AGREEMENT AND PLAN OF MERGER
Dated as of April 1, 1998
By and Among
BANDO MCGLOCKLIN SMALL BUSINESS LENDING CORPORATION
and
BANDO MCGLOCKLIN REAL ESTATE INVESTMENT CORPORATION
TABLE OF CONTENTS
Page
1. MERGER.............................................................. 1
1.1. Merger..................................................... 1
1.2. Effective Time............................................. 1
1.3. Rights of Surviving Corporation............................ 1
1.4. Articles of Incorporation and Bylaws of the
Surviving Corporation.................... ................. 2
2. EFFECT OF THE MERGER ON BMREIC COMMON STOCK......................... 2
2.1. Effect on Common Stock..................................... 2
3. REPRESENTATIONS AND WARRANTIES OF BMREIC............................ 2
3.1. Corporate.................................................. 2
3.2. Authority.................................................. 3
3.3. Consents and Approvals; No Violation....................... 3
3.4. Financial Statements....................................... 4
3.5. Tax Matters................................................ 4
3.6. Accounts Receivable........................................ 5
3.7. Interim Changes............................................ 6
3.8. Absence of Undisclosed Liabilities......................... 7
3.9. No Litigation.............................................. 7
3.10. Compliance With Laws and Orders............................ 7
3.11. Title to and Condition of Properties....................... 9
3.12. Insurance.................................................. 11
3.13. Contracts and Commitments.................................. 11
3.14. Employment Compensation.................................... 13
3.15. Fees, Commissions and Expenses............................. 13
3.16. Disclosure................................................. 13
3.17. Bank Accounts.............................................. 13
4. REPRESENTATIONS AND WARRANTIES OF BMSBLC............................ 13
4.1. Organization and Qualification............................. 13
4.2. Consents and Approvals..................................... 14
4.3. Litigation................................................. 14
5. COVENANTS........................................................... 14
5.1. Access to Information...................................... 14
5.2. Conduct of Business Pending the Closing.................... 15
5.3. Efforts to Consummate Transaction.......................... 16
5.4. Title Insurance............................................ 16
5.5. Surveys.................................................... 17
5.6. Merger Expenses............................................ 17
5.7. Dividends Paid by BMREIC............................................ 17
(i)
6. CONDITIONS PRECEDENT TO BMSBLC'S OBLIGATIONS ....................... 17
6.1. Representations and Warranties True as of the
Closing Date........................... ................... 17
6.2. Compliance With Agreement.................................. 17
6.3. Absence of Litigation...................................... 17
6.4. Consents and Approvals..................................... 18
6.5. Due Diligence.............................................. 18
6.6. Shareholder Approval....................................... 18
6.7. Appraisals................................................. 18
6.8. Financing.................................................. 18
6.9. Dissenters' Rights......................................... 18
7. CONDITIONS PRECEDENT TO BMREIC'S OBLIGATIONS........................ 18
7.1. Representations and Warranties True on the Closing Date.... 18
7.2. Compliance With Agreement.................................. 18
7.3. Tax Opinion................................................ 18
8. TERMINATION......................................................... 19
8.1. Termination................................................ 19
8.2. Effect of Termination...................................... 19
9. CLOSING............................................................. 20
9.1. Documents to be Delivered by BMREIC........................ 20
9.2. Documents to be Delivered by BMSBLC........................ 21
10. MISCELLANEOUS....................................................... 21
10.1. Fees and Expenses.......................................... 21
10.2. Disclosure Schedule........................................ 21
10.3. Further Assurance.......................................... 21
10.4. Disclosures and Announcements.............................. 22
10.5. Nonsurvival of Representations, Warranties and Covenants... 22
10.6. Notices.................................................... 22
10.7. Assignment................................................. 23
10.8. Waivers and Amendments..................................... 23
10.9. Law Governing Agreement.................................... 23
10.10. Entire Agreement............................................. 23
10.11. Counterparts................................................. 23
(ii)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 1, 1998 (the
"Agreement"), between BANDO MCGLOCKLIN SMALL BUSINESS LENDING CORPORATION, a
Wisconsin corporation ("BMSBLC") and BANDO McGLOCKLIN REAL ESTATE INVESTMENT
CORPORATION, a Wisconsin corporation ("BMREIC").
RECITALS
A. The Board of Directors of BMSBLC and the Board of Directors of
BMREIC each have determined that a business combination between BMSBLC and
BMREIC is in the best interests of their respective companies and shareholders
and presents an opportunity for their respective companies to achieve long-term
strategic and financial benefits, and accordingly have agreed to effect the
merger provided for herein upon the terms and subject to the conditions set
forth herein.
B. BMSBLC and BMREIC desire to make certain representations,
warranties, covenants and agreements in connection with the merger.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth and intending to be legally bound hereby, the parties hereto agree as
follows:
1. MERGER
1.1. Merger. Subject to the terms and conditions of this Agreement, at
the Effective Times (as defined in Section 1.2), BMREIC shall be merged with and
into BMSBLC in accordance with this Agreement and the separate corporate
existence of BMREIC shall thereupon cease (the "Merger"). The closing of the
Merger (the "Closing") shall take place on the closing date ("Closing Date") as
defined in Section 9. BMSBLC shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "Surviving Corporation"). The Merger
shall have the effects specified in Section 180.1106 of the Wisconsin Business
Corporation Law ("WBCL").
1.2. Effective Time. If all the conditions to the Merger set forth in
Articles 6 and 7 shall have been fulfilled or waived in accordance herewith and
this Agreement shall not have been terminated as provided in Article 8 the
parties hereto shall cause Articles of Merger meeting the requirements of the
WBCL to be properly executed, verified and delivered for filing in accordance
with the WBCL on the Closing Date. The Merger shall become effective upon the
later of the acceptance for record of the Articles of Merger by the Department
of Financial Institutions of the State of Wisconsin in accordance with the WBCL
or the time which the parties hereto shall have agreed upon and designated in
such filings in accordance with applicable law as the effective time of the
Merger (the "Effective Time").
1.3. Rights of Surviving Corporation. BMSBLC, as the surviving
corporation, shall possess all of the rights and privileges that it and BMREIC
had prior to the merger.
1.4. Articles of Incorporation and Bylaws of the Surviving Corporation.
The Articles of Incorporation of BMSBLC in effect immediately prior to the
Effective Time shall be the Articles of Incorporation of the Surviving
Corporation, until duly amended in accordance with applicable law. The Bylaws of
BMSBLC in effect immediately prior to the Effective Time shall be the Bylaws of
the Surviving Corporation, until duly amended in accordance with applicable law.
2. EFFECT OF THE MERGER ON BMREIC COMMON STOCK
2.1. Effect on Common Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof, each share of
common stock $.01 par value per share ("Shares"), of BMREIC issued and
outstanding immediately prior to the Effective Time, subject to the provisions
of Sections 180.1301 through 180.1331 of the WBCL with respect to the rights of
dissenting shareholders of BMREIC, shall be converted into the right to receive
$10.65 per share (the "Merger Consideration") in accordance with the terms and
conditions hereof and as set forth in the Plan of Merger in substantially the
form attached as Exhibit A hereto (the "Plan of Merger"). All Shares issued and
outstanding immediately prior to the Effective Time shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and each holder of a certificate representing any such shares shall cease
to have any rights with respect thereto, except the right to receive the Merger
Consideration in accordance with the Plan of Merger.
3. REPRESENTATIONS AND WARRANTIES OF BMREIC
BMREIC make the following representations and warranties to BMSBLC:
3.1. Corporate.
3.1.(a) Organization. BMREIC is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Wisconsin. BMREIC owns no subsidiaries.
3.1.(b) Corporate Power. BMREIC has all required legal power
and authority to own, operate and lease its properties and to carry on
its business as is now being conducted.
3.1.(c) Qualification. BMREIC is duly licensed and qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction wherein the character of the properties owned or leased by
it, or the nature of its business, makes such licensing or
qualification necessary. The states in which BMREIC and each of its
subsidiaries is licensed or qualified to do business are listed on
Schedule 3.1.(c).
