AGREEMENT AND PLAN OF MERGER

Exhibit 10.1

 

EXECUTION COPY

 

AGREEMENT AND PLAN OF MERGER

 

BETWEEN

 

GOLD BANC CORPORATION, INC.

 

AND

 

MARSHALL & ILSLEY CORPORATION

 

 

Dated as of November 9, 2005

 

 

TABLE OF CONTENTS

	Page
ARTICLE I - THE MERGER
1.1 The Merger	1
1.2 The Closing; Effective Time	1
1.3 Effect of the Merger	2
1.4 Articles of Incorporation; By-Laws	2
1.5 Directors and Officers	2
1.6 Conversion of Securities; Dissenting Shares	2
1.7 Exchange of Certificates	4
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF SELLER
2.1 Organization and Qualification; Subsidiaries	7
2.2 Articles of Incorporation and By-Laws	8
2.3 Capitalization	8
2.4 Authority	9
2.5 No Conflict; Required Filings and Consents	10
2.6 Compliance; Permits	10
2.7 Securities and Banking Reports; Financial Statements	11
2.8 Absence of Certain Changes or Events	14
2.9 Absence of Litigation	14
2.10 Employee Benefit Plans	16
2.11 Registration Statement; Proxy Statement/Prospectus	18
2.12 Title to Property	18
2.13 Environmental Matters	18
2.14 Absence of Agreements	20
2.15 Taxes	20
2.16 Insurance	21
2.17 Brokers	21
2.18 Tax Matters	21
2.19 Seller Material Adverse Effect	21
2.20 Material Contracts	21
2.21 Opinion of Financial Advisor	21
2.22 Vote Required	22
2.23 Stock Options	22
2.24 Rights Agreement	22
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1 Organization and Qualification; Subsidiaries	22
3.2 Articles of Incorporation and By-Laws	23
3.3 Capitalization	23
3.4 Authority	24
3.5 No Conflict; Required Filings and Consents	24
3.6 Compliance; Permits	25
3.7 Securities and Banking Reports; Financial Statements	25
3.8 Absence of Certain Changes or Events	28
3.9 Absence of Litigation	28
3.10 Registration Statement; Proxy Statement/Prospectus	29
3.11 Compliance; Permits	29
3.12 Title to Property	30
3.13 Brokers	30
3.14 Tax Matters	30
3.15 Company Material Adverse Effect	30
ARTICLE IV - COVENANTS OF SELLER
4.1 Affirmative Covenants	30
4.2 Negative Covenants	31
4.3 Letter of Seller’s Accountants	34
4.4 No Solicitation of Transactions	34
4.5 Update Disclosure; Breaches	37
4.6 Affiliates; Tax Treatment	38
4.7 Delivery of Stockholder List	38
4.8 Loan and Investment Policies	38
4.9 Access and Information	39
4.10 Confidentiality Agreement	39
4.11 Rights Agreement	39
ARTICLE V - COVENANTS OF THE COMPANY
5.1 Affirmative Covenants	39
5.2 Negative Covenants	39
5.3 Breaches	40
5.4 Stock Exchange Listing	40
5.5 Tax Treatment	40
5.6 Confidentiality Agreement	40
5.7 Stock Options	40
ARTICLE VI - ADDITIONAL AGREEMENTS
6.1 Proxy Statement/Prospectus; Registration Statement; Board Recommendation	41
6.2 Meeting of Seller’s Stockholders	42
6.3 Appropriate Action; Consents; Filings	42
6.4 Employee Benefit Matters	42
6.5 Directors’ and Officers’ Indemnification and Insurance	42
6.6 Notification of Certain Matters	43
6.7 Public Announcements	43
6.8 Exemption From Liability Under Section 16(b)	44
6.9 Customer Retention	44
6.10 Directorships	44
ARTICLE VII - CONDITIONS OF MERGER
7.1 Conditions to Obligation of Each Party to Effect the Merger	45
7.2 Additional Conditions to Obligations of the Company	46
7.3 Additional Conditions to Obligations of the Seller	47
ARTICLE VIII - TERMINATION
8.1 Termination	49
8.2 Notice of Termination; Effect of Termination	51
8.3 Fees and Expenses	51
ARTICLE IX - GENERAL PROVISIONS
9.1 Non-Survival of Representations, Warranties and Agreements	52
9.2 Notices	52
9.3 Certain Definitions	53
9.4 Headings	56
9.5 Severability	56
9.6 Entire Agreement	56
9.7 Assignment	56
9.8 Parties in Interest	56
9.9 Governing Law	56
9.10 Counterparts	56
9.11 Time is of the Essence	56
9.12 Specific Performance	56
9.13 Interpretation	57

 

 

ANNEX A

SUBSIDIARIES OF SELLER

ANNEX B

EMPLOYEE BENEFIT MATTERS

ANNEX C

FORM OF OPINION OF COUNSEL TO SELLER

ANNEX D

FORM OF OPINION OF COUNSEL TO COMPANY

EXHIBIT 1.1

PLAN OF MERGER

EXHIBIT 4.6

AFFILIATE LETTER

 

 

Index of Defined Terms

Acquisition Proposal

SECTION 4.4(a)

Acquisition Transaction

SECTION 4.4(a)

Additional Stock Amount

SECTION 8.1(k)(ii)

Affiliate

SECTION 9.3

Agreement

PREAMBLE

BHCA

SECTION 2.1(a)

Blue Sky Laws

SECTION 2.5(b)

Business Day

SECTION 9.3

Cash Amount

SECTION 1.6(c)(i)

Certificate or Certificates

SECTION 1.7(b)

Change of Recommendation

SECTION 4.4(b)

Closing

SECTION 1.2(a)

Closing Date

SECTION 1.2(a)

Code

PREAMBLE

Company

PREAMBLE

Company Approvals

SECTION 3.1(a)

Company Articles

SECTION 1.4

Company By-Laws

SECTION 1.4

Company Common Stock

SECTION 1.6(c)(i)

Company Disclosure Schedule

ARTICLE III

Company Material Adverse Effect

SECTION 3.1(d)

Company Reports

SECTION 3.7(a)

Company SEC Reports

SECTION 3.7(a)

Company Subsidiaries

SECTION 3.1(a)

Company Subsidiary

SECTION 3.1(a)

Company’s Board of Directors

PREAMBLE

Confidentiality Agreement

SECTION 4.10

Consent

SECTION 9.3

Contract

SECTION 9.3

Control

SECTION 9.3

Default

SECTION 9.3

D&O Policy

SECTION 6.5(b)

DFI

SECTION 1.2(b)

Dissenting Shares

SECTION 1.6(e)

Effect

SECTION 2.1(d)

Effective Time

SECTION 1.2(b)

Environmental Claims

SECTION 2.13(c)

Environmental Laws

SECTION 2.13

ERISA

SECTION 2.10(a)

Exchange Act

SECTION 2.5(b)

Exchange Agent

SECTION 1.6(d)

Exchange Fund

SECTION 1.7(a)

Existing D&O Policy

SECTION 4.1(d)

FDIC

SECTION 2.1(b)

Federal Reserve Board

SECTION 2.1(a)

Financial Statements

SECTION 9.3

GAAP

SECTION 2.7(b)

GLB Act

SECTION 2.1(a)

Governmental Authority

SECTION 1.7(e)

Hazardous Materials

SECTION 2.13

HSR Act

SECTION 2.5(b)

Indemnified Parties

SECTION 6.5(d)

Insiders

SECTION 6.8

Insurance Amount

SECTION 6.5(b)

IRS

SECTION 2.10(a)

Kansas Secretary of State

SECTION 1.2(b)

KGCC

PREAMBLE

Knowledge

SECTION 9.3

Law

SECTION 9.3

Laws

SECTION 2.5(a)

Liability

SECTION 9.3

Lien

SECTION 9.3

Litigation

SECTION 9.3

Loan Property

SECTION 2.13(a)

Material Contract

SECTION 9.3

Material Weakness

SECTION 2.7(e)

Merger

PREAMBLE

NASD

SECTION 2.1(b)

Nasdaq

SECTION 2.7(d)

NYSE

SECTION 1.6(c)(ii)

OCC

SECTION 3.1(a)

Option

SECTION 5.7(a)

Option Plans

SECTION 5.7(a)

Order

SECTION 9.3

OTS

SECTION 3.1(a)

Participation Facility

SECTION 2.13(b)

Patriot Act

SECTION 2.9(d)

Permit

SECTION 9.3

Per Share Consideration

SECTION 1.6(c)(i)

Person

SECTION 9.3

Plans

SECTION 2.10(a)

Proxy Statement/Prospectus

SECTION 2.11

Registration Statement

SECTION 3.10

Regulatory Authorities

SECTION 9.3

Rights

SECTION 9.3

Rights Agreement

SECTION 2.24

RSU

SECTION 2.3

SAC

SECTION 2.9(a)

Sarbanes-Oxley

SECTION 2.7(d)

SBL

SECTION 2.5(b)

SBA

SECTION 2.1(b)

SEC

SECTION 2.1(b)

Section 16 Information

SECTION 6.8

Section 180.0622(2)(b) of the WBCL

SECTION 3.3(a)

Section 409A

SECTION 2.10(e)

Securities Act

SECTION 2.5(b)

Seller

PREAMBLE

Seller Approvals

SECTION 2.1(b)

