimated as of
the close of business on the third day immediately preceding the
Closing Date (the "Estimation Date") plus the net amount of any
prorated items required by Section 2.7 hereof owed by Seller to
the Bank and less the sum of: (a) the amount of all Cash on Hand
as of the close of business on the Estimation Date; (b) the net
amount of any prorated items required by Section 2.7 hereof owed
by the Bank to Seller; (c) the Net Book Value (as hereinafter
defined) as of the close of business on the Estimation Date of
the Personal Property; (d) the Net Book Value as of the
Estimation Date of the Purchased Loans, together with unpaid
accrued interest thereon; (e) the "Premium," which shall be the
product of the amount of the Deposit Liabilities at the Lincoln
Branch as of the Estimation Date multiplied by 10% (0.10) plus
the product of the Deposit Liabilities at the Pontiac Branch as
of the Estimation Date multiplied by 8.5% (0.0850) plus the
product of the Deposit Liabilities at the Taylorville Branch as
of the Estimation Date multiplied by 10% (0.10); and (f) the Net
Book Value as of the close of business on the Estimation Date of
the Real Estate. The Bank and Seller shall agree in writing upon
the allocation of such amount among various categories of assets
being acquired by the Bank. The Bank and Seller agree to be
bound by the allocation for all purposes, including reporting to
the Internal Revenue Service under Section 1060 of the Internal
Revenue Code, as amended ("IRC"). For purposes of this
Agreement, the term Net Book Value means net book value
determined from the books and records of Seller in accordance
with generally accepted accounting principles consistently
applied.
2.5 Fiduciary Relationships. The Bank shall assume all of
the fiduciary relationships of Seller arising out of any
Individual Retirement Account ("IRA") included in the Deposit
Liabilities.
2.6 Names and Marks. Seller is not selling, assigning,
conveying, transferring or delivering, nor shall the Bank
acquire, any rights or interest in or to: (a) the name "First of
America" or any derivation thereof; or (b) any logos, service
marks or trademarks, advertising materials or slogans or any
similar items used by Seller in connection with its business.
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2.7 Prorations. All taxes associated with the Real Estate,
assessments, utility payments, payments due on Assigned
Contracts, and similar expenses related to the Assets transferred
hereunder which were accrued or prepaid by Seller prior to the
Effective Time but are allocable to any period following the
Effective Time shall be prorated between the parties on the basis
of a 30-day month and 360-day year as of the Closing Date. Taxes
shall be prorated as though all tax bills which are received in a
particular year are payable for that year. There shall be no
charge to the Bank with respect to the Federal Deposit Insurance
Corporation ("FDIC") premium paid by Seller with respect to the
Deposit Liabilities prior to the Closing Date. Any items
susceptible of being prorated but which cannot be prorated by the
Closing Date shall be prorated as soon as the requisite
information becomes available. Such adjustments after the
Closing Date shall take place at a mutually agreeable time and
place within twenty (20) Business Days (as hereinafter defined)
of the Closing Date. For purposes of this Agreement, the term
"Business Day" shall mean any day other than a Saturday, Sunday
or legal holiday under the laws of the United States or the State
of Illinois.
2.8 Transitional Matters.
(a) During the ninety (90) day period following the
Closing Date, the Bank shall pay, in accordance with law and
customary banking practices, all properly drawn and presented
checks, and automated clearinghouse debits and credits, ATM
deposits and withdrawals, drafts and withdrawal orders presented
to the Bank by mail, over the counter through the check clearing
system of the banking industry, by depositors of the Deposit
Liabilities ("Depositors") on checks, drafts or withdrawal order
forms provided by Seller, and in all other respects, to
discharge, in the usual course of the banking business, the
duties and obligations of Seller with respect to the balances due
and owing to the Depositors.
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(b) If any of the Depositors, instead of accepting the
obligations of the Bank to pay the Deposit Liabilities, shall
demand payment from Seller for all or any part of any of the
Deposit Liabilities, Seller may make such payment. If any
Depositor draws a check, draft or withdrawal order against his or
her Deposit, has or makes an automated clearinghouse generated
debit or credit with respect to his or her Deposit or makes an
ATM deposit or withdrawal, which is presented or charged to
Seller within ninety (90) days after the Closing Date, Seller may
pay the same and the Bank will reimburse Seller for any such
payment or charges provided there are sufficient funds in the
Depositor's account. The Bank and Seller shall settle within the
next Business Day any such Deposits paid by Seller and any
checks, drafts or orders of withdrawal presented by Seller to the
Bank so long as presentment is made by 3:00 p.m. on the day of
presentment of such item by the Depositor. In order to reduce
the continuing charges to Seller through the check clearing
system of the banking industry which will result from check forms
of Seller being used after the Closing Date by the Depositors,
the Bank agrees, at its sole cost and expense, and without charge
to such Depositors, to notify such Depositors, as soon as
practicable after the Closing Date, of the Bank's assumption of
the Deposit Liabilities and to furnish each Depositor with checks
on the forms of the Bank, and with instructions to utilize the
Bank's checks and to destroy unused checks of Seller.
(c) For a period of ninety (90) days after the Closing
Date, Seller (within thirty (30) hours of receipt thereof) shall
deliver to the Bank a detailed list of checks presented to Seller
for payment which are drawn on accounts which are included in the
Deposit Liabilities. As soon thereafter as is reasonably
practicable, Seller shall deliver to the Bank the checks detailed
on such lists. The Bank will reimburse Seller for its expenses
(other than data processing expenses) reasonably incurred in the
performance hereof.
(d) As of the Effective Time, (i) all ATM access cards
issued by Seller to Depositors who will not have ATM-accessible
accounts with Seller after the Effective Time and (ii) all check
guarantee cards issued by Seller to Depositors who will not have
checking accounts with Seller after the Effective Time, if any,
will be void. Within fifteen (15) days of the date of this
Agreement, Seller shall provide the Bank with the data tapes (in
the Bank's standard format) reasonably required, prior to the
Closing Date, to accommodate the processing of ATM cards which
may be issued but not activated prior to the Closing Date.
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(e) Seller and the Bank will use their best efforts to
transfer all ACH arrangements to the Bank as soon as possible
following the Closing Date. Within twenty (20) calendar days of
the date of this Agreement, Seller will use its best efforts to
deliver to the Bank (i) a modem transmission (in the Bank's
standard format) of all ACH Items and Recurring Debit
arrangements as of the date hereof, (ii) copies of all ACH
origination forms for social security payments and Recurring
Debit arrangements as of the date hereof and (iii) all other
records and information necessary for the Bank to service such
arrangements. In the event that any ACH arrangements or
Recurring Debit arrangements are established between the date
hereof and the Closing Date, Seller shall, as soon as practicable
thereafter, provide the Bank with the information described in
clauses (i), (ii) and (iii) above with respect to such new
arrangements. The Bank shall continue such ACH arrangements and
such Recurring Debit arrangements as are originated and
administered by third parties and for which the Bank need act
only as processor; the Bank shall have no obligation to continue
any such arrangements that were originated and administered by
Seller, and Seller shall terminate such arrangements on or prior
to the Closing Date.
2.9 Post-Closing Adjustments. Within twenty (20) Business
Days after the Closing Date ("Adjustment Payment Date"), the
parties shall determine, consistent with the express terms of
this Agreement, the amount of the Deposit Liabilities, prorated
items owed by Seller to the Bank and all items listed in
Subparagraphs (a), (b), (c), (d), (e) and (f) of Section 2.4, in
each case as of the Effective Time, and shall make an appropriate
post-closing adjustment payment (the "Adjustment Payment"). The
Adjustment Payment shall be paid by wire transfer to a previously
designated account, by Seller or by the Bank, as the case may be,
on or before the Adjustment Payment Date. Interest on the amount
of the Adjustment Payment for the period from the Closing Date to
the Adjustment Payment Date shall be due to the party receiving
the Adjustment Payment. Interest shall be calculated at a rate
equal to the average of the high and low bids for Federal Funds
as reported in The Wall Street Journal on the Closing Date, or,
if no such rates were reported on the Closing Date, on the latest
date immediately prior to the Closing Date on which such bids
were reported in The Wall Street Journal.
