EXHIBIT 2.4
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STOCK PURCHASE AGREEMENT
AMONG
HOME BANCSHARES, INC.
AND
THE SHAREHOLDERS OF
MOUNTAIN VIEW BANCSHARES, INC.
AND
MOUNTAIN VIEW BANCSHARES, INC.
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DATED AS OF APRIL 20, 2005
TABLE OF CONTENTS
RECITALS................................................................... 1
DEFINITIONS................................................................ 2
ARTICLE I. STOCK PURCHASE.................................................. 7
1.1. PURCHASE OF SHARES................................................ 7
1.2. CLOSING DATE...................................................... 7
1.3. CLOSING........................................................... 8
ARTICLE II. CONSIDERATION.................................................. 8
2.1. PURCHASE PRICE.................................................... 8
2.2. MVBI EARNINGS..................................................... 9
2.3. SECURITIES LAW EXEMPTION.......................................... 9
ARTICLE III. ACTIONS PENDING CLOSING....................................... 10
3.1. CAPITAL STOCK..................................................... 10
3.2. DIVIDENDS, ETC.................................................... 11
3.3. INDEBTEDNESS; LIABILITIES; ETC.................................... 11
3.4. LINE OF BUSINESS; OPERATING PROCEDURES; ETC....................... 11
3.5. LIENS AND ENCUMBRANCES............................................ 11
3.6. COMPENSATION; EMPLOYMENT AGREEMENTS; ETC.......................... 11
3.7. BENEFIT PLANS..................................................... 11
3.8. CONTINUANCE OF BUSINESS........................................... 11
3.9. AMENDMENTS........................................................ 12
3.10. CLAIMS............................................................ 12
3.11. CONTRACTS......................................................... 12
3.12. LOANS............................................................. 12
ARTICLE IV. REPRESENTATIONS AND WARRANTIES................................. 12
4.1. REPRESENTATIONS AND WARRANTIES OF SELLERS AND MVBI................ 12
4.2. REPRESENTATIONS AND WARRANTIES OF HBI............................. 23
ARTICLE V. COVENANTS....................................................... 26
5.1. BEST EFFORTS...................................................... 26
5.2. PUBLICITY......................................................... 26
5.3. ACCESS; DUE DILIGENCE INFORMATION; CONFIDENTIALITY................ 26
5.4. SOLE AGREEMENT TO SELL............................................ 27
5.5. NO RIGHTS TRIGGERED............................................... 27
5.6. REGULATORY APPLICATIONS........................................... 27
5.7. REGULATORY DIVESTITURES........................................... 28
5.8. CURRENT INFORMATION............................................... 28
5.9. DIRECTOR AND OFFICER LIABILITY INSURANCE.......................... 28
5.10. SHORT-YEAR TAX RETURN............................................. 28
5.11. BMV DEFINED BENEFIT PLAN.......................................... 29
5.12. MVBI INVESTMENT PORTFOLIO......................................... 29
5.13. CONTINUED PARTICIPATION OF HINKLE AND SUTTON...................... 29
5.14. MOUNTAIN VIEW AVIATION, LLC....................................... 30
5.15. REAL PROPERTIES OF MVBI........................................... 30
5.16. RESERVATION OF RIGHT TO REVISE TRANSACTION........................ 30
ARTICLE VI. CONDITIONS TO CONSUMMATION OF THE MERGER....................... 30
6.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS............................ 30
6.2. CONDITIONS TO OBLIGATIONS OF HBI.................................. 31
6.3. CONDITIONS TO OBLIGATIONS OF MVBI................................. 33
ARTICLE VII. TERMINATION................................................... 34
7.1. TERMINATION UPON CERTAIN CONDITIONS............................... 34
7.2. TERMINATION FOR BREACH............................................ 36
ARTICLE VIII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.. 36
8.1. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS............. 36
8.2. SELLERS' INDEMNITY................................................ 36
8.3. HBI'S INDEMNITY................................................... 36
8.4. LIMITATIONS....................................................... 36
8.5. DEFENSE OF THIRD PARTY CLAIMS..................................... 37
ARTICLE IX. OTHER MATTERS.................................................. 38
9.1. WAIVER; AMENDMENT................................................. 38
9.2. COUNTERPARTS...................................................... 38
9.3. GOVERNING LAW..................................................... 38
9.4. EXPENSES.......................................................... 38
9.5. NOTICES........................................................... 39
9.6. SELLERS' REPRESENTATIVES - APPOINTMENT OF AGENT................... 40
9.7. TIME IS OF THE ESSENCE............................................ 41
9.8. ASSIGNMENT........................................................ 41
9.9. BINDING EFFECT.................................................... 41
9.10. SEVERABILITY...................................................... 41
9.11. ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES................ 41
9.12. ENFORCEMENT PROCEEDINGS........................................... 41
9.13. BENEFIT PLANS..................................................... 41
9.14. HEADINGS.......................................................... 42
MVBI SCHEDULES
HBI SCHEDULES
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, dated as of the 20th day of April, 2005
(this "Agreement"), is by and among Home BancShares, Inc. ("HBI"), an Arkansas
corporation, the undersigned shareholders of Mountain View Bancshares, Inc.
("SELLERS" or individually, a "SELLER") and Mountain View Bancshares, Inc.
("MVBI"), an Arkansas corporation.
RECITALS
(A) MVBI. MVBI is a corporation duly organized and existing in good
standing under the laws of the State of Arkansas, with its principal executive
offices located in Mountain View, Arkansas. MVBI is a registered bank holding
company under the Bank Holding Company Act of 1956, as amended. As of December
31, 2004, MVBI had Capital (as hereafter defined) of $31,295,000, divided into
common stock of $80,000, comprehensive income/surplus of $12,923,000, and
retained earnings of $18,292,000. Since December 31, 2004, MVBI paid a cash
dividend of $5,611,346.00. There are no options to purchase MVBI Stock issued
and outstanding. As of the date of this Agreement, MVBI has 10,000 authorized
shares of common stock, $10.00 par value ("MVBI Stock"), of which 7,982 shares
are issued and outstanding (no other class of capital stock being authorized),
and all of which are owned by Sellers.
(B) BANK OF MOUNTAIN VIEW. Bank of Mountain View ("BMV") is an Arkansas
state bank duly organized and existing in good standing under the laws of the
State of Arkansas with its main office located in Mountain View, Arkansas. As of
the date of this Agreement, BMV has 4,000 authorized shares of common stock,
$25.00 par value per share (no other class of capital stock being authorized),
of which 4,000 shares are issued and outstanding, and 100% owned by MVBI.
(C) HBI. HBI is a corporation duly organized and existing in good standing
under the laws of the State of Arkansas, with its principal executive offices
located in Conway, Arkansas. HBI is a financial holding company subject to
regulation by the Federal Reserve Board (hereafter defined). As of December 31,
2004, HBI had Capital of $106,610,000, divided into common stock of $266,000,
preferred stock of $21,000, preferred treasury stock of $(569,000), accumulated
other comprehensive loss of $(858,000), capital surplus of $90,455,000 and
retained earnings of $17,295,000. As of the date of this Agreement, HBI has
5,000,000 authorized shares of common stock, $0.10 par value ("HBI Common
Stock"). On April 18, 2005, the common shareholders of HBI voted to reduce the
par value of the HBI Common Stock to $0.01 per share and increase the number of
authorized shares to 25,000,000. There are 3,915,230 shares of HBI Common Stock
issued and outstanding. HBI has 5,500,000 authorized shares of preferred stock,
$0.01 par value, of which 2,500,000 shares of Class A Preferred Stock are
authorized and 2,134,068 are issued and outstanding, and 3,000,000 shares of
Class B Preferred Stock are authorized, and none are issued and outstanding.
In consideration of their mutual promises and obligations, the Parties
further agree as follows:
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DEFINITIONS
(A) DEFINITIONS. Capitalized terms used in this Agreement have the
following meanings:
"Accredited Investor" has the meaning assigned to such term in Rule 501
promulgated under the Securities Act.
"Acquisition" has the meaning assigned to such term in Section 1.1.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, Controls, is
Controlled by, or is under common Control with such Person.
"Agreement" means this Stock Purchase Agreement, together with all Exhibits
and Schedules annexed hereto, and incorporated by specific reference, as a part
of this Agreement.
"Arkansas Resident" means:
(1) A corporation, partnership, trust or other form of business
organization which has a principal office within the State of Arkansas on the
date of execution of this Agreement and on the Closing Date.
(2) An individual whose principal residence is in the State of
Arkansas on the date of execution of this Agreement and on the Closing Date.
(3) A corporation, partnership, trust or other form of business
organization which is organized for the specific purpose of acquiring part of an
issue offered pursuant to this Agreement, of which all of the beneficial owners
of such organization are residents of the State of Arkansas on the date of
execution of this Agreement and on the Closing Date.
"Asset Classification" has the meaning assigned to such term in Section
4.1(U).
"BMV" means Bank of Mountain View, as set forth in paragraph (B) of the
Recitals.
"Business Day" means any day other than a Saturday, Sunday, or a day on
which the HBI Banks are not open for business.
"Capital" means capital stock, surplus and retained earnings determined in
accordance with GAAP. Unrealized gains or losses in investment securities will
be included when determining Capital.
"Cash Consideration" has the meaning assigned to such term in Section 2.1.
"Closing Date" has the meaning assigned to such term in Section 1.2.
"Code" has the meaning assigned to such term in Section 4.1(R)(2).
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"Compensation and Benefit Plans" has the meaning assigned to such term in
Section 4.1(R)(1).
"Contract" has the meaning assigned to such term in Section 4.1(O).
"Control" with respect to any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting interests, by
Contract, or otherwise.
"Derivatives Contract" means an exchange-traded or over-the-counter swap,
forward, future, option, cap, floor or collar financial contract or any other
contract that (1) is not included on the balance sheet of the Financial Reports
of MVBI, and (2) is a derivative contract (including various combinations
thereof).
"Earnings Calculation" has the meaning assigned to such term in Section
2.2.
"Environmental Law" means (1) any federal, state, and/or local law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, legal doctrine, order, judgment, decree, injunction,
requirement or agreement with any governmental entity, relating to (a) the
protection, preservation or restoration of the environment (including air, water
vapor, surface water, groundwater, drinking water supply, surface land,
subsurface land, plant and animal life or any other natural resource) or to
human health or safety, or (b) the exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of Hazardous Material, in each case as amended
and as now in effect, including the Federal Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the Federal Water Pollution Control Act of 1972, the
Federal Clean Air Act, the Federal Clean Water Act, the Federal Resource
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments thereto), the Federal Solid Waste Disposal and the Federal Toxic
Substances Control Act, and the Federal Insecticide, Fungicide and Rodenticide
Act, the Federal Occupational Safety and Health Act of 1970, and (2) any common
law or equitable doctrine (including injunctive relief and tort doctrines such
as negligence, nuisance, trespass and strict liability) that may impose
Liability or obligations for injuries or damages due to, or threatened as a
result of, the presence of or exposure to any Hazardous Material.
"ERISA" has the meaning assigned to such term in Section 4.1(R)(2).
"ERISA Affiliate" has the meaning assigned to such term in Section
4.1(R)(3).
"ERISA Plans" has the meaning assigned to such term in Section 4.1(R)(2).
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System.
"Financial Reports" (1) as to HBI, means its respective audited
consolidated balance sheets and the related statements of income, changes in
shareholders' equity and cash flows for
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the fiscal years or periods ended December 31, 2002, December 31, 2003 and
December 31, 2004, unaudited consolidated balance sheets and the related
statements of income, changes in shareholders' equity and cash flows for the
three (3)-month period ended March 31, 2005, and all financial reports filed or
to be filed by HBI, subsequent to December 31, 2004, in the form filed with the
Federal Reserve Board, FDIC and the Arkansas State Bank Department and (2) as to
MVBI, means its respective unaudited, compiled consolidated balance sheets and
the related statements of income, changes in shareholders' equity and cash flows
for the fiscal years or periods ended December 31, 2002, December 31, 2003 and
December 31, 2004, prepared in accordance with GAAP, unaudited consolidated
balance sheets and the related statements of income, changes in shareholders'
equity and cash flows for the three (3)-month period ended March 31, 2005 and
all financial reports filed or to be filed by MVBI subsequent to December 31,
2004, in the form filed with the Federal Reserve Board, FDIC and the Arkansas
State Bank Department; and as to BMV, means its call reports for the fiscal
years ended December 31, 2002, December 31, 2003, and December 31, 2004.
"GAAP" means generally accepted accounting principles consistently applied.
"Governing Documents" means the articles of incorporation, charter, and
bylaws of the subject entity, including all amendments thereto.
"Hazardous Material" means any substance presently listed, defined,
designated or classified as hazardous, toxic, radioactive or dangerous, or
otherwise regulated, under any Environmental Law, whether by type or quantity,
including any oil or other petroleum product, toxic waste, pollutant,
contaminant, hazardous substance, toxic substance, hazardous waste, special
waste or petroleum or any derivative or by-product thereof, radon, radioactive
material, asbestos, asbestos containing material, urea formaldehyde foam
insulation, lead and polychlorinated biphenyl.
"HBI" means Home BancShares, Inc., an Arkansas corporation and registered
financial holding company as set forth in paragraph (C) of the Recitals.
"HBI Banks" means the following wholly-owned subsidiary banks of HBI: First
State Bank, an Arkansas banking corporation with its principal office in Conway,
Arkansas, Community Bank, an Arkansas banking corporation with its principal
office in Cabot, Arkansas, Twin City Bank, an Arkansas banking corporation with
its principal office in North Little Rock, and upon the closing of the merger
between HBI and Marine Bancorp, Inc., Marine Bank of the Florida Keys, a Florida
banking corporation with its principal office in Marathon, Florida.
"HBI Common Stock" has the meaning assigned to such term in paragraph (C)
of the Recitals.
"HBI Transaction" means: (1) a merger, consolidation or similar transaction
involving HBI, where HBI is not the corporation surviving such transaction or
where a change of Control of HBI is otherwise effected, or (2) the disposition,
by sale, lease, exchange or otherwise, of assets or deposits of HBI or any of
its significant Subsidiaries representing in either case 25% or more of the
consolidated assets or deposits of HBI and its Subsidiaries, or (3) the
issuance, sale or other disposition (including by way of merger, consolidation,
share exchange or any similar
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transaction) of securities representing 25% or more of the voting power of HBI
or any of its significant Subsidiaries other than the issuance of HBI Common
Stock upon the exercise of then outstanding options or the conversion of then
outstanding convertible securities of HBI.
"Hinkle" means James G. Hinkle.
"Indemnified Party" has the meaning assigned to such term in Section
8.5(A).
"Indemnifying Party" has the meaning assigned to such term in Section
8.5(A).
"Insured Depository Institution" has the meaning given it in the Federal
Deposit Insurance Act, as amended, and applicable regulations under such
statute.
"Intellectual Property Rights" has the meaning given such term in Section
4.1(L).
"Knowledge" (and "Know" or "Known") means the actual (but not the
constructive) knowledge of the individual or, if an entity, the Chairman, Chief
Executive Officer, President, Chief Financial Officer, and Chief Lending Officer
of the entity.
"Liability" means any debts, liabilities and obligations of the Party,
whether the same shall be matured or un-matured; whether by Contract or
otherwise, whether accrued, absolute, contingent or otherwise.
"Loan/Fiduciary Property" means any property owned or Controlled by MVBI or
any of its Subsidiaries or in which MVBI or any of its Subsidiaries holds a
security or other interest, and, where required by the context, includes any
such property where MVBI or any of its Subsidiaries constitutes the owner or
operator of such property, but only with respect to such property.
"Losses" has the meaning assigned to such term in Section 8.2.
