EXHIBIT 10.12
STOCK PURCHASE AGREEMENT
between
BANK IV KANSAS, NATIONAL ASSOCIATION,
as Purchaser
and
EMPRISE FINANCIAL CORPORATION,
as Seller
Dated as of January 31, 1994
TABLE OF CONTENTS
Page #
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ARTICLE I. Definitions . . . . . . . . . . . . . . . . . . .1
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . .1
Section 1.2 Accounting Terms. . . . . . . . . . . . . . . . .8
Section 1.3 Use of Defined Terms. . . . . . . . . . . . . . .8
ARTICLE II. Sale and Transfer of Stock; Closing . . . . . . .8
Section 2.1 Sale of the Shares. . . . . . . . . . . . . . . .8
Section 2.2 Purchase Price. . . . . . . . . . . . . . . . . .8
Section 2.3 Closing . . . . . . . . . . . . . . . . . . . . .8
Section 2.4 Closing Deliveries. . . . . . . . . . . . . . . .8
ARTICLE III. Agreements of the Parties . . . . . . . . . . . .9
Section 3.1 Agreements of BANK IV . . . . . . . . . . . . . .9
Section 3.2 Agreements of Seller. . . . . . . . . . . . . . 10
Section 3.3 Section 338(h)(10) Election;
Payment of Income Taxes . . . . . . . . . . . . 15
Section 3.4 Software and Copyrighted Materials. . . . . . . 15
ARTICLE IV. Representations and Warranties. . . . . . . . . 16
Section 4.1 Representations and Warranties of
Seller. . . . . . . . . . . . . . . . . . . . . 16
Section 4.2 Representations and Warranties of
BANK IV . . . . . . . . . . . . . . . . . . . . 26
ARTICLE V. Book Value Adjustments. . . . . . . . . . . . . 28
Section 5.1 Mutual Agreement. . . . . . . . . . . . . . . . 28
Section 5.2 Expenses Caused by BANK IV. . . . . . . . . . . 28
ARTICLE VI. Closing Conditions. . . . . . . . . . . . . . . 28
Section 6.1 Conditions to Obligations of BANK IV. . . . . . 28
Section 6.2 Conditions to Obligations of Seller . . . . . . 30
ARTICLE VII Termination of Agreement. . . . . . . . . . . . 31
Section 7.1 Mutual Consent; Termination Date. . . . . . . . 31
Section 7.2 Election by BANK IV . . . . . . . . . . . . . . 31
Section 7.3 Election by Seller. . . . . . . . . . . . . . . 31
Section 7.4 Effect of Termination . . . . . . . . . . . . . 32
ARTICLE VIII. Indemnification . . . . . . . . . . . . . . . . 32
Section 8.1 Closing; Survival of Representations and
Warranties. . . . . . . . . . . . . . . . . . . 32
Section 8.2 Indemnification . . . . . . . . . . . . . . . . 32
Section 8.3 Procedure . . . . . . . . . . . . . . . . . . . 33
Section 8.4 Agreement as to Particular Contingent
Liabilities . . . . . . . . . . . . . . . . . . 33
ARTICLE IX. Miscellaneous . . . . . . . . . . . . . . . . . 34
Section 9.1 Expenses. . . . . . . . . . . . . . . . . . . . 34
Section 9.2 Notices . . . . . . . . . . . . . . . . . . . . 34
Section 9.3 Time. . . . . . . . . . . . . . . . . . . . . . 35
Section 9.4 Law Governing . . . . . . . . . . . . . . . . . 35
Section 9.5 Entire Agreement; Amendment . . . . . . . . . . 35
Section 9.6 Successors and Assigns. . . . . . . . . . . . . 35
Section 9.7 Cover, Table of Contents, and
Headings. . . . . . . . . . . . . . . . . . . . 35
Section 9.8 Counterparts. . . . . . . . . . . . . . . . . . 35
Section 9.9 Non-Competition . . . . . . . . . . . . . . . . 35
EXHIBITS
Exhibit "A" Form of Morris, Laing, Evans, Brock & Kennedy,
Chartered legal opinion
Exhibit "B" Form of Noncompetition Agreement--W. A. Michaelis,
Jr.
Exhibit "C" Form of Noncompetition Agreement--M. D. Michaelis
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of January 31, 1994,
between BANK IV KANSAS, NATIONAL ASSOCIATION, a national banking
association ("BANK IV"), and EMPRISE FINANCIAL CORPORATION, a
Kansas corporation ("Seller").
W I T N E S S E T H: That,
-------------------
WHEREAS, BANK IV desires to acquire all, and not less
than all, of the issued and outstanding capital stock of all
classes of Emprise Bank, National Association, Hutchinson, Kansas
(the "Bank") subject to and pursuant to the terms of this
Agreement; and
WHEREAS, Seller owns all of the issued and outstanding
capital stock of all classes of the Bank other than 1,200
directors' qualifying shares all of which it has the right to
acquire; and
WHEREAS, each party hereto believes that the proposed
acquisition by BANK IV of Bank pursuant to the terms and conditions
of this Agreement would be desirable and in their respective best
interests;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties hereto, intending to be legally
bound, agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. The following terms as used in this
Agreement shall have the following meanings unless the context
otherwise requires.
"This Agreement" refers to this Stock Purchase Agreement
and all amendments hereto.
"Bank" means Emprise Bank, National Association, a
national banking association organized under the laws of the United
States.
"BANK IV" means BANK IV Kansas, National Association, a
national banking association organized under the laws of the United
States.
"Bank Holding Company Act" means the federal Bank Holding
Company Act of 1956, as amended (12 U.S.C. Section 1841 et seq.), or any
successor federal statute, and the rules and regulations of the
Board promulgated thereunder, all as the same may be in effect at
the time.
"Bank Stock" means common stock of the Bank, par value
$10.00 per share.
"Board" means the Board of Governors of the Federal
Reserve System or any successor governmental entity which may be
granted powers currently exercised by the Board of Governors.
"Book Value of the Bank" means the aggregate consolidated
book value of the Bank, calculated in accordance with GAAP, except
excluding:
(a) any adjustments otherwise required by
Financial Accounting Standard No. 115 to reflect changes
in the Bank's securities portfolio to adjust to market
value;
(b) any accounting adjustments to
(i) the "push-down" accounting on the Bank
and bank acquisitions by Bank;
(ii) accrue for vacation pay, sick leave,
and float holidays of employees not now
reflected on the financial statements of
Bank and which will not be reflected at the
time of closing, notwithstanding that BANK
IV will agree to cause such accrued employee
benefits to be paid in accordance with past
practices;
(iii) the accounting treatment of intangible
assets for goodwill, core deposit
intangibles, covenants not to compete, and
credit life agency shown on the daily
statements of Bank, except that adjustments
will be made for normal amortization of the
assets in accordance with past practices of
Bank;
(iv) accrue for the litigation against Bank
in Reno County District Court, Case No. 91 C
522, brought by Bruce Dierking, et al, if no
final judgment has been rendered in the case
at the time of Closing;
(c) any other accounting adjustments, even though
agreed upon by the parties, except in the amount that all
such adjustments in the aggregate exceed the sum of
$200,000, and
(d) the cost to the Bank of discharging its
remaining obligations under its discontinued pension
plan;
but including:
(a) the effect of all dividends and bonuses
permitted by this Agreement, whether or not otherwise
properly accruable, which have not been accounted for in
the Book Value of the Bank; and
(b) adjustments, if any, to the loan loss
reserves or investment portfolios as provided herein and
as agreed by the parties.
"Closing" means the event at which the purchase and sale
agreed upon in this Agreement is consummated by payment of the
Purchase Price by BANK IV and assignment of the Shares by Seller as
provided in this Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder, all
as the same may be in effect at the time.
"Comptroller" means the United States Comptroller of the
Currency or any successor governmental agency which may be granted
powers currently exercised by the Comptroller of the Currency.
"Corporations" refers collectively to the Bank and
Emprise Building Corp.-Hutchinson, and "Corporation" refers to any
one of them.
"Disclosure Statement" means the Disclosure Statement
prepared by Seller and delivered by Seller to BANK IV prior to the
execution and delivery of this Agreement by BANK IV.
"Effective Time" means the date and time on which the
Closing occurs.
"Environmental, Health, and Safety Liabilities" means any
loss, cost, expense, claim, demand, liability, or obligation of
whatever kind or otherwise, based upon Environmental Law relating
to:
(i) any environmental, health, or safety matter
or conditions, including, but not limited to, on-site or
off-site contamination, occupational safety and health,
and regulation of chemical substances or products;
(ii) fines, penalties, judgments, awards,
settlements, legal or administrative proceedings,
damages, losses, claims, demands, and response, remedial
or inspection costs and expenses arising under
Environmental Laws;
(iii) financial responsibility under any
Environmental Law for cleanup costs or corrective
actions, including for any removal, remedial or other
response actions, and for any natural resource damage;
and
(iv) any other compliance, corrective, or
remedial action required under any Environmental Law.
"Environmental Law" means any provision of past or
present Law relating to any environmental, health, or safety
matters or conditions, Hazardous Materials, pollution, or
protection of the environment, including, but not limited to, on-
site and off-site contamination, occupational safety and health,
and regulation of chemical substances or products, emissions,
discharges, release, or threatened release of contaminants,
chemicals or industrial, toxic, radioactive, or Hazardous Materials
or wastes into the environment, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of Hazardous Materials,
pollutants, contaminants, chemicals, or industrial, toxic,
radioactive, or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended, and the rules and regulations promulgated
thereunder, all as the same may be in effect at the time.
"Facilities" means any real property, leaseholds, or
other interests in real property owned by the Bank or any of the
Corporations and/or any buildings, plants, structures, or equipment
of any of the Corporations.
"FDIC" means the Federal Deposit Insurance Corporation or
any successor agency.
"Federal Deposit Insurance Act" means the Federal Deposit
Insurance Act, as amended, and the rules and regulations
promulgated thereunder, all as the same may be in effect at the
time.
"Financial Statements" refers to all of the financial
statements described in clause i of Section 4.1 of this Agreement.
"GAAP" means generally accepted accounting principles,
applied on a consistent basis, set forth in Opinions of the
Accounting Principles Board of the American Institute of Certified
Public Accountants and/or in statements of the Financial Accounting
Standards Board and/or their successors which are applicable in the
circumstances in question; and the requisite that such principles
be applied on a consistent basis means that the accounting
principles observed in a current period are comparable in all
material respects to those applied in a preceding period.
"Hazardous Materials" means and includes: (i) any
hazardous substance or toxic material (excluding any lawful product
in customary quantities for use in the Bank's ordinary course of
business which contains such substance or material), pollutant,
contaminant, toxic material, or hazardous waste as defined in any
state, federal, or local Environmental Law; (ii) waste oil and
petroleum products; and (iii) any asbestos, asbestos containing
material, urea formaldehyde or material which contains it.
"Indemnifying Losses" shall have the meaning set forth in
Section 8.2 of this Agreement.
"Indemnitee" and "Indemnitees" shall have the meanings
set forth in Section 8.2 of this Agreement.
"Law" or "Laws" means all applicable statutes, laws,
ordinances, regulations, orders, writs, injunctions, or decrees of
the United States of America, any state or commonwealth, or any
subdivision thereof, or of any court or governmental department,
agency, commission, board, bureau, or other instrumentality.