ARTICLE THREE: THE BANK'S
REPRESENTATIONS AND WARRANTIES
The Bank represents and warrants to Seller as follows:
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3.1 Authority Relative to this Agreement. The execution,
delivery and performance of this Agreement by the Bank has been
duly authorized and approved by all necessary corporate action on
the part of the Bank, and this Agreement is legally binding and
enforceable against the Bank in accordance with its terms. This
Agreement and the transactions contemplated hereby do not and
will not violate any of the provisions of, or constitute a
default under: (a) the Articles of Incorporation or Bylaws of
the Bank; or (b) any other material agreement, commitment or
instrument to which the Bank is a party or by which any of its
properties or assets are bound.
3.2 Organization and Good Standing. The Bank is a state
savings bank duly organized, validly existing and in good
standing under the laws of the State of Illinois and all of its
deposits are insured by the FDIC through the Savings Association
Insurance Fund ("SAIF") to the extent provided under applicable
law, and it has the corporate power to carry on its business as
it is now being conducted and to consummate the transactions
contemplated by this Agreement. The Bank acknowledges and agrees
that all or a portion of the Deposit Liabilities being
transferred to the Bank by Seller pursuant to this Agreement may
be deemed by the FDIC to be insured through the Bank Insurance
Fund ("BIF") and may be required to be maintained as BIF
deposits by the Bank.
3.3 Governmental Notices. The Bank has received no notice
from any federal, state, or other governmental agency indicating
that such agency would oppose or not grant or issue its consent
or approval, if required, with respect to the transactions
contemplated hereby.
3.4 Litigation. There is no action, suit, or proceeding
pending against the Bank or, to the knowledge of the Bank,
threatened against or affecting the Bank before any court or
arbitrator or any governmental body, agency, or official which
could materially adversely affect the ability of the Bank to
perform its obligations under this Agreement or which in any
manner questions the validity of this Agreement.
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3.5 Other Information. To its knowledge, no representation
or warranty by the Bank contained in this Agreement, or
disclosure by the Bank in any certificate or other instrument or
document furnished or to be furnished by or on behalf of the Bank
pursuant to this Agreement, and no information furnished or to be
furnished by the Bank for use in applications to various
regulatory authorities contains or will contain any untrue
statement of a material fact or omits or will omit to state any
material fact required to be stated herein or therein or which is
necessary to make the statements contained herein or therein, in
light of the circumstances under which they were or are made, not
misleading in any material respect.
3.6 Advice of Changes. Between the date hereof and the
Closing Date, the Bank shall promptly advise Seller in writing of
any fact which, if existing or known as of the date hereof, would
have been required to be set forth or disclosed in or pursuant to
this Agreement or of any fact which, if existing or known as of
the date hereof, would have made any of the representations
contained herein untrue in any material respect.
ARTICLE FOUR: SELLER'S
REPRESENTATIONS AND WARRANTIES
Seller represents and warrants to the Bank as follows:
4.1 Authority Relative to this Agreement. The execution,
delivery and performance of this Agreement by Seller has been
duly authorized and approved by all necessary corporate action on
the part of Seller, and this Agreement is legally binding and
enforceable against Seller in accordance with its terms. This
Agreement and the transactions contemplated hereby do not and
will not violate any of the provisions of, or constitute a
default under: (a) the Articles of Association or Bylaws of
Seller; or (b) any other material agreement, commitment or
instrument to which Seller is a party or by which any of its
properties or assets are bound.
4.2 Organization and Good Standing. Seller is a national
banking association duly organized, validly existing and in good
standing under the laws of the United States and all of its
deposits are insured by the FDIC through BIF or SAIF and it has
corporate power to carry on its business, including the business
of the Branch Offices, as it is now being conducted and to
consummate the transactions contemplated by this Agreement.
4.3 Governmental Notices. Seller has received no notice
from any federal, state, or other governmental agency indicating
that such agency would oppose or not grant or issue its consent
or approval, if required, with respect to the transactions
contemplated hereby.
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4.4 Litigation. As of the date of this Agreement there is
no action, suit, or proceeding or investigation of any nature
pending, or to the knowledge of Seller, threatened against or
affecting Seller before any court or arbitrator or any
governmental body, agency, or official or otherwise that arises
out of Seller's operation of the Branch Offices or challenges the
validity or legality of the transactions contemplated by this
Agreement or which would adversely affect the Assets or the
Branch Offices or which could materially adversely affect the
ability of Seller to perform its obligations under this
Agreement.
4.5 Proceedings Relating to Properties. No proceedings to
take all or any part of the Real Estate by condemnation or right
of eminent domain are pending or, to the best of Seller's
knowledge, threatened and Seller's use of the Real Estate is not,
and no complaints have been received by Seller that Seller is, in
violation of applicable building, zoning, safety or similar laws,
ordinances or regulations. To the best of Seller's knowledge,
there are no special or general assessments pending against or
affecting the Real Estate and, to the best of its knowledge, no
public improvements have been recently made which would cause
special or general assessments to be assessed against the Real
Estate. Seller makes no representations or warranties concerning
the environmental condition of the Real Estate and the Real
Estate is being sold to the Bank on an "as is" basis, which term
includes the environmental condition of the Real Estate and,
except for such matters that entitle the Bank to indemnification
from Seller, as set forth in Section 12.3 of this Agreement, the
Bank releases Seller from any claims relating to the
environmental condition of Real Estate.
4.6 Taxes. Seller has paid all property, excise, sales and
use and other taxes imposed by any taxing authority which are due
and payable, and there are no unpaid taxes which could result in
liens being placed on the Assets or the Deposit Liabilities.
Seller has in place insurance sufficient to replace buildings
located on the Real Estate and Personal Property located at the
Branch Offices if such building or items of Personal Property are
damaged or destroyed prior to the Effective Time.
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4.7 Financial Statements. The books and records of Seller
regarding the operations of the Branch Offices and all other
financial or other information supplied by Seller to the Bank
prior to the execution hereof is true and complete and fairly
represents, in accordance with generally accepted accounting
principles consistently applied, the information set forth
therein relating to the Assets, the Assumed Liabilities and the
business conducted by Seller at the Branch Offices as of the
date(s) specified in such books, records or other statements
(subject, with respect to statements covering a portion of a
year, to normal year-end adjustments and accruals).
4.8 Compliance with Law. The business and operations of the
Branch Offices (including the origination and administration of
the Purchased Loans and the Deposit Liabilities) have been and
are being conducted in accordance with all applicable laws,
rules, and regulations of all authorities, including all
regulations pertaining to the receipt of customer information
required by state and federal law concerning taxpayer
identification numbers, social security numbers and the like.
4.9 Employee Contracts. There are no employment contracts
between Seller and any of the Employees (as that term is
hereinafter defined) not terminable on thirty (30) or fewer days'
notice after the Closing Date. Seller is not a party to any
contract or arrangement with any union relating to the business
conducted at the Branch Offices and Seller is not aware of any
pending organizational efforts at the Branch Offices. To the
best of its knowledge, there has been no indication to Seller
that a union organizational effort or labor disturbance is likely
at the Branch Offices prior to the Closing Date. Seller has not
entered into any agreement or otherwise made any commitment or
representation to any of such employees with respect to their
employment by the Bank.
4.10 Forms. Within fifteen (15) days from the date of this
Agreement, Seller will provide the Bank with copies of the forms
of signature cards, deposit account forms, Regulation E
disclosures, Truth-in-Savings disclosures, deposit account
agreements, and IRA trust agreements and beneficiary
designations, as well as the forms of any other instruments or
agreements presently in use at the Branch Offices in connection
with the Deposit Liabilities. For purposes of this Section 4.10,
all referenced documents shall be the forms used by Seller as of
the date of this Agreement for new customers.
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4.11 Deposit Liabilities. During the period of Seller's
operation of the Branch Offices, Seller has properly accrued
interest on the Deposit Liabilities and, to the best of Seller's
knowledge, the records respecting the Deposit Liabilities
accurately reflect such accruals of interest. A list of all
deposits at the Branch Offices as of September 30, 1996, is
included in Schedule IV to this Agreement.
4.12 Title to Assets. Seller has acquired, and at the
Effective Time the Bank will acquire, good and marketable title
to all of the Assets, free and clear of any material
encumbrances, claims, liens, rights of way, easements, charges,
pledges, options, licenses, restrictions, conditions, covenants,
judgments, security interests, rights of first refusal,
agreements, obligations, commitments, arrangements and
understandings.
4.13 Assigned Contracts. To the best of Seller's
knowledge, the Assigned Contracts constitute the legal, valid and
binding obligations of Seller and of the other parties thereto,
enforceable in accordance with their terms. Seller is not in
default under any of the Assigned Contracts, and, to the best of
Seller's knowledge, no other party to any of the Assigned
Contracts is in default thereunder. True and correct copies of
each of the Assigned Contracts, and all attachments, amendments
and addenda thereto, are attached to Schedule II to this
Agreement.
