8-K
Investar Holding Corp (ISTR)
--12-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): June 30, 2025
Investar Holding Corporation
(Exact name of registrant as specified in its charter)
| Louisiana | 001-36522 | 27-1560715 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission<br><br> <br>File Number) | (I.R.S. Employer<br><br> <br>Identification No.) |
| 10500 Coursey Blvd.<br><br> <br>Baton Rouge, Louisiana 70816 | ||
| --- | ||
| (Address of principal executive offices) (Zip Code) |
Registrant’s telephone number, including area code: (225) 227-2222
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, $1.00 par value per share | ISTR | The Nasdaq Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 **** **** Entry into a Material Definitive Agreement
Agreement and Plan of Merger with Wichita Falls Bancshares, Inc.
On July 1, 2025, Investar Holding Corporation (“Investar”), the holding company for Investar Bank, National Association, Baton Rouge, Louisiana (“Investar Bank”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Wichita Falls Bancshares, Inc. (“WFB”), the holding company for First National Bank, Wichita Falls, Texas. The Merger Agreement provides for the merger of WFB with and into Investar, with Investar as the surviving corporation. Immediately following the merger, First National Bank will be immediately merged with and into Investar Bank, with Investar Bank as the surviving bank.
Under the terms of the Merger Agreement, all of the issued and outstanding shares of WFB common stock will be converted into and represent the right to receive in the aggregate $7.2 million in cash from Investar and 3,955,344 shares of Investar common stock, subject to certain adjustments. Based on Investar’s closing stock price of $19.32 as of June 30, 2025, the transaction is valued at approximately $83.6 million in the aggregate.
The Merger Agreement contains customary representations, warranties and covenants by the parties. Included among the covenants contained in the Merger Agreement is the obligation of WFB not to solicit, initiate, encourage or facilitate the making of any inquiries with respect to, or provide any information to, conduct any assessment of or negotiate with any other person with respect to any alternative business combination transaction, subject to certain exceptions. In the event that WFB receives an unsolicited proposal with respect to an alternative business combination transaction that its board of directors determines to be superior to the transaction with Investar, Investar will have an opportunity to match the terms of such proposal, subject to certain requirements.
The assertions embodied in the representations and warranties contained in the Merger Agreement were made solely for purposes of the Merger Agreement and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating terms. Moreover, the representations and warranties are subject to contractual standards of materiality that may be different from what may be viewed as material to shareholders, and the representations and warranties may have been used to allocate risk between Investar and WFB, rather than establishing matters as facts. For the foregoing reasons, no one should rely on such representations, warranties, covenants or other terms, provisions or conditions as statements of factual information regarding Investar or WFB at the time they were made or otherwise. The representations and warranties of the parties will not survive the closing.
Consummation of the transactions contemplated by the Merger Agreement is subject to various customary conditions, including, without limitation, the approval of the shareholders of each of Investar and WFB; the receipt of certain regulatory approvals; the accuracy of the representations and warranties of the parties and compliance by the parties with their respective covenants and obligations under the Merger Agreement (subject to customary materiality qualifiers); and the absence of a material adverse change with respect to WFB.
The Merger Agreement contains certain termination rights, including the right, subject to certain exceptions, of either party to terminate the Merger Agreement if the closing has not occurred by March 31, 2026 (or June 30, 2026 if the only outstanding closing condition is the receipt of all required regulatory approvals), and the right of WFB to terminate the Merger Agreement, subject to certain conditions, to accept a business combination transaction deemed by its board of directors to be superior to the proposed merger. The Merger Agreement provides for the payment by WFB of a termination fee of $3,300,000 upon the termination of the Merger Agreement under certain circumstances.
The foregoing summary of the Merger Agreement is qualified in its entirety by reference to the complete text of the Merger Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference in its entirety.
The Merger Agreement has been unanimously approved by the boards of directors of each of Investar and WFB, and the Merger Agreement has been executed and delivered by each of the parties. Subject to the satisfaction of all closing conditions, including the receipt of all required regulatory and shareholder approvals, the merger is expected to be completed in the fourth quarter of 2025. In connection with the execution of the Merger Agreement, certain directors and executive officers of WFB have entered into customary director support agreements and voting agreements related to the transaction. The director support agreements provide generally that the executing party will not solicit the former employees or customers of WFB or otherwise engage in banking activities in competition with Investar for a period of two years following the effective date of the merger, subject to certain exceptions. The voting agreements generally provide that the executing party will vote his or her shares in favor of the Merger Agreement at any meeting of the WFB shareholders called to consider such transaction(s).
Private Placement of Series A Preferred Stock
On June 30, 2025, Investar also entered into a Securities Purchase Agreement with certain institutional and other accredited investors relating to the sale by Investar in a private placement offering (the “Private Placement”) of an aggregate of 32,500 shares (the “Private Placement Shares”) of its newly designated 6.5% Series A Non-Cumulative Perpetual Convertible Preferred Stock (“Series A Preferred Stock”) at a purchase price of $1,000 per share, for aggregate gross proceeds to Investar of approximately $32.5 million. Investar estimates the net proceeds of the Private Placement will be approximately $30.4 million, after deducting placement agent fees and other offering related expenses. Investar intends to use the net proceeds from the offering to support the acquisition of WFB and for general corporate purposes, including organic growth and other potential acquisitions. The Series A Preferred Stock is intended to qualify as additional tier 1 capital of Investar.