"Material" means, with respect to either Party, an event, occurrence or
circumstance (including (i) the making of any provisions for possible loan and
lease losses, write-downs of other real estate owned and taxes, and (ii) any
breach of a representation or warranty contained in this Agreement by such
Party) that (a) has or is reasonably likely to have a material adverse effect on
or constitute a material adverse change in the financial condition, results of
operations, business, future operations or prospects of such Party or, as
applicable, its Subsidiaries, or (b) would impair such Party's ability to
perform its obligations under this Agreement or the consummation of any of the
transactions contemplated by this Agreement; provided, however that the
occurrence of the following event or circumstance will not be deemed "Material":
(i) acts of terrorism or war (whether or not declared); (ii) a change in laws or
regulations applicable to either Party; or (iii) general business or financial
condition effecting the commercial banking industry generally.
"MVBI" means Mountain View Bancshares, Inc., an Arkansas corporation as set
forth in paragraph (A) of the Recitals.
"MVBI Earnings" has the meaning assigned to such term in Section 2.2.
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"MVBI Stock" has the meaning assigned to such term in paragraph (A) of the
Recitals.
"Multiemployer Plans" has the meaning assigned to such term in Section
4.1(R)(2).
"Participation Facility" means any loan facility in which MVBI or any of
its Subsidiaries participates in the management and, where required by the
context, includes the owner or operator of such facility.
"Party" means a party to this Agreement.
"Pension Plan" has the meaning assigned to such term in Section 4.1(R)(2).
"Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, governmental
body, or other entity.
"Purchase Price" means the price to be paid by HBI for the MVBI Stock as
set forth in Section 2.1.
"Regulatory Authorities" means federal or state governmental agencies,
authorities or departments (1) charged with the supervision or regulation of
depository institutions or (2) engaged in the insurance of deposits.
"Rights" means securities or obligations convertible into or exchangeable
for, or giving any Person any right to subscribe for or acquire, or any options,
calls or commitments relating to, shares of capital stock.
"Securities Act" means the Securities Act of 1933, as amended, together
with the rules and regulations promulgated under such statute.
"Sellers' Representatives" means James G. Hinkle and Kenneth W. Sutton, as
appointed pursuant to Section 9.6.
"Short-Year Return" has the meaning assigned to such term in Section 5.10.
"Stock Consideration" has the meaning assigned to such term in Section 2.1.
"Stock Restrictions" has the meaning assigned to such term in Section 1.1.
"Subsidiary" means, with respect to any entity, each partnership, limited
liability company, or corporation the majority of the outstanding partnership
interests, membership interests, capital stock or voting power of which is (or
upon the exercise of all outstanding warrants, options and other rights would
be) owned, directly or indirectly, at the time in question by such entity. For
the avoidance of doubt, a Subsidiary shall not include any entity Controlled by
Sellers except MVBI and its Subsidiaries.
"Sutton" means Kenneth W. Sutton.
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"Tax Returns" has the meaning assigned to such term in Section 4.1(BB).
"Taxes" means federal, state, local or foreign income, gross receipts,
windfall profits, severance, property, production, sales, use, license, excise,
franchise, employment, withholding or similar taxes imposed on the income,
properties or operations of the respective Party or its Subsidiaries, together
with any interest, additions, or penalties with respect thereto and any interest
in respect of such additions or penalties.
"Termination Date" has the meaning assigned to such term in Section 5.1.
"Third Party" means any person or group and their respective directors,
officers, employees, representatives, and agents other than HBI, MVBI, or any of
their Subsidiaries, and their respective directors, officers, employees,
representatives, and agents.
"Third Party Claim(s)" has the meaning assigned to such term in Section
8.5.
(B) GENERAL INTERPRETATION. Except as otherwise expressly provided in this
Agreement or unless the context clearly requires otherwise, the terms defined in
this Agreement include the plural as well as the singular; the word "including"
means including without limitation; the words "hereof," "herein," "hereunder,"
"in this Agreement" and other words of similar import refer to this Agreement as
a whole and not to any particular Article, Section or other subdivision; and
references in this Agreement to Articles, Sections, Schedules, and Exhibits
refer to Articles and Sections of and Schedules and Exhibits to this Agreement.
Unless otherwise stated, references to Subsections refer to the Subsections of
the Section in which the reference appears. All pronouns used in this Agreement
include the masculine, feminine and neuter gender, as the context requires. All
accounting terms used in this Agreement that are not expressly defined in this
Agreement have the respective meanings given to them in accordance with GAAP.
ARTICLE I. STOCK PURCHASE
1.1. PURCHASE OF SHARES. Subject to the provisions of this Agreement, on
the Closing Date, the Sellers agree to sell and convey to HBI one hundred
percent (100%) of the MVBI Stock issued and outstanding on the Closing Date for
the consideration set forth herein, free and clear of all liens, encumbrances,
security agreements, equities, options, claims, charges, and restrictions of any
kind or nature whatsoever ("Stock Restrictions") and HBI agrees to purchase the
MVBI Stock from the Sellers upon the terms and conditions set forth herein (the
"Acquisition").
1.2. CLOSING DATE. Unless the Parties agree upon another date, the "Closing
Date" will be the tenth (10th) Business Day after the fulfillment or waiver of
each condition precedent set forth in, and the granting of each approval (and
expiration of any waiting period) required by, ARTICLE VI. If the Acquisition is
not consummated in accordance with this Agreement on or prior to the Termination
Date, either Party may terminate this Agreement in accordance with ARTICLE VII.
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1.3. CLOSING. The closing ("Closing") of the Acquisition shall take place
on the Closing Date at the offices of Mitchell, Williams, Selig, Gates &
Woodyard, P.L.L.C., 425 West Capitol Avenue, Suite 1800, Little Rock, Arkansas
72201.
(A) At the Closing, the Sellers will deliver to HBI all of the issued
and outstanding shares of MVBI Stock, properly endorsed in blank, with
signatures guaranteed in form and substance satisfactory to HBI. Such shares
shall be fully paid and non-assessable, and shall be free and clear of all Stock
Restrictions. If any certificate representing such shares have been lost or
destroyed, then the holder of such shares shall, at HBI's option, deliver at the
Closing an affidavit to that fact, or such indemnity as may be acceptable to
HBI.
(B) HBI shall pay the Cash Consideration at the Closing in immediately
available funds in Little Rock, Arkansas. The Stock Consideration shall be paid
as validly issued, fully paid and non-assessable shares of HBI Common Stock,
which shall bear the restrictive legend set forth in Section 2.3(B).
(C) If not paid prior to Closing, MVBI may distribute to its
shareholders at Closing MVBI's earnings, calculated in accordance with GAAP, for
the period beginning January 1, 2005 and ending March 3, 2005. This distribution
shall be in addition to the Purchase Price and the MVBI Earnings.
ARTICLE II. CONSIDERATION
2.1. PURCHASE PRICE. On the Closing Date, HBI shall pay to the Sellers the
total amount of $43,750,000 represented $39,374,984 by payments in cash (the
"Cash Consideration") and $4,375,016 by the issuance by HBI of 115,132 shares of
HBI Common Stock valued for purposes of the exchange at $38.00 per share (the
"Stock Consideration").
(A) The Cash Consideration shall be distributed to the Sellers pro
rata in proportion to their percentage of ownership of MVBI Stock, after taking
into account in the portions to be paid to Hinkle and Sutton, the Stock
Consideration paid to them.
(B) The Stock Consideration will be paid fifty percent (50%), or
57,566 shares, to Hinkle and fifty percent (50%), or 57,566 shares, to Sutton,
subject to the provisions of Section 2.2.
(1) If prior to the issuance of HBI Common Stock as Stock
Consideration, the outstanding shares of HBI Common Stock are increased,
decreased, or are changed into a different number of shares or a different
class by reason of any merger, recapitalization, reclassification, stock
split, or similar transaction, or if a stock dividend shall be paid, an
appropriate and proportionate adjustment or adjustments will be made to the
number of shares to be issued as Stock Consideration so that the full
amount of the Stock Consideration is paid.
(2) If, at any time during the period beginning on March 3, 2005
and ending within twelve (12) months following the Closing Date, HBI offers
its Common
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Stock in (i) a public offering or (ii) as stock consideration for the
purchase of stock or assets of a Third Party for a value less than $38 per
share, such value being adjusted for any of the changes in HBI Common Stock
set forth in Section 2.1(B)(1), the number of shares of HBI Common Stock
required to pay the Stock Consideration shall be adjusted, and, within ten
(10) Business Days after the completion of such offering, HBI shall issue
to each of Hinkle and Sutton such additional number of shares of HBI Common
Stock (to the nearest whole share) so that the full amount of the Stock
Consideration of $4,375,016 is paid.
For example: if HBI Common Stock is offered in a public offering
at $31 per share, the additional number of shares of HBI Common Stock
required to satisfy the Stock Consideration would be calculated as: the
Stock Consideration of $4,375,016 divided by the offering price of $31, the
dividend of which is 141,129, then subtracting 141,129 from 115,132 (the
number of shares issued on the Closing Date) yielding an additional 25,997
shares of HBI Common Stock, or 12,998 shares to each of Hinkle and Sutton.
2.2. MVBI EARNINGS. In addition to the Purchase Price, MVBI and Sellers
agree that MVBI shall not distribute the earnings of MVBI for the period from
March 4, 2005 through the Closing Date (the "MVBI Earnings") to Sellers, but
instead agree that an additional Purchase Price amount equal to one-half (1/2)
such earnings shall be paid by HBI to Sellers. In addition, MVBI and Sellers
agree that neither MVBI nor Sellers shall make any adjustments to the books and
records of MVBI (other than in the ordinary and usual course of business
consistent with past practices or as required for legal or regulatory purposes)
that will have the affect of increasing or inflating the MVBI Earnings, without
the prior written consent of HBI. Within ten (10) Business Days following the
Closing Date, HBI will calculate the MVBI Earnings in accordance with GAAP and
then pay one-half (1/2) of such amount to the Sellers by bank check pro rata in
proportion to their percentage of ownership of MVBI Stock. Following this
determination of MVBI's Earnings, a written memorandum showing that
determination shall be prepared by HBI and annexed to this Agreement.
2.3. SECURITIES LAW EXEMPTION. The offering of HBI Common Stock to Hinkle
and Sutton is being made pursuant to an exemption from registration under the
Securities Act and in compliance with Rule 147. Therefore, Hinkle and Sutton, in
their individual capacities, as evidenced by their signatures at the end of this
Agreement, each hereby represents and warrants to HBI that, on the date of this
Agreement and as of the Closing Date, he:
(A) acknowledges that the shares HBI Common Stock to be issued
hereunder are not registered under the Securities Act, nor under the Arkansas
Securities Act and further acknowledges that the HBI Common Stock is being
offered and sold pursuant to exemptions from registration pursuant to Section
3(a)(11) of the Securities Act and Rule 147 promulgated thereunder and Section
23-42-503(a)(3) of the Arkansas Securities Act.;
(B) acknowledges that pursuant to the exemption provided under Section
3(a)(11) of the Securities Act and Rule 147: (i) for a period of nine (9) months
from the date of the original issuance of the HBI Common Stock to him, the
Shares may only be resold to persons resident within the State of Arkansas; (ii)
HBI will issue stop transfer instructions to its
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Exchange Agent prohibiting the transfer of shares in violation of Rule 147, and
(iii) the shares so issued will bear the following restrictive legend:
"The securities evidenced by this certificate have not been registered
under the Securities Act of 1933 or the securities laws of the state
of Arkansas and are being offered and sold in reliance on exemptions
from the registration requirements of the Securities Act of 1933 and
the Arkansas Securities Act. The securities are subject to
restrictions on transferability and resale. During the period in which
the securities are being offered and sold by the issuer, and for a
period of nine (9) months from the date of the last sale by the issuer
of the securities, all resales of any part of the securities shall be
made only to persons resident within the state of Arkansas."
(C) is an Arkansas Resident in that his principal residence is located
in Arkansas at the address set forth following his signature;
(D) is an Accredited Investor as that term is defined in Section
2(a)(15) of the Securities Act and Rule 501(a) promulgated thereunder, and (i)
is fully familiar with HBI's business, financial condition, and operations,
prospects and future potential, (ii) has such other information, financial and
otherwise, including all of the information he would be provided in an offering
registered under the Securities Act, which he has deemed material in formulating
a decision to acquire the HBI Common Stock on the terms and conditions set forth
herein, and (iii) has had the opportunity to ask questions of and receive
answers from HBI;
(E) is acquiring the HBI Common Stock for his own account, solely for
investment purposes, and not for a view to resale of said HBI Common Stock;
(F) is able to bear the economic risks of this investment; and
(G) acknowledges that the shares of HBI Common Stock acquired
hereunder will not be resold or otherwise transferred or assigned without
compliance with the registration provisions of the Securities Act and applicable
state blue sky laws or exemption therefrom.
ARTICLE III. ACTIONS PENDING CLOSING
Unless HBI otherwise agrees in writing between the date hereof and the
Closing Date, the Sellers shall cause MVBI, and MVBI shall and shall cause each
of its Subsidiaries to conduct its respective business in the ordinary and usual
course consistent with past practice and shall use their respective best efforts
to maintain and preserve MVBI's and each of its Subsidiaries' business
organization, employees and advantageous business relationships and retain the
services of MVBI's or, as applicable, its Subsidiaries' officers and key
employees identified by HBI, and Sellers shall cause MVBI not to do any of the
following, and MVBI shall not do, and shall cause BMV not to do any of the
following, without the prior written consent of HBI:
3.1. CAPITAL STOCK. Except as disclosed in Schedule 4.1(C), issue, sell or
otherwise permit to become outstanding any additional shares of capital stock of
MVBI or BMV,
10
or any Rights with respect thereto, or enter into any agreement with respect to
the foregoing, or permit any additional shares of MVBI Stock to become subject
to grants of employee stock options, stock appreciation rights or similar
stock-based employee compensation rights.
3.2. DIVIDENDS, ETC. Except as permitted by Section 1.3(C), declare or pay
any dividend on or in respect of, or declare or make any distribution on, or
directly or indirectly combine, split, subdivide, redeem, reclassify, purchase
or otherwise acquire, any shares of its capital stock or, other than as
permitted in or contemplated by this Agreement, authorize the creation or
issuance of, or issue, any additional shares of its capital stock or any Rights
with respect thereto.
3.3. INDEBTEDNESS; LIABILITIES; ETC. Other than in the ordinary and usual
course of business consistent with past practice, incur any indebtedness for
borrowed money, assume, guarantee, endorse or otherwise as an accommodation
become responsible or liable for the obligations of any other individual,
corporation or other entity.
3.4. LINE OF BUSINESS; OPERATING PROCEDURES; ETC. Except as may be directed
by any regulatory agency: (A) change its lending, investment, liability
management or other Material banking policies in any Material respect, or (B)
commit to incur any further capital expenditures beyond those disclosed in
Schedule 3.4 or incurred in the ordinary and usual course of business consistent
with past practices and not exceeding $15,000 individually or $25,000 in the
aggregate.
3.5. LIENS AND ENCUMBRANCES. Except as disclosed in Schedule 3.5 or
incurred in the ordinary and usual course of business consistent with past
practices, subject any of its assets to a lien, charge, or encumbrance
(including mortgage, pledge or security interest), or permit any such lien,
charge or encumbrance to exist.
3.6. COMPENSATION; EMPLOYMENT AGREEMENTS; ETC. Except as disclosed in
Schedule 3.6, enter into or amend any employment, severance or similar agreement
or arrangement with any of its directors, officers or employees, or grant any
salary or wage increase, or increase any employee benefit (including incentive
or bonus payments), except normal individual increases in regular compensation
to officers or employees in the ordinary and usual course of business consistent
with past practice.