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3.1.(d) Corporate Documents, etc. The copies of the Articles
of Incorporation and By-laws of BMREIC, including any amendments
delivered by BMREIC to BMSBLC and all other records of BMREIC furnished
to BMSBLC are true, correct and complete copies of such instruments as
presently in effect. The directors and officers of BMREIC are listed on
Schedule 3.1.(d).
3.1.(e) Capitalization of BMREIC. BMREIC is authorized to
issue 1,000,000 Shares. As of the date hereof, 10,500 Shares are held
in treasury and 483,023 Shares are issued and outstanding, duly
authorized and issued, fully paid and non-assessable, and owned by
shareholders (beneficially and of record) as set forth on Schedule
3.1(e). Other than the Shares, BMREIC has no outstanding capital stock
and, except as set forth on Schedule 3.1(e), there are no outstanding
options, warrants or similar rights to acquire, or any securities
convertible into or exchangeable for, any capital stock of BMREIC.
Except as set forth on Schedule 3.1(e), there are no outstanding stock
appreciation rights, "phantom stock" or similar arrangements with
respect to BMREIC.
3.2. Authority.
3.2.(a) Power. BMREIC has full power, legal right and
authority to enter into, execute and deliver this Agreement and the
other documents contemplated hereby.
3.2.(b) Authorization. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by the board of directors of BMREIC and
except for approval of the shareholders of BMREIC, no other corporate
proceedings on the part of BMREIC are necessary to authorize this
Agreement or to consummate the transactions so contemplated.
3.2.(c) Validity. This Agreement and documents in connection
therewith have been duly and validly executed and delivered by BMREIC
and when executed and delivered will be the legal, valid and binding
obligation of BMREIC, enforceable in accordance with their terms.
3.3. Consents and Approvals; No Violation. Except as described in
Schedule 3.3 delivered herewith, neither the execution and delivery of this
Agreement by BMREIC nor the consummation of the transactions contemplated hereby
nor compliance by BMREIC with any of the provisions hereof will (a) conflict
with or result in any breach of any provision of the Articles of Incorporation,
as amended, Bylaws, as amended, or other organization documents of BMREIC, (b)
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority (as defined below), except (i) the
filing of Articles of Merger pursuant to the WBCL, or (ii) such filings and
approvals as may be required under the "blue sky," takeover or securities laws
of various states, (c) result in a default (with or without due notice or lapse
of time or both) (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage,
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indenture, contract, license, agreement or other instrument or obligation to
which BMREIC is a party or by which BMREIC, or any of its assets may be bound,
except for such defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been obtained, (d)
result in the creation or imposition of any lien, charge of other encumbrance on
the assets of BMREIC, or (e) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to BMREIC or any of its assets.
"Governmental Authority" shall mean the United States, any foreign country,
state, county, city or other political subdivision, agency or instrumentality
exercising executive, legislative, judicial, regulatory or administration
jurisdiction over any of the parties hereto.
3.4. Financial Statements. Attached hereto as Schedule 3.4 are the
audited balance sheets and statements of income and cash flows of BMREIC as of
and for the fiscal years ended December 31, 1994, 1995, 1996 and unaudited
statements for the fiscal year ended December 31, 1997 (the "Historical
Financials"). The Historical Financials have been prepared in accordance with
the generally accepted accounting principles ("GAAP") consistently applied and
fairly present in all material respects the financial position of BMREIC as of
the date specified and the results of operations of BMREIC for the periods
covered thereby, and BMREIC has no material liabilities or obligations of any
nature (absolute, accrued, contingent or otherwise) that are not either (i)
reflected or reserved against on the audited balance sheet of BMREIC as of
December 31, 1997 (the "Latest Balance Sheet"), or incurred in the ordinary
course of the Business subsequent to the date of the Latest Balance Sheet, or
(ii) set forth on the disclosure schedules hereto.
3.5. Tax Matters.
3.5.(a) Except as set forth on Schedule 3.5.(a), BMREIC has
(i) timely filed all returns and reports of or for taxes and (ii) paid
all taxes which are shown to have come due pursuant to such returns or
reports. All such returns or reports have been prepared in all material
respects in accordance with all applicable laws and requirements and
accurately reflect taxable income of BMREIC. There is no outstanding
claim or issue concerning any liability for taxes of BMREIC asserted,
raised or threatened by any taxing authority. The provision made for
taxes on the Latest Balance Sheet is sufficient for the payment of all
federal, state, foreign, county, local and other income, ad valorem,
excise, profits, franchise, occupation, property, payroll, sales, use,
gross receipts and other taxes (and any interest and penalties) and
assessments, whether or not disputed, at the date of the Latest Balance
Sheet and for all years and periods prior thereto. Since the date of
the Latest Balance Sheet, BMREIC has not incurred any taxes other than
taxes incurred in the ordinary course of business consistent in type
and amount with past practices of BMREIC.
3.5.(b) Except as set forth on Schedule 3.5(b), (i) proper and
accurate amounts have been withheld by BMREIC from its employees and
others for all prior periods in compliance in all material respects
with the tax withholding provisions of applicable federal, state and
local laws and regulations, and proper due diligence steps
4
have been taken in connection with back-up withholding, (ii) tax
returns which are accurate and complete in all material respects have
been filed by BMREIC for all periods for which tax returns were due
with respect to income tax withholding, Social Security and
unemployment taxes, and (iii) the amounts shown on such tax returns to
be due and payable have been paid in full or adequate provision
therefor has been included by BMREIC on the Latest Balance Sheet.
3.5.(c) Except as set forth on Schedule 3.5(c), no tax return
of BMREIC has been audited or examined by the Internal Revenue Service
or any other taxing authority. There are no outstanding agreements,
waivers or arrangements extending the time within which BMREIC may file
any tax return or the statutory period of limitation applicable to any
claim for, or the period for the collection or assessment of, any taxes
due from or with respect to BMREIC for any taxable period. No closing
agreement pursuant to Section 7121 of the Code (or any predecessor
provision) or any similar provision of any state, local or foreign law
has been entered into by or with respect to BMREIC for any tax period.
3.5.(d) Except as set forth on Schedule 3.5(d), no audit or
other proceeding by any court or other governmental or regulatory
authority is pending or threatened with respect to any taxes due from
or with respect to BMREIC or any tax return filed by or with respect to
BMREIC, and there is no pending dispute or claim concerning any tax
liability of BMREIC nor is there any reasonable basis therefor.
3.5.(e) BMREIC has not made and is not obligated to make any
payment, nor is BMREIC or any of its subsidiaries bound by any contract
or other agreement, plan or arrangement covering any person that,
individually or collectively, could give rise to any payment that would
not be deductible under Section 280G or 162(m) of the Code.
3.5.(f) For all years in which it has been in existence,
BMREIC has continuously been organized and operated in conformity with
the requirements for qualification as a real estate investment trust
under the Internal Revenue Code of 1986, as amended (the "Code").
BMREIC has no intention of changing its operations or engaging in
activities which adversely affect its ability to qualify, or make
economically undesirable its continued qualification as, a real estate
investment trust.
3.6. Accounts Receivable. Except as set forth on Schedule 3.6, all
accounts receivable of BMREIC reflected on the Latest Balance Sheet have been
incurred in the normal course of business, represent arm's-length sales actually
made in the ordinary course of business and are collectible in the ordinary
course of business without commencement of legal proceedings, are subject to no
counterclaims or setoffs, and are not in dispute.
5
3.7. Interim Changes. Except as expressly contemplated by this
Agreement or as reflected on Schedule 3.7, since the date of the Latest Balance
Sheet BMREIC has conducted its business only in the ordinary and usual course
and there have not been:
3.7.(a) any changes in the financial condition, assets,
liabilities, prospects, personnel or operations or prospects of BMREIC
or in BMREIC's relationships with lessors, employees or others with
whom it has business dealings, other than changes which individually or
in the aggregate could not reasonably be expected to have a material
adverse effect;
3.7.(b) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting BMREIC;
3.7.(c) any transfer, lease, license or other disposition of
assets of BMREIC other than in the ordinary course of business;
3.7.(d) any occurrence of indebtedness for borrowed money or
any encumbrances placed on any of the assets of BMREIC other than in
the ordinary course of business;
3.7.(e) any change in accounting methods, principles or
practices by BMREIC materially affecting its assets, liabilities or
business, except insofar as may have been required by a change in
generally accepted accounting principles;
3.7.(f) any declaration, setting aside or payment of dividends
or distributions in respect of the Shares (other than those dividends
publicly announced, declared and paid by BMREIC), or any redemption,
purchase or other acquisition of any of BMREIC's securities;
3.7.(g) any entry by BMREIC into any commitment or transaction
material to the condition (financial or other), business or operations
of BMREIC, taken as a whole, which is not in the ordinary course of
business and consistent with past practice;
3.7.(h) any revaluation by BMREIC of any of its assets,
including, without limitation, writing down the value of assets or
writing off notes or accounts receivables other than in the ordinary
course of business and consistent with past practice;
3.7.(i) any waiver by BMREIC of any rights that, singularly or
in the aggregate, are material to the business, assets, financial
condition of results of operation of BMREIC, taken as a whole.