Seller Articles

SECTION 2.2

Seller By-Laws

SECTION 2.2

Seller Common Stock

SECTION 1.6(a)

Seller Disclosure Schedule

ARTICLE II

Seller Material Adverse Effect

SECTION 2.1(d)

Seller Preferred Stock

SECTION 2.3

Seller Reports

SECTION 2.7(a)

Seller SEC Documents

SECTION 2.7(c)

Seller SEC Reports

SECTION 2.7(a)

Seller Stockholders’ Meeting

SECTION 2.11

Seller Subsidiaries

SECTION 2.1(a)

Seller Subsidiary

SECTION 2.1(a)

Seller’s Board of Directors

PREAMBLE

Seller’s Board of Directors Recommendation

SECTION 2.4

Shares

SECTION 1.6(a)

Significant Deficiency

SECTION 2.7(e)

Silver

SECTION 2.9(a)

Stock Amount

SECTION 1.6(c)(i)

Subsidiaries

SECTION 9.3

Subsidiary

SECTION 9.3

Subsidiary Organizational Documents

SECTION 2.2

Superior Offer

SECTION 4.4(c)

Surviving Corporation

SECTION 1.1

Tax or Taxes

SECTION 2.15

Tax Returns

SECTION 2.15

Termination Fee

SECTION 8.3(b)

Title IV Plan

SECTION 2.10(b)

TRUPs

SECTION 2.3

Valuation Period Market Value

SECTION 1.6(c)(ii)

WBCL

PREAMBLE

 

 

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER , dated as of November 9, 2005 (the “Agreement”), between Gold Banc Corporation, Inc., a Kansas corporation (the “ Seller”), and Marshall & Ilsley Corporation, a Wisconsin corporation (the “ Company”).

WHEREAS , the Boards of Directors of the Company (the “ Company’s Board of Directors”) and the Seller (the “ Seller’s Board of Directors”) have each determined that it is advisable to and in the best interests of their respective stockholders for the Seller to merge with and into the Company (the “ Merger”) upon the terms and subject to the conditions set forth herein and in accordance with the Kansas General Corporation Code (the “ KGCC”) and the Wisconsin Business Corporation Law (the “ WBCL”);

WHEREAS , the Company’s Board of Directors and the Seller’s Board of Directors have each approved the Merger of the Seller with and into the Company, upon the terms and subject to the conditions set forth herein, and approved and adopted this Agreement;

WHEREAS , subsequent to the Seller’s approval of this Agreement and concurrently with the execution of this Agreement and as a condition and an inducement to the willingness of the Company to enter into this Agreement, the Company has entered into a Stockholder Voting Agreement pursuant to which each stockholder listed on Schedule I to such Stockholder Voting Agreement has agreed to vote the shares of the Seller Common Stock beneficially owned by such stockholder in favor of the Merger; and

WHEREAS , for federal income tax purposes, it is intended that the Merger shall qualify as a reorganization under the provisions of Section 368 of the Internal Revenue Code of 1986, as amended (the “ Code”), and this Agreement shall constitute the plan of reorganization.

NOW , THEREFORE , in consideration of the foregoing premises and the representations, warranties and agreements contained herein, and subject to the terms and conditions set forth herein, the parties hereto hereby agree as follows:

ARTICLE I  - THE MERGER

1.1

The Merger .  Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the KGCC, the WBCL and the Plan of Merger attached hereto as Exhibit 1.1, at the Effective Time the Seller shall be merged with and into the Company.  As a result of the Merger, the separate corporate existence of the Seller shall cease and the Company shall continue as the surviving corporation of the Merger (the “ Surviving Corporation”).

 

1.2

The Closing; Effective Time

 

(a)

The closing of the Merger and the transactions contemplated hereby (the “ Closing”) shall be held at such time, date (the “ Closing Date”) and location as may be mutually agreed by the parties.  In the absence of such agreement, the Closing shall be held at the offices of Godfrey & Kahn, S.C., 780 North Water Street, Milwaukee, Wisconsin, commencing at 9:00 a.m., Milwaukee time, on a date specified by either party upon five (5) business days’ written notice (or at the election of the Company on the last business day of the month) after the last to occur of the following events:  (a) receipt of all consents and approvals of government Regulatory Authorities legally required to consummate the Merger and the expiration of all statutory waiting periods; and (b) approval of this Agreement and the Merger by the Seller’s stockholders.  Scheduling or commencing the Closing shall not constitute a waiver of the conditions set forth in Article VII by either the Company or the Seller.

 

(b)

As promptly as practicable after the Closing, the parties hereto shall cause the Merger to be consummated by filing a certificate of merger and articles of merger, as necessary, and any other required documents, with the Secretary of State of the State of Kansas (the “ Kansas Secretary of State”) and the Department of Financial Institutions of the State of Wisconsin (the “ DFI”), in such form as required by, and executed in accordance with the relevant provisions of, the KGCC and the WBCL (the date and time of such filing or such date and time as the Company and the Seller shall agree and specify in the certificate of merger and articles of merger are referred to herein as the “ Effective Time”).

 

1.3

Effect of the Merger .  At the Effective Time, the effect of the Merger shall be as provided in this Agreement and the applicable provisions of the KGCC and the WBCL.  Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, except as otherwise provided herein, all the property, rights, privileges, powers and franchises of the Company and the Seller shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and the Seller shall become the debts, liabilities and duties of the Surviving Corporation.

 

1.4

Articles of Incorporation; By-Laws .  At the Effective Time, the Company’s Articles of Incorporation, as amended (the “ Company Articles”), and the Company’s By-Laws, as amended (the “ Company By-Laws”), as in effect immediately prior to the Effective Time, shall be the Articles of Incorporation and the By-Laws of the Surviving Corporation.

 

1.5

Directors and Officers .  At the Effective Time, the directors of the Company immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation, each to hold office in accordance with the Articles of Incorporation and By-Laws of the Surviving Corporation and to be assigned to the class previously assigned, except that the Chief Executive Officer of the Seller shall be appointed to the Company’s Board of Directors as soon as practicable after the Closing Date in accordance with Section 6.10 of this Agreement.  At the Effective Time, the officers of the Company immediately prior to the Effective Time, shall be the initial officers of the Surviving Corporation, in each case until their respective successors are duly elected or appointed.

 

1.6

Conversion of Securities; Dissenting Shares.

 

(a)

Subject to Section 1.6(d) regarding fractional shares, at the Effective Time, by virtue of the Merger and without action on the part of the Company or the Seller, each share of the common stock, $1.00 par value, of the Seller (“ Seller Common Stock”), issued and outstanding immediately prior to the Effective Time, other than shares of Seller Common Stock (i) held in the treasury of the Seller, (ii) owned by the Company or any Company Subsidiary for its own account, and (iii) other than Dissenting Shares (such shares of Seller Common Stock being referred to herein as the “ Shares”), shall cease to be outstanding and shall be converted into the right to receive the Per Share Consideration.

 

(b)

Each share of Seller Common Stock held by the Seller as treasury stock and each such share held by the Company or any Company Subsidiary immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof as otherwise provided in this Section 1.6.

 

(c)

For purposes of this Agreement, the following definitions shall apply:

 

(i)

“ Per Share Consideration” means (A) an amount in cash equal to $2.78 (the “ Cash Amount”), plus (B) a number of shares of common stock, $1.00 par value, of the Company (“ Company Common Stock”) (rounded to the nearest ten thousandth of a share) (the “ Stock Amount”) determined as follows:

 

(A)

If the Valuation Period Market Value is less than $36.40, the Stock Amount shall be equal to 0.4319 of a share of Company Common Stock;

 

(B)

If the Valuation Period Market Value is equal to or greater than $36.40 but less than or equal to $49.24, the Stock Amount shall be equal to the quotient determined by dividing $15.72 by the Valuation Period Market Value;

 

(C)

If the Valuation Period Market Value is greater than $49.24, the Stock Amount shall be equal to 0.3192 of a share of Company Common Stock; and

 

(D)

Plus, to the extent the Company elects to exercise its right under Section 8.1(k)(ii), below, the Additional Stock Amount.

 

Notwithstanding the foregoing, the parties acknowledge and agree that the Cash Amount may have to be reduced and the Stock Amount may have to be increased in accordance with Section 1.6(f), below.

 

(ii)

“ Valuation Period Market Value” means the average of the average daily high and low sale price per share of the Company Common Stock on the New York Stock Exchange (the “ NYSE”) for the five (5) trading days ending on and including the third trading day preceding the Effective Time (as reported in an authoritative source).

 

(d)

No fractional shares of Company Common Stock shall be issued in the Merger.  In lieu of a fractional share of Company Common Stock, the holder of any Shares who would otherwise be entitled to receive such fractional share (after taking into account all shares of Seller Common Stock delivered by such holder) shall be entitled to receive a cash payment, without interest and rounded up to the nearest whole cent, in an amount determined by multiplying the Valuation Period Market Value by the fraction of a share of Company Common Stock to which the holder would otherwise have been entitled.  As promptly as practicable after the determination of the amount of cash, if any, to be paid to holders of fractional share interests, the bank or trust company designated by the Company (the “ Exchange Agent”) shall so notify the Company, and the Company shall deposit that amount with the Exchange Agent and shall cause the Exchange Agent to forward payments to the holders of fractional share interests, subject to and in accordance with the terms of this Section 1.6.