3.7. BENEFIT PLANS. Except as provided in Section 5.11, or as disclosed in
Schedule 3.7, enter into or modify (except as may be required by applicable law
or by this Agreement) any pension, retirement, stock option, stock purchase,
savings, profit sharing, deferred compensation, consulting, bonus, group
insurance or other employee benefit, incentive or welfare contract, plan or
arrangement, or any trust agreement related thereto, in respect of any of its
directors, officers or other employees, including taking any action that
accelerates the vesting or exercise of any benefits payable thereunder.
3.8. CONTINUANCE OF BUSINESS. Except pursuant to Sections 5.13, 5.14 and
5.15, or as disclosed in Schedule 3.8, dispose of or discontinue any portion of
its assets, business or properties, that is in excess of $25,000 individually or
$100,000 in the aggregate, or merge or consolidate with, or acquire all or any
portion of, the business or property of any other entity
11
(except foreclosures or acquisitions by BMV in its fiduciary capacity, in each
case in the ordinary and usual course of business consistent with past
practice).
3.9. AMENDMENTS. Amend its Governing Documents.
3.10. CLAIMS. Settle any claim, litigation, action or proceeding involving
any Liability for money damages in excess of $25,000 or Material restrictions
upon the operations of MVBI or BMV.
3.11. CONTRACTS. Except as disclosed on Schedule 3.11, enter into, renew,
terminate or make any change in any Contract (excluding agreements and loans
permitted under Section 3.12) of a value or requiring payments during the life
of the Contract, including all options, in excess of $25,000, except in the
ordinary and usual course of business consistent with past practice with respect
to Contracts that are terminable by it without penalty on no more than 60 days
prior written notice.
3.12. LOANS. Extend credit or account for loans and leases other than in
the ordinary and usual course of business of MVBI and in accordance with written
lending policies and accounting practices in existence at the date of the
execution of this Agreement, except that BMV shall not, without the prior notice
and consultation with HBI's Chairman or President make any new loan or renew any
existing loan in a principal amount in excess of $1,000,000.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
4.1. REPRESENTATIONS AND WARRANTIES OF SELLERS AND MVBI. Each of the
Sellers and MVBI hereby represents and warrants to HBI, now and as of the
Closing Date, as follows:
(A) RECITALS. The facts set forth in the Recitals of this Agreement
with respect to MVBI and BMV are true and correct.
(B) ORGANIZATION, STANDING AND AUTHORITY. Each of MVBI, BMV, and any
other Subsidiary of MVBI, is incorporated under the laws of the State of
Arkansas, and is in good standing under the laws of the State of Arkansas and is
duly qualified to do business and is in good standing in the states of the
United States and foreign jurisdictions where the failure to be duly qualified,
individually or in the aggregate, is reasonably likely to have a Material effect
on it. All of such foreign jurisdictions are set forth on Schedule 4.1(B). Each
of MVBI, BMV, and any other Subsidiary of MVBI has in effect all federal, state,
local and foreign governmental authorizations necessary for it to own or lease
its properties and assets and to carry on its business as it is now conducted.
BMV is the only Subsidiary of MVBI that is an Insured Depository Institution,
and its deposits are insured by the Bank Insurance Fund of the FDIC. Except as
disclosed in Schedule 4.1(B), BMV is not subject to any orders, resolutions,
commitments, agreements, undertakings, understandings, or consents that affect
its status as such Insured Depository Institution.
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(C) SHARES. The outstanding shares of MVBI's and its Subsidiaries'
capital stock are validly issued and outstanding, fully paid and non-assessable,
and subject to no preemptive rights. Except as disclosed in Schedule 4.1(C),
there are no shares of capital stock or other equity securities of MVBI or its
Subsidiaries outstanding and no outstanding Rights with respect thereto.
(D) MVBI SUBSIDIARIES. MVBI has disclosed on Schedule 4.1(D) a list of
all of its Subsidiaries, and the number of authorized, issued, and outstanding
shares of each class of stock and percentages of ownership of MVBI or BMV. No
equity securities of BMV are or may become required to be issued (other than to
MVBI or one of its Subsidiaries) by reason of any Rights with respect thereto.
There are no Contracts, commitments, understandings or arrangements by which any
of its Subsidiaries is or may be bound to sell or otherwise issue any shares of
such Subsidiary's capital stock, and there are no Contracts, commitments,
understandings or arrangements relating to the rights of MVBI or its
Subsidiaries, as applicable, to vote or to dispose of such shares. All of the
shares of capital stock of each of its Subsidiaries held by MVBI are fully paid
and non-assessable and are owned by MVBI or one of its Subsidiaries free and
clear of any Stock Restrictions. Except as disclosed in Schedule 4.1(D), MVBI
does not own beneficially, directly or indirectly, any shares of any equity
securities or similar interests of any corporation, bank, partnership, joint
venture, business trust, association or organization other than BMV.
(E) CORPORATE POWER. Each of MVBI and its Subsidiaries has the
corporate power and authority to carry on its business as it is now being
conducted and to own all its Material properties and assets.
(F) AUTHORITY. This Agreement, and each of the MVBI obligations set
forth herein, has been authorized by all necessary corporate action of MVBI. To
the extent any of the Sellers is an entity, this Agreement has been duly
authorized by all necessary action of that entity. This Agreement is a valid and
binding agreement of the Sellers and MVBI, enforceable against them in
accordance with its terms, subject to bankruptcy, insolvency and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(G) NO DEFAULTS. Subject to the required regulatory approvals referred
to in Section 6.1, any required filings under federal and state securities laws,
and, except as disclosed in Schedule 4.1(G), the execution, delivery and
performance of this Agreement and the consummation by the Sellers and MVBI of
the transactions contemplated by this Agreement do not and will not Materially
(1) constitute a breach of, or violation of, or a default under, any law, rule
or regulation or any judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of the Sellers or MVBI or any of its
Subsidiaries or to which the Sellers or MVBI or any of its Subsidiaries or any
of their properties is subject or bound, or (2) constitute a breach of, or
violation of, or a default under, the Governing Documents of MVBI or any of its
Subsidiaries, or (3) require any consent or approval under any such law, rule,
regulation, judgment, decree, order, governmental permit or license or the
consent or approval of any other party to any such agreement, indenture or
instrument.
(H) MVBI FINANCIAL REPORTS. Except as disclosed in Schedule 4.1(H),
the Financial Reports of each of MVBI and BMV: (1) did not and will not contain
any untrue
13
statement of a Material fact or omit to state a Material fact required to be
stated therein or necessary in order to make the statements made therein, and in
light of the circumstances under which they were made, not Materially
misleading; (2) each of the balance sheets in or incorporated by reference into
the Financial Reports (including the related notes and schedules thereto) are
correct, complete, and in accordance with the books and records of and fairly
presents and will fairly present the financial position of the entity or
entities to which it relates as of its date; (3) each of the statements of
income and changes in shareholders' equity and cash flows or equivalent
statements in the Financial Reports (including any related notes and schedules
thereto) are correct, complete, and in accordance with the books and records of
and fairly presents and will fairly present the results of operations, changes
in shareholders' equity and cash flows, as the case may be, of the entity or
entities to which it relates for the periods set forth therein; and (4) in each
case in accordance with GAAP during the periods involved, except in each case as
may be noted therein, subject to normal and recurring year-end adjustments,
related notes and schedules in the case of such statements.
(I) ABSENCE OF UNDISCLOSED LIABILITIES. Neither MVBI nor any of its
Subsidiaries has any Material Liability, except (1) as disclosed on Schedule
4.1(I), (2) as reflected in its Financial Reports prior to the date of this
Agreement, and (3) for commitments and obligations made, or Liabilities
incurred, in the ordinary and usual course of business consistent with past
practice since December 31, 2004 and which are fully reflected as liabilities on
that entity's books and records. Except (x) as disclosed on Schedule 4.1(I) and
(y) for commitments and obligations made, or Liabilities incurred, in the
ordinary and usual course of business consistent with past practice since
December 31, 2004 and which are fully reflected as liabilities on that entity's
books and records, since December 31, 2004, neither MVBI nor any of its
Subsidiaries has incurred or paid any Material Liability (including any
Liability incurred in connection with any acquisitions in which any form of
direct financial assistance of the federal government or any agency thereof has
been provided to any Subsidiary).
(J) NO EVENTS. Except (x) as disclosed on Schedule 4.1(J) and (y) for
events occurring in the ordinary and usual course of business consistent with
past practice since December 31, 2004 and which are fully reflected as
liabilities on that entity's books and records, since December 31, 2004, no
event has occurred that, individually or in the aggregate, is reasonably likely
to have a Material effect on MVBI or any of its Subsidiaries.
(K) PROPERTIES. Except as disclosed in Schedule 4.1(K), MVBI and each
of its Subsidiaries have good and marketable title, free and clear of all liens,
encumbrances, charges, defaults, or equities of any character, to all of the
properties and assets, tangible and intangible, reflected in the Financial
Reports of MVBI as being owned by MVBI or its Subsidiaries as of the dates
thereof. All buildings and all Material fixtures, equipment, and other property
and assets that are held under leases or subleases by MVBI or any of its
Subsidiaries are held under valid leases or subleases enforceable in accordance
with their respective terms, other than any such exceptions to validity or
enforceability as are disclosed on Schedule 4.1(K). Other than month-to-month
leases on operating equipment, all leases and subleases are identified on
Schedule 4.1(K), and except as disclosed on such schedule, are fully
transferrable to HBI upon consummation of this Agreement. MVBI further
represents, covenants and warrants that, except as disclosed in Schedule 4.1(K),
taking their age and ordinary wear and tear into account, the
14
assets and properties of MVBI or any of its Subsidiaries are in good operating
condition and repair and have been operated and maintained in the ordinary and
usual course of business, consistent with past practice, other than those items
of personal property not in use by MVBI or its Subsidiaries as of the date
hereof.
(L) INTELLECTUAL PROPERTY RIGHTS. Schedule 4.1(L) lists all patents,
patent rights, licenses, trade secrets, trademarks, service marks, trademark
rights, trade names or trade name rights, copyrights, inventions and other
intellectual property rights ("Intellectual Property Rights") necessary for the
ownership and operation of the business of MVBI or any of its Subsidiaries in
the manner in which the business has been historically and currently owned and
operated by MVBI or its Subsidiaries. none of the Intellectual Property Rights
interferes with, infringes upon, misappropriates, or violates any intellectual
property rights of third parties, and neither Sellers nor MVBI nor any of its
Subsidiaries has received any written charge, complaint, claim, demand, or
notice alleging any such interference, infringement, misappropriation, or
violation. To MVBI's Knowledge, no Third Party has interfered with, infringed
upon, misappropriated, or violated any of the Intellectual Property Rights.
Neither Sellers nor MVBI nor any of its Subsidiaries has received any written
notice with respect to any outstanding injunction, judgment, order, decree,
ruling, or charge relating to any item of the Intellectual Property Rights, and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
or demand is pending or, to the Knowledge of the Sellers or MVBI or any of its
Subsidiaries, is threatened which challenges the legality, validity,
enforceability, use, or ownership of any of the Intellectual Property Rights.
(M) LITIGATION; REGULATORY ACTION. Except as disclosed in Schedule
4.l(M), no litigation, proceeding or controversy before any court or
governmental agency is pending to the Knowledge of the Sellers or MVBI against
MVBI or any of its Subsidiaries, including, without limitation, any litigation,
proceedings, or controversies that allege claims under any fair lending law or
other law relating to discrimination, including the Equal Credit Opportunity
Act, the Fair Housing Act, the Community Reinvestment Act and the Home Mortgage
Disclosure Act, or allege claims under any fair credit reporting laws or laws
for the protection of non-public personal information, including the Fair Credit
Reporting Act, and the Gramm-Leach-Bliley Act, and, to the Knowledge of the
Sellers or MVBI, no such litigation, proceeding or controversy has been
threatened; and except as disclosed in Schedule 4.1(M), neither MVBI nor any of
its Subsidiaries or any of its or their Material properties or their officers,
directors or Controlling persons is a party to or is subject to any order,
decree, agreement, memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, any Regulatory Authority or other
governmental authority, and neither Sellers nor MVBI nor any of its Subsidiaries
has been advised by any of such Regulatory Authorities or other governmental
authority that such authority is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum or understanding, commitment letter or similar
submission.
(N) COMPLIANCE WITH LAWS. Except as disclosed in Schedule 4.1(N), each
of MVBI and its Subsidiaries:
15
(1) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Regulatory Authorities or other governmental authority that are
required in order to permit it to own its businesses presently conducted
and that are Material to the business of it and its Subsidiaries, taken as
a whole; all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect and, to the Knowledge of the Sellers
and MVBI, no suspension or cancellation of any of them is threatened; and
all such filings, applications and registrations are current;
(2) has received no notification or communication from any
Regulatory Authority or other governmental authority or the staff thereof
(a) asserting that MVBI or any of its Subsidiaries is not in compliance
with any of the statutes, regulations or ordinances which such Regulatory
Authority or governmental authority enforces, (b) threatening to revoke any
license, franchise, permit or governmental authorization of MVBI or any of
its Subsidiaries, or (c) requiring any of MVBI or BMV (or any of its
officers, directors or Controlling persons) to enter into a cease and
desist order, agreement or memorandum of understanding (or requiring the
board of directors thereof to adopt any resolution or policy);
(3) is not required to give prior notice to any federal banking
or thrift agency of the proposed addition of an individual to its Board of
Directors or the employment of an individual as a senior executive; and
(4) BMV is in compliance in all Material respects with all fair
lending laws or other laws relating to discrimination, including the Equal
Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment
Act and the Home Mortgage Disclosure Act, and all fair credit reporting
laws and laws for the protection of non-public personal information,
including the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act, and
the Fair and Accurate Credit Transaction Act.
(O) MATERIAL CONTRACTS. Except as disclosed in Schedule 4.1(O) (and
with a true and complete copy of the document or other item in question attached
to such schedule), none of MVBI or its Subsidiaries, nor any of their respective
assets, businesses or operations, is a party to, or is bound or affected by, or
receives benefits under, any written or oral contract, indenture, agreement,
lease, standby letter of credit, mortgage, loan or commitment ("Contract") or
Contracts obligating it or them to pay more than $25,000 in any year and which
cannot be terminated upon notice of sixty (60) days or less. Except as disclosed
in Schedule 4.1(O), neither MVBI nor any of its Subsidiaries is in default under
any such Contract to which it is a party, by which its respective assets,
business or operations may be bound or affected, or under which it or any of its
respective assets, business or operations receives benefits, and there has not
occurred any event that, with the lapse of time or the giving of notice or both,
would constitute such a default. Except as disclosed in Schedule 4.1(O), neither
MVBI nor any of its Subsidiaries is subject to or bound by any Contract
containing covenants that limit the ability of MVBI or any of its Subsidiaries
to compete in any line of business or with any Person or that involve any
restriction of geographical area in which, or method by which, MVBI or BMV may
16
carry on its business (other than as may be required by law or any applicable
Regulatory Authority).
(P) REPORTS. Since January 1, 2002 each of MVBI and BMV has filed all
reports and statements, together with any amendments required to be made with
respect thereto, that it was required to file with (1) the Arkansas State Bank
Department, (2) the FDIC, (3) the Federal Reserve Board, and (4) any other
Regulatory Authorities or other governmental authority having jurisdiction with
respect to MVBI and its Subsidiaries. As of their respective dates (and without
giving effect to any amendments or modifications filed after the date of this
Agreement with respect to reports and documents filed before the date of this
Agreement), each of such reports and documents, including the financial
statements, exhibits and schedules thereto, complied in all Material respects
with all of the statutes, rules and regulations enforced or promulgated by the
Regulatory Authority with which they were filed and did not contain any untrue
statement of a Material fact or omit to state any Material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not Materially misleading.