4.14 Purchased Loans. To the best of Seller's knowledge,
each of the Purchased Loans: (i) is a legal, valid and binding
obligation of the obligor, maker, co-maker, guarantor, endorser
or debtor (such persons are sometimes referred to herein as
"Obligors") thereof or thereunder and is evidenced by legal,
valid and binding instruments (such instruments, which will be
delivered to the Bank on the Closing Date, are sometimes referred
to herein as the "Loan Agreements") executed by the respective
Obligors, each of whom at the time of such execution had capacity
to contract, and any signature on any Loan Agreement is the true
signature of the Obligor on the Purchased Loan involved, (ii) is
enforceable in accordance with its terms (except as
enforceability may be limited by bankruptcy laws and other laws
of similar nature relating to creditors' rights) and (iii) is not
subject to any defense, counterclaim or set-off of any kind.
Seller is not in default under any of the Purchased Loans. Each
of the Purchased Loans may be assigned to the Bank without the
approval of consent of any Obligor. As of the Effective Time,
Seller will have delivered to the Bank the originals of all of
the Loan Agreements, including without limitation, the promissory
notes and other documentation relating to the Purchased Loans and
the documentation relating to the collateral securing the
Purchased Loans.
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4.15 Other Information. No representation or warranty by
Seller contained in this Agreement, or disclosure by Seller in
any certificate or other instrument or document furnished or to
be furnished by or on behalf of Seller pursuant to this
Agreement, and no information furnished or to be furnished by
Seller for use in applications to various regulatory authorities
contains or will contain any untrue statement of a material fact
or omits or will omit to state any material fact required to be
stated herein or therein or which is necessary to make the
statements contained herein or therein, in light of the
circumstances under which they were or are made, not misleading
in any material respect.
4.16 Advice of Changes. Between the date hereof and the
Closing Date, Seller shall promptly advise the Bank in writing of
any fact which, if existing or known as of the date hereof, would
have been required to be set forth or disclosed in or pursuant to
this Agreement or of any fact which, if existing or known as of
the date hereof, would have made any of the representations
contained herein untrue in any material respect.
ARTICLE FIVE: COVENANTS OF THE BANK
The Bank hereby covenants and agrees with Seller as follows:
5.1 Conduct of Business; Certain Covenants. From and after
the execution and delivery of this Agreement and until the
Closing Date, the Bank will: (a) conduct its business and
operate only in the ordinary course of business, consistent with
past practices; and (b) use its best efforts to remain in good
standing with all applicable banking regulatory authorities.
5.2 Confidentiality. The Bank will cause all internal,
nonpublic financial and business information obtained by it from
Seller or otherwise to be treated confidentially (exercising the
same degree of care as it uses to preserve and safeguard its own
confidential information); provided, however, that
notwithstanding the foregoing, nothing contained herein shall
prevent or restrict the Bank from making such disclosure thereof
as may be required by law or as may be required in the
performance of this Agreement. If the transactions contemplated
hereby shall not take place, all nonpublic financial statements,
documents and other materials of Seller and all copies thereof
shall be returned to Seller and shall not thereafter be used by
the Bank.
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5.3 Required Approvals. As soon as practicable after the
execution of this Agreement, the Bank shall at its expense: (a)
submit applications to the Commissioner of Banks and Real Estate
of the State of Illinois (the "Commissioner") and to the FDIC for
permission to acquire the Deposit Liabilities and to establish
branch offices at the locations at which the Branch Offices are
located; and (b) prepare and submit for filing any and all other
applications, filings, and registrations with, and notification
to, all federal and state authorities required on the part of the
Bank for the transactions described in this Agreement to be
consummated. Thereafter, the Bank shall pursue all such
applications, filings, registrations, and notifications
diligently and in good faith, and shall file such supplements,
amendments, and additional information in connection therewith as
may be reasonably necessary for the transactions contemplated
herein to be consummated. The Bank shall deliver to Seller, as
soon as is reasonably practicable after the filing thereof,
copies of each and all of such applications, filings,
registrations, and notifications (except for any portions thereof
deemed confidential by the Bank), and any supplement, amendment,
or item of additional information in connection therewith (except
for any portions thereof deemed confidential by the Bank). The
Bank shall also deliver promptly to Seller a copy of each
material notice, order, opinion, and other item of correspondence
received by the Bank from such federal and state authorities
(except for any portions thereof deemed confidential by the Bank)
and shall advise Seller, at Seller's request, of developments and
progress with respect to such matters.
5.4 Use of Seller's Name. On and after the Closing Date,
the Bank shall not use the name of Seller in any manner in
connection with the operation of the Branch Offices. No activity
conducted by the Bank on or after the Closing Date shall state or
imply that Seller is in any way involved as a partner, joint
venturer or otherwise in the business of the Bank.
5.5 Best Efforts to Satisfy Conditions. The Bank covenants
with and agrees that it: (a) will use its best efforts to satisfy
the conditions to which the obligations of Seller are subject
pursuant to this Agreement on or prior to December 31, 1996; and
(b) will fully cooperate to facilitate the consummation of the
transactions contemplated by this Agreement, including but not
limited to the operational aspects of the transfer of the Deposit
Liabilities and the change of signage.
5.6 Further Assurances. On and after the Closing Date, the
Bank shall give such further assurances to Seller and, upon
Seller's request, shall execute, acknowledge and deliver all such
acknowledgments and other instruments and take such further
action as may be necessary and appropriate to effectively relieve
and discharge Seller from any obligations remaining under the
Deposit Liabilities.
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ARTICLE SIX: COVENANTS OF SELLER
Seller hereby covenants and agrees with the Bank as follows:
6.1 Access to Records and Information; Personnel;
Customers.
(a) Between the date of this Agreement and the Closing
Date, Seller shall afford to the Bank and its authorized agents
and representatives access, during normal business hours and
other mutually agreeable times and upon reasonable notice, to the
properties, operations, books, records, contracts, documents and
other information of or relating to the Branch Offices. If any
of such books, records, contracts, documents or other information
are not located at the Branch Offices, Seller, upon the Bank's
request, will make the same (or copies thereof) available at the
Branch Offices to the extent it is reasonably practicable to do
so. Seller shall cause its personnel to provide assistance in
the Bank's investigation of matters relating to the Branch
Offices; provided, however, that the Bank's investigation shall
be conducted in a manner which does not unreasonably interfere
with Seller's normal operations, customers and employee relations
and provided further that the right of access and examination
granted hereby is subject to the requirements of financial
privacy laws or similar laws relating to account holders and
other records.
(b) Within ten (10) Business Days following the last
day of each calendar month ending after the date of this
Agreement and prior to the Closing Date, Seller shall provide the
Bank with copies of all balance sheets, income statements or
comparable financial statements prepared for Seller's internal
use reflecting the operations of the Branch Offices during such
monthly period.
6.2 Conduct of Business; Certain Covenants. From and after
the execution and delivery of this Agreement and until the
Closing Date, Seller will: (a) conduct the business of the
Branch Offices only in the usual and ordinary course of business
consistent with past practice; (b) maintain in full force and
effect all necessary business permits, licenses, registrations
and authorizations relating to the Branch Offices; and (c) use
its best efforts to maintain all existing contracts, customers,
account relationships and all other customer agreements,
relationships and business of the Branch Offices.
6.3 Employee Matters. The parties shall follow the
following procedure in dealing with employees of Seller who are
employed in the Branch Offices (the "Employees"):
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(a) Within twenty (20) days of the date hereof, to the
extent that Seller is able to obtain the written consents
referenced below, Seller shall deliver to the Bank a true and
complete list of all Employees by name, date of hire and position
in the Branch Offices as of the date hereof and shall permit the
Bank to have such access to its records as is required to enable
the Bank to review personnel records of the Employees, including
all performance evaluations, resumes, applications, current
salaries, compensation histories and other compensation
arrangements. Seller shall use its best efforts to obtain the
written consent of each such Employee prior to the release of the
foregoing information to the Bank.
(b) Within ten (10) days of receipt of the information
required by Section 6.3(a), the Bank shall interview those
Employees which the Bank, in its sole discretion, wishes to
employ following the Effective Time and shall deliver to Seller a
confidential list identifying the Employees to which offers of
employment will be made by the Bank effective at the Effective
Time (the "Designated Employees"). The term Designated Employees
shall not include the current temporary manager of the
Taylorville Branch , it being understood that Seller shall be
permitted to continue to employ such manager after the Effective
Time.