 

(e)

Notwithstanding anything in this Agreement to the contrary, shares of Seller Common Stock which are issued and outstanding immediately prior to the Effective Time and which are held by stockholders who have validly exercised appraisal rights available under Section 17-6712 of the KGCC (the “ Dissenting Shares”) shall not be converted into or be exchangeable for the right to receive the Per Share Consideration in accordance with this Section 1.6, unless and until such holders shall have failed to perfect or shall have effectively withdrawn or lost their appraisal rights under the KGCC.  Dissenting Shares shall be treated in accordance with Section 17-6712 of the KGCC, if and to the extent applicable.  If any such holder shall have failed to perfect or shall have effectively withdrawn or lost such appraisal rights, such holder’s shares of Seller Common Stock shall thereupon be converted into and become exchangeable only for the right to receive, as of the Effective Time, the Per Share Consideration in accordance with this Section 1.6.  The Seller shall give the Company (a) prompt notice of each and every notice of a stockholder’s intent to demand payment for the stockholder’s shares of Seller Common Stock, attempted withdrawals of such demands, and any other instruments served pursuant to the KGCC and received by the Seller relating to rights to be paid the “fair value” of Dissenting Shares, as provided in Section 17-6712 of the KGCC and (b) the opportunity to direct all negotiations and proceedings with respect to demands for appraisal under the KGCC.  The Seller shall not, except with the prior written consent of the Company, voluntarily make any payment with respect to, offer to settle or settle, or approve any withdrawal of any demands for “fair value” under Section 17-6712 of the KGCC.

 

(f)

If either the tax opinion referred to in Section 7.2(e) or the tax opinion referred to in Section 7.3(d) cannot be rendered because the counsel charged with providing such opinion reasonably determines that the Merger may not satisfy the continuity of interest requirements under applicable federal income tax principles relating to reorganizations under Section 368(a) of the Code, then the Company shall reduce the Cash Amount and correspondingly increase the Stock Amount to the minimum extent necessary to enable the relevant tax opinions to be rendered.

 

1.7

Exchange of Certificates .

 

(a)

Exchange Agent .  The Company shall deposit, or shall cause to be deposited, from time to time, with the Exchange Agent, for the benefit of the holders of Shares, for exchange in accordance with this Article I, through the Exchange Agent, the Per Share Consideration, together with any dividends or distributions with respect thereto, if any, to be issued in exchange for Shares pursuant to this Article I (the “ Exchange Fund”).  Such deposits shall be made after the Effective Time as requested by the Exchange Agent in order for the Exchange Agent to promptly deliver the Per Share Consideration.

 

(b)

Exchange Procedures .  As soon as reasonably practicable after the Effective Time, the Exchange Agent shall mail to each holder of record of a certificate representing ownership of Shares (a “ Certificate” or “Certificates”) whose Shares were converted into the right to receive the Per Share Consideration pursuant to Section 1.6, (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in such form and have such other provisions as the Company may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Per Share Consideration.  Upon surrender of a Certificate for cancellation to the Exchange Agent together with such letter of transmittal, duly executed, the holder of such Certificate shall be entitled to receive in exchange therefor the Per Share Consideration and any unpaid dividends and distributions thereon as provided in this Article I, which such holder has the right to receive in respect of the Certificate surrendered pursuant to the provisions of this Article I (after taking into account all Shares then held by such holder), and the Certificate so surrendered shall forthwith be canceled.  In the event of a transfer of ownership of Shares which is not registered in the transfer records of the Seller, a transferee may exchange the Certificate representing such Shares for the Per Share Consideration and any unpaid dividends and distributions thereon as provided in this Article I if the Certificate representing such Shares is presented to the Exchange Agent, accompanied by all documents required to evidence and effect such transfer, and by evidence that any applicable stock transfer taxes have been paid.  In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and the posting by such person of a bond in such amount as the Company may direct as indemnity against any claim that may be made against it or the Exchange Agent with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the Per Share Consideration and any unpaid dividends and distributions thereon as provided in this Article I, which such holder would have had the right to receive in respect of such lost, stolen or destroyed Certificate.  Until surrendered as contemplated by this Section 1.7, each Certificate (other than Certificates representing Shares owned by the Company or any Company Subsidiary, and Certificates representing Dissenting Shares) shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Per Share Consideration and any unpaid dividends and distributions thereon as provided in this Article I.

 

(c)

Distributions with Respect to Unexchanged Shares .  No dividends or other distributions declared or made after the Effective Time with respect to Company Common Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate with respect to the shares of Company Common Stock represented thereby, and no cash payment in lieu of fractional shares shall be paid to any such holder pursuant to Section 1.6(d), until the holder of such Certificate shall surrender such Certificate.  Subject to the effect of applicable laws, following surrender of any such Certificate, there shall be paid to the holder of the certificates representing whole shares of Company Common Stock issued in exchange therefor, without interest, (i) promptly, the amount of any cash payable with respect to a fractional share of Company Common Stock to which such holder is entitled pursuant to Section 1.6(d) and the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to such whole shares of Company Common Stock, and (ii) at the appropriate payment date, the amount of dividends or other distributions, with a record date after the Effective Time but prior to surrender and a payment date occurring after surrender, payable with respect to such whole shares of Company Common Stock.

 

(d)

No Further Rights in the Shares .  The Per Share Consideration issued and paid upon conversion of the Shares in accordance with the terms hereof shall be deemed to have been issued and paid in full satisfaction of all rights pertaining to such Shares.

 

( e)

Termination of Exchange Fund .  Any portion of the Exchange Fund which remains undistributed to the former stockholders of the Seller for six (6) months after the Effective Time shall be delivered to the Company, upon demand, and any former stockholders of the Seller who have not theretofore complied with this Article I shall thereafter look only to the Company to claim the Per Share Consideration, any cash in lieu of fractional shares of Company Common Stock and any dividends or distributions with respect to Company Common Stock, in each case without interest thereon, and subject to Section 1.7(g).  Any portion of the Exchange Fund remaining unclaimed by holders of Shares as of a date which is immediately prior to such time as such amounts would otherwise escheat to or become property of any United States federal, state or local or any foreign government, or political subdivision thereof, or any multinational organization or authority or any authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, any court or tribunal (or any department, bureau or division thereof), or any arbitrator or arbitral body (each a “ Governmental Authority”) shall, to the extent permitted by applicable Law, become the property of the Surviving Corporation free and clear of any claims or interest of any Person previously entitled thereto.

 

(f)

No Liability .  Neither the Company nor the Seller shall be liable to any former holder of Shares for any such Shares (or dividends or distributions with respect thereto) or cash or other payment delivered to a public official pursuant to any abandoned property, escheat or similar laws.

 

(g)

Withholding Rights .  Each of the Company and the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any former holder of Shares such amounts as it is required to deduct and withhold with respect to the making of such payment under any Laws relating to Taxes and pay such withholding amount over to the appropriate taxing authority.  To the extent that amounts are so withheld by the Company or the Exchange Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the former holder of the Shares in respect of which such deduction and withholding was made by the Company or the Exchange Agent as the case may be.

 

ARTICLE II  - REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except as disclosed in the Seller SEC Reports or in the disclosure schedule (the “ Seller Disclosure Schedule”) delivered by Seller to the Company prior to the execution of this Agreement (which schedule sets forth items of disclosure with specific reference to the particular Section or subsection of this Agreement to which the information in the Seller Disclosure Schedule relates); provided , however , that any information set forth in one section or subsection of the Seller Disclosure Schedule will be deemed to apply to each other Section or subsection of this Agreement to which its relevance is reasonably apparent, Seller hereby represents and warrants to the Company as follows:

 

2.1

Organization and Qualification; Subsidiaries .  

 

(a)

The Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Kansas, a registered bank holding company under the Bank Holding Company Act of 1956, as amended (the “ BHCA”), and a financial holding company under the Graham-Leach-Bliley Act of 1999 and the regulations promulgated thereunder (the “ GLB Act”).  The Seller is also subject to regulation by the Board of Governors of the Federal Reserve System (the “ Federal Reserve Board”).  Each subsidiary of the Seller (a “ Seller Subsidiary,” or collectively the “ Seller Subsidiaries”) is a state banking association, corporation, limited liability company, limited partnership, or trust duly organized, validly existing and in good standing under the laws of the state of its incorporation or organization.  Each of the Seller and the Seller Subsidiaries has the requisite corporate power and authority to own, lease and operate the properties it now owns or holds under lease and to carry on its business as it is now being conducted, is duly qualified or licensed as a foreign business entity to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such jurisdictions in which the failure to be so qualified or licensed would not, individually or in the aggregate, have a Seller Material Adverse Effect.  Each Seller Subsidiary that is a Kansas bank has been in existence and actively engaged in business for five or more years.

 

(b)

Each of the Seller and the Seller Subsidiaries has all franchises, grants, authorizations, licenses, permits, easements, consents, certificates, approvals and orders (“ Seller Approvals”) necessary to own, lease and operate their properties and to carry on its business as it is now being conducted, including all required authorizations from the Federal Reserve Board, the Federal Deposit Insurance Corporation (the “ FDIC”), the Securities and Exchange Commission (the “ SEC”), the National Association of Securities Dealers, Inc. (the “ NASD”), the United States Small Business Administration (the “ SBA”), the Office of the Kansas State Bank Commissioner, the Missouri Division of Finance, the Oklahoma Office of State Finance and the Florida Office of Financial Regulation, and neither the Seller nor any Seller Subsidiary has received any notice of proceedings relating to the revocation or modification of any Seller Approvals, except in each case where such revocations or modifications, or the failure to have such Seller Approvals would not, individually or in the aggregate, have a Seller Material Adverse Effect.