(Q) BROKERS AND FINDERS. Except as set forth in Schedule 4.1(Q),
neither the Sellers nor MVBI, BMV, any of their Subsidiaries, nor any of their
respective officers, directors or employees has employed any broker or finder,
or agreed to pay any fees to any director or former director or incurred any
Liability for any financial advisory fees, brokerage fees, commissions or
finder's fees, and no broker or finder, or director or former director of MVBI
and BMV, has acted directly or indirectly for the Sellers or MVBI or any of its
Subsidiaries in connection with this Agreement or the transactions contemplated
hereby.
(R) EMPLOYEE BENEFIT PLANS.
(1) Schedule 4.1(R)(1) contains a complete list of all bonus,
deferred compensation, pension, retirement, profit-sharing, thrift savings,
employee stock ownership, stock bonus, stock purchase, restricted stock and
stock option plans, all employment or severance contracts, all medical,
dental, health and life insurance plans, all other employee benefit plans,
Contracts or arrangements and any applicable "change of control" or similar
provisions in any plan, Contract or arrangement maintained or contributed
to by MVBI or any of its Subsidiaries for the benefit of employees, former
employees, directors, former directors or their beneficiaries (the
"Compensation and Benefit Plans"). True and complete copies of all
Compensation and Benefit Plans of MVBI and its Subsidiaries, including any
trust instruments and/or insurance contracts, if any, forming a part
thereof, and all amendments thereto, have been supplied to HBI.
(2) All "employee benefit plans" within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), other than "multiemployer plans" within the meaning of Section
3(37) of ERISA ("Multiemployer Plans"), covering employees or former
employees of MVBI and its Subsidiaries (the "ERISA Plans"), to the extent
subject to ERISA, are in substantial compliance with ERISA. Except as
disclosed in Schedule 4.1(R)(2) each ERISA Plan which is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA ("Pension
Plan") and which is intended to be qualified under Section 401(a) of
17
the Internal Revenue Code of 1986 (as amended, the "Code") has received a
favorable determination letter from the Internal Revenue Service, and
Sellers and MVBI are not aware of any circumstances reasonably likely to
result in the revocation or denial of any such favorable determination
letter or the inability to receive such a favorable determination letter.
There is no Material litigation relating to the ERISA Plans pending or, to
the Sellers' or MVBI's Knowledge, threatened. Neither MVBI nor any of its
Subsidiaries has engaged in a transaction with respect to any ERISA Plan
that could subject MVBI or any of its Subsidiaries to a tax or penalty
imposed by either Section 4975 of the Code or Section 502(i) of ERISA in an
amount which would be Material.
(3) No Liability under Subtitle C or D of Title IV of ERISA has
been or is expected to be incurred by MVBI or any of its Subsidiaries with
respect to any ongoing, frozen or terminated "single-employer plan," within
the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or the single-employer plan of any entity which
is considered one employer with MVBI under Section 4001(a)(15) of ERISA or
Section 414 of the Code (an "ERISA Affiliate"). Neither MVBI nor any of its
Subsidiaries presently contributes to a Multiemployer Plan, nor have they
contributed to such a plan within the past five calendar years. No notice
of a "reportable event," within the meaning of Section 4043 of ERISA for
which the 30-day reporting requirement has not been waived, has been
required to be filed for any Pension Plan or by any ERISA Affiliate within
the past 12-month period.
(4) All contributions required to be made under the terms of any
ERISA Plan have been timely made. Neither any Pension Plan nor any
single-employer plan of an ERISA Affiliate has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412 of
the Code or Section 302 of ERISA, except as disclosed in Schedule
4.1(R)(4). Neither MVBI nor any of its Subsidiaries has provided, or is
required to provide, security to any Pension Plan or to any single-employer
plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the Code.
(5) Except as disclosed in Schedule 4.1(R)(5), under each Pension
Plan which is a single-employer plan, as of the last day of the most recent
plan year, the actuarially determined present value of all "benefit
liabilities," within the meaning of Section 4001(a)(16) of ERISA (as
determined on the basis of the actuarial assumptions contained in the
plan's most recent actuarial valuation) did not exceed the then current
value of the assets of such plan, and there has been no Material change in
the financial condition of such plan since the last day of the most recent
plan year.
(6) Neither MVBI nor any of its Subsidiaries has any obligations
for retiree health and life benefits under any plan, except as set forth in
Schedule 4.1(R)(6). There are no restrictions on the rights of MVBI or its
Subsidiaries to amend or terminate any such plan without incurring any
Liability thereunder.
(7) Except as disclosed in Schedule 4.l(R)(7), neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated by this Agreement will (a) result in any payment
(including severance, unemployment compensation, golden parachute or
otherwise) becoming due to any director or any
18
employee of MVBI or any of its Subsidiaries under any Compensation and
Benefit Plan or otherwise from MVBI or any of its Subsidiaries, (b)
increase any benefits otherwise payable under any Compensation and Benefit
Plan, or (c) result in any acceleration of the time of payment or vesting
of any such benefit.
(S) NO KNOWLEDGE. Neither the Sellers nor MVBI and its Subsidiaries
Know of any reason why the regulatory approvals referred to in Section 6.1
should not be obtained.
(T) LABOR AGREEMENTS. Neither MVBI nor any of its Subsidiaries is a
party to or is bound by any collective bargaining agreement, Contract or other
agreement or understanding with a labor union or labor organization, nor is MVBI
or any of its Subsidiaries the subject of a proceeding asserting that it or any
such Subsidiary has committed an unfair labor practice (within the meaning of
the National Labor Relations Act) or seeking to compel it or such Subsidiary to
bargain with any labor organization as to wages and conditions of employment,
nor is there any strike or other labor dispute involving it or any of its
Subsidiaries pending or, to the Sellers' or MVBI's Knowledge, threatened, nor
are they aware of any activity involving MVBI or any of the Subsidiaries'
employees seeking to certify a collective bargaining unit or engaging in any
other organization activity.
(U) ASSET CLASSIFICATION. MVBI and its Subsidiaries have disclosed in
Schedule 4.1(U) a list, accurate and complete in all Material respects, of the
aggregate amounts of loans, extensions of credit or other assets of MVBI and its
Subsidiaries that have been classified by it as of December 31, 2004 (the "Asset
Classification"); and no amounts of loans, extensions of credit or other assets
that have been classified as of December 31, 2004 by any regulatory examiner as
"Other Loans Specially Mentioned," "Substandard," "Doubtful" "Loss," or words of
similar import are excluded from the amounts disclosed in the Asset
Classification, other than amounts of loans, extensions of credit or other
assets that were charged off by MVBI or any Subsidiary prior to December 31,
2004, and which are also disclosed on Schedule 4.1(U).
(V) ALLOWANCE FOR POSSIBLE LOAN LOSSES. Except as disclosed on
Schedule 4.1(V), the allowance for possible loan losses shown on the
consolidated balance sheets in the December 31, 2004 Financial Reports of MVBI
and to be shown on subsequent Financial Reports of MVBI was and, to the
Knowledge of the Sellers and MVBI, shall be adequate to provide for possible
losses, net of recoveries relating to loans previously charged off, on loans
outstanding (including accrued interest receivable) as of the date thereof.
(W) INSURANCE. Each of MVBI and its Subsidiaries has taken all
requisite action (including the making of claims and the giving of notices)
pursuant to its directors' and officers' liability insurance policy or policies
in order to preserve all rights thereunder with respect to all matters that are
Known to the Sellers and MVBI, except for such matters that, individually or in
the aggregate, are not reasonably likely to have a Material adverse effect on
MVBI or its Subsidiaries. Set forth in Schedule 4.l(W) is a list of all
insurance policies maintained by or for the benefit of MVBI or its Subsidiaries
or their respective directors, officers, employees or agents.
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(X) BOOKS AND RECORDS. All books of account, minute books, stock
record books and other records of MVBI and all of its Subsidiaries, all of which
have been made available to HBI, are complete and correct in all Material
respects and since January 1, 1995 have been maintained in accordance with the
laws of the State of Arkansas for banks, bank holding companies, and
corporations, and applicable rules and regulations promulgated thereunder and in
accordance with sound business practices. The minute books of MVBI and its
Subsidiaries contain accurate and complete summary of all Material actions taken
at meetings held of, and corporate action taken by, the shareholders, the Boards
of Directors and committees of the Boards of Directors of MVBI or a Subsidiary
of MVBI (as applicable) since January 1, 1995, and no meeting of any such
shareholders, Boards of Directors or committees has been held for which minutes
have not been prepared and are not contained in such minute books. At the
Closing Date, all of those books and records shall be in the possession of MVBI
and shall be delivered to HBI.
(Y) TAKEOVER-RELATED PROVISIONS. MVBI and its Subsidiaries have taken
all necessary action to exempt (or ensure the continued exemption of) this
Agreement and the transactions contemplated by this Agreement from the
provisions of any takeover-related provisions of MVBI's and its Subsidiaries'
Governing Documents.
(Z) NO FURTHER ACTION. The Sellers and MVBI and its Subsidiaries have
taken all action so that the entering into of this Agreement and the
consummation of the transactions contemplated by this Agreement, or any other
action or combination of actions, or any other transactions, contemplated by
this Agreement do not and will not (1) require a vote of shareholders of MVBI,
or (2) result in the grant of any rights to any Person under the Governing
Documents of MVBI or its Subsidiaries or under any agreement to which MVBI or
any such Subsidiary is a party, or (iii) restrict or impair in any way the
ability of any Party to exercise the rights granted under this Agreement.
(AA) ENVIRONMENTAL MATTERS.
(1) The Participation Facilities and the Loan/Fiduciary
Properties are, and have been, in compliance with all Environmental Laws,
except as disclosed on Schedule 4.1(AA)(1).
(2) There is no investigation or proceeding pending or, to the
Sellers' or MVBI's Knowledge, threatened by or before any court,
governmental agency or board or other forum in which MVBI or any of its
Subsidiaries or any Participation Facility has been, or with respect to
threatened investigations or proceedings, reasonably would be expected to
be, named as a defendant or potentially responsible party (a) for alleged
noncompliance (including by any predecessor) with any Environmental Law, or
(b) relating to the release or threatened release into the environment of
any Hazardous Material, whether or not occurring at or on a site owned,
leased or operated by MVBI or any of its Subsidiaries or any Participation
Facility, except as disclosed in Schedule 4.1(AA)(2).
(3) There is no investigation or proceeding pending, or to
Sellers' or MVBI's knowledge, threatened by or before any court,
governmental agency or board or
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other forum in which any Loan/Fiduciary Property (or MVBI or any of its
Subsidiaries in respect of any Loan/Fiduciary Property) has been, or with
respect to threatened investigations or proceedings, reasonably would be
expected to be, named as a defendant or potentially responsible party (a)
for alleged noncompliance (including by any predecessor) with any
Environmental Law, or (b) relating to the release or threatened release
into the environment of any Hazardous Material, whether or not occurring at
or on a Loan/Fiduciary Property, except for such investigations or
proceedings disclosed in Schedule 4.1(AA)(3).
(4) To the Sellers' and MVBI's Knowledge, there is no reasonable
basis for any investigation or proceeding of a type described in
subparagraph (2) or (3) of this paragraph (AA), except as has been
disclosed in Schedule 4.1(AA)(4).
(5) To the Sellers' and MVBI's Knowledge, and except as disclosed
on Schedule 4.1(AA)(5), during the period of (a) ownership or operation by
MVBI or any of its Subsidiaries of any of their respective current
properties, (b) participation in the management of any Participation
Facility by MVBI or any of its Subsidiaries, or (c) holding of a security
or other interest in a Loan/Fiduciary Property by MVBI or any of its
Subsidiaries, there have been no releases of Hazardous Material in, on,
under or affecting any such property, Participation Facility or
Loan/Fiduciary Property that violate Environmental Laws.
(6) To the Sellers' and MVBI's Knowledge, and except as disclosed
on Schedule 4.1(AA)(6), prior to the period of (a) ownership or operation
by MVBI or any of its Subsidiaries of any of their respective current
properties, (b) participation in the management of any Participation
Facility by MVBI or any of its Subsidiaries, or (c) holding of a security
or other interest in a Loan/Fiduciary Property by MVBI or any of its
Subsidiaries, there were no releases of Hazardous Material in, on, under or
affecting any such property, Participation Facility or Loan Fiduciary
Property.
(7) To the Sellers' and MVBI's Knowledge, and except as disclosed
in Schedule 4.1(AA)(7), no underground storage tanks are located on any
property of MVBI or any of its Subsidiaries or any Loan/Fiduciary Property.
(8) To the Sellers' and MVBI's Knowledge, and except as disclosed
in Schedule 4.1(AA)(8), neither MVBI's nor any of its Subsidiaries'
facilities have building components containing friable asbestos.
(BB) TAX RETURNS. Except as disclosed in Schedule 4.1(BB), (1) all
reports and returns with respect to Taxes that are required to be filed by or
with respect to MVBI or its Subsidiaries, including consolidated federal income
tax returns of MVBI and BMV (collectively, the "Tax Returns"), have been duly
filed, or requests for extensions have been timely filed and have not expired,
for periods ended on or prior to the most recent fiscal year-end, and such Tax
Returns were true, complete and accurate in all Material respects, (2) all Taxes
shown to be due on the Tax Returns have been paid in full, (3) the Tax Returns
have not been examined by the Internal Revenue Service or the appropriate state,
local or foreign taxing authority, or the period for assessment of the Taxes in
respect of which such Tax Returns were required to be filed has
21
expired, (4) all Taxes due with respect to completed and settled examinations
have been paid in full, (5) no issues have been raised by the relevant taxing
authority in connection with the examination of any of the Tax Returns which are
reasonably likely, individually or in the aggregate, to result in a
determination that would have a Material effect on MVBI or its Subsidiaries,
except as reserved against in the Financial Reports of MVBI, and (6) no waivers
of statutes of limitations (excluding such statutes that relate to years under
examination by the Internal Revenue Service) have been given by or requested
with respect to any Taxes of MVBI or its Subsidiaries.
(CC) ACCURACY OF INFORMATION. The statements with respect to MVBI and
its Subsidiaries contained in this Agreement, the Schedules and any other
written documents executed and delivered by or on behalf of Sellers or MVBI
pursuant to the terms of or relating to this Agreement are now, except as
specifically noted hereunder, and will be as of the Closing Date true and
correct in all Material respects, and do not omit any Material fact necessary in
order to make the statements contained therein, in light of the circumstances
under which they were made, now and as of the Closing Date, not misleading.
(DD) DERIVATIVES CONTRACTS. Neither MVBI nor any of its Subsidiaries
is a party to or has agreed to enter into a Derivatives Contract or owns
securities that are referred to as "structured notes" except for those
Derivatives Contracts and structured notes disclosed in Schedule 4.1(DD).
Schedule 4.1(DD) includes a list of any assets of MVBI or its Subsidiaries that
are pledged as security for each such Derivatives Contract.
(EE) ACCOUNTING CONTROLS. Each of MVBI and its Subsidiaries has
devised and maintained systems of internal accounting controls sufficient to
provide reasonable assurances that (1) all Material transactions are executed in
accordance with management's general or specific authorization in all material
respects, (2) all Material transactions are recorded as necessary to permit the
preparation of financial statements in conformity with GAAP in all material
respects, and to maintain proper accountability for items, (3) access to the
Material property and assets of MVBI and its Subsidiaries is permitted only in
accordance with management's general or specific authorization, and (4) the
recorded accountability for items is compared with the actual levels at
reasonable intervals and appropriate action is taken with respect to any
differences.