(c) On such date to which the parties agree, Seller
shall notify in writing all Employees that the Branch Offices are
being transferred to the Bank and that the employment of the
Designated Employees by Seller will terminate as of the Effective
Time. Concurrently with the delivery of such notice by Seller,
the Bank shall offer employment to the Designated Employees. The
positions in which such Designated Employees shall be employed by
the Bank, and the terms and conditions of employment, shall be
determined by the Bank, in its sole discretion.
(d) Except with the prior written consent of the Bank,
Seller shall not, for a period of one (1) year after the Closing
Date, solicit any Designated Employee employed by the Bank to
again become an employee of Seller or any of its affiliates.
Seller shall promptly inform the Bank of any Designated Employee
who resigns prior to the Closing Date.
(e) Nothing in this Section 6.3 is intended, nor shall
it be construed, to confer any rights or benefits upon any person
other than the Bank or Seller.
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6.4 Negative Covenants. Except as may be required by
regulatory authorities, Seller shall not, without the prior
written consent of the Bank: (a) transfer to Seller's other
branches any of the Assets (it being understood that any loans
not being transferred to the Bank pursuant to Section 1.1(c)
hereof are not included in such prohibition against transfer);
(b) transfer to Seller's other branches any of the Deposit
Liabilities (it being understood that any deposits not being
transferred to the Bank pursuant to Section 1.2(a) hereof are not
included in such prohibition against transfer) except upon the
unsolicited request of a depositor in the ordinary course of
business; (c) transfer, assign, encumber or otherwise dispose of
or enter into any contract, agreement or understanding to
transfer, assign, encumber or otherwise dispose of any of the
Assets except in the ordinary course of business; (d) invest in
any fixed assets, improvements to the Branch Offices or Personal
Property, except for improvements currently in progress and
except for replacements of furniture, furnishings, equipment and
supplies purchased or made in the ordinary course of business; or
(e) enter into any contract, commitment, lease or other
transaction relating to the Branch Offices, except in the
ordinary course of business.
6.5 Confidentiality. Seller will cause all internal,
nonpublic financial and business information obtained by it from
the Bank or otherwise to be treated confidentially (exercising
the same degree of care as it uses to preserve and safeguard its
own confidential information); provided, however, that
notwithstanding the foregoing, nothing contained herein shall
prevent or restrict Seller from making such disclosure thereof as
may be required by law or as may be required in the performance
of this Agreement. If the transactions contemplated hereby shall
not take place, all nonpublic financial statements, documents and
other materials of the Bank and all copies thereof shall be
returned to the Bank and shall not thereafter be used by Seller
in any way detrimental to the Bank.
6.6 Assistance in Obtaining Regulatory Approvals. Seller
agrees to use all reasonable efforts to assist the Bank in
obtaining all regulatory approvals necessary to complete the
transactions contemplated hereby. Seller shall fully and promptly
cooperate with the Bank in connection with such applications,
filings and registrations, and shall, among other things, provide
the Bank upon request with such information concerning Seller and
its operations as may be requested by any federal or state
authority in connection with any such applications, filings or
registrations and, to the extent required by applicable laws,
rules or regulations, join in any such application, filing or
registration.
6.7 Real Estate, Title, and Surveys.
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(a) At least twenty (20) Business Days prior to the
Closing Date, Seller shall deliver to the Bank copies of the deed
which it shall deliver for recordation on the Closing Date which
shall be a general warranty deed, subject only to Permitted
Exceptions (as hereinafter defined). Seller will convey good and
marketable title to the Real Estate to the Bank subject to
Permitted Exceptions. Seller shall, at its expense, cause to be
delivered to the Bank as soon as is reasonably practicable after
the date hereof, a commitment for title insurance from a
nationally recognized title company agreeable to the Bank and
Seller (the "Title Insurer") insuring the title and interest of
the Bank in and to the Real Estate (including without limitation,
all easements and rights appurtenant thereto), together with
copies of all exceptions to title to the Real Estate. In
addition, an as-built survey of the Real Estate prepared by a
licensed surveyor shall be provided to the Bank by Seller. The
cost of the survey shall be borne by Seller.
(b) Unless the Bank notifies Seller of objections to
any exceptions shown on the title commitment or of any
unacceptable survey defects in writing within fifteen (15) days
of receipt of the title commitment or survey, as the case may be,
all such exceptions or survey defects reflected therein shall be
deemed Permitted Exceptions. The term "Permitted Exceptions"
shall also mean any or all of the following: (i) those special
exceptions acceptable to the Bank, including restrictions,
easements, rights of way, leases, and encumbrances referred to in
the title commitment to be delivered by Seller to the Bank
pursuant to this Agreement which individually or in the aggregate
do not materially interfere with the present or intended use of
the Real Estate; and (ii) statutory liens for current taxes or
assessments not yet due, or if due not yet delinquent, or the
validity of which is being contested in good faith by appropriate
proceedings; and (iii) such other liens, imperfections in title,
charges, easements, restrictions, and encumbrances which are not
yet due and payable and which, individually and in the aggregate,
do not materially detract from the value of, or materially
interfere with the present or intended use of, the Real Estate.
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(c) If the title commitment or survey delivered
pursuant to this Section 6.7 discloses title exceptions or survey
defects other than Permitted Exceptions, Seller shall have ten
(10) days from the date of receipt of notice thereof (and the
parties shall postpone the Closing Date, if necessary to enable
Seller to undertake such activities) to have such exceptions or
survey defects cleared, or to have the title insurer commit to
insure against loss or damage that may be occasioned by such
exceptions or survey defects by an endorsement in form and
substance satisfactory to the Bank. If the exceptions or survey
defects are not removed or endorsements over the exceptions or
survey defects are not obtained, the Bank, upon notice to Seller
within five (5) days after the expiration of the 10-day cure
period, may elect (i) to terminate this Agreement in which case
this Agreement shall be null and void and the parties shall be
under no obligation to each other; or (ii) the Bank may elect to
take title notwithstanding the exceptions and such exceptions
shall be deemed Permitted Exceptions.
6.8 Insurance. From the date hereof through the Effective
Time, Seller shall maintain in full force and effect all of its
insurance policies relating to the Assets.
6.9 Assignment of Contracts. Seller shall use its best
efforts to obtain on or before the Closing Date any required
consents to assign the Assigned Contracts to the Bank at the same
terms, including charges or fees, as are currently stated in or
associated with the Assigned Contracts. Seller shall transfer to
the Bank, no later than the Closing Date, any and all funds held
by Seller as security deposits under Assigned Contracts.
6.10 Transfer of Data. Within fifteen (15) days of the
execution of this Agreement, Seller shall provide to the Bank the
format by which Seller proposes to transfer all data on the
Deposit Liabilities. The format to be used for transfer of data
will be the format normally used by Seller in the electronic
processing of its accounts. Any changes from the proposed format
shall be at the expense of the Bank.
6.11 Signs. Seller shall have the right, at its own
expense, to remove exterior signage and the lettering and/or
fascia of all interior signs from the Branch Offices. Seller
agrees to remove such lettering and/or fascia from the Branch
Offices on or before the Closing Date or such other date as the
parties may agree. Seller shall be responsible for all expenses
incurred in patching or repairing the surfaces surrounding the
signs. Seller shall not be responsible for expenses incurred in
connection with the construction or placement of any signs by the
Bank at the Branch Offices.
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6.12 Best Efforts to Satisfy Conditions. Seller covenants
and agrees that it: (a) will use its best efforts to satisfy the
conditions to which the obligations of the Bank are subject
pursuant to this Agreement on or prior to December 31, 1996; and
(b) will fully cooperate to facilitate the consummation of the
transactions contemplated by this Agreement, including but not
limited to the operational aspects of the transfer of the Assets
and the assumption of the Deposit Liabilities and the change of
signage.
6.13 Further Assurances. On and after the Closing Date,
Seller shall give such further assurances to the Bank and, upon
the Bank's request, shall execute, acknowledge and deliver all
such acknowledgments and other instruments and take such further
action as may be necessary and appropriate to effectively
transfer the Real Estate, the other Assets, and the Deposit
Liabilities to the Bank.