"Litigation" means any proceeding, claim, lawsuit, and/or
investigation being conducted or, to the best of the knowledge of
the person or corporation making the representation, threatened
before any court or other tribunal, including, but not limited to,
proceedings, claims, lawsuits, and/or investigations, under or
pursuant to any occupational safety and health, banking, antitrust,
securities, tax, or other Laws, or under or pursuant to any
contract, agreement, or other instrument.
"Permitted Contract" means a contract or agreement,
written or oral, between the Bank or another of the Corporations,
on the one hand, and a person other than a customer of the Bank or
another financial institution, on the other hand, which (i) was
entered into in the ordinary course of business, (ii) may be
terminated by BANK IV after the Effective Time on no more than 30
days' prior notice, (iii) provides for a payment of no more than
$1,000 in any calendar month by the Bank or a Corporation, and (iv)
provides for no payment upon termination in excess of $1,000.
"Permitted Encumbrances" means with respect to any asset:
(a) liens for taxes not past due;
(b) mechanics' and materialmen's liens for
services or materials for which payment is not past due;
and
(c) minor defects, encumbrances, and
irregularities in title which do not, in the aggregate,
materially diminish the value of an asset or materially
impair the use of an asset for the purposes for which it
is or may reasonably be expected to be used.
"Purchase" means the purchase at the Closing of the
Shares from Seller by BANK IV pursuant to this Agreement.
"Purchase Price" has the meaning set forth in Section 2.2
of this Agreement.
"Required Approvals" means the approval, consent, or non-
objection, as the case may be, of the Board, the Comptroller, and
all other governmental or self-governing agencies, boards,
departments, and bodies whose approval, consent or non-action is
required in order to consummate the Purchase, the merger of the
Bank into BANK IV and the retention by BANK IV of all of the Bank's
Subsidiaries in substantially their present form, which approvals,
consents, and non-objections shall have become final and
nonappealable without any appeal or other form of review having
been initiated and as to which all required waiting periods shall
have expired.
"Seller" means Emprise Financial Corporation, a Kansas
corporation.
"Shares" means collectively all of the 500,000 shares of
Bank Stock being purchased and sold pursuant to this Agreement.
"Subsidiary" means any corporation fifty percent or more
of the common stock or other form of equity of which shall be
owned, directly or indirectly, by another corporation.
"Valuation Date" means the last day of the month which
immediately precedes the Effective Time.
1.2. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
GAAP consistent with that applied in the preparation of the
financial statements submitted pursuant to this Agreement, and all
financial statements submitted pursuant to this Agreement shall be
prepared in all material respects in accordance with such
principles subject to exceptions described in this Agreement.
1.3. Use of Defined Terms. All terms defined in this
Agreement shall have the defined meanings when used in any other
agreement, document, or certificate made or delivered pursuant to
this Agreement, unless the context otherwise requires.
ARTICLE II
SALE AND TRANSFER OF STOCK; CLOSING
2.1. Sale of the Shares. Subject to the terms and
conditions of this Agreement, at the Closing, Seller shall sell,
transfer, and deliver to BANK IV, and BANK IV shall purchase, all
500,000 of the Shares for the Purchase Price.
2.2. Purchase Price. The total Purchase Price for all
of the Shares shall be the sum of:
(i) the Book Value of the Bank at the Valuation
Date; and
(ii) $8,909,000.
2.3. Closing. The Closing shall take place at the
offices of Foulston & Siefkin, 700 Fourth Financial Center,
Wichita, Kansas, at 10:00 a.m., or at such other time or place as
the parties may agree, on a date selected by BANK IV upon giving
reasonable notice to Seller, which, unless otherwise agreed, shall
be the end of the month in which the final Required Approval is
obtained and in which the last required waiting periods shall
expire. The parties agree to exert their best efforts to cause the
Closing to occur on or before April 30, 1994.
2.4. Closing Deliveries. At the Closing:
a. Seller shall deliver to BANK IV:
(i) certificates representing all of the
Shares, endorsed for transfer to BANK IV, free
and clear of all encumbrances, liens, security
interests, claims, and equities whatsoever;
(ii) such other documents, including
officers' certificates, as may be required by
this Agreement or reasonably requested by BANK
IV; and
(iii) the opinion of Morris, Laing, Evans,
Brock & Kennedy, Chartered, counsel to Seller and
the Bank, substantially in the form of Exhibit
"A" hereto.
b. BANK IV shall deliver to Seller
immediately available funds in the total amount
of the Purchase Price, less that amount necessary
to pay in full the present loan from BANK IV to
Seller which is secured by a security interest in
the Shares owned by Seller and which amount of
the total Purchase Price shall be applied in
payment and satisfaction of such loan.
c. BANK IV and W. A. Michaelis, Jr., and
M. D. Michaelis shall execute and deliver non-
competition agreements substantially in the form
of Exhibits "B" and "C" hereto, respectively.
ARTICLE III
AGREEMENTS OF THE PARTIES
3.1. Agreements of BANK IV.
Prior to the Effective Time, BANK IV, shall use
its best efforts in good faith to take or cause to be
taken as promptly as practicable all such steps as shall
be necessary to obtain all of the Required Approvals.
All such steps, including all proceedings before
governmental bodies, shall be at the sole cost and
expense of BANK IV, but Seller shall fully cooperate and
shall cause the Corporations to cooperate fully with BANK
IV in obtaining all Required Approvals.
3.2. Agreements of Seller.
a. Prior to the Closing, Seller shall not permit
any of the Corporations to, except with the prior written
consent of BANK IV or as otherwise provided in this
Agreement:
(1) Amend its articles or certificate of
incorporation, bylaws, or other charter
documents, make any change in its authorized,
issued, or outstanding capital stock, grant any
stock options or right to acquire shares of any
class of its capital stock or any security
convertible into any class of capital stock,
purchase, redeem, retire, or otherwise acquire
(otherwise than in a fiduciary capacity) any
shares of any class of its capital stock or any
security convertible into any class of its
capital stock, or agree to do any of the
foregoing;
(2) Except for quarterly cash dividends in
the maximum amount of $350,000 each payable by
the Bank at the same time or times as has been
done in the past, declare or pay any dividend or
other distribution in respect of any class of its
capital stock;
(3) Adopt, enter into, or amend materially
any employment contract or any bonus, stock
option, profit sharing, pension, retirement,
incentive, or similar employee benefit program or
arrangement or grant any bonus, salary, or wage
increase, except (a) normal individual bonuses or
increases in compensation to employees in
accordance with established employee procedures
of the Corporations; and (b) normal severance pay
on termination of any employee in accordance with
past practices and employee termination
guidelines;
(4) Incur any indebtedness for borrowed
money (except for federal funds, repurchase
agreements entered into in the ordinary and usual
course of business, deposits received by the
Bank, endorsement for collection or deposit of
negotiable instruments received in the ordinary
and usual course of business, and issuance of
letters of credit by the Bank in the ordinary and
usual course of business), assume, guarantee,
endorse, or otherwise as an accommodation become
liable or responsible for obligations of any
other individual, firm, or corporation;
(5) Pay or incur any obligation or
liability, absolute or contingent, other than
liabilities incurred in the ordinary and usual
course of business of the Corporations;
(6) Except for transactions in the ordinary
and usual course of business of the Bank,
mortgage, pledge, or subject to lien or other
encumbrance any of its properties or assets;
(7) Except for transactions in the ordinary
and usual course of business of the Bank
(including, without limitation, sales of assets
acquired by the Bank in the course of collecting
loans), sell or transfer any of its properties or
assets or cancel, release, or assign any
indebtedness owed to it or any claims held by it;
(8) Make any investment of a capital nature
in excess of $25,000 for any one item or group of
similar items either by the purchase of stock or
securities (not including bonds or collateralized
mortgage obligations purchased in the ordinary
and usual course of business by the Bank),
contributions to capital, property transfers, or
otherwise, or by the purchase of any property or
assets of any other individual, firm, or
corporation;
(9) Enter into any other agreement not in
the ordinary and usual course of business;
(10) Merge or consolidate with any other
corporation, acquire any stock (except in a
fiduciary capacity), solicit any offers for any
Bank Stock, or a substantial portion of the
assets of either of the Corporations or, except
in the ordinary course of business, acquire any
assets of any other person, corporation, or other
business organization, or enter into any
discussions with any person concerning, or agree
to do, any of the foregoing; or
(11) Enter into any transaction or take any
action which would, if effected prior to the
Effective Time, constitute a breach of any of the
representations, warranties, or covenants
contained in this Agreement; provided, that
transactions and other dealings with affiliated
banks which are made to separate their respective
affairs shall not constitute a breach of any of
the covenants contained in this subparagraph (a).
b. Prior to the Effective Time, Seller shall
cause each of the Corporations to conduct its respective
business in the ordinary and usual course as heretofore
conducted and to use its best efforts (1) to preserve its
business and business organization intact, (2) to keep
available to BANK IV the services of the present officers
and employees of the Bank, except Seller reserves the
right to hire Patrick W. Michaelis, Diana Fisher, Cynthia
Fleming, Steve Onken, Roy Doonan, and Keith Moyer, (3) to
preserve the good will of customers and others having
business relations with the Bank, (4) to maintain its
properties in customary repair, working order and
condition (reasonable wear and tear excepted), (5) to
comply with all Laws applicable to it and the conduct of
its businesses, (6) to keep in force at not less than
their present limits all existing policies of insurance,
(7) except as provided in this Agreement, to make no
material changes in the customary terms and conditions
upon which it does business, (8) to duly and timely file
all reports, tax returns, and other documents required to
be filed with federal, state, local, and other
authorities, and (9) unless it is contesting the same in
good faith and has established reasonable reserves
therefor, to pay when required to be paid all taxes
indicated by tax returns so filed or otherwise lawfully
levied or assessed upon it or any of its properties and
to withhold or collect and pay to the proper governmental
authorities or establish separate liability accounts for
such payment all taxes and other assessments which it
believes in good faith to be required by law to be so
withheld or collected.
c. Prior to the Effective Time, Seller shall
cause the Corporations, to the extent permitted by Law,
to give BANK IV and its counsel and accountants full
access, during normal business hours and upon reasonable
notice, to their respective properties, books, and
records, and to furnish BANK IV during such period with
all such information concerning their affairs as BANK IV
may reasonably request. Except for matters expressly
disclosed in the Disclosure Statement, the availability
or actual delivery of information about the Corporations
to BANK IV shall not affect the covenants,
representations, and warranties of Seller contained in
this Agreement. Except for information disclosed in the
course of obtaining governmental approvals, BANK IV shall
treat as confidential all such information in the same
manner as BANK IV treats similar confidential information
of its own and, if this Agreement is terminated, BANK IV
shall continue to treat all such information obtained in
such investigation and not otherwise known to BANK IV, or
already in the public domain, as confidential and shall
return such documents theretofore delivered by Seller to
BANK IV as Seller shall request.
d. Seller acknowledges that BANK IV will merge
the Bank into BANK IV at the Effective Time.