(FF) COMMITMENTS AND CONTRACTS. Neither MVBI nor any of its
Subsidiaries is a party or subject to any of the following (whether written or
oral, express or implied):
(1) except as disclosed in Schedule 4.1(FF)(1), any employment
Contract or understanding (including any understandings or obligations with
respect to severance or termination pay Liabilities or fringe benefits)
with any present or former officer, director or employee (other than those
which are terminable at will by MVBI or any such Subsidiary without any
obligation on the part of MVBI or any such Subsidiary to make any payment
in connection with such termination);
(2) except as disclosed in Schedule 4.1(FF)(2), any Contract,
commitment, or understanding with any Person related to or under the
Control of any
22
present or former officer, director, or employee of MVBI or any of its
Subsidiaries, to the extent that such Contract, commitment or understanding
Materially impacts the financial condition of any of MVBI or its
Subsidiaries;
(3) except as disclosed in Schedule 4.1(FF)(3), any real or
personal property lease with annual rental payments aggregating $50,000 or
more; or
(4) except as disclosed in Schedule 4.1(FF)(4), any Material
Contract with any Affiliate.
(GG) CLAIMS OF OFFICERS, DIRECTORS, AND EMPLOYEES. Except as disclosed
on Schedule 4.1(GG), no officer or director of MVBI or BMV has any claims
against MVBI or any of its Subsidiaries, other than for their regular accrued
but unpaid salary and/or director's fee. Except as disclosed on Schedule
4.1(GG), there are no outstanding or, to Knowledge of MVBI, potential claims by
a present or former employee against MVBI or any of its Subsidiaries under
federal or state law, under any employment agreement, or otherwise, other than
for wages, salary, or overtime pay owed in respect of the current pay period, or
vacation or sick pay or time off owed in respect of the current fiscal year.
(HH) DISCLOSURE. Matters disclosed by MVBI or Sellers on a Schedule to
this Agreement shall be a disclosure for each other Schedule to which such
matter reasonably pertains and for all other purposes of this Agreement.
(II) DISCLAIMER. THE PARTIES HERETO AGREE THAT EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, INCLUDING THE SCHEDULES HERETO, MVBI AND SELLERS MAKE
NO REPRESENTATIONS OR WARRANTIES OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED.
4.2. REPRESENTATIONS AND WARRANTIES OF HBI. HBI hereby represents and
warrants to MVBI now and as of the Closing Date as follows:
(A) RECITALS. The facts set forth in the Recitals of this Agreement
with respect to HBI are true and correct.
(B) ORGANIZATION, STANDING AND AUTHORITY. Each of HBI, the HBI Banks,
and any other Subsidiary of HBI is in good standing under the laws of the
jurisdiction in which it is incorporated or organized, and is duly qualified to
do business and is in good standing in the states of the United States and
foreign jurisdictions where the failure to be duly qualified, individually or in
the aggregate, is reasonably likely to have a Material effect on it. All of such
jurisdictions are set forth on Schedule 4.2(B). Each of HBI, the HBI Banks, and
any other Subsidiary of HBI has in effect all federal state, local and foreign
governmental authorizations necessary for it to own or lease its properties and
assets and to carry on its business as it is now conducted.
(C) SHARES. The outstanding shares of HBI and its Subsidiaries'
capital stock are validly issued and outstanding, fully paid and non-assessable,
and subject to no preemptive rights. Except as disclosed in Schedule 4.2(C),
there are no shares of capital stock or
23
other equity securities of HBI or its Subsidiaries outstanding and no
outstanding Rights with respect thereto.
(D) HBI SUBSIDIARIES. HBI has disclosed in Schedule 4.2(D) a list of
all of its Subsidiaries, and the number of authorized, issued, and outstanding
shares of each class of stock and the percentages of ownership of HBI or an HBI
Subsidiary. No equity securities of any of its Subsidiaries are or may become
required to be issued (other than to HBI or one of its Subsidiaries) by reason
of any Rights with respect thereto. There are no Contracts, commitments,
understandings or arrangements by which any of its Subsidiaries is or may be
bound to sell or otherwise issue any shares of such Subsidiary's capital stock,
and there are no Contracts, commitments, understandings or arrangements relating
to the rights of HBI or its Subsidiaries, as applicable, to vote or to dispose
of such shares. All of the shares of capital stock of each of its Subsidiaries
held by HBI or one of its Subsidiaries are fully paid and non-assessable and are
owned by HBI or one of its Subsidiaries free and clear of any charge, mortgage,
pledge, security interest, restriction, claim, lien or encumbrance. Each of its
Subsidiaries is in good standing under the laws of the jurisdiction in which it
is incorporated or organized. Except as disclosed in Schedule 4.2(D), HBI does
not own beneficially, directly or indirectly, any shares of any equity
securities or similar interests of any corporation, bank, partnership, joint
venture, business trust, association or other organization.
(E) CORPORATE POWER. Each of HBI and its Subsidiaries has the
corporate power and authority to carry on its business as it is now being
conducted and to own all its Material properties and assets.
(F) CORPORATE AUTHORITY. This Agreement, and each of the HBI
obligations set forth herein, has been authorized by all necessary corporate
action of HBI and this Agreement is a valid and binding agreement of HBI,
enforceable against HBI in accordance with its terms, subject to bankruptcy,
insolvency and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(G) NO DEFAULTS. Subject to the required regulatory approvals referred
to in Section 6.1, and any required filings under federal and state securities
laws, and except as disclosed in Schedule 4.2(G), the execution, delivery and
performance of this Agreement and the consummation by HBI of the transactions
contemplated by this Agreement do not and will not Materially (1) constitute a
breach of, or violation of, or a default under, any law, rule or regulation or
any judgment, decree, order, governmental permit or license, or agreement,
indenture or instrument of HBI or to which HBI or its properties is subject or
bound, or (2) constitute a breach of, or violation of, or a default under, the
Governing Documents of HBI, or (3) require any consent or approval under any
such law, rule, regulation, judgment, decree, order, governmental permit or
license or the consent or approval of any other party to any such agreement,
indenture or instrument.
(H) HBI FINANCIAL REPORTS. Except as disclosed in Schedule 4.2(H), the
Financial Reports of HBI: (1) did not and will not contain any untrue statement
of a Material fact or omit to state a Material fact required to be stated
therein or necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not Materially misleading; (2)
each of the balance sheets in or incorporated by reference into the
24
Financial Reports (including the related notes and schedules thereto) are
correct, complete, and in accordance with the books and records of and fairly
presents and will fairly present the financial position of the entity or
entities to which it relates as of its date; (3) each of the statements of
income and changes in shareholders' equity and cash flows or equivalent
statements in the Financial Reports (including any related notes and schedules
thereto) are correct, complete, and in accordance with the books and records of
and fairly presents and will fairly present the results of operations, changes
in shareholders' equity and cash flows, as the case may be, of the entity or
entities to which it relates for the periods set forth therein; and (4) in each
case in accordance with GAAP during the periods involved, except in each case as
may be noted therein, subject to normal and recurring year-end audit
adjustments, related notes and schedules in the case of unaudited statements.
(I) REPORTS. Since January 1, 2002 each of HBI and the HBI Banks has
filed all reports and statements, together with any amendments required to be
made with respect thereto, that it was required to file with (1) the Arkansas
State Bank Department, (2) the FDIC, (3) the Federal Reserve Board, and (4) any
other Regulatory Authorities or other governmental authority having jurisdiction
with respect to HBI and its Subsidiaries. As of their respective dates (and
subject to any amendments or modifications filed after the date of this
Agreement with respect to reports and documents filed before the date of this
Agreement), each of such reports and documents, including the financial
statements, exhibits and schedules thereto, complied in all Material respects
with all of the statutes, rules and regulations enforced or promulgated by the
Regulatory Authority with which they were filed and did not contain any untrue
statement of a Material fact or omit to state any Material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not Materially misleading.
Notwithstanding the foregoing, HBI makes no warranty under this Section
4.2(I) as to reports, statements, or related amendments made by an HBI Bank,
other than First State Bank, prior to the date of its acquisition by HBI.
(J) ACCURACY OF INFORMATION. The statements with respect to HBI
contained in this Agreement, the Schedules and any other written documents
executed and delivered by or on behalf of HBI pursuant to the terms of or
relating to this Agreement are now, except as specifically noted hereunder, and
as of the Closing Date true and correct in all Material respects and do not omit
any Material fact necessary in order to make the statements contained therein,
in light of the circumstances under which they were made, now and as of the
Closing Date, not misleading.
(K) BROKERS AND FINDERS. Except as set forth in Schedule 4.2(J),
neither HBI and any HBI Subsidiary, nor any of their respective officers,
directors or employees has employed any broker or finder, or agreed to pay any
fees to any director or former director or incurred any Liability for any
financial advisory fees, brokerage fees, commissions or finder's fees, and no
broker or finder, or director or former director of HBI, has acted directly or
indirectly for HBI, or any HBI Subsidiary, in connection with this Agreement or
the transactions contemplated hereby.
25
(L) DISCLOSURE. Matters disclosed by HBI on a Schedule to this
Agreement shall be a disclosure for each other Schedule to which such matter
reasonably pertains and for all other purposes of this Agreement.
(M) DISCLAIMER. THE PARTIES HERETO AGREE THAT EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, INCLUDING THE SCHEDULES HERETO, HBI MAKE NO
REPRESENTATIONS OR WARRANTIES OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED.
ARTICLE V. COVENANTS
The Sellers and MVBI hereby covenants to HBI, and HBI hereby covenants to
the Sellers and MVBI, as applicable, that:
5.1. BEST EFFORTS. Each Party shall use its best efforts in good faith to
take, or cause to be taken, all actions, and to do, or cause to be done, all
other things necessary, proper or desirable, or advisable under applicable laws,
so as to permit consummation of the Acquisition by October 1, 2005, (the
"Termination Date"), and otherwise to enable consummation of Acquisition, and
shall cooperate fully with the Party to that end (it being understood that a
re-solicitation of proxies as a consequence of an HBI Transaction shall not
violate this covenant).
5.2. PUBLICITY. The Parties agree that (a) no communication of any kind,
whether written, electronic, or oral, to the shareholders of MVBI or HBI, to the
public media, or otherwise, regarding the Agreement, shall be made without the
express prior written consent of the authorized officers of HBI and MVBI, and
(b) the contents of any such communication shall conform in all respects,
whether written, electronic or oral, to the language agreed upon between the
Parties; provided, however, if HBI or MVBI is required by federal or state
securities laws or otherwise to make disclosure of certain matters or take other
action which would otherwise be covered by the terms of this section, it may
make such disclosure or communication without the express prior written consent
of the other Party, after first giving the other Party what the disclosing
Party, in the exercise of its judgment, determines to be reasonable prior notice
of such disclosure or communication.
5.3. ACCESS; DUE DILIGENCE INFORMATION; CONFIDENTIALITY.
(A) Upon reasonable notice, MVBI shall afford HBI and its officers,
employees, counsel, accountants and other authorized representatives, full
access, during normal business hours throughout the period up to the Closing
Date, to all of MVBI's and its Subsidiaries' respective properties, books,
Contracts, commitments and records of MVBI or its Subsidiaries and shall furnish
or cause to be furnished all such information as HBI may reasonably request.
(B) HBI agrees to complete its due diligence review by the fifteenth
(15th) Business Day after the execution of this Agreement and to notify Sellers'
Representatives in writing whether its review was satisfactory or unsatisfactory
within five (5) Business Days thereafter. Failure of HBI to provide this
notification in the time and manner required shall result in HBI not having any
right of termination under Section 7.1(D).
26
(C) HBI, MVBI, Sellers and their respective agents, attorneys and
accountants will maintain the confidentiality of all information provided in
connection herewith in accordance with the terms of the Mutual Confidentiality
and Non-Disclosure Agreement executed between the Parties on December 2, 2004,
which is incorporated herein by reference and made a part hereof. The provisions
of the Mutual Confidentiality and Non-Disclosure Agreement shall survive the
termination of this Agreement indefinitely.
(D) Each Party furnishing information to the other Party pursuant to
this Agreement (the "Disclosing Party") shall furnish promptly (and cause its
accountants and other agents to furnish promptly) to the other Party (the
"Requesting Party") a copy of each Material report, schedule and other document
filed by the Disclosing Party with any Regulatory Authority or other
governmental authority, and upon reasonable notice given by the Requesting
Party, any other information regarding the business, properties, and personnel
of the Disclosing Party as the Requesting Party may reasonably request, provided
that no investigation pursuant to this Section 5.3 shall affect or be deemed to
modify or waive any representation or warranty made by the Disclosing Party in
this Agreement or the conditions to the obligations of the Disclosing Party to
consummate the transactions contemplated by this Agreement.
5.4. SOLE AGREEMENT TO SELL. Without the prior written consent of HBI and
so long as this Agreement is not terminated, the Sellers shall not, and shall
cause MVBI and its Subsidiaries not to, and MVBI and its Subsidiaries shall not,
solicit, initiate or encourage inquiries or proposals with respect to, or
furnish any nonpublic information relating to or participate in any negotiations
or discussions concerning, any acquisition or purchase of all or a substantial
portion of the assets of, or a substantial equity interest in, MVBI or any of
its Subsidiaries or any merger or other business combination with MVBI or any of
its Subsidiaries other than as contemplated by this Agreement. Sellers and MVBI
shall instruct MVBI and its Subsidiaries' officers, directors, agents, advisors
and Affiliates to refrain from doing any of the foregoing and shall notify HBI
immediately if any such inquiries or proposals are received by, or any such
negotiations or discussions are sought to be initiated with, MVBI or any of its
Subsidiaries.
5.5. NO RIGHTS TRIGGERED. Except for those consents of Third Parties
disclosed on Schedule 4.1(G) and consents disclosed on Schedule 4.1(K), the
Sellers and MVBI shall take all necessary steps to ensure that the entering into
of this Agreement and the consummation of the transactions contemplated by this
Agreement and any other action or combination of actions contemplated by this
Agreement, do not and will not (A) result in the grant of any Rights to any
Person under the Governing Documents of MVBI or under any agreement to which
MVBI or any of its Subsidiaries is a Party, or (B) restrict or impair in any way
the ability of HBI to exercise the rights granted under this Agreement.
5.6. REGULATORY APPLICATIONS. HBI shall (A) promptly prepare and submit
applications to the appropriate Regulatory Authorities for approval of the
Acquisition, and (B) promptly make all other appropriate filings to secure all
other approvals, consents and rulings that are necessary for the consummation of
the Acquisition by HBI. HBI will provide drafts of such applications to Sellers
Representatives for review and approval by Sellers Representatives prior to
submission to the Regulatory Authorities. Sellers Representatives will
27
promptly review such drafts and advise HBI of objections, if any, and HBI will
work cooperatively and in good faith to resolve any such objections prior to
submitting such applications.
5.7. REGULATORY DIVESTITURES. No later than the Closing Date, MVBI shall
cease engaging in such activities as HBI shall advise MVBI in writing are not
permitted to be engaged in by HBI under applicable law following the Closing
Date and, to the extent required by any Regulatory Authority as a condition of
approval of the transactions contemplated by this Agreement, MVBI shall divest
any Subsidiary engaged in activities or holding assets that are impermissible
for HBI, on terms and conditions agreed to by HBI; provided, however, that prior
to MVBI taking such action, HBI shall certify that the conditions of Sections
6.1 and 6.2 to HBI's obligations to consummate the transactions contemplated by
this Agreement have been satisfied or waived.
5.8. CURRENT INFORMATION.
(A) During the period from the date of this Agreement to the Closing
Date, Sellers' Representatives and HBI shall confer on a regular and frequent
basis with the other. In addition, HBI shall be entitled to have its
representatives attend all meetings of the boards of directors of MVBI and BMV,
as well as all committees of MVBI and BMV, and MVBI and BMV shall provide notice
to HBI at least two (2) days in advance of all of such meetings.
