STOCK OPTION AGREEMENT
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THIS STOCK OPTION AGREEMENT (the "Agreement"), dated as of January 14,
1998, between First Midwest Bancorp, Inc. ("Acquiror"), a Delaware corporation
registered as a bank holding company under the Bank Holding Company Act of 1956,
as amended (the "BHCA"), and Heritage Financial Services, Inc. ("Heritage"), an
Illinois corporation registered as a bank holding company under the BHCA.
WITNESSETH
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WHEREAS, the Boards of Directors of Acquiror and Heritage have approved an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), providing for the merger of Heritage with and into a wholly owned
subsidiary of Acquiror (the "Merger"); and
WHEREAS, to induce Acquiror to enter into the Merger Agreement, Acquiror
has required that Heritage agree, and Heritage has agreed, to grant to Acquiror
the option set forth herein to purchase shares of Heritage's authorized but
unissued common stock, no par value per share ("Heritage Common Stock").
NOW, THEREFORE, in consideration of the premises herein contained, the
parties agree as follows:
1. Definitions. Capitalized terms defined in the Merger Agreement
and used herein shall have the same meaning as in the Merger Agreement unless
otherwise specified herein.
2. Option.
(a) Grant of Option. Subject to the terms and conditions set
forth herein, Heritage hereby grants to Acquiror an unconditional, irrevocable
option (the "Option") to purchase up to 2,400,000 shares of Heritage Common
Stock (the "Option Shares") at an exercise price of $21.25 per share (with the
number of Option Shares and price per share being subject to adjustment pursuant
to Section 7 hereof), payable in cash as provided in Section 4 hereof; provided,
however, that in the event Heritage issues or agrees to issue any shares of
Heritage Common Stock (except for shares issued pursuant to Heritage Stock
Option Plans) after the date hereof at a price less than $21.25 per share (as
adjusted pursuant to Section 7 hereof), the exercise price shall be equal to
such lesser price; and provided further that in no event shall the aggregate
number of Option Shares issuable under the Option exceed 19.9 percent of the
number of shares of Heritage Common Stock then issued and outstanding before
giving effect to the issuance of the Option Shares.
(b) Exercise Price. Upon any exercise of the Option, in the
event the "Aggregate Value" of the Option, as defined below, exceeds the
Aggregate Value Cap (as defined below), the exercise price shall be increased so
that the Aggregate Value is reduced to the amount of the Aggregate Value Cap.
The term "Aggregate Value" shall mean the amount arrived at by (i) subtracting
the exercise price from the then market value of a share of Heritage Common
Stock and (ii) multiplying the result by the total number of Option Shares
purchasable upon exercise of the Option. The market value of a share of
Heritage Common Stock shall be the most recent closing sale price for a share as
reported on any exchange or the Nasdaq Stock Market as of the close of the
Business Day preceding the date on which Acquiror consummates its purchase of
the Option Shares, or, if the shares of Heritage Common Stock are not traded on
an exchange or such market, the value of a share of Heritage Common Stock as
determined as of such Business Day by a nationally recognized investment banking
firm selected by Acquiror. The term "Aggregate Value Cap" means $12,000,000
reduced by the sum of Aggregate Values of all previous Option exercises.
3. Exercise of Option.
(a) Expiration of Option. Subject to compliance with applicable
provisions of law, Acquiror may exercise the Option, in whole or part, at any
time or from time to time upon the occurrence or during the continuance of a
Purchase Event (as defined below); provided that to the extent the Option shall
not have been exercised, it shall terminate and be of no further force and
effect (i) at the Effective Time of the Merger; (ii) upon a termination of the
Merger Agreement pursuant to Section 10.1(a) thereof; (iii) the acquisition by
upon a termination of the Merger Agreement by Heritage pursuant to Sections
10.1(b), 10.1(d), 10.1(e) or 10.l(f) of the Merger Agreement; (iv) on the 360th
day after the termination of the Merger Agreement (such 360-day period after
termination of the Merger Agreement is referred to herein as the "Post-
Termination Period") for any other reason if no Purchase Event has occurred or
continued during the term of the Merger Agreement or during the Post-Termination
Period; or (v) on the 360th day after the discontinuance of all Purchase Events
that occurred or continued during the term of the Merger Agreement or during the
Post-Termination Period if a Purchase Event occurred or continued during any
such term or period.