The Securities Purchase Agreement contains representations and warranties, covenants, and indemnification provisions that are customary for private placements of shares of convertible preferred stock by companies that have securities registered with the U.S. Securities and Exchange Commission (the “Commission”). The representations and warranties made by the parties will survive for a period of three years following closing. The assertions embodied in the representations and warranties contained in the Securities Purchase Agreement were made solely for purposes of the Securities Purchase Agreement and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating terms. Moreover, the representations and warranties are subject to contractual standards of materiality that may be different from what may be viewed as material to shareholders, and the representations and warranties may have been used to allocate risk between Investar and the purchasers party to the Securities Purchase Agreement, rather than establishing matters as facts. For the foregoing reasons, no one should rely on such representations, warranties, covenants or other terms, provisions or conditions as statements of factual information regarding Investar or the purchasers party to the Securities Purchase Agreement at the time they were made or otherwise.
The Private Placement Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemption from registration in Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D of the Commission promulgated under the Securities Act, and, as a result, the Private Placement Shares may not be offered or sold in the United States absent a registration statement or exemption from registration.
Contemporaneously with the execution of the Securities Purchase Agreement, Investar and each of the purchasers under the Securities Purchase Agreement entered into the Registration Rights Agreement, by which Investar has agreed at its expense, subject to certain exceptions, to file with the Commission a registration statement with respect to the resale of the Underlying Shares (as defined below) no later than 60 days following the closing of the Private Placement and to have the registration statement declared effective by the Commission no later than the earlier of (i) the fifth trading day after the Commission notifies Investar that it will not review or has completed its review of the registration statement, or (ii) the 120th calendar day following the closing of the Private Placement (or the 150th calendar day following the closing in the event that the registration statement is subject to review by the Commission).
The resale registration rights set forth in the Registration Rights Agreement terminate with respect to registrable securities that (i) are sold or otherwise transferred under an effective registration statement under the Securities Act, (ii) cease to be outstanding, (iii) are transferred in a transaction in which the purchaser’s rights are not assigned to the transferee of the securities, (iv) are sold in accordance with Rule 144 promulgated under the Securities Act (“Rule 144”), or (v) become eligible for resale without volume or manner-of-sale restrictions under Rule 144 (or any successor rule then in effect) and without the requirement for Investar to be in compliance with the current public information requirement under Rule 144.
The foregoing summary of the Securities Purchase Agreement and Registration Rights Agreement is qualified in its entirety by reference to the complete text of those documents, the forms of which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference in their entirety.
Item 3.02 **** **** Unregistered Sales of Equity Securities.
The information contained in Items 1.01 (under the heading “Private Placement of Preferred Stock”), 3.03 and 5.03 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
Item 3.03 **** **** Material Modification to Rights of Security Holders.
On June 30, 2025, Investar filed Articles of Amendment to its Restated Articles of Incorporation (the “Articles of Amendment”) with the Louisiana Secretary of State, which became effective on June 30, 2025, establishing the relative preferences, rights and limitations of the Series A Preferred Stock, having a liquidation preference of $1,000 per share. The Articles of Amendment were filed in connection with the Private Placement, as described above.
The Series A Preferred Stock ranks, with respect to the payment of dividends and distributions upon liquidation, dissolution or winding-up, (i) on parity with each class or series of preferred stock or capital stock Investar may issue in the future the terms of which expressly provide that such class or series will rank on a parity with the Series A Preferred Stock as to dividend rights and rights on liquidation, winding up and dissolution of Investar, and (ii) senior to Investar common stock and each other class or series of preferred stock or capital stock Investar may issue in the future the terms of which do not expressly provide that such class or series will rank on a parity with or senior to the Series A Preferred Stock as to dividend rights and/or rights on liquidation, winding-up and dissolution of Investar (“Junior Securities”).
Following the issuance of the Private Placement Shares (as described in Item 1.01, above), the ability of Investar to declare or pay dividends on, or purchase, redeem or otherwise acquire, shares of Investar common stock will be subject to certain restrictions in the event that Investar fails to pay dividends in full on the Series A Preferred Stock. These restrictions are set forth in the Articles of Amendment, a copy of which is attached hereto as Exhibit 3.1 and incorporated herein by reference, and the foregoing description of certain terms of the Series A Preferred Stock is qualified in its entirety by reference to the full text of the Articles of Amendment.
The information contained in Item 5.03 of this Current Report on Form 8-K under the heading “Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year” is also incorporated by reference into this Item 3.03.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On June 30, 2025, Investar filed the Articles of Amendment with the Louisiana Secretary of State, which became effective as of June 30, 2025, amending Investar’s Restated Articles of Incorporation, by establishing and designating the newly authorized Series A Preferred Stock of Investar initially consisting of 32,500 authorized shares.
Holders of Series A Preferred Stock will be entitled to receive, if, when, and as declared by Investar’s Board of Directors, non-cumulative cash dividends at an annual rate per share of Series A Preferred Stock (in each case, only when, as and if declared) of 6.5% on the $1,000 per share liquidation preference, payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year commencing on October 1, 2025. Dividends payable for a dividend period will be computed on the basis of a 360-day year of twelve 30-day months.
So long as any Series A Preferred Stock remains outstanding, unless full dividends for the most recently completed dividend period have been declared and paid (or declared and a sum sufficient for the payment thereof has been set aside) on all outstanding shares of Series A Preferred Stock, Investar may not, subject to certain exceptions, declare or pay dividends with respect to, or redeem, purchase or otherwise acquire, any Junior Securities.