(B) Each of MVBI and HBI shall promptly notify the other of (1) any
Material change in the business or operations of it or its Subsidiaries, (2) any
Material complaints, investigations or hearings (or communications indicating
that the same may be contemplated) of any Regulatory Authority or other
governmental authority relating to it, or as applicable its Subsidiaries, (3)
the initiation or threat of Material litigation involving or relating to it or
its Subsidiaries, or (4) any Material event or condition.
5.9. DIRECTOR AND OFFICER LIABILITY INSURANCE. Prior to the Closing Date,
MVBI may obtain and prepay, at Sellers' expense, "tail" coverage on director and
officer liability insurance for a period of three (3) years following the
Closing Date, with policy limits not in excess of $2,000,000 per occurrence, on
each person serving as an officer or director of MVBI and each MVBI Subsidiary
immediately prior to the Closing Date against all damages, Liabilities,
judgments, and claims (and related expenses, including reasonable attorney fees
and amounts paid in settlement) with respect to acts or omissions of such
officers and directors based upon or arising from his or her capacity as an
officer or director of MVBI or a MVBI Subsidiary, occurring on or prior to the
Closing Date.
5.10. SHORT-YEAR TAX RETURN. Upon the earlier of (i) the date MVBI
terminates it subchapter S corporation status or (ii) the Closing Date (the "Sub
S Termination Date"), the books and records of MVBI shall be closed and a
short-year return (the "Short-Year Return") shall be prepared for MVBI.
Notwithstanding any provisions of this Agreement to the contrary, HBI consents
to the termination of the subchapter S corporation status of MVBI and its
Subsidiaries at any time prior to the Closing Date, as solely determined by
Sellers. After the Closing Date, HBI shall thereafter operate the business in
whatever form so chosen by HBI. MVBI's accountant shall after the Sub S
Termination Date determine MVBI's income for the
28
period from January 1, 2005, to the Sub S Termination Date and allocate the
income to each of the Sellers by preparation of a federal Form 1120S with
attached Forms K-1. An Arkansas Form AR 1100S shall likewise be prepared for
MVBI for such period. Sellers and MVBI represent and warrant to HBI that such
Short-Year Return shall be true, complete and accurate in all Material respects
and that all Taxes shown to be due on the Short-Year Return shall be paid in
full.
5.11. BMV DEFINED BENEFIT PLAN. HBI and MVBI agree that, on the Closing
Date, the BMV defined benefit pension plan will be frozen and all benefits
accrued under the plan will become fully vested. Following the Closing (the time
and manner to be determined by HBI it its sole discretion), the plan will be
terminated and distributed according to the terms of the plan. Sellers shall
fully fund such plan on or before the Closing Date, and such funding shall not
reduce or otherwise be taken into account in calculating the MVBI Earnings or
the 50% of such MVBI Earnings due to HBI at Closing.
5.12. MVBI INVESTMENT PORTFOLIO. If, under GAAP, the investment portfolio
of MVBI should be adjusted for an impairment, whether or not such adjustment
would be required to be reflected in MVBI's financial statements, MVBI shall
make such adjustment at or prior to the Closing and such adjustment shall be
taken into account in calculating the MVBI Earnings the 50% of such MVBI
Earnings due to Sellers and the 50% of such MVBI Earnings to be retained by HBI
at Closing.
5.13. CONTINUED PARTICIPATION OF HINKLE AND SUTTON.
(A) Hinkle and Sutton currently serve on the board of directors and
the loan committee of BMV. Following the Closing, Hinkle and Sutton will
continue to serve at the pleasure of HBI (i) as members of the BMV board of
directors and on the BMV loan committee, and (ii) in such other board or
committee capacities with BMV and with such duties on such BMV boards and
committees as HBI may designate, and each agrees to resign from such board or
committee positions or other capacities immediately if so requested by HBI. For
each month in which Hinkle or Sutton serve BMV in one or more of these
capacities, BMV will pay to the person so serving a monthly fee of Two Thousand
and No/100 Dollars ($2,000.00).
(B) While thus employed by BMV, the services to be provided by Hinkle
shall include the continued management of BMV's current airplane loan portfolio
by Hinkle.
(C) Hinkle and Sutton shall be entitled to the following benefits
while a director or committee member or employed by BMV in any capacity without
expense to Hinkle or Sutton: (i) continued use of each of their current offices
(and parking spaces) located at BMV; (ii) administrative assistance provided by
the staff currently assigned to them on the date of this Agreement (or a
replacement thereof), subject to the willingness of such staff members to remain
in the employ of BMV; (iii) the continued use of the vehicle currently provided
to Hinkle at the date of execution of this Agreement; and (iv) health benefits
equivalent to the benefits currently available to them at the date of execution
of this Agreement. HBI acknowledges that Sutton is not currently provided health
insurance benefits by BMV and agrees that Sutton shall be provided such benefits
without charge to Sutton at Sutton's request. In the event Hinkle or Sutton are
no longer providing services to BMV, BMV shall provide COBRA coverage for the
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period required by law without the requirement that Hinkle or Sutton pay for
such benefits and coverage.
(D) On or before the Closing Date, Hinkle shall be entitled to
purchase from BMV the 2003 Lexus GX-470 at its book value.
5.14. MOUNTAIN VIEW AVIATION, LLC. Mountain View Aviation, LLC, the
wholly-owned subsidiary of BMV, owns as its sole assets (i) a King Air 200
airplane and (ii) cash. The parties agree that on or before June 30, 2005 (a)
BMV shall write down or reduce the value of this airplane on its books to
$250,000 and (b) the Sellers (or one or more of them) shall purchase all of the
Membership Units of Mountain View Aviation, LLC owned by BMV for $250,000;
provided that prior to such purchase all cash of Mountain View Aviation, LLC
shall be distributed to BMV. The loss, if any, recognized by BMV on such write
down shall not be taken into account for purposes of determining the MVBI
Earnings and the division of such Earnings by Sellers and HBI. Title to the
Membership Units and the airplane shall be transferred to the purchaser(s) free
and clear of any lien or encumbrance.
5.15. REAL PROPERTIES OF MVBI. Except for the real property described on
Schedule 5.15, all real property owned by MVBI or its Subsidiaries as of the
date of this Agreement shall remain an asset of MVBI following the Closing. The
parties agree that the Sellers (or any one of them) shall purchase the real
property described in Schedule 5.15 at or prior to the Closing for one dollar
($1). Title to such property shall be transferred to such purchaser(s) by
general warranty deed and free and clear of any lien or encumbrance.
5.16. RESERVATION OF RIGHT TO REVISE TRANSACTION. In its sole discretion,
and notwithstanding any other provision in this Agreement to the contrary, HBI
may at any time change the method of effecting the Acquisition by requiring MVBI
to pay a dividend to Sellers, which dividend shall be deemed a dollar for dollar
payment of the Cash Consideration; provided, however, that (A) the payment of
such dividend shall have received Regulatory Approval; (B) the payment of such
dividend to Sellers shall be a "qualified dividend" for purposes of the Internal
Revenue Code of 1986 (as determined by Sellers) and (C) no delay caused by such
a change shall be the basis upon which HBI terminates this Agreement pursuant to
Section 7.1(B). If HBI elects to change the method of acquisition, MVBI and
Sellers will cooperate with and assist HBI with any necessary amendment to this
Agreement, and with the preparation and filing of such applications, documents,
instruments and notices as may be necessary or desirable, in the opinion of
counsel for HBI, to obtain all necessary shareholder approvals and approvals of
any regulatory agency, administrative body or other governmental entity.
ARTICLE VI. CONDITIONS TO CONSUMMATION OF THE MERGER
6.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS. The obligation of the Sellers
and HBI to effect the transactions contemplated hereby shall be subject to the
fulfillment, at or prior to the Closing Date, of the following conditions:
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(A) REGULATORY APPROVALS. The Parties shall have procured all
necessary regulatory consents and approvals by the appropriate Regulatory
Authorities, and any waiting periods relating thereto shall have expired;
provided, however, that no such approval or consent shall have imposed any
condition or requirement which cannot be satisfied through the rights granted in
Section 5.7 of this Agreement.
(B) NO PENDING OR THREATENED CLAIMS. No claim, action, suit,
investigation or other proceeding shall be pending or threatened in writing
before any court or governmental agency which presents a Material risk of the
restraint or the prohibition of the transactions contemplated by this Agreement
or the obtaining of Material damages or other relief in connection therewith.
(C) NO INJUNCTION. There shall not be in effect any order, decree or
injunction of any court or agency of competent jurisdiction that enjoins or
prohibits consummation of any of the transactions contemplated by this
Agreement.
(D) SCHEDULES AND EXHIBITS. Each Party responsible for Schedules or
Exhibits to be attached hereto shall provide such Schedule or Exhibit to the
other Party for their review not less than fifteen (15) Business Days from the
execution of this Agreement. The Party receiving such Schedules and Exhibits
shall have five (5) Business Days within which to object (the "Objecting
Party"), in writing, to all or part of the Schedules or Exhibits submitted. If
the receiving Party does not object within such five Business Days period, that
Party shall be deemed to have waived any objection thereto, and this Agreement
shall remain in full force and effect as if the Schedules and Exhibits were
attached at the time of execution of this Agreement. The Parties shall use their
best efforts to resolve any objections of an Objecting Party within ten (10)
Business Days and if not so resolved to the satisfaction of the Objecting Party,
the Objecting Party may terminate this Agreement pursuant to Section 7.1.
6.2. CONDITIONS TO OBLIGATIONS OF HBI. Unless waived in writing by HBI, the
obligations of HBI to consummate the transactions contemplated by this Agreement
are subject to the satisfaction at or prior to the Closing Date of the following
conditions:
(A) PERFORMANCE. Each of the acts, undertakings, and covenants and
other agreements of the Sellers and MVBI to be performed at or before the
Closing Date shall have been duly performed, and the Sellers and MVBI shall not
have breached any of their covenants and other agreements set forth herein.
(B) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Sellers and MVBI contained in this Agreement shall be true and correct,
in all Material respects, on and as of the Closing Date with the same effect as
though made on and at the Closing Date, except for any such representations and
warranties that specifically relate to an earlier date, which shall be true and
correct as of such earlier date.
(C) CERTIFICATES. In addition to the documents described elsewhere in
this Agreement, HBI shall have received the following documents and instruments:
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(i) A certificate signed by the Secretary or Assistant Secretary
of MVBI certifying that: (A) MVBI's Board of Directors has duly
adopted a resolution (a copy of which shall be attached to such
certificate) authorizing MVBI to enter into this Agreement and
certifying that such resolution has not been amended and remain in
full force and effect; (B) each person executing this Agreement on
behalf of MVBI is an officer of MVBI, holding the office or offices
specified therein, with full power and authority to execute this
Agreement and any and all other documents in connection with the
Agreement, and the signature of each person on such documents is his
or her genuine signature; and (C) the Governing Documents of MVBI
(copies of which shall be attached to such certificate) remain in full
force and effect;
(ii) A certificate signed by the Sellers' Representatives and the
President and Chief Financial Officer of MVBI dated the Closing Date
stating that the conditions set forth in Sections 6.2(A), 6.2(B) and
6.2(E) of this Agreement have been satisfied as of the Closing Date;
and
(iii) For any Seller that is not a natural person, a certificate
signed by the officer or representative of such Seller stating that
such representative is duly authorized to sign this Agreement on
behalf of such Seller in the capacity stated herein, and stating the
basis for such authority.
(D) LEGAL OPINION. HBI shall have received a legal opinion, dated the
Closing Date, from Baxter & Jewell, P.A., in substantially the form of EXHIBIT
A.
(E) NO MATERIAL CHANGE. During the period from December 31, 2004 to
the Closing Date, no Material change in the business, property, assets
(including loan portfolios), Liabilities, prospects, operations, liquidity,
income or condition (financial or otherwise) of MVBI and/or BMV shall have
occurred.
(F) DESTRUCTION OF PROPERTY. Between the date of this Agreement and
the Closing Date, there shall have been no damage to or destruction of real
property, improvements or personal property of MVBI or BMV which Materially
reduces the market value of such property, and no zoning or other order,
limitation or restriction imposed against the same, that might have a Material
impact upon the operations, business, future operations, or prospects of MVBI or
BMV; provided, however, in the event there is insurance coverage to repair or
replace the affected real or personal property, such damage or destruction shall
not result in, or deemed to result in, a Material impact or Material reduction
in market value.
(G) INSPECTIONS PERMITTED. Between the date of this Agreement and the
Closing Date, MVBI shall have afforded HBI and its authorized agents and
representatives reasonable access during normal business hours to the
properties, operations, books, records, Contracts, documents, loan files and
other information of or relating to MVBI and BMV. MVBI and BMV shall have caused
all MVBI and BMV personnel to provide reasonable assistance to HBI in its
investigations of all matters related to MVBI and BMV.
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(H) OTHER BUSINESS COMBINATIONS, ETC. Other than as contemplated
hereunder, subsequent to the date of this Agreement, neither the Sellers, MVBI
nor BMV shall have entered into any agreement, letter of intent, understanding
or other arrangement pursuant to which the Sellers would sell the MVBI Stock or
MVBI and BMV would merge, consolidate with, effect a business combination with,
or sell any substantial part of MVBI's or BMV's assets; acquire a significant
part of the share of assets of any other person or entity (financial or
otherwise); or adopt any "poison pill" or other type of anti-takeover
arrangement, any shareholder rights provision, or any "golden parachute" or
similar program which would have the effect of Materially decreasing the value
of MVBI or BMV or the benefits of acquiring MVBI Stock.
(I) MAINTENANCE OF CERTAIN COVENANTS. At the Closing Date: (i) neither
MVBI nor BMV shall have issued or repurchased from the date hereof any
additional equity or debt securities, or any rights to purchase or repurchase
such securities (therefore, there shall be not more than the number of shares of
MVBI Stock set forth in the Recitals of this Agreement validly issued and
outstanding at the Closing Date); and (ii) from December 31, 2004, there shall
have been no extraordinary sale of assets by MVBI or BMV other than those
permitted by this Agreement.
(J) NO LITIGATION. Except as disclosed on Schedule 6.2(K), no action,
suit, or other proceeding before any court or any governmental authority
pertaining to the transactions contemplated by this Agreement or against the
Sellers, MVBI or any of MVBI's Subsidiaries or Materially affecting MVBI or any
of its Subsidiaries shall have been instituted or threatened on or before the
Closing Date.
(K) NO ENVIRONMENTAL LIABILITIES. HBI shall not have discovered any
material liability relating to the Participating Facilities with respect to
environmental matters, such discovery to include, without limitation, at HBI's
option and expense, a Phase I environmental site assessment for each
Participation Facility. If as a result of a Phase I environmental site
assessment, HBI should determine in its reasonable judgment that further testing
is required, all such further testing shall be performed at the Sellers'
expense.
(L) COVENANTS NOT TO COMPETE. Each of Hinkle and Sutton shall have
executed the Covenants Not To Compete in substantially the form of EXHIBIT B.
6.3. CONDITIONS TO OBLIGATIONS OF MVBI. Unless waived in writing by the
Sellers' Representatives, the obligations of the Sellers to consummate the
transactions contemplated by this Agreement are subject to the satisfaction of
Sellers' Representatives at or prior to the Closing Date of the following
conditions:
(A) PERFORMANCE. Each of the acts, undertakings, and covenants of HBI
to be performed at or before the Closing Date shall have been duly performed,
and HBI shall not have breached any of its respective covenants and other
agreements set forth herein.