 

(c)

A true and complete list of the Seller Subsidiaries, together with (i) the Seller’s percentage ownership of each Seller Subsidiary and (ii) laws under which the Seller Subsidiary is incorporated or organized, is set forth in the Seller Disclosure Schedule and on Annex A.  The Seller or one or more of the Seller Subsidiaries owns beneficially and of record all of the outstanding shares of capital stock or other equity interests of each of the Seller Subsidiaries.  Except for the Seller Subsidiaries, the Seller does not directly or indirectly own any capital stock or equity interest in, or any interests convertible into or exchangeable or exercisable for any capital stock or equity interest in, any corporation, partnership, joint venture or other business association or entity, other than in the ordinary course of business, and in no event in excess of 5% of the outstanding equity securities of such entity.

 

(d)

As used in this Agreement, the term “Seller Material Adverse Effect” means, any effect, change, event, fact, condition, occurrence, or development (each an “ Effect”), that, individually or in the aggregate with other Effects, (i) is material and adverse to the business, assets, liabilities, results of operations or financial condition of the Seller and Seller Subsidiaries taken as a whole, or (ii) materially impairs the ability of the Seller to consummate the transactions contemplated hereby; provided , however , that the term “ Seller Material Adverse Effect” shall not be deemed to include the impact of (a) changes in laws and regulations or interpretations thereof that are generally applicable to the banking industry, (b) changes in generally accepted accounting principles that are generally applicable to the banking industry, (c) expenses reasonably incurred in connection with the transactions contemplated hereby, (d) changes attributable to or resulting from changes in general economic conditions affecting banks or their holding companies generally, (e) any Effect to the extent resulting from the announcement of this Agreement or the transactions contemplated thereby, (f) any change in the market price or trading volume of the Seller’s Common Stock following the execution of this Agreement, (g) the payment of any amounts due to, or the provision of any other benefits to, any officers or employees under employment contracts, non-competition agreements, employee benefit plans, severance agreements or other arrangements in existence as of the date of or contemplated by this Agreement, provided that the payment of any such amounts or the provision of any such benefits shall be made in the ordinary course consistent with past practices, (h) the taking of any action by the Seller approved or consented to in writing by the Company, or (i) any action taken or not taken by the Seller or Seller’s Subsidiaries in accordance with the terms and covenants contained in this Agreement.

 

(e)

The minute books of the Seller and each of the Seller Subsidiaries contain true, complete and accurate records in all material respects of all meetings and other corporate actions held or taken since January 1, 2000, of their respective stockholders and Boards of Directors (including committees of their respective Boards of Directors).

 

2.2

Articles of Incorporation and By-Laws .  The Seller has heretofore furnished or made available to the Company a complete and correct copy of the Seller’s Articles of Incorporation and the Seller’s By-Laws, as amended or restated (“ Seller Articles” and “ Seller By-Laws,” respectively), and the Articles of Incorporation and the By-Laws, or other organizational documents, as the case may be, of each Seller Subsidiary (the “ Subsidiary Organizational Documents”).  The Seller Articles, Seller By-Laws and Subsidiary Organizational Documents are in full force and effect.  Neither the Seller nor any Seller Subsidiary is in breach of any of the provisions of the Seller Articles, Seller By-Laws or Subsidiary Organizational Documents.

 

2.3

Capitalization .  The authorized capital stock of the Seller consists of 50,000,000 shares of Seller Common Stock and 50,000,000 shares of the Seller’s preferred stock, $1.00 par value (“ Seller Preferred Stock”).  As of November 4, 2005, (i) 38,205,194 shares of Seller Common Stock were issued and outstanding, all of which were duly authorized, validly issued, fully paid and non-assessable, and not issued in violation of any preemptive right of any Seller stockholder, (ii) 7,058,914 shares of Seller Common Stock were held as treasury shares by the Seller, (iii) no shares of Seller Preferred Stock were issued and outstanding, (iv) 781,379 shares of Seller Common Stock were subject to outstanding stock options issued pursuant to the Seller’s stock option plans, and (v) 209,100 shares of issued and outstanding Seller Common Stock were restricted common stock, and there were 139,400 restricted stock units (“ RSU”) issued and outstanding in each case under and subject to the Seller’s equity compensation plan.  The authorized capital stock of Gold Banc Trust III, Gold Banc Trust IV and Gold Banc Capital Trust V consists of common securities and trust preferred securities (the “ TRUPs”).  As of the date of this Agreement, all of the issued and outstanding common securities are duly authorized, validly issued, fully paid and non-assessable and owned by the Seller.  As of the date of this Agreement, $84,000,000 in TRUPs are issued and outstanding, all of which are duly authorized, validly issued, fully paid and non-assessable and not issued in violation of any preemptive rights of any Seller stockholder or holder of TRUPs.  Except as set forth in clauses (iv) and (v), above, and in the Rights Agreement, there are no outstanding Rights relating to the issued or unissued capital stock or other equity interests of the Seller or any Seller Subsidiary or obligating the Seller or any Seller Subsidiary to issue or sell any shares of capital stock or other equity interests of, or other equity interests in, the Seller or any Seller Subsidiary.  There are no obligations, contingent or otherwise, of the Seller or any Seller Subsidiary to repurchase, redeem or otherwise acquire any shares of Seller Common Stock or the capital stock or other equity interests of any Seller Subsidiary or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any Seller Subsidiary or any other entity, except for loan commitments and other funding obligations entered into in the ordinary course of business.  Each of the outstanding shares of capital stock or other equity interests of each Seller Subsidiary are duly authorized, validly issued, fully paid and non-assessable, and not issued in violation of any preemptive rights of any Seller Subsidiary stockholder or other equity holder, and such shares or other equity interests owned by the Seller or another Seller Subsidiary are owned free and clear of all security interests, liens, claims, pledges, agreements, limitations of the Seller’s voting rights, charges or other encumbrances of any nature whatsoever.

 

2.4

Authority .  The Seller has the requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby (other than, with respect to the Merger, the approval and adoption of this Agreement by the Seller’s stockholders in accordance with the KGCC and the Seller Articles and Seller By-Laws).  The execution and delivery of this Agreement by the Seller and the consummation by the Seller of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of the Seller, including, without limitation, Seller’s Board of Directors.  As of the date of this Agreement, the Seller’s Board of Directors, at a meeting duly called, constituted and held, has by the unanimous vote of all directors present at the meeting determined (a) that this Agreement and the transactions contemplated thereby, including the Merger, is advisable to, fair to and in the best interests of the Seller and its stockholders, (b) to submit this Agreement for approval and adoption by the stockholders of the Seller and to declare the advisability of this Agreement, and (c) to recommend that the stockholders of the Seller adopt and approve this Agreement and the transactions contemplated thereby, including the Merger, and direct that this Agreement be submitted for consideration by the stockholders of the Seller at the Seller Stockholders’ Meeting (collectively, the “ Seller’s Board of Directors Recommendation”).  No other corporate proceedings on the part of the Seller are necessary to authorize this Agreement or to consummate the transactions so contemplated hereby (other than, with respect to the Merger, the approval and adoption of this Agreement by the Seller’s stockholders in accordance with the KGCC and the Seller Articles and Seller By-Laws).  This Agreement has been duly executed and delivered by, and constitutes a valid and binding obligation of the Seller and assuming due authorization, execution and delivery by Company, enforceable against the Seller in accordance with its terms, except as enforcement may be limited by laws affecting insured depository institutions, general principles of equity whether applied in a court of law or a court of equity and by bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally.

 

2.5

No Conflict; Required Filings and Consents .  

 

(a)

The execution and delivery of this Agreement by the Seller do not, and the performance of this Agreement and the transactions contemplated hereby by the Seller will not, (i) conflict with or violate the Seller Articles or Seller By-Laws or the Subsidiary Organizational Documents, (ii) conflict with or violate any federal, state or local statute, ordinance, rule, regulation, order, judgment or decree (collectively, “ Laws”) applicable to the Seller or any Seller Subsidiary or by which its or any of their respective properties is bound or affected, or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets of the Seller or any Seller Subsidiary pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Seller or any Seller Subsidiary is a party or by which the Seller or any Seller Subsidiary or its or any of their respective properties is bound or affected, except in the case of clauses (ii) and (iii), above, for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually or in the aggregate, have a Seller Material Adverse Effect.  Sections 17-1286 through 17-1298 and Sections 17-12,100 through 17-12,104 of the KGCC are inapplicable to the execution, delivery or performance of this Agreement and the transactions contemplated thereby, including the Merger.  No other “business combination,” “control share acquisition,” “fair price” or other anti-takeover laws or regulations enacted under Kansas state law applies to the execution, delivery or performance of this Agreement or any of the transactions contemplated hereby by the Seller, including the Merger.