(b) Purchase Event. As used herein, "Purchase Event" shall
mean: (i) the Board of Directors of Heritage shall not have recommended that the
shareholders of Heritage reject a publicly disclosed offer to Heritage's
shareholders to engage in an Acquisition Transaction with any person other than
Acquiror or its Subsidiaries; (ii) Heritage, without having received Acquiror's
prior written consent, shall have entered into an agreement to engage in an
Acquisition Transaction with any person (other than Acquiror or its
Subsidiaries); (iii) Heritage or any of its Representatives shall have breached
Section 6.7 of the Merger Agreement; or (iv) a proposal is made by a third party
to Heritage or its shareholders to engage in an Acquisition Transaction and
Heritage shall have willfully breached any of its representations, warranties,
covenants or agreements contained in the Merger Agreement which breach would
entitle Acquiror to terminate the Merger Agreement (without regard to the cure
periods provided for therein) and such breach shall not have been cured prior to
the Notice Date (as defined below). If more than one of the transactions giving
rise to a Purchase Event under this Section 3(b) is undertaken or effected, then
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all such transactions shall give rise only to one Purchase Event, which Purchase
Event shall be deemed continuing for all purposes hereof until all such
transactions are abandoned. As used in this Agreement, "person" shall have the
meanings specified in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange
Act of 1934, as amended.
(c) Notice of Purchase Event. Heritage shall notify Acquiror
promptly in writing of the occurrence of any Purchase Event; provided, however,
that the giving of such notice by Heritage shall not be a condition to the right
of Acquiror to exercise the Option.
(d) Notice of Exercise. In the event Acquiror wishes to
exercise the Option, it shall send to Heritage a written notice (the date of
which being herein referred to as the "Notice Date") specifying (i) the total
number of shares it will purchase pursuant to such exercise, and (ii) a place
and date not earlier than ten business days nor later than twenty business days
from the Notice Date for the closing of such purchase. Notwithstanding the
foregoing, if prior notification to or approval of the Federal Reserve or any
other Regulatory Authority is required in connection with such purchase,
Acquiror shall promptly file the required notice or application for approval and
shall expeditiously process the same and the period of time that otherwise would
run pursuant to the preceding sentence shall run instead from the date on which
any required notification periods have expired or been terminated or such
approvals have been obtained and any requisite waiting period or periods shall
have passed. Any exercise of the Option shall be deemed to occur on the Notice
Date relating thereto.
(e) Election of Remedies. First Midwest shall not be entitled
to exercise the Option in the event it elects to sue Heritage for damages
because of Heritage's Breach of the Merger Agreement. The exercise of the
Option by First Midwest shall not be deemed to deprive First Midwest of any
right to pursue any remedies it might have against any Person who is neither
Heritage nor an Affiliate or Representative of Heritage.
4. Payment and Delivery of Certificates.
(a) Payment. At the closing referred to in Section 3(d) hereof,
Acquiror shall pay to Heritage the aggregate purchase price for the shares
purchased pursuant to the exercise of the Option in immediately available funds
by a wire transfer to a bank account designated by Heritage; provided that the
failure or refusal of Heritage to designate such a bank account shall not
preclude Acquiror from exercising the Option.