The Series A Preferred Stock has no maturity date and is perpetual unless redeemed or converted in accordance with the Articles of Amendment. Subject to certain conditions, Investar, at the option of its Board of Directors or any duly authorized committee of the Board of Directors, may redeem, from time to time, out of assets legally available therefor, in whole or in part, the shares of Series A Preferred Stock then outstanding on any dividend payment date (and, for the avoidance of doubt, following the payment of any dividend payable on such dividend payment date) occurring on or after July 1, 2030. In addition, subject to certain conditions, Investar, at the option of its Board of Directors or any duly authorized committee of the Board of Directors, may redeem out of assets legally available therefor, in whole but not in part, the Series A Preferred Stock then outstanding at any time if the Series A Preferred Stock ceases to constitute additional Tier 1 capital of Investar. The redemption price for any such shares of Series A Preferred Stock will be equal to $1,000 per share, plus all declared but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends. The Series A Preferred Stock is not subject to redemption at the option of the holder thereof.
Each holder of shares of Series A Preferred Stock will have the right, at any time and from time to time, at such holder’s option, to convert all or any portion of such holder’s Series A Preferred Stock into shares of Investar common stock (the “Underlying Shares”) at the rate of 47.619 shares of Investar common stock per share of Series A Preferred Stock (subject to adjustment as described in the Articles of Amendment) (the “Conversion Rate”), plus cash in lieu of fractional shares of Investar common stock. The maximum number of Underlying Shares that may be issued upon conversion of the Series A Preferred Stock is 1,600,000 (subject to certain adjustments as described in the Articles of Amendment). Additionally, subject to certain conditions, on or after July 1, 2028, Investar will have the right, at its option, from time to time on any dividend payment date (and, for the avoidance of doubt, following the payment of any dividend payable on such dividend payment date), to cause some or all of the Series A Preferred Stock to be converted into Underlying Shares at the Conversion Rate if, for 20 trading days within the period of 30 consecutive trading days (including the last trading day of such period) ending on the trading day preceding the date Investar delivers a notice of mandatory conversion to holders of Series A Preferred Stock, the closing price of Investar common stock exceeds $26.25 per share (subject to adjustment as described in the Articles of Amendment).
Upon the voluntary or involuntary liquidation, dissolution, or winding-up of Investar, holders of outstanding shares of Series A Preferred Stock will be entitled to be paid out of Investar’s assets legally available for distribution to its shareholders, before any distribution of assets is made to holders of Junior Securities, a liquidating distribution in an amount equal to the greater of (1) an amount equal to $1,000 per share of Series A Preferred Stock, plus any declared and unpaid dividends thereon, and (2) the amount that such holder would have received in respect of the shares of Underlying Shares issuable upon conversion of Series A Preferred Stock held thereby had such holder converted such share of Series A Preferred Stock immediately prior to such time.
Upon the occurrence prior to an applicable conversion date of a merger or similar business combination in which Investar common stock is converted into other consideration; a sale of all or substantially all of the property and assets of Investar in which Investar common stock is converted into other consideration; any reclassification of Investar common stock into other securities; or any statutory share exchange of Investar common stock for other securities (each, a “Reorganization Event”), each share of Series A Preferred Stock outstanding immediately prior to such Reorganization Event will, without the consent of any holders, be entitled to receive, out of the assets of Investar or proceeds thereof available for distribution to Investar stockholders, and after satisfaction of all liabilities and obligations to creditors of the corporation and subject to the rights of any securities ranking senior to the Series A Preferred Stock, before any distribution of such assets or proceeds is made to or set aside for the holders of Investar common stock and any other Junior Securities, in full, the greater of the (i) amount per share equal to the liquidation value of $1,000 per share, plus all declared but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends, and (ii) amount equal to the distribution amount of such assets or proceeds of Investar as was receivable by a holder of the number of shares of Investar common stock into which such share of Series A Preferred Stock was convertible immediately prior to such Reorganization Event.
Holders of the Series A Preferred Stock will have no voting rights, except with respect to certain changes in the terms of the Series A Preferred Stock, certain fundamental business transactions and as otherwise required by applicable law. In addition, shares of Series A Preferred Stock are not subject to the operation of a sinking fund.
Equiniti Trust Company, LLC, Investar’s registrar and transfer agent with respect to its common stock, will serve as the initial transfer agent, registrar, paying agent and conversion agent with respect to the Series A Preferred Stock. Investar may, in its sole discretion, remove any transfer agent, registrar, paying agent or conversion agent provided that Investar appoints a successor to such position(s) who accepts such appointment prior to the effectiveness of such removal.
The Articles of Amendment do not limit the authority of Investar to issue any securities ranking junior or senior to, or on parity with, the Series A Preferred Stock as to dividends and the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of Investar.
The foregoing description of the material terms of the Series A Preferred Stock is qualified in its entirety by reference to the complete text of the Articles of Amendment, a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K and incorporated herein by reference in its entirety. The information contained in Item 3.03 of this Current Report on Form 8-K under the heading “Material Modification to Rights of Security Holders” is also incorporated by reference into this Item 5.03.
Item 7.01 Regulation FD Disclosure.
On July 1, 2025, Investar and Wichita Falls issued a joint press release announcing the execution of the Merger Agreement, and Investar announced the Private Placement. A copy of the press release is furnished as Exhibit 99.1.
On July 1, 2025, Investar issued an investor presentation regarding the matters described in Item 1.01 of this Form 8-K, a copy of which is furnished as Exhibit 99.2.
The information set forth in this Item 7.01 (including the information in Exhibits 99.1 and 99.2 hereto) is being furnished to the Commission and will not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under the Exchange Act. Such information will not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as will be expressly set forth by specific reference in such filing.
Item 9.01 **** **** Financial Statements and Exhibits.
