EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
among
XXXXX XXXXX XXXXXXX
GOLDEN NATIONAL ACQUISITION CORPORATION
and
CGB&L FINANCIAL GROUP, INC.
February 16, 2001
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TABLE OF CONTENTS
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Page
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ARTICLE 1 DEFINITIONS........................................................................... 8
1.1 Definitions.......................................................................... 8
1.2 Principles of Construction........................................................... 13
ARTICLE 2 THE MERGER........................................................................... 14
2.1 Manner of Merger..................................................................... 14
2.2 Effective Time; Closing.............................................................. 14
2.3 Effect of Merger..................................................................... 15
2.4 Articles of Incorporation............................................................ 15
2.5 Bylaws............................................................................... 15
2.6 Board of Directors................................................................... 15
2.7 Management........................................................................... 15
2.8 Acquiror's Deliveries at Closing..................................................... 15
2.9 CGB&L's Deliveries at Closing........................................................ 16
2.10 Alternative Structure................................................................ 18
2.11 Absence of Control................................................................... 18
ARTICLE 3 CONVERSION OF SECURITIES IN THE MERGER............................................... 18
3.1 Manner of Merger..................................................................... 18
3.2 Steps of Transaction................................................................. 19
3.3 Escheat.............................................................................. 20
3.4 Dissenting Shares.................................................................... 21
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF CGB&L............................................... 21
4.1 CGB&L Organization................................................................... 21
4.2 Bank Organization.................................................................... 21
4.3 Authorization; Enforceability........................................................ 21
4.4 No Conflict.......................................................................... 22
4.5 CGB&L Capitalization................................................................. 22
4.6 Bank Capitalization.................................................................. 23
4.7 Financial Statements and Reports..................................................... 23
4.8 Books and Records.................................................................... 24
4.9 Title to Properties.................................................................. 24
4.10 Condition and Sufficiency of Assets.................................................. 24
4.11 Loan Loss Reserve.................................................................... 25
4.12 Undisclosed Liabilities; Adverse Changes............................................. 25
4.13 Taxes................................................................................ 25
4.14 Compliance with ERISA................................................................ 25
4.15 Compliance with Legal Requirements................................................... 26
4.16 Legal Proceedings; Orders............................................................ 26
4.17 Absence of Certain Changes and Events................................................ 27
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4.18 Properties, Contracts, Employee Benefit Plans and Other Agreements....................... 29
4.19 No Defaults.............................................................................. 31
4.20 Insurance................................................................................ 31
4.21 Compliance with Environmental Laws....................................................... 32
4.22 Regulatory Filings....................................................................... 32
4.23 Fiduciary Powers......................................................................... 32
4.24 Bylaws; State Takeover Statutes.......................................................... 32
4.25 Disclosure............................................................................... 32
4.26 Brokerage Commissions.................................................................... 33
4.27 Approval Delays.......................................................................... 33
4.28 Due Diligence Report..................................................................... 33
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF ACQUIROR................................................. 33
5.1 Acquiror Residency/Acquisition Corp Organization......................................... 33
5.2 Authorization; Enforceability............................................................ 33
5.3 No Conflict.............................................................................. 33
5.4 Approval Delays.......................................................................... 34
5.5 Financing................................................................................ 34
5.6 Disclosure............................................................................... 34
ARTICLE 6 CGB&L'S COVENANTS.......................................................................... 34
6.1 Access and Investigation................................................................. 34
6.2 Operation of CGB&L and the Bank.......................................................... 35
6.3 Negative Covenant........................................................................ 36
6.4 Subsequent CGB&L Financial Statements; Securities Reports................................ 36
6.5 Title to Real Estate..................................................................... 36
6.6 Survey................................................................................... 37
6.7 Advice of Changes........................................................................ 37
6.8 Other Offers............................................................................. 37
6.9 Information Provided to Acquiror......................................................... 38
6.10 Stockholders' Meeting.................................................................... 38
6.11 Proxy Statement.......................................................................... 39
6.12 Best Efforts; Cooperation................................................................ 39
6.13 Information Provided to Acquiror......................................................... 39
6.14 Termination of Employee Benefit Plans; ESOP Loan......................................... 39
6.15 Voting Agreement......................................................................... 40
6.16 Accounting and Other Adjustments......................................................... 40
ARTICLE 7 ACQUIROR'S COVENANTS....................................................................... 40
7.1 Regulatory Approvals..................................................................... 40
7.2 Information for Proxy Statement.......................................................... 40
7.3 Indemnification.......................................................................... 41
7.4 Best Efforts............................................................................. 41
ARTICLE 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR............................................ 41
8.1 Accuracy of Representations and Warranties............................................... 41
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8.2 CGB&L's Performance........................................................... 41
8.3 Documents Satisfactory........................................................ 41
8.4 No Proceedings................................................................ 41
8.5 Absence of Material Adverse Changes........................................... 42
8.6 Consents and Approvals........................................................ 42
8.7 No Prohibition................................................................ 42
8.8 Stockholder Approval.......................................................... 42
8.9 Dissenting Shares............................................................. 42
8.10 Minimum Stockholders' Equity.................................................. 42
ARTICLE 9 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF CGB&L................................ 42
9.1 Accuracy of Representations and Warranties.................................... 42
9.2 Acquiror's Performance........................................................ 42
9.3 Documents Satisfactory........................................................ 43
9.4 No Proceedings................................................................ 43
9.5 Regulatory Approvals.......................................................... 43
9.6 No Prohibitions............................................................... 43
9.7 Stockholder Approval.......................................................... 43
ARTICLE 10 TERMINATION.................................................................... 43
10.1 Reasons for Termination and Abandonment....................................... 43
10.2 Effect of Termination......................................................... 44
10.3 Expenses...................................................................... 44
ARTICLE 11 MISCELLANEOUS.................................................................. 45
11.1 Governing Law................................................................. 45
11.2 Assignments, Successors and No Third Party Rights............................. 45
11.3 Waiver........................................................................ 45
11.4 Publicity..................................................................... 46
11.5 Confidentiality............................................................... 46
11.6 Notices....................................................................... 46
11.7 Entire Agreement.............................................................. 47
11.8 Modification.................................................................. 48
11.9 Severability.................................................................. 48
11.10 Further Assurances............................................................ 48
11.11 Survival...................................................................... 48
11.12 Lack of Control............................................................... 48
11.13 Counterparts.................................................................. 48
11.14 Counterparts.................................................................. 48
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as of
February __, 2001, among XXXXX XXXXX XXXXXXX, a New York resident ("Acquiror"),
CGB&L FINANCIAL GROUP, INC., a Delaware corporation ("CGB&L"), and GOLDEN
NATIONAL ACQUISITION CORPORATION, a Delaware corporation which is wholly-owned
by Acquiror ("Acquisition Corp").
R E C I T A L S:
- - - - - - - -
A. The parties to this Agreement desire to effect a reorganization
whereby Acquiror desires to acquire control of CGB&L through the merger (the
"Merger") of Acquisition Corp with and into CGB&L with CGB&L being the surviving
corporation, which will become, by virtue of the Merger, wholly-owned by
Acquiror (the "Surviving Corporation").
B. Subject to the terms of this Agreement, each outstanding share of the
capital stock of CGB&L, which is comprised of one class of common stock, $0.01
par value per share ("CGB&L Common Stock"), shall be converted at the effective
time of the Merger into the right to receive cash as set forth below, and each
outstanding share of common stock of Acquisition Corp shall be converted into
and thereafter represent one share of common stock of the Surviving Corporation,
$0.01 par value per share.
C. The parties desire to make certain representations, warranties and
agreements in connection with the Merger and also agree to certain prescribed
conditions of the Merger.
A G R E E M E N T S:
- - - - - - - - - -
In consideration of the foregoing premises and the following mutual promises,
covenants and agreements, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. In addition to those terms defined throughout this
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Agreement, the following terms, when used herein, shall have the following
meanings.
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Adjusted Stockholders' Equity" means the consolidated
stockholders' equity of CGB&L, calculated in accordance with GAAP (as defined
below) and reflecting the recognition of or accrual for all expenses paid or
incurred or projected to be paid or incurred by CGB&L or the Bank in connection
with this Agreement and the Contemplated Transactions (including all fees and
expenses incurred in connection with obtaining stockholder approval and any
attorneys,
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accountants, brokers, finders or investment bankers) ("Transaction Costs") but
adjusted to exclude (i) any realized gains with respect to any sales of
securities occurring after December 31, 2000, (ii) with respect to securities
that are or were classified as available for sale or as trading securities, any
change in the amount of the adjustment required pursuant to SFAS 115 resulting
from changes in unrealized gains and losses occurring after December 31, 2000
and (iii) any accounting or other adjustments made pursuant to Section 6.16 of
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this Agreement. CGB&L's Adjusted Stockholders' Equity shall be calculated by
CGB&L's independent certified public accountants as of the close of business on
the day immediately preceding the Closing Date (as defined below), using
reasonable estimates of revenues and expenses where actual amounts are not
available. Such calculation shall be subject to verification and approval prior
to the Closing (as defined below) by certified public accountants selected by
Acquiror, which approval shall not be withheld unreasonably.
(d) "Affiliate" means with respect to:
(i) a particular individual: (A) each other member of such individual's Family;
(B) any Person that is directly or indirectly controlled by such individual or
one or more members of such individual's Family; (C) any Person in which such
individual or members of such individual's Family hold (individually or in the
aggregate) a Material Interest; and (D) any Person with respect to which such
individual or one or more members of such individual's Family serves as a
director, officer, partner, executor or trustee (or in a similar capacity); and
(ii) a specified Person other than an individual: (A) any Person that directly
or indirectly controls, is directly or indirectly controlled by, or is directly
or indirectly under common control with such specified Person; (B) any Person
that holds a Material Interest in such specified Person; (C) each Person that
serves as a director, officer, partner, executor or trustee of such specified
Person (or in a similar capacity); (D) any Person in which such specified Person
holds a Material Interest; (E) any Person with respect to which such specified
Person serves as a general partner or a trustee (or in a similar capacity); and
(F) any Affiliate of any individual described in clause (B) or (C) of this
subsection (ii).
(e) "Applicable Contract" means any Contract: (i) under which CGB&L or the Bank
has or may acquire any rights; (ii) under which CGB&L or the Bank has or may
become subject to any obligation or liability; or (iii) by which CGB&L or the
Bank or any of the assets owned or used by either or them is or may become
bound.
(f) "Bank" means Cerro Gordo Building and Loan, s.b., an Illinois savings bank
with its main office located in Cerro Gordo, Illinois, and a wholly owned
subsidiary of CGB&L.
(g) "Best Efforts" means the efforts that a prudent Person desirous of achieving
a result would use in similar circumstances to ensure that such result is
achieved as expeditiously as possible, provided, however, that an obligation to
use Best Efforts under this Agreement does not require the Person subject to
that obligation to take actions that would result in a materially adverse change
in the benefits to such Person of this Agreement and the Contemplated
Transactions.
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(h) "Breach" means with respect to a representation, warranty, covenant,
obligation or other provision of this Agreement or any instrument delivered
pursuant to this Agreement: (i) any inaccuracy in or breach of, or any failure
to perform or comply with, such representation, warranty, covenant, obligation
or other provision; or (ii) any claim (by any Person) or other occurrence or
circumstance that is or was inconsistent with such representation, warranty,
covenant, obligation or other provision, and the term "Breach" means any such
inaccuracy, breach, failure, claim, occurrence or circumstance.
(i) "Business Day" means any day except Saturday, Sunday and any day on which
the Bank is authorized or required by law or other government action to close.
(j) "CGB&L Equity Benchmark" shall mean an amount equal to the greater of (i)
$1,540,854 and (ii) the difference between $1,653,354 (being the total
stockholders' equity of CGB&L at December 31, 2000) and 75% of the tax-effected
Transaction Costs. For purposes of this definition, in no event shall
Transaction Costs exceed $150,000. The calculation of the CGB&L Benchmark shall
be subject to verification and approval prior to the Closing by certified public
accountants selected by Acquiror, which approval shall not be withheld
unreasonably.
(k) "CGB&L Management Plan" shall mean the CGB&L Financial Group, Inc.
Management Development Recognition Plan and Trust Agreement.
(l) "CGB&L Stock Awards" shall mean each of the 2,992 shares of CGB&L Common
Stock granted as plan share awards to a Person by CGB&L pursuant to the CGB&L
Management Plan prior to December 31, 2000 that is outstanding as of the date of
this Agreement and which shares will be, by virtue of the Contemplated
Transactions or otherwise, treated like all other issued and outstanding stock.
(m) "CGB&L Stock Option" shall mean each of the 9,150 stock options granted to a
Person by CGB&L, under the CGB&L Stock Option Plan or otherwise, prior to the
date of this Agreement that is outstanding and which will be, by virtue of the
Contemplated Transactions or otherwise, vested and fully exercisable immediately
prior to the Effective Time.
(n) "CGB&L Stock Option Plan" shall mean the CGB&L Financial Group, Inc. 1999
Stock Incentive Plan, as amended.
(o) "Call Reports" means the quarterly reports of income and condition required
to be filed with the Federal Deposit Insurance Corporation.
(p) "Commissioner" means the Commissioner of the Office of Banks and Real Estate
for the State of Illinois.
(q) "Contemplated Transactions" means all of the transactions contemplated by
this Agreement, including: (i) the Merger; (ii) the performance by Acquiror,
Acquisition Corp and CGB&L of their respective covenants and obligations under
this Agreement; and (iii) Acquiror's acquisition of control of CGB&L and,
indirectly, the Bank.
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(r) "Contract" means any agreement, contract, obligation, promise or
understanding (whether written or oral and whether express or implied) that is
legally binding.
(s) "Employment Agreements" means the Employment Agreement by and between CGB&L
and Xxxxxxx Xxxxxxx dated June 7, 1999 and the Employment Agreement by and
between the Bank and Xx. Xxxxxxx dated June 7, 1999.
(t) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
(u) "ESOP" means the CGB&L Financial Group, Inc. Employee Stock Ownership Plan,
as amended.
(v) "Family" means with respect to an individual: (i) the individual; (ii) the
individual's spouse and former spouses; (iii) any other natural person who is
related to the individual or the individual's spouse within the second degree;
and (iv) any other natural person who resides with such individual.
(w) "ESOP Loan" means the principal amount of and accrued interest on the loan
made by CGB&L to the ESOP as evidenced by a note dated September 22, 1998, the
terms of which shall not be modified, amended or restated without the consent of
Acquiror.
(x) "Knowledge" with respect to:
(i) an individual means that such person will be deemed to have "Knowledge" of a
particular fact or other matter if: (A) such individual is actually aware of
such fact or other matter; or (B) a prudent individual could be expected to
discover or otherwise become aware of such fact or other matter in the course of
conducting a reasonably comprehensive investigation concerning the existence of
such fact or other matter; and
(ii) a Person (other than an individual) means that such Person will be deemed
to have "Knowledge" of a particular fact or other matter if any individual who
is serving, or who has served in the past twelve (12) months as a director,
outside advisor, officer, manager, partner, executor or trustee of such Person
(or in any similar capacity) has Knowledge of such fact or other matter.
(y) "Legal Requirement" means any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, regulation, rule, policy statement, directive, statute or treaty.
(z) "Material Adverse Effect" with respect to a Person (other than an
individual) means, a material adverse effect (whether or not required to be
accrued or disclosed under Statement of Financial Accounting Standards No. 5):
(i) on the condition (financial or otherwise), properties, assets, liabilities,
businesses or results of operations of such Person (but does not include any
such effect resulting from or attributable to any action or omission by CGB&L or
Acquiror or any Subsidiary of either of them taken with the prior written
consent of the other parties hereto,
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in contemplation of the Contemplated Transactions); or (ii) on the ability of
such Person to perform its obligations under this Agreement on a timely basis.
(aa) "Material Interest" means the direct or indirect beneficial ownership (as
currently defined in Rule 13d-3 under the 1934 Act, as amended) of voting
securities or other voting interests representing at least 10% of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 10% of the outstanding equity securities or
equity interests in a Person.
(bb) "Option Spread" shall have the meaning given to such form in Section
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3.1(a)(iii) hereof. The aggregate amount of the Option Spreads shall not exceed
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$121,237.50.
(cc) "Order" means any award, decision, injunction, judgment, order, ruling,
extraordinary supervisory letter, memorandum of understanding, resolution,
agreement, directive, subpoena or verdict entered, issued, made, rendered or
required by any court, administrative or other governmental agency, including
any Regulatory Authority, or by any arbitrator.
(dd) "Ordinary Course of Business" shall include any action taken by a Person
only if such action:
(i) is consistent with the past practices of such Person and is taken in the
ordinary course of the normal day-to-day operations of such Person;
(ii) is not required to be authorized by the board of directors of such Person
(or by any Person or group of Persons exercising similar authority), other than
loan approvals for customers of a financial institution; and
(iii) is similar in nature and magnitude to actions customarily taken, without
any authorization by the board of directors (or by any Person or group of
Persons exercising similar authority), other than loan approvals for customers
of a financial institution, in the ordinary course of the normal day-to-day
operations of other Persons that are in the same line of business as such
Person.
(ee) "Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union or other entity
or Regulatory Authority.
(ff) "Proceeding" means any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative, investigative or
informal) commenced, brought, conducted or heard by or before, or otherwise
involving, any judicial or governmental authority, including a Regulatory
Authority, or arbitrator.
(gg) "Proxy Statement" means the proxy statement to be used by CGB&L in
connection with the solicitation by its Board of Directors of proxies for use at
the meeting of its stockholders to be convened for the purpose of voting on the
Merger, pursuant to Section 6.10 hereof.
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(hh) "Regulatory Authorities" means any federal, state or local governmental
body, agency or authority which, under applicable Legal Requirements: (i) has
supervisory, judicial, administrative, police, enforcement, taxing or other
power or authority over CGB&L, the Bank, Acquiror or Acquisition Corp; (ii) is
required to approve, or give its consent to the Contemplated Transactions; or
(iii) with which a filing must be made in connection therewith, including in any
case, the Board of Governors of the Federal Reserve System.
(ii) "Representative" means with respect to a particular Person, any director,
officer, manager, employee, agent, consultant, advisor or other representative
of such Person, including legal counsel, accountants and financial advisors.
(jj) "SEC" means the Securities and Exchange Commission.
(kk) "Subsidiary" means with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation's or other Person's board of
directors or similar governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other than securities
or other interests having such power only upon the happening of a contingency
that has not occurred) are held by the Owner or one or more of its Subsidiaries.
(ll) "Tax" means any tax (including any income tax, capital gains tax, value-
added tax, sales tax, property tax, gift tax or estate tax), levy, assessment,
tariff, duty (including any customs duty), deficiency or other fee, and any
related charge or amount (including any fine, penalty, interest or addition to
tax), imposed, assessed or collected by or under the authority of any Regulatory
Authority or payable pursuant to any tax-sharing agreement or any other Contract
relating to the sharing or payment of any such tax, levy, assessment, tariff,
duty, deficiency or fee.