6.14 Inspection of Premises, Loans, Deposit Liabilities.
Within fifteen (15) days after the date of this Agreement, the
Bank may, at its expense, inspect or cause to be inspected the
physical and/or environmental condition of the Real Estate and
the Personal Property and the Bank may also inspect the Deposit
Liabilities and the Purchased Loans (and any agreements or
documents relating thereto) and other Assets and it may also
interview the Employees. Within such period, the Bank may also
obtain a Phase I environment assessment. Seller shall deliver
promptly to the Bank all documents and information reasonable
requested by the Bank pursuant to this Section 6.14 and shall
otherwise reasonably cooperate with the Bank in its inspections.
In the event the Bank is not satisfied with the results of such
inspections, it may, in its sole discretion, terminate this
Agreement. The Bank shall within such fifteen (15) day period
notify Seller in writing if it elects to terminate this
Agreement. Failure to notify Seller within such period will
constitute a waiver of such right.
ARTICLE SEVEN: CONDITIONS PRECEDENT TO
SELLER'S OBLIGATIONS
All obligations of Seller under this Agreement are subject
to the fulfillment (or waiver in writing by a duly authorized
officer of Seller), on or before the Closing Date, of the
following conditions:
7.1 Compliance by the Bank. All terms, covenants and
conditions of this Agreement to be complied with and performed by
the Bank on or before the Closing Date shall have been fully
complied with and performed in all material respects.
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7.2 Renewal of Representations and Warranties. The Bank's
representations and warranties contained in this Agreement shall
be deemed to have been made again as of the Closing Date and,
except as otherwise contemplated by this Agreement, shall then be
true in all material respects; and the Bank shall have performed
and complied with all material agreements, conditions and
covenants required by this Agreement to be performed or complied
with by the Bank prior to or at the Closing Date.
7.3 Delivery of Documents. The Bank shall have delivered
the following documents to Seller:
(a) An Assignment and Assumption of Accounts Agreement
in substantially the form set forth in Exhibit B hereto.
(b) An Assignment and Assumption of Loans and Loan
Agreements in substantially the form of Exhibit C hereto.
(c) An Assignment and Assumption of Contracts in
substantially the form set forth in Exhibit D hereto.
(d) An Assignment, Transfer and Appointment of
Successor Trustee for Individual Retirement Accounts in
substantially the form set forth in Exhibit E hereto.
(e) Resolutions of the Bank's Board of Directors,
certified by its Secretary or Assistant Secretary, authorizing
the signing and delivery of this Agreement and the consummation
of the transactions contemplated hereby.
(f) A certificate of the Secretary or Assistant
Secretary of the Bank as to the incumbency and signatures of
officers.
(g) A certificate signed by a duly authorized officer
of the Bank stating that the conditions precedent to the
obligations of Seller pursuant to this Agreement have been
fulfilled.
7.4 Litigation. No action, suit, proceeding, or claim
shall have been instituted, made, or threatened by any person
relating to the validity or propriety of the transactions
contemplated by this Agreement.
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ARTICLE EIGHT: CONDITIONS PRECEDENT
TO THE BANK'S OBLIGATIONS
All obligations of the Bank under this Agreement are subject
to the fulfillment (or waiver in writing by a duly authorized
officer of the Bank), on or before the Closing Date (except with
respect to those conditions requiring satisfaction prior to the
Closing Date), of each of the following conditions:
8.1 Regulatory Approvals. All required licenses, approvals
and consents of any relevant state, federal or other regulatory
agencies necessary to permit the Bank to consummate the
transactions contemplated hereby shall have been obtained with no
requirements imposed upon the Bank which, in the Bank's
reasonable judgment, are unduly burdensome.
8.2 Compliance by Seller. All terms, covenants and
conditions of this Agreement to be complied with and performed by
Seller on or before the Closing Date shall have been fully
complied with and performed in all material respects.
8.3 Renewal of Representations and Warranties. Seller's
representations and warranties contained in this Agreement shall
be deemed to have been made again as of the Closing Date and,
except as otherwise contemplated by this Agreement, shall then be
true in all material respects; and Seller shall have performed
and complied with all material agreements, conditions and
covenants required by this Agreement to be performed or complied
with by Seller prior to or at the Closing Date.
8.4 Documents. Seller shall have delivered the following
documents to the Bank:
(a) An Assignment and Assumption of Accounts Agreement
in substantially the form set forth in Exhibit B hereto.
(b) An Assignment and Assumption of Loans and Loan
Agreements in substantially the form of Exhibit C hereto.
(c) An Assignment and Assumption of Contracts in
substantially the form set forth in Exhibit D hereto.
(d) An Assignment, Transfer and Appointment of
Successor Trustee for Individual Retirement Accounts in
substantially the form set forth in Exhibit E hereto.
(e) A Bill of Sale in substantially the form set forth
in Exhibit F hereto.
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(f) Instruments of conveyance satisfactory to legal
counsel for the Bank, together with the title commitment, title
insurance, and the survey with respect to the Real Estate,
conveying the Real Estate to the Bank in compliance with Section
6.7 of this Agreement.
(g) Such other bills of sale, assignments, and other
instruments and documents as counsel for the Bank may reasonably
require as necessary or desirable for transferring, assigning and
conveying to the Bank good, marketable and insurable title to the
Assets pursuant to this Agreement.
(h) Resolutions of Seller's Board of Directors,
certified by Seller's Secretary or Assistant Secretary,
authorizing the signing and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
(i) A certificate from the Secretary or Assistant
Secretary of Seller as to the incumbency and signature of
officers.
(j) A certificate signed by a duly authorized officer
of Seller stating that the conditions precedent to the
obligations of the Bank pursuant to the Agreement have been
fulfilled.
(k) Listings of the Deposit Liabilities as of the
Estimation Date (the "Deposit Listings") on magnetic tape or
utilizing such other method of information transfer as the
parties may mutually agree, which Deposit Listings shall include
account number, the outstanding principal balance, and the
accrued interest.
(l) All Books and Records capable of being delivered
to the Bank.
8.5 Absence of Certain Changes or Events. From the date
hereof to the Closing Date, there shall be and have been no
material adverse changes in the Real Estate, the other Assets,
the Deposit Liabilities, or otherwise in the business, operations
or condition of the Branch Offices.
8.6 Litigation. No action, suit, proceeding, or claim
shall have been instituted, made, or threatened by any person
relating to the validity or propriety of the transactions
contemplated by this Agreement.
ARTICLE NINE: TERMINATION
9.1 Termination Provisions. This Agreement may be
terminated at any time prior to the Closing Date:
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(a) Mutual Consent. By mutual consent of Seller and
the Bank;
(b) Conditions Precedent. By either Seller or the
Bank in the event the conditions precedent to their own
obligations as set forth in Articles Seven and Eight have not
been met and satisfied or waived or shall have become impossible
of fulfillment; or
(c) Elapsed Time. By either Seller or the Bank if the
Closing Date does not occur before March 31, 1997, or such later
date as the parties may mutually agree upon.
ARTICLE TEN: EXPENSES
10.1 The Bank's Expenses. Except as otherwise provided
herein, the Bank will pay all expenses incurred by it incident to
obtaining requisite regulatory approvals to permit the Bank to
consummate the transactions contemplated hereby and all expenses
incurred by it incident to the consummation of the transactions
contemplated hereby (including legal and accounting fees and
expenses incurred for legal and accounting services rendered to
the Bank in connection with the transactions contemplated
hereby).
10.2 Seller's Expenses. Except as otherwise provided
herein, Seller will pay all expenses incurred by it incident to
permit Seller to consummate the transactions contemplated hereby
(including the costs of the title insurance policy and survey
contemplated by Section 6.7 hereof, recording fees, stamp taxes,
as well as legal and accounting fees and expenses incurred for
legal and accounting services rendered to Seller in connection
with the transactions contemplated hereby).
10.3 Brokers' Fees. Seller will pay, indemnify and save
harmless the Bank from and against any and all finders' fees,
brokers' commissions or other similar fees or expenses incurred
by Seller (or the Bank as a result of understandings, agreements
or arrangements made by Seller) and arising out of or in
connection with the transactions contemplated hereby. The Bank
will pay, indemnify and save harmless Seller from and against any
and all finders' fees, brokers' commissions or other similar fees
or expenses incurred by the Bank (or Seller as a result of
understandings, agreements or arrangements made by the Bank) and
arising out of or in connection with the transactions
contemplated hereby.
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ARTICLE ELEVEN: OTHER AGREEMENTS
11.1 Backup Withholding. Seller shall deliver to the Bank
(i) on or before the Closing Date a list of all "B" (TINs do not
match) and "C" (under reporting/IRS imposed withholding) notices
from the IRS imposing withholding restrictions and (ii) for a
period of one hundred twenty (120) calendar days after the
Closing Date, all notices received by Seller from the IRS
releasing withholding restrictions on the Deposit Liabilities.