Accordingly, Seller agrees to take all such action and to
cause the Bank to take all such action as BANK IV may
reasonably request in order for such a merger to occur
contemporaneous with the Effective Time. Any such
request shall be in writing and mailed, faxed, served, or
delivered to either Mr. L. Thomas Veatch, as Senior Vice
President and Chief Financial Officer of Seller, or
Ralph R. Brock, as attorney for Seller.
e. Seller agrees not to sell, pledge, encumber
or otherwise hypothecate or transfer any shares of Bank
Stock prior to the Effective Time.
f. Upon request, Seller shall furnish or cause
to be furnished to BANK IV copies of title insurance
policies, title opinions of attorneys, or other title
evidence presently in the possession of Seller or
Corporations covering or pertaining to the title of
Corporations to any real properties owned by them. Any
additional title evidence desired by BANK IV shall be
obtained by it at its expense. Seller may, but shall not
be obligated to, perform any curative title work in event
the title to any of such real properties contains a
defect other than Permitted Encumbrances. If Seller
declines to perform any such curative work, then BANK IV
may, but shall not be obligated to, undertake such
curative work, in which event Seller shall fully
cooperate with BANK IV in such work which shall then be
at the cost and expense of BANK IV.
g. BANK IV shall have the right at any time
prior to Closing at its cost and expense to make such
environmental inspections and surveys of the property of
the Corporations and to obtain such environmental
assessment reports as BANK IV may deem advisable and
appropriate. BANK IV, its agents and consultants, shall
have access to the properties at all reasonable times and
may take such soil or other tests as may be reasonable,
and Seller and Corporations shall cooperate fully with
BANK IV with reference to such environmental surveys and
assessments.
h. Seller shall permit and cause Corporations to
permit BANK IV at all reasonable times within 45 days
from the date hereof to have any of the Facilities of
Corporations surveyed by a duly licensed surveyor of BANK
IV's choice. Any such surveys shall be made and obtained
at the cost and expense of BANK IV, but Seller and
Corporations shall cooperate fully with BANK IV in
obtaining any such survey.
i. From the date hereof through the Effective
Time, Seller shall cause the Bank to give BANK IV one
business day's advance notice by telephone or facsimile
to Thomas A. Page, President-Community Banking of BANK
IV, of all proposed securities purchases or sales
involving an aggregate price of $250,000 or more. If no
objection is received within such period of one business
day, then Bank may proceed to make the proposed purchases
or sales.
j. Seller, in consultation with BANK IV, shall
cause the Bank to exert its best efforts to fully
discharge all of its remaining liabilities under its
discontinued pension plan.
3.3. Section 338(h)(10) Election; Payment of Income
Taxes. Seller and BANK IV agree to make a joint election under
Section 338(h)(10) of the Code in accordance with applicable Law.
At Closing, BANK IV shall pay to Seller an amount equal to all
amounts that are included at the Valuation Date in the "Accrued
Federal Income Tax," "Accrued Privilege Tax," "Deferred Federal
Income Tax," "Deferred Privilege Tax," and any other accounts of
Corporations containing a liability for income and privilege taxes,
including any accounting adjustments and/or corrections agreed upon
by Seller and BANK IV through the Valuation Date, plus the
estimated liability of the Corporations for all such taxes for the
period from the Valuation Date through the Effective Time, and plus
the amount of any reimbursements for such taxes, if any, received
by Corporations during such period, less the amount of such taxes,
if any, paid by Corporations during such period. If any of such
accounts have debit (negative) balances at the Valuation Date, they
will offset the credit balances, and only the net amount will be
paid to Seller. All liability for such taxes of the Corporations
during the period from the Valuation Date through the Effective
Time shall be estimated by using a per-day accrual for that period
based on the average daily income of the Corporations for the
preceding three months and a 39% combined tax rate, with the
calculation of such average daily income to be made without regard
to any accounting adjustments or adjustments to loan loss reserves
or investment portfolios resulting from the transactions
contemplated by this Agreement. Seller will pay all state and
federal income taxes attributable to the Corporations' operations
through the Effective Time. BANK IV will promptly pay over to
Seller any refunds it may receive for overpayments, carrybacks,
credits, or otherwise arising which are attributable to either or
both of the Corporations for the period through the Effective Time.
3.4. Software and Copyrighted Materials. At Closing
Seller shall assign to BANK IV all licenses owned by Seller of
software or other copyrighted property and the licensed software
and property presently being used by Bank sufficient to permit BANK
IV to continue using such property if Bank paid for its right to
use such property, such licenses can be assigned without the
consent or approval of the licensors or any third party, and BANK
IV desires to continue to use such property. If assignment of any
such license or right to use such property requires the consent or
approval of the licensor or another party, Seller agrees to use its
best efforts to obtain such consent or approval or to obtain a
separate license or right to use the property for BANK IV on such
terms and for such price, royalty, or other consideration, if any,
required by the licensor or other party as may be satisfactory to
BANK IV, which shall pay such consideration. Any license or right
to use such property and the software and property licensed will
not be assigned to BANK IV or obtained for it if BANK IV does not
desire to continue the use of such property or if any required
consent to such assignment or right to use such property cannot be
obtained on terms satisfactory to BANK IV. If any such rights or
right to use such property is owned by Bank and BANK IV desires to
continue to use such property, but will not have the right to do so
after the merger without the consent of the licensor or a third
party, Seller likewise will use its best efforts to obtain such
consent or approval the same as though the license was owned by
Seller. If any such license or right to use such property is owned
by Bank and BANK IV does not desire to continue the use of such
property, but Seller desires to acquire the same, then at Closing
Bank shall assign to Seller such license or right to use such
property and the property licensed if such license or right to use
such property can be assigned without the consent or approval of
the licensor or another party or if any required consent or
approval can be obtained on terms and for such price, royalty, or
other consideration, if any, required by the licensor or another
party, as may be satisfactory to Seller, which shall pay such
consideration. Any software or other licensed or copyrighted
materials presently utilized by Bank and which BANK IV will not
have the right to use after Closing shall at Closing be returned or
delivered to Seller or the licensor who is entitled to it, as the
case may be, and BANK IV covenants and agrees after Closing not to
use, disclose, reveal, or permit others to use, disclose, or reveal
such property or materials in violation of any license or other
agreement pertaining thereto, or any copyright or other law, or
rule of law pertaining to trade secrets or proprietary or
confidential information, which violation could subject Seller to
a claim or payment of damages or other legal remedies for such
violation. Notwithstanding the foregoing, however, it is
understood and agreed that any software or hardware techniques or
methods devised or developed by the Data Processing Center or
personnel of Seller shall be retained by Seller as its trade
secrets and proprietary information, and after Closing Bank shall
have no further right to use the same.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Representations and Warranties of Seller. Except
as disclosed in the Disclosure Statement, Seller represents and
warrants to BANK IV as follows:
a. Organization, Good Standing, and Authority.
Seller is a bank holding company duly registered pursuant
to the Bank Holding Company Act. Each of the
Corporations is a corporation or bank duly organized,
validly existing, and in good standing under the laws of
the jurisdiction of its incorporation.
b. Authority. Each of the Corporations has all
requisite corporate power and authority to conduct its
business as it is now conducted, to own its properties
and assets, and to lease properties used in its business.
Neither of the Corporations is in violation of its
charter documents or bylaws, or of any applicable Law in
any material respect, or in default in any material
respect under any material agreement, indenture, lease,
or other document to which it is a party or by which it
is bound. The deposits of the Bank are insured by the
FDIC to the extent provided by the Federal Deposit
Insurance Act and the Bank has paid all assessments and
filed all reports required to be filed under the Federal
Deposit Insurance Act.
c. Binding Obligations; Due Authorization. This
Agreement constitutes the valid and binding obligation of
Seller, enforceable against it in accordance with the
terms hereof, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other similar
laws and equitable principles affecting creditors' rights
generally.
d. Absence of Default. The execution and the
delivery of this Agreement, the sale of the Shares, and
the consummation of the other transactions contemplated
hereby, and the fulfillment of the terms hereof will not
(1) conflict with, or result in a breach of the terms,
conditions, or provisions of, or constitute a default
under the organizational documents or bylaws of any of
the Corporations or under any agreement or instrument
under which either of the Corporations or the Seller is
obligated, or (2) violate any Law to which either of the
Corporations or the Seller is or will be subject prior to
the Closing, but Seller makes no representation or
warranty as to the proposed merger of the Bank into BANK
IV or as to any aspect of any Law peculiar to BANK IV or
Fourth Financial Corporation.
e. Subsidiaries. The only Subsidiary of the
Bank is Emprise Building Corp.-Hutchinson.
f. Capitalization; Ownership of Shares. The
Bank is authorized to issue 500,000 shares of capital
stock, par value $10 per share, all of which is duly
issued and outstanding. Seller is the owner, free and
clear of all encumbrances, liens, security interests, and
claims whatsoever, except a security interest to secure
a loan from BANK IV, of all 500,000 shares of Bank Stock,
except for 1,200 directors' qualifying shares. As
provided herein, the loan will be repaid from the total
Purchase Price at Closing. The directors' qualifying
shares will be reacquired by Seller and will be sold and
transferred to BANK IV at the Closing. Emprise Building
Corp.-Hutchinson is authorized to issue 100,000 shares of
common stock, par value $1 per share, of which 30,000
shares are issued and outstanding and are owned, free and
clear of all liens, security interests, and claims
whatsoever, by the Bank.
g. Charter Documents. True and correct copies
of the charter documents and bylaws of both of the
Corporations, with all amendments thereto, are included
in the Disclosure Statement as Exhibits "G-1" to "G-4."
h. Options, Warrants, and Other Rights. None of
the Corporations has outstanding any options, warrants,
or rights of any kind requiring it to sell or issue to
anyone any capital stock of any class and none of the
Corporations has agreed to issue or sell any additional
shares of its capital stock.
i. Financial Statements. Included in the
Disclosure Statement as Exhibits "I-1," et seq. are true
and complete copies of the following financial
statements, all of which are true and complete in all
material respects and have been prepared in all material
respects in accordance with GAAP and all applicable
regulatory accounting principles consistently followed
throughout the periods indicated, subject in the case of
interim financial statements, to normal recurring year-
end adjustments (the effect of which will not,
individually or in the aggregate, be materially adverse)
and the absence of notes (which if presented would not
differ materially from those included in the most recent
year-end financial statements):
(1) Unaudited Consolidated Financial
Statements of the Bank as of December 31, 1992,
and 1991, and for the fiscal years then ended
with accountants' compilation report thereon and
notes thereto, which have been compiled by Grant
Thornton, independent certified public
accountants; and
(2) Consolidated Reports of Condition and
Income, as of March 31, June 30, and
September 30, 1993, as filed by the Bank with the
FDIC.
As soon as practicable between the date hereof and the
Effective Time, Seller will deliver to BANK IV copies of
monthly operating statements and monthly securities
inventory reports of the Bank and of all reports filed by
either of the Corporations with any regulatory agencies.