(b) Delivery of Certificates. At such closing, simultaneously
with the delivery of cash as provided in subsection (a) above, Heritage shall
deliver to Acquiror a certificate or certificates representing the number of
shares of Heritage Common Stock purchased by Acquiror, which certificates may
bear the legend set forth in Section 4(c) below, and Acquiror shall deliver to
Heritage a letter agreeing that Acquiror will not offer to sell or otherwise
dispose of such shares in violation of this Agreement or applicable law or in a
manner that would result in Acquiror becoming an "underwriter" within the
meaning of that term under the Securities Act. Heritage shall pay all expenses
and any and all United States federal, state and local taxes (other than income
taxes) and other charges that may be payable in connection with the preparation,
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issuance and delivery of stock certificates under this Section 4 in the name of
Acquiror or its assignee, transferee or designee. Upon the giving by Acquiror
to Heritage of the written notice of exercise of the Option provided for under
Section 3(d) above and the tender of the applicable purchase price in
immediately available funds, Acquiror shall be deemed to be the holder of record
of the shares of Heritage Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of Heritage shall then be closed
or that certificates representing such shares of Heritage Common Stock shall not
then be actually delivered to Acquiror.
(c) Restrictive Legend. Certificates for Heritage Common Stock
delivered at a closing hereunder may be endorsed with a restrictive legend that
shall read substantially as follows:
"The transfer of the shares represented by this certificate is subject
to certain provisions of an agreement between the registered holder hereof
and the Issuer and to resale restrictions arising under the Securities Act
of 1933, as amended, and any applicable state securities laws, a copy of
which agreement is on file at the principal office of the Issuer. A copy
of such agreement will be mailed to the holder hereof without charge within
five days after the receipt by the Issuer of a written request."
It is understood that (i) the reference to the resale restrictions of the
Securities Act in the above legend shall be removed by delivery of substitute
certificate(s) without reference if Acquiror shall have delivered to Heritage a
copy of a letter from the staff of the SEC, or an opinion of counsel, in form
and substance reasonably satisfactory to Heritage, to the effect that such
legend is not required for purposes of the Securities Act; (ii) the reference to
the provisions of this Agreement in the above legend shall be removed by
delivery of substitute certificate(s) without such reference if the shares have
been sold or transferred in compliance with the provisions of this Agreement and
under circumstances that do not require the retention of such reference; and
(iii) the legend shall be removed in its entirety if the conditions in the
preceding clauses (i) and (ii) are both satisfied. In addition, such
certificates shall bear any other legend as may be required by law.
5. Heritage Representations. Heritage hereby represents and
warrants to Acquiror as follows:
(a) Reservation of Shares. Heritage has taken all necessary
corporate action to authorize and reserve for issuance a sufficient number of
shares of Heritage Common Stock to satisfy its obligations upon the exercise of
the Option without additional authorization of Heritage Common Stock after
giving effect to all other options, warrants, convertible securities and other
rights to purchase Heritage Common Stock. Heritage shall not, by charter
amendment or through reorganization, consolidation, merger, dissolution or sale
of assets or by any other voluntary act, avoid or seek to avoid the observance
or performance of any of the covenants, stipulations or conditions to be
observed or performed hereunder by Heritage.
(b) Duly Authorized Shares. The shares of Heritage Common Stock
to be issued upon exercise, in whole or in part, of the Option, when paid for as
provided herein,
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will be duly authorized, validly issued, fully paid and nonassessable, and will
be delivered free and clear of all claims, liens, encumbrances and security
interests and will not be subject to any preemptive rights.
(c) Additional Actions. Heritage shall promptly take all
reasonable action as may from time to time be required to be taken by it
(including (A) complying with all premerger notification, reporting and waiting
period requirements applicable to it specified in 15 U.S.C. Section 18a and
regulations promulgated thereunder, and (B) in the event, under the BHCA or a
state banking law, prior approval of or notice to the Federal Reserve or to any
other Regulatory Authority is necessary before the Option may be exercised,
cooperating fully with Acquiror in preparing such applications or notices and
providing such information to the applicable Regulatory Authority as may be
required) in order to permit Acquiror to exercise the Option and Heritage duly
and effectively to issue shares of Heritage Common Stock pursuant thereto.
Heritage shall promptly take all other reasonable action provided herein to
protect the rights of Acquiror against dilution.