Any amounts required by any governmental agencies to be withheld
from any of the Deposit Liabilities (the "Withholding
Obligations") will be handled as follows:
(a) Any Withholding Obligations required to be
remitted to the appropriate governmental agency prior to the
Closing Date will be withheld and remitted by Seller;
(b) Any Withholding Obligations required to be
remitted to the appropriate governmental agency on or after the
Closing Date will be remitted by the Bank. At the Closing,
Seller will remit to the Bank all sums withheld by Seller
pursuant to Withholding Obligations which funds are or may be
required to be remitted to governmental agencies on or after the
Closing Date.
(c) Any penalties described on "B" notices from the
IRS or any similar penalties that relate to Deposit Liabilities
opened by Seller prior to the Effective Time will be paid by
Seller promptly upon receipt of the notice, provided such penalty
assessment resulted from Seller's acts, policies or omissions.
11.2 IRA. Seller shall be responsible for reporting through
and including the Closing Date, all federal and state income tax
matters associated with IRA deposits assumed by the Bank. The
Bank shall report such information beginning on the day following
the Closing Date. Said reports shall be made to the Depositors
and to the applicable federal and state regulatory agencies.
Seller and the Bank shall each provide to the other information
in its possession reasonably requested by the other to satisfy
its obligations hereunder.
11.3 Interest Reporting. Seller shall report through and
including the Closing Date, all interest credited to, interest
paid by, interest withheld from, and early withdrawal penalties
charged to the Deposit Liabilities. The Bank shall report all
such information beginning on the day following the Closing Date.
Said reports shall be made to the Depositors and to the
applicable federal and state regulatory agencies. Seller and the
Bank shall each provide to the other information in its
possession reasonably requested by the other to satisfy its
obligations hereunder.
PAGE
<PAGE>
11.4 Pre-Closing Notices to Depositors and Obligors. On
such date as the parties may agree, or in the absence of such an
agreement on the date which is fifteen (15) days prior to the
Closing Date (or if such date shall not be a Business Day, the
next succeeding Business Day), Seller and the Bank will notify
all Depositors of the pending transfer of the Deposits and all
Obligors of the pending transfer of the Purchased Loans to the
Bank. This notice will also include a statement by Seller urging
Depositors to maintain their deposits at the Branch Offices with
the Bank. This notice will be in a form acceptable to both
parties and in compliance with all federal regulations. The cost
of such notice shall be borne equally by Seller and the Bank.
Seller will cooperate with the Bank in providing such other
notices to customers of the Branch Offices as the Bank may
reasonably request. Seller and the Bank hereby acknowledge and
agree that the notices and other communications to the Depositors
contemplated hereby will not include information concerning any
plans the Bank may have to, after the Closing Date, change rates
or other terms and conditions with regard to the Deposit
Liabilities.
11.5 Post Closing Certification. Within five (5) Business
Days after the Closing Date, Seller shall deliver to the Bank a
statement setting forth the aggregate amount of Deposit
Liabilities and the aggregate amount of Purchased Loans,
including accrued interest thereon, as of the Effective Time,
with a certification of the chief financial officer or other
appropriate officer of Seller, certifying that, the information
contained in the statement is true, correct, and complete.
11.6 Post Closing Access to Records. After the Closing
Date, Seller shall provide the Bank with access to, and will upon
the Bank's request provide the Bank with copies of any Records
which are not capable of being transferred to the Bank pursuant
to this Agreement.
11.7 Covenant Not to Compete. Seller hereby covenants and
agrees that following the consummation of this transaction and
for a period of three (3) years commencing as of the Closing
Date:
(a) Seller shall not establish, acquire, or operate
any facilities, including a proprietary ATM facility, for the
taking of deposits or the production of loans within a fifteen
(15) mile radius of the Pontiac Branch and the Taylorville Branch
or within a ten (10) mile radius of the Lincoln Branch (the
"Protected Territory");
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(b) Seller shall not solicit or directly communicate
with any person who is a customer with respect to the Deposit
Liabilities or the Purchased Loans for the purpose of inducing
such person to borrow or deposit money or to purchase products or
services from Seller or any of its affiliates; and
(c) Except as expressly permitted by Section 6.3(b)
hereof, Seller shall not directly or indirectly offer employment
to any person employed by the Bank at any of the Branch Offices;
provided, however, nothing contained herein shall preclude Seller
from permitting an Employee who declines employment with the Bank
from accepting another position with Seller provided that Seller
has not encouraged such Employee to decline to accept such
position with the Bank or to seek another position with Seller.
This Section shall not preclude Seller from making any
communication: (i) with any customer who, independent of any
solicitation by Seller subsequent to the Closing Date, is or
becomes Seller's customer at a location other than a Branch
Offices; (ii) with any customer who receives periodic statements
from Seller with respect to any outstanding loan or deposit
account owned or serviced by or on behalf of Seller after the
Closing Date; or (iii) by means of general advertising or mass
mailings which are not specifically targeted to customers of any
of the Branch Offices. Additionally, this Section shall not
preclude Seller from acquiring a financial institution which has
existing branches within the Protected Territory and shall
neither apply to nor restrict the solicitation by Seller of
Public Unit Deposits ("Public Unit Deposits" shall mean deposits
by federal, state or local units of government, school districts,
or governmental agencies). If any term of the covenant not to
compete, as set forth in this Section 11.7, or the application of
any term to any person or set of circumstances, shall be
determined to be invalid, unlawful or unenforceable to any extent
at the time after the Closing Date, the remainder of the covenant
not to compete, and the application of such terms to persons or
circumstances other than those as to which it is determined to be
invalid, unlawful or unenforceable, shall not be affected and
shall continue to be enforceable to the fullest extent permitted
by law.
ARTICLE TWELVE: INDEMNIFICATION
12.1 Indemnification of the Bank. Seller shall indemnify,
hold harmless and defend the Bank from and against any and all
damage, loss, liability, cost, claim, or expense (including
reasonable legal fees and expenses) incurred or suffered by the
Bank in connection with Seller's operation of the Branch Offices
on or prior to the Effective Time.
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12.2 Indemnification of Seller. The Bank shall indemnify,
hold harmless and defend Seller from and against any and all
damage, loss, liability, cost, claim, or expense (including
reasonable legal fees and expenses) incurred or suffered by
Seller in connection with the Bank's operation of the Branch
Offices after the Effective Time.
12.3 Indemnification of the Bank for Environmental Matters.
Notwithstanding anything to the contrary in this Agreement,
Seller shall indemnify, hold harmless and defend the Bank, its
successors and assigns, from and against any and all damage,
loss, liability, cost, claim or expense (including reasonable
legal fees and expenses) arising from any environmental condition
of the Real Estate which condition existed before the Effective
Time and for which Seller would have been liable if it had
remained the owner of the Real Estate. This indemnity shall
apply only to claims for response or remediation required of the
Bank and shall only apply to claims which are the subject of a
valid order of a court of competent jurisdiction or by order or
directive of a governmental agency with jurisdiction over
environmental matters. This indemnity shall not apply to any
environmental condition caused, created or exacerbated by the
party claiming indemnity, or for claims of diminution in value of
the Real Estate caused by the environmental condition. In order
for the Bank to claim indemnity under the terms of this
provision, it shall provide written notice to Seller of the claim
within sixty (60) days of its receipt of notification of the
claim and prior to any payment of the claim and such claim shall
be made not later than ten (10) years following the Effective
Time. Seller shall thereafter have the right, in its sole
discretion, to assume defense of the claim.
ARTICLE THIRTEEN: AMENDMENT, WAIVER AND NOTICE
13.1 Amendment. Any duly authorized officer of Seller or
the Bank may make, execute and deliver such amendment or
amendments, modifications, or supplements to this Agreement as
any one of such officers signing any such amendment, modification
or supplement on behalf of a party may approve, as shall be
conclusively evidenced by his or her signature to any such
amendment, modification or supplement in such manner as may be
agreed upon by them in writing at any time.
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13.2 Waiver. The failure of either party at any time or
times to require performance at any time prior to the Closing
Date of any provision hereof shall in no manner affect such
party's right at a later time to enforce the same. No waiver at
any time prior to the Closing Date by either party of any
condition, or of the breach of any term, covenant, representation
or warranty contained in this Agreement, whether by conduct or
otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition
or breach or a waiver of any other condition or the breach of any
other term, covenant, representation or warranty of this
Agreement.