The books of account of each of the Corporations and each
of the Financial Statements fairly and correctly reflect
and, when delivered, will reflect in all material
respects in accordance with GAAP and all applicable rules
and regulations of regulatory agencies applied on a
consistent basis, the respective incomes, expenses,
assets, and liabilities, except contingent liabilities
disclosed in the Disclosure Statement, of each of the
Corporations (except for the absence in the monthly
operating statements of the Bank of certain information
and footnotes normally included in financial statements
prepared in accordance with GAAP and except the
exceptions listed in the definition of Book Value of the
Bank in Section 1.1 of this Agreement). There have been,
and prior to the Effective Time there will be, no
material changes in the financial condition of the Bank
from December 31, 1992, other than changes made in the
usual and ordinary conduct of the businesses of the
Corporations, none of which has been or will be
materially adverse and all of which have been or will be
recorded in the books of account of the Corporations,
except possible contingent liabilities disclosed in
Exhibit "I-_" of the Disclosure Statement; and except as
specifically permitted by this Agreement, there have
been, and prior to the Effective Time there will be, no
substantial changes in the respective businesses, assets,
properties, or liabilities, absolute or contingent, of
any of the Corporations, or in their respective
condition, financial or otherwise, from the date of the
most recent of the Financial Statements that has been
delivered to BANK IV on the date hereof other than
changes occurring in the usual and ordinary conduct of
the business of the Corporations, none of which has been
or will be materially adverse and all of which have been
or will be recorded in the respective books of account of
the Corporations. Neither of the Corporations has any
contingent liabilities, other than letters of credit and
similar obligations of the Bank incurred in the ordinary
course of business, asserted or which have a reasonable
likelihood of being asserted, that are not disclosed in
the Financial Statements listed above or that have not
otherwise been disclosed to BANK IV in the Disclosure
Statement. Seller also agrees to use reasonable efforts
to have the accountants of Bank prepare and deliver to
BANK IV prior to Closing a copy of Bank's compiled
consolidated financial statements as of December 31,
1993, and for the year then ended, with accountant's
compilation report thereon and notes thereto, but makes
no warranty that such financial statements can or will be
available prior to Closing, particularly if Closing
occurs prior to April 1, 1994.
j. Real Properties. Exhibit "J" to the
Disclosure Statement is a complete list of all real
estate owned or leased by either of the Corporations.
Each Corporation has good and marketable title in fee
simple to all lands and buildings described in the
Disclosure Statement as being owned by it, free and clear
of all liens, encumbrances, and charges, except for
Permitted Encumbrances. All leases of real property to
which either of the Corporations is a party as lessee,
true and complete copies of each of which with all
amendments thereto are included in Exhibit "J" to the
Disclosure Statement, are each valid and enforceable in
accordance with their respective terms except as
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, or similar Laws and equitable
principles affecting creditors' rights generally, and
there has been no material default by any party thereto.
No zoning ordinance prohibits, interferes with, or
materially impairs the usefulness of any of the real
property and buildings thereon owned or used by any
Corporation for the purposes for which it is now being
used; and all the premises owned or leased by either of
the Corporations are in good operating condition and
repair, normal wear and tear excepted.
k. Personal Property. Except for the personal
property listed on Exhibit "K" to the Disclosure
Statement, each of the Corporations has good and
marketable title to all of the machinery, equipment,
materials, supplies, and other property of every kind,
tangible or intangible, contained in its offices and
other facilities or shown as assets in its records and
books of account, free and clear of all liens,
encumbrances, and charges. All leases of personal
property to which either of the Corporations is a party
as lessee are valid and enforceable in accordance with
their terms, and there has been no material default by
any party thereto. All of such personal property owned
or leased by either of the Corporations is in good
operating condition, normal wear and tear excepted.
l. Taxes. The Corporations have filed all tax
returns and reports required to be filed with the United
States Government and with all states and political
subdivisions thereof where any such returns or reports
are required to be filed and where the failure to file
such return or report would subject any of the
Corporations to any material liability or penalty. All
taxes imposed by the United States, or by any foreign
country, or by any state, municipality, subdivision, or
instrumentality of the United States or of any foreign
country, or by any other taxing authority, which are due
and payable by either of the Corporations have been paid
in such amounts and at such times as not to be delinquent
or have been adequately provided for by reserves shown in
the records and books of account of the Corporations and
in the Financial Statements. No extension of time for
the assessment of deficiencies for any years is in
effect. Except for the potential claim by the State of
Kansas for additional privilege taxes described in
Exhibit "L" to the Disclosure Statement, neither Seller
nor any of the Corporations has any knowledge of any
unassessed tax deficiency proposed or threatened against
any of them.
m. Contracts. Other than Permitted Contracts
and agreements with customers of the Bank and with
financial institutions entered into by the Bank in the
ordinary course of its banking business, attached to the
Disclosure Statement as Exhibit "M" is a list of all
material contracts and other agreements and arrangements,
both written and oral, to which either of the
Corporations is a party and which involve $10,000 or
more, which affect or pertain to the operation of their
respective businesses. To the best knowledge of Seller,
all parties thereto have in all material respects
performed, and are in good standing with respect to, all
the material obligations required to be performed under
all such contracts and other agreements and arrangements,
and no obligation with respect thereto is overdue. All
of the material agreements of the Corporations, including
without limitation the agreements disclosed in writing
pursuant to this clause (m), are valid, binding, and
enforceable in accordance with their terms, except as
limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws and equitable
principles affecting creditors' rights generally. Except
as otherwise noted in Exhibit "M" to the Disclosure
Statement, no contract, lease, or other agreement or
arrangement to which either of the Corporations is a
party or as to which any of their assets is subject
requires the consent of any third party in connection
with this Agreement. Except as described in Exhibit "M"
to the Disclosure Statement, neither any Corporation nor
Seller has any knowledge of any threatened cancellation
of, any outstanding disputes or default under, or of any
basis for any claim of breach or default of, any lease,
contract, or other agreement or arrangement to which
either of the Corporations is a party. Except for
Permitted Contracts and except as set forth in Exhibit
"M" to the Disclosure Statement, neither the Bank nor the
Corporations is a party to:
(1) Any contract for the purchase or sale
of any materials, or supplies which contains any
escalator, renegotiation, or redetermination
clause or which commits it for a fixed term;
(2) Any contract of employment with any
officer or employee not terminable at will
without liability on account of such termination;
(3) Any management or consultation
agreement not terminable at will without
liability on account of such termination;
(4) Any license, royalty, or union
agreement, or loan agreement in which any of the
Corporations is the borrower;
(5) Any contract, accepted order, or
commitment for the purchase or sale of materials,
services, or supplies having a total remaining
contract price in excess of $10,000;
(6) Any contract containing any
restrictions on any party thereto competing with
either of the Corporations, or any other person;
(7) Any other agreement which materially
affects the business, properties, or assets of
either of the Corporations, or which was entered
into other than in the ordinary and usual course
of business; or
(8) Any letter of credit or commitment to
make any loan or group of loans to related
parties in an amount in excess of $250,000.
n. Labor Relations; Employees; ERISA. Neither
of the Corporations is a party to or affected by any
collective bargaining agreement, nor is any Corporation
a party to any pending or, to the best knowledge of
Seller, threatened labor dispute, organizational efforts,
or labor negotiations. Each of the Corporations has
complied in all material respects with all applicable
Laws relating to the employment of labor, including, but
not limited to, the provisions thereof relating to wages,
hours, collective bargaining, payment of social security
taxes, and equal employment opportunity, the violation of
which would have a materially adverse impact on their
respective businesses. Neither of the Corporations is
liable for any arrears of wages or any taxes or penalties
for failure to comply with any of the foregoing. Except
for the Bank's profit sharing plan (the "Profit Sharing
Plan"), true and complete copies of which with all
amendments thereto are Exhibit "N" to the Disclosure
Statement, neither of the Corporations has any written or
oral retirement, pension, profit sharing, stock option,
bonus, or other employee benefit plan or practice other
than group health and accident insurance and employee
bonuses for country club dues and year-end employee
incentive awards. The Profit Sharing Plan is in material
compliance with ERISA and the Code and is a "qualified
plan" within the meaning of Section 401(a) of the Code
and is the subject of a currently effective written
determination of the Internal Revenue Service to such
effect and to the further effect that the trust
thereunder is a trust exempt from taxation under Section
501 of the Code. Neither Seller nor either of the
Corporations knows of any facts or circumstances that
could adversely affect the status of such plan as such a
plan or such trust as such a trust. All accrued
contributions and other payments to be made by the Bank
under the Profit Sharing Plan have been made or reserves
adequate for such purposes have been set aside therefor.
Neither of the Corporations has violated any of the
provisions of ERISA, and neither of them has engaged in
any "prohibited transactions" as such term is defined in
Section 406 of ERISA. Each of the Corporations has
complied with all applicable notice requirements and has
provided group health care continuation coverage under
Section 4980B of the Code and/or any other applicable
Laws. There is no employee of either of the Corporations
whose employment is not terminable at will without
severance pay or other penalty or compensation other than
as described in Exhibit "N." All employment contracts
with employees are oral and are terminable at will.
o. Government Authorizations. Each of the
Corporations has all permits, charters, licenses, orders,
and approvals of every federal, state, local, or foreign
governmental or regulatory body required in order to
permit it to carry on its business substantially as
presently conducted. All such licenses, permits,
charters, orders, and approvals are in full force and
effect, and, to the knowledge of the Corporations and
Seller, no suspension or cancellation of any of them is
threatened and neither Seller nor any of the Corporations
knows of any fact or circumstance that will interfere
with or adversely affect the renewal of any of such
licenses, permits, charters, orders, or approvals; and
none of such permits, charters, licenses, orders, and
approvals will be affected by the consummation of the
transactions contemplated by this Agreement, except as
they may be affected by the merger contemplated by BANK
IV.
p. Insurance. Exhibit "P" to the Disclosure
Statement is a complete list of all insurance policies
presently in effect and in effect during the past three
years. All the insurance policies and bonds currently
maintained by any of the Corporations are in full force
and effect.
q. Litigation. Exhibit "Q" to the Disclosure
Statement contains a true and complete list and brief
description of all pending or, to the knowledge of either
of the Corporations or Seller, threatened, Litigation to
which either of the Corporations is or would be a party
or to which any of their assets is or would be subject.
Except as described on Exhibit "Q" to the Disclosure
Statement, neither of the Corporations is a party to any
Litigation other than routine litigation commenced by the
Bank to enforce obligations of borrowers in which no
counterclaims for any material amounts of money have been
asserted or, to the knowledge of the Corporations or
Seller, threatened.
r. Brokers or Finders. No broker, agent,
finder, consultant, or other party (other than legal and
accounting advisors) has been retained by Seller or
either of the Corporations or is entitled to be paid
based upon any agreements, arrangements, or
understandings made by Seller or either of the
Corporations in connection with any of the transactions
contemplated by this Agreement.
s. Environmental Compliance. Each of the
Corporations is in material compliance with all relevant
Environmental Laws and neither of the Corporations has
any material Environmental, Health, and Safety
Liabilities. None of the Facilities is now being used
or, to the best of Seller's knowledge, at any time in the
past has ever been used by any of the Corporations, or to
the knowledge of Seller without investigation, by third
parties, for the storage (whether permanent or
temporary), disposal, or handling of any Hazardous
Materials, nor are any Hazardous Materials located in,
on, under, or at any of the Facilities. Neither Seller
nor either of the Corporations has received any notice of
material violation of any Environmental Law, or any
notice of any material potential Environmental, Health,
and Safety Liabilities with respect to any of the
Facilities or to any other properties and assets in which
either of the Corporations has had an interest.
t. Employment of Aliens. Each of the
Corporations is in material compliance with the
Immigration Reform and Control Act of 1986.
u. Notes and Leases. All promissory notes and
leases owned by the Bank at the Effective Time will
represent bona fide indebtedness or obligations to the
Bank and are and will be fully enforceable in accordance
with their terms without valid set-offs or counterclaims,
except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws and equitable
principles affecting creditors' rights generally;
provided, however, no representation or warranty is made
in this Agreement as to the collectibility of such notes
and leases.
v. No Misrepresentations. Neither this
Agreement, the Disclosure Statement, nor the Financial
Statements, when considered in conjunction with all other
information and documents contained therein, contains or
will contain any misstatement of a material fact or omits
or will omit to state a material fact necessary to make
the statements contained herein or therein not
misleading.
w. Updating of Representations and Warranties.