(d) Principal Stockholders. To the Knowledge of Heritage, as of
the date of this Agreement, no person owns beneficially more than ten percent of
the outstanding shares of its Common Stock, except as set forth on Heritage's
1997 Proxy Statement.
6. Acquiror Representations. Acquiror hereby represents and
warrants to Heritage that Acquiror will not transfer or otherwise dispose of any
shares purchased by Acquiror pursuant to this Agreement except in a transaction
registered or exempt from registration under the Securities Act, and otherwise
in accordance with the terms of this Agreement.
7. Adjustment Upon Changes in Capitalization.
(a) Stock Dividends. In the event of any change in the
outstanding Heritage Common Stock by reason of stock dividends, split-ups,
mergers, recapitalizations, combinations, exchanges of shares, or the like (but
excluding any exercise of stock options pursuant to any of the Heritage Stock
Option Plans), the type and number of shares subject to the Option, or the
purchase price per share, as the case may be, shall be adjusted appropriately,
and proper provision shall be made in the agreements governing any such
transaction so that Acquiror shall receive upon exercise of the Option the
number and class of shares, other securities or property that Acquiror would
have received in respect of the shares of Heritage Common Stock subject to the
Option if the Option had been exercised and the Heritage Common Stock subject to
the Option had been issued to Acquiror immediately prior to such event or the
record date therefor, as applicable.
(b) Issuance of Additional Shares. In the event that any
additional shares of Heritage Common Stock are issued after the date of this
Agreement (other than pursuant to this Agreement or as provided in Section 7(a)
above or pursuant to any exercise of stock options pursuant to any of the
Heritage Stock Option Plans), the number of shares subject to the Option shall
be adjusted after such issuance, so that it equals 19.9 percent of the number of
shares of Heritage Common Stock then issued and outstanding before giving effect
to the issuance of the
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Option Shares; provided, however, that nothing contained in this Section 7 shall
be deemed to authorize Heritage to issue any shares of its Common Stock in
breach of the provisions of the Merger Agreement; and provided further that in
no event shall the number of shares subject to the Option exceed 19.9 percent of
Heritage's issued and outstanding Common Stock, before giving effect to the
issuance of the Option Shares.
8. Repurchase.
(a) Repurchase Price. In the event that after the date hereof
any person, other than Acquiror or any of its Subsidiaries, acquires beneficial
ownership of 20% or more of the outstanding shares of Heritage Common Stock; or
the Board of Directors of Heritage shall accept or publicly recommend that the
shareholders of Heritage accept an offer from a person, other than Acquiror or
its Subsidiaries, to acquire 20% or more of either the outstanding shares of
Heritage Common Stock or the consolidated assets of Heritage (a "Repurchase
Event"), at the request of Acquiror and subject to any regulatory requirements,
Heritage shall repurchase the Option but only prior to the expiration thereof
from Acquiror together with any of the Option Shares purchased by Acquiror
pursuant thereto, at a price equal to the sum of:
(i) the exercise price paid by Acquiror for any of the Option
Shares;
(ii) the difference between the "market/tender offer price" (as
defined below) for shares of Heritage Common Stock and the exercise
price as determined pursuant to Section 2 hereof, multiplied by the
number of shares of Heritage Common Stock with respect to which the
Option has not been exercised, but only if the market/tender offer
price is greater than such exercise price;
(iii) the difference between the market/tender offer price (as
defined below) and the exercise price paid by Acquiror for any Option
Shares, multiplied by the number of shares so purchased, but only if
the market/tender offer price is greater than such exercise price;
(iv) Acquiror's costs and expenses as provided in Section
10.3(a) of the Merger Agreement; provided there shall be no
duplication of payment under this Agreement and the Merger Agreement.