13.3 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed
to have been duly given if delivered or mailed, registered or
certified mail, postage prepaid, as follows:
If to the Bank:
First Mutual Bank, S.B.
135 East Main Street
Decatur, Illinois 62523
Attention: Paul K. Reynolds
President and Chief Executive Officer
With a copy to:
Barack, Ferrazzano, Kirschbaum & Perlman
333 West Wacker Drive
Suite 2700
Chicago, Illinois 60606
Attention: Judith K. Muncy, Esq.
If to Seller:
First of America Bank-Illinois, National Association
1111 West 22nd Street, Suite 300
Oak Brook, Illinois 60521
Attention: Richard K. McCord
President and Chief Operating Officer
with a copy to:
Howard & Howard Attorneys, P.C.
The Kalamazoo Building, Suite 400
107 West Michigan Avenue
Kalamazoo, Michigan 49007
Attention: Joseph B. Hemker, Esq.
PAGE
<PAGE>
ARTICLE FOURTEEN: GENERAL
14.1 Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the
State of Illinois, and, to the extent applicable, to the laws of
the United States.
14.2 Entire Agreement. This Agreement and the Schedules
and the Exhibits attached hereto set forth the entire agreement
and understanding of the parties with respect to the transactions
contemplated hereby and supersede all prior agreements,
arrangements and understandings related to the subject matter
hereof.
14.3 Method of Consent or Waiver. Any consent hereunder or
any waiver of conditions or covenants as may be herein provided
for, subject to all of the other requirements contained in this
Agreement, shall be evidenced in writing, properly executed by a
duly authorized officer of the party so electing hereunder.
14.4 Public Announcement. Seller and the Bank shall
consult with one another concerning the form and substance and
timing of any press release of any matters relating to this
Agreement.
14.5 No Assignment. Neither party shall assign or transfer
any right or interest in and to this Agreement, without the prior
written consent of the other party, except that Seller may assign
its rights hereunder to any successor to the Seller by merger or
otherwise.
14.6 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute
one and the same instrument.
14.7 Reliance on Headings, Etc. The Article, Section and
Subsection Headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.8 Severability Clause. If any provisions of this
Agreement shall be held invalid, the remainder shall,
nevertheless, be deemed valid and effective.
14.9 Parties in Interest. None of the provisions of this
Agreement is intended to provide any rights or remedies to any
person (including without limitation any depositors, employees or
creditors of any of the parties hereto) other than the parties
hereto and their respective permitted successors and assigns, if
any.
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IN WITNESS WHEREOF, the undersigned parties hereto have duly
executed this Agreement on the date first above written.
WITNESSES FIRST MUTUAL BANK, S.B.
- ------------------- By: -------------------------------
Paul K. Reynolds
Its: President and Chief Executive
Officer
FIRST OF AMERICA BANK-ILLINOIS,
NATIONAL ASSOCIATION
- ------------------- By: -------------------------------
Richard K. McCord
Its: President and Chief Operating
Officer
PAGE
<PAGE>
EXHIBIT A
CONVEYED REAL ESTATE LEGAL DESCRIPTION
LINCOLN PARCEL
To be provided in conjunction with the delivery of the title
insurance commitment referenced in Section 6.7 of the Agreement.
PAGE
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EXHIBIT A
CONVEYED REAL ESTATE LEGAL DESCRIPTION
PONTIAC PARCEL
To be provided in conjunction with the delivery of the title
insurance commitment referenced in Section 6.7 of the Agreement.
PAGE
<PAGE>
EXHIBIT A
CONVEYED REAL ESTATE LEGAL DESCRIPTION
TAYLORVILLE PARCEL
To be provided in conjunction with the delivery of the title
insurance commitment referenced in Section 6.7 of the Agreement.
PAGE
<PAGE>
EXHIBIT B
ASSIGNMENT AND ASSUMPTION OF ACCOUNTS AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION OF ACCOUNTS AGREEMENT
("Assignment and Assumption Agreement") is made and entered into
this ------- day of -----------------, 1996, by and between FIRST
OF AMERICA BANK-ILLINOIS, NATIONAL ASSOCIATION ("Seller") and
FIRST MUTUAL BANK, S.B. ("Purchaser").
RECITALS
A. Seller and Purchaser have entered into an Agreement to
Purchase Assets and Assume Liabilities dated as of November 1,
1996 (the "Agreement"), a copy of which is attached hereto and is
incorporated herein by this reference.
B. Seller desires to transfer and Purchaser desires to
assume the Deposit Liabilities maintained at or for the branch
offices of Seller located at 122 North McLean Street, Lincoln,
Illinois, 110 West Water Street, Pontiac, Illinois and 725 West
Spresser Street, Taylorville, Illinois (the "Branch Offices"), a
schedule of which Deposit Liabilities is attached hereto and
hereby made a part hereof.
C. Seller and Purchaser have obtained all corporate,
governmental, regulatory and other approvals required in
connection with the consummation of the transactions contemplated
by the Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the
mutual covenants herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Purchaser hereby agree as
follows:
1. Capitalized terms used but not defined herein shall have
the meanings set forth in the Agreement. Unless otherwise
indicated, all citations to section numbers herein are references
to sections in the Agreement.
2. Effective as of the Effective Time, Seller hereby
assigns, and Purchaser hereby assumes liability for the Deposit
Liabilities.
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3. By execution hereof, Purchaser agrees, effective as of
the Effective Time, to be bound by all of the terms, covenants
and conditions of the agreements creating the Deposit Liabilities
(the "Deposit Agreements") and Purchaser agrees to discharge, in
the usual course of the banking business, the duties and
obligations of Seller with respect to the balances due and owing
to the depositors with respect to the Deposit Liabilities, as set
forth in the Deposit Agreements, but only to the extent arising
by reason of Purchaser's assumption of the Deposit Liabilities
from and after the Effective Time.
4. As of the Effective Time, all of the Deposit Liabilities
shall become deposit liabilities of Purchaser of the same amount,
terms, rate and maturity.
5. Nothing contained herein or in the Agreement shall
preclude Purchaser from changing the terms or rates with respect
to the Deposit Liabilities after the Effective Time if it may
lawfully do so.
6. Purchaser and Seller shall each be indemnified by the
other with respect to the transactions contemplated by this
Assignment and Assumption Agreement to the extent provided in the
Agreement.
IN WITNESS WHEREOF, Seller and Purchaser have executed this
Assignment and Assumption Agreement effective as of the date
first written above.
FIRST OF AMERICA BANK-ILLINOIS,
NATIONAL ASSOCIATION
By:----------------------------------
Richard K. McCord
Its: President and Chief Operating
Officer
FIRST MUTUAL BANK, S.B.
By:----------------------------------
Paul K. Reynolds
Its: President and Chief Executive
Officer
PAGE
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EXHIBIT C
ASSIGNMENT AND ASSUMPTION OF LOANS AND LOAN AGREEMENTS
THIS ASSIGNMENT AND ASSUMPTION OF LOANS AND LOAN AGREEMENTS
("Assignment and Assumption Agreement") is made and entered into
this ------ day of -------------, 1996, by and between FIRST OF
AMERICA BANK-ILLINOIS, NATIONAL ASSOCIATION ("Seller") and FIRST
MUTUAL BANK, S.B. ("Purchaser").
RECITALS
A. Seller and Purchaser have entered into an Agreement to
Purchase Assets and Assume Liabilities dated as of November 1,
1996, (the "Agreement"), a copy of which is attached hereto and
incorporated herein by this reference.
B. Seller desires to sell and Purchaser desires to purchase
certain loans (referred to in the Agreement as the "Purchased
Loans") and related loan agreements (the "Loan Agreements")
maintained at or for Seller's branch offices located at 122 North
McLean Street, Lincoln, Illinois, 110 West Water Street, Pontiac,
Illinois and 725 West Spresser Street, Taylorville, Illinois (the
"Branch Offices"), a schedule of which Purchased Loans is
attached hereto and hereby made a part hereof.
C. Seller and Purchaser have obtained all corporate,
governmental, regulatory and other approvals required in
connection with the consummation of the transactions contemplated
by the Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the
mutual covenants herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Purchaser hereby agree as
follows:
1. Capitalized terms used but not defined herein shall have
the meanings set forth in the Agreement. Unless otherwise
indicated, all citations to section numbers herein are references
to sections in the Agreement.
2. Effective as of the Effective Time, Seller hereby sells,
transfers and assigns to Purchaser, and Purchaser hereby
purchases from Seller the Purchased Loans and the Loan
Agreements together with accrued interest thereon through the
date hereof.