(mm) "Tax Return" means any return (including any information return), report,
statement, schedule, notice, form or other document or information filed with or
submitted to, or required to be filed with or submitted to, any Regulatory
Authority in connection with the determination, assessment, collection or
payment of any Tax or in connection with the administration, implementation, or
enforcement of or compliance with any Legal Requirement relating to any Tax.
(nn) "Threatened" means a claim, Proceeding, dispute, action or other matter for
which any demand or statement has been made (orally or in writing) or any notice
has been given (orally or in writing), or if any other event has occurred or any
other circumstances exist, that would lead a prudent Person to conclude that
such a claim, Proceeding, dispute, action or other matter is likely to be
asserted, commenced, taken or otherwise pursued in the future.
Section 1.2 Principles of Construction. (a) In this Agreement, unless otherwise
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stated or the context otherwise requires, the following uses apply: (i) actions
permitted under this Agreement may be taken at any time and from time to time in
the actor's sole discretion; (ii) references to a statute shall refer to the
statute and any successor statute, and to all regulations promulgated under or
implementing the statute or its successor, as in effect at the relevant time;
(iii) in computing periods from a specified date to a later specified date, the
words "from" and
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"commencing on" (and the like) mean "from and including," and the words "to,"
"until" and "ending on" (and the like) mean "to, but excluding"; (iv) references
to a governmental or quasi-governmental agency, authority or instrumentality
shall also refer to a regulatory body that succeeds to the functions of the
agency, authority or instrumentality; (v) indications of time of day mean
Chicago, Illinois time; (vi) "including" means "including, but not limited to";
(vii) all references to sections, schedules and exhibits are to sections,
schedules and exhibits in or to this Agreement unless otherwise specified;
(viii) all words used in this Agreement will be construed to be of such gender
or number as the circumstances require; and (ix) the captions and headings of
articles, sections, schedules and exhibits appearing in or attached to this
Agreement have been inserted solely for convenience of reference and shall not
be considered a part of this Agreement nor shall any of them affect the meaning
or interpretation of this Agreement or any of its provisions.
(b) The Schedules of each of CGB&L and Acquiror referred to in this Agreement
consist of the agreements and other documentation described and referred to in
this Agreement with respect to such party, which Schedules were delivered by
each of CGB&L and Acquiror to the other not less than two (2) Business Days
before the date of this Agreement (the "Schedule Delivery Date"). If the
Schedules are delivered after the Schedule Delivery Date, then the party
receiving such Schedules shall have the opportunity to terminate this Agreement,
without penalty and without regard to the termination provisions in Article 10,
on or before 5:00 p.m. of the date which is five (5) Business Days after the
date of actual delivery of the Schedules. The disclosures in the Schedules, and
those in any supplement thereto, shall relate only to the representations and
warranties in the Section of the Agreement to which they expressly relate and
not to any other representation or warranty in this Agreement. In the event of
any inconsistency between the statements in the body of this Agreement and those
in the Schedules (other than an exception expressly set forth as such in the
Schedules with respect to a specifically identified representation or warranty),
the statements in the body of this Agreement will control.
(c) All accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles in the United States,
consistently applied ("GAAP").
ARTICLE 2
THE MERGER
Section 2.1 Manner of Merger. Provided that this Agreement shall not have been
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terminated in accordance with its express terms, upon the terms and subject to
the conditions of this Agreement and in accordance with the applicable
provisions of the Delaware General Corporation Law, as amended (the "DGCL"), at
the Effective Time (as defined below), Acquisition Corp shall be merged with and
into CGB&L. As a result of the Merger, the separate corporate existence of
Acquisition Corp shall cease and CGB&L will be the Surviving Corporation.
Section 2.2 Effective Time; Closing. (a) Provided that this Agreement shall not
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have been terminated in accordance with its express terms, the closing of the
Merger (the "Closing") shall occur through the mail or at a place which is
mutually acceptable to Acquiror and CGB&L, or if they fail to agree, at the
offices of Barack Xxxxxxxxxx Xxxxxxxxxx Xxxxxxx & Xxxxxxxxx, located
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at 000 X. Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, at 10:00 a.m. on
the date which is ten Business Days after the end of the month in which all
required approvals or consents of the Regulatory Authorities for the
Contemplated Transactions have been received and all statutory waiting periods
relating to such approvals have expired (the "Closing Date"). Subject to the
provisions of Article 10, failure to consummate the Merger on the date and time
and at the place determined pursuant to this Section will not result in the
termination of this Agreement and will not relieve any party of any obligation
under this Agreement.
(b) The parties hereto agree to file on the Closing Date an appropriate
certificate of merger, as contemplated by Section 251 and Section 103 of the
DGCL with the Secretary of State of the State of Delaware. The Merger shall be
effective upon the close of business on the day the certificate of merger has
been duly filed with the Secretary of State of the State of Delaware (the
"Effective Time").
Section 2.3 Effect of Merger. At the Effective Time, the effect of the
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Merger shall be as provided in Sections 251, 259, 260 and 261 of the DGCL.
Without limiting the generality of the foregoing, at the Effective Time, all the
property, rights, privileges, powers and franchises of Acquisition Corp and
CGB&L shall be vested in the Surviving Corporation, and all debts, liabilities
and duties of Acquisition Corp and CGB&L shall become the debts, liabilities and
duties of the Surviving Corporation.
Section 2.4 Certificate of Incorporation. At the Effective Time, the certificate
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of incorporation of the Surviving Corporation shall be amended and restated in
its entirety to read as the certificate of incorporation of Acquisition Corp as
in effect immediately prior to the Effective Time.
Section 2.5 Bylaws. At the Effective Time, the bylaws of Acquisition Corp as in
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effect immediately prior to the Effective Time shall become the bylaws of the
Surviving Corporation until thereafter amended in accordance with applicable
law.
Section 2.6 Board of Directors. From and after the Effective Time, until duly
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changed in compliance with applicable law and the articles of incorporation and
bylaws of the Surviving Corporation, the board of directors of the Surviving
Corporation shall consist of the directors of Acquisition Corp immediately prior
to the Effective Time.
Section 2.7 Management. At the Effective Time, the officers of Acquisition Corp
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immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation and shall hold office until their respective successors
are duly elected or appointed and qualified in the manner provided in the
articles of incorporation and bylaws of the Surviving Corporation.
Section 2.8 Acquiror's Deliveries at Closing. At the Closing, Acquiror shall
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deliver or cause to be delivered the following items to or on behalf of CGB&L:
(a) evidence of the delivery by Acquiror or its agents to the Paying Agent (as
defined below) of cash representing the Purchase Price to be paid in exchange
for the shares of CGB&L Common Stock in accordance with the terms of this
Agreement;
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(b) a good standing certificate for Acquisition Corp issued by the Secretary of
State of the State of Delaware, and dated not more than ten Business Days prior
to the Closing Date;
(c) a copy of the certificate of incorporation of Acquisition Corp certified not
more that ten Business Days prior to the Closing Date by the Secretary of State
of the State of Delaware;
(d) a certificate of the Secretary or any Assistant Secretary of Acquisition
Corp dated the Closing Date certifying a copy of the bylaws of Acquisition Corp;
(e) a certificate executed by Acquiror dated the Closing Date stating that: (i)
all of the representations and warranties of Acquiror set forth in this
Agreement are true and correct with the same force and effect as if all of such
representations and warranties were made at the Closing Date; and (ii) Acquiror
has performed or complied in all material respects with all of the covenants and
obligations to be performed or complied with by it under the terms of this
Agreement on or prior to the Closing Date, provided, however, that to the extent
performance and compliance with such covenants and obligations are subject in
this Agreement to a standard of materiality, Acquiror shall have performed and
complied in all respects with such covenants and obligations to the extent of
the materiality standard set forth herein;
(f) a certificate executed by the President or Vice President and Secretary or
any Assistant Secretary of Acquisition Corp dated the Closing Date stating that:
(i) all of the representations and warranties of Acquisition Corp set forth in
this Agreement are true and correct with the same force and effect as if all of
such representations and warranties were made at the Closing Date; and (ii)
Acquisition Corp has performed or complied in all material respects with all of
the covenants and obligations to be performed or complied with by it under the
terms of this Agreement on or prior to the Closing Date, provided, however, that
to the extent performance and compliance with such covenants and obligations are
subject in this Agreement to a standard of materiality, Acquisition Corp shall
have performed and complied in all respects with such covenants and obligations
to the extent of the materiality standard set forth herein; and
(g) a legal opinion of Acquiror's counsel dated the Closing Date in the form
attached as Exhibit A.
---------
All of such items shall be reasonably satisfactory in form and substance to
CGB&L and its counsel.
Section 2.9 CGB&L's Deliveries at Closing. At the Closing, CGB&L shall deliver
-----------------------------
the following items to Acquiror:
(a) a good standing certificate for CGB&L issued by the Secretary of State of
the State of Delaware and dated not more than ten Business Days prior to the
Closing Date;
(b) a copy of the certificate of incorporation of CGB&L certified not more than
ten Business Days prior to the Closing Date by the Secretary of State of the
State of Delaware;
16
(c) a certificate of the Secretary or any Assistant Secretary of CGB&L dated the
Closing Date certifying a copy of the bylaws of CGB&L;
(d) copies of resolutions of the stockholders and the board of directors of
CGB&L authorizing and approving this Agreement and the consummation of the
Contemplated Transactions, certified as of the Closing Date by the Secretary or
any Assistant Secretary of CGB&L;
(e) a good standing certificate for the Bank issued by the Commissioner and
dated not more than ten (10) Business Days prior to the Closing Date;
(f) a copy of the charter of the Bank certified by the Commissioner and dated
not more than ten Business Days prior to the Closing Date;
(g) a certificate of the Cashier of the Bank dated the Closing Date certifying a
copy of the bylaws of the Bank and stating that there have been no further
amendments to the charter of the Bank delivered pursuant to the immediately
preceding paragraph of this Section;
(h) a certificate executed by the President or Vice President and Secretary or
any Assistant Secretary of CGB&L dated the Closing Date stating that: (i) all of
the representations and warranties of CGB&L set forth in this Agreement are true
and correct with the same force and effect as if all of such representations and
warranties were made at the Closing Date; and (ii) CGB&L has performed or
complied in all material respects with all of the covenants and obligations to
be performed or complied with by it under the terms of this Agreement on or
prior to the Closing Date, provided, however, that to the extent performance and
compliance with such covenants and obligations are subject in this Agreement to
a standard of materiality, CGB&L shall have performed and complied in all
respects with such covenants and obligations to the extent of the materiality
standard set forth herein;
(i) a list of all holders of CGB&L Common Stock and Bank Shares (as defined
below) as of the Closing Date and a list of all Persons who have the right at
any time to acquire shares of CGB&L Common Stock and Bank Shares certified in
each case by the Secretary or any Assistant Secretary of CGB&L;
(j) a legal opinion of CGB&L's counsel dated the Closing Date in the form
attached as Exhibit C;
---------
(k) a certificate of each of CGB&L's legal counsel, accountants and financial
advisor or investment banker, if any, representing that all fees and expenses
incurred by CGB&L prior to and including the Effective Time have been paid in
full;
(l) an employment agreement in the form of Exhibit B, attached hereto, executed
---------
by Xxxxxxx X. Xxxxxxx;
(m) at and pursuant to the request of Acquiror, a resignation from each of the
directors and officers of CGB&L from such individual's position as a director
and an officer of CGB&L, as the case may be; and
17
(n) such other documents as Acquiror may reasonably request.
All of such items shall be reasonably satisfactory in form and substance to
Acquiror and its counsel.
Section 2.10 Alternative Structure. Notwithstanding anything contained herein to
---------------------
the contrary, upon receipt of CGB&L's prior written consent (which consent shall
not be unreasonably withheld), Acquiror may specify, for any reasonable
business, tax or regulatory purpose, that, before the Effective Time, Acquiror
and CGB&L shall enter into transactions other than those described in this
Agreement to effect the purposes of this Agreement, including the merger of
CGB&L with any Affiliate of Acquiror or the purchase of the CGB&L Common Stock
directly from the stockholders of CGB&L, and the parties to this Agreement shall
take all action necessary and appropriate to effect, or cause to be effected,
such transactions, provided, however, that no such proposed change on the
structure of the transactions contemplated in this Agreement shall delay the
Closing Date (if such a date has already been firmly established) by more than
30 Business Days or adversely affect the economic benefits, the form of
consideration or the tax effect of the Merger at the Effective Time to the
holders of CGB&L Common Stock.
Section 2.11 Absence of Control. Subject to any specific provisions of this
------------------
Agreement, it is the intent of the parties to this Agreement that neither
Acquiror nor CGB&L by reason of this Agreement shall be deemed (until
consummation of the Contemplated Transactions) to control, directly or
indirectly, the other party and shall not exercise, or be deemed to exercise,
directly or indirectly, a controlling influence over the management or policies
of such other party.
ARTICLE 3
CONVERSION OF SECURITIES IN THE MERGER
Section 3.1 Manner of Merger. (a) At the Effective Time, by virtue of the Merger
----------------
and without any action on the part of Acquiror or CGB&L or the holder of any
CGB&L Common Stock:
(i) each share of common stock, $0.01 par value per share, of Acquisition Corp
issued and outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and non-assessable share of common
stock of the Surviving Corporation;
(ii) each share of CGB&L Common Stock issued and outstanding immediately prior
to the Effective Time, including shares granted pursuant to the CGB&L Management
Plan pursuant to Section 3.2(h), shall be converted into the right to receive
--------------
cash in an amount equal to the Purchase Price Per Share (as defined below), and
all shares of CGB&L Common Stock held by CGB&L as treasury stock shall not be
converted into the right to receive cash but instead shall be canceled as a
result of the Merger; and
(iii) Each CGB&L Stock Option shall, ipso facto and without any action on the
part of holders thereof, become and be converted into the right to receive the
difference between the Purchase Price Per Share and the applicable option
exercise price (the "Option Spread"), payable as
18
provided herein. Prior to the Effective Time, the Board of Directors of CGB&L
and the committee or committees established under the CGB&L Stock Option Plans
shall take such actions or make such determinations as may be required under the
CGB&L Stock Option Plans, subject to the approval of Acquiror, to effect the
provisions of this Agreement.
(b) The "Purchase Price Per Share" shall be equal to the Total Purchase
Price divided by Total CGB&L Shares, as such terms are defined below.
(i) "Total CGB&L Shares" shall be equal to the sum of (x) the total number of
shares of CGB&L Common Stock issued and outstanding immediately prior to the
Effective Time and (y) the number of shares of CGB&L Common Stock issuable
pursuant to all CGB&L Stock Options.
(ii) "Total Purchase Price" shall be equal to $2,353,686.50 adjusted down by the
positive difference, if any, between (x) the CGB&L Equity Benchmark and (y)
CGB&L's Adjusted Stockholders' Equity.
(c) After the Effective Time, no holder of CGB&L Common Stock which is issued
and outstanding immediately prior to the Effective Time will have any rights in
respect of such CGB&L Common Stock except to receive payment for such shares of
CGB&L Common Stock in the manner provided herein or as provided in Section 262
of the DGCL.
Section 3.2 Steps of Transaction. (a) After the date that notice is sent to
--------------------
stockholders of CGB&L (the "Mailing Date") of the special meeting of
shareholders to be held pursuant to Section 6.10 (the "Special Meeting"),
Acquiror shall mail or cause to be mailed to each then current holder of record
of a certificate or certificates representing outstanding shares of CGB&L Common
Stock (the "Certificates") transmittal materials for use in surrendering such
Certificates. Pursuant to the terms of a mutually agreeable Paying Agent
agreement, the parties hereto agree to appoint American National Bank and Trust
Company of Chicago with its main office located in Chicago, Illinois, as Paying
Agent (the "Paying Agent"), for the parties to effect the surrender of the
Certificates in exchange for cash in an amount determined as provided in this
Agreement. Acquiror shall use all reasonable efforts to mail or cause to be
mailed the transmittal materials to all persons who become holders of CGB&L
Common Stock subsequent to the Mailing Date and no later than the close of
business of the third Business Day prior to the Closing Date.
(b) Acquiror shall have the discretion, which he may delegate in whole or in
part to the Paying Agent, to determine whether transmittal materials have been
properly completed, signed and submitted and to disregard any defects it
determines are immaterial. The decision of Acquiror or the Paying Agent on such
matters shall be conclusive and binding. Neither Acquiror nor the Paying Agent
shall be under any obligation to notify any person of any defect in the
materials submitted to the Paying Agent.
(c) As promptly as practicable after the Effective Time, Acquiror shall cause
the Paying Agent to deliver to each holder of CGB&L Common Stock who has
theretofore submitted effective transmittal materials accompanied by the
Certificates covered by such materials a check in an amount equal to the
Purchase Price Per Share times the number of shares of CGB&L Common
19
Stock theretofore represented by the Certificates so surrendered, after given
effect to any required Tax withholdings. The amount paid by Acquiror pursuant to
this Section 3.2(c) shall constitute and represent full satisfaction of all
--------------
rights pertaining to such shares of CGB&L Common Stock.
(d) As promptly as practicable after the Effective Time, Acquiror shall send to
each holder of record of CGB&L Common Stock immediately prior to the Effective
Time who has not previously submitted his or her Certificates, additional
transmittal materials for use in surrendering such Certificates to the Paying
Agent and instructions for use in effecting such surrender.
(e) Until so surrendered and exchanged, each such outstanding Certificate shall,
for all purposes, represent the cash amount into and for which such shares have
been so converted; provided, however, that upon surrender of a Certificate,
there shall be paid to the record holder or holders of the Certificate, the cash
amount, without interest thereon, represented by such Certificate.
(f) At the Effective Time, CGB&L shall deliver a certified copy of a list of its
stockholders to Acquiror after which there shall be no further registration or
transfers on the stock transfer books of CGB&L of the shares of CGB&L Common
Stock which were outstanding immediately prior to the Effective Time. Any Person
whose name does not appear upon such list who submits Certificates to the Paying
Agent shall be entitled to receive no cash payment, and any such Certificates
shall be canceled.
(g) If any cash amount representing the Purchase Price Per Share is to be issued
in the name of a Person other than the Person in whose name the Certificate
surrendered in exchange therefor is registered, it shall be a condition of the
issuance thereof that the Certificate so surrendered shall be properly endorsed,
accompanied by all documents required to evidence and effect such transfer and
otherwise in proper form for transfer and that the person requesting such
exchange shall pay to Acquiror any transfer or other taxes required by reason of
the payment of the Purchase Price Per Share to or in the name of a Person other
than the Person in whose name the Certificate surrendered in exchange therefor
is registered, or otherwise required, or shall establish to the satisfaction of
Acquiror that such tax has been paid or is not payable.