Between the date hereof and the Effective Time, Seller
will promptly disclose to BANK IV in writing any
information of which it has actual knowledge (1)
concerning any event that would render any material
representation or warranty of Seller untrue if made as to
the date of such event, (2) which renders any information
set forth in this Agreement or the Disclosure Statement
no longer correct in all material respects, or (3) which
arises after the date hereof and which would have been
required to be included in this Agreement or Disclosure
Statement if such information had existed on the date
hereof.
x. True at Effective Time. Except as otherwise
specifically provided in this Agreement, all of the
representations and warranties set forth above will be
true and correct at the Effective Time with the same
force and effect as though such representations and
warranties had been made at the Effective Time.
4.2. Representations and Warranties of BANK IV. BANK
IV represents and warrants to Seller as follows:
a. Organization, Good Standing, and Authority.
BANK IV is a bank duly organized, validly existing, and
in good standing under the laws of the United States, and
has all requisite corporate power and authority to
conduct its business as it is now conducted, to own its
properties and assets, and to lease properties used in
its business. BANK IV is not in violation of its charter
documents or bylaws, or of any applicable Law in any
material respect, or in default in any material respect
under any material agreement, indenture, lease, or other
document to which it is a party or by which it is bound.
b. Binding Obligations; Due Authorization. This
Agreement constitutes the valid and binding obligations
of BANK IV, enforceable against it in accordance with its
terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other similar
laws and equitable principles affecting creditors' rights
generally. The execution, delivery, and performance of
this Agreement and the transactions contemplated hereby
have been duly authorized by the board of directors of
BANK IV.
c. Absence of Default. None of the execution or
the delivery of this Agreement, the consummation of the
transactions contemplated hereby, or the fulfillment of
the terms hereof, will (1) conflict with, or result in a
breach of the terms, conditions, or provisions of, or
constitute a default under the charter documents or
bylaws of BANK IV or under any agreement or instrument
under which BANK IV is obligated, or (2) violate any Law
to which it is subject.
d. Brokers or Finders. No broker, agent,
finder, consultant, or other party (other than legal and
accounting advisors) has been retained by BANK IV or is
entitled to be paid based upon any agreements,
arrangements, or understandings made by BANK IV in
connection with any of the transactions contemplated by
this Agreement.
ARTICLE V
BOOK VALUE ADJUSTMENTS
5.1. Mutual Agreement. The parties agree that no
adjustments to the Book Value of the Bank shall be made for any of
those items excluded from adjustment in the definition of Book
Value of the Bank contained in Section 1.1 of this Agreement. No
adjustments shall be made for loan loss reserves, investment
portfolios, or accounting adjustments unless such accounting
adjustments are in excess of $200,000 in the aggregate, without the
mutual consent of both parties to this Agreement. With reference
to loan loss reserves, BANK IV acknowledges that it has reviewed
the loan loss reserves as of October 31, 1993, finds that they are
adequate as of that time, and agrees not to request adjustments to
the amount of the loan loss reserves as of that date for the loans
of Bank existing on that date in the absence of material adverse
changes subsequent to that date in the financial condition of a
borrower or borrowers or in the absence of receipt after that date
of additional financial information concerning a borrower or
borrowers which justifies a higher risk reclassification of the
loans of such borrower or borrowers. In event Seller and BANK IV
are unable to agree on any accounting adjustment, adjustment to the
loan loss reserves or investment portfolio, or to any adjustment
which would cause an adjustment in Book Value of the Bank after
good faith negotiations, then this Agreement shall terminate.
5.2. Expenses Caused by BANK IV. The amount of any out
of pocket expense incurred by the Bank on or before Closing as a
result of due diligence efforts undertaken by BANK IV or in
preparation for assuming control of Corporations, including without
limitation but by way of illustration, additional payroll costs
resulting from attendance by employees at seminars to become
familiar with BANK IV methods and procedures, shall be paid by BANK
IV to Bank at Closing or, if this Agreement is terminated without
closing other than by reason of Seller's breach or pursuant to
Section 5.1, to Corporations in reimbursement of such expenses.
ARTICLE VI
CLOSING CONDITIONS
6.1. Conditions to Obligations of BANK IV. The
obligations of BANK IV to purchase the Shares shall be subject to
the following conditions which may, to the extent permitted by Law,
be waived by BANK IV at its option:
a. Absence of Litigation. No order, judgment,
or decree shall be outstanding restraining or enjoining
consummation of the purchase of the Shares; and no
Litigation shall be pending or threatened in which it is
sought to restrain or prohibit the purchase of the Shares
or obtain other substantial monetary or other relief
against one or more of the parties hereto in connection
with this Agreement.
b. Regulatory Approvals. All Required Approvals
shall have been procured (and shall continue to be in
effect) and all other requirements prescribed by Law
shall have been satisfied.
c. Minimum Net Worth of Bank. The Book Value of
the Bank as of the Valuation Date, computed in accordance
with GAAP, except as provided in this Agreement, shall be
not less than $20,000,000.
d. Opinion of Counsel. BANK IV shall have
received the opinion of Morris, Laing, Evans, Brock &
Kennedy, Chartered, counsel to the Corporations and
Seller, substantially in the form of Exhibit "A" hereto.
e. Representations and Warranties; Covenants.
The representations and warranties of Seller contained in
Section 4.1 of this Agreement shall have been true and
correct in all material respects on the date made and
shall be true and correct in all material respects at the
Effective Time as though made at such time, excepting any
changes occurring in the ordinary course of business,
none of which shall have been materially adverse, and
excepting any changes contemplated or permitted by this
Agreement. Seller shall have performed all of its
obligations under this Agreement.
f. Certificates. Seller shall have delivered to
BANK IV a certificate, in form and substance satisfactory
to BANK IV, dated the Effective Time and signed by the
chief executive officer and chief financial officer of
each of Seller and Bank, certifying in such detail as
BANK IV may reasonably request the fulfillment of the
foregoing conditions; provided, that none of the
certifications contained therein shall survive the
Closing except to the extent they pertain to
representations and warranties that survive the Closing
as expressly provided in Section 8.1 of this Agreement.
g. Resignations. Seller shall have delivered to
BANK IV the written resignations, effective at the
Effective Time, of those directors of the Corporations as
BANK IV shall have requested at least five business days
prior to the Effective Time.
h. Delivery of Noncompetition Agreements. The
parties shall have executed and delivered Noncompetition
Agreements substantially in the form of Exhibits "B" and
"C" hereto.
6.2. Conditions to Obligations of Seller. The
obligation of Seller to sell the Shares and to consummate the
transactions contemplated hereby shall be subject to the following
conditions which may, to the extent permitted by Law, be waived by
Seller at its option:
a. General. Each of the conditions specified in
clauses a and b of Section 6.1 shall have occurred and be
continuing.
b. Representations and Warranties; Covenants.
The representations and warranties of BANK IV contained
in Section 4.2 of this Agreement shall have been true and
correct in all material respects on the date made and
shall be true and correct in all material respects at the
Effective Time as though made at such time. BANK IV
shall have duly performed all of its obligations under
this Agreement.
c. Delivery of Noncompetition Agreements. The
parties shall have executed and delivered Noncompetition
Agreements substantially in the form of Exhibits "B" and
"C" hereto.
ARTICLE VII
TERMINATION OF AGREEMENT
7.1. Mutual Consent; Termination Date. This Agreement
shall terminate at any time when the parties hereto mutually agree
in writing. This Agreement may also be terminated at the election
of either Seller or BANK IV, upon written notice from the party
electing to terminate this Agreement to the other party if, without
fault on the part of the party electing to terminate this
Agreement, there has been a denial of a Required Approval. Unless
extended by written agreement of the parties, this Agreement shall
terminate if all conditions to the obligations of the parties
hereto have not occurred on or before May 31, 1994.
7.2. Election by BANK IV. This Agreement shall
terminate at BANK IV's election, upon written notice from BANK IV
to Seller if any one or more of the following events shall occur
and shall not have been remedied to the satisfaction of BANK IV
within 30 days after written notice is delivered to Seller: (a)
there shall have been any material breach of any of the
obligations, covenants, or warranties of the Seller hereunder; or
(b) there shall have been any written representation or statement
furnished by the Seller hereunder which at the time furnished is
false or misleading in any material respect in relation to the size
and scope of the transactions contemplated by this Agreement. BANK
IV shall also have the right to terminate this Agreement without
such 30 days' written notice if the parties are unable to agree as
to adjustments to Book Value of Bank as provided in Section 5.1 of
this Agreement.
7.3. Election by Seller. This Agreement shall
terminate at the election of Seller upon written notice from Seller
to BANK IV if any one or more of the following events shall occur
and shall not have been remedied to its satisfaction within 30 days
after written notice is delivered to BANK IV: (a) there shall have
been any material breach of any of the obligations, covenants, or
warranties of BANK IV hereunder; or (b) there shall have been any
written representation or statement furnished by BANK IV hereunder
which at the time furnished is false or misleading in any material
respect in relation to the size and scope of the transactions
contemplated by this Agreement. Seller shall also have the right
to terminate this Agreement without such 30 days' written notice if
the parties are unable to agree as to adjustments to Book Value of
Bank as provided in Section 5.1 of this Agreement.
7.4. Effect of Termination. If either party commits a
material breach of its obligations, covenants, or representations
which gives the other party the right to elect to terminate as
provided in this Article VII, termination shall be the sole remedy
of the other party prior to Closing absent a willful breach of such
obligations, covenants, warranties, or representations. Upon
termination of this Agreement for any reason as provided in this
Article VII, this Agreement shall become null and void and of no
further force and effect, except that BANK IV shall keep
confidential information acquired by it through its due diligence
investigation, whether performed before or after execution of this
Agreement, shall destroy all memoranda, summaries, or other
writings based upon such information, and shall upon Seller's
request return all documents or instruments obtained through such
due diligence investigation, and shall not use any such information
to compete against Bank for loans or other transactions or
relationships or for Bank's customers, and shall reimburse
Corporations for any expenses as provided in Section 5.2 of this
Agreement.