3.7.(j) any material agreement, arrangement or transaction
between BMREIC and a shareholder or any affiliate of a shareholder;
6
3.7.(k) any other transactions not in the ordinary course of
business that, individually or in the aggregate, could have a material
adverse effect; or
3.7.(l) any commitment with respect to any of the foregoing.
3.8. Absence of Undisclosed Liabilities. Except as and to the extent
specifically disclosed in the Latest Balance Sheet, BMREIC does not have any
liabilities, commitments or obligations (secured or unsecured, whether accrued,
absolute, contingent, direct, indirect or otherwise), other than commercial
liabilities and obligations incurred since the date of the Latest Balance Sheet
in the ordinary course of business and consistent with past practice and none of
which has or will have a material adverse effect on the business, financial
condition or results of operation of BMREIC.
3.9. No Litigation. Except as set forth on Schedule 3.9, there are no
pending or threatened (nor within the last ten years has there been any) claims,
actions, suits, arbitrations, proceedings, investigations or inquiries, whether
civil, criminal or administrative ("Litigation") pending or threatened against
BMREIC, its directors, its business or any of its assets, nor does BMREIC know,
or have grounds to know, of any basis for any Litigation. Neither BMREIC nor its
business or assets is subject to any injunction, decree of any court of
competent jurisdiction or order of any government entity.
3.10. Compliance With Laws and Orders.
3.10.(a) Compliance. BMREIC is in compliance with all
applicable laws and orders. BMREIC has not received notice of any
violation or alleged violation of any laws or orders. All reports and
returns required to be filed by BMREIC with any Governmental Authority
have been filed and were accurate and complete when filed.
3.10.(b) Licenses and Permits. Except as set forth on Schedule
3.10(b), BMREIC has all licenses, permits, approvals, authorizations
and consents of all government entities and all certification
organizations required for the conduct of its business. BMREIC is and
has been in compliance with all such permits and licenses, approvals,
authorizations and consents.
3.10.(c) Environmental Matters.
(i) Except as disclosed in Schedule 3.10(c), the
location, construction, occupancy, operation, condition and
use of the real property now or previously owned, leased by or
in the possession of BMREIC (the "Real Property"), the
facilities or improvements located thereon and the operations
and practices of BMREIC are or at the time of ownership, lease
or possession were in substantial compliance at all time with
all environmental laws contained in any regulations, code,
plan, order, decree, judgement, injunction notice or demand
letter issued, entered or promulgated (the "Environmental
Laws") and any restrictive covenant
7
or deed restriction (recorded or otherwise) affecting the Real
Property, including, without limitation, all applicable zoning
ordinances and building codes in effect at the time of
improvement of such Real Property, flood disaster and
occupational health and safety laws.
(ii) BMREIC is not subject to any liability or
obligation, including investigatory or remedial obligations
under any Environmental Laws or the common law with respect to
Hazardous Materials (as defined below), relating to (a) the
environmental conditions on, under or about the Real Property,
including, without limitation, the air, soil, surface water
and groundwater conditions at the Real Property, or (b) the
use, management, handling, transport, treatment, generation,
storage, disposal, release or discharge of any Hazardous
Materials. "Hazardous Material" shall mean any substance or
material (i) which is or becomes defined as a hazardous waste,
hazardous substance, pollutant, contaminant or toxic substance
or water under any Environmental Laws; (ii) which is toxic,
explosive, corrosive, flammable, infectious, radioactive,
mutagenic or otherwise hazardous and is or becomes regulated
by any Governmental Authority; (iii) the presence of which
requires investigation or remediation under any Environmental
Law or common law; or (iv) the presence of which is deemed to
constitute a nuisance, trespass or pose a health or safety
hazard to persons or neighboring properties.
(iii) With the exception of those Hazardous Materials
and activities described in Schedule 3.10(c), no portion of
the Real Property is being used, nor has been used by BMREIC
at any previous time, for the generation, storage, treatment,
processing, disposal or other handling of any Hazardous
Materials.
(iv) BMREIC has not received any notice and is not
aware of any existing condition (including the condition of
the Real Property, whether or not caused by BMREIC) or the
practice of the business conducted by BMREIC which forms or
could form the basis of any claim, action, suit, proceeding,
administrative consent or agreement, litigation or settlement,
hearing or investigation, arising out of the manufacture,
processing, distribution, use, treatment, storage, spill,
disposal, transport or handling of, or the emission,
discharge, release or threatened release into the environment
of, any Hazardous Materials which, if decided against BMREIC
would have a material adverse effect on BMREIC.
(v) BMREIC has listed and described on Schedule
3.10(c) or made available to BMSBLC, as appropriate (a) all
treatment, storage and disposal facilities, as defined in the
Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Section 6901, et seq., as amended, or under similar
Environmental Laws, and all underground storage tanks, whether
empty, filled, or partially filled with
8
any substance, that are located on the Real Property; (b) the
current and past Hazardous Material disposal practices of
BMREIC; and (c) any environmental assessment or environmental
audit reports delivered to BMREIC.
(vi) BMREIC is not required to obtain or apply for
any permit, license, registration, notification or similar
authorization under any Environmental Laws for the conduct of
BMREIC's business or relating to the Real Property, the
facilities, improvements or equipment located thereon.
(vii) No portion of the Real Property has been
designated as a covered facility under the Comprehensive
Environmental Response, Cleanup and Liability Act of 1980
("CERCLA") or included on any similar "superfund" list or
registry or has been made subject to any environmental lien
pursuant to any Environmental Laws or by any Governmental
Authority.
3.10.(d) ERISA Matters. BMREIC has no "Employee Benefit Plans"
as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), that cover any of its employees.
BMREIC has never contributed to a "multiemployer plan" as defined in
Section 3 (37) of ERISA.
3.11. Title to and Condition of Properties.
3.11.(a) Marketable Title. Except as set forth on Schedule
3.11(a), BMREIC has good and marketable title to all of its assets,
free and clear of all liens. Except as set forth on Schedule 3.11(a),
none of BMREIC's assets are subject to any restrictions with respect to
the transferability thereof and BMREIC's title thereto will not be
affected in any way by the transactions contemplated hereby.
3.11.(b) Condition. All property and assets owned or utilized
by BMREIC are in good operating condition and repair, free from any
defects, have been maintained consistent with the standards generally
followed in the industry and are sufficient to carry on the business of
BMREIC.
3.11.(c) Real Property.
(i) Schedule 3.11.(c) sets forth all Real Property
owned by BMREIC, including a description of all land, and all
encumbrances, easements or rights of way of record (or, if not
of record, of which BMREIC has notice or knowledge) granted on
or appurtenant to or otherwise affecting such Real Property,
the zoning classification thereof, and all plants, buildings
or other structures located thereon. There are now in full
force and effect duly issued certificates of occupancy
permitting the Real Property and improvements located thereon
to be legally used and occupied as the same are now
constituted. All of the Real Property has permanent rights of
access to dedicated public highways. No fact
9
or condition exists which would prohibit or adversely affect
the ordinary rights of access to and from the Real Property
from and to the existing highways and roads and there is no
pending or threatened restriction or denial, governmental or
otherwise, upon such ingress and egress. All Real Property on
Schedule 3.11(c) is leased by BMREIC to others. All Real
Property owned by BMREIC is listed on Schedule 3.11(c).