(h) Immediately prior to the Effective Time, the expiration of the
forfeiture provisions on all outstanding shares of CGB&L Common Stock granted
pursuant to CGB&L Stock Awards shall be accelerated and all outstanding CGB&L
Stock Options shall become immediately exercisable and fully vested. At the
Effective Time, all CGB&L Common Stock granted pursuant to CGB&L Stock Awards
shall be converted into cash as provided in Section 3.1(a)(ii). Immediately
------------------
prior to the Effective Time, all outstanding CGB&L Stock Options shall be
cancelled and CGB&L shall pay each holder, for each CGB&L Stock Option held, an
amount in cash equal to the Option Spread reduced by any required Tax
withholdings. The payment of the Option Spreads pursuant to this Article 3 shall
---------
be delivered and paid by CGB&L in full satisfaction of all rights pertaining to
the CGB&L Stock Option Plans and the CGB&L Stock Options.
Section 3.3 Escheat. Notwithstanding anything in this Article III or elsewhere
------- -----------
in this Agreement to the contrary, neither the Paying Agent nor any party hereto
shall be liable to a former holder of
20
CGB&L Common Stock or any CGB&L Stock Option for any funds delivered to a public
official pursuant to any applicable escheat or abandoned property laws.
Section 3.4 Dissenting Shares. Notwithstanding anything to the contrary
-----------------
contained in this Agreement, to the extent appraisal rights are available to
CGB&L stockholders pursuant to Section 262 of the DGCL, any shares held by a
Person who delivers to CGB&L, prior to the Special Meeting, a written demand for
payment for his or her shares, whose shares were not voted in favor of the
Merger and who complies with all of the provisions of the DGCL concerning the
rights of such Person to dissent from the Merger and to require appraisal of
such Person's shares and who has not withdrawn such objection or waived such
rights prior to the Closing Date ("Dissenting Shares") shall not be converted
pursuant to Section 3.1 but shall become the right to receive such consideration
-----------
as may be determined to be due to the holder of such Dissenting Shares pursuant
to the DGCL, provided, however, that each Dissenting Share held by a Person at
the Effective Time who shall, after the Effective Time, withdraw the demand for
appraisal or lose the right of appraisal, in either case pursuant to the DGCL
shall be deemed to be converted, as of the Effective Time, into cash in an
amount determined as provided in this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF CGB&L
CGB&L hereby represents and warrants to Acquiror as follows:
Section 4.1 CGB&L Organization. CGB&L: (a) is a corporation duly organized,
------------------
validly existing and in good standing under the laws of the State of Delaware
and is also in good standing in each other jurisdiction in which the nature of
the business conducted or the properties or assets owned or leased by it makes
such qualification necessary; (b) is registered with the Board of Governors of
the Federal Reserve System (the "Federal Reserve") as a bank holding company
under the federal Bank Holding Company Act of 1956, as amended (the "BHCA"); and
(c) has full power and authority, corporate and otherwise, to operate as a bank
holding company and to own, operate and lease its properties as presently owned,
operated and leased, and to carry on its business as it is now being conducted.
Copies of the certificate of incorporation and bylaws of CGB&L and all
amendments thereto set forth on Schedule 4.1 are complete and correct. CGB&L has
no Subsidiaries other than the Bank.
Section 4.2 Bank Organization. The Bank is an Illinois savings bank duly
-----------------
organized, validly existing and in good standing under the laws of the State of
Illinois. The Bank has full power and authority, corporate and otherwise, to
own, operate and lease its properties as presently owned, operated and leased,
and to carry on its business as it is now being conducted, and is duly qualified
to do business and is in good standing in each jurisdiction in which the nature
of the business conducted or the properties or assets owned or leased by it
makes such qualification necessary. Copies of the charter and bylaws of the Bank
and all amendments thereto set forth on Schedule 4.2 are complete and correct.
Section 4.3 Authorization; Enforceability. CGB&L has the requisite corporate
-----------------------------
power and authority to enter into and perform its obligations under this
Agreement. The execution, delivery
21
and performance of this Agreement by CGB&L, and the consummation by it of its
obligations under this Agreement, have been authorized by all necessary
corporate action (except for the requisite approval of its shareholders), and
this Agreement constitutes a legal, valid and binding obligation of CGB&L
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other laws and subject to
general principles of equity.
Section 4.4 No Conflict. Except as set forth on Schedule 4.4, neither the
-----------
execution nor delivery of this Agreement nor the consummation or performance of
any of the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time): (a) contravene, conflict with or result in a
violation of any provision of the certificate of incorporation or charter and
the bylaws, of CGB&L or the Bank, or any resolution adopted by the board of
directors or shareholders of CGB&L or the Bank; (b) contravene, conflict with or
result in a violation of, or give any Regulatory Authority or other Person the
valid and enforceable right to challenge any of the Contemplated Transactions or
to exercise any remedy or obtain any relief under, any Legal Requirement or any
Order to which CGB&L or the Bank, or any of their respective assets that are
owned or used by them, may be subject, except for any contravention, conflict or
violation that is permissible by virtue of obtaining the regulatory approvals
necessitated by the Contemplated Transactions, including any such approvals
under the Federal Deposit Insurance Act, as amended (the "FDI Act"), the BHCA,
the 1933 Act, the 1934 Act, the laws of the State of Delaware (the "Delaware
Statutes") and the laws of the State of Illinois (the "Illinois Statutes"); (c)
except with respect to the ESOP and Employment Agreements and in connection with
the CGB&L Stock Awards and the CGB&L Stock Options, contravene, conflict with or
result in a violation or breach of any provision of, or give any Person the
right to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify any material
Applicable Contract to which CGB&L or the Bank is a party or by which any of
their respective assets is bound; or (d) result in the creation of any lien,
charge or encumbrance upon or with respect to any of the assets owned or used by
CGB&L or the Bank. Except as set forth on Schedule 4.4, neither CGB&L nor the
Bank is or will be required to give any notice to or obtain any consent from any
Person in connection with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated Transactions.
Section 4.5 CGB&L Capitalization. The authorized capital stock of CGB&L
--------------------
currently consists exclusively of: (a) 900,000 shares of CGB&L Common Stock,
$0.01 par value per share, of which (i) 99,000 shares are duly issued and
outstanding, fully paid and non-assessable, (ii) 1,937 shares are, and will be
immediately prior to the Closing, held by CGB&L as treasury shares, and (iii)
9,150 shares have been reserved for issuance in respect of outstanding CGB&L
Stock Options; and (b) 100,000 shares of preferred stock, $0.01 par value per
share, none of which are issued and outstanding. On the Closing Date, all of
such shares of CGB&L Common Stock will be subject to no claim of right except
pursuant to this Agreement. There are no unexpired or pending preemptive rights
with respect to any shares of capital stock of CGB&L. Except with respect to the
CGB&L Stock Awards and the CGB&L Stock Options as set forth on Schedule 4.18,
and as set forth on Schedule 4.5, there are no outstanding securities of CGB&L
which are reserved for issuance or are convertible into or exchangeable for any
shares of CGB&L's capital
22
stock, and except with respect to the ESOP and except as provided in this
Section, CGB&L is not a party to any Contract relating to the issuance, sale or
transfer of any equity securities or other securities of CGB&L. CGB&L does not
own or have any Contract to acquire any equity securities or other securities of
any Person or any direct or indirect equity or ownership interest in any other
business except for the capital stock of the Bank and as set forth on Schedule
4.5.
Section 4.6 Bank Capitalization. The authorized capital stock of the Bank
-------------------
consists, and immediately prior to the Effective Time, will consist exclusively
of 1,000 shares of capital stock, $1.00 par value per share, all of which shares
are, and immediately prior to the Closing will be, duly authorized, validly
issued and outstanding, fully paid and nonassessable (the "Bank Shares"). Except
as set forth on Schedule 4.6, CGB&L is, and will be on the Closing Date, the
record and beneficial owner of 100% of the Bank Shares, free and clear of any
lien or encumbrance whatsoever. The Bank Shares are, and will be on the Closing
Date, freely transferable and are, and will be on the Closing Date, subject to
no claim of right except pursuant to this Agreement and as set forth on Schedule
4.6. There are no unexpired or pending preemptive rights with respect to any
shares of capital stock of the Bank. There are no outstanding securities of the
Bank which are convertible into or exchangeable for any shares of the Bank's
capital stock, and the Bank is not a party to any Contract relating to the
issuance, sale or transfer of any equity securities or other securities of the
Bank. Except with respect to shares of stock of the Federal Home Loan Bank of
Chicago ("FHLB"), and stock of the Central Illinois Community Development
Corporation and stock of the Federal Home Loan Mortgage Corporation, the Bank
does not own or have any Contract to acquire, any equity securities or other
securities of any Person or any direct or indirect equity or ownership interest
in any other business, except as set forth on Schedule 4.6.
Section 4.7 Financial Statements and Reports. True, correct and complete copies
--------------------------------
of the following financial statements are included in Schedule 4.7:
(a) audited Consolidated Balance Sheets for CGB&L as of March 31, 2000 and the
related Consolidated Statements of Income, Statements of Cash Flows and
consolidated Statements of Changes in Shareholders' Equity for the year ended
March 31, 2000;
(b) CGB&L's Consolidated Report of Income for the nine-month period ended
December 31, 2000; and
(c) CGB&L's FR-Y9SP as of June 30, 2000 and December 31, 1999 as filed with the
Federal Reserve.
The financial statements described in clause (a) have been prepared in
conformity with GAAP. The financial statements described in clause (b) above
have been prepared on a basis consistent with past accounting practices and as
required by applicable rules or regulations and fairly present the consolidated
financial condition and results of operations at the dates and for the periods
presented (which changes in the aggregate would not reasonably be expected to
have a Material Adverse Effect on CGB&L on a consolidated basis). Taken
together, the financial statements described in clauses (a) and (b) above
(collectively, the "CGB&L Financial Statements") fairly and accurately present
in all material respects the respective financial position, assets, liabilities
23
and results of operations of CGB&L and the Bank as at the respective dates of
and for the periods referred to in the CGB&L Financial Statements.
Section 4.8 Books and Records. The books of account, minute books, stock record
-----------------
books and other records of CGB&L and the Bank are complete and correct in all
material respects and have been maintained in accordance with sound business
practices and all applicable Legal Requirements, including the maintenance of
any adequate system of internal controls. The minute books of CGB&L and the Bank
contain accurate and complete records in all material respects of all meetings
held of, and corporate action taken by, its respective shareholders, board of
directors and committees of the board of directors. At the Closing, all of those
books and records will be in the possession of CGB&L and the Bank.
Section 4.9 Title to Properties. Each of CGB&L and the Bank has good and
-------------------
marketable title to all assets and properties, whether real or personal,
tangible or intangible, which it purports to own, subject to no valid liens,
mortgages, security interests, encumbrances or charges of any kind except: (a)
as noted in the most recent CGB&L Financial Statement or on Schedule 4.9; (b)
statutory liens for Taxes not yet delinquent or being contested in good faith by
appropriate Proceedings and for which appropriate reserves have been established
and reflected on the CGB&L Financial Statements; (c) pledges or liens required
to be granted in connection with the acceptance of government deposits, granted
in connection with repurchase or reverse repurchase agreements, granted to
secure the advance of funds from the FHLB, or otherwise incurred in the Ordinary
Course of Business; (d) minor defects and irregularities in title and
encumbrances which do not materially impair the use thereof for the purposes for
which they are held; and (e) assets of the Bank pledged to secure advances from
the FHLB. Each of CGB&L and the Bank as lessee has the right under valid and
existing leases to occupy, use, possess and control any and all of the
respective property leased by it. All buildings and structures owned by each of
CGB&L and the Bank lie wholly within the boundaries of the real property owned
or validly leased by it, do not encroach upon the property of, or otherwise
conflict with the property rights of, any other Person
Section 4.10 Condition and Sufficiency of Assets. The buildings, structures and
-----------------------------------
equipment of CGB&L and the Bank are structurally sound, are in good operating
condition and repair, and are adequate for the uses to which they are being put,
and none of such buildings, structures or equipment is in need of maintenance or
repairs except for ordinary, routine maintenance and repairs that are not
material in the aggregate in nature or in cost. The real property, buildings,
structures and equipment owned or leased by CGB&L and the Bank are in compliance
with the Americans with Disabilities Act of 1990, as amended, and the
regulations promulgated thereunder, and all other building and development codes
and other restrictions, including subdivision regulations, building and
construction regulations, drainage codes, health, fire and safety laws and
regulations, utility tariffs and regulations, conservation laws and zoning laws
and ordinances. The assets and properties, whether real or personal, tangible or
intangible, which CGB&L or the Bank purport to own are sufficient for the
continued conduct of the business of CGB&L and the Bank after the Closing in
substantially the same manner as conducted prior to the Closing.
24
Section 4.11 Loans; Loan Loss Reserve. All loans and loan commitments extended
------------------------
by the Bank and any extensions, renewals or continuations of such loans and loan
commitments (the "Loans") were made in accordance with customary lending
standards of the Bank in the Ordinary Course of Business. The Loans are
evidenced by appropriate and sufficient documentation and constitute valid and
binding obligations to the Bank enforceable in accordance with their terms. All
such Loans are, and at the Closing will be, free and clear of any encumbrance or
other charge and the Bank has complied, and at the Closing will have complied
with all Legal Requirements relating to such Loans. The reserve for possible
loan and lease losses of the Bank is and will be on the Closing Date adequate in
all material respects to provide for possible or specific losses, net of
recoveries relating to loans previously charged off, and contains and will
contain an additional amount of unallocated reserves for unanticipated future
losses at an adequate level. On the Closing Date, the Bank's reserve for
possible loan and lease losses will equal the amount required by Section 6.2
-----------
(e). None of the Loans is subject to any material offset or claim of offset, and
---
the aggregate loan balances in excess of the Bank's reserve for loan and lease
losses are, based on past loan loss experience, collectible in accordance with
their terms and all uncollectible loans have been charged off.
Section 4.12 Undisclosed Liabilities; Adverse Changes. Except as set forth on
----------------------------------------
Schedule 4.12, neither CGB&L nor the Bank has any material liabilities or
obligations of any nature (whether absolute, accrued, contingent or otherwise)
except for liabilities or obligations reflected or reserved against in the CGB&L
Financial Statements and current liabilities incurred in the Ordinary Course of
Business since the respective dates thereof. Since the date of the latest CGB&L
Financial Statement, there has not been any change in the business, operations,
properties, prospects, assets or condition of CGB&L or the Bank, and, to CGB&L's
knowledge, no event has occurred or circumstance exists, that has had or would
reasonably be expected to have a Material Adverse Effect on CGB&L on a
consolidated basis.
Section 4.13 Taxes. Each of CGB&L and the Bank has duly filed or will duly file
-----
all Tax Returns required to be filed by it for all periods prior to the Closing,
and each such Tax Return is or will be complete and accurate in all material
respects. Each of CGB&L and the Bank has paid, or made adequate provision for
the payment of, all Taxes (whether or not reflected in Tax Returns as filed or
to be filed) due and payable by CGB&L or the Bank, or claimed to be due and
payable by any Regulatory Authority, and is not delinquent in the payment of any
Tax, except such Taxes as are being contested in good faith and as to which
adequate reserves have been provided. There is no claim or assessment pending
or, to the Knowledge of CGB&L, Threatened against CGB&L or the Bank for any
Taxes owed by any of them. No audit, examination or investigation related to
Taxes paid or payable by CGB&L or the Bank is presently being conducted or, to
the Knowledge of CGB&L, Threatened by any Regulatory Authority. CGB&L has
delivered to Acquiror true, correct and complete copies of all Tax Returns
previously filed with respect to the last two and three fiscal years by CGB&L
and the Bank, respectively, and any tax examination reports and statements of
deficiencies assessed or agreed to for any of CGB&L or the Bank for any such
time period.
Section 4.14 Compliance with ERISA. Except as set forth on Schedule 4.14, all
---------------------
employee benefit plans (as defined in Section 3(3) of ERISA) established or
maintained by CGB&L or the
25
Bank or to which CGB&L or the Bank contributes, are in compliance with all
applicable requirements of ERISA, and are in compliance with all applicable
requirements (including qualification and non-discrimination requirements in
effect as of the Closing) of the Internal Revenue Code of 1986, as amended (the
"Code"), for obtaining the tax benefits the Code thereupon permits with respect
to such employee benefit plans. No such employee benefit plan has, or as of the
Closing will have, any amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA) for which CGB&L or the Bank would be liable to any
Person under Title IV of ERISA if any such employee benefit plan were terminated
as of the Closing. Such employee benefit plans are funded in accordance with
Section 412 of the Code (if applicable). There would be no obligations of CGB&L
or the Bank under Title IV of ERISA relating to any such employee benefit plan
that is a multi-employer plan if any such plan were terminated or if CGB&L or
the Bank withdrew from any such plan as of the Closing.
Section 4.15 Compliance with Legal Requirements. Except as set forth on Schedule
----------------------------------
4.15, each of CGB&L and the Bank is, and at all times since January 1, 1997, has
been, in compliance with each Legal Requirement that is or was applicable to it
or to the conduct or operation of its respective businesses or the ownership or
use of any of its respective assets. No event has occurred or circumstance
exists that (with or without notice or lapse of time): (a) may constitute or
result in a violation by CGB&L or the Bank of, or a failure on the part of CGB&L
or the Bank to comply with, any Legal Requirement; or (b) may give rise to any
obligation on the part of CGB&L or the Bank to undertake, or to bear all or any
portion of the cost of, any remedial action of any nature in connection with a
failure to comply with any Legal Requirement. Except as set forth on Schedule
4.15, neither CGB&L nor the Bank has received, at any time since January 1,
1997, any notice or other communication (whether oral or written) from any
Regulatory Authority or any other Person regarding: (x) any actual, alleged,
possible, or potential violation of, or failure to comply with, any Legal
Requirement; or (y) any actual, alleged, possible, or potential obligation on
the part of CGB&L or the Bank to undertake, or to bear all or any portion of the
cost of, any remedial action of any nature in connection with a failure to
comply with any Legal Requirement.
Section 4.16 Legal Proceedings; Orders.
-------------------------
(a) Schedule 4.16 is a true and correct list of all Proceedings and Orders
pending, entered into or, to the Knowledge of CGB&L, Threatened against or
affecting CGB&L or the Bank or any of their respective assets or businesses, or
the Contemplated Transactions, since January 1, 1997, and there is no fact known
to CGB&L which would provide a basis for any other Proceeding or Order. To the
Knowledge of CGB&L, no officer, director, agent or employee of CGB&L or the Bank
is subject to any Order that prohibits such officer, director, agent or employee
from engaging in or continuing any conduct, activity or practice relating to the
businesses of CGB&L or the Bank. Except as set forth of Schedule 4.16, neither
CGB&L nor the Bank has received at any time since January 1, 1997, any notice or
other communication (whether oral or written) from any Regulatory Authority or
any other Person regarding any actual, alleged, possible or potential violation
of, or failure to comply with, any material Legal Requirement to which CGB&L or
the Bank, or any of the assets owned or used by any of them, is or has been
subject.