ARTICLE VIII
INDEMNIFICATION
8.1. Closing; Survival of Representations and
Warranties. Notwithstanding any rule of law or provision of this
Agreement to the contrary, upon Closing all representations,
warranties, and obligations of the parties under this Agreement
shall be deemed to be true and fulfilled and shall not survive the
Closing, except that the representations and warranties of Seller
contained in subparagraphs (a), (c), (d), (f), (l), and (r), of
Section 4.1 of this Agreement and the provisions of Sections 8.4
and 9.9 of this Agreement shall survive the Closing.
8.2. Indemnification. Seller shall be liable for, and
shall defend, save, indemnify, and hold harmless BANK IV, the
Corporations, and their respective successors, officers, directors,
employees, and agents, and each of them (hereinafter individually
referred to as an "Indemnitee" and collectively as "Indemnitees")
against and with respect to any losses, liabilities, claims,
diminution in value, litigation, demands, damages, costs, charges,
reasonable legal fees, suits, actions, proceedings, judgments,
expenses, or any other losses (herein collectively referred to as
"Indemnifying Losses") that may be sustained, suffered, or incurred
by, or obtained against, any Indemnitee arising from or by reason
of the breach or nonfulfillment of any of the warranties,
agreements, or representations made by the Seller in subparagraphs
(a), (c), (d), (f), (l), and (r) of Section 4.1 of this Agreement.
8.3. Procedure. If any claim or demand shall be made
or liability asserted against any Indemnitee, or if any Litigation,
suit, action, or administrative or legal proceedings shall be
instituted or commenced in which any Indemnitee is involved or
shall be named as a defendant either individually or with others,
and if such Litigation, claim, demand, liability, suit, action, or
proceeding, if successfully maintained, will result in any
Indemnifying Losses as defined in Section 8.2, BANK IV shall give
Seller written notice thereof within 20 days after it acquires
knowledge thereof. If, within 20 days after the giving of such
notice, BANK IV receives written notice from Seller stating that
Seller disputes or intends to defend against such claim, demand,
liability, suit, action, or proceeding, then Seller shall have the
right to select counsel of its choice and to dispute or defend
against or settle such claim at its expense, and the Indemnitees
shall fully cooperate with Seller in such dispute or defense or
settlement so long as Seller is conducting such dispute or defense
diligently and in good faith. If no such notice of intent to
dispute or defend is received by BANK IV within the aforesaid 20-
day period, of if such diligent and good faith defense is not
being, or ceases to be, conducted, BANK IV shall have the right,
directly or through one or more of the Indemnitees, to dispute and
defend against the claim, demand, or other liability at the cost
and expense of Seller, to settle such claim, demand, or other
liability, together with interest or late charges thereon, and in
either event to be indemnified as provided in this Agreement so
long as BANK IV conducts such defense diligently and in good faith.
If any event shall occur that would entitle Indemnitees to a right
of indemnification hereunder, any loss, damage, or expense subject
to indemnification shall be the after-tax net loss to the
Indemnitees after due allowance for the income tax effect, if any,
of amounts to be received by the Indemnitees hereunder, insurance,
or offsetting income or assets resulting therefrom.
8.4. Agreement as to Particular Contingent Liability.
If at or after the Effective Time any claim, demand, suit, or
cross-claim against Bank is pending and unresolved or any claim or
demand is made or suit or cross-claim is filed against Bank arising
or alleged to have arisen in any manner out of any act, error, or
omission done, made, or omitted by the Bank performing trust
services in connection with Satco, Ltd., including without
limitation, any claim, liability, or judgment arising in any manner
out of Case No. 88 C 438, entitled City of South Hutchinson, Kansas
and Hutchinson National Bank and Trust Company v. Satco Ltd., et
al., pending in the District Court of Reno County, Kansas, and any
subsequent claims or legal proceedings with respect to the Bank's
relationship with Satco, Ltd., whether based on the Bank's services
as trustee, as purchaser of industrial revenue bonds, as lender, or
otherwise, BANK IV shall defend or cause Bank to defend against
such claims, demands, suit, or cross-claim as BANK IV may deem
advisable and appropriate. BANK IV shall have the right to select
and employ counsel of its choice for such defense and shall have
full control of such defense, including the power and authority to
enter into any settlement or compromise as it may deem advisable,
but shall keep Seller reasonably advised of all negotiations,
actions, and proceedings in such defense. Seller shall fully
cooperate with BANK IV in such defense, and may at Seller's expense
employ counsel to monitor such defense, but such counsel shall have
no right to conduct such defense or participate therein. All costs
and expenses, including attorneys' fees, in conducting such defense
shall be paid by BANK IV or Bank, but any money awarded or paid to
the claimant or claimants, whether resulting from a judgment or a
settlement and compromise, shall be paid 50% by Seller and 50% by
BANK IV or Bank.
ARTICLE IX
MISCELLANEOUS
9.1. Expenses. Whether or not the Purchase is
effected, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expense, except as provided in Section
5.2.
9.2. Notices. All notices or other communications
required or permitted hereunder, except as otherwise provided in
this Agreement, shall be sufficiently given if personally delivered
or if sent by certified or registered mail, postage prepaid, return
receipt requested, addressed as follows: (a) If to BANK IV,
addressed to K. Gordon Greer, Chairman of the Board, Post Office
Box 4, Wichita, KS 67201; and (b) if to the Seller, addressed to
W. A. Michaelis, Jr., Chairman of the Board of Emprise Financial
Corporation, P. O. Box 247, Wichita, KS 67201, with a copy to
Ralph R. Brock, attorney-at-law, Fourth Floor, 200 West Douglas,
Wichita, KS 67202, or to such other person or such other address
as shall have been furnished in writing in the manner provided
herein for giving notice.
9.3. Time. Time is of the essence of this Agreement.
9.4. Law Governing. This Agreement shall, except to
the extent federal law is applicable, be construed in accordance
with and governed by the laws of the State of Kansas, without
regard to the principles of conflicts of laws thereof.
9.5. Entire Agreement; Amendment. This Agreement and
the agreements expressly provided for herein together contain and
incorporate the entire agreement and understanding of the parties
hereto with respect to the subject matter hereof and supersede all
prior negotiations, agreements, letters of intent, and
understandings. This Agreement may only be amended by an
instrument in writing duly executed by BANK IV and Seller and all
attempted oral waivers, modifications, and amendments shall be
ineffective.
9.6. Successors and Assigns. The rights and
obligations of the parties hereto shall inure to the benefit of and
shall be binding upon the successors and permitted assigns of each
of them; provided, however, that this Agreement or any of the
rights, interests, or obligations hereunder may not be assigned by
either of the parties hereto without the prior written consent of
the other party hereto.
9.7. Cover, Table of Contents, and Headings. The
cover, table of contents, and the headings of the sections and
subsections of this Agreement are for convenience of reference only
and shall not be deemed to be a part hereof or thereof or taken
into account in construing this Agreement.
9.8. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original
but which together shall constitute but one agreement.
9.9. Non-Competition. For a period of five years from
the Effective Time, Seller will not, within Reno, Pratt, Meade,
Finney, or McPherson Counties in Kansas, directly or indirectly,
own, manage, operate, or otherwise be connected with the ownership,
management, operation or control of any business engaged in the
business of commercial banking, of making consumer or commercial
loans, or of accepting deposits; provided, however, that after 30
months from the Effective Time, the restriction contained herein
pertaining to McPherson County, Kansas shall be reduced to comprise
an area within a radius of five miles of Lindsborg, Kansas. It is
understood that any banking business conducted by banks that are at
such time Subsidiaries of Seller which does not breach the
covenants in the Noncompetition Agreements of W. A. Michaelis, Jr.
and M. D. Michaelis, Exhibits "B" and "C" hereto, shall not
constitute a breach of the restrictive covenant contained in this
Section 9.9. If, at any time during the period the restrictions
described in the preceding sentence are in effect, all of the
issued and outstanding capital stock of Seller is sold to, or
Seller is merged into, a wholly unrelated and unaffiliated third
party not controlled by any one or more of Seller's former
stockholders, all of such restrictions shall terminate except that
such purchaser shall not use the name "Emprise Bank" or a variation
thereof within the area described in the preceding sentence during
the remainder of such period. Seller agrees that, in addition to
all other remedies otherwise available to BANK IV and the Bank,
BANK IV and the Bank shall each have the right to injunctive relief
to restrain and enjoin any actual or threatened breaches of this
provision and that if in any litigation that might arise over the
provisions contained in this Section a court should determine that
the restrictions contained in this Section are too broad, or too
long in duration, or too broad in geographic scope to be
enforceable in equity, such provisions as such court might find
unenforceable are amended only so much as shall be necessary in
order for the restrictions contained herein to be enforceable and,
as so amended, shall be enforced by such court.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed.
BANK IV KANSAS, NATIONAL ASSOCIATION
By
--------------------------
/s/K. Gordon Greer,
Chairman of the Board
"BANK IV"
[signatures continued]
EMPRISE FINANCIAL CORPORATION
By
---------------------------
"Seller"
AGREEMENT TO MERGE
between
BANK IV KANSAS, NATIONAL ASSOCIATION,
and
EMPRISE BANK, NATIONAL ASSOCIATION
under the charter of
BANK IV KANSAS, NATIONAL ASSOCIATION
under the title of
BANK IV KANSAS, NATIONAL ASSOCIATION
THIS AGREEMENT made among BANK IV Kansas, National
Association (hereinafter referred to as "BANK IV"), a banking
association organized under the laws of the United States, being
located at 100 North Broadway, City of Wichita, County of Sedgwick,
in the State of Kansas, with a capital of $356,457,292.74 divided
into 9,254,200 shares of common stock, each of $5.00 par value, and
surplus of $218,601,457.92 and undivided profits, including capital
reserves, of $91,584,834.82 as of December 31, 1993, and Emprise
Bank, National Association, a national banking association
organized under the laws of the United States (hereinafter referred
to as "Emprise") being located at 20 West Second, Hutchinson,
County of Reno, in the State of Kansas, with a capital of
$5,000,000, divided into 500,000 shares of common stock, each of
$10.00 par value, and surplus of $_________ and undivided profits,
including capital reserves, of $_________ as of December 31, 1993,
each acting pursuant to a resolution of its board of directors,
adopted by the vote of a majority of its directors, pursuant to the
authority given by and in accordance with the provisions of the Act
of November 7, 1918, as amended (12 USC Section 215a).
W I T N E S S E T H: That,
Section 1. Emprise shall be merged into BANK IV under
the charter of the latter.
Section 2. The name of the receiving association
(hereinafter referred to as the "Association") shall be BANK IV
Kansas, National Association.
Section 3. The business of the Association shall be that
of a national banking association. This business shall be
conducted by the Association at its main office which shall be
located at 100 North Broadway, Wichita, Kansas, and at its legally
established branches.
Section 4. At the time the merger shall be effective,
the amount of capital stock of the Association shall be
$361,457,292.74, divided into 10,254,200 shares of common stock,
each of $5.00 par value, the Association shall have a surplus of
$___________, and undivided profits, including capital reserves,
which when combined with the capital and surplus will be equal to
the combined capital structures of the merging banks as stated in
the preamble of this Agreement, adjusted, however, for normal
earnings and expenses (and if applicable, purchase accounting
adjustments) between December 31, 1993, and the effective time of
the merger. The amount of capital stock of the Association and its
surplus and undivided profits at the time the merger becomes
effective shall also be adjusted to reflect the effect of all
mergers of other banks into the Association, if any, between
December 31, 1993 and the effective time of the merger.