(ii) There is not (a) any claim of adverse possession
or prescriptive rights involving any of the Real Property, (b)
any structure located on any Real Property which encroaches on
or over the boundaries of neighboring or adjacent properties
or (c) any structure of any other party which encroaches on or
over the boundaries of any of such Real Property. None of the
Real Property is located in a flood plain, flood hazard area,
wetland or lakeshore erosion area within the meaning of any
law, regulation or ordinance. No public improvements have been
commenced and, to BMREIC's knowledge none are planned which in
either case may result in special assessments against or
otherwise materially adversely affect any Real Property.
(iii) BMREIC does not have notice or knowledge of any
(a) planned or proposed increase in assessed valuations of any
Real Property, (b) Order requiring repair, alteration, or
correction of any existing condition affecting any Real
Property or the systems or improvements thereat, (c) condition
or defect which could give rise to an order of the sort
referred to in "(b)" above, (d) underground storage tanks, or
any structural, mechanical, or other defects of material
significance affecting any Real Property or the systems or
improvements thereat (including, but not limited to,
inadequacy for normal use of mechanical systems or disposal or
water systems at or serving the Real Property), or (e) work
that has been done or labor or materials that has or have been
furnished to any Real Property during the period of six (6)
months immediately preceding the date of this Agreement for
which liens could be filed against any of the Real Property.
(iv) As to each parcel of Real Property, Schedule
3.11(c) sets forth (a) the location and name of tenant, (b)
lease term, (c) monthly rental (both base and additional rent)
being paid to BMREIC, and (d) renewal option, if any. Complete
and correct copies of all mortgages, deeds of trust, leases
and other documents concerning such real property have been
made available to BMSBLC.
3.11.(d) No Condemnation or Expropriation. Neither the whole
nor any portion of the property or any other assets of BMREIC is
subject to any order to be sold or is being condemned, expropriated or
otherwise taken by any government entity with or without payment of
compensation therefor, nor has any such condemnation, expropriation or
taking been proposed.
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3.11.(e) Personal Property. Except as set forth on Schedule
3.11(e), BMREIC has good and marketable title to its assets (other than
Real Property, which is covered in Section 3.11(c)) free and clear of
all encumbrances. BMREIC's machinery, equipment and other tangible
assets have been maintained in good working condition (except for
normal wear and tear consistent with BMREIC's reported maintenance and
repair expenses as a percentage of revenue over the past three years)
and are sufficient for the current conduct of the business. BMREIC's
accounts receivable represent bona fide obligations arising in the
ordinary course of business and are collectible by BMREIC, net of
reserves for doubtful accounts reflected on the Latest Balance Sheet.
The assets reflected on the Latest Balance Sheet constitute all of the
assets, properties and other rights used in the conduct of the business
except for those assets acquired or disposed of in the ordinary course
of business subsequent to the date of the Latest Balance Sheet.
3.12. Insurance. Set forth on Schedule 3.12 is a complete and accurate
list and description of all forms of insurance presently in effect with respect
to the business and properties of BMREIC, true and correct copies of which have
heretofore been delivered to BMSBLC. All such policies are valid, outstanding
and enforceable policies and provide insurance coverage for the properties,
assets and operations of BMREIC of the kinds, in the amounts and against the
risks customarily maintained by organizations similarly situated. There is no
claim by BMREIC pending under any such policies as to which coverage has been
questioned, denied or disputed by the underwriters of such policies, and BMREIC
has no knowledge of any basis for denial of any claim under any such policy.
3.13. Contracts and Commitments. Except as set forth on Schedule 3.13:
3.13.(a) Personal Property Leases. Except as set forth on
Schedule 3.13.(a), BMREIC has no leases of personal property involving
consideration or other expenditure in excess of $5,000 or involving
performance over a period of more than six months.
3.13.(b) Purchase Commitments. BMREIC has no purchase
commitments for inventory items or supplies that, together with amounts
on hand, constitute in excess of six months normal usage, or which are
at an excessive price.
3.13.(c) Sales Commitments. BMREIC has no sales contracts or
commitments except those made in the ordinary course of business, at
arm's-length, and no such contracts or commitments are for a sales
price which would result in a loss to BMREIC.
3.13.(d) Guarantees. Except as set forth on Schedule 3.13.(d),
BMREIC has not guaranteed the payment or performance of any person,
firm or corporation, agreed to indemnify any person or act as a surety,
or otherwise agreed to be contingently or secondarily liable for the
obligations of any person.
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3.13.(e) Loan Agreements. Except as set forth on Schedule
3.13.(e), BMREIC is not obligated under any loan agreement, promissory
note, letter of credit, or other evidence of indebtedness as a
signatory, guarantor or otherwise.
3.13.(f) Affiliates. Except as disclosed on Schedule 3.13.(f),
BMREIC is not a party to any transaction with (a) any shareholder, (b)
any employee, officer or director of BMREIC, (c) any relative of any
shareholder or of any such employee, officer or director, or (d) any
entity, corporation or partnership that, directly or indirectly, is
controlled by or under common control with any shareholder or with ;any
such employee, officer, director or relative, including without
limitation any contract, or other agreement (i) providing for the
furnishing of services by such person, (ii) providing for the rental of
real or personal property from or to such person, (iii) providing for
the guarantee of any obligation of such person, (iv) requiring any
payment to such person which will continue beyond the Closing Date, or
(v) establishing any right or interest of such person in any of the
assets or rights of BMREIC.
3.13.(g) Other Material Contracts. Schedule 3.13.(g) sets
forth a list of contracts (other than real property leases) relating to
the business to which BMREIC is a party or to which its respective
assets are subject (i) which involve consideration with a value of
$50,000 or more, (ii) which will require BMREIC to purchase or provide
goods or services for a period of more than 180 days after the Closing
Date, (iii) which evidence or provide for any encumbrance on any of its
assets, (iv) which guarantee the performance, liabilities or
obligations of any other entity, (v) which restrict the ability of
BMREIC to conduct any business activities, (vi) which involve any
related party, including the shareholder or any affiliate of a
shareholder, (vii) which are not in the ordinary course of business,
(viii) which are subject to termination or modification by any third
party as a result of the transactions contemplated by this Agreement,
or (ix) which are otherwise material to the business of BMREIC. BMREIC
is not in material breach of any agreement set forth on Schedule
3.13.(g). True and complete copies of all agreements set forth on
Schedule 3.13.(g) have previously been delivered to BMSBLC.
3.13.(h) No Default. BMREIC is not in default under any lease,
contract or commitment, nor has any event or omission occurred which
through the passage of time or the giving of notice, or both, would
constitute a default thereunder or cause the acceleration of any of
BMREIC's obligations or result in the creation of any Lien on any of
the assets owned, used or occupied by BMREIC. No third party is in
default under any lease, contract or commitment to which BMREIC is a
party, nor has any event or omission occurred which, through the
passage of time or the giving of notice, or both, would constitute a
default thereunder or give rise to an automatic termination, or the
right of discretionary termination, thereof.
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3.14. Employment Compensation. Schedule 3.14 contains a true and
correct list of all employees to whom BMREIC is paying compensation, including
bonuses and incentives, at an annual rate in excess of $25,000 for services
rendered or otherwise.
3.15. Fees, Commissions and Expenses. BMREIC has not paid and is not
obligated to pay any brokerage commissions, finders' fees or similar
compensation (including any payments to employees of BMREIC, but excluding fees
to attorneys and accountants) in connection with the transactions contemplated
by this Agreement.
3.16. Disclosure. No representation or warranty by BMREIC nor any
statement, certificate, schedule, document or exhibit hereto furnished or to be
furnished by or on behalf of BMREIC pursuant to this Agreement or in connection
with transactions contemplated hereby, contains or shall contain any untrue
statement of material fact or omits or shall omit a material fact necessary to
make the statements contained therein not misleading. All statements and
information contained in any certificate, instrument, disclosure schedule or
document delivered by or on behalf of BMREIC shall be deemed representations and
warranties by BMREIC.
3.17. Bank Accounts. Schedule 3.17 sets forth the names and locations
of all banks, trust companies, savings and loan associations and other financial
institutions at which BMREIC maintains a safe deposit box, lock box or checking,
savings, custodial or other account of any nature, the type and number of each
such account and the signatories therefore, a description of any compensating
balance arrangements, and the names of all persons authorized to draw thereon,
make withdrawals therefrom or have access thereto.