(B) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of HBI contained in this Agreement shall be true and correct, in all Material
respects, on and as of the Closing Date with the same effect as though made on
and at the Closing Date,
33
except for any such representations and warranties that specifically relate to
an earlier date, which shall be true and correct as of such earlier date.
(C) OFFICER'S CERTIFICATE. In addition to the documents described
elsewhere in this Agreement, the Sellers' Representatives shall have received
the following documents and instruments:
(i) A certificate signed by the Secretary or Assistant Secretary
of HBI certifying that: (A) HBI's Board of Directors has duly adopted
a resolution (a copy of which shall be attached to such certificate)
approving the substantive terms of this Agreement and authorizing the
consummation of the transactions contemplated by this Agreement and
certifying that such resolutions have not been amended and remain in
full force and effect; (B) each person executing this Agreement on
behalf of HBI is an officer of HBI, holding the office or offices
specified therein, with full power and authority to execute this
Agreement and any and all other documents in connection with the
Agreement, and the signature of each person on such documents is his
or her genuine signature; and (C) the Governing Documents of HBI
(copies of which shall be attached to such certificate) remain in full
force and effect; and
(ii) A certificate signed by the President and Chief Financial
Officer of HBI dated the Closing Date stating that the conditions set
forth in Sections 6.3(A), 6.3(B), and 6.3(E) of this Agreement have
been satisfied as of the Closing Date.
(D) LEGAL OPINION. MVBI shall have received a legal opinion, dated the
Closing Date, from Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C., in
substantially the form of EXHIBIT C.
(E) NO MATERIAL CHANGE. During the period from December 31, 2004 to
the Closing Date, no Material change in the business, property, assets
(including loan portfolios), Liabilities, prospects, operations, liquidity,
income or condition (financial or otherwise) of HBI shall have occurred.
(F) NO LITIGATION. Except as disclosed on Schedule 6.3(F), no action,
suit, or other proceeding before any court or any governmental authority
pertaining to the transactions contemplated by this Agreement or against HBI or
any of its Subsidiaries or Materially affecting HBI or any of its Subsidiaries
shall have been instituted or threatened on or before the Closing Date.
ARTICLE VII. TERMINATION
7.1. TERMINATION UPON CERTAIN CONDITIONS. In the event of the termination
or abandonment of this Agreement pursuant to the provisions of this Section 7.1,
the Agreement shall become void and have no force or effect, without any further
liability on the part of the Sellers or HBI, MVBI, or their directors or
officers or shareholders with respect to
34
this Agreement. This Agreement may be terminated prior to the Closing Date,
either before or after receipt of required shareholder approvals, under the
following conditions:
(A) MUTUAL CONSENT. By the mutual consent evidenced by a writing
signed by the Sellers' Representatives and HBI;
(B) DELAY. By either Sellers' Representatives or HBI in the event the
Acquisition is not consummated by the Termination Date, unless the failure of
the consummation of the transactions to occur shall be due to the failure of the
Party seeking to terminate this Agreement to perform its obligations hereunder
in a timely manner; provided, however, that neither may terminate the Agreement
pursuant to this Section 7.1(B), if such delay results from (a) an HBI
Transaction, or any other acquisition or sale transaction, or any offering of
securities, in which HBI is involved, or (b) a change in the method of
acquisition pursuant to Section 5.16 (provided that if the Acquisition is
consummated after the Termination Date as a result of (a) or (b), then, in
addition to the MVBI Earnings provided for in Section 2.2, beginning on the
Termination Date and thereafter through the Closing Date, Sellers shall receive
seventy-five percent (75%) of the earnings of MVBI), and provided, further, that
neither the Sellers' Representatives nor HBI may not terminate the Agreement
pursuant to this Section 7.1(B) if it is in Material breach of any of the
provisions of the Agreement;
(C) NO REGULATORY APPROVALS. By Sellers' Representatives or HBI, in
the event that, absent the Material breach of the terminating party, any of the
required regulatory approvals set forth in Section 6.1(A) are denied (or should
any such required approval be conditioned upon a substantial deviation from the
transactions contemplated); provided, however, that either the Sellers'
Representatives or HBI may extend the term of this Agreement for a sixty
(60)-day period to prosecute diligently and overturn such denial provided that
such denial has been appealed within fifteen (15) Business Days of the receipt
thereof;
(D) UNSATISFACTORY DUE DILIGENCE. By HBI, if on or before the last
date set forth in Section 5.3(B), HBI (i) during the course of its due diligence
review discovers events, occurrences or circumstances that, either individually
or in the aggregate, would be expected, in the exercise of HBI's reasonable
judgment, to cause a Material adverse effect with respect to the financial
condition, results of operations, business, future operations or prospects of
MVBI or any of its Subsidiaries and (ii) HBI gives written notice to the
Sellers' Representatives that HBI is exercising the right of termination
pursuant to this Section 7.1(D); or
(E) SECURITIES LAW EXEMPTION. By HBI, in the event it believes, in the
exercise of its or its counsel's reasonable judgment, that the issuance of the
HBI Common Stock (1) is not or may not be exempt from registration under the
Securities Act or any applicable state securities laws, or (2) would require
HBI's registration as a broker-dealer, agent or similar registration under any
applicable state securities laws; provided that HBI may only terminate the
Agreement pursuant to this subsection (E) by providing notice to MVBI and
Sellers on or before July 1, 2005.
(F) FAILURE TO AGREE ON SCHEDULES. By HBI, Sellers or MVBI if the
Parties fail to agree on the Schedules and Exhibits within the time provided in
Section 6.1(D).
35
(G) EFFECT OF TERMINATION. In the event this Agreement is terminated
pursuant to subsections (A) through (E) of this Section 7.1, then each Party
shall bear its own fees and expenses (including attorneys fees, consulting fees
or accountants fees) incurred in pursuing the transaction contemplated by this
Agreement and each Party does fully and forever release, relinquish and
discharge the other Party from any and all claims, debts, liabilities, demands,
obligations, promises, acts, costs, fees, performance and delivery dates,
expenses, attorneys' fees, damages, including, but not limited to consequential,
special or punitive damages, loss of profits, loss of benefits, actions and
causes of action of whatever kind or nature whether now known or unknown, which
a Party has, ever had, or hereafter can, shall or may have against the other
Party based on, arising out of, or in connection pursing the transaction
contemplated by this Agreement; provided that such release shall not apply to a
breach of a Party's obligations pursuant to Section 5.2 and 5.3 of this
Agreement.
7.2. TERMINATION FOR BREACH. This Agreement may be terminated prior to the
Closing Date, either before or after receipt of required shareholder approvals,
by either Sellers' Representatives or HBI if there has been a Material breach on
the part of the other Party of its representations, warranties, covenants, or
other agreements set forth herein or in any Schedule or certificate delivered
pursuant hereto. The non-breaching Party expressly reserves all rights and
remedies available in law or equity if this Agreement is terminated for breach.
ARTICLE VIII. SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION
8.1. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations, warranties and covenants contained in this Agreement and all
other terms and conditions hereof shall survive for a period of two (2) years
following the Closing Date after which time they shall be of no further force
and effect; provided, however, the covenants set forth in Sections 5.3(C), 5.10.
8.2 through 8.5, 9.4, 9.5, 9.6 and 9.12, hereof shall survive indefinitely and
the Covenants Not To Compete in Schedule 6.2(L) shall survive for the period
stated therein.
8.2. SELLERS' INDEMNITY. Subject to Section 8.4 hereof, Sellers hereby
severally agree to indemnify, defend and hold HBI harmless against, and in
respect of, any and all claims, demands, losses, damages and expenses,
including, but not limited to, reasonable attorneys' fees (collectively,
"Losses"), which HBI shall incur or suffer, which arise, result from, or relate
to any default, breach or violation of, or inaccuracy in, or failure by any
Seller or MVBI to perform any of their or its representations, warranties,
covenants or agreements in this Agreement or in any other instrument furnished
or to be furnished under this Agreement.
8.3. HBI'S INDEMNITY. HBI hereby agrees to indemnify, defend and hold
Sellers harmless against, and in respect of, any and all Losses, which Sellers
shall incur or suffer, which arise, result from, or relate to any default,
breach or violation of, or inaccuracy in or failure by HBI to perform any of its
representations, warranties, covenants or agreements in this Agreement or in any
other instrument furnished or to be furnished under this Agreement.
8.4. LIMITATIONS.
36
(A) No Party shall be liable for any claim for indemnification
hereunder unless written notice of a claim for indemnification is delivered by
the Party seeking indemnification to the Party from whom indemnification is
sought with respect to any such breach before the applicable survival date
specified in Section 8.1 hereof (in which case such indemnification obligation
shall survive the time at which it would otherwise terminate pursuant to Section
8.1). All notices given pursuant to Sections 8.2 through 8.5 shall set forth
with reasonable specificity the basis for such claim for indemnification.
(B) Notwithstanding anything in this Agreement to the contrary:
(1) Except with respect to indemnification obligations under this
Article XIII, neither Party shall assert any claim against the other for
indemnification hereunder with respect to any breach of such warranties or
representations unless and until the amount of such claim or claims shall exceed
$25,000 calculated on a cumulative basis and not a per item basis, and then only
in respect to the excess over said amount; and
(2) Neither Party shall be entitled to recover from the other an
amount greater than $17,500,000 with respect to all claims for indemnity or
damages whether such claims are brought under this Article XIII or otherwise.
8.5. DEFENSE OF THIRD PARTY CLAIMS. The obligations of Sellers, MVBI, and
HBI with respect to their respective indemnities hereunder resulting from any
claim or other assertion of liability by third parties (hereinafter
collectively, "Third Party Claim(s)"), shall be subject to the following terms
and conditions:
(A) The Party seeking indemnification (the "Indemnified Party") shall
give written notice of any such Third Party Claim to the Party from whom
identification is sought (the "Indemnifying Party") within a reasonable time
after the Indemnified Party receives notice thereof; provided, however, the
failure to give notice timely shall not affect the Indemnifying Party's
obligation hereunder except to the extent that such failure prejudices the
Indemnifying Party or its ability to defend such Third Party Claims.
(B) The Indemnifying Party shall have the right to undertake, at its
own expense, with counsel or other representatives of its own choosing and
reasonably acceptable to the Indemnified Party, the defense or settlement of any
such Third Party Claim.
(C) In the event that the Indemnifying Party shall have the right to
undertake the defense of any Third Party Claim, but shall fail to notify the
Indemnified Party within ten (10) Business Days of receipt of the notice that it
has elected to undertake such defense or settlement, or if at any time the
Indemnifying Party shall otherwise fail to diligently defend or pursue
settlement of such claim, then the Indemnified Party shall have the right to
undertake the defense, compromise, or settlement of such claim, subject to
subsection 8.5(D), with counsel reasonably acceptable to the Indemnifying Party.
(D) Neither Party shall settle any Third Party Claim without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld or delayed. In the event the Indemnifying Party submits to the
Indemnified Party a bona fide settlement offer from
37
the third party claimant of any Third Party Claim (which settlement offer shall
include as an unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party of a release from all liability in respect of
such claim) and the Indemnified Party refuses to consent to such settlement,
then thereafter the Indemnifying Party's liability to the Indemnified Party for
indemnification hereunder with respect to such Third Party Claim shall not
exceed the settlement amount included in said bona fide settlement offer, and
the Indemnified Party shall either assume the defense of such Third Party Claim
or pay the Indemnified Party's attorney fees and other out-of-pocket costs
incurred thereafter in continuing the defense of such claim.
(E) Regardless of which Party is conducting the defense of any such
Third Party Claim, the other Party, with counsel or other representatives of its
own choosing and at its sole cost and expense, shall have the right to consult
with the Party conducting the defense of such claim and its counsel or other
representatives concerning such claim and the Indemnifying Party and the
Indemnified Party and their respective counsel or other representatives shall
cooperate with respect to such claim, and the Party conducting the defense of
any such claim and its counsel shall in any case keep the other Party and its
counsel (if any) fully informed as to the status of any claim and any matters
relating thereto. Each Party shall provide to the other Party such records,
books, documents and other materials as shall reasonably be necessary for such
Party to conduct or evaluate the defense of any Third Party Claim and will
generally cooperate with respect to any matters relating thereto.
(F) Any amount of an Indemnified Party's indemnification costs that
become due with respect to Third Party Claims, whether or not through settlement
or adjudication, including periodic costs to defend any claim or demand, shall
be paid promptly by the Indemnifying Party within thirty (30) days after written
demand therefor.
ARTICLE IX. OTHER MATTERS
9.1. WAIVER; AMENDMENT. Prior to the Closing Date, any provision of this
Agreement may be (A) waived in writing by the Party benefited by the provision,
or (B) amended or modified at any time (including the structure of the
transactions contemplated by this Agreement) by an agreement in writing among
the Sellers' Representatives, MVBI and HBI. Nothing contained in this Section
9.1 is intended to modify HBI's rights pursuant to Section 5.16.
9.2. COUNTERPARTS. This Agreement may be executed in one or more facsimile
counterparts, each of which shall be deemed to constitute an original. This
Agreement shall become effective when one counterpart has been signed by each
Party.
9.3. GOVERNING LAW. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of Arkansas, except as federal law may be
applicable.
9.4. EXPENSES. Each Party will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated by this
Agreement. Notwithstanding, HBI agrees that BMV may pay the fees and expenses of
Baxter & Jewell, P.A. incurred by Sellers,
38
MVBI and BMV and billed prior to the Closing for services with respect to the
Acquisition, including reasonable estimated fees for post-Closing services
rendered related to the Acquisition.
9.5. NOTICES. All notices, demands, and requests given or required to be
given by one Party to the other Parties shall be in writing. All such notices,
demands, and requests shall be deemed to have been properly given if served in
person, sent by telefacsimile (and receipt confirmed) or by prepaid nationally
recognized overnight delivery service providing proof of delivery, addressed as
follows:
If to HBI, to Home BancShares, Inc.
719 Harkrider
Conway, Arkansas 72032
Attn: Ron Strother, President
Fax: (501) 329-2991
With a copy to: Mitchell Williams Selig Gates
& Woodyard, P.L.L.C.
425 W. Capitol Avenue, Suite 1800
Little Rock, Arkansas 72201
Attn: John S. Selig, Esq.
Fax: (501) 918-7804
If to Sellers' Representatives: James G. Hinkle
855 Woodland Hills
Mountain View, AR 72560
Fax: (870) 269-4601
Kenneth W. Sutton
505 South Bayou
Mountain View, AR 72560
Fax: (870) 269-6011
With a copy to: Baxter & Jewell, P.A.
1 Information Way, Suite 210
Little Rock, Arkansas 72202
Attn: Samuel R. Baxter, Esq.
Fax: (501) 664-9559
If to MVBI, to: Mountain View Bancshares, Inc.
121 Main Street
Mountain View, Arkansas 72560-1228
Attn: James G. Hinkle, President
Fax: (870) 269-2899
With a copy to: Baxter & Jewell, P.A.
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1 Information Way, Suite 210
Little Rock, Arkansas 72202
Attn: Samuel R. Baxter, Esq.
Fax: (501) 664-9559
Notices, demands and requests sent pursuant to this section shall be deemed
to be received (A) on the date of delivery if received by telefacsimile (and
receipt confirmed) or by person and, (B) on the next Business Day if sent by
prepaid overnight delivery service.
9.6. SELLERS' REPRESENTATIVES - APPOINTMENT OF AGENT.
(A) The Sellers make, constitute and appoint Hinkle and Sutton their
true and lawful agents and attorneys-in-fact (the "Sellers' Representatives")
and authorize and empower them, acting jointly, to fulfill the role of Sellers'
Representatives hereunder; provided however, that in the event of death,
resignation, unavailability or incapacity of Hinkle or Sutton the other shall
act as the sole Sellers' Representative in his place unless the Sellers provide
HBI unanimous written instructions to the contrary.