Section 5. All assets as they exist at the effective
time of the merger shall pass to and vest in the Association
without any conveyance or other transfer. The Association shall be
responsible for all of the liabilities of every kind and
description, including liabilities arising from the operation of a
trust department, of each of the merging entities existing as of
the effective time of the merger.
Section 6. Of the capital stock of the Association, the
presently outstanding 9,254,200 shares of common stock, each of
$5.00 par value, the holder of it, Fourth Financial Corporation,
shall retain its present rights. In addition, Fourth Financial
Corporation shall receive an additional 1,000,000 shares of common
stock of the Association by reason of the merger. Upon the merger
becoming effective, all of the issued and outstanding shares of
capital stock of Emprise shall be cancelled.
Section 7. Except as expressly permitted in a Stock
Purchase Agreement dated as of January 31, 1994, between BANK IV
and Emprise Financial Corporation (the "Stock Purchase agreement"),
Emprise shall not (i) declare or pay any dividend to its
shareholders, (ii) dispose of any of its assets in any other manner
except in the normal course of business and for adequate value, or
(iii) take any other action which would violate the terms of the
Stock Purchase Agreement.
Section 8. The present board of directors and officers
of BANK IV shall continue to serve as the board of directors and
officers of the Association until the next annual meeting or until
such time as their successors have been elected and have qualified.
Section 9. The merger shall be effective immediately
following the Purchase as such term is defined in the Stock
Purchase Agreement. Effective as of the time this merger shall
become effective as specified in the merger approval to be issued
by the Comptroller of the Currency, the articles of association of
BANK IV as then in effect shall be the articles of association of
the resulting bank.
Section 10. This Agreement may be terminated as provided
in the Stock Purchase Agreement. Notwithstanding the approval of
this Agreement by any stockholder group, this Agreement shall
automatically terminate upon the termination of the Stock Purchase
Agreement for any reason, and in no event shall the merger of
Emprise into BANK IV occur prior to the consummation of the
Purchase as such term is defined in the Stock Purchase Agreement.
Section 11. This Agreement shall be ratified and
confirmed by the affirmative vote of stockholders of each of the
merging banks owning at least two-thirds of its capital stock
outstanding, at a meeting to be held on the call of the directors;
and the merger shall become effective at the time specified in a
merger approval to be issued by the Comptroller of the Currency of
the United States.
WITNESS, the signatures and seals of said merging
entities as of the ___ day of _______ 1994, each set by its
chairman of the board, president, or a vice president and attested
to by its cashier or secretary, pursuant to a resolution of its
board of directors, acting by a majority:
BANK IV KANSAS,
NATIONAL ASSOCIATION
Attest:
By
--------------------------
- ------------------------- /s/K. Gordon Greer,
/s/John C. Maloney, Secretary Chairman of the Board
and President
[Seal of Bank]
EMPRISE BANK, NATIONAL
ASSOCIATION
By
---------------------------
________________, President
Attest:
_______________________
______________, Secretary
[Seal of Bank]
STATE OF KANSAS )
) SS:
SEDGWICK COUNTY )
On this ____ day of _______, 1994, before me, a notary
public for this state and county, personally came K. Gordon Greer,
as chairman of the board and president, and John C. Maloney, as
secretary, of BANK IV Kansas, National Association, a national
banking association, and each in his capacity acknowledged this
instrument to be the act and deed of the association and the seal
affixed to it to be its seal.
WITNESS my official seal and signature this day and year.
--------------------
Notary Public
My Appointment Expires:
- -----------------------
STATE OF KANSAS )
) SS:
RENO COUNTY )
On this ___ day of _______, 1994, before me, a notary
public for this state and county, personally came ________________
as president, and ______________ as secretary of Emprise Bank,
National Association, a national banking association, and each in
his/her capacity acknowledged this instrument to be the act and
deed of the bank and the seal affixed to it to be its seal.
WITNESS my official seal and signature this day and year.
--------------------
Notary Public
My Appointment Expires:
- -----------------------
EXHIBIT "A"
_______, 1994
Board of Directors
BANK IV Kansas, National Association
100 North Broadway
Wichita, Kansas 67202
Gentlemen:
We have acted as counsel to Emprise Financial Corporation
("Seller") in connection with the preparation of the Stock Purchase
Agreement, dated as of January 31, 1994, between BANK IV Kansas,
National Association and Seller (the "Agreement"). This Opinion
Letter is provided to you at the request of Seller pursuant to
Section 6.1(d) of the Agreement. Except as otherwise indicated
herein, capitalized terms used in this Opinion Letter are defined
in the Agreement or the Accord described below.
This Opinion Letter is governed by, and shall be
interpreted in accordance with, the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991). As a
consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, and
this Opinion Letter should be read in conjunction therewith. The
law covered by the opinions expressed herein is limited to the
Federal Law of the United States and the Law of the State of
Kansas.
For purposes of this Opinion Letter, we have relied upon
factual representations made by Seller in Section 4.1 of the
Agreement. In addition, the opinions as to (a) due organization of
the Seller and the Corporations in Paragraph 1 of this Opinion
Letter, (b) capitalization of the Corporation and lack of
encumbrances, liens, and security interests relating to the Bank
Stock owned by Seller in Paragraph 4 of this Opinion Letter, and
(c) options of the Corporation in Paragraph 5 of this Opinion
Letter, are based solely on our review of the Constituent
Documents, minute books, and stock records of the Corporations
furnished to us by representatives of Seller.
Based upon and subject to the foregoing, we are of the
opinion that:
1. Organization, Good Standing, and Authority.
Seller is a bank holding company duly registered pursuant
to the Bank Holding Company Act. Seller and the
Corporations are each a corporation or bank duly
organized, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation.
2. Binding Obligations. The Agreement is
enforceable against the Seller.
3. Absence of Default. None of the execution or
the delivery of the Agreement, the consummation of the
Purchase, or the fulfillment of the terms thereof, will
(1) violate the Constituent Documents of either of the
Corporations or of Seller or any agreement or instrument
under which Seller is obligated, or (2) violate
applicable provisions of any order or understandings
issued to or entered into by Seller or by any of the
Corporations by any governmental agency or body having
regulatory authority over their business or affairs.
4. Capitalization. The Bank is authorized to
issue 500,000 shares of common stock, par value $10 per
share, all of which are validly issued and outstanding.
Emprise Building Corp.-Hutchinson is authorized to issue
100,000 shares of common stock, par value $1 per share,
of which 30,000 shares are validly issued and outstanding
and owned by the Bank. Seller is the owner, free and
clear of all encumbrances, liens, and security interests
whatsoever, of all issued and outstanding shares of Bank
Stock, except that the Shares are subject to a security
interest of BANK IV given to secure a loan from BANK IV
to Seller.
5. Options. To our Actual Knowledge, neither of
the Corporations has outstanding any options, warrants,
or rights of any kind requiring it to sell or issue to
anyone any capital stock of any class and neither of the
Corporations has agreed to sell any shares of its capital
stock.
6. Governmental Approvals. The execution,
delivery, and performance of the Agreement by Seller do
not require any approval, authorization, consent,
exemptions, notices of intent not to disapprove, or other
action of any regulatory body, administrative agency, or
any other governmental body or any filing with any
governmental body to which Seller or either Corporation
is subject, other than approvals of or filing with the
Board and the Comptroller. All such requisite approvals,
authorizations, consents, exemptions, and notices have
been taken by the appropriate governmental body.
We hereby confirm to you that to our Actual Knowledge
there are no actions or proceedings against either Corporation,
pending or overtly threatened in writing, before any court,
governmental agency or arbitrator which (i) seek to affect the
enforceability of the Agreement or (ii) seek damages in excess of
$25,000, except as described in the Disclosure Statement. In this
connection, we also confirm to you that we do not ordinarily
represent either Corporation in actions or proceedings in which
they are or may be involved or in the conduct of their legal
affairs.
The phrase "Primary Lawyer Group", as used in the Accord,
is hereby modified and, for the purposes of applying the Accord to
this Opinion Letter, the Primary Lawyer Group means only the
lawyers in this firm who have given substantive legal attention to
representation of Seller and the Corporations in connection with
the Transaction.
This Opinion Letter may be relied upon by you only in
connection with the Transaction and may not be used or relied upon
by you or any other person for any purpose whatsoever, except to
the extent authorized in the Accord, without in each instance our
prior written consent.
Very truly yours,
/s/Morris, Laing, Evans, Brock &
Kennedy, Chartered
EXHIBIT "B"
NONCOMPETITION AGREEMENT
------------------------
THIS AGREEMENT, made and entered into on the ___ day of
____________, 1994, by and between BANK IV KANSAS, NATIONAL
ASSOCIATION, a national banking association, hereinafter referred
to as "BANK IV"; and W. A. MICHAELIS, JR., hereinafter referred to
as "Michaelis."
W I T N E S S E T H: That,
- - - - - - - - - -
WHEREAS, contemporaneous with the execution and delivery
of this Agreement BANK IV is purchasing all of the issued and
outstanding capital stock ("Bank Stock") of Emprise Bank, National
Association, Hutchinson, Kansas (the "Bank") from Emprise Financial
Corporation ("Seller") pursuant to a Stock Purchase Agreement dated
as of January 31, 1994 (the "Agreement"); and
WHEREAS, Michaelis, as a substantial stockholder of
Seller, will receive substantial benefits from the sale of the Bank
Stock to BANK IV; and
WHEREAS, Michaelis holds senior management level
positions with Seller and has held senior management level
positions with Bank; and
WHEREAS, Seller owns and may hereafter acquire other
banks (which banks, whether now or hereafter acquired, are
hereinafter referred to as "Other Banks") located and doing
business in the State of Kansas over which Michaelis has control;
and
WHEREAS, the Agreement provides that the parties hereto
will enter into this Noncompetition Agreement;
NOW THEREFORE, in consideration of the premises and the
covenants contained herein and the payments to be made to Michaelis
pursuant to this Agreement and the Agreement, the parties hereto
agree as follows:
1. Consideration. Contemporaneous with the execution
and delivery of this Agreement, BANK IV has paid Michaelis
$400,000, receipt of which is hereby acknowledged by Michaelis.
2. Relationship, Confidence, and Trust. Michaelis
acknowledges that during the period Seller owned the Bank and he
held a senior management level position, he acquired valuable and
confidential information, trade secrets, and relationships with
respect to the Bank's successful business practices and operations,
including, by way of illustration and not of limitation, knowledge
of the Bank's customers, prices, costs, and future plans
(collectively "Proprietary Information"). As a consequence of the
foregoing, Michaelis occupied a position of trust and confidence
with respect to the Bank's affairs. In view of the foregoing and
in consideration of the consideration paid to him, Michaelis agrees
that it is reasonable and necessary for the protection of the
goodwill and business of the Bank and BANK IV that he make the
covenants contained in Paragraphs 3 and 4 regarding his conduct,
and that BANK IV and the Bank will suffer irreparable injury if he
engages in conduct prohibited thereby. The covenants contained in
Paragraphs 3 and 4 shall each be construed to be a separate
agreement independent of any other provision of this Agreement, and
the existence of any claim or cause of action of Michaelis against
BANK IV or the Bank, predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by BANK IV or the
Bank of any of said covenants.