4. REPRESENTATIONS AND WARRANTIES OF BMSBLC
BMSBLC makes the following representations and warranties to BMREIC.
4.1. Organization and Qualification.
4.1.(a) BMSBLC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Wisconsin.
BMSBLC has all requisite power and authority to own or operate its
properties and conduct its business as it is now being conducted.
BMSBLC is duly qualified and in good standing as a foreign corporation
or entity authorized to do business in each of the jurisdictions in
which the character of the properties owned or held under lease by it
or the nature of the business transacted by it makes such qualification
necessary, except where the failure to be so qualified and in good
standing would not have a material adverse effect on BMSBLC.
4.1.(b) BMSBLC has all requisite corporate power and authority
to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by the Board of Directors of
BMSBLC and, except for the approval of the sole shareholder of BMSBLC
no other
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corporate proceedings on the part of BMSBLC is necessary to authorize
this Agreement or to consummate the transactions so contemplated. This
Agreement has been duly and validly executed and delivered by BMSBLC
and constitutes a valid and binding agreement of BMSBLC, enforceable
against BMSBLC in accordance with its terms.
4.2. Consents and Approvals. Except as set forth on Schedule 4.2, no
filings with, notices to, or approvals of any Governmental Authority are
required to be obtained or made by BMSBLC for the consummation by it of the
transactions contemplated herein.
4.3. Litigation. There are no claims, actions, suits or proceedings
pending against BMSBLC or, to BMSBLC's best knowledge, threatened against BMSBLC
before or by any court or governmental agency which, if adversely determined,
individually or in the aggregate, would materially and adversely affect BMSBLC's
ability to consummate the transactions contemplated herein. BMSBLC is not
presently subject to any injunction, order or other decree of any court of
competent jurisdiction.
5. COVENANTS
5.1. Access to Information.
5.1.(a) Due Diligence. From the date of this Agreement to the
Closing Date, BMREIC shall (i) allow BMSBLC and its representatives to
have reasonable access (subject to tenants' rights) to all BMREIC
employees, real estate, offices, warehouses and other facilities and
property of BMREIC and to its books and records, (ii) permit BMSBLC and
its representatives to make such inspections thereof as BMSBLC may
reasonably require, and (iii) furnish BMSBLC and its representatives
with such financial and operating data, environmental assessments and
other information with respect to the business and real property of
BMREIC as BMSBLC may from time to time reasonably request; provided
that any such investigation shall be conducted in such a manner as not
to interfere unreasonably with the operation of BMREIC's business.
5.1.(b) Confidentiality. If the transactions contemplated by
this Agreement are not consummated, BMSBLC will maintain the
confidentiality of all information and materials obtained from BMREIC
and will not disclose such information to any third party (other than
legal counsel, accountants, advisors and board members), except to the
extent disclosure of any such information is authorized by BMREIC or
required by law. BMREIC acknowledges that the terms and conditions of
this Agreement are confidential, and it agrees not to disclose such
information to any third party without the prior written consent of
BMSBLC.
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5.2. Conduct of Business Pending the Closing. From the date hereof
until the Closing, except as otherwise approved in writing by BMSBLC, BMREIC
shall:
5.2.(a) conduct its business only in the usual, regular and
ordinary course in substantially the same manner as heretofore
conducted and maintain working capital at current levels subject to
normal fluctuation consistent with past experience;
5.2.(b) maintain in all material respects all of the
structures, equipment and other tangible personal property of its
business in its present condition, except for ordinary wear and tear
and damage by unavoidable casualty;
5.2.(c) keep in full force and effect insurance comparable in
amount and scope of coverage to insurance now carried with respect to
its business;
5.2.(d) perform in all material respects all obligations under
leases, agreements, contracts and instruments relating to or affecting
its business;
5.2.(e) maintain the books of account and records of its
business in the usual, regular and ordinary manner;
5.2.(f) comply in all material respects with all statutes,
laws, ordinances, rules and regulations applicable to the conduct of
its business;
5.2.(g) not create or permit the creation of any encumbrance
on the assets of BMREIC;
5.2.(h) not enter into or modify any contract obligating
BMREIC to purchase goods or services for a period of 180 days or more,
or sell, lease, license or otherwise dispose of any asset of its
business (other than dispositions of obsolete assets and inventory in
the ordinary course of business) or acquire any substantial assets
other than the acquisition of replacement assets, inventory and
supplies to be used in its business;
5.2.(i) not declare or pay any dividend or other distribution
on the Shares, except usual and customary dividends in the ordinary
course of business;
5.2.(j) not issue, sell or pledge, or authorize to propose the
issuance, sale or pledge of (i) additional shares of capital stock of
any class, or securities convertible into any such shares, or any
rights, warrants or options to acquire any such shares or other
convertible securities; or (ii) any other securities in respect of, in
lieu of or in substitution for, capital stock outstanding on the date
hereof;
5.2.(k) purchase or otherwise acquire, or proposed to purchase
or otherwise acquire, any of its outstanding securities;
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5.2.(l) authorize, recommend, propose or announce an intention
to authorize, recommend or propose, or enter into an agreement in
principle or an agreement with respect to, any merger, consolidation or
business combination (other than the Merger), any acquisition of a
material amount of assets or securities, any disposition of a material
amount of assets or securities or any material change in its
capitalization, or any entry into a material contract or any release or
relinquishment of any material contract rights, not in the ordinary
course of business;
5.2.(m) propose or adopt any amendments to its Articles of
Incorporation or bylaws;
5.2.(n) acquire, dispose of, encumber or relinquish any
material asset other than the sale of real properties in accordance
with the terms of any option to purchase;
5.2.(o) waive, compromise or settle any right or claim that
would adversely affect the ownership, operation or value of any asset;
or
5.2.(p) agree in writing or otherwise to take any of the
foregoing actions or any action which would make any representation or
warranty in this Agreement untrue or incorrect.
5.3. Efforts to Consummate Transaction. Subject to the terms and
conditions herein provided and to the fiduciary duties of the Boards of
Directors of the parties under applicable law, the parties shall take or cause
to be taken all actions required to consummate the transactions contemplated
hereby, including without limitation such actions as may be necessary to obtain,
prior to the Closing, all necessary governmental or other third-party approvals
and consents required to be obtained in connection with the consummation of the
transactions contemplated by this Agreement.
5.4. Title Insurance. Not less than 15 days prior to the Closing,
BMREIC shall provide to BMSBLC title insurance commitments, issued by a title
insurance company or companies reasonably satisfactory to BMSBLC, agreeing to
issue to BMSBLC standard form owner's policies of title insurance with respect
to all Real Property, together with a copy of each document to which reference
is made in such commitments. Such policies shall be standard ALTA Form 1992
owner's policies in the full fair market value thereof, insuring good and
marketable title thereto (expressly including all easements and other
appurtenances). All policies shall insure title in full accordance with the
representations and warranties set forth herein and shall be subject only to
such conditions and exceptions as shall be reasonably acceptable to BMSBLC, and
shall contain such endorsements as BMSBLC shall reasonably request (including,
but not limited to, an endorsement over rights of creditors, if requested by
BMSBLC or BMSBLC's lender). The cost of such title insurance shall be divided
equally by BMSBLC and BMREIC.
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5.5. Surveys. Not less than fifteen (15) days prior to the Closing,
BMREIC shall provide to BMSBLC surveys of all BMREIC Real Property prepared in
accordance with ALTA/ACSM 1997 standards (including all Table A items other than
item 5), each dated no more than thirty (30) days prior to the Closing and each
detailing the legal description, the perimeter boundaries, all improvements
located thereon, all easements and encroachments affecting each such parcel of
Real Property and such other matters as may be reasonably requested by Buyer or
the title insurance companies, each containing a surveyor certificate reasonably
acceptable to BMSBLC and the title insurance companies, and each prepared by a
registered land surveyor in the state where the Real Property is located
satisfactory to BMSBLC. The cost of such surveys shall be divided equally
between BMSBLC and BMREIC.