(d) Exhibits
Forward-Looking Statements
This Current Report on Form 8-K may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as “may,” “will,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “forecast,” and other words and terms of similar meaning. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Investar cautions readers that any forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. Such forward-looking statements include, but are not limited to: statements about the benefits of the proposed merger involving Investar and WFB, including future financial and operating results; statements about Investar’s plans, objectives, expectations and intentions; statements about the expected timing of completion of the proposed merger; and other statements that are not historical facts. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include risks and uncertainties relating to: (i) the ability to obtain the requisite shareholder approvals; (ii) the risk that Investar may be unable to obtain governmental and regulatory approvals required to consummate the proposed merger, or required governmental and regulatory approvals may delay the merger or result in the imposition of conditions that could cause the parties to abandon the merger; (iii) the risk that a condition to closing may not be satisfied; (iv) the timing to consummate the proposed merger; (v) the risk that the businesses will not be integrated successfully; (vi) the risk that the cost savings and any other synergies from the proposed merger may not be fully realized or may take longer to realize than expected; (vii) disruption from the proposed merger making it more difficult to maintain relationships with customers, employees or vendors; (viii) the diversion of management time on merger-related issues; and (ix) other factors which Investar discusses or refers to in the “Risk Factors” section of its most recent Annual Report on Form 10-K filed with the Commission. Each forward-looking statement speaks only as of the date of the particular statement and Investar undertakes no obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
Additional Information about the Transaction and Where to Find It
In connection with the proposed merger, Investar intends to file with the Commission a registration statement on Form S-4 (the “Form S-4”) that will include a joint proxy statement of Investar and WFB and a prospectus of Investar with respect to the shares of Investar common stock to be issued in the proposed merger (the “proxy statement/prospectus”). Investar may also file other relevant documents with the Commission regarding the proposed merger. This document is not a substitute for the Form S-4 or proxy statement/prospectus or any other document that Investar may file with the Commission. The definitive proxy statement/prospectus (if and when available) will be mailed to stockholders of each of Investar and WFB. Investors and security holders are urged to read the Form S-4, the proxy statement/prospectus and any other relevant documents that may be filed with the Commission, as well as any amendments or supplements to these documents, carefully and in their entirety if and when they become available because they contain or will contain important information about the proposed merger. Investors and security holders will be able to obtain free copies of the Form S-4 and the proxy statement/prospectus (if and when available) and other documents containing important information about Investar, WFB and the proposed merger, once such documents are filed with the Commission through the website maintained by the Commission at http://www.sec.gov. Copies of the documents filed with, or furnished to, the Commission by Investar will be available free of charge in the “Investor Relations” section of Investar’s website at www.investarbank.com. The information included on, or accessible through, Investar’s website is not incorporated by reference into this communication.
Participants in the Solicitation
Investar and WFB and their respective directors and officers may be deemed to be participants in the solicitation of proxies from their respective shareholders in connection with the proposed merger. Information about Investar’s directors and executive officers and their ownership of Investar’s securities is set forth in Investar’s filings with the Commission, including its most recent Annual Report on Form 10-K filed with the Commission. To the extent that holdings of Investar’s securities have changed since the amounts printed in most recent Annual Report on Form 10-K filed with the Commission, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the Commission. Additional information regarding the interests of those persons and other persons who may be deemed participants in the proposed merger may be obtained by reading the proxy statement/prospectus regarding the proposed merger. You may obtain free copies of these documents as described in the preceding paragraph.
No Offer or Solicitation
The information contained in this Current Report on Form 8-K is not an offer to sell or the solicitation of an offer to buy any securities of Investar. The Private Placement Shares and the Underlying Shares have not been registered under the Securities Act and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| INVESTAR HOLDING CORPORATION | ||
|---|---|---|
| Date: July 1, 2025 | By: | /s/ John J. D’Angelo |
| John J. D’Angelo | ||
| President and Chief Executive Officer |
ex_834286.htm
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
by and between
INVESTAR HOLDING CORPORATION
and
WICHITA FALLS BANCSHARES, INC.