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3. By execution hereof, Purchaser agrees, effective as of
the Effective Time, to be bound by all of the terms, covenants
and conditions of the Loan Agreements and Purchaser agrees to
discharge, in the usual course of the banking business, the
duties and obligations of Seller with respect to obligations
owing to customers with respect to the Purchased Loans, but only
to the extent arising by reason of Purchaser's ownership of the
Purchased Loans from and after the Effective Time.
4. As of the Effective Time, all of the Purchased Loans
shall become loans of Purchaser of the same amount, terms, rate
and maturity as set forth in the Loan Agreements.
5. Nothing contained herein or in the Agreement shall
preclude Purchaser from changing the terms or rates with respect
to the Purchased Loans after the date hereof if it may lawfully
do so.
6. Seller and Purchaser shall each be indemnified by the
other with respect to the transactions contemplated by this
Assignment and Assumption Agreement to the extent provided in the
Agreement.
IN WITNESS WHEREOF, Seller and Purchaser have executed this
Assignment and Assumption Agreement effective as of the date
first written above.
FIRST OF AMERICA BANK-ILLINOIS,
NATIONAL ASSOCIATION
By:----------------------------------
Richard K. McCord
Its: President and Chief Operating
Officer
FIRST MUTUAL BANK, S.B.
By:----------------------------------
Paul K. Reynolds
Its: President and Chief Executive
Officer
PAGE
<PAGE>
EXHIBIT D
ASSIGNMENT AND ASSUMPTION OF CONTRACTS
KNOW ALL MEN BY THESE PRESENTS, that for good and valuable
consideration FIRST OF AMERICA BANK-ILLINOIS, NATIONAL
ASSOCIATION ("Assignor"), does hereby assign to FIRST MUTUAL
BANK, S.B. ("Assignee"), all Assignor's rights and obligations
under the contracts described as the Assigned Contracts in that
certain Agreement to Purchase Assets and Assume Liabilities dated
November 1, 1996, between Assignor and Assignee (the "Purchase
and Assumption Agreement"), which Assigned Contracts are listed
on the schedule attached hereto which is hereby made a part
hereof, and Assignee does hereby assume and agree to discharge
all the Assignor's obligations under the Assigned Contracts.
Assignor and Assignee shall each be indemnified by the other
with respect to this assignment and assumption to the extent
provided in the Purchase and Assumption Agreement.
This assignment and assumption shall be effective as of the
Effective Time, as defined in the Purchase and Assumption
Agreement.
IN WITNESS WHEREOF, Assignor and Assignee have duly executed
this Assignment and Assumption of Contracts this ----- day of
- ------------------, 1996.
ASSIGNOR:
FIRST OF AMERICA BANK-ILLINOIS,
NATIONAL ASSOCIATION
By:----------------------------------
Richard K. McCord
Its: President and Chief Operating
Officer
ASSIGNEE:
FIRST MUTUAL BANK, S.B.
By:----------------------------------
Paul K. Reynolds
Its: President and Chief Executive
Officer
PAGE
<PAGE>
EXHIBIT E
ASSIGNMENT, TRANSFER, AND APPOINTMENT OF
SUCCESSOR TRUSTEE FOR INDIVIDUAL RETIREMENT ACCOUNTS
KNOW ALL MEN BY THESE PRESENTS THAT:
WHEREAS, FIRST OF AMERICA BANK-ILLINOIS, NATIONAL
ASSOCIATION ("SELLER") and FIRST MUTUAL BANK, S.B., ("BUYER") are
parties to a certain Agreement to Purchase Assets and Assume
Liabilities dated as of November 1, 1996, ("Agreement"), pursuant
to which SELLER has agreed to assign to BUYER the trusteeship of
certain of SELLER'S Individual Retirement Accounts ("IRAs")
maintained under the custody of SELLER, and BUYER has agreed to
assume the trusteeship of such IRAs upon the terms and conditions
contained in the Agreement;
NOW, THEREFORE, for good and valuable consideration paid by
BUYER, effective as of the Effective Time, SELLER does hereby
sell, assign, and transfer to BUYER for valuable consideration
paid by BUYER all of SELLER'S right, title, and interest as
Trustee in:
1. All of the IRAs as described in Appendix A attached
hereto and incorporated herein, as such Appendix A shall be
amended following the Closing Date by attachment of a listing of
IRAs as of the Effective Time are booked at or attributed to the
Branch Offices.
2. All the records, files, correspondence, and
documentation relating to the IRAs.
BUYER hereby represents that it has adopted or will adopt
the Individual Retirement Trust Account promulgated as Form 5305
by the Internal Revenue Service ("Plan") attached hereto as
Appendix B and incorporated herein, and that BUYER will assume
the responsibilities as Successor Trustee, and warrants to SELLER
that it will adhere to all provisions contained in the Plan as
now written, and shall only amend the Plan to the extent
permitted by its terms. Based upon the representations and
warranties made by BUYER, SELLER hereby appoints BUYER as
Successor Trustee effective as of the Effective Time. SELLER
represents that all of the IRAs described in Appendix A hereto
are governed by the Plan attached as Appendix B hereto.
CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL HAVE THE
SAME MEANINGS AS ASCRIBED TO THEM IN THE AGREEMENT.
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<PAGE>
BUYER and SELLER shall each be indemnified by the other with
respect to the transactions contemplated hereby to the extent
provided in the Agreement.
IN WITNESS WHEREOF, SELLER and BUYER have caused this
Assignment to be signed by their proper officers, as of this
- --- day of ---------------------, 1996.
FIRST OF AMERICA BANK-ILLINOIS,
NATIONAL ASSOCIATION
By:----------------------------------
Richard K. McCord
Its: President and Chief Operating
Officer
FIRST MUTUAL BANK, S.B.
By:----------------------------------
Paul K. Reynolds
Its: President and Chief Executive
Officer
PAGE
<PAGE>
EXHIBIT F
BILL OF SALE
FIRST OF AMERICA BANK-ILLINOIS, NATIONAL ASSOCIATION
("Seller") of 1111 West 22nd Street, Suite 300, Oak Brook,
Illinois 60521, for good and valuable consideration paid and
delivered by FIRST MUTUAL BANK, S.B. ("Purchaser") of 135 East
Main Street, Decatur, Illinois 62523, the receipt of which is
hereby acknowledged, does sell to the Purchaser the cash, the
personal property, office equipment, fixtures and furnishings and
other assets identified on Schedule A (collectively the
"Assets").
Seller hereby warrants that Seller is the owner of the
Assets free and clear of all mortgages, pledges, liens, charges,
or encumbrances, except liens for current taxes not yet due and
payable.
Receipt of delivery of the Assets is hereby acknowledged.
Dated this ------ day of ---------------------, 1996.
Seller: FIRST OF AMERICA BANK-ILLINOIS,
NATIONAL ASSOCIATION
By:----------------------------------
Richard K. McCord
Its: President and Chief Operating
Officer
Purchaser: FIRST MUTUAL BANK, S.B.
By:----------------------------------
Paul K. Reynolds
Its: President and Chief Executive
Officer
PAGE
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SCHEDULE I
COMMERCIAL LOANS
[Attached]
PAGE
<PAGE>
SCHEDULE II
PERSONAL PROPERTY
[Attached]
PAGE
<PAGE>
SCHEDULE III
ASSIGNED CONTRACTS
[Attached]
PAGE
<PAGE>
SCHEDULE IV
DEPOSITS
[Attached]
PAGE
<PAGE>
FIRST MUTUAL BANCORP, INC.
For Immediate Release
Contact: Paul K. Reynolds
President and Chief
Executive Officer
(217) 429-2306
FIRST MUTUAL BANK
COMPLETES ACQUISITION OF BRANCHES
January 3, 1997, Decatur, Illinois Paul K. Reynolds,
President and Chief Executive Officer of First Mutual Bancorp,
Inc., the holding company for First Mutual Bank, announced today
the completion of the Bank's acquisition of three branch offices
from First of America Bank-Illinois, N.A. The branch offices,
located in Lincoln, Taylorville and Pontiac, Illinois, include an
aggregate of $147 million in deposits. Mr. Reynolds stated, "We
are pleased to complete the acquisition of these branches as they
solidify and expand our presence in these important market areas.
We welcome our new customers."
First Mutual Bank now has twelve offices located in Central
Illinois. The holding company has total consolidated assets of
$438 million. Its common stock is traded on the Nasdaq National
Market System under the symbol "FMBD".