26
(b) Neither CGB&L nor any of CGB&L Subsidiary is subject to any cease-and-desist
or other order or enforcement action issued by, or is a party to any written
agreement, consent agreement or memorandum of understanding with, or is a party
to any commitment letter or similar undertaking to, or is subject to any order
or directive by, or has been since January 1, 1997, a recipient of any
supervisory letter from, or has been ordered to pay any civil money penalty by,
or has adopted any policies, procedures or board resolutions at the request of
any Regulatory Authority that currently restricts in any material respect the
conduct of its business or that in any material manner relates to its capital
adequacy, its ability to pay dividends, its credit or risk management policies,
its management or its business, nor has CGB&L or any CGB&L Subsidiary been
advised by any Regulatory Authority that it is considering issuing, initiating,
ordering or requesting any of the foregoing.
Section 4.17 Absence of Certain Changes and Events. Except as set forth on
-------------------------------------
Schedule 4.17, since March 31, 2000, each of CGB&L and the Bank has conducted
its respective businesses only in the Ordinary Course of Business and with
respect to each there has not been any:
(a) change in its authorized or issued capital stock; grant of any stock option
or right to purchase shares of its capital stock; issuance of any security
convertible into such capital stock or evidences of indebtedness (except in
connection with customer deposits); grant of any registration rights; purchase,
redemption, retirement or other acquisition by it of any shares of any such
capital stock; or declaration or payment of any dividend or other distribution
or payment in respect of shares of its capital stock;
(b) amendment to its certificate of incorporation, charter or bylaws or any
resolutions adopted by its board of directors or shareholders with respect to
the same;
(c) payment of any bonus or increase of any salaries or other compensation to
any of its shareholders, directors, officers or employees, or entry by it into
any employment, severance or similar Contract with any director, officer or
employee;
(d) adoption, amendment (except for any amendment necessary to comply with any
Legal Requirement) or termination of, or increase in the payments to or benefits
under, any Employee Benefit Plan (as defined below);
(e) damage to or destruction or loss of any of its assets or property, whether
or not covered by insurance;
(f) entry into, termination or extension of, or receipt of notice of termination
of any joint venture or similar agreement pursuant to any Contract or any
similar transaction;
(g) material change in, or termination of, any existing lease of real or
personal property to which it is a party;
(h) entry into any new, or modification, amendment, renewal or extension
(through action or inaction) of the term of any existing, lease, contract or
license that has a term of more than one
27
(1) year, or that involves the payment by CGB&L or any Subsidiary of CGB&L of
more than $10,000 in the aggregate;
(i) Loan or commitment to make any Loan except for (i) Loans secured by one-to-
four family residences with a loan to value ratio of not more than 90%, (ii)
unsecured Loans not in excess of $10,000, (iii) non-real estate secured Loans
not in excess of 90% of the amount of any deposit account at the Bank used as
collateral for the Loan; (iv) Loans secured by real estate not in excess of
$250,000;
(j) Loan or commitment to make, renew, extend the term or increase the amount of
any Loan to any Person if such Loan or any other Loans to such Person or an
Affiliate of such Person is on the "watch list" or similar internal report of
CGB&L or the Bank, or has been classified as "substandard," "doubtful," "loss,"
or "other Loans specially mentioned or listed as a "potential problem loan";"
provided, however, that nothing in this Section 4.17(j) shall prohibit CGB&L or
---------------
the Bank from honoring any contractual obligation in existence on the date of
this Agreement;
(k) sale (other than any sale in the Ordinary Course of Business), lease or
other disposition of any of its assets or properties or mortgage, pledge or
imposition of any lien or other encumbrance upon any of its material assets or
properties except for tax and other liens which arise by operation of law and
with respect to which payment is not past due and except for pledges or liens:
(i) required to be granted in connection with the acceptance by the Bank of
government deposits; (ii) granted in connection with repurchase or reverse
repurchase agreements; or (iii) otherwise incurred in the Ordinary Course of
Business;
(l) incurrence by it of any obligation or liability (fixed or contingent) other
than in the Ordinary Course of Business;
(m) cancellation or waiver by it of any claims or rights with a value in excess
of $10,000;
(n) any investment by it of a capital nature exceeding $5,000 or aggregate
investments of a capital nature exceeding $10,000;
(o) except for the Contemplated Transactions, merger or consolidation with or
into any other Person, or acquisition of any stock, equity interest or business
of any other Person;
(p) transaction for the borrowing or loaning of monies, other than in the
Ordinary Course of Business;
(q) change in any policies and practices with respect to liquidity management
and cash flow planning, marketing, deposit origination, lending, budgeting,
profit and tax planning, accounting or any other material aspect of its business
or operations, except for such changes as may be required in the opinion of the
management of CGB&L to respond to then current market or economic conditions or
as may be required by any Regulatory Authorities;
28
(r) filing of any applications for additional branches, opening of any new
office or branch, closing of any current office or branch, or relocation of
operations from existing locations;
(s) discharge or satisfaction of any material lien or encumbrance on its assets
or repayment of any material indebtedness for borrowed money, except for
obligations incurred and repaid in the Ordinary Course of Business;
(t) entry into any contract or agreement to buy, sell, exchange or otherwise
deal in any assets or series of assets in a single transaction in excess of
$10,000 in aggregate value, except for sales of CGB&L "other real estate owned"
and other repossessed properties or the acceptance of a deed in lieu of
foreclosure;
(u) purchase or other acquisition of any investments, direct or indirect, in any
derivative securities, financial futures or commodities or entry into any
interest rate swap, floors and option agreements, or other similar interest rate
management agreements;
(v) hiring of any employee with an annual salary in excess of $10,000, except
for employees at will who are hired to replace employees who have resigned or
whose employment has otherwise been terminated; or
(w) agreement, whether oral or written, by it to do any of the foregoing.
Section 4.18 Properties, Contracts, Employee Benefit Plans and Other Agreements.
------------------------------------------------------------------
Except for loan agreements evidencing loans made by the Bank in the Ordinary
Course of Business, Schedule 4.18 lists or describes the following with respect
to CGB&L and the Bank:
(a) All real property owned by each of CGB&L and the Bank and the principal
buildings and structures located thereon, together with a legal description of
such real estate, and each lease of real property to which each of CGB&L and the
Bank is a party, identifying the parties thereto, the annual rental payable, the
expiration date thereof and a brief description of the property covered, and in
each case of either owned or leased real property, the proper identification, if
applicable, of each such property as a branch or main office or other office of
CGB&L or the Bank;
(b) each Applicable Contract that involves performance of services or delivery
of goods or materials by CGB&L or the Bank of an amount or value in excess of
$5,000;
(c) each Applicable Contract that was not entered into in the Ordinary Course of
Business and that involves expenditures or receipts of CGB&L or the Bank in
excess of $15,000;
(d) each lease, rental, license, installment and conditional sale agreement and
other Applicable Contract affecting the ownership of, leasing of, title to, use
of, or any personal property (except personal property leases and installment
and conditional sales agreements having a value per item or aggregate payments
of less than $10,000 and with terms of less than one year);
29
(e) each licensing agreement or other Applicable Contract with respect to
patents, trademarks, copyrights, or other intellectual property (collectively,
"Intellectual Property Assets"), including agreements with current or former
employees, consultants or contractors regarding the appropriation or the non-
disclosure of any of the Intellectual Property Assets of CGB&L or the Bank;
(f) each collective bargaining agreement and other Applicable Contract to or
with any labor union or other employee representative of a group of employees;
(g) each joint venture, partnership and other Applicable Contract (however
named) involving a sharing of profits, losses, costs or liabilities by CGB&L or
the Bank with any other Person;
(h) each Applicable Contract containing covenants that in any way purport to
restrict the business activity of CGB&L or the Bank or any Affiliate of either,
or limit CGB&L or the Bank or any Affiliate of the foregoing to engage in any
line of business or to compete with any Person;
(i) each Applicable Contract providing for payments to or by any Person based on
sales, purchases or profits, other than direct payments for goods;
(j) the name and annual salary of each director, officer or employee of each of
CGB&L and the Bank, and the profit sharing, bonus or other form of compensation
(other than salary) paid or payable by CGB&L, the Bank or a combination of any
of them to or for the benefit of each such person in question for the year ended
March 31, 2000, and for the current year, and any employment agreement or
arrangement with respect to each such person;
(k) each profit sharing, group insurance, hospitalization, stock option,
pension, retirement, bonus, deferred compensation, stock bonus, employee stock
ownership, stock purchase or other employee welfare or benefit agreements, plans
or arrangements established, maintained, sponsored or undertaken by CGB&L or the
Bank for the benefit of the officers, directors or employees of CGB&L or the
Bank, including each trust or other agreement with any custodian or any trustee
for funds held under any such agreement, plan or arrangement, and all other
Contracts or arrangements under which pensions, deferred compensation or other
retirement benefits are being paid or may become payable by CGB&L or the Bank
for the benefit of the employees of CGB&L or the Bank (collectively, the
"Employee Benefit Plans"), and, in respect to any of them, the latest reports or
forms, if any, filed with the Department of Labor and Pension Benefit Guaranty
Corporation under the ERISA, any current financial or actuarial reports and any
currently effective Internal Revenue Service private rulings or determination
letters obtained by or for the benefit of CGB&L or the Bank;
(l) each holder of a CGB&L Stock Option and each holder of a CGB&L
Stock Award and the number of underlying shares to which each such holder may be
entitled;
(m) each of the participants in the ESOP showing the number of
outstanding shares of CGB&L Common Stock credited to each participant, the
vesting dates thereof, the unpaid balance of any loans owing by the ESOP to
CGB&L or any party as of the date hereof
30
(the "ESOP Loan"), and the number of unallocated shares of CGB&L Common Stock
under the ESOP;
(n) each Applicable Contract entered into other than in the Ordinary
Course of Business that contains or provides for an express undertaking by CGB&L
or the Bank to be responsible for consequential damages;
(o) each Applicable Contract for capital expenditures in excess of $5,000;
(p) each written warranty, guaranty or other similar undertaking with respect to
contractual performance extended by CGB&L or the Bank other than in the Ordinary
Course of Business; and
(q) each amendment, supplement and modification (whether oral or written) in
respect of any of the foregoing.
Copies of each document, plan or Contract listed and described on Schedule 4.18
are appended to such Schedule.
Section 4.19 No Defaults. Except as set forth on Schedule 4.19, each Contract
-----------
identified or required to be identified on Schedule 4.18 is in full force and
effect and is valid and enforceable in accordance with its terms. Each of CGB&L
and the Bank is, and at all times since January 1, 1997, has been, in full
compliance with all applicable terms and requirements of each Contract under
which either CGB&L or the Bank has or had any obligation or liability or by
which CGB&L or the Bank or any of their respective assets owned or used by them
is or was bound. Each other Person that has or had any obligation or liability
under any such Contract under which CGB&L or the Bank has or had any rights is,
and at all times since January 1, 1997, has been, in full compliance with all
applicable terms and requirements of such Contract. No event has occurred or
circumstance exists that (with or without notice or lapse of time) may
contravene, conflict with or result in a violation or breach of, or give CGB&L,
the Bank or other Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or to cancel, terminate
or modify, any Applicable Contract. Except in the Ordinary Course of Business
with respect to loans made by the Bank, neither CGB&L nor the Bank has given to
or received from any other Person, at any time since January 1, 1997, any notice
or other communication (whether oral or written) regarding any actual, alleged,
possible or potential violation or breach of, or default under, any Contract.
Other than in the Ordinary Course of Business in connection with workouts and
restructured loans, there are no renegotiations of, attempts to renegotiate or
outstanding rights to renegotiate any material amounts paid or payable to CGB&L
or the Bank under current or completed Contracts with any Person and no such
Person has made written demand for such renegotiation.
Section 4.20 Insurance. Schedule 4.20 lists the policies of insurance (including
---------
bankers blanket bond and insurance providing benefits for employees) owned or
held by CGB&L or the Bank on the date hereof. Each policy is in full force and
effect (except for any expiring policy which is
31
replaced by coverage at least as extensive) until the Closing. All premiums due
on such policies have been paid in full.
Section 4.21 Compliance with Environmental Laws. Except as set forth on Schedule
----------------------------------
4.21, there are no actions, suits, investigations, liabilities, inquiries,
Proceedings or Orders involving CGB&L or the Bank or, to the Knowledge of CGB&L,
any of their respective assets that are pending or, to the Knowledge of CGB&L,
Threatened, nor is there any factual basis for any of the foregoing, as a result
of any asserted failure of CGB&L or the Bank, or any predecessor thereof, to
comply (or the assertion of liability even if in compliance) with any Legal
Requirements designed to minimize, prevent, punish or remedy the consequences of
actions that damage or threaten the soil, land surface or subsurface strata,
surface waters (including navigable waters, ocean waters, streams, ponds,
drainage basins and wetlands), groundwaters, drinking water supply, stream
sediments, ambient air (including indoor air), plant and animal life and any
other environmental medium or natural resource.
Section 4.22 Regulatory Filings. Since January 1, 1997, each of CGB&L and the
------------------
Bank has filed in a timely manner all required filings with all Regulatory
Authorities. Without limitation of the foregoing, since January 1, 1997, CGB&L
has filed on a timely basis all proxy statements, reports and other documents
required to be filed by it under the 1934 Act, and CGB&L has furnished Acquiror
copies of its Annual Report on Form 10-K for the fiscal year ended March 31,
2000, and all quarterly and periodic reports and proxy statements filed under
the 1934 Act by CGB&L after such date, each as filed with the SEC. All such
filings were accurate and complete in all material respects as of the dates of
the filings, and no such filing has made any untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not misleading.
Section 4.23 Fiduciary Powers. Schedule 4.23 contains a list and a brief
----------------
description of all accounts for which the Bank acts as a fiduciary, including
accounts for which it serves as a trustee, agent, custodian, personal
representative, guardian, conservator or investment advisor. The Bank has
properly administered all accounts for which it acts as fiduciary, including
accounts for which it serves as trustee, agent, custodian or investment advisor,
in accordance with the terms of the governing documents and applicable state and
federal law and regulations and common law. None of the Bank or any of its
directors, officers or employees has committed any breach of trust with respect
to any such fiduciary account, and the accountings for each such fiduciary
account are true and correct in all material respects and accurately reflect the
assets of such fiduciary account.
Section 4.24 Bylaws; State Takeover Statutes. The Board of Directors of CGB&L
-------------------------------
has approved the Contemplated Transactions and has taken whatever action that
may be necessary to render inapplicable to the Contemplated Transactions the
provisions of Section 203 of the DGCL and any anti-takeover provision set forth
in CGB&L's Bylaws or certificate of incorporation.
Section 4.25 Disclosure. Neither any representation or warranty of CGB&L in, nor
----------
any schedule to, this Agreement omits to state a material fact necessary to make
the statements herein or therein, in light of the circumstances in which they
were made, not misleading. No notice given pursuant to Section 6.9 will contain
-----------
any untrue statement or omit to state a material fact
32
necessary to make the statements therein or in this Agreement, in light of the
circumstances in which they were made, not misleading.
Section 4.26 Brokerage Commissions. Except for the obligation of CGB&L to pay
---------------------
Olive Corporate Finance LLC, none of CGB&L or the Bank or any of their
respective Representatives has incurred any obligation or liability, contingent
or otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement.
Section 4.27 Approval Delays. To the Knowledge of CGB&L, there is no reason why
---------------
the granting of any of the regulatory approvals referred to in Section 7.1 would
-----------
be denied or unduly delayed.
Section 4.28 Due Diligence Report. Schedule 4.28 contains Acquiror's due
--------------------
diligence request reflected in the Due Diligence Checklist delivered to CGB&L's
counsel on February 2, 2001. CGB&L has no Knowledge of any information that is
responsive to such request that has not been reflected on or included as part of
Schedule 4.28.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF Acquiror
Acquiror hereby represents and warrants to CGB&L as follows:
Section 5.1 Acquiror Residency/Acquisition Corp Organization. Acquiror is an
------------------------------------------------
individual residing in the State of New York. Acquisition Corp is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Acquisition Corp has full power and authority, corporate and
otherwise, to own, operate and lease its respective properties as presently
owned, operated and leased, and to carry on its respective business as it is now
being conducted. Copies of the articles of incorporation and bylaws of
Acquisition Corp and all amendments thereto set forth on Schedule 5.1 are
complete and correct.
Section 5.2 Authorization; Enforceability. Acquiror and Acquisition Corp have
-----------------------------
the requisite legal capacity and corporate power, respectively, and the
authority to enter into and perform their respective obligations under this
Agreement. The execution, delivery and performance of this Agreement by
Acquisition Corp, and the consummation by it of its obligations under this
Agreement, have been authorized by all necessary corporate action, including any
necessary approval of its shareholders. This Agreement constitutes a legal,
valid and binding obligation of each of Acquiror and Acquisition Corp
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other laws and subject to
general principles of equity.
Section 5.3 No Conflict. Except as set forth on Schedule 5.3, neither the
-----------
execution nor delivery of this Agreement nor the consummation or performance of
any of the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time): (a) contravene, conflict with or result in a
violation of any provision of the articles of incorporation or charter, and the
bylaws, of any of Acquiror's Subsidiaries, or any resolution adopted by the
board of
33
directors or shareholders of any of Acquiror's Subsidiaries; (b) contravene,
conflict with or result in a violation of, or give any Regulatory Authority or
other Person the valid and enforceable right to challenge any of the
Contemplated Transactions or to exercise any remedy or obtain any relief under,
any Legal Requirement or any Order to which Acquiror or any of its Subsidiaries,
or any of their respective assets that are owned or used by them, may be
subject, except for any contravention, conflict or violation that is permissible
by virtue of obtaining the regulatory approvals necessitated by the Contemplated
Transactions, including any such approvals under the FDI Act, the BHCA, the 1933
Act, the 1934 Act, the Delaware Statutes and the Illinois Statutes; (c)
contravene, conflict with or result in a violation or breach of any provision
of, or give any Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or to cancel, terminate
or modify any material Applicable Contract to which Acquiror or any of its
Subsidiaries is a party or by which any of their respective assets is bound; or
(d) result in the creation of any lien, charge or encumbrance upon or with
respect to any of the assets owned or used by Acquiror or any of its
Subsidiaries. Except for the regulatory approvals referred to in Section 7.5 and
-----------
as set forth on Schedule 5.3, neither Acquiror nor any of its Subsidiaries is or
will be required to give any notice to or obtain any consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.