Any payment under this Section 8(a)(iv) shall only be made if no
payment has been made under Section 10.3(a) of the Merger Agreement,
and any payment under this Section 8(a)(iv) shall discharge any and
all obligations to Heritage to make a payment under Section 10.3(a) of
the Merger Agreement; and
(v) Notwithstanding the foregoing, the maximum amount payable
by Heritage to Acquiror pursuant to the provisions of this Section
8(a) shall not exceed the sum of (i) the aggregate exercise price paid
by Acquiror to Heritage in connection with the actual purchase by
Acquiror of any Option Shares, (ii) $12,000,000, and (iii) the amount
specified in Section 8(a)(iv) above.
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As used herein, the phrase "market/tender offer price" shall mean the greater of
(x) the price per share at which a tender or exchange offer has been made if
such tender or exchange offer shall have given rise to the Repurchase Event, or
(y) the highest price paid by a person, whose actions shall have given rise to
the Repurchase Event, for shares of Heritage Common Stock at any time after the
date of this Agreement, or (z) the highest closing price for shares of Heritage
Common Stock within the four-month period immediately preceding the date
Acquiror gives notice of the required repurchase of the Option. In the event
the consideration used in a Repurchase Event is payable, in whole or in part, in
securities or other property, the value of such securities or other property
shall be determined by a nationally recognized investment banking firm selected
by Acquiror.
(b) Repurchase Date. In the event Acquiror exercises its right
to require the repurchase of the Option and/or the Option Shares, Heritage
shall, within three business days thereafter, pay the required amount to
Acquiror in immediately available funds to an account designated by Acquiror and
Acquiror shall surrender the Option and the certificates evidencing the Option
Shares.
(c) Heritage's Repurchase Right. At Heritage's option, Heritage
may repurchase the Option and the Option Shares from Acquiror at the price
specified in Section 8(a) (as limited by Section 8(a)(v)) at any time beginning
on the 360th day after the discontinuance of all Purchase Events that occurred
or continued during the term of the Merger Agreement or during the Post-
Termination Period if a Purchase Event occurred or continued during any such
term or period.
(d) Heritage's First Right of Refusal. If, at any time within
eighteen months after the acquisition of Option Shares by Acquiror, it shall
desire to sell, assign, transfer or otherwise dispose of all or any of the
Option Shares, it shall give Heritage written notice of the proposed transaction
(an "Offeror's Notice"), identifying the proposed transferee, and setting forth
the terms of the proposed transaction. An Offeror's Notice shall be deemed an
offer by Acquiror to Heritage, which may be accepted within five business days
of the receipt of such Offeror's Notice, on the same terms and conditions and at
the same price at which Acquiror is proposing to transfer the Option Shares to a
third party. The purchase of the number of the Option Shares by Heritage
specified in the Offeror's Notice shall be closed within ten business days of
the date of the acceptance of the offer and the purchase price shall be paid to
Acquiror by wire transfer of immediately available funds to an account
designated by Acquiror. In the event of the failure or refusal of Heritage to
purchase all the Option Shares covered by the Offeror's Notice or if any
Regulatory Authority disapproves Heritage's proposed purchase of the Option
Shares, Acquiror may, within sixty days from the latter to occur of Heritage's
failure or refusal or the date of such disapproval, sell the number of Option
Shares specified in the Offeror's Notice to such third party at no less than the
price specified and on terms no more favorable to the purchaser than those set
forth in the Offeror's Notice. The requirements of this Section 8(d) shall not
apply to any disposition as a result of which the proposed transferee would
beneficially own not more than 2% of the voting power of Heritage.
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9. Registration Rights.