Dated as of July 1 , 2025
TABLE OF CONTENTS
| ARTICLE I THE MERGER | 2 | |
|---|---|---|
| Section 1.01 | The Merger | 2 |
| Section 1.02 | Articles of Incorporation and Bylaws; Officers and Directors | 2 |
| Section 1.03 | Bank Merger | 2 |
| Section 1.04 | Reservation of Right to Revise Structure | 3 |
| ARTICLE II CLOSING | 3 | |
| Section 2.01 | Effective Time; Closing | 3 |
| Section 2.02 | Actions to be Taken at the Closing by WFB | 3 |
| Section 2.03 | Actions to be Taken at the Closing by Investar | 5 |
| ARTICLE III MERGER CONSIDERATION; EXCHANGE PROCEDURES | 5 | |
| Section 3.01 | Merger Consideration | 5 |
| Section 3.02 | Rights as Shareholders; Stock Transfers | 6 |
| Section 3.03 | Fractional Shares | 6 |
| Section 3.04 | Plan of Reorganization | 7 |
| Section 3.05 | Exchange Procedures | 7 |
| Section 3.06 | Deposit and Delivery of Merger Consideration | 7 |
| Section 3.07 | Rights of Certificate Holders after the Effective Time | 8 |
| Section 3.08 | Anti-Dilution Provisions | 9 |
| ARTICLE IV REPRESENTATIONS AND WARRANTIES OF WFB | 9 | |
| Section 4.01 | Organization and Standing | 9 |
| Section 4.02 | Capital Stock | 9 |
| Section 4.03 | Subsidiaries | 10 |
| Section 4.04 | Corporate Power; Minute Books | 11 |
| Section 4.05 | Corporate Authority | 11 |
| Section 4.06 | Regulatory Approvals; No Defaults | 12 |
| Section 4.07 | Financial Statements; Internal Controls | 13 |
| Section 4.08 | Regulatory Reports | 14 |
| Section 4.09 | Absence of Certain Changes or Events | 14 |
| Section 4.10 | Legal Proceedings | 14 |
| Section 4.11 | Compliance with Laws | 15 |
| Section 4.12 | WFB Material Contracts; Defaults | 17 |
| Section 4.13 | Agreements with Regulatory Agencies | 18 |
| Section 4.14 | Brokers; Fairness Opinion | 18 |
| Section 4.15 | Employee Benefit Plans | 19 |
| Section 4.16 | Labor Matters | 21 |
| Section 4.17 | Environmental Matters | 22 |
| Section 4.18 | Tax Matters | 23 |
| Section 4.19 | Investment Securities | 26 |
| Section 4.20 | Derivative Transactions | 27 |
| Section 4.21 | Regulatory Capitalization | 27 |
| Section 4.22 | Loans; Nonperforming and Classified Assets | 27 |
| Section 4.23 | Allowance for Credit Losses | 29 |
| Section 4.24 | Trust Business; Administration of Fiduciary Accounts | 29 |
| Section 4.25 | Investment Management and Related Activities | 29 |
| Section 4.26 | Repurchase Agreements | 29 |
|---|---|---|
| Section 4.27 | Deposit Insurance | 30 |
| Section 4.28 | Transactions with Affiliates | 30 |
| Section 4.29 | Tangible Properties and Assets | 30 |
| Section 4.30 | Intellectual Property | 32 |
| Section 4.31 | Insurance | 33 |
| Section 4.32 | Antitakeover Provisions | 33 |
| Section 4.33 | WFB Information | 34 |
| Section 4.34 | Information Security | 34 |
| Section 4.35 | Transactional Expenses | 34 |
| Section 4.36 | Deposits | 34 |
| Section 4.37 | Disaster Recovery and Business Continuity. | 34 |
| ARTICLE V REPRESENTATIONS AND WARRANTIES OF INVESTAR | 35 | |
| Section 5.01 | Organization and Standing | 35 |
| Section 5.02 | Capital Stock | 35 |
| Section 5.03 | Corporate Power | 35 |
| Section 5.04 | Corporate Authority | 35 |
| Section 5.05 | SEC Documents; Financial Statements | 36 |
| Section 5.06 | Regulatory Reports | 37 |
| Section 5.07 | Regulatory Approvals; No Defaults | 38 |
| Section 5.08 | Investar Information | 38 |
| Section 5.09 | Absence of Certain Changes or Events | 38 |
| Section 5.10 | Investar Regulatory Matters | 38 |
| Section 5.11 | Agreements with Regulatory Agencies | 39 |
| Section 5.12 | Brokers | 39 |
| Section 5.13 | Legal Proceedings | 39 |
| Section 5.14 | Regulatory Capitalization | 39 |
| Section 5.15 | Compliance with Laws | 40 |
| Section 5.16 | Reorganization | 41 |
| ARTICLE VI COVENANTS | 42 | |
| Section 6.01 | Conduct of Business of WFB | 42 |
| Section 6.02 | Covenants of Investar | 47 |
| Section 6.03 | Commercially Reasonable Efforts | 47 |
| Section 6.04 | Shareholder Approvals | 48 |
| Section 6.05 | Registration Statement; Joint Proxy Statement/Prospectus; Nasdaq Listing | 49 |
| Section 6.06 | Regulatory Filings; Consents | 50 |
| Section 6.07 | Publicity | 51 |
| Section 6.08 | Access; Current Information | 51 |
| Section 6.09 | No Solicitation by WFB; Superior Proposals | 53 |
| Section 6.10 | Indemnification | 56 |
| Section 6.11 | Employees; Benefit Plans | 57 |
| Section 6.12 | Retention Bonus Pool | 59 |
| Section 6.13 | Notification of Certain Changes | 59 |
| Section 6.14 | Transition; Informational Systems Conversion | 59 |
| Section 6.15 | [Reserved] | 60 |
| Section 6.16 | No Control of Other Party’s Business | 60 |
|---|---|---|
| Section 6.17 | Certain Litigation | 60 |
| Section 6.18 | Board Representation; Resignations | 60 |
| Section 6.19 | Claims Letters | 61 |
| Section 6.20 | Coordination | 61 |
| Section 6.21 | Confidentiality | 62 |
| Section 6.22 | Section 16 Matters | 62 |
| Section 6.23 | Code Section 280G Matters | 63 |
| Section 6.24 | Tax Matters | 63 |
| Section 6.25 | Assumed Debt | 64 |
| Section 6.26 | Updated Disclosure Schedules | 64 |
| Section 6.27 | Takeover Statutes | 64 |
| ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER | 64 | |
| Section 7.01 | Conditions to Obligations of the Parties to Effect the Merger | 64 |
| Section 7.02 | Conditions to Obligations of WFB | 65 |
| Section 7.03 | Conditions to Obligations of Investar | 66 |
| Section 7.04 | Frustration of Closing Conditions | 67 |
| ARTICLE VIII TERMINATION | 67 | |
| Section 8.01 | Termination | 67 |
| Section 8.02 | Termination Fee | 69 |
| Section 8.03 | Effect of Termination | 69 |
| ARTICLE IX DEFINITIONS | 70 | |
| Section 9.01 | Definitions. | 70 |
| ARTICLE X MISCELLANEOUS | 80 | |
| Section 10.01 | Survival | 80 |
| Section 10.02 | Waiver; Amendment | 80 |
| Section 10.03 | Governing Law; Jurisdiction | 80 |
| Section 10.04 | Waiver of Jury Trial | 81 |
| Section 10.05 | Expenses | 81 |
| Section 10.06 | Notices | 81 |
| Section 10.07 | Entire Understanding; No Third Party Beneficiaries | 82 |
| Section 10.08 | Severability | 83 |
| Section 10.09 | Enforcement of the Agreement | 83 |
| Section 10.10 | Interpretation | 83 |
| Section 10.11 | Assignment | 84 |
| Section 10.12 | Counterparts | 84 |
| Section 10.13 | Delivery by Facsimile or Electronic Transmission | 84 |
Exhibit A – Form of Bank Merger Agreement
Exhibit B – Form of Voting Agreement
Exhibit C – Form of Director Support Agreement
Exhibit D – Form of Claims Letter
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this “Agreement”) is dated as of July 1, 2025, by and between Investar Holding Corporation, a Louisiana corporation (“Investar”), and Wichita Falls Bancshares, Inc., a Texas corporation (“WFB” and, together with Investar, the “Parties” and each a “Party”).