 

(b)

The execution and delivery of this Agreement by the Seller do not, and the performance of this Agreement by the Seller will not, require any consent, approval, authorization or permit of, or filing with or notification to, any domestic governmental or regulatory authority except (i) for applicable requirements, if any, of the Securities Act of 1933, as amended (the “ Securities Act”), the Securities Exchange Act of 1934, as amended (the “ Exchange Act”), state securities or blue sky laws (“ Blue Sky Laws”), the BHCA, the banking laws and regulations of the States of Kansas, Missouri, Oklahoma and Florida (the “ SBL”), regulations promulgated by the SBA, the filing and recordation of appropriate merger or other documents as required by the KGCC and WBCL, and prior notification filings with the Department of Justice under the Hart-Scott-Rodino Act (the “ HSR Act”), and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not prevent or delay consummation of the Merger or otherwise prevent the Seller from performing its obligations under this Agreement, and would not have a Seller Material Adverse Effect.  Neither the Seller nor any Seller Subsidiary are subject to any foreign Governmental Authority or foreign law.

 

2.6

Compliance; Permits .  Neither the Seller nor any Seller Subsidiary is in conflict with, or in default or violation of, (i) any Law applicable to the Seller or any Seller Subsidiary or by which its or any of their respective properties is bound or affected, or (ii) any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Seller or any Seller Subsidiary is a party or by which the Seller or any Seller Subsidiary or its or any of their respective properties is bound or affected, except for any such violations, conflicts or defaults which would not, individually or in the aggregate, have a Seller Material Adverse Effect.

 

2.7

Securities and Banking Reports; Financial Statements .  

 

(a)

The Seller and each Seller Subsidiary have filed all forms, reports and documents required to be filed with (x) the SEC since December 31, 2002, and as of the date of this Agreement has delivered or made available to the Company (i) its Annual Reports on Form 10-K for the fiscal years ended December 31, 2002, 2003 and 2004, respectively, (ii) all proxy statements relating to the Seller’s meetings of stockholders (whether annual or special) held since December 31, 2002, (iii) all Reports on Form 8-K filed by the Seller with the SEC since December 31, 2002, (iv) all other reports or registration statements filed by the Seller with the SEC since December 31, 2002 and (v) all amendments and supplements to all such reports and registration statements filed by the Seller with the SEC since December 31, 2002 (collectively, the “ Seller SEC Reports”) and (y) the Federal Reserve Board, the FDIC, the Kansas Office of the State Bank Commissioner, the Missouri Division of Finance, the Oklahoma Office of State Finance, the Florida Office of Financial Regulation and any other applicable federal or state securities or banking authorities (all such reports and statements are collectively referred to as the “ Seller Reports”).  The Seller Reports (i) were prepared in all material respects in accordance with the requirements of applicable Law and (ii) did not at the time they were filed, after giving effect to any amendment thereto filed prior to the date hereof, 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 therein, in the light of the circumstances under which they were made, not misleading, except that information as of a later date (but before the date of this Agreement) will be deemed to modify information as of an earlier date.  The parties agree that failure of the Seller’s Chief Executive Officer or Chief Financial Officer to provide any certification required to be filed with any document filed in any Seller SEC Report shall constitute an event that has a Seller Material Adverse Effect.

 

(b)

Each of the audited and unaudited consolidated financial statements (including, if applicable, any related notes thereto) contained in the Seller SEC Reports have been prepared in accordance with generally accepted accounting principles (“ GAAP”) applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or required by reason of a concurrent change to GAAP) and each fairly presents in all material respects the consolidated financial position of the Seller and the Seller Subsidiaries as of the respective dates thereof and the consolidated results of its operations and cash flows and changes in financial position for the periods indicated, except (i) for any statement therein or omission therefrom which were corrected, amended or supplemented or otherwise disclosed or updated in a subsequent Seller SEC Report, and (ii) that any unaudited interim financial statements do not contain the footnotes required by GAAP, and were or are subject to normal and recurring year-end adjustments, which were not or are not expected to be material in amount, either individually or in the aggregate.  The Seller has not had any dispute with any of its auditors regarding accounting matters or policies during any of its past three full fiscal years or during the current fiscal year-to-date requiring disclosure pursuant to Item 304 of Regulation S-K promulgated by the SEC.  To Seller’s Knowledge, the Seller’s auditors will deliver to the Seller an unqualified audit opinion with respect to the Seller’s financial statements as of and for the year ended December 31, 2005, and unqualified opinions with respect to the effectiveness of the Seller’s internal controls and with respect to the assessment of management of the Seller regarding the effectiveness of the Seller’s internal controls.

 

(c)

The Seller has made available to the Company a complete copy of any amendments or modifications which are required to be filed with the SEC, but have not yet been filed with the SEC, to (i) the Seller SEC Reports filed prior to the date hereof, and (ii) contracts which previously have been filed by the Seller with the SEC pursuant to the Securities Act and Exchange Act (together with the Seller SEC Reports, the “ Seller SEC Documents”).  The Seller has timely responded to all comment letters and other correspondence of the staff of the SEC relating to the SEC Documents, and the SEC has not advised the Seller that any final responses are inadequate, insufficient or otherwise non-responsive.  The Seller has made available to the Company true, correct and complete copies of all correspondence between the SEC, on the one hand, and the Seller and any of the Seller Subsidiaries, on the other, occurring since January 1, 2002 and prior to the date hereof and will, reasonably promptly following the receipt thereof, make available to the Company any such correspondence sent or received after the date hereof.  To Seller’s Knowledge, none of the SEC Documents is the subject of ongoing SEC review or outstanding SEC comment.

 

(d)

To Seller’s Knowledge, the Seller and each of its officers and directors are in compliance with and have complied in all material respects with (A) the applicable provisions of the Sarbanes-Oxley Act of 2002 (“ Sarbanes-Oxley”), including, without limitation, Section 404 thereof, and any related rules and regulations promulgated by the SEC thereunder and (B) the applicable listing and corporate governance rules and regulations of The Nasdaq National Market (“ Nasdaq”).  With respect to each Report on Form 10-K and Form 10-Q and each amendment of any such report filed by the Seller with the SEC since December 31, 2002, the Chief Executive Officer and Chief Financial Officer of the Seller have made all certifications required by Sections 302 and 906 of Sarbanes-Oxley and the rules and regulations promulgated thereunder at the time of such filing, and the statements contained in each such certification were true and correct when made.  Further, the Seller has established and maintains “disclosure controls and procedures” (as defined in Rule 13a-15(e) promulgated under the Exchange Act) that are reasonably designed to ensure that material information (both financial and non-financial) relating to the Seller and the Seller Subsidiaries required to be disclosed by the Seller in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to the Seller’s principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the principal executive officer and the principal financial officer of the Seller required by Section 302 of Sarbanes-Oxley with respect to such reports.  For purposes of this agreement, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in Sarbanes-Oxley.

 

(e)

The Seller has established and maintains a system of “internal control over financial reporting” (as defined in Rule 13a-15(f) promulgated under the Exchange Act) (“internal controls”).  To Seller’s Knowledge, based on its evaluation of internal controls prior to the date hereof, such internal controls are sufficient to provide reasonable assurance regarding the reliability of the Seller’s financial reporting and the preparation of the Seller’s financial statements for external purposes in accordance with GAAP.  The Seller has disclosed, based on its evaluation of internal controls prior to the date hereof, to the Seller’s auditors and audit committee (i) any significant deficiencies and material weaknesses known to the Seller in the design or operation of internal controls which are reasonably likely to adversely affect in a material respect the Seller’s ability to record, process, summarize and report financial information and (ii) any material fraud known to the Seller that involves management or other employees who have a significant role in internal controls.  The Seller has made available to the Company a summary of any such disclosure regarding material weaknesses and fraud made by management to the Seller’s auditors and audit committee since December 31, 2002.  For purposes of this agreement, a “ significant deficiency” in controls means a control deficiency that adversely affects an entity’s ability to initiate, authorize, record, process, or report external financial data reliably in accordance with GAAP.  A “significant deficiency” may be a single deficiency or a combination of deficiencies that results in more than a remote likelihood that a misstatement of the annual or interim financial statements that is more than inconsequential will not be prevented or detected.  For purposes of this Agreement, a “material weakness” in controls means a significant deficiency, or a combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

 

(f)

There are no outstanding loans made by the Seller or any Seller Subsidiary to any executive officer (as defined in Rule 3b-7 promulgated under the Exchange Act) or director of the Seller, other than loans that are subject to Regulation O under the Federal Reserve Act.

 

(g)

Except (i) for those liabilities that are reflected or fully reserved against on the consolidated balance sheet of the Seller as of September 30, 2005, and (ii) for liabilities incurred in the ordinary course of business consistent with past practice since September 30, 2005, neither the Seller nor any Seller Subsidiary has incurred any liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise due or to become due), that are required to be disclosed on a balance sheet prepared in accordance with GAAP, that, either alone or when combined with all similar liabilities, has had, or would reasonably be expected to have, a Seller Material Adverse Effect.

 

(h)

The Seller has not been notified by its independent registered public accounting firm or by the staff of the SEC that such accounting firm or the staff of the SEC, as the case may be, are of the view that any financial statement included in any Seller SEC Report should be restated which has not been restated in a subsequent Seller SEC Report that was filed prior to the date of this Agreement, or that the Seller should modify its accounting in future periods in a manner that would have a Seller Material Adverse Effect.