(a) Registration Procedure. If a Purchase Event shall have
occurred and be continuing, if requested by Acquiror at any time during the
three-year period beginning on the date of the acquisition of any of the Option
Shares, as expeditiously as possible, use its best efforts to effect the
registration of the Option Shares, on a form of general use under the Securities
Act, in order to permit the sale or other disposition of such shares in
accordance with the intended method of sale or other disposition requested by
Acquiror and by any underwriter selected by Acquiror; provided, however, that
Acquiror may effect only two registrations pursuant to this Section 9. The
first registration effected under this Section 9(a) shall be at Heritage's
expense. If a second registration is requested hereunder by Acquiror, it shall
be paid for equally by Acquiror and Heritage. In connection with such
registrations, each party shall pay the fees and expenses of its own legal
counsel and Acquiror shall pay all blue sky fees and any underwriting discounts
and commissions incurred in connection with such registrations. Acquiror shall
provide such information as may be necessary for Heritage's preparation of the
registration statement. Heritage will use its best efforts to cause such
registration statement first to become effective and then to remain effective
for such period not in excess of 180 days from the day such registration
statement first becomes effective or such shorter time as may be reasonably
necessary to effect such sales or other dispositions. The obligations of
Heritage hereunder to file a registration statement and to maintain its
effectiveness may be suspended for one or more periods of time that do not
exceed 120 days in the aggregate if the Board of Directors of Heritage shall
have determined that the filing of such registration statement or the
maintenance of its effectiveness would require a special audit of Heritage or
any of its Subsidiaries or the disclosure of nonpublic information that would
materially and adversely affect Heritage. The foregoing notwithstanding, if, at
the time of any request by Acquiror for registration of the Option Shares as
provided above, Heritage is in registration with respect to an underwritten
public offering of shares of its Common Stock, and if, in the good faith
judgment of the managing underwriter or managing underwriters, or, if none, the
sole underwriter or underwriters, of such offering, the inclusion of the Option
Shares would interfere with the successful marketing of the shares of Common
Stock offered by Heritage, the number of shares represented by Option Shares
which are to be covered in the registration statement contemplated hereby may be
reduced; provided, however, that after any such required reduction the number of
Option Shares to be included in such offering for the account of Acquiror shall
constitute at least 25% of the total number of shares to be sold by Acquiror and
Heritage in such offering in the aggregate; provided, further, however, that if
such reduction occurs, then Heritage shall file a registration statement for the
balance as promptly as practical and no reduction shall thereafter occur.
(b) Registration Indemnification. In connection with the filing
of any such registration statement, Heritage shall indemnify and hold harmless
Acquiror or its transferee against any losses, claims, damages or liabilities,
joint or several, to which Acquiror or its transferee may become subject,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration statement,
including any prospectus included therein, or any amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary
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to make the statements therein not misleading; and Heritage shall reimburse
Acquiror or its transferee for any legal or other expense reasonably incurred by
Acquiror or its transferee in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that Heritage
shall not be liable in any case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or omission or
an alleged untrue statement or omission made in such registration statement, and
any prospectus included therein, or any amendment or supplement thereto, in
reliance upon and in conformity with written information furnished by or on
behalf of Acquiror or its transferee specifically for use in the preparation
thereof. Acquiror or its transferee shall indemnify and hold harmless Heritage
to the same extent as set forth in the immediately preceding sentence but only
with reference to written information furnished by or on behalf of Acquiror or
its transferee for use in the preparation of such registration statement, and
any prospectus included therein, or any amendment or supplement thereto; and
Acquiror or its transferee shall reimburse Heritage for any legal or other
expenses reasonably incurred by Heritage in connection with investigation or
defense of any such loss, claim, damage, liability or action.
10. Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by a court or a Regulatory Authority of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected, impaired
or invalidated. If for any reason such court or Regulatory Authority determines
that the Option will not permit the holder to acquire the full number of Option
Shares of Heritage Common Stock provided in Section 2 hereof (as adjusted
pursuant to Section 7 hereof), it is the express intention of Heritage to allow
the holder to acquire such lesser number of shares as may be permissible,
without any amendment or modification hereof.
11. Miscellaneous.
(a) Expenses. Except as otherwise provided herein, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder, including
fees and expenses of its own financial consultants, investment bankers,
accountants and counsel.
(b) Entire Agreement. Except as otherwise expressly provided herein,
this Agreement contains the entire agreement between the parties with respect to
the transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns. Nothing in this Agreement,
expressed or implied, is intended to confer upon any party, other than the
parties hereto, and their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided herein.