RECITALS
WHEREAS, Investar owns all of the issued and outstanding shares of capital stock of Investar Bank, National Association, a national banking association with its main office in Baton Rouge, Louisiana (“Investar Bank”);
WHEREAS, WFB owns all of the issued and outstanding shares of capital stock of First National Bank, a national banking association with its main office in Wichita Falls, Texas (“FNB”);
WHEREAS, the boards of directors of the Parties have determined that it is in the best interests of their respective companies and shareholders to consummate the business combination transaction provided for in this Agreement in which WFB will, on the terms and subject to the conditions set forth in this Agreement, merge with and into Investar (the “Merger”), with Investar as the surviving company in the Merger (sometimes referred to in such capacity as the “Surviving Company”);
WHEREAS, as consideration for the Merger, Investar will issue shares of Investar common stock to the former WFB shareholders in exchange for all of the issued and outstanding capital stock of WFB;
WHEREAS, the Parties intend that, immediately following the Merger, FNB will merge with and into Investar Bank, with Investar Bank surviving the merger, on the terms and conditions set forth in the Agreement and Plan of Bank Merger attached hereto as Exhibit A (the “Bank Merger Agreement”);
WHEREAS, as an inducement to Investar to enter into this Agreement, each director, executive officer of WFB have entered into a voting agreement, substantially in the form attached hereto as Exhibit B, dated as of the date hereof, with Investar (each a “Voting Agreement” and collectively, the “Voting Agreements”), pursuant to which each such person has agreed, among other things, to vote all shares of WFB Common Stock owned by such person in favor of the approval of this Agreement and the transactions contemplated hereby, subject to the terms of the Voting Agreements;
WHEREAS, as a further inducement to Investar’s willingness to enter into this Agreement, each director of WFB who is not also an employee of WFB or any of its Subsidiaries has entered into a director support agreement, substantially in the form attached hereto as Exhibit C, dated as of the date hereof, with Investar (each a “Director Support Agreement” and collectively, the “Director Support Agreements”), containing, with certain permitted exceptions, non-solicitation and non-competition obligations;
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WHEREAS, the Parties desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe certain conditions to the Merger; and
WHEREAS, for federal income tax purposes, it is intended that each of the Merger and the Bank Merger (as defined herein) qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder (the “Code”), and this Agreement is intended to be and is adopted as a “plan of reorganization” for each of the Merger and the Bank Merger for purposes of Sections 354 and 361 of the Code.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
THE MERGER
Section 1.01 The Merger. Subject to the terms and conditions of this Agreement, in accordance with the Louisiana Business Corporation Act (the “LBCA”), at the Effective Time, WFB will merge with and into Investar pursuant to the terms of this Agreement. Investar will be the Surviving Company in the Merger and will continue its existence as a corporation under the laws of the State of Louisiana. As of the Effective Time, the separate corporate existence of WFB will cease.
Section 1.02 Articles of Incorporation and Bylaws; Officers and Directors.
(a) At the Effective Time, the articles of incorporation of Investar in effect immediately prior to the Effective Time will be the articles of incorporation of the Surviving Company until thereafter amended in accordance with applicable Law. The bylaws of Investar in effect immediately prior to the Effective Time will be the bylaws of the Surviving Company until thereafter amended in accordance with applicable Law and the terms of such bylaws.
(b) The directors of Investar in office immediately prior to the Effective Time will serve as the directors of the Surviving Company in accordance with the bylaws of the Investar, except as provided in Section 6.18 hereof.
(c) The officers of Investar in office immediately prior to the Effective Time, together with such additional persons as may thereafter be appointed, will serve as the officers of the Surviving Company from and after the Effective Time in accordance with the bylaws of the Surviving Company.
Section 1.03 Bank Merger. Immediately following the Effective Time or on such later date as may be determined by Investar in its sole discretion, FNB will be merged (the “Bank Merger”) with and into Investar Bank in accordance with the Bank Merger Agreement and applicable Law, and Investar Bank will be the surviving bank (the “Surviving Bank”). The Bank Merger will have the effects as set forth under applicable Law. The board of directors of Investar Bank and FNB, respectively, have approved the Bank Merger Agreement and caused it to be executed and delivered on the date of this Agreement. Each of Investar and WFB has also approved the Bank Merger Agreement in its capacity as sole shareholders of Investar Bank or FNB, as applicable.