Section 5.4 Approval Delays. To the Knowledge of Acquiror, there is no reason
---------------
why the granting of any of the regulatory approvals referred to in Section 7.1
-----------
would be denied or unduly delayed.
Section 5.5 Financing. Acquiror and Acquisition Corp have sufficient assets to
---------
consummate the contemplated transactions without obtaining third-party
financing.
Section 5.6 Disclosure. No representation or warranty of Acquiror or Acquisition
----------
Corp in this Agreement omits to state a material fact necessary to make the
statements herein or therein, in light of the circumstances in which they were
made, not misleading.
ARTICLE 6
CGB&L'S COVENANTS
Section 6.1 Access and Investigation. Acquiror and its Representatives shall, at
------------------------
all times during normal business hours and with reasonable advance notice prior
to the Closing Date, have full and continuing access to the facilities,
operations, records and properties of CGB&L and the Bank in accordance with the
provisions of this Section. Acquiror and its Representatives may, prior to the
Closing Date, make or cause to be made such reasonable investigation of the
operations, records and properties of each of CGB&L and the Bank and of its
respective financial and legal condition as Acquiror shall deem necessary or
advisable to familiarize itself with such records, properties and other matters,
provided, however, that such access or investigation shall not interfere
unnecessarily with the normal operations of CGB&L or the Bank. Upon request,
each of CGB&L and the Bank will furnish Acquiror or its Representatives
attorneys' responses to auditors' requests for information regarding CGB&L or
the Bank, as the case may be, and such financial and operating data and other
information reasonably requested by Acquiror
34
(provided with respect to attorneys, such disclosure would not result in the
waiver by CGB&L or the Bank of any claim of attorney-client privilege), and will
permit Acquiror and its Representatives to discuss such information directly
with any individual or firm performing auditing or accounting functions for
CGB&L or the Bank, and such auditors and accountants shall be directed to
furnish copies of any reports or financial information as developed to Acquiror
or its Representatives. CGB&L shall, and shall cause the Bank to, give Acquiror
prior notice of each meeting of its respective board of directors and any
committees thereof, including specifically the Bank's loan committee, and
Acquiror shall be invited to have one of its Representatives in attendance at
each such meeting as an observer. No investigation by Acquiror or any of its
Representatives shall affect the representations and warranties made by CGB&L.
This Section shall not require the disclosure of any information the disclosure
of which to Acquiror would be prohibited by any Legal Requirement.
Section 6.2 Operation of CGB&L and the Bank. Except with the prior written
-------------------------------
consent of Acquiror, between the date of this Agreement and the Closing Date,
CGB&L will, and will cause the Bank, to
(a) conduct its business only in the Ordinary Course of Business;
(b) use its Best Efforts to preserve intact its current business organization,
keep available the services of its current officers, employees and agents, and
maintain the relations and goodwill with its suppliers, customers, landlords,
creditors, employees, agents and others having business relationships with it;
(c) confer with Acquiror concerning operational matters of a material nature;
(d) enter into loan transactions only in accordance with sound credit practices
and only on terms and conditions which are not materially more favorable than
those available to the borrower from competitive sources in arm's-length
transactions, and in that connection, from the date hereof to the Closing Date,
shall not;
(i) enter into any new credit or new lending relationships in excess of $250,000
(other than mortgage loans secured by first liens on owner-occupied residences
with a loan to value ratio of not more than 80%) to any Person and such Person's
Affiliate; or
(ii) other than incident to a reasonable loan restructuring, extend additional
credit to any Person or that Person's Affiliate if such Person or such Affiliate
is the obligor under any indebtedness to it which constitutes a non-performing
loan or against any part of such indebtedness it has established loss reserves
or any part of which has been charged-off by it;
(e) consistent with past practice, maintain a reserve for possible loan and
lease losses which is adequate in all material respects under the requirements
of GAAP to provide for possible losses, net of recoveries relating to loans
previously charged off, on loans outstanding (including accrued interest
receivable);
35
(f) maintain all of its assets necessary for the conduct of its business in good
operating condition and repair, reasonable wear and tear and damage by fire or
unavoidable casualty excepted, and maintain policies of insurance upon its
assets and with respect to the conduct of its business in amounts and kinds
comparable to that in effect on the date hereof and pay all premiums on such
policies when due;
(g) file in a timely manner all required filings with all Regulatory Authorities
and cause such filings to be true and correct in all material respects; and
(h) maintain its books, accounts and records in the usual, regular and ordinary
manner, on a basis consistent with prior years and comply with all Legal
Requirements.
Section 6.3 Negative Covenant. Except with respect to (i) dividends declared and
-----------------
paid by the Bank to CGB&L on or prior to December 31, 2000 and (ii) the issuance
or distribution of CGB&L Common Stock pursuant to the CGB&L Stock Awards and the
CGB&L Stock Options; and except as otherwise expressly permitted by this
Agreement, and as contemplated by Schedule 4.17, between the date of this
Agreement and the Closing Date, CGB&L will not, and will cause the Bank not to,
without the prior written consent of Acquiror, take any affirmative action, or
fail to take any reasonable action within its control, as a result of which any
of the changes or events listed in Section 4.17 is likely to occur.
------------
Section 6.4 Subsequent CGB&L Financial Statements; Securities Reports. As soon
---------------------------------------------------------
as available after the date hereof, CGB&L will furnish Acquiror copies of the
quarterly unaudited consolidated balance sheets and income statements of CGB&L
prepared for its internal use, and the Bank's Call Reports for each quarterly
period completed after September 30, 2000. Prior to the Closing, CGB&L will
furnish all other financial reports or statements submitted by CGB&L or the Bank
to Regulatory Authorities after the date hereof, to the extent permitted by law
(collectively, the "Subsequent CGB&L Financial Statements"). Without limitation
of the foregoing, as soon as available, if at all, CGB&L will deliver to
Acquiror complete copies of its Annual Report on Form 10-K for the year ending
March 31, 2001, all Quarterly Reports on Form 10-Q, all Current Reports on Form
8-K and any proxy materials filed hereafter with the SEC pursuant to the 1934
Act (collectively, the "SEC Filings"). The Subsequent CGB&L Financial Statements
and the financial information in the SEC Filings shall be prepared on a basis
consistent with past accounting practices and shall fairly present in all
material respects the consolidated financial condition and results of operations
for the dates and periods presented. The Subsequent CGB&L Financial Statements
will not include any material assets or omit to state any material liabilities,
absolute or contingent, or other facts, which inclusion or omission would render
such CGB&L Financial Statements misleading in any material respect. The SEC
Filings will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements contained therein not misleading.
Section 6.5 Title to Real Estate. As soon as practical after the date hereof,
--------------------
but in any event no later than thirty (30) days after the date hereof, CGB&L
shall obtain at its own expense and deliver to Acquiror, with respect to all
real estate owned by CGB&L or the Bank (the "CGB&L
36
Real Estate"), an owner's preliminary report of title covering a date subsequent
to the date hereof, issued by Chicago Title Insurance Company or such other
title insurance company as is reasonably acceptable to Acquiror, showing fee
simple title in CGB&L or the Bank in such real estate subject to no liens,
mortgages, security interests, encumbrances or charges of any kind except: (a)
as noted in the most recent CGB&L Financial Statement or on Schedule 4.9; (b)
statutory liens for Taxes not yet delinquent or being contested in good faith by
appropriate Proceedings and for which appropriate reserves have been established
and reflected on the CGB&L Financial Statements; (c) pledges or liens required
to be granted in connection with the acceptance of government deposits, granted
in connection with repurchase or reverse repurchase agreements or otherwise
incurred in the Ordinary Course of Business; and (d) minor defects and
irregularities in title and encumbrances which do not materially impair the use
thereof for the purposes for which they are held.
Section 6.6 Survey. As soon as practicable after the date hereof, CGB&L shall
------
deliver to Acquiror all surveys of the CGB&L Real Estate which CGB&L holds or
which it can obtain without cost.
Section 6.7 Advice of Changes. Between the date of this Agreement and the
-----------------
Closing Date, CGB&L will promptly notify Acquiror in writing if CGB&L or the
Bank becomes aware of any fact or condition that causes or constitutes a Breach
of any of CGB&L's representations and warranties as of the date of this
Agreement, or if CGB&L or the Bank becomes aware of the occurrence after the
date of this Agreement of any fact or condition that would (except as expressly
contemplated by this Agreement) cause or constitute a Breach of any such
representation or warranty had such representation or warranty been made as of
the time of occurrence or discovery of such fact or condition. If any such fact
or condition would require any change in the Schedules if such Schedules were
dated the date of the occurrence or discovery of any such fact or condition,
CGB&L will promptly deliver to Acquiror a supplement to the Schedules specifying
such change. During the same period, CGB&L will promptly notify Acquiror of the
occurrence of any Breach of any covenant of CGB&L in this Article or of the
occurrence of any event that might reasonably be expected to make the
satisfaction of the conditions in Article 8 impossible or unlikely.
Section 6.8 Other Offers.
------------
(a) Until such time, if any, as this Agreement is terminated pursuant to Article
10, CGB&L will not, and will cause the Bank and their respective Representatives
not to, directly or indirectly solicit, initiate or encourage any inquiries or
proposals from, discuss or negotiate with, provide any non-public information
to, or consider the merits of any unsolicited inquiries or proposals from, any
Person (other than Acquiror) relating to any Acquisition Transaction (as defined
below) or a potential Acquisition Transaction involving CGB&L or the Bank.
Notwithstanding the foregoing in this Section 6.8, CGB&L may provide information
-----------
at the request of, or enter into negotiations with, a third party with respect
to an Acquisition Transaction if the board of directors of CGB&L determines, in
good faith, that the exercise of its fiduciary duties to CGB&L's stockholders
under applicable law, as advised in writing by Xxxxxx & Xxxxxx Attorneys PC,
requires it to take such action, and, provided further, that CGB&L may not, in
any
37
event, provide to such third party any information which it has not provided to
Acquiror. CGB&L shall promptly notify Acquiror orally and in writing in the
event it receives any such inquiry or proposal and shall provide reasonable
detail of all relevant facts relating to such inquiries, along with a summary of
the advice provided by Xxxxxx & Xxxxxx Attorneys PC.
(b) "Acquisition Transaction" shall, with respect to CGB&L, mean any of the
following: (i) a merger or consolidation, or any similar transaction (other than
the Merger) of any company with either CGB&L or any significant subsidiary (as
defined in Rule 1.2 of Regulation S-X of the SEC) (a "Significant Subsidiary")
of CGB&L; (ii) a purchase, lease or other acquisition of all or substantially
all the assets of either CGB&L or any Significant Subsidiary of CGB&L; (iii) a
purchase or other acquisition of "beneficial ownership" by any "person" or
"group" (as such terms are defined in Section 13(d)(3) of the Securities
Exchange Act) (including by way of merger, consolidation, share exchange or
otherwise) which would cause such person or group to become the beneficial owner
of securities representing 10% or more of the voting power of either CGB&L or
any Significant Subsidiary of CGB&L; (iv) a tender or exchange offer to acquire
securities representing 10% or more of the voting power of CGB&L; (v) a public
proxy or consent solicitation made to stockholders of CGB&L seeking proxies in
opposition to any proposal relating to any aspect of the Contemplated
Transactions that has been recommended by the board of directors of CGB&L; (vi)
the filing of an application or notice with any federal or state regulatory
authority (which application has been accepted for processing) seeking approval
to engage in one or more of the transactions referenced in clauses (i) through
(iv) above; or (vii) the making of a bona fide proposal to CGB&L or its
stockholders, by public announcement or written communication, that is or
becomes the subject of public disclosure, to engage in one or more of the
transactions referenced in clauses (i) through (v) above.
Section 6.9 Information Provided to Acquiror. CGB&L agrees that none of the
--------------------------------
information concerning CGB&L or the Bank which is provided or to be provided by
CGB&L or the Bank or their respective Representatives to Acquiror for inclusion
or which is included in any documents to be filed with any Regulatory Authority
in connection with the Contemplated Transactions will, at the respective times
such documents are filed, be false or misleading with respect to any material
fact or omit to state any material fact necessary in order to make the
statements therein not misleading.
Section 6.10 Stockholders' Meeting. CGB&L will take all steps necessary to duly
---------------------
call, give notice of, convene and hold a meeting of its stockholders, as soon as
practicable, but in no event later than forty-five (45) days after the date the
SEC completes its review of the Proxy Statement, for the purpose of obtaining
stockholder approval of this Agreement and the Merger (the "Special Meeting");
provided, however, that the Proxy Statement shall not be mailed to the holders
of CGB&L Common Stock until Olive Corporate Finance LLC has delivered to the
Board of Directors of CGB&L for inclusion in the Proxy Statement a fairness
opinion (the "Fairness Opinion"), dated the mailing date, to the effect that the
Total Purchase Price is fair to the stockholders of CGB&L from a financial point
of view, which opinion shall be in standard industry form with respect to
transactions of this nature. CGB&L shall send the Proxy Statement to its
stockholders at least twenty (20) days prior to such meeting in accordance with
Section 251 of the DGCL. Along with such notice, CGB&L shall include a copy of
this Agreement and a
38
copy of Section 262 of the DGCL governing the procedures required to be met by
dissenting shareholders.
Section 6.11 Proxy Statement.
---------------
(a) CGB&L will take all reasonable steps necessary to submit the
Proxy Statement to the SEC within thirty (30) days after the date of this
Agreement. The Proxy Statement will satisfy all requirements of the 1934 Act and
the rules and regulations promulgated thereunder and will include a unanimous
recommendation by the Board of Directors of CGB&L that the stockholders of the
CGB&L approve this Agreement and the Merger. CGB&L and its Representatives shall
solicit proxies voting only in favor thereof from the stockholders of CGB&L.
CGB&L shall deliver a draft of the Proxy Statement to Acquiror and its counsel
at least five (5) Business Days prior to filing it with the SEC, and shall
provide Acquiror with copies of all responses or other written communications
from the SEC relating to the Proxy Statement. CGB&L shall also deliver a copy of
the final Proxy Statement to Acquiror promptly after the SEC has completed its
review thereof.
(b) None of the information to be supplied by CGB&L for inclusion
or incorporation by reference in the Proxy Statement as of the time of its
mailing and as of the time of the meeting of CGB&L's stockholders in connection
therewith, and as amended or supplemented by CGB&L, will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements contained therein
not misleading; in no event, however, shall CGB&L be liable for any untrue
statement of a material fact or omission to state a material fact in the Proxy
Statement made in reliance upon, and in conformity with, written information
concerning Acquiror or Acquisition Corp furnished by Acquiror specifically for
use in the Proxy Statement.
Section 6.12 Best Efforts; Cooperation. CGB&L agrees to exercise good faith and
-------------------------
use its Best Efforts to satisfy the various covenants and conditions to Closing
in this Article and Article 8, respectively, and to consummate the transactions
contemplated hereby as promptly as possible. CGB&L will not intentionally take
or intentionally permit to be taken any action that would be a Breach of the
terms or provisions of this Agreement. Between the date of this Agreement and
the Closing Date, CGB&L will, and will cause the Bank and each of its and their
Affiliates and Representatives to, cooperate with Acquiror with respect to all
filings that Acquiror is required by Legal Requirements to make in connection
with the Contemplated Transactions.
Section 6.13 Information Provided to Acquiror. CGB&L agrees that none of the
--------------------------------
information concerning CGB&L or the Bank which is provided or to be provided by
CGB&L to Acquiror for inclusion or which is included, in a submission to any
other documents to be filed with, any Regulatory Authority in connection with
the Contemplated Transactions will, at the respective times such documents are
submitted to be false or misleading with respect to any material fact, or omit
to state any material fact necessary in order to make the statements therein not
misleading.
Section 6.14 ESOP Loan. From and after the date of this Agreement through the
---------
Effective Time, CGB&L and/or the Bank shall not make any contributions to the
ESOP that will be used
39
to repay, nor shall they repay, the ESOP Loan or any amounts due thereunder
except to the extent such payments are required to be made pursuant to the
express terms of the ESOP Loan. Immediately following the Effective Time, the
ESOP shall, with the proceeds of the cash received by the ESOP pursuant to
Section 3.1(a)(ii) with respect to shares of CGB&L Common Stock held by the ESOP
which have not, as of the Effective Time, been allocated to accounts of ESOP
participants, pay to the Surviving Corporation the full amount of the ESOP Loan
and any remaining cash received by the ESOP shall be allocated to the accounts
of ESOP participants.
Section 6.15 Voting Agreement. Concurrently with the execution and delivery of
----------------
this Agreement, CGB&L shall deliver to Acquiror a voting agreement in the form
of Exhibit D signed by all directors and officers of CGB&L or the Bank who are
---------
holders of CGB&L Common Stock.
Section 6.16 Accounting and Other Adjustments. CGB&L agrees that it shall, and
--------------------------------
shall cause the Bank, to: (a) make any accounting adjustments or entries to its
books of account and other financial records; (b) make additional provisions to
any allowance for loan and lease losses; (c) sell or transfer any investment
securities held by it; (d) charge-off any loan or lease; (e) create any new
reserve account or make additional provisions to any other existing reserve
account; (f) make changes in any accounting method; (g) accelerate, defer or
accrue any anticipated obligation, expense or income item; and (h) make any
other adjustments which would affect the financial reporting of Acquiror, on a
consolidated basis after the Effective Time, in any case as Acquiror shall
reasonably request, provided, however, that neither CGB&L nor the Bank shall be
obligated to take any such requested action until immediately prior to the
Closing and at such time as CGB&L shall have received reasonable assurances that
all conditions precedent to CGB&L's obligations under this Agreement (except for
the completion of actions to be taken at the Closing) have been satisfied and no
such adjustment which CGB&L or the Bank would not have been required to make but
for the provisions of this Section shall have any effect on the calculation of
the Exchange Rate.
ARTICLE 7
ACQUIROR'S COVENANTS
Section 7.1 Regulatory Approvals. Except as otherwise provided in this
--------------------
Agreement, as promptly as practicable after the date of this Agreement, Acquiror
will make all filings required by Legal Requirements to be made by it to
consummate the Contemplated Transactions (including all filings under the BHCA,
the FDI Act, Delaware Statutes and Illinois Statutes). Acquiror shall in good
faith pursue all necessary regulatory approvals.
Section 7.2 Information for Proxy Statement. Acquiror shall furnish such
-------------------------------
information concerning Acquiror and Acquisition Corp as is necessary in order to
cause the Proxy Statement, insofar as it relates to Acquiror, to be prepared in
accordance with all applicable requirements of the 1934 Act and the rules and
regulations promulgated thereunder. Acquiror agrees promptly to advise CGB&L if
any time prior to the Special Meeting any information provided by Acquiror in
the Proxy Statement becomes incorrect or incomplete in any material respect, and
to provide to CGB&L the information needed to correct such inaccuracy or
omission.