(B) The Sellers' Representatives are hereby fully authorized by the
Sellers for them and in their names (i) to receive all notices and other
communications directed to Sellers under this Agreement and (ii) to take any
action (or to determine to take no action), with respect thereto as they may
deem appropriate as effectively as the Sellers could act themselves, including,
without limitation, the settlement or compromise of any dispute or controversy,
to consummate the sale of the MVBI Stock as provided in this and accompanying
agreements in connection therewith, but without limitation, to execute all
documents, make all applications, provide and verify any information and data,
deliver and update all instruments, schedules, and other matters required,
contemplated or which might become necessary in order to consummate the sale of
the MVBI Stock as herein contracted, including the execution and delivery of all
documents, instruments and certificates at Closing.
(C) The appointment of the Sellers' Representatives shall be deemed
coupled with an interest and shall be irrevocable, and HBI and any other Person
may conclusively and absolutely rely, without inquiry, upon any action of the
Sellers' Representatives as the act of Sellers in all matters referred to in
this Agreement. Each Seller hereby ratifies and confirms all that the Sellers'
Representatives shall do or cause to be done by virtue of their appointment as
Sellers' Representatives of such Seller. The Sellers' Representatives shall act
for Sellers on all of the matters set forth in this agreement in the manner the
Sellers' Representatives believes to be in the best interest of the Sellers and
consistent with their obligations under this Agreement.
(D) Each Seller hereby expressly acknowledges and agrees that the
Sellers' Representatives are authorized to act on behalf of such Seller
notwithstanding any dispute or disagreement among the Sellers, and that HBI
shall be entitled to rely on any and all action taken by the Sellers'
Representatives under this Agreement without liability to, or obligation to
inquire of, any of the Sellers. Upon receipt of any writing which reasonably
appears to have been signed by the Sellers' Representatives, HBI may act upon
the same without any further duty of inquiry as to the genuineness of the
writing.
40
(E) EACH SELLER INTENDS THAT THE AUTHORITY AND AGENCY OF THE SELLERS'
REPRESENTATIVES UNDER THIS SECTION 9.6 SHALL BE IRREVOCABLE AND SHALL NOT
TERMINATE AS A RESULT OF THE TERMINATION OF ANY TRUST OR CHANGE OF TRUSTEE
THEREOF.
9.7. TIME IS OF THE ESSENCE. The Parties hereto agree that time is of the
essence with respect to the Closing Date and each and every condition and
covenant contained herein.
9.8. ASSIGNMENT. The assignment of this Agreement by a Party without the
express written consent of the other Parties hereto shall be void; provided,
however, that this Section 9.8 is not intended to modify HBI's rights pursuant
to Section 5.16.
9.9. BINDING EFFECT. This Agreement shall be binding upon the Parties and
their respective successors and assigns.
9.10. SEVERABILITY. The holding of any provision of this Agreement invalid,
illegal, or unenforceable, in whole or in part, shall not affect the other
provisions of this Agreement, which shall remain in full force and effect.
9.11. ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES. This Agreement
and the Mutual Confidentiality and Non-Disclosure Agreement represent the entire
understanding of the Parties with reference to transactions contemplated by this
Agreement and supersede any and all other oral or written agreements previously
made. Nothing in this Agreement, expressed or implied, is intended to confer
upon any Person other than the Parties any rights, remedies, obligations or
Liabilities under or by reason of this Agreement.
9.12. ENFORCEMENT PROCEEDINGS. The Parties hereto agree that irreparable
damage may occur in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that each Party shall be entitled to seek an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity. In any action or proceeding in
connection with the enforcement of this Agreement, the prevailing Party will be
entitled to reimbursement of its reasonable attorneys' fees and expenses from
the non-prevailing Party.
9.13. BENEFIT PLANS. Upon consummation of the Acquisition, all employees of
MVBI and BMV, except those with whom HBI enters into written employment
agreements, shall be deemed to be at-will employees of HBI. From and after the
Closing Date, employees of MVBI and BMV shall be entitled to participate in the
pension, employee benefit and similar plans (including stock option, bonus or
other incentive plans) on substantially the same terms and conditions as
similarly situated employees of HBI. For the purpose of determining eligibility
to participate in such plans and the vesting of benefits under such plans, HBI
shall give effect to years of service with MVBI or BMV, as the case may be, as
if such service were with HBI. Employees of MVBI and BMV will be entitled to
carry over unused vacation days and sick leave accrued as of the Closing Date.
41
9.14. HEADINGS. The headings contained in this Agreement are for reference
purposes only and are not part of this Agreement.
(Signatures on page following.)
42
IN WITNESS WHEREOF, the Parties have caused this instrument to be executed
in counterparts by their duly authorized officers, all as of the day and year
first above written.
MOUNTAIN VIEW BANCSHARES, INC.
By: /s/ JAMES G. HINKLE
------------------------------------
James G. Hinkle, President
HOME BANCSHARES, INC.
By: /s/ RON W. STROTHER
------------------------------------
Ron W. Strother,
President and Chief Operating
Officer
SELLERS
HINKLE FAMILY REVOCABLE LIVING TRUST
By: /s/ JAMES G. HINKLE
------------------------------------
James G. Hinkle, Trustee
790 shares
JENNIE LOU HINKLE REVOCABLE TRUST
By: /s/ JAMES G. HINKLE
------------------------------------
James G. Hinkle, Trustee
790 shares
/s/ JAMES G. HINKLE
----------------------------------------
James G. Hinkle
1,213 shares
Address: 855 Woodland Hills
Mountain View, AR 72560
43
/s/ KAY S. HINKLE
----------------------------------------
Kay S. Hinkle
1,212 shares
/s/ KATHERINE L. HINKLE
----------------------------------------
Katherine Linn Hinkle
388 shares
/s/ LEAANN WALKER
----------------------------------------
LeaAnn Hinkle Walker
388 shares
/s/ KENNETH W. SUTTON
----------------------------------------
Kenneth W. Sutton
1,064 shares
Address: 505 South Bayou
Mountain View, AR 72560
/s/ JANICE SUTTON
----------------------------------------
Janice Sutton
1,005 shares
/s/ JENIFER S. TUCKER
----------------------------------------
Jenifer Sutton Tucker
566 shares
/s/ ROBERT W. SUTTON
----------------------------------------
Robert Sutton
566 shares
44
STATE OF ARKANSAS )
) SS: ACKNOWLEDGMENT
COUNTY OF STONE )
On this 21st day of April, 2005, before me the undersigned officer,
personally appeared James G. Hinkle, known to me (or satisfactorily proven) to
be the person whose name is subscribed as Trustee for the HINKLE FAMILY
REVOCABLE LIVING TRUST, and acknowledged that he executed the same as the act of
his principal for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal this 21st day
of April, 2005.
/s/ KARI S. WINNINGHAM
----------------------------------------
Notary Public
My Commission Expires:
08/18/2008
(SEAL)
STATE OF ARKANSAS )
) SS: ACKNOWLEDGMENT
COUNTY OF STONE )
On this 21st day of April, 2005, before me the undersigned officer,
personally appeared James G. Hinkle, known to me (or satisfactorily proven) to
be the person whose name is subscribed as Trustee for the JENNIE LOU HINKLE
REVOCABLE TRUST, and acknowledged that he executed the same as the act of his
principal for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal this 21st day
of April, 2005.
/s/ KARI S. WINNINGHAM
----------------------------------------
Notary Public
My Commission Expires:
08/18/2008
(SEAL)
45
STATE OF ARKANSAS )
) SS: ACKNOWLEDGMENT
COUNTY OF STONE )
On this 21st day of April, 2005, before me, the undersigned officer,
personally appeared JAMES G. HINKLE, known to me (or satisfactorily proven) to
be the person whose name is subscribed to the within instrument and acknowledged
that he/she executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this 21st
day of April, 2005.
/s/ KARI S. WINNINGHAM
----------------------------------------
Notary Public
My Commission Expires:
08/18/2008
(SEAL)
STATE OF ARKANSAS )
) SS: ACKNOWLEDGMENT
COUNTY OF STONE )
On this 21st day of April, 2005, before me, the undersigned officer,
personally appeared KAY S. HINKLE, known to me (or satisfactorily proven) to be
the person whose name is subscribed to the within instrument and acknowledged
that he/she executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this 21st
day of April, 2005.
/s/ KARI S. WINNINGHAM
----------------------------------------
Notary Public
My Commission Expires:
08/18/2008
(SEAL)
46
STATE OF ARKANSAS )
) SS: ACKNOWLEDGMENT
COUNTY OF PULASKI )
On this 28th day of April, 2005, before me, the undersigned officer,
personally appeared KATHERINE LINN HINKLE, known to me (or satisfactorily
proven) to be the person whose name is subscribed to the within instrument and
acknowledged that he/she executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this 28th
day of April, 2005.
/s/ SAMUEL R. BAXTER
----------------------------------------
Notary Public
My Commission Expires:
08/15/2010
(SEAL)
STATE OF ARKANSAS )
) SS: ACKNOWLEDGMENT
COUNTY OF STONE )
On this 21st day of April, 2005, before me, the undersigned officer,
personally appeared LEA ANN HINKLE WALKER, known to me (or satisfactorily
proven) to be the person whose name is subscribed to the within instrument and
acknowledged that he/she executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this 21st
day of April, 2005.
/s/ KARI S. WINNINGHAM
----------------------------------------
Notary Public
My Commission Expires:
08/18/2008
(SEAL)
47
STATE OF ARKANSAS )
) SS: ACKNOWLEDGMENT
COUNTY OF STONE )
On this 21st day of April, 2005, before me, the undersigned officer,
personally appeared KENNETH W. SUTTON, known to me (or satisfactorily proven) to
be the person whose name is subscribed to the within instrument and acknowledged
that he/she executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this 21st
day of April, 2005.
/s/ KARI S. WINNINGHAM
----------------------------------------
Notary Public
My Commission Expires:
08/18/2008
(SEAL)
STATE OF ARKANSAS )
) SS: ACKNOWLEDGMENT
COUNTY OF STONE )
On this 21st day of April, 2005, before me, the undersigned officer,
personally appeared JANICE SUTTON, known to me (or satisfactorily proven) to be
the person whose name is subscribed to the within instrument and acknowledged
that he/she executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this 21st
day of April, 2005.
/s/ KARI S. WINNINGHAM
----------------------------------------
Notary Public
My Commission Expires:
08/18/2008
(SEAL)
48
STATE OF ARKANSAS )
) SS: ACKNOWLEDGMENT
COUNTY OF PULASKI )
On this 28th day of April, 2005, before me, the undersigned officer,
personally appeared JENIFER SUTTON TUCKER, known to me (or satisfactorily
proven) to be the person whose name is subscribed to the within instrument and
acknowledged that he/she executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this 28th
day of April, 2005.
/s/ SAMUEL R. BAXTER
----------------------------------------
Notary Public
My Commission Expires:
08/15/2010
(SEAL)
STATE OF ARKANSAS )
) SS: ACKNOWLEDGMENT
COUNTY OF PULASKI )
On this 28th day of April, 2005, before me, the undersigned officer,
personally appeared ROBERT SUTTON, known to me (or satisfactorily proven) to be
the person whose name is subscribed to the within instrument and acknowledged
that he/she executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this 28th
day of April, 2005.
/s/ SAMUEL R. BAXTER
----------------------------------------
Notary Public
My Commission Expires:
08/15/2010
(SEAL)
49
LIST OF MVBI SCHEDULES
Schedule 3.4 Changes or Commitments Respecting Line of Business or
Operating Procedures
Schedule 3.5 Liens or Encumbrances
Schedule 3.6 New or Changes to Compensation, Employment Agreements,
Etc.
Schedule 3.7 New or Changes to Benefit Plans
Section 3.8 Continuance of Business
Schedule 3.11 New or Changes to Contracts
Schedule 4.1(B) Jurisdictions Where MVBI and BMV are Qualified to do
Business; Orders, etc. Affecting Status
Schedule 4.1(C) Shares Outstanding
Schedule 4.1(D) MVBI Subsidiaries
Schedule 4.1(G) No Defaults - Agreements Requiring Third Party Consent
Schedule 4.1(H) MVBI Financial Reports
Schedule 4.1(I) Undisclosed Liabilities of MVBI
Schedule 4.1(J) No Events Causing Material Adverse Effect
Schedule 4.1(K) Properties: Leases, Subleases, Defects of Title or
Condition
Schedule 4.1(L) Intellectual Property Rights
Schedule 4.1(M) Litigation, Regulatory Action
Schedule 4.1(N) Compliance with Laws
Schedule 4.1(O) Material Contracts
Schedule 4.1(Q) Brokers and Finders
Schedule 4.1(R)(1) List of Employee Benefit Plans
Schedule 4.1(R)(2) Employee Benefit Plans Not Qualified Under ERISA
Schedule 4.1(R)(4) Pension Accumulated Funding Deficiency
Schedule 4.1(R)(5) Amount by Which Benefit Liabilities Exceed Agreement
Assets
Schedule 4.1(R)(6) Obligations for Retiree Health and Life Benefits
Schedule 4.1(R)(7) Agreements Resulting in Payments to Employees Under Any
Compensation and Benefit Plan with Respect to Proposed
Transaction
Schedule 4.1(U) Asset Classification
Schedule 4.1(V) Inadequate Allowance for Loan Losses
Schedule 4.1(W) Insurance
Schedule 4.1(AA)(1) Noncompliance with Environmental Laws
Schedule 4.1(AA)(2) Pending Proceedings with Respect to Environmental Matters
Schedule 4.1(AA)(3) Pending Proceedings with Respect to Environmental Matters
Involving Loan/Fiduciary Property
Schedule 4.1(AA)(4) Pending Proceedings with Respect to Environmental Matters
Listed in Sections 4.1(Z)(2) or (3)
Schedule 4.1(AA)(5) Actions During Ownership Which Could Have Material
Adverse Effect with Respect to Environmental Matters
Schedule 4.1(AA)(6) Actions Prior to Ownership Which could Have Material
Adverse Effect with Respect to Environmental Matters
Schedule 4.1(AA)(7) Underground Storage Tanks
Schedule 4.1(AA)(8) Building Components with Friable Asbestos
Schedule 4.1(BB) Tax Return Matters
Schedule 4.1(DD) Derivative Contracts, including a list of any assets
pledged as security for such Derivative Contracts
Schedule 4.1(FF)(1) Employment Contracts Requiring Payment In Connection with
Termination
Schedule 4.1(FF)(2) Contracts with Related Persons
Schedule 4.1(FF)(3) Leases with Aggregate Annual Rent Exceeding $50,000
Schedule 4.1(FF)(4) Material Contracts with Affiliates
Schedule 4.1(GG) Claims of Officers, Directors, Employees
Schedule 5.15 Real Property Sold to Sellers
Schedule 6.2(J) Litigation or Proceedings Materially Affecting MVBI
or BMV Prior to Closing Date
Schedule 6.2(L) Covenants Not To Compete
LIST OF HBI SCHEDULES
Schedule 4.2(B) Jurisdictions Where HBI and its Subsidiaries are Qualified to
do Business; Orders, etc. Affecting Status
Schedule 4.2(C) Shares Outstanding
Schedule 4.2(D) HBI Subsidiaries
Schedule 4.2(G) No Defaults - Agreements Requiring Third Party Consent
Schedule 4.2(H) HBI Financial Reports
Schedule 4.2(J) Brokers and Finders
Schedule 6.3(F) Litigation or Proceedings Materially Affecting HBI or its
Subsidiaries Prior to Closing Date