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Section 1.04 Reservation of Right to Revise Structure. Investar may at any time and without the approval of WFB change the method of effecting the business combination contemplated by this Agreement if and to the extent that it reasonably deems such a change to be necessary or advantageous; provided, however, that no such change will (i) alter the nature or reduce the amount of the consideration to be issued to Holders as Merger Consideration as currently contemplated in this Agreement, (ii) reasonably be expected to materially impede or delay consummation of the Merger, (iii) adversely affect the federal income tax treatment of Holders in connection with the Merger, or (iv) require submission to or approval of the Holders after this Agreement has been approved by the Holders. In the event that Investar elects to make such a change, the Parties agree to cooperate to execute appropriate documents to reflect the change.
ARTICLE II
CLOSING
Section 2.01 Effective Time; Closing.
(a) Subject to the terms and conditions of this Agreement, the Parties will make all such filings as may be required to consummate the Merger and the Bank Merger by applicable Laws. The Merger will become effective on the date and at the time (the “Effective Time”) specified in the certificates of merger issued by the Louisiana Secretary of State and the Texas Secretary of State (the “Certificates of Merger”). Unless otherwise mutually agreed by the Parties, the Effective Time will occur on a date to be determined by Investar within thirty-five (35) days of the date that all of the conditions to the Closing set forth in Article VII (other than conditions to be satisfied at the Closing, which will be satisfied or waived at the Closing) have been satisfied or waived in accordance with the terms hereof.
(b) The closing of the transactions contemplated by this Agreement (the “Closing”) will take place on the Business Day immediately preceding the Effective Time (such date, the “Closing Date”) by electronic exchange of documents, or at such place to which, or such other manner as, the Parties mutually agree.
Section 2.02 Actions to be Taken at the Closing by WFB. At the Closing, WFB will execute and acknowledge, or cause to be executed and acknowledged (as appropriate), and deliver to Investar such documents and certificates contemplated to be delivered pursuant to this Agreement or reasonably necessary to evidence the transactions contemplated by this Agreement, including, without limitation, the items set forth below (all of such actions constituting conditions precedent to Investar’s obligations to close hereunder).
(a) True, correct and complete copies of the Articles of Incorporation of WFB, including all amendments thereto, duly certified as of a recent date by the Texas Secretary of State.
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(b) True, correct and complete copies of the Articles of Association of FNB, and all amendments thereto, duly certified as of a recent date by the OCC.
(c) A certificate of good standing, dated as of a recent date, issued by the Texas Secretary of State, duly certifying as to the existence and good standing of WFB under the laws of the State of Texas.
(d) A certificate of good standing, dated as of a recent date, issued by the OCC, duly certifying as to authorization of FNB to transact the business of banking.
(e) A certificate, dated as of the Closing Date, executed by the Corporate Secretary or other appropriate executive officer of WFB, pursuant to which such officer will certify: (i) the due adoption by the WFB Board of Directors of corporate resolutions attached to such certificate authorizing the execution and delivery of this Agreement and the other agreements and documents contemplated hereby and the taking of all actions contemplated hereby and thereby; (ii) the due adoption and approval by the WFB shareholders of this Agreement; and (iii) the incumbency and true signatures of those officers of WFB duly authorized to act on its behalf in connection with the transactions contemplated by this Agreement and to execute and deliver this Agreement and other agreements and documents contemplated hereby and thereby; and (iv) that the copy of the Bylaws of WFB attached to such certificate is true and correct and such Bylaws have not been amended except as reflected in such copy.
(f) A certificate, dated as of the Closing Date, executed by an executive officer of WFB, acting solely in his or her official capacity, pursuant to which WFB will certify, to the Knowledge of WFB, that WFB has satisfied the conditions set forth in Section 7.03(a), Section 7.03(b), and Section 7.03(c) of this Agreement.
(g) (i) an affidavit issued by WFB dated as of the Closing Date, sworn under penalty of perjury and signed by an officer of WFB, in form and substance required under the Treasury Regulations issued pursuant to Code Section 1445(b)(3), stating that WFB is not and has not been a United States real property holding corporation (as defined in Code Section 897(c)(2)) during the applicable period specified in Code Section 897(c)(1)(A)(ii) and (ii) a notice from WFB to the IRS in accordance with the requirements of Treasury Regulations Section 1.897-2(h)(2).
(h) A bring down letter from the applicable director and/or executive officer of WFB and FNB with respect to each Claims Letter provided pursuant to Section 6.19.
(i) All other documents required to be delivered to Investar by WFB under this Agreement, and all other documents, certificates and instruments as are reasonably requested by Investar or its counsel.
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Section 2.03 Actions to be Taken at the Closing by Investar. At the Closing, Investar will execute and acknowledge, or cause to be executed and acknowledged (as appropriate), and deliver to, or cause to be delivered to, WFB such documents and certificates contemplated to be delivered pursuant to this Agreement or reasonably necessary to evidence the transactions contemplated by this Agreement, including the items set forth below (all of such actions constituting conditions precedent to WFB’s obligations to close hereunder).
(a) True, correct and complete copies of the Articles of Incorporation of Investar, including all amendments thereto, duly certified as of a recent date by the Louisiana Secretary of State.
(b) True, correct and complete copies of the Articles of Association of Investar Bank, and all amendments thereto, duly certified as of a recent date by the OCC.
(c) A certificate of good standing, dated as of a recent date, issued by the Louisiana Secretary of State, duly certifying as to the existence and good standing of Investar under the laws of the State of Louisiana.