40
Section 7.3 Indemnification. Except as may be limited by applicable Legal
---------------
Requirements, Acquiror shall use his Best Efforts to cause the Bank to honor its
obligations in respect of indemnification and advancement of expenses currently
provided by the Bank in favor of their current and former employees, directors,
officers and agents in the charter or bylaws of the Bank for three (3) years
from the Effective Time with respect to matters occurring prior to the Effective
Time.
Section 7.4 Best Efforts. Acquiror and Acquisition Corp agree to exercise good
------------
faith and use their Best Efforts to satisfy the various covenants and conditions
to Closing in this Article and Article 5, respectively, and to consummate the
transactions contemplated hereby as promptly as possible. Acquiror and
Acquisition Corp will not intentionally take or intentionally permit to be taken
any action that would be a Breach of the terms or provisions of this Agreement.
Between the date of this Agreement and the Closing Date, Acquiror and
Acquisition Corp will, and will cause each of its Subsidiaries and their
Affiliates and Representatives to, cooperate with CGB&L with respect to all
filings that Acquiror is required by Legal Requirements to make in connection
with the Contemplated Transactions.
ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR
The obligations of Acquiror to consummate the Merger and to take the other
actions required to be taken by Acquiror at the Closing are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Acquiror, in whole or in part):
Section 8.1 Accuracy of Representations and Warranties. All of the
------------------------------------------
representations and warranties of CGB&L set forth in this Agreement shall be
true and correct with the same force and effect as if all of such
representations and warranties were made at the Closing Date.
Section 8.2 CGB&L's Performance. CGB&L shall have performed or complied in all
-------------------
material respects with all of the covenants and obligations to be performed or
complied with by it under the terms of this Agreement on or prior to the Closing
Date, provided, however, that to the extent performance and compliance with such
covenants and obligations are subject in this Agreement to a standard of
materiality, CGB&L shall have performed and complied in all respects with such
covenants and obligations to the extent of the materiality standard set forth
herein.
Section 8.3 Documents Satisfactory. All proceedings, corporate or other, to be
----------------------
taken by CGB&L in connection with the Contemplated Transactions, and all
documents incident thereto, shall be reasonably satisfactory in form and
substance to counsel for Acquiror, and CGB&L shall have made available to
Acquiror for examination the originals or true and correct copies of all records
and documents relating to the business and affairs of CGB&L and the Bank which
Acquiror may reasonably request in connection with said transactions.
Section 8.4 No Proceedings. Since the date of this Agreement, there must not
--------------
have been commenced or Threatened against CGB&L or the Bank any Proceeding: (a)
involving any challenge to, or seeking damages or other relief in connection
with, any of the Contemplated
41
Transactions; or (b) that may have the effect of preventing, delaying, making
illegal or otherwise interfering with any of the Contemplated Transactions.
Section 8.5 Absence of Material Adverse Changes. From the date hereof to the
-----------------------------------
Closing, there shall be and have been no event or occurrence that had or would
reasonably be expected to have a Material Adverse Effect on CGB&L or the Bank.
Section 8.6 Consents and Approvals. Any consents or approvals required to be
----------------------
secured by either party by the terms of this Agreement shall have been obtained
and shall be reasonably satisfactory to Acquiror, and all applicable waiting
periods shall have expired.
Section 8.7 No Prohibition. Neither the consummation nor the performance of any
--------------
of the Contemplated Transactions will, directly or indirectly (with or without
notice or lapse of time), contravene, or conflict with or result in a violation
of: (a) any applicable Legal Requirement or Order; or (b) any Legal Requirement
or Order that has been published, introduced, or otherwise proposed by or before
any Regulatory Authority.
Section 8.8 Stockholder Approval. The required stockholder approval for the
--------------------
Merger and this Agreement shall have been obtained at the Special Meeting.
Section 8.9 Dissenting Shares. The total number of Dissenting Shares shall be no
-----------------
greater than 10% of the number of shares of CGB&L Common Stock issued and
outstanding immediately prior to the Effective Time.
Section 8.10 Minimum Stockholders' Equity. CGB&L's Adjusted Stockholders' Equity
----------------------------
(as calculated immediately prior to the Closing Date for purposes of Section
-------
3.1(b) hereof) shall not be less than $1,500,000, and the allowance for loan and
------
lease losses of the Bank shall not be less than an amount equal to $32,700 on
the Closing Date.
ARTICLE 9
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF CGB&L
CGB&L's obligation to consummate the Merger and to take the other actions
required to be taken by CGB&L at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by CGB&L, in whole or in part):
Section 9.1 Accuracy of Representations and Warranties. All of the
------------------------------------------
representations and warranties of Acquiror set forth in this Agreement shall be
true and correct with the same force and effect as if all of such
representations and warranties were made at the Closing Date.
Section 9.2 Acquiror's Performance. Each of Acquiror and Acquisition Corp shall
----------------------
have performed or complied in all material respects with all of the covenants
and obligations to be performed or complied with by it under the terms of this
Agreement on or prior to the Closing Date, provided however, that to the extent
performance and compliance with such covenants and obligations are subject in
this Agreement to a standard of materiality, Acquiror and Acquisition
42
Corp shall have performed and complied in all respects with their respective
covenants and obligations to the extend of the materiality standard set forth
herein.
Section 9.3 Documents Satisfactory. All proceedings, corporate or other, to be
----------------------
taken by Acquiror and Acquisition Corp in connection with the Contemplated
Transactions, and all documents incident thereto, shall be reasonably
satisfactory in form and substance to counsel for CGB&L.
Section 9.4 No Proceedings. Since the date of this Agreement, there must not
--------------
have been commenced or Threatened against Acquiror or Acquisition Corp any
Proceeding: (a) involving any challenge to, or seeking damages or other relief
in connection with, any of the Contemplated Transactions; or (b) that may have
the effect of preventing, delaying, making illegal or otherwise interfering with
any of the Contemplated Transactions, in either case that would reasonably be
expected to have a Material Adverse Effect on CGB&L or such Affiliate.
Section 9.5 Regulatory Approvals. Acquiror shall have received all of the
--------------------
regulatory approvals referred to in Section 7.1
-----------
Section 9.6 No Prohibitions. Neither the consummation nor the performance of any
---------------
of the Contemplated Transactions will, directly or indirectly (with or without
notice or lapse of time), contravene, or conflict with or result in a violation
of: (a) any applicable Legal Requirement or Order; or (b) any Legal Requirement
or Order that has been published, introduced, or otherwise proposed by or before
any Regulatory Authority.
Section 9.7 Stockholder Approval. The required CGB&L stockholder approval for
--------------------
the Merger and this Agreement shall have been obtained at the Special Meeting
and the Fairness Opinion shall not have been withdrawn as of the date of the
Special Meeting.
ARTICLE 10
TERMINATION
Section 10.1 Reasons for Termination and Abandonment. This Agreement, by prompt
---------------------------------------
written notice given to the other parties prior to or at the Closing, may be
terminated:
(a) by mutual consent of Acquiror and the board of directors of CGB&L;
(b) by Acquiror if: (i) any of the conditions in Article 8 has not been
satisfied as of the Closing Date or if satisfaction of such a condition is or
becomes impossible (other than through the failure of Acquiror to comply with
its obligations under this Agreement); and (ii) Acquiror has not waived such
condition on or before the Closing Date;
(c) by CGB&L if: (i) any of the conditions in Article 9 has not been satisfied
as of the Closing Date or if satisfaction of such a condition is or becomes
impossible (other than through the failure of CGB&L to comply with its
obligations under this Agreement); and (ii) CGB&L has not waived such condition
on or before the Closing Date;
43
(d) by Acquiror, at any time within ten (10) Business Days after the date of
this Agreement, by giving written notice to CGB&L that Acquiror has determined
from its due diligence investigation that there are matters which are, in the
reasonable judgment of Acquiror, either (x) inconsistent in any material respect
with any of the representations and warranties of CGB&L contained in this
Agreement or (y) of such significance as (1) to have a Material Adverse Effect
on CGB&L or (2) to deviate materially and adversely from CGB&L's audited
financial statements for the year ended March 31, 2000; or
(e) by either Acquiror or CGB&L if the Closing has not occurred (other than
through the failure of any party seeking to terminate this Agreement to comply
fully with its obligations under this Agreement) by the date which is ten (10)
months after the date of this Agreement, or such later date as the parties may
agree (the "Termination Date").
Section 10.2 Effect of Termination. Except as provided in Section 10.3, in the
--------------------- ------------
event of termination of this Agreement pursuant to Section 10.1, this Agreement
------------
shall forthwith become void, there shall be no liability under this Agreement on
the part of Acquiror, CGB&L or Acquisition Corp or any of their respective
Representatives, and all rights and obligations of each party hereto shall
cease, provided, however, that, subject to Section 10.3, nothing herein shall
------------
relieve any party from liability for the breach of any of its representations
and warranties or the breach of any of its covenants or agreements set forth in
this Agreement.
Section 10.3 Expenses. (a) Except as provided below, all Expenses (as defined
--------
below) incurred in connection with this Agreement and the Merger shall be paid
by the party incurring such expenses, whether or not the Merger is consummated.
"Expenses" as used in this Agreement shall consist of all out-of-pocket expenses
(including all fees and expenses of counsel, accountants, investment bankers,
experts and consultants to a party hereto and its Affiliates) incurred by a
party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement, the
solicitation of shareholder approvals and all other matters related to the
consummation of the Merger.
(b) If this Agreement is terminated by (i) Acquiror because CGB&L committed a
Breach of its obligations under this Agreement, unless such Breach is a result
of the failure by Acquiror to perform and comply in all material respects with
any of its material obligations under this Agreement which are to be performed
or complied with by it prior to or on the date required hereunder; or (ii) or by
Acquiror or CGB&L because CGB&L's shareholders fail to approve the Contemplated
Transactions and this Agreement (in each case, a "CGB&L Termination"), then
CGB&L shall pay to Acquiror, upon its written demand, an amount equal to the sum
of Acquiror's Expenses (but not in excess of $75,000), plus an amount equal to
$100,000. Such sums shall constitute liquidated damages and the receipt thereof
shall be Acquiror's sole and exclusive remedy under this Agreement for all
Breaches of this Agreement by CGB&L or such failure to approve. In addition to
these payments, if there is a CGB&L Termination, and within eighteen (18) months
after the termination of this Agreement CGB&L enters into a Contract with any
party other than Acquiror providing for the acquisition of control of CGB&L or
the Bank by such other party, then CGB&L shall pay to Acquiror, upon its written
demand, the additional sum of $150,000, provided, however, that the provisions
of this Section shall in no way limit
44
Acquiror's rights against any such third party. For purposes of this Section,
the phrase "control of CGB&L or the Bank" means the acquisition by any such
third party of: (i) legal or beneficial ownership (as defined by Rule 13d-3
promulgated under the 0000 Xxx) of greater than twenty percent (20%) of the then
issued and outstanding voting stock of CGB&L or the Bank through any transaction
to which CGB&L, the Bank or any Affiliate of CGB&L or the Bank is a party; or
(ii) all or substantially all of the assets of CGB&L or the Bank.
Notwithstanding anything to the contrary set forth above in this Section
-------
10.3(b), Acquiror shall not be entitled to the amounts described in this Section
------- -------
10.3(b) if Acquiror terminates this Agreement pursuant to Section 10.1(d).
------- ---------------
(c) If Acquiror does not consummate the Merger for any reason other than a CGB&L
Termination and CGB&L is in compliance with all of its obligations under this
Agreement, Acquiror shall pay to CGB&L, upon its written demand, an amount equal
to $100,000. Such sum shall constitute liquidated damages and the receipt
thereof shall be CGB&L's sole and exclusive remedy under this Agreement and in
connection with the Contemplated Transactions.
ARTICLE 11
MISCELLANEOUS
Section 11.1 Governing Law. All questions concerning the construction, validity
-------------
and interpretation of this Agreement and the performance of the obligations
imposed by this Agreement shall be governed by the internal laws of the State of
Illinois applicable to Contracts made and wholly to be performed in such state
without regard to conflicts of laws.
Section 11.2 Assignments, Successors and No Third Party Rights. None of the
-------------------------------------------------
parties to this Agreement may assign any of its rights under this Agreement
without the prior consent of the other parties. Subject to the preceding
sentence, this Agreement and every representation, warranty, covenant, agreement
and provision hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the parties to this Agreement any legal or equitable right, remedy or
claim under or with respect to this Agreement or any provision of this
Agreement.
Section 11.3 Waiver. Except as provided in Section 10.3(b), the rights and
------ ---------------
remedies of the parties to this Agreement are cumulative and not alternative.
Neither the failure nor any delay by any party in exercising any right, power or
privilege under this Agreement or the documents referred to in this Agreement
will operate as a waiver of such right, power or privilege, and no single or
partial exercise of any such right, power or privilege will preclude any other
or further exercise of such right, power or privilege or the exercise of any
other right, power or privilege. To the maximum extent permitted by applicable
law: (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed
by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to
45
take further action without notice or demand as provided in this Agreement or
the documents referred to in this Agreement.
Section 11.4 Publicity. Any public announcement or similar publicity with
---------
respect to this Agreement or the Contemplated Transactions will be issued, if at
all, at such time and in such manner as Acquiror and CGB&L shall jointly
determine. Unless consented to by the other in advance or required by Legal
Requirements, prior to the Closing, neither Acquiror nor CGB&L shall, and shall
cause each of its respective Subsidiaries and Representatives to, keep this
Agreement strictly confidential and may not make any disclosure of this
Agreement to any Person. CGB&L and Acquiror will consult with each other
concerning the means by which their respective employees, customers and
suppliers and others having dealings with either of them and CGB&L's
Subsidiaries will be informed of the Contemplated Transactions.
Section 11.5 Confidentiality. Between the date of this Agreement and the Closing
---------------
Date, each of Acquiror and CGB&L will maintain in confidence, and will cause
each of its respective Representatives to maintain in confidence, and not use to
the detriment of the other or its Subsidiaries any written, oral, or other
information obtained in confidence from the other of any of its Subsidiaries in
connection with this Agreement or the Contemplated Transactions, unless: (a)
such information is already known to such party or to others not bound by a duty
of confidentiality or such information becomes publicly available through no
fault of such party; (b) the use of such information is necessary or appropriate
in making any filing or obtaining any consent or approval required for the
consummation of the Contemplated Transactions; or (c) the furnishing or use of
such information is required by or necessary or appropriate in connection with
any legal proceedings. If the Contemplated Transactions are not consummated,
each party will return or destroy as much of such written information as the
other party may reasonably request.
Section 11.6 Notices. All notices, consents, waivers and other communications
-------
under this Agreement must be in writing (which shall include telecopier
communication) and will be deemed to have been duly given if delivered by hand
or by nationally recognized overnight delivery service (receipt requested),
mailed by registered or certified U.S. mail (return receipt requested) postage
prepaid or telecopied if confirmed immediately thereafter by also mailing a copy
of any notice, request or other communication by U.S. mail as provided in this
Section:
(a) If to Acquiror, to:
Xx. Xxxxx Xxxxx Xxxxxxx
c/o Golden National Mortgage Banking Corp.
Xxx Xxxxxxxxxx Xxxxxxxxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
46
with copies to:
Barack Xxxxxxxxxx Xxxxxxxxxx Xxxxxxx & Xxxxxxxxx
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. del Hierro, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) if to CGB&L, to:
CGB&L Financial Group, Inc.
000 X. Xxxxx Xxxxxx
P.O. Box 680
Cerro Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxx, President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with copies to:
Xxxxxx & Xxxxxx Attorneys PC
Xxx Xxxxxxxxxx Xxxxx
Xxxxx 000
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or to such other Person or place as CGB&L shall furnish to Acquiror or Acquiror
shall furnish to CGB&L in writing. Except as otherwise provided herein, all such
notices, consents, waivers and other communications shall be effective: (a) if
delivered by hand, when delivered; (b) if mailed in the manner provided in this
Section, five Business Days after deposit with the United States Postal Service;
(c) if delivered by overnight express delivery service, on the next Business Day
after deposit with such service; and (d) if by telecopier, on the next Business
Day if also confirmed by mail in the manner provided in this Section.
Section 11.7 Entire Agreement. This Agreement and any documents executed by the
----------------
parties pursuant to this Agreement and referred to herein constitute the entire
understanding and agreement of the parties hereto and supersede all other prior
agreements and understandings, written or oral, relating to such subject matter
between the parties.
47
Section 11.8 Modification. This Agreement may not be amended except by a written
------------
agreement signed by each of CGB&L and Acquiror.
Section 11.9 Severability. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement unless the
consummation of the Contemplated Transactions is adversely affected thereby.
Section 11.10 Further Assurances. The parties agree: (a) to furnish upon request
------------------
to each other such further information; (b) to execute and deliver to each other
such other documents; and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
Section 11.11 Survival. The representations, warranties and covenants contained
--------
herein shall not survive beyond the Closing.
Section 11.12 Lack of Control. Subject to any specific provisions of this
---------------
Agreement, it is the intent of the parties to this Agreement that neither
Acquiror nor Acquisition Corp by reason of this Agreement shall be deemed (until
consummation of the Contemplated Transactions) to control, directly or
indirectly, CGB&L or any CGB&L Subsidiary.
Section 11.13 Counterparts. This Agreement and any amendments thereto may be
------------
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same agreement.
Section 11.14 Disclosure Schedules. The parties acknowledge that the disclosure
--------------------
schedules called for by this Agreement shall be contained in a separate three-
ring binder, one copy of which will be provided to each party upon execution of
this Agreement, with each page therein being consecutively number stamped. Such
disclosure schedules shall be considered a part of this Agreement.
[Remainder of Page Intentionally Left Blank]
48
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers on the day and year first written above.
Xxxxx Xxxxx Xxxxxxx
GOLDEN NATIONAL ACQUISITION
CORPORATION
By:/s/ Xxxxx Xxxxx Xxxxxxx
-------------------------------------
Xxxxx Xxxxx Xxxxxxx
President
CGB&L FINANCIAL GROUP, INC.