(c) Assignment. Neither of the parties hereto may assign any of its
rights or obligations under this Agreement or the Option created hereunder to
any other person, without the express written consent of the other party, except
that in the event a Purchase Event
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shall have occurred and be continuing Acquiror may assign in whole or in part
the Option, and its rights and obligations hereunder; provided, however, that
until the date thirty days following the date on which the Federal Reserve
approves an application by Grantee (as defined below) under the BHCA to acquire
the Option Shares, if such approvals are necessary, Grantee may not assign its
rights under the Option except in (i) a widely dispersed public distribution,
(ii) a private placement in which no one party acquires the right to purchase in
excess of two percent of the voting shares of Heritage, (iii) an assignment to a
single party (e.g., a broker or investment banker) for the purpose of conducting
a widely dispersed public distribution on Grantee's behalf, or (iv) any other
manner approved by the Federal Reserve. "Grantee" means Acquiror or any person,
corporation or other entity to which this Agreement or the Option created hereby
is assigned pursuant to this Section 11(c).
(d) Notices. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered
personally or by reliable overnight courier or sent by registered or certified
mail, postage prepaid, addressed as follows:
If to Acquiror: First Midwest Bancorp, Inc.
300 Park Boulevard
Suite 405
Itasca, Illinois 60143-0459
Attention: Mr. Donald J. Swistowicz,
Executive Vice President
with a copy to: Timothy M. Sullivan, Esquire
Hinshaw & Culbertson
222 North LaSalle Street, Suite 300
Chicago, Illinois 60601
If to Heritage: Heritage Financial Services, Inc.
12015 South Western Avenue
Blue Island, IL 60406
Attention: Richard T. Wojcik, Chairman and Chief
Executive Officer
with a copy to: John E. Freechack, Esquire
Barack Ferrazzano Kirschbaum Perlman & Nagelberg
333 W. Wacker Drive
Suite 2700
Chicago, IL 60606
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Joel S. Corwin, Esquire
Two First National Plaza
20 South Clark Street
Suite 2200
Chicago, Illinois 60603
A party may change its address for notice purposes by written notice to the
other party hereto. All such notices and communications shall be deemed
delivered when received by all parties entitled to such receipt hereunder.
(e) Extension of Time. All time periods specified herein shall be
extended, if necessary, by the length of time required for any necessary
governmental approval to be sought and received or governmental notice to be
given and the waiting period to expire, provided that any governmental
application or notice shall be made or given promptly. All of the parties
hereto shall use their best efforts to secure any required governmental approval
and to give any required governmental notice. Notwithstanding anything to the
contrary contained herein, no party shall be required to proceed with any
transaction described herein if any required governmental approval is not
obtained or if, upon the giving of any required governmental notice, the
notified governmental agency prohibits any such transaction. If any required
governmental approval is not obtained or if a governmental agency prohibits any
such transaction upon receipt of a required notice, the decision to appeal such
governmental action shall be solely that of Acquiror; provided, however, that
Acquiror shall bear all of the costs and expenses, including legal and
accounting fees, incurred by any of the parties hereto in prosecuting such an
appeal. Periods of time that otherwise would run under the terms of this
Agreement shall also be extended to the extent necessary to avoid liability
under Section 16(b) of the Securities Exchange Act of 1934, as amended.
(f) Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
(g) Specific Performance. The parties agree that damages would be an
inadequate remedy for a breach of the provisions of this Agreement by Heritage
and that this Agreement may be enforced by Acquiror through injunctive or other
equitable relief.
(h) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware applicable to agreements
made and entirely to be performed within such state and such federal laws as may
be applicable.
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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the day and year first above written.
FIRST MIDWEST BANCORP, INC.
By: DONALD J. SWISTOWICZ
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Its Executive Vice President
HERITAGE FINANCIAL SERVICES, INC.
By RICHARD T. WOJCIK
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Its President
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