 

(i)

Since January 1, 2005, neither the Seller nor the Seller Subsidiaries nor, to Seller’s Knowledge, any director, officer, employee, auditor, accountant or representative of the Seller or the Seller Subsidiaries, has received any complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Seller or the Seller Subsidiaries or their respective internal accounting controls, including any complaint, allegation, assertion or claim that the Seller or the Seller Subsidiaries has engaged in questionable accounting or auditing practices.  To Seller’s Knowledge, no attorney representing the Seller or the Seller Subsidiaries, whether or not employed by the Seller or the Seller Subsidiaries, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by the Seller or any of its officers, directors, employees or agents to the Seller’s Board of Directors or any committee thereof or to any director or officer of the Seller.  Since January 1, 2005, there have been no internal investigations regarding accounting or revenue recognition discussed with, reviewed by or initiated at the direction of the Chief Executive Officer, Chief Financial Officer, the Seller’s Board of Directors or any committee thereof.

 

2.8

Absence of Certain Changes or Events .  

 

(a)

Since January 1, 2005 to the date of this Agreement, the Seller and the Seller Subsidiaries have conducted their businesses only in the ordinary course and in a manner consistent with past practice and, since January 1, 2005, there has not been (i) any change in the financial condition, results of operations or business of the Seller and any of the Seller Subsidiaries which has had a Seller Material Adverse Effect, (ii) any damage, destruction or loss (whether or not covered by insurance) with respect to any assets of the Seller or any of the Seller Subsidiaries which has had a Seller Material Adverse Effect, (iii) any change by the Seller in its accounting methods, principles or practices, (iv) any revaluation by the Seller of any of its assets in any material respect, (v) except for regular quarterly cash dividends on the Seller Common Stock with usual record and payment dates, to the date of this Agreement, and the publicly-announced stock repurchase program, any declaration setting aside or payment of any dividends or distributions in respect of shares of Seller Common Stock or any redemption, purchase or other acquisition of any of its securities or any of the securities of any Seller Subsidiary, (vi) any increase in the wages, salaries, bonuses, compensation, pension, or other fringe benefits or perquisites payable to any executive officer, employee, or director or any grant of any severance or termination pay, except in the ordinary course of business consistent with past practices, (vii) any strike, work stoppage, slow-down or other labor disturbance, (viii) the execution of any collective bargaining agreement, contract or other agreement or understanding with a labor union or organization, or (ix) any union organizing activities.

 

(b)

To Seller’s Knowledge, no third party has used, with or without permission, the corporate name, the trademarks, trade names, service marks, logos, symbols or similar intellectual property of Seller or any Seller Subsidiary in connection with the marketing, advertising, promotion or sale of such third party’s products or services.  Neither Seller nor any Seller Subsidiary is a party to any joint marketing or other affinity marketing program with a third party.

 

2.9

Absence of Litigation .  

 

(a)

There is no Litigation or other proceedings pending or, to Seller’s Knowledge, threatened, against Seller or any Seller Subsidiary or any of their property or assets or challenging the validity or propriety of the transactions contemplated by this Agreement, as to which there is a reasonable probability of an adverse determination and which, if adversely determined, would, individually or in the aggregate, have a Seller Material Adverse Effect.  To Seller’s Knowledge, neither Seller nor any of the Seller Subsidiaries or their affiliates are liable for the payment of any termination, break-up or other fee to Silver Acquisition Corp. (“ Silver”), SAC Acquisition Corp. (“ SAC”), or any of their affiliates, advisers or representatives as a result of the Seller’s termination of that certain Merger Agreement dated as of February 24, 2004 by and among the Seller, Silver and SAC and no basis exists for the payment of any such termination, break-up or other fee.

 

(b)

There is no Order imposed upon the Seller, any of the Seller Subsidiaries or the assets of the Seller or any of the Seller Subsidiaries which has had a Seller Material Adverse Effect.

 

(c)

Except as set forth in the Seller’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 or its Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 (without giving effect to any amendment filed after the date of this Agreement), neither the Seller nor any of the Seller Subsidiaries is subject to, and, to the Seller’s Knowledge, neither the Seller nor any of the Seller Subsidiaries is reasonably likely to become subject to, any written order, decree, agreement (including an agreement under Section 4(m) of the BHCA), memorandum of understanding or similar arrangement with, or a commitment letter or similar submission to, or extraordinary supervisory letter from, or adopted any extraordinary board resolutions at the request of, any Governmental Authority charged with the supervision or regulation of financial institutions or issuers of securities or engaged in the insurance of deposits or the supervision or regulation of it or any of its Subsidiaries, nor has any Governmental Authority advised it in writing or, to Seller’s Knowledge, otherwise advised, that it is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such order, decree, agreement, memorandum of understanding or extraordinary supervisory letter or any such board resolutions, nor, to its knowledge, has any Governmental Authority commenced an investigation in connection therewith.

 

(d)

Neither the Seller nor any Seller Subsidiary has received any order, decree, notice or other communication from any Governmental Authority asserting or claiming that the Seller or any Seller Subsidiary is, and to Seller’s Knowledge, no facts or circumstances exist which would cause it or any of the Seller Subsidiaries to be deemed to be, (i) operating in violation of the Bank Secrecy Act, the USA PATRIOT ACT of 2001 and the regulations promulgated thereunder (the “ Patriot Act”), any order issued with respect to anti-money laundering by the U.S. Department of the Treasury’s Office of Foreign Assets Control, or any other applicable anti-money laundering statute, rule or regulation, except where any such violation would not have a Seller Material Adverse Effect; or (ii) not in satisfactory compliance, with the applicable privacy and customer information requirements contained in any federal and state privacy laws and regulations, including, without limitation, in Title V of the GLB Act, as well as the provisions of the information security program adopted pursuant to 12 C.F.R Part 40, except where the failure to so comply would not have a Seller Material Adverse Effect.  The Seller (or where appropriate the Seller Subsidiary) has adopted and implemented an anti-money laundering program that contains adequate and appropriate customer identification verification procedures that comply with Section 326 of the Patriot Act and such anti-money laundering program meets the requirements in all material respects of Section 352 of the Patriot Act and the regulations thereunder, and it (or such other of the Seller Subsidiaries) has complied in all material respects, except where the failure to comply would not have a Seller Material Adverse Effect, with any requirements to file reports and other necessary documents as required by the Patriot Act and the regulations thereunder.

 

2.10

Employee Benefit Plans .  

 

(a)

Current Plans .  The Seller Disclosure Schedule lists all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA”)), and all bonus, stock option, stock purchase, restricted stock, incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, programs or arrangements, and all material employment, termination, severance or other employment contracts or employment agreements, with respect to which the Seller or any Seller Subsidiary has any obligation (collectively, the “ Plans”).  The Seller has furnished or made available to the Company a complete and accurate copy of each Plan (or a description of the Plans, if the Plans are not in writing) and a complete and accurate copy of each material document prepared in connection with each such Plan, including, without limitation, and where applicable, a copy of (i) each trust or other funding arrangement, (ii) each summary plan description and summary of material modifications, (iii) the three (3) most recently filed IRS Forms 5500 and related schedules, (iv) the most recently issued determination letter from the United States Internal Revenue Service (the “ IRS”) for each such Plan and the materials submitted to obtain that letter and (v) the three (3) most recently prepared actuarial and financial statements with respect to each such Plan.

 

(b)

Absence of Certain Types of Plans .  No member of the Seller’s “controlled group,” within the meaning of Section 4001(a)(14) of ERISA, maintains or contributes to, or within the five years preceding the Effective Time has maintained or contributed to, an employee pension benefit plan subject to Title IV of ERISA (“ Title IV Plan”).  No Title IV Plan is a “multiemployer pension plan” as defined in Section 3(37) of ERISA.  None of the Plans obligates the Seller or any of the Seller Subsidiaries to pay material separation, severance, termination or similar type benefits solely as a result of any transaction contemplated by this Agreement or as a result of a “change in control,” within the meaning of such term under Section 280G of the Code.  Except as required by COBRA, none of the Plans provides for or promises retiree medical, disability or life insurance benefits to any current or former employee, officer or director of the Seller or any of the Seller Subsidiaries.  Each of the Plans is subject only to the laws of the United States or a political subdivision thereof.

 

(c)

Compliance with Applicable Law .  Each Plan has been operated in all respects in accordance with the requirements of all applicable Law and all persons who participate in the operation of such Plans and all Plan “fiduciaries” (within the meaning of Section 3(21) of ERISA) have acted in accordance with the provisions of all applicable Law, except where such operations or violations of applicable Law would not, individually or in the aggregate, have a Seller Material Adverse Effect.  The Seller and the Seller Subsidiaries have performed all obligations required to be performed by any of them under, are not in any respect in default under or in violation of, and the Seller and the Seller Subsidiaries have no Knowledge of any default or violation by any party to, any Plan, except where such failures, defaults or violations would not, individually or in the aggregate, have a Seller Material Adverse Effect.  No legal action, suit or claim is pending or, to Seller’s Knowledge, threatened with respect to any Plan (other than claims for benefits in the ordinary course) and, except as disclosed in Section 2.10(c) of the Seller Disclosure Schedule, to Seller’s Knowledge, no fact or event exists that could give rise to any such action, suit or claim.  Except as disclosed in Section 2.10(c) of the Seller Disclosure Schedule, neither the Seller nor any Seller Subsidiary has incurred any material liability under Section 302 of ERISA or Section 412 of the Code that has not been satisfied in full and no condition exists that presents a material risk of incurring any such liability.