5.6. Merger Expenses. Immediately prior to Closing, BMREIC shall pay,
and shall indemnify, defend and hold BMSBLC harmless from and against, each of
the following:
(i) Title Insurance Premiums and Surveys. Fifty percent (50%)
of the premiums for the issuance of the title insurance policies issued
pursuant to Section 5.4 hereof, and fifty percent (50%) of the cost of
surveys performed pursuant to Section 5.5.
(ii) Professional Fees. All other fees and expenses of BMREIC,
including legal, accounting, investment banking and other professional
counsel in connection with the transactions contemplated hereby.
5.7. Dividends Paid by BMREIC. Immediately prior to the Closing, BMREIC
shall pay all of its taxable income generated from January 1, 1998 (as reduced
by the payments described in Section 5.6(i) and 5.6(ii)) to its shareholders as
a dividend, provided, that BMREIC shall not be responsible for the payment of
such expenses in excess of the taxable income (as reduced by the payment of such
expenses) immediately prior to the payment of any dividend. Any of such expenses
not paid by BMREIC pursuant to the foregoing shall become the liability of
BMSBLC and BMREIC shall have no responsibility for payment therefor.
6. CONDITIONS PRECEDENT TO BMSBLC'S OBLIGATIONS
Each and every obligation of the BMSBLC to be performed on the Closing
Date shall be subject to the satisfaction prior to or at the Closing of each of
the following conditions:
6.1. Representations and Warranties True as of the Closing Date. Each
of the representations and warranties made by BMREIC in this Agreement, and the
statements contained in the Schedules attached hereto or in any instrument,
list, certificate or writing delivered by BMREIC pursuant to this Agreement,
shall be true and correct in all material respects when made and, to the best
knowledge of BMREIC, shall be true and correct in all material respects at and
as of the Closing Date.
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6.2. Compliance With Agreement. BMREIC shall have in all material
respects performed and complied with all of their agreements and obligations
under this Agreement which are to be performed or complied with by them prior to
or on the Closing Date.
6.3. Absence of Litigation. No Litigation shall have been commenced or
threatened, and no investigation by any Governmental Authority shall have been
commenced, against BMREIC or any of the affiliates, officers or directors of
BMREIC, with respect to the transactions contemplated hereby.
6.4. Consents and Approvals. All governmental and third party
approvals, consents and waivers that are required to effect the transactions
contemplated hereby and the releases of all encumbrances to be removed prior to
Closing shall have been received, executed and delivered to the BMSBLC at
Closing.
6.5. Due Diligence. BMSBLC shall have completed to its satisfaction its
review of BMREIC's business and customers, including enviromental matters, title
matters, building conditions, building vacancies and other matters deemed
significant by BMSBLC.
6.6. Shareholder Approval. This Agreement and the transactions
contemplated hereby shall have been approved by the affirmative vote of the
shareholders of BMREIC by the requisite vote.
6.7. Appraisals. BMSBLC shall have obtained appraisals on the Real
Property that are reasonably satisfactory to BMSBLC and its lenders.
6.8. Financing. BMSBLC shall have obtained financing reasonably
satisfactory to BMSBLC that would allow financing in the minimum amount of
$[20,000,000] to consist of loans on the Real Property.
6.9. Dissenters' Rights. The holders of not more than 5% of the
outstanding shares of common stock of BMREIC shall have exercised their rights
of dissenting shareholders pursuant to Sections 180.1301 through 180.1331 of the
WBCL.
7. CONDITIONS PRECEDENT TO BMREIC'S OBLIGATIONS
Each and every obligation of BMREIC to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the following
conditions:
7.1. Representations and Warranties True on the Closing Date. Each of
the representations and warranties made by BMSBLC in this Agreement shall be
true and correct in all material respects when made and shall be true and
correct in all material respects at and as of the Closing Date.
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7.2. Compliance With Agreement. BMSBLC shall have in all material
respects performed and complied with all of its agreements and obligations under
this Agreement which are to be performed or complied with by BMSBLC prior to or
on the Closing Date.
7.3. Tax Opinion. BMREIC shall have received an opinion from Weiss
Berzowski Brady & Donahue dated the Closing Date, opining that, in effect,
BMREIC shall not incur taxable income upon the Merger to the extent that BMSBLC
distributes cash to the stockholders of BMREIC pursuant to the Merger and that
the stockholders of BMREIC shall be subject to capital gains treatment with
respect to the consideration received pursuant to the Merger.
8. TERMINATION
8.1. Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time, notwithstanding approval
thereof by the shareholders of BMREIC and BMSBLC, prior to the Effective Time:
8.1.(a) by mutual written consent duly authorized by the
Boards of Directors of BMREIC and BMSBLC;
8.1.(b) by BMSBLC or BMREIC if the Effective Time will not
have occurred on or before June 30, 1998
8.1.(c) by BMSBLC or BMREIC if any court of competent
jurisdiction or other Governmental Authority shall have issued an
order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the Merger or if litigation or
proceedings shall be pending that are reasonably likely to result in
any of the foregoing;
8.1.(d) by BMREIC, if BMSBLC shall not have performed all
obligations required to be performed by it under this Agreement, except
where any failures to perform would, in the aggregate, not materially
impair or delay the ability of BMREIC to effect the Merger;
8.1.(e) by BMSBLC, if BMREIC shall not have performed all
obligations required to be performed by it under this Agreement, except
where any failures to perform would, in the aggregate, not materially
impair or delay the ability of BMSBLC to effect the Merger;
8.1.(f) by BMREIC, if there shall have been a breach by BMSBLC
of any of its covenants contained herein or if any representation or
warranty made by BMSBLC is untrue in any material respect;
8.1.(g) by BMSBLC, if there shall have been a breach by BMREIC
of any of its covenants contained herein or if any representation or
warranty made by BMREIC is untrue in any material respect.
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8.2. Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party or its directors, officers or shareholders, other than the provisions
of Section 5.1(b). The termination and abandonment of this Agreement pursuant to
Paragraph 8.1 is the sole remedy available to either party upon the occurrence
of any events set forth in Paragraph 8.1(a) through (g) and in no case shall
BMREIC be liable for damages or specific performance to this contract.
9. CLOSING
The Closing shall take place at the offices of Foley & Lardner, 777
East Wisconsin Avenue, Milwaukee, Wisconsin 53202, at 10 A.M. on May 15, 1998,
or at such other time and place as the parties hereto shall agree upon. Such
date is referred to in this Agreement as the "Closing Date."
9.1. Documents to be Delivered by BMREIC. At the Closing, BMREIC shall
deliver to BMSBLC the following documents, in each case duly executed or
otherwise in proper form:
9.1.(a) Compliance Certificate. A certificate signed by the
chief executive officer of BMREIC that (i) to the best knowledge of
BMREIC, each of the representations and warranties made by BMREIC in
this Agreement is true and correct in all material respects on and as
of the Closing Date with the same effect as though such representations
and warranties had been made or given on and as of the Closing Date
(except for any changes permitted by the terms of this Agreement or
consented to in writing by BMSBLC); (ii) that BMREIC has performed and
complied with all of BMREIC's obligations under this Agreement which
are to be performed or complied with on or prior to the Closing Date;
and (iii) that BMREIC has paid its share of the expenses of the Merger
as required by Section 5.6 (with a list of such expenses and proof of
payment attached thereto) and that there are no other expenses to be
paid in connection with the Merger, except for BMSBLC's share of such
expenses pursuant to Sections 5.6 and 5.7, if applicable.
9.1.(b) Opinion of Counsel. A written opinion of The Schroeder
Group, S.C., counsel to BMREIC, dated as of the Closing Date, addressed
to BMSBLC, substantially in the form of Exhibit B hereto.
9.1.(c) Certified Board Resolutions. Certified copies of the
resolutions of the Board of Directors of BMREIC authorizing and
approving this Agreement and the consummation of the transactions
contemplated by this Agreement.
9.1.(d) Shareholder Resolutions. Copies of the resolutions of
the shareholders of BMREIC authorizing and approving this Agreement and
the consummation of the transactions contemplated by this Agreement.
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9.1.(e) Title Policies. Good and valid title insurance
policies or, in final form, irrevocable title insurance binders, dated
as of the Closing Date, conforming to the specifications set forth in
Section 5.4 hereof.