By:/s/Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx
President
49
EXHIBIT INDEX
Exhibit A Form of Legal Opinion of Acquiror's Counsel
Exhibit B Form of Employment Agreement
Exhibit C Form of Legal Opinion of CGB&L's Counsel
Exhibit D Form of Voting Agreement
LIST OF SCHEDULES
Schedule 4.1 CGB&L Organization
Schedule 4.2 Bank Organization
Schedule 4.4 No Conflict
Schedule 4.5 CGB&L Capitalization
Schedule 4.6 Bank Capitalization
Schedule 4.7 Financial Statements and Reports
Schedule 4.9 Title to Properties
Schedule 4.12 Undisclosed Liabilities; Adverse Changes
Schedule 4.14 Compliance With ERISA
Schedule 4.15 Compliance With Legal Requirements
Schedule 4.16 Legal Proceedings; Orders
Schedule 4.17 Absence of Certain Changes and Events
Schedule 4.18 Properties, Contracts, Employee Benefit Plans and Other
Agreements
Schedule 4.19 No Defaults
Schedule 4.20 Insurance
Schedule 4.21 Compliance with Environmental Laws
Schedule 4.23 Fiduciary Accounts
Schedule 4.28 Due Diligence Materials
50
Schedule 5.1 Acquiror Organization
Schedule 5.3 No Conflict
51
EXHIBIT A
FORM OF LEGAL OPINION OF ACQUIROR'S COUNSEL
On the basis of and subject to the foregoing and the qualifications stated
below, we are of the opinion that:
12. Acquisition Corp is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
13. The execution, delivery and performance of the Agreement and the
Contemplated Transactions have been duly authorized by the board of directors of
Acquisition Corp, and the Agreement has been approved by the sole stockholder of
Acquisition Corp, these being the only corporate authorizations required of
Acquiror or Acquisition Corp under the certificate of incorporation and bylaws
of Acquisition Corp and applicable law. The Agreement constitutes the legal,
valid and binding obligation of Acquiror and Acquisition Corp enforceable in
accordance with its terms.
14. The execution, delivery and performance by Acquiror and Acquisition Corp of
the Agreement will not violate the charter or bylaws of Acquisition Corp and
will not, to our knowledge, result in a breach of or constitute a default under,
any material lease, mortgage, contract, agreement, instrument, judgment, order
or decree of which we have knowledge to which Acquiror or Acquisition Corp is a
party or to which their or any of their respective properties or assets may be
bound.
15. To our knowledge, no consent, approval, authorization or order of any court
or governmental agency or body that has not been obtained is required on behalf
of Acquiror or Acquisition Corp for consummation of the transactions
contemplated by the Agreement.
52
EXHIBIT B
XXXXX XXXXX XXXXXXXX XXX XXXX, X.X.
FORM OF AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made effective as of _________________,
2001 (the "Effective Date") by and between Cerro Gordo Building and Loan, s.b.
(the "Institution"), a state chartered savings institution, with its principal
administrative office at 000 Xxxx Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxx 00000 and
Xxxxxxx X. Xxxxxxx ("Executive").
WHEREAS, the Executive and the Institution have previously entered into an
Employment Agreement as of _______________, 1998 (the "Prior Agreement"); and
WHEREAS, the Executive has previously entered into an employment agreement
with CGB&L Financial Group, Inc., a corporation organized under the laws of the
State of Delaware, the holding company for the Institution (the "Holding
Company"), as of ______________, 1998 (the "Holding Company Agreement"); and
WHEREAS, the Holding Company has entered into that certain Agreement and
Plan of Merger with Xxxxx Xxxxx Xxxxxxx and Golden National Acquisition
Corporation dated _____________________________ (the "Merger Agreement"); and
WHEREAS, the Institution and the Executive wish to terminate the Holding
Company Agreement and amend and restate the Prior Agreement as follows:
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
ARTICLE 1
TERMINATION OF HOLDING COMPANY AGREEMENT
Executive and the Holding Company agree that the Holding Company Agreement
is terminated as of the date of this Agreement, and the Executive hereby waives
all rights, claims or other entitlements under the Holding Company Agreement.
ARTICLE 2
POSITION AND RESPONSIBILITIES
During the period of her employment hereunder, Executive agrees to serve as the
President of the Institution or as such other senior executive officer of the
Institution in accordance with the direction and determination of the Board of
Directors of the Institution (the "Board") from time
53
to time. Executive shall render administrative and management services to the
Institution such as are customarily performed by persons situated in a similar
executive capacity.
ARTICLE 3
TERMS AND DUTIES
Section 3.1 Term. The period of the Executive's employment under this
----
Agreement shall commence as of the Effective Date and shall continue for a
period of thirty-six (36) full calendar months thereafter. Any continuation of
the Agreement after the expiration of the initial term shall be on such terms
and conditions as the parties shall mutually agree upon.
Section 3.2 Best Efforts. During the period of Executive's employment
------------
hereunder, except for periods of absence occasioned by illness, reasonable
vacation periods, and reasonable leaves of absence, Executive shall devote
substantially all business time, attention, skill, and efforts to the faithful
performance of her duties hereunder including activities and services related to
the organization, operation and management of the Institution and participation
in community and civic organizations; provided, however, that, with the approval
of the Board, as evidenced by a resolution of such Board, from time to time,
Executive may serve, or continue to serve, on the boards of directors of, and
hold any other offices or positions in, companies or organizations, which, in
such Board's judgment, will not present any conflict of interest with the
Institution, or materially affect the performance of Executive's duties pursuant
to this Agreement.
Section 3.3 Termination. Notwithstanding anything herein to the contrary,
-----------
Executive's employment with the Institution may be terminated by the Institution
or the Executive during the term of this Agreement, subject to the terms and
conditions of this Agreement.
ARTICLE 4
COMPENSATION AND REIMBURSEMENT
Section 4.1 Base Salary. The Institution shall pay Executive as
-----------
compensation a salary of Fifty Thousand Dollars ($50,000) per year ("Base
Salary"). Base Salary shall include any amounts of compensation deferred by
Executive under any qualified or unqualified plan maintained by the Institution.
Such Base Salary shall be payable monthly. During the period of this Agreement,
Executive's Base Salary shall be reviewed at least annually; the first such
review will be made no later than one (1) year from the date of this Agreement.
Such review shall be conducted by the Board or by a Committee of the Board,
delegated such responsibility by the Board. The Committee or the Board may
increase Executive's Base Salary. Any increase in Base Salary shall become the
"Base Salary" for purposes of this Agreement. In addition to the Base Salary
provided in this Section 4.1, the Institution shall also provide Executive, at
no premium cost to Executive, with all such other benefits as are provided
uniformly to full-time employees of the Institution.
54
Section 4.2 Employee Benefits. The Executive shall be entitled to
-----------------
participate in any employee benefit plans, arrangements and perquisites
substantially equivalent to those in which Executive was participating or
otherwise deriving benefit from immediately prior to the beginning of the term
of this Agreement, and the Institution will not, without Executive's prior
written consent, make any changes in such plans, arrangements or perquisites
which would materially adversely affect Executive's rights or benefits
thereunder; except to the extent such changes are made applicable to all
Institution employees. Without limiting the generality of the foregoing
provisions of this Section 4.2, Executive shall be entitled to participate in or
receive benefits under any employee benefit plans, including, but not limited
to, retirement plans, supplemental retirement plans, pension plans, profit-
sharing plans, stock or option plans, health-and-accident plans, medical
coverage or any other employee benefit plan or arrangement made available by the
Institution in the future to its senior executives and key management employees,
subject to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements. Executive shall be entitled to
incentive compensation and bonuses as provided in any plan or arrangement of the
Institution in which Executive is eligible to participate. Nothing paid to the
Executive under any such plan or arrangement will be deemed to be in lieu of
other compensation to which the Executive is entitled under this Agreement.
Section 4.3 Reimbursement of Expenses. In addition to the Base Salary
-------------------------
provided for by Section 4.1 and other compensation provided for by Section 4.2,
the Institution shall pay or reimburse Executive for all reasonable travel and
other reasonable expenses incurred by Executive performing her obligations under
this Agreement and may provide such additional compensation in such form and
such amounts as the Board may from time to time determine.
ARTICLE 5
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION
Section 5.1 Event of Termination. Upon the occurrence of an Event of
--------------------
Termination (as herein defined) during the Executive's term of employment under
this Agreement, the provisions of this Section shall apply. As used in this
Agreement, an "Event of Termination" shall mean and include any one or more of
the following: (i) the termination by the Institution of Executive's full-time
employment hereunder for any reason other than a termination governed by Article
6 hereof or Termination for Cause, as defined in Article 8 hereof; or (ii)
Executive's resignation from the Institution's employ upon any of the following:
(A) unless consented to by the Executive, failure to elect or reelect or to
appoint or reappoint Executive as a senior executive officer of the Institution
or failure to nominate or re-nominate Executive as a Director to the extent
Executive was serving as a Director of the Institution as of the Effective Date,
(B) a reduction in the benefits and perquisites to the Executive from those
being provided as of the Effective Date, unless consented to by the Executive,
(C) a relocation of Executive's principal place of employment by more than 25
miles from her location immediately prior to the Event of Termination, (D) a
liquidation or dissolution of the Institution, or (E) breach of this Agreement
by the Institution. Upon the occurrence of any event described in clauses (A),
(B), (C), (D) or (E), above, Executive shall have the right to
55
elect to terminate her employment under this Agreement by resignation upon not
less than sixty (60) days prior written notice given within six (6) full months
after the event giving rise to said right to elect.
Section 5.2 Institution's Obligations Upon an Event of Termination. Upon
------------------------------------------------------
the occurrence of an Event of Termination, on the Date of Termination, as
defined in Article 9, the Institution shall be obligated to pay Executive, or,
in the event of her subsequent death, her beneficiary or beneficiaries, or her
estate, as the case may be a sum equal to the sum of: (i) the Executive's Base
Salary (as of the Date of Termination) that would have been paid to the
Executive through the remaining term of the Agreement; and (ii) the amount equal
to the annual Institution contributions or payments made on Executive's behalf
to any employee retirement benefit plans of the Institution for the calendar
year immediately preceding the Date of Termination multiplied by the number of
full calendar years from the Date of Termination through the remaining term of
the Agreement; provided, however, that any payments pursuant to this Section 5.2
and Section 5.3 below shall not, in the aggregate, exceed three (3) times
Executive's average "Annual Compensation," as defined below, for the five (5)
most recent taxable years that Executive has been employed by the Institution or
such lesser number of years in the event that Executive shall have been employed
by the Institution for less than five (5) years. For purposes of this Section
5.2, "Annual Compensation" shall mean the Executive's Base Salary, commissions,
bonuses, contributions on Executive's behalf to any pension and/or profit
sharing plan, and directors or committee fees paid to the Executive in any such
year. The amount payable pursuant to this Section 5.2 shall be paid to the
Executive as follows: (y) one-half of the amount shall be paid in one (1) lump
sum as soon as practicable following the Date of Termination; and (z) one-half
shall be paid in equal monthly installments over the one (1) year period
immediately following the Date of Termination. In the event the Institution is
not in compliance with its minimum capital requirements or if such payments
pursuant to this Section 5.2 would cause the Institution's capital to be reduced
below its minimum regulatory capital requirements, such payments shall be
deferred until such time as the Institution or successor thereto is in capital
compliance. Such payments shall not be reduced in the event the Executive
obtains other employment following termination of employment.
Section 5.3 Continuation of Benefits Upon an Event of Termination. Upon the
-----------------------------------------------------
occurrence of an Event of Termination, the Institution will cause to be
continued life, medical and dental coverage substantially identical to the
coverage maintained by the Institution for Executive prior to her termination at
no premium cost to the Executive, except to the extent such coverage may be
changed in its application to all Institution employees. Such coverage shall
cease upon the expiration of the remaining term of this Agreement.
ARTICLE 6
CHANGE IN CONTROL
Section 6.1 Change in Control Defined. For purposes of this Agreement, a
-------------------------
"Change in Control" of the Institution shall mean an event of a nature that: (i)
results in a Change in
56
Control of the Institution within the meaning of the Change in Bank Control Act
and the Rules and Regulations promulgated by the Federal Deposit Insurance
Corporation ("FDIC") at 12 C.F.R. Section 303.4(a) as in effect on the Effective
Date; or (ii) without limitation such a Change in Control shall be deemed to
have occurred at such time as (A) "any person" (as the term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of voting
securities of the Institution representing 20% or more of the Institution's
outstanding voting securities or right to acquire such securities except for any
voting securities of the Institution purchased by the Holding Company and any
voting securities purchased by any employee benefit plan of the Institution, or
(B) individuals who constitute the Board on the date hereof (the "Incumbent
Board") cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the date hereof whose election
was approved by a vote of at least three-quarters of the directors comprising
the Incumbent Board, or whose nomination for election by the Institution's
stockholders was approved by the same Nominating Committee serving under an
Incumbent Board, shall be, for purposes of this clause (B), considered as though
she were a member of the Incumbent Board, or (C) a plan of reorganization,
merger, consolidation, sale of all or substantially all the assets of the
Institution or similar transaction occurs in which the Institution is not the
resulting entity. The transaction contemplated by the Merger Agreement shall not
constitute a Change in Control.
Section 6.2 Change in Control Termination. If a Change in Control has
-----------------------------
occurred pursuant to Section 6.1 or the Board has determined that a Change in
Control has occurred, Executive shall be entitled to the benefits provided in
Sections 6.3 and 6.4 upon her subsequent termination of employment at any time
during the term of this Agreement due to: (1) Executive's dismissal or (2)
Executive's voluntary resignation following any demotion, loss of title, office
or significant authority or responsibility, material reduction in annual
compensation or benefits or relocation of her principal place of employment by
more than 25 miles from its location immediately prior to the Change in Control,
unless such termination is because of her death, disability, retirement (on or
after age sixty-five (65)) or termination for "Cause," as defined below.
Section 6.3 Change in Control Payment. Upon Executive's entitlement to
-------------------------
benefits pursuant to Section 6.2, the Institution shall pay Executive, or in the
event of her subsequent death, her beneficiary or beneficiaries, or her estate,
as the case may be, the amount payable to the Executive as if her termination
were pursuant to Section 5.1 hereof, and at such times as provided in Section
5.2. In the event the Institution is not in compliance with its minimum capital
requirements or if such payments would cause the Institution's capital to be
reduced below its minimum regulatory capital requirements, such payments shall
be deferred until such time as the Institution or successor thereto is in
capital compliance. Such payments shall not be reduced in the event Executive
obtains other employment following termination of employment.
Section 6.4 Continuation of Benefits Upon Change in Control. Upon the
-----------------------------------------------
Executive's entitlement to benefits pursuant to Section 6.2, the Institution
will cause to be continued life, medical and dental coverage substantially
identical to the coverage maintained by the
57
Institution for Executive prior to her severance at no premium cost to the
Executive, except to the extent that such coverage may be changed in its
application for all Institution employees, for the remaining term of the
Agreement, after which time such coverage and payments shall cease.
ARTICLE 7
CHANGE IN CONTROL RELATED PROVISIONS
Notwithstanding the provisions of Article 6, in no event shall the aggregate
payments or benefits to be made or afforded to Executive under said Article (the
"Termination Benefits") constitute an "excess parachute payment" under Section
280G of the Internal Revenue Code of 1986, as amended, or any successor thereto,
and in order to avoid such a result, Termination Benefits will be reduced, if
necessary, to an amount (the "Non-Triggering Amount"), the value of which is one
dollar ($1.00) less than an amount equal to three (3) times Executive's "base
amount," as determined in accordance with said Section 280G. The allocation of
the reduction required hereby among the Termination Benefits provided by Article
6 shall be determined by Executive.
ARTICLE 8
TERMINATION FOR CAUSE
The term "Termination for Cause" shall mean termination because of: (1)
Executive's personal dishonesty, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule, regulation (other than traffic violations or similar
offenses), final cease and desist order or material breach of any provision of
this Agreement which results in a material loss to the Institution, or (2)
Executive's conviction of a crime or act involving moral turpitude or a final
judgement rendered against Executive based upon actions of Executive which
involve moral turpitude. For the purposes of this Article 8, no act, or failure
to act, on Executive's part shall be "willful" unless done, or omitted to be
done, not in good faith and without reasonable belief that the action or
omission was in the best interests of the Institution or its affiliates.
Notwithstanding the foregoing, Executive shall not be deemed to have been
Terminated for Cause unless and until there shall have been delivered to her a
Notice of Termination which shall include a copy of a resolution duly adopted by
the affirmative vote of not less than a majority of the members of the Board at
a meeting of the Board called and held for that purpose (after reasonable notice
to Executive and an opportunity for her, together with counsel, to be heard
before the Board), finding that in the good faith opinion of the Board,
Executive was guilty of conduct justifying Termination for Cause and specifying
the particulars thereof in detail. Executive shall not have the right to receive
compensation or other benefits for any period after the Date of Termination for
Cause. During the period beginning on the date of the Notice of Termination for
Cause pursuant to Article 9 hereof through the Date of Termination for Cause,
stock options and related limited rights granted to Executive under any stock
option plan shall not be exercisable nor shall any unvested awards granted to
Executive under any stock benefit plan of the Institution, the Holding Company
or any subsidiary or affiliate thereof, vest. At the Date of Termination for
Cause, such stock options and related
58
limited rights and any unvested awards shall become null and void and shall not
be exercisable by or delivered to Executive at any time subsequent to such
Termination for Cause.
ARTICLE 9
NOTICE
Section 9.1 Notice of Termination. Any purported termination by the
---------------------
Institution or by Executive shall be communicated by Notice of Termination to
the other party hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated.
Section 9.2 Date of Termination. "Date of Termination" shall mean the date
-------------------
specified in the Notice of Termination (which, in the case of a Termination for
Cause, shall not be less than thirty (30) days from the date such Notice of
Termination is given).
ARTICLE 10
POST-TERMINATION OBLIGATIONS
All payments and benefits to Executive under this Agreement shall be subject to
Executive's compliance with this Article 10 for one (1) full year after the
earlier of the expiration of this Agreement or termination of Executive's
employment with the Institution. Executive shall, upon reasonable notice,
furnish such information and assistance to the Institution as may reasonably be
required by the Institution in connection with any litigation in which it or any
of its subsidiaries or affiliates is, or may become, a Party.
ARTICLE 11
NON-COMPETITION AND NON-DISCLOSURE
Section 11.1 Non-Competition. Upon any termination of Executive's
---------------
employment hereunder for any reason, including without limitation any
termination pursuant to Article 6, Executive agrees not to compete with the
Institution for a period of one (1) year following such termination in any city,
town or county in which the Executive's normal business office is located and
the Institution has an office or has filed an application for regulatory
approval to establish an office, determined as of the effective date of such
termination, except as agreed to pursuant to a resolution duly adopted by the
Board. Executive agrees that during such period and within said cities, towns
and counties, Executive shall not work for or advise, consult or otherwise serve
with, directly or indirectly, any entity whose business materially competes with
the depository, lending or other business activities of the Institution. The
parties hereto, recognizing that irreparable injury will result to the
Institution, its business and property in the event of Executive's breach of
this Section 11.1, agree that in the event of any such breach by Executive, the
Institution, will be entitled, in addition to any other remedies and damages
available, to an injunction to restrain the violation hereof by Executive,
Executive's partners,
59
agents, servants, employees and all persons acting for or under the direction of
Executive. Nothing herein will be construed as prohibiting the Institution from
pursuing any other remedies available to the Institution for such breach or
threatened breach, including the recovery of damages from Executive.