 

(d)

Qualification of Certain Plans .  Each Plan that is intended to be qualified under Section 401(a) of the Code or Section 401(k) of the Code (including each trust established in connection with such a Plan that is intended to be exempt from Federal income taxation under Section 501(a) of the Code) has received a favorable determination letter from the IRS that it is so qualified or is entitled to rely on a favorable opinion or advisory letter issued to the sponsor of a master and prototype plan pursuant to IRS Announcement 2001-77, and the Seller is not aware of any fact or event that could adversely affect the qualified status of any such Plan.  No trust maintained or contributed to by the Seller or any of the Seller Subsidiaries is intended to be qualified as a voluntary employees’ beneficiary association or is intended to be exempt from federal income taxation under Section 501(c)(9) of the Code.  

 

(e)

Non-Qualified Deferred Compensation Plans .  No Plan that is a non-qualified deferred compensation plan subject to Section 409A of the Code (“ Section 409A”) has been modified (as defined under Section 409A) on or after October 3, 2004 and all such non-qualified deferred compensation plans have been operated and administered in good faith compliance with Section 409A from the period beginning January 1, 2005 through the date hereof, except modifications and operations that, individually or in the aggregate, would not have a Seller Material Adverse Effect.

 

(f)

Absence of Certain Liabilities and Events .  There has been no non-exempt prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan.  The Seller and each of the Seller Subsidiaries has not incurred any liability for any excise tax arising under Sections 4971 through 4980G of the Code that would, individually or in the aggregate, have a Seller Material Adverse Effect, and, to Seller’s Knowledge, no fact or event exists that could give rise to any such liability.

 

(g)

Plan Contributions .  All contributions, premiums or payments required to be made with respect to any Plan have been made on or before their due dates.

 

(h)

Employment Contracts .  Neither the Seller nor any Seller Subsidiary is a party to any contracts for employment, severance, consulting or other similar contracts with any employees, consultants, officers or directors of the Seller or any of the Seller Subsidiaries.  Neither the Seller nor any Seller Subsidiary is a party to any collective bargaining agreements.

 

(i)

Effect of Agreement .  The consummation of the transactions contemplated by this Agreement will not, either alone or in conjunction with another event, entitle any current or former employee of the Seller or any Seller Subsidiary to severance pay, unemployment compensation or any other payment, including payments constituting “excess parachute payments” within the meaning of Section 280G of the Code, except as expressly provided herein, or accelerate the time of payment or vesting or increase the compensation due any such employee or former employee, in each case, except as expressly provided herein.

 

2.11

Registration Statement; Proxy Statement/Prospectus .  The information supplied by the Seller for inclusion or incorporation by reference in the Registration Statement will not at the time the Registration Statement is declared effective contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The information supplied by the Seller for inclusion or incorporation by reference in the proxy statement/prospectus to be sent to the stockholders of the Seller in connection with the meeting of the Seller’s stockholders to consider the Merger (the “ Seller Stockholders’ Meeting”) (such proxy statement/prospectus as amended or supplemented is referred to herein as the “ Proxy Statement/Prospectus”) will not at the date the Proxy Statement/Prospectus (or any amendment thereof or supplement thereto) is first mailed to stockholders, at the time of the Seller Stockholders’ Meeting and at the Effective Time, be false or misleading with respect to any material fact required to be stated therein, or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they are made, not misleading.  If at any time prior to the Effective Time any event relating to Seller or any of its affiliates, officers or directors should be discovered by Seller which should be set forth in an amendment to the Registration Statement or a supplement to the Proxy Statement/Prospectus, Seller shall promptly inform the Company.  The Proxy Statement/Prospectus will comply in all material respects as to form with the requirements of the Securities Act, the Exchange Act (to the extent applicable) and the rules and regulations thereunder.  

 

2.12

Title to Property .  The Seller and each of the Seller Subsidiaries has good and marketable title to all of their respective properties and assets, real and personal, free and clear of all mortgage liens, and free and clear of all other liens, charges and encumbrances except liens for taxes not yet due and payable, pledges to secure deposits and such minor imperfections of title, if any, as do not materially detract from the value of or interfere with the present use of the property affected thereby or which, individually or in the aggregate, would not have a Seller Material Adverse Effect; and all leases pursuant to which Seller or any of the Seller Subsidiaries lease from others material amounts of real or personal property are in good standing, valid and effective in accordance with their respective terms, and there is not, under any of such leases, any existing material default or event of default (or event which with notice or lapse of time, or both, would constitute a material default and in respect of which the Seller or such Seller Subsidiary has not taken adequate steps to prevent such a default from occurring).  Substantially all of Seller’s and each of the Seller’s Subsidiaries’ buildings and equipment in regular use have been reasonably maintained and are in good and serviceable condition, reasonable wear and tear excepted.

 

2.13

Environmental Matters .  To Seller’s Knowledge:  (i) each of the Seller, the Seller’s Subsidiaries, properties owned or operated by the Seller or the Seller’s Subsidiaries, the Participation Facilities (as hereinafter defined) are and have been in compliance with, and the Loan Properties (as hereinafter defined) are and have been in substantial compliance with, all applicable federal, state and local laws including common law, rules, guidance, regulations and ordinances and with all applicable decrees, orders, judgments, and contractual obligations relating to the environment, health, safety, natural resources, wildlife or “ Hazardous Materials” which are hereinafter defined as chemicals, pollutants, contaminants, wastes, toxic substances, compounds, products, solid, liquid, gas, petroleum or other regulated substances or materials which are hazardous, toxic or otherwise harmful to health, safety, natural resources, or the environment (“ Environmental Laws”), except for violations which, either individually or in the aggregate, would not have a Seller Material Adverse Effect; (ii) during and prior to the period of (a) the Seller’s or any of the Seller’s Subsidiaries’ ownership or operation of any of their respective current properties, (b) the Seller’s or any of the Seller’s Subsidiaries’ participation in the management of any Participation Facility or (c) the Seller’s or any of the Seller’s Subsidiaries’ holding of a security interest in a Loan Property, Hazardous Materials have not been generated, treated, stored, transported, released or disposed of in, on, under, above, from or affecting any such property, except where such release, generation, treatment, storage, transportation, or disposal would not have, either individually or in the aggregate, a Seller Material Adverse Effect; (iii) there is no asbestos or any material amount of ureaformaldehyde materials in or on any property owned or operated by Seller or Seller’s Subsidiaries or any Participation Facility and no electrical transformers or capacitors, other than those owned by public utility companies, on any such properties contain any PCB’s; (iv) there are no underground or aboveground storage tanks and there have never been any underground or aboveground storage tanks located on, in or under any properties currently or formerly owned or operated by the Seller or any of Seller’s Subsidiaries or any Participation Facility; (v) neither Seller nor Seller’s Subsidiaries have received any notice from any governmental agency or third party notifying the Seller or Seller’s Subsidiaries of any Environmental Claim; (vi) and there are no circumstances with respect to any properties currently owned or operated by the Seller or any of Seller’s Subsidiaries or any Loan Property or Participation Facility that could reasonably be anticipated (a) to form the basis for an Environmental Claim against Seller or Seller’s Subsidiaries or any properties currently or formerly owned or operated by the Seller or any of Seller’s Subsidiaries or any Loan Property or Participation Facility or (b) to cause any properties currently owned or operated by the Seller or any of Seller’s Subsidiaries or any Loan Property or Participation Facility to be subject to any restrictions on ownership, occupancy, use or transferability under any applicable Environmental Law or require notification to or consent of any Governmental Authority or third party pursuant to any Environmental Law.

 

The following definitions apply for purposes of this Section 2.13:  (a) “ Loan Property” means any property in which the Seller or any of the Seller’s Subsidiaries holds a security interest, the fair market value of which (based on the most recent appraisal or other information available to the Seller or any Seller Subsidiary) exceeds $5,000,000, and, where required by the context, said term means the owner or operator of such property; (b) “ Participation Facility” means any facility in which the Seller or any of the Seller’s Subsidiaries participates in the management and, where required by the context, said term means the owner or operator of such property; and (c) “ Environmental Claims” shall mean any and all administrative, regulatory, judicial or private actions, suits, demands, demand letters, notices, claims, liens, notices of non compliance or violation, investigations, allegations, injunctions or proceedings relating in any way to (i) any Environmental Law; (ii) any Hazardous Material including without limitation any abatements, removal, remedial, corrective or other response action in connection with any Hazardous Material, Environmental Law or order of a Governmental Authority; or (iii) any actual or alleged damage, injury, threat or harm to health, safety, natural resources, wildlife, or the environment, which individually or in the aggregate would have a Seller Material Adverse Effect.

 

2.14

Absence of Agreements .  Neither the Seller nor any Seller Subsidiary is a party to any agreement or memorandum of understanding with, or a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or is a recipient of any extraordinary supervisory letter which restricts materially the conduct of its business (including any contract containing covenants which limit the ability of the Seller or of any Seller Subsidiary to compete in any line of business or with any person or which involve any restriction of the geographical area in which, or method by which, the Seller or any Seller Subsidiary may carry on its business (other than as may be required by Law or applicable Regulatory Authorities)), or in any manner relates to its capital adequacy, its credit policies or its management, nor has the Seller been advised that any federal, state, or governmental agency is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such order, decree, agreement, memorandum of understanding, extraordinary supervisory letter, commitment letter or similar submission.