9.1.(f) Other Documents. All other documents, instruments or
writings required to be delivered to BMSBLC at or prior to the Closing
pursuant to this Agreement and such other certificates of authority and
documents as BMSBLC may reasonably request.
9.2. Documents to be Delivered by BMSBLC. At the Closing, BMSBLC shall
deliver to BMREIC the following documents, in each case duly executed or
otherwise in proper form:
9.2.(a) Compliance Certificate. A certificate signed by the
Chief Executive Officer of BMSBLC that the representations and
warranties made by BMSBLC in this Agreement are true and correct on and
as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of the
Closing Date (except for any changes permitted by the terms of this
Agreement or consented to in writing by BMREIC), and that BMSBLC has
performed and complied with all of BMSBLC's obligations under this
Agreement which are to be performed or complied with on or prior to the
Closing Date.
9.2.(b) Opinion of Counsel. A written opinion of Foley &
Lardner, counsel to BMSBLC, dated as of the Closing Date, addressed to
BMREIC, in substantially the form of Exhibit C hereto.
9.2.(c) Certified Board Resolutions. A certified copy of the
resolutions of the Board of Directors of BMSBLC authorizing and
approving this Agreement and the consummation of the transactions
contemplated by this Agreement.
9.2.(d) Shareholder Resolutions. A copy of the resolutions of
the sole shareholder of BMSBLC authorizing the approving this Agreement
and the consummation of the transactions contemplated by this
Agreement.
9.2.(e) Other Documents. All other documents, instruments or
writings required to be delivered to BMREIC at or prior to the Closing
pursuant to this Agreement and such other certificates of authority and
documents as BMREIC may reasonably request.
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10. MISCELLANEOUS
10.1. Fees and Expenses. Subject to Sections 5.6 and 5.7, BMREIC will
pay for all of its fees and expenses incurred with respect to the transactions
contemplated hereby, and BMSBLC will pay for all of its costs and expenses,
including all real estate transfer taxes, if any.
10.2. Disclosure Schedule. The Disclosure Schedule attached hereto
shall not vary, change or alter the language of the representations and
warranties contained in this Agreement.
10.3. Further Assurance. From time to time, at BMSBLC's request and
without further consideration, BMREIC will execute and deliver to BMSBLC such
documents and take such other action as BMSBLC may reasonably request in order
to consummate more effectively the transactions contemplated hereby.
10.4. Disclosures and Announcements. Announcements concerning the
transactions provided for in this Agreement by BMSBLC or BMREIC shall be subject
to the approval of the other parties in all essential respects, except that
approval of BMREIC shall not be required as to any statements and other
information which BMSBLC or its parent, Bando McGlocklin Capital Corporation,
may be required by law to disclose.
10.5. Nonsurvival of Representations, Warranties and Covenants. All
representations, warranties and covenants in this Agreement or in any instrument
delivered pursuant to this Agreement shall not survive the Merger.
10.6. Notices. Any and all notices or other communications or
deliveries required or permitted to be given or made pursuant to any of the
provisions of this Agreement shall be deemed to have been duly given or made for
all purposes if (i) hand delivered, (ii) sent by a nationally recognized
overnight courier or (iii) sent by telephone facsimile transmission (with prompt
oral confirmation of receipt) as follows:
If to BMSBLC:
Bando McGlocklin Small Business Lending Corporation
W239 N1700 Busse Road
Waukesha, Wisconsin 53188
Attention: George S. Schonath, President
Telecopy No.: (414) 523-4193
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With a copy to:
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, WI 53202-5367
Attention: Phillip J. Hanrahan
Telecopy No.: (414) 297-4900
If to BMREIC:
Bando McGlocklin Real Estate Investment Corporation
W239 N1700 Busse Road
Waukesha, WI 53188
Attention: Scott Kestly, President
Telecopy No.: (414) 523-4193
With a copy to:
The Schroeder Group, S.C.
Attorneys at Law
Crossroads Center
20700 Swenson Drive, Suite 250
Waukesha, WI 53186
Attention: Stuart R. Schroeder
Telecopy No.: (414) 797-8020
or at such other address as any party may specify by notice given to the other
party in accordance with this Section 10.6. The date of giving of any such
notice shall be the date of hand delivery, the date sent by telephone facsimile,
and the day after delivery to the overnight courier service; provided, however,
that the notice is actually received.
10.7. Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party.
10.8. Waivers and Amendments. This Agreement may be amended,
superseded, canceled, renewed or extended and the terms hereof may be waived
only by a written instrument signed by the parties or, in the case of a waiver,
by the party waiving compliance.
10.9. Law Governing Agreement. This Agreement shall be construed and
interpreted according to the internal laws of the State of Wisconsin, excluding
any choice of law rules that may direct the application of the laws of another
jurisdiction.
23
10.10. Entire Agreement. This instrument embodies the entire agreement
between the parties hereto with respect to the transactions contemplated herein,
and there have been and are no agreements, representations or warranties between
the parties other than those set forth or provided for herein.
10.11. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
BANDO MCGLOCKLIN SMALL
BUSINESS LENDING CORPORATION
By: _____/s/_________________________
Its: ___________________________
BANDO MCGLOCKLIN REAL ESTATE
INVESTMENT CORPORATION
By: __/s/____________________________
Its: ___________________________
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EXHIBIT A
PLAN OF MERGER
THIS PLAN OF MERGER ("Plan of Merger") is entered into as of July 14,
1998, by and between BANDO McGLOCKLIN SMALL BUSINESS LENDING CORPORATION, a
Wisconsin corporation and wholly-owned subsidiary of Bando McGlocklin Capital
Corporation ("BMSBLC") and BANDO McGLOCKLIN REAL ESTATE INVESTMENT CORPORATION,
a Wisconsin corporation ("BMREIC").
W I T N E S S E T H :
WHEREAS, the authorized capital stock of BMSBLC consists of 9,000
shares of Common Stock, no par value ("BMSBLC Common Stock"); and
WHEREAS, the authorized capital stock of BMREIC consists of 1,000,000
shares of Common Stock, no par value ("BMREIC Common Stock") of which 483,023
shares of BMREIC Common Stock are issued and outstanding; and
WHEREAS, the respective boards of directors of BMSBLC and BMREIC and
the respective shareholders of BMSBLC and BMREIC deem it to be desirable and in
the best interest of the respective corporations that the two corporations merge
into a single corporation (the "Merger"), and, pursuant to resolutions duly
adopted, the boards of directors of BMSBLC and BMREIC and the shareholders of
BMSBLC and BMREIC have approved and adopted an Agreement and Plan of Merger
dated as of April 1, 1998 ("Merger Agreement"), and have approved and adopted
this Plan of Merger.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements and covenants contained herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 Merger. In accordance with the provisions of the Wisconsin Business
Corporation Law ("WBCL") on the Effective Time (defined below) of the Merger,
BMREIC shall be merged with and into BMSBLC, with BMSBLC being the surviving
corporation (in its capacity as such surviving corporation BMSBLC is hereinafter
sometimes referred to as the "Surviving Corporation", and BMREIC and BMSBLC are
hereinafter sometimes referred to collectively as the "Constituent
Corporations"), and as such BMSBLC shall continue to be governed by the laws of
the State of Wisconsin.
I.2 Effective Time. The Articles of Merger (including this Plan of
Merger) will be executed, adopted, and approved in accordance with the WBCL and
filed with the Wisconsin Department of Financial Institutions on or before the
Closing (as defined herein). The closing
of the Merger will occur on July 10, 1998, or such other date as may be mutually
agreed by the parties ("Closing"). The Merger shall become effective upon
receipt by the Wisconsin Department of Financial Institutions ("Effective
Time"). The actions described above shall be conclusive evidence, for all
purposes of this Plan of Merger, of compliance with all conditions precedent.
I.3. Continuation of Corporate Existence. Except as may otherwise be
set forth herein, at the Effective Time, the corporate existence and identity of
BMSBLC, with all its purposes, powers, franchises, privileges, rights, and
immunities shall continue under the laws of the State of Wisconsin, unaffected
and unimpaired by the Merger, and the corporate existence and identity of
BMREIC, with all its purposes, powers, franchises, privileges, rights and
immunities, shall be merged with and into BMSBLC and the Surviving Corporation
shall be vested fully therewith, and the separate corporate existence and
identity of BMREIC shall thereafter cease, except to the extent continued by
applicable law. At the Effective Time, the Surviving Corporation shall have the
following rights and obligations:
(a) The Surviving Corporation shall have all the
rights, privileges, immunities, and powers, and shall be
subject to all of the duties and liabilities, of a corporation
organized under the laws of the State of Wisconsin.