Section 11.2 Non-Disclosure. Executive recognizes and acknowledges that the
--------------
knowledge of the business activities and plans for business activities of the
Institution and affiliates thereof, as it may exist from time to time, is a
valuable, special and unique asset of the business of the Institution. Executive
will not, during or after the term of her employment, disclose any knowledge of
the past, present, planned or considered business activities of the Institution
or affiliates thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever. Notwithstanding the foregoing, Executive may
disclose any knowledge of banking, financial and/or economic principles,
concepts or ideas which are not solely and exclusively derived from the business
plans and activities of the Institution. Further, Executive may disclose
information regarding the business activities of the Institution to the
Commissioner of Banks and Real Estate of the State of Illinois ("Commissioner")
and the FDIC pursuant to a formal regulatory request. In the event of a breach
or threatened breach by Executive of the provisions of this Section 11.2, the
Institution will be entitled to an injunction restraining Executive from
disclosing, in whole or in part, the knowledge of the past, present, planned or
considered business activities of the Institution or affiliates thereof, or from
rendering any services to any person, firm, corporation, other entity to whom
such knowledge, in whole or in part, has been disclosed or is threatened to be
disclosed. Nothing herein will be construed as prohibiting the Institution from
pursuing any other remedies available to the Institution for such breach or
threatened breach, including the recovery of damages from Executive.
ARTICLE 12
EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS
This Agreement contains the entire understanding between the parties hereto and
supersedes any prior employment agreement between the Institution or any
predecessor of the Institution and Executive including without limitation (a)
the Prior Employment Agreement and (b) the Holding Company Agreement. This
Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to her without reference to this Agreement.
ARTICLE 13
REQUIRED PROVISIONS
Section 13.1 The Institution may terminate the Executive's employment at
any time, but any termination by the Institution, other than Termination for
Cause, shall not prejudice the Executive's right to compensation or other
benefits under this Agreement. The Executive
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shall not have the right to receive compensation or other benefits for any
period after Termination for Cause in accordance with Article 8 above.
Section 13.2 If the Executive is suspended from office and/or temp orarily
prohibited from participating in the conduct of the Institution's affairs by a
notice served under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit
Insurance Act, as amended (the "FDI Act"), (12 U.S.C. 1818(e)(3) and 12 U.S.C.
1818(g)(1), respectively), the obligations of the Institution under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the
Institution may in its discretion (i) pay the Executive all or part of the
compensation withheld while its obligations under this Agreement were suspended
and (ii) reinstate (in whole or in part) any of the obligations which were
suspended.
Section 13.3 If the Executive is removed and/or permanently prohibited from
participating in the conduct of the affairs of the Holding Company or the
Institution by an order issued under either Section 8(e)(4) or Section 8(g)(1)
of the FDI Act (12 U.S.C. 1818(e)(1) and 12 U.S.C. 1818(g)(1), respectively),
all obligations of the Institution under this Agreement shall terminate as of
the effective date of the order, but vested rights of the contracting parties
shall not be affected.
Section 13.4 If the Institution is in default for reasons unrelated to
conduct of the Executive, as defined in Section 3(x)(1) of the FDI Act (12
U.S.C. 1813(x)(1)), all obligations of the Institution under this Agreement
shall terminate as of the date of default, but vested rights of the contracting
parties shall not be affected.
Section 13.5 All obligations of the Institution under this Agreement shall
be terminated, except to the extent determined that continuation of this
Agreement is necessary for the continued operation of the Institution, (i) by
the Federal Deposit Insurance Corporation (the "FDIC") at the time FDIC enters
into an agreement to provide assistance to or on behalf of the Institution under
the authority contained in Section 13(c) of the FDI Act (12 U.S.C. 1823(c)); or
(ii) by the Office of Thrift Supervision (the "OTS") at the time the OTS or its
District Director approves a supervisory merger to resolve problems related to
the operations of the Institution or when the Institution is determined by the
OTS or FDIC to be in an unsafe or unsound condition. Any rights of the parties
that have already vested, however, shall not be affected by such action.
Section 13.6 Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C. Section
1828(k) and any rules and regulations promulgated thereunder, including 12
C.F.R. Part 359.
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ARTICLE 14
MISCELLANEOUS
Section 14.1 No Attachment. Except as required by law, no right to receive
-------------
payments under her Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or
to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to affect any such action shall
be null, void, and of no effect.
Section 14.2 Successors. This Agreement shall be binding upon and inure to
----------
the benefit of Executive and the Institution and their respective successors and
assigns.
Section 14.3 Modification and Waiver. This Agreement may not be modified or
-----------------------
amended except by an instrument in writing signed by the parties hereto.
Section 14.4 No Waiver. No term or condition of this Agreement shall be
---------
deemed to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement, except by written instrument of
the party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and each such
waiver shall operate only as to the specific term or condition waived and shall
not constitute a waiver of such term or condition for the future as to any act
other than that specifically waived.
Section 14.5 Severability. If, for any reason, any provision of this
------------
Agreement, or any part of any provision, is held invalid, such invalidity shall
not affect any other provision of this Agreement or any part of such provision
not held so invalid, and each such other provision and part thereof shall to the
full extent consistent with law continue in full force and effect.
Section 14.6 Headings for Reference Only. The headings of sections and
---------------------------
paragraphs herein are included solely for convenience of reference and shall not
control the meaning or interpretation of any of the provisions of this
Agreement.
Section 14.7 Governing Law. This Agreement shall be governed by the laws of
-------------
the State of Illinois, unless otherwise stated herein.
Section 14.8 Arbitration. Any dispute or controversy arising under or in
-----------
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three (3) arbitrators sitting in a location selected
by Executive within fifty (50) miles from the location of the Institution, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction; provided, however, that Executive shall be entitled to seek
specific performance of her right to be paid until the Date of Termination
during the pendency of any dispute or controversy arising under or in connection
with this Agreement.
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Section 14.9 Payment of Costs and Legal Fees. In the event any dispute or
-------------------------------
controversy arising under or in connection with Executive's termination is
resolved in favor of the Executive, whether by judgment or arbitration,
Executive shall be entitled to the payment of reasonable legal fees incurred by
Executive in resolving such dispute or controversy.
ARTICLE 15
INDEMNIFICATION
The Institution shall continue to provide Executive (including her heirs,
executors and administrators) with such coverage under the Institution's
standard directors' and officers' liability insurance policy, if any, in place
as of the Effective Date, at its expense, provided that such coverage and
insurance remains available to the Institution at commercially reasonable rates
and terms.
ARTICLE 16
SUCCESSOR TO THE INSTITUTION
The Institution shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Institution, expressly and
unconditionally to assume and agree to perform the Institution's obligations
under this Agreement, in the same manner and to the same extent that the
Institution would be required to perform if no such succession or assignment had
taken place.
[Signature Page to Follow]
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IN WITNESS WHEREOF, Cerro Gordo Building and Loan, s.b. has caused this
Agreement to be executed and its seal to be affixed hereunto by their duly
authorized officers and directors, and Executive has signed this Agreement, on
the _____ day of _______________, 2001.
ATTEST: XXXXX XXXXX XXXXXXXX XXX XXXX, x.x.
_____________________________ _ By: _____________________________________ _
[Name] [Name]
Secretary
For the Board of Directors
WITNESS:
_____________________________ _ _________________________________________ _
XXXXXXX X. XXXXXXX
Executive
Solely for purposes of Article 1 hereof:
ATTEST: CGB&L FINANCIAL GROUP, INC.
_____________________________ _ By: _____________________________________ _
[Name] [Name]
Secretary
For the Board of Directors
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EXHIBIT C
FORM OF LEGAL OPINION OF CGB&L'S COUNSEL
On the basis of and subject to the foregoing and the qualifications stated
below, we are of the opinion that:
16. CGB&L is a Delaware corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware, and is in good standing
in any other jurisdiction where the nature of its properties and its business
activities require such qualification. CGB&L is a registered bank holding
company under the BHCA and has the corporate power and authority to own its
properties and to carry on its business as it is now being conducted as a bank
holding company.
17. The authorized capital stock of CGB&L consists of 900,000 shares of voting
common stock, $0.01 par value per share, of which ______ shares are duly issued
and outstanding, and shares are held by CGB&L as treasury stock. To our
knowledge, except as disclosed in the Agreement and the schedules thereto, and
for the rights of Acquiror and Acquisition Corp under the Agreement, there are
no shares of capital stock issued and outstanding, nor are there any options,
agreements, contracts or other rights in existence to purchase or acquire from
CGB&L any shares of capital stock of CGB&L, whether now or hereafter authorized
or issued.
18. All outstanding shares of capital stock of CGB&L have been duly and validly
authorized and issued and are fully paid and nonassessable and, to our
knowledge, have not been issued in violation of any preemptive right of
stockholders.
19. The Bank is an Illinois savings bank with its main office located in Cerro
Gordo, Illinois, and is duly organized, validly existing and in good standing
under the laws of the State of Illinois. The Bank has the power and authority to
carry on its business as it is now being conducted and to own or hold under
lease the properties and assets it owns or holds under lease. To our knowledge,
the Bank owns no voting stock or equity securities of any corporation,
association, partnership or other entity, other than as disclosed in the
Agreement and the schedules thereto.
20. All outstanding shares of capital stock of the Bank have been duly and
validly authorized and issued and are fully paid and nonassessable and, to our
knowledge, have not been issued in violation of any preemptive right of
shareholders. All of the issued and outstanding shares of the capital stock of
the Bank are owned of record directly by CGB&L, and, to our knowledge, such
shares are free and clear of all liens, charges and encumbrances of any kind
whatsoever. The Bank is the only subsidiary of CGB&L.
21. To our knowledge, except as disclosed in the Agreement and the schedules
thereto, there is no existing option, warrant, call, subscription or other
agreement or commitment obligating CGB&L or the Bank to issue or sell, or to
purchase or redeem, any shares of capital stock of CGB&L or the Bank.
65
22. The execution, delivery and performance of the Agreement and the
transactions contemplated therein have been duly authorized by the board of
directors of CGB&L and, in the case of the Agreement, approved by the
stockholders of CGB&L, these being the only corporate authorizations thereof
required of CGB&L under CGB&L's certificate of incorporation, its bylaws and
applicable law. The Agreement constitutes the legal, valid and binding
obligation of CGB&L enforceable in accordance with its terms.
23. The execution, delivery and performance by CGB&L of the Agreement and the
consummation of the Contemplated Transactions by CGB&L will not violate,
conflict with, or result in a breach of (a) the certificate of incorporation or
bylaws of CGB&L or the charter or bylaws of the Bank, as the case may be, (b)
any material lease, mortgage, contract, agreement, instrument, judgment, order
or decree of which we have knowledge to which CGB&L or the Bank is a party or to
which it or any of its respective properties or assets may be bound, (c) any
federal or Delaware statute, code, ordinance, rule or regulation, or (d) any
judgment, order, writ, arbitral award, decree or injunction applicable to CGB&L
or any CGB&L Subsidiary of which we have knowledge.
24. To our knowledge, no consent, approval, authorization or order of any court
or governmental agency or body which has not been obtained is required on behalf
of CGB&L or the Bank for consummation of the transactions contemplated by the
Agreement.
25. To our knowledge, there are no actions, suits or proceedings, pending or
threatened against or affecting CGB&L or the Bank, at law or in equity or before
or by any governmental department, commission, board, bureau, agency or
instrumentality, or before any arbitrator of any kind which, in our opinion,
based upon such knowledge, are likely to result in a material adverse change in
the business, operations, properties or assets or in the condition, financial or
otherwise, of CGB&L and the CGB&L Subsidiaries taken as a whole.
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EXHIBIT D
FORM OF VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Agreement") is entered into as of the __ day of
February, 2001, by and among CGB&L FINANCIAL GROUP, INC., a Delaware corporation
(the "CGB&L"), XXXXX XXXXX XXXXXXX, a New York resident ("Acquiror"), GOLDEN
NATIONAL ACQUISITION CORPORATION, a Delaware corporation that is wholly owned by
Acquiror ("Acquisition Corp"), and each of the Directors or Officers of CGB&L or
Cerro Gordo Building and Loan, s.b. (an Illinois savings bank that is wholly
owned by CGB&L) who own stock in CGB&L (individually, the "Management
Stockholder," and collectively, the "Management Stockholders").
R E C I T A L S:
- - - - - - - -
A. As of the date hereof, each of the Management Stockholders is the owner of
the number of shares of the common stock of CGB&L, $0.01 par value, ("CGB&L
Common Stock"), as is set forth opposite such Management Stockholder's name on
the signature page attached hereto and such number of shares represents
approximately the percentage of the issued and outstanding shares of the capital
stock of CGB&L which is also set forth thereon opposite such Management
Stockholder's name.
B. Acquiror is contemplating the acquisition of CGB&L by means of a merger
(the "Merger") of Acquisition Corp with and into CGB&L pursuant to an Agreement
and Plan of Merger dated of even date herewith (the "Merger Agreement").
C. Acquiror is unwilling to expend the substantial time, effort and expense
necessary to implement the proposed acquisition of CGB&L, including applying for
and obtaining necessary approvals of federal and state banking authorities,
unless all of the Management Stockholders enter into this Agreement. Pursuant to
Section 2.11 in the Merger Agreement, nothing contained herein shall be deemed
to grant Acquiror an ownership interest in any shares of CGB&L Common Stock.
D. Each of the Management Stockholders believes it is in his or her best
interest as well as the best interest of CGB&L for Acquiror and Acquisition Corp
to consummate the Merger.
A G R E E M E N T S:
- - - - - - - - - -
In consideration of the covenants and agreements of the parties herein
contained and as an inducement to Acquiror to enter into the Merger Agreement
and to incur the expenses associated with the Merger, the parties hereto,
intending to be legally bound, hereby agree as follows:
67
Section 1. Representations and Warranties. Each of the Management Stockholders
------------------------------
represents and warrants that as of the date hereof he or she owns beneficially
and of record the number of shares of CGB&L Common Stock as is set forth
opposite such Management Stockholder's name on the signature page attached
hereto, all of which shares are free and clear of all liens, pledges, security
interests, claims, encumbrances, options and agreements to sell. Each of the
Management Stockholders represents and warrants that such Management Stockholder
has the sole voting power with respect to such shares of CGB&L Common Stock.
Section 2. Voting Agreement. Each of the Management Stockholders hereby agrees
----------------
to vote all shares of CGB&L Common Stock now or at any time hereafter owned or
controlled by him or her (the "Subject Shares") in favor of the Merger Agreement
and the Merger at any meeting of stockholders of CGB&L called for the purpose of
considering the approval of the Merger Agreement or the Merger. Each of the
Management Stockholders further agrees not to vote his or her Subject Shares in
favor of any acquisition of stock or of all or substantially all of the assets
of CGB&L by any party other than Acquiror or its wholly-owned subsidiaries prior
to the termination of this Agreement, nor shall he or she consent to such
acquisition. Each of the Management Stockholders agrees that none of his or her
Subject Shares shall be transferred without the prior written consent of
Acquiror. At Acquiror's request, each of the Management Stockholders shall use
his or her best efforts to cause any necessary meeting of stockholders of CGB&L
to be duly called and held or any necessary consents of stockholders to be
obtained for the purpose of approving either or both of the Merger Agreement and
the Merger.
Section 3. Termination. Notwithstanding any other provision of this Agreement,
-----------
this Agreement shall automatically terminate on the earlier of: (a) the date of
termination of the Merger Agreement as set forth in Article 10 thereof, as such
termination provisions may be amended by CGB&L, Acquiror and Acquisition Corp
from time to time; or (b) the Effective Time, as defined in the Merger
Agreement.
Section 4. Remedies. Each of the Management Stockholders understands and
--------
acknowledges that if he or she should breach any of his or her covenants
contained in this Agreement, the damage to Acquiror would be indeterminable in
view of the inability to measure the ultimate value and benefit to Acquiror
resulting from its contemplated future ownership and control of CGB&L, and that
Acquiror therefore would not have an adequate remedy at law in respect of any
such breach. Each of the Management Stockholders therefore agrees that in
addition to any other remedy available to Acquiror at law or in equity, Acquiror
shall be entitled to specific performance of this Agreement by such Management
Stockholder upon application to any court having jurisdiction over the parties.
Section 5. Amendment and Modification. This Agreement may be amended, modified
--------------------------
or supplemented at any time by the written approval of such amendment,
modification or supplement by CGB&L, Acquiror, Acquisition Corp and all of the
Management Stockholders.
Section 6. Entire Agreement. This Agreement evidences the entire agreement among
----------------
the parties hereto with respect to the matters provided for herein and there are
no agreements, representations or warranties with respect to the matters
provided for herein other than those set
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forth herein and in the Merger Agreement and written agreements related thereto.
Except for the Merger Agreement, this Agreement supersedes any agreements among
any of CGB&L, its stockholders, Acquiror or Acquisition Corp concerning the
acquisition, disposition or control of CGB&L Common Stock.
Section 7. Severability. The parties agree that if any provision of this
------------
Agreement shall under any circumstances be deemed invalid or inoperative, this
Agreement shall be construed with the invalid or inoperative provisions deleted
and the rights and obligations of the parties shall be construed and enforced
accordingly.
Section 8. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
Section 9. Governing Law. The validity, construction, enforcement and effect of
-------------
this Agreement shall be governed by the internal laws of the State of Illinois.
Section 10. Headings. The headings for the sections of this Agreement are
--------
inserted for convenience only and shall not constitute a part hereof or affect
the meaning or interpretation of this Agreement.
Section 11. Successors; Assignment. This Agreement shall be binding upon and
----------------------
inure to the benefit of CGB&L, Acquisition Corp and Acquiror, and their
successors and permitted assigns, and each of the Management Stockholders and
such Management Stockholder's spouse and their respective executors, personal
representatives, administrators, heirs, legatees, guardians and other legal
representatives. This Agreement shall survive the death or incapacity of any
Management Stockholder. This Agreement may be assigned only by Acquiror, and
then only to an Affiliate of Acquiror.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers on the day and year first written above.
_
Xxxxx Xxxxx Xxxxxxx
GOLDEN NATIONAL ACQUISITION CORPORATION
By: _
Xxxxx Xxxxx Xxxxxxx
President
CGB&L FINANCIAL GROUP, INC.
By:
Xxxxxxx X. Xxxxxxx
President
[Signature Page Continued]
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PERCENTAGE
MANAGEMENT STOCKHOLDERS SHARES OWNED OWNERSHIP
------------ ---------
Name _____ _____%
Name _____ _____%
Name _____ _____%
Name _____ _____%
Name _____ _____%
Name _____ _____%
Name _____ _____%
Name _____ _____%
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