 

2.15

Taxes.  The Seller and the Seller Subsidiaries have timely filed all Tax Returns required to be filed by them on or prior to the date of this Agreement (all such returns being accurate and complete in all material respects), and the Seller and the Seller Subsidiaries have timely paid and discharged all Taxes due in connection with or with respect to the filing of such Tax Returns, except such as are not yet due or are being contested in good faith by appropriate proceedings and with respect to which the Seller is maintaining reserves adequate for their payment or where the failure to make such filings or pay such taxes would not have a Seller Material Adverse Effect.  For purposes of this Agreement, “ Tax” or “Taxes” shall mean taxes, charges, fees, levies, and other governmental assessments and impositions of any kind, payable to any federal, state, or local governmental entity or taxing authority or agency, including, without limitation, (i) income, franchise, profits, gross receipts, estimated, ad valorem, value added, sales, use, service, real or personal property, capital stock, license, payroll, withholding, disability, employment, social security, workers compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premiums, windfall profits, transfer and gains taxes, (ii) customs duties, imposts, charges, levies or other similar assessments of any kind, and (iii) interest, penalties and additions to tax imposed with respect thereto; and “Tax Returns” shall mean returns, reports, and information statements with respect to Taxes required to be filed with the IRS or any other governmental entity or taxing authority or agency, including, without limitation, consolidated, combined and unitary tax returns.  For the purposes of this Section 2.15, references to the Seller and the Seller Subsidiaries include former subsidiaries of the Seller for the periods during which any such corporations were owned, directly or indirectly, by the Seller.  To Seller’s Knowledge, neither the IRS nor any other governmental entity or taxing authority or agency is now asserting, either through audits, administrative proceedings or court proceedings, any deficiency or claim for additional Taxes.  Neither the Seller nor any of the Seller Subsidiaries has granted any waiver of any statute of limitations with respect to, or any extension of a period for the assessment of, any Tax.  Except for statutory liens for current taxes not yet due, there are no material tax liens on any assets of the Seller or any of the Seller Subsidiaries.  Neither the Seller nor any of the Seller Subsidiaries has received a ruling or entered into an agreement with the IRS or any other taxing authority that would have a Seller Material Adverse Effect after the Effective Time.  No agreements relating to allocating or sharing of Taxes exist among the Seller and the Seller Subsidiaries and no tax indemnities given by the Seller or the Seller Subsidiaries in connection with a sale of stock or assets remain in effect.  Neither the Seller nor any of the Seller Subsidiaries is required to include in income either (i) any amount in respect of any adjustment under Section 481 of the Code or (ii) any installment sale gain.  Neither the Seller nor any of the Seller Subsidiaries has made an election under Section 341(f) of the Code.  Neither the Seller nor any of the Seller Subsidiaries (i) is a member of an affiliated, consolidated, combined or unitary group, other than one of which the Seller was the common parent, or (ii) has any liability for the Taxes of any Person (other than the Seller and the Seller Subsidiaries) under Treasury Regulation Section 1-1502-6 (or any similar provision of state or local law) as a transferee or successor, by contract or otherwise.

 

2.16

Insurance .  The Seller Disclosure Schedule lists all material policies of insurance of the Seller and the Seller Subsidiaries currently in effect.  Neither the Seller nor any of the Seller Subsidiaries has any liability for unpaid premiums or premium adjustments not properly reflected on the Seller’s financial statements for the nine months ended September 30, 2005.

 

2.17

Brokers .  No broker, finder or investment banker (other than Hovde Financial LLC) is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Seller.  Prior to the date of this Agreement, the Seller has furnished to the Company a complete and correct copy of all agreements between the Seller and Hovde Financial LLC pursuant to which such firm would be entitled to any payment relating to the transactions contemplated hereunder.

 

2.18

Tax Matters .  Neither Seller, nor any Seller Subsidiary, through the date of this Agreement has taken or agreed to take any action that would prevent the Merger from qualifying as a reorganization under Section 368(a)(1)(A) of the Code.

 

2.19

Seller Material Adverse Effect. .  Since December 31, 2004, there has not been any Effect that has had, individually or in the aggregate, a Seller Material Adverse Effect.

 

2.20

Material Contracts .  Except for (i) loan, credit or similar agreements entered into by the Seller or any Seller Subsidiary in the ordinary course of business consistent with past practice, or (ii) as disclosed in the Seller Disclosure Schedule, neither Seller nor any Seller Subsidiary is a party to or obligated under any contract, agreement or other instrument or understanding which obligates the Seller or any Seller Subsidiary for payments or other consideration with a value in excess of $150,000, or would require disclosure by the Seller pursuant to Item 601(b)(10) of Regulation S-K under the Exchange Act, other than contracts that are terminable by the Seller or any Seller Subsidiary without additional payment or penalty within 60 days.

 

2.21

Opinion of Financial Advisor .  The Seller has received the written opinion of Hovde Financial LLC on the date of this Agreement to the effect that, as of the date of this Agreement, the consideration to be received in the Merger by the Seller’s stockholders is fair to the Seller’s stockholders from a financial point of view, and the Seller will promptly, after the date of this Agreement, deliver a copy of such opinion to the Company.

 

2.22

Vote Required .  The affirmative vote of a majority of the votes that holders of the outstanding shares of Seller Common Stock are entitled to cast is the only vote of the holders of any class or series of the Seller capital stock necessary to approve this Agreement and the transactions contemplated hereby, including the Merger.

 

2.23

Stock Options .  The assumption of the Option Plans and the Options issued thereunder as provided in Section 5.7 of this Agreement by the Company are permitted by and consistent with the terms of the Option Plans, the agreements under which the Options were issued and applicable law.  

 

2.24

Rights Agreement .  The Seller and the Seller’s Board of Directors have taken all necessary action to render the Rights Agreement dated as of October 13, 1999 between the Seller and American Stock Transfer & Trust Company (the “ Rights Agreement”) inapplicable to this Agreement and the transactions contemplated hereby, including the Merger, without any further action on the part of the holders of Seller Common Stock or the Seller’s Board of Directors, and neither the execution and delivery of this Agreement nor the consummation of any of the transactions contemplated hereby will result in the occurrence of a Distribution Date (as defined in the Rights Agreement) or otherwise cause the Rights (as defined in the Rights Agreement) to become exercisable by the holders thereof.  The First Amendment to the Rights Agreement dated as of February 24, 2004 has been superseded by the Second Amendment to the Rights Agreement adopted by the Seller’s Board of Directors.

 

ARTICLE III  - REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as disclosed in the Company SEC Reports or in the disclosure letter (the “ Company Disclosure Schedule”) delivered by the Company to the Seller prior to the execution of this Agreement (which letter sets forth items of disclosure with specific reference to the particular Section or subsection of this Agreement to which the information in the Company Disclosure Schedule relates; provided , however , that any information set forth in one section of the Company Disclosure Schedule will be deemed to apply to each other Section or subsection of this Agreement to which its relevance is reasonably apparent, the Company hereby represents and warrants to the Seller as follows:

 

3.1

Organization and Qualification; Subsidiaries .  

 

(a)

The Company is a company duly organized, validly existing and in active status under the laws of the State of Wisconsin and a registered bank holding company under the BHCA, and a financial holding company under the GLB Act.  Each subsidiary of the Company (a “ Company Subsidiary” or, collectively, “Company Subsidiaries”) is a bank, a corporation, a limited liability company or another form of business entity duly organized, validly existing and in good standing under the laws of the state of its organization or the United States of America.  Each of the Company and the Company Subsidiaries have the requisite corporate power and authority and are in possession of all franchises, grants, authorizations, licenses, permits, easements, consents, certificates, approvals and orders (“ Company Approvals”) necessary to own, lease and operate their respective properties and to carry on their respective business as now being conducted, including appropriate authorizations from the Federal Reserve Board, the FDIC, the DFI, the Office of Thrift Supervision (the “ OTS”), or the Office of Comptroller of the Currency (“ OCC”) and neither Company nor any Company Subsidiary has received any notice of proceedings relating to the revocation or modification of any Company Approvals, except in each case where the revocations or modifications, the failure to be so organized, existing and in good standing or to have such power, authority or Company Approvals would not, individually or in the aggregate, have a Company Material Adverse Effect.

 

(b)

The Company and each Company Subsidiary is duly qualified or licensed as a foreign business entity to do business, and is in good standing, in each jurisdiction where the character of its properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that would not, either individually or in the aggregate, have a Company Material Adverse Effect.

 

(c)

A true and complete list of all of the Company Subsidiaries as of September 30, 2005 is set forth in the Company Disclosure Schedule.

 

(d)

As used in this Agreement, the term “Company Material Adverse Effect” means any Effect that, individually or in the aggregate with other Effects, (i) is material and adverse to the business, assets, liabilities, results of operations or financial condition of the Company and Company Subsidiaries taken as a whole, or (ii) materially impairs the ability of the Company to consummate the transactions contemplated hereby; provided , however , that the term “ Company Material Adverse Effect” shall not be deemed to include:  (a) any Effect to the extent resulting from the announcement of this Agreement or the transactions contemplated hereby, (b) any Effect resulting from compliance with the terms and conditions of this Agreement, (c) any decrease in the price or trading volume of the Company Common Stock (but not excluding any Effect underlying such decrease to the extent such Effect would constitute a Company Material Adverse Effect), (d) any Effect to the extent resulting from changes in Laws generally applicable to the banking industry, (e) any Effect to the extent resulting from changes in generally accepted accounting principles which the Company or any of the Company Subsidiaries is