3. Disclosure of Proprietary Information. Michaelis
recognizes and acknowledges that the Proprietary Information and
all other information as to the business affairs of the Bank not
generally known to the public, as the same may exist from time to
time, are confidential information and are valuable, special, and
unique assets of BANK IV's and the Bank's business. Michaelis
therefore agrees that he will never disclose any of the Proprietary
Information, or any other information as to the business affairs of
the Bank to any person, firm, corporation, association, or other
entity for any reason or purpose whatsoever; provided, that
Michaelis may make use of such information in managing the Other
Banks. In the event of a breach or threatened breach by Michaelis
of the provisions of this paragraph, the Bank and BANK IV shall
each be entitled to injunctive or other equitable relief enjoining
and restraining him from disclosing, in whole or in part, any such
Proprietary Information. Nothing herein shall be construed as
prohibiting BANK IV or the Bank from pursuing any other remedies
available to BANK IV or the Bank for such breach or threatened
breach.
4. Restrictive Covenant. For a period of five years
from the date of this Agreement, Michaelis will not, within Reno,
Pratt, Meade, Finney, or McPherson Counties in Kansas, without the
prior written consent of BANK IV, directly or indirectly, own,
manage, operate, consult with, be employed by, or be connected with
the ownership, management, operation, or control of any business
engaged in the business of commercial banking, of making consumer
or commercial loans, or of accepting deposits; provided, however,
that after 30 months from the date hereof, the restriction
contained herein pertaining to McPherson County, Kansas shall be
reduced to comprise an area within a radius of five miles of
Lindsborg, Kansas. Without limiting the generality of the
foregoing, Michaelis will not, directly or indirectly through
Seller or any Other Bank or entity while owned or controlled by
him, solicit during the above five-year or 30-month periods any
customers of Bank in the above prohibited areas for loans or
deposits or other banking business; provided, however, that loans,
deposits, or other banking business may be conducted with such
customers if they voluntarily on their own initiative without such
solicitation choose to conduct banking business with Other Banks;
and provided, further, that Other Banks conducting any banking
business with customers of Bank who are also customers of Other
Banks or who were referred to Bank by an Other Bank shall not
constitute a violation of this Agreement. It is also understood
that newspaper, magazine, regional telephone directories, radio,
television, or other advertising by Other Banks, although published
to target customers and to develop business in areas other than the
above prohibited areas, may also be received, delivered, or
otherwise reach the prohibited areas, and the fact that such
advertising may reach the prohibited areas likewise shall not
constitute a violation of this Agreement.
5. Remedies on Breach. Michaelis agrees that, in
addition to all other remedies otherwise available to BANK IV and
the Bank, BANK IV and the Bank shall each have the right to
injunctive relief to restrain and enjoin any actual or threatened
breaches of this provision and that if in any litigation that might
arise over the provisions contained in this paragraph a court
should determine that the restrictions contained in this paragraph
are too broad, or too long in duration, or too broad in geographic
scope to be enforceable in equity, such provisions as such court
might find unenforceable are amended only so much as shall be
necessary in order for the restrictions contained herein to be
enforceable and, as so amended, shall be enforced by such court.
6. Notices. Any notices required or permitted to be
given under this Agreement shall be sufficient if in writing, and
if sent by registered or certified mail to his or her last known
residence in the case of Michaelis, or to its principal office in
the case of BANK IV.
7. Waiver of Breach. The waiver of a breach of any
provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach.
8. Assignment. The rights and obligations of BANK IV
under this Agreement shall inure to the benefit of, and shall be
binding upon, BANK IV, the Bank, and their respective successors
and assigns. Obligations of Michaelis contained herein are
obligations personal to and binding only on Michaelis, and
Michaelis shall not have the right to assign any of the rights or
obligations contained in this Agreement.
9. Entire Agreement. This instrument contains the
entire agreement of the parties. It may not be changed orally but
only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension, or
discharge is sought.
IN WITNESS WHEREOF, the parties have executed this
Agreement on the day, month, and year first above written.
BANK IV Kansas, National
Association
By____________________________
/s/K. Gordon Greer, Chairman of
the Board
"BANK IV"
______________________________
/s/W. A. Michaelis, Jr.
"Michaelis"
EXHIBIT "C"
NONCOMPETITION AGREEMENT
------------------------
THIS AGREEMENT, made and entered into on the ___ day of
____________, 1994, by and between BANK IV KANSAS, NATIONAL
ASSOCIATION, a national banking association, hereinafter referred
to as "BANK IV"; and M. D. MICHAELIS, hereinafter referred to as
"Michaelis."
W I T N E S S E T H: That,
- - - - - - - - - -
WHEREAS, contemporaneous with the execution and delivery
of this Agreement BANK IV is purchasing all of the issued and
outstanding capital stock ("Bank Stock") of Emprise Bank, National
Association, Hutchinson, Kansas (the "Bank") from Emprise Financial
Corporation ("Seller") pursuant to a Stock Purchase Agreement dated
as of January 31, 1994 (the "Agreement"); and
WHEREAS, Michaelis, as a substantial stockholder of
Seller, will receive substantial benefits from the sale of the Bank
Stock to BANK IV; and
WHEREAS, Michaelis holds senior management level
positions with Seller and has held senior management level
positions with Bank; and
WHEREAS, Seller owns and may hereafter acquire other
banks (which banks, whether now or hereafter acquired, are
hereinafter referred to as "Other Banks") located and doing
business in the State of Kansas over which Michaelis has control;
and
WHEREAS, the Agreement provides that the parties hereto
will enter into this Noncompetition Agreement;
NOW THEREFORE, in consideration of the premises and the
covenants contained herein and the payments to be made to Michaelis
pursuant to this Agreement and the Agreement, the parties hereto
agree as follows:
1. Consideration. Contemporaneous with the execution
and delivery of this Agreement, BANK IV has paid Michaelis
$600,000, receipt of which is hereby acknowledged by Michaelis.
2. Relationship, Confidence, and Trust. Michaelis
acknowledges that during the period Seller owned the Bank and he
held a senior management level position with Bank, he acquired
valuable and confidential information, trade secrets, and
relationships with respect to the Bank's successful business
practices and operations, including, by way of illustration and not
of limitation, knowledge of the Bank's customers, prices, costs,
and future plans (collectively "Proprietary Information"). As a
consequence of the foregoing, Michaelis occupied a position of
trust and confidence with respect to the Bank's affairs. In view
of the foregoing and in consideration of the consideration paid to
him, Michaelis agrees that it is reasonable and necessary for the
protection of the goodwill and business of the Bank and BANK IV
that he make the covenants contained in Paragraphs 3 and 4
regarding his conduct, and that BANK IV and the Bank will suffer
irreparable injury if he engages in conduct prohibited thereby.
The covenants contained in Paragraphs 3 and 4 shall each be
construed to be a separate agreement independent of any other
provision of this Agreement, and the existence of any claim or
cause of action of Michaelis against BANK IV or the Bank,
predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by BANK IV or the Bank of any of said
covenants.
3. Disclosure of Proprietary Information. Michaelis
recognizes and acknowledges that the Proprietary Information and
all other information as to the business affairs of the Bank not
generally known to the public, as the same may exist from time to
time, are confidential information and are valuable, special, and
unique assets of BANK IV's and the Bank's business. Michaelis
therefore agrees that he will never disclose any of the Proprietary
Information, or any other information as to the business affairs of
the Bank to any person, firm, corporation, association, or other
entity for any reason or purpose whatsoever; provided, that
Michaelis may make use of such information in managing the Other
Banks. In the event of a breach or threatened breach by Michaelis
of the provisions of this paragraph, the Bank and BANK IV shall
each be entitled to injunctive or other equitable relief enjoining
and restraining him from disclosing, in whole or in part, any such
Proprietary Information. Nothing herein shall be construed as
prohibiting BANK IV or the Bank from pursuing any other remedies
available to BANK IV or the Bank for such breach or threatened
breach.
4. Restrictive Covenant. For a period of five years
from the date of this Agreement, Michaelis will not, within Reno,
Pratt, Meade, Finney, or McPherson Counties in Kansas, without the
prior written consent of BANK IV, directly or indirectly, own,
manage, operate, consult with, be employed by, or be connected with
the ownership, management, operation, or control of any business
engaged in the business of commercial banking, of making consumer
or commercial loans, or of accepting deposits; provided, however,
that after 30 months from the date hereof, the restriction
contained herein pertaining to McPherson County, Kansas shall be
reduced to comprise an area within a radius of five miles of
Lindsborg, Kansas. Without limiting the generality of the
foregoing, Michaelis will not, directly or indirectly through
Seller or any Other Bank or entity while owned or controlled by
him, solicit during the above five-year or 30-month periods any
customers of Bank in the above prohibited areas for loans or
deposits or other banking business; provided, however, that loans,
deposits, or other banking business may be conducted with such
customers if they voluntarily on their own initiative without such
solicitation choose to conduct banking business with Other Banks;
and provided, further, that Other Banks conducting any banking
business with customers of Bank who are also customers of Other
Banks or who were referred to Bank by an Other Bank shall not
constitute a violation of this Agreement. It is also understood
that newspaper, magazine, regional telephone directories, radio,
television, or other advertising by Other Banks, although published
to target customers and to develop business in areas other than the
above prohibited areas, may also be received, delivered, or
otherwise reach the prohibited areas, and the fact that such
advertising may reach the prohibited areas likewise shall not
constitute a violation of this Agreement.
5. Remedies on Breach Michaelis agrees that, in
addition to all other remedies otherwise available to BANK IV and
the Bank, BANK IV and the Bank shall each have the right to
injunctive relief to restrain and enjoin any actual or threatened
breaches of this provision and that if in any litigation that might
arise over the provisions contained in this paragraph a court
should determine that the restrictions contained in this paragraph
are too broad, or too long in duration, or too broad in geographic
scope to be enforceable in equity, such provisions as such court
might find unenforceable are amended only so much as shall be
necessary in order for the restrictions contained herein to be
enforceable and, as so amended, shall be enforced by such court.
6. Notices. Any notices required or permitted to be
given under this Agreement shall be sufficient if in writing, and
if sent by registered or certified mail to his or her last known
residence in the case of Michaelis, or to its principal office in
the case of BANK IV.
7. Waiver of Breach. The waiver of a breach of any
provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach.
8. Assignment. The rights and obligations of BANK IV
under this Agreement shall inure to the benefit of, and shall be
binding upon, BANK IV, the Bank, and their respective successors
and assigns. Obligations of Michaelis contained herein are
obligations personal to and binding only on Michaelis, and
Michaelis shall not have the right to assign any of the rights or
obligations contained in this Agreement.
9. Entire Agreement. This instrument contains the
entire agreement of the parties. It may not be changed orally but
only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension, or
discharge is sought.
IN WITNESS WHEREOF, the parties have executed this
Agreement on the day, month, and year first above written.
BANK IV Kansas, National
Association
By____________________________
/s/K. Gordon Greer, Chairman of
the Board
"BANK IV"
______________________________
/s/M. D. Michaelis
"Michaelis"