(b) The Surviving Corporation shall succeed to,
without other transfer, and shall possess and enjoy, all of
the rights, privileges, immunities, powers, purposes, and
franchises, of both a public and private nature, of the
Constituent Corporations and all property, real, personal and
mixed, and all debts due to either of the Constituent
Corporations on whatever account and all other choses in
action, and every other interest of or belonging to either of
the Constituent Corporations shall be deemed to be transferred
to and vested in the Surviving Corporation without further act
or deed, and shall thereafter be the property of the Surviving
Corporation as they were of the respective Constituent
Corporations, and the title to any real estate vested by deed
or otherwise in either of said Constituent Corporations shall
not revert or be in any way impaired by reason of the Merger.
(c) The Surviving Corporation shall thenceforth be
responsible and liable for all debts, liabilities,
obligations, and duties of either of the Constituent
Corporations, and any claim existing or acting or proceeding
pending by or against either Constituent Corporation may be
prosecuted as if the merger had not occurred, or the Surviving
Corporation may be substituted in its place. Neither the
rights of creditors nor any liens upon the property of either
Constituent Corporation shall be impaired by the Merger.
I.4. Additional Actions. If at any time the Surviving Corporation shall
deem or be advised that any further transfers, assignments, conveyances,
assurances in law, or other acts or things are necessary or desirable to vest or
confirm in the Surviving Corporation the title to any property or assets of
either of the Constituent Corporations, each Constituent Corporation
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and its proper officers and directors shall execute and deliver any and all such
proper transfers, assignments, conveyances, and assurances in law, and shall do
all other acts and things as are necessary or proper to vest or confirm title to
such property and assets in the Surviving Corporation and to otherwise carry out
the purposes and intent of the Merger Agreement and this Plan of Merger.
ARTICLE II
CORPORATE GOVERNANCE
2.1. Articles of Incorporation. The Articles of Incorporation of BMSBLC
in effect at the Effective Time shall constitute the Articles of Incorporation
of the Surviving Corporation until amended, altered, or repealed in the manner
provided by law.
2.2. Bylaws. The Bylaws of BMSBLC in effect at the Effective Time shall
be the Bylaws of the Surviving Corporation, until amended, altered, or repealed.
2.3. Directors. At the Effective Time, the board of directors of BMSBLC
shall be the directors of the Surviving Corporation until the next annual
meeting of shareholders of the Surviving Corporation or until their respective
successors are elected and qualified.
2.4. Officers. At the Effective Time, the officers of BMSBLC shall be
the officers of the Surviving Corporation and shall hold office subject to the
Bylaws of the Surviving Corporation.
ARTICLE III
CONVERSION OF SHARES;
PAYMENT OF OTHER CONSIDERATION
3.1. Conversion of Shares. At the Effective Time, but subject to the
provisions of Sections 180.1301 through 180.1331 of the WBCL with respect to the
rights of dissenting shareholders of BMREIC, the manner of exchanging the
outstanding Common Stock of the Constituent Corporations shall be as follows:
(a) Conversion of BMREIC Common Stock. Each share of
BMREIC Common Stock outstanding immediately prior to the
Effective Time shall, at the Effective Time, by virtue of the
Merger and without action on the part of the holder thereof,
be converted into the right to receive $10.65 per share of
BMREIC Common Stock (the "Merger Consideration").
(b) Cancellation of Shares. All BMREIC Common Stock
issued and outstanding immediately prior to the Effective Time
shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder
of a certificate representing any such shares shall cease to
have any rights with respect thereto, except the right to
receive the Merger
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Consideration to be issued in consideration therefor upon the
surrender of such certificate in accordance with Section 3.2,
without interest.
(c) BMSBLC Common Stock. Each Share of BMSBLC Common
Stock outstanding immediately prior to the Effective Time
shall, at the Effective Time, by virtue of the Merger and
without any action on the part of the holder thereof, remain
issued and outstanding stock of the Surviving Corporation.
(d) Other Rights. All options, warrants, or other
rights to acquire shares of BMREIC's Common Stock, or
instruments convertible into shares of BMREIC's Common Stock,
will have been exercised or terminated on or before the
Effective Time, or if not so exercised, will terminate upon
effectiveness of the Merger.
3.2. Exchange of Certificates.
(a) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, BMSBLC shall deliver to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of BMREIC Common Stock (the "Certificates") whose
shares were converted into the right to receive the Merger Consideration (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to BMSBLC and shall be in such form and have such other provisions
as BMSBLC and BMREIC may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to BMSBLC,
together with such letter of transmittal, duly executed, the holder of such
Certificate shall be entitled to receive in exchange the Merger Consideration in
the form of funds made payable to the holder of such Certificate and the
Certificate so surrendered shall forthwith be canceled. Until surrendered as
contemplated by this Section 3.2, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration as contemplated by this Section 3.2.
(b) No Further Ownership Rights in BMREIC Common Stock. The
Merger Consideration issued upon the surrender for exchange of shares of BMREIC
Common Stock in accordance with the terms hereof shall be deemed to have been
issued in full satisfaction of all rights pertaining to such shares of BMREIC
Common Stock. If, after the Effective Time, Certificates are presented to the
Surviving Corporation they shall be canceled and exchanged as provided in this
Plan of Merger.
(c) No Liability. Neither BMSBLC nor BMREIC shall be liable to
any holder of shares of BMREIC Common Stock for such shares (or dividends or
distributions with respect thereto) or cash delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
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ARTICLE IV
CONDITIONS; TERMINATION; MISCELLANEOUS
4.1. Conditions to the Merger. Consummation of the Merger is
conditioned upon the fulfillment or waiver of the conditions precedent set forth
in Articles 6 and 7 of the Merger Agreement.
4.2. Termination. This Plan of Merger may be terminated at any time on
or before the Effective Time by mutual agreement of BMSBLC and BMREIC. If the
Merger Agreement is terminated in accordance with Article 8 thereof, then this
Plan of Merger will terminate simultaneously and the Merger will be abandoned
without further action by BMSBLC and BMREIC.
4.3. Amendment; Modification. Subject to applicable law, this Agreement
may be amended, modified or supplemented only by written agreement of BMREIC and
BMSBLC at any time prior to the Effective Time.
4.4. .Assignment; Parties in Interest. This Plan of Merger shall be
binding upon and inure solely to the benefit of the parties hereto and their
respective successors and assigns, but shall not be assigned by the parties
hereto, by operation of law or otherwise, without the prior written consent of
the other party. Nothing in this Plan of Merger, expressed or implied, is
intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Plan of Merger.
4.5. Entire Agreement. Except as otherwise provided therein, this Plan
of Merger and the Merger Agreement supersede any other agreement, whether
written or oral, that may have been made or entered into by BMSBLC and BMREIC or
by any officer or officers of such parties relating to the transactions
contemplated thereunder. This Plan of Merger and the Merger Agreement constitute
the entire agreement by the respective parties relating to the transactions
contemplated thereunder, and there are no agreements or commitments with respect
to such transactions except as set forth herein and in the Merger Agreement.
4.6. Captions and Counterparts. The captions in the Plan of Merger are
for convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Plan of Merger. This
Plan of Merger may be executed in several counterparts, each of which shall
constitute one and the same instrument.
4.7. Governing Law. This Plan of Merger shall be construed and
interpreted in accordance with the laws of the State of Wisconsin without regard
to the conflicts of laws rules.
[The next page following is the signature page.]
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IN WITNESS WHEREOF, each of the Constituent Corporations has caused
this Plan of Merger to be executed on its behalf by its respective officers
hereunto duly authorized as of the date first above written.
BANDO McGLOCKLIN SMALL
BUSINESS LENDING CORPORATION
By:
Its:_/s/______________________
BANDO McGLOCKLIN REAL ESTATE
INVESTMENT CORPORATION
By:
Its:_/s/_____________________