(d) A certificate of good standing, dated as of a recent date, issued by the OCC, duly certifying as to authorization of Investar Bank to transact the business of banking.
(e) A certificate, dated as of the Closing Date, executed by the Corporate Secretary or other appropriate executive officer of Investar, pursuant to which such officer will certify: (i) the due adoption by the Board of Directors of Investar of corporate resolutions attached to such certificate authorizing the execution and delivery of this Agreement and the other agreements and documents contemplated hereby and the taking of all actions contemplated hereby and thereby; (ii) the due adoption and approval by the Investar shareholders of this Agreement; and (iii) the incumbency and true signatures of those officers of Investar duly authorized to act on its behalf in connection with the transactions contemplated by this Agreement and to execute and deliver this Agreement and other agreements and documents contemplated hereby and thereby; and (iv) that the copy of the Bylaws of Investar attached to such certificate is true and correct and such Bylaws have not been amended except as reflected in such copy.
(f) A certificate, dated as of the Closing Date, executed by an executive officer of Investar pursuant to which Investar will certify, to the Knowledge of Investar, that Investar has satisfied the conditions set forth in Section 7.02(a), Section 7.02(b), and Section 7.02(c) of this Agreement.
(g) All other documents required to be delivered to WFB by Investar under this Agreement, and all other documents, certificates and instruments as are reasonably requested by WFB or its counsel.
ARTICLE III
MERGER CONSIDERATION; EXCHANGE PROCEDURES
Section 3.01 Merger Consideration. Subject to the provisions of this Agreement, at the Effective Time, automatically by virtue of the Merger and without any action on the part of the Parties or any shareholder of WFB:
(a) Each share of Investar Common Stock that is issued and outstanding immediately prior to the Effective Time will remain outstanding following the Effective Time and will be unchanged by the Merger.
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(b) Each share of WFB Common Stock owned directly by Investar, WFB, or any of their respective Subsidiaries (excluding shares in trust accounts, managed accounts and the like for the benefit of customers or shares held as collateral for outstanding debt previously contracted) immediately prior to the Effective Time will be cancelled and retired at the Effective Time without any conversion thereof, and no payment will be made with respect thereto (the “WFB Cancelled Shares”).
(c) Subject to Section 3.03, each share of WFB Common Stock (excluding WFB Cancelled Shares and Dissenting Shares) issued and outstanding immediately prior to the Effective Time will cease to be outstanding and will be converted, in accordance with the terms of this Article III, into and exchanged for the right to receive (i) the Per-Share Stock Consideration and (ii) the Per-Share Cash Consideration (the “Per-Share Merger Consideration”).
(d) Notwithstanding anything in this Agreement to the contrary, each Holder will have such rights to dissent from the Merger and obtain payment of the fair value of his shares as are afforded to such Person by Chapter 10, Subchapter H of the Texas Business Organizations Code (“TBOC”). Each share of WFB Common Stock issued and outstanding immediately prior to the Effective Time, the holder of which has properly perfected such holder’s rights of appraisal by following the exact procedure required by under the TBOC, is referred to herein as a “Dissenting Share.” If any holder of Dissenting Shares will effectively withdraw or lose his appraisal rights under the applicable provisions of the TBOC, each such Dissenting Share will cease to be a Dissenting Share and will be deemed to have been converted into and to have become exchangeable for, the right to receive the Per-Share Merger Consideration for each of such holder’s Dissenting Shares without any interest thereon in accordance with the provisions of Section 3.01(d). WFB will give Investar (i) prompt notice of any written notices to exercise dissenters’ rights in respect of any shares of WFB Common Stock, attempted withdrawals of such notices and any other instruments served pursuant to the TBOC and received by WFB relating to dissenters’ rights and (ii) the opportunity to participate in negotiations and proceedings with respect to demands for fair value under the TBOC. WFB will not, except with the prior written consent of Investar, voluntarily make any payment with respect to, or settle, or offer or agree to settle, any such demand for payment.
Section 3.02 Rights as Shareholders; Stock Transfers. At the Effective Time, all shares of WFB Common Stock, when converted in accordance with Section 3.01, will no longer be outstanding and will automatically be cancelled and retired and will cease to exist, and each Certificate or Book-Entry Share previously evidencing such shares will thereafter represent only the right to receive (i) the Merger Consideration in accordance with this Article III and (ii) any dividends or distributions which the holder thereof has the right to receive under Section 3.07. At the Effective Time, the stock transfer books of WFB will be closed, and there will be no registration of transfers on the stock transfer books of WFB of shares of WFB Common Stock.
Section 3.03 Fractional Shares. Notwithstanding any other provision hereof, no fractional shares of Investar Common Stock, and no certificates or scrip therefor, or other evidence of ownership thereof, will be issued in the Merger. Instead, after aggregating all shares converted with respect to each such former holder of WFB Common Stock, Investar will pay to each former holder of WFB Common Stock otherwise would be entitled to receive such fractional share an amount in cash (rounded to the nearest cent) determined by multiplying (i) the volume-weighted average trading price of Investar Common Stock on NASDAQ for the five consecutive trading days ending on the last trading date preceding the Closing Date, by (ii) the fraction of a share (rounded to the nearest thousandth when expressed in decimal form) of Investar Common Stock which such holder would otherwise be entitled to receive under Section 3.01(c).
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Section 3.04 Plan of Reorganization. It is intended that the Merger and the Bank Merger will each qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and that this Agreement will constitute a “plan of reorganization” as that term is used in Sections 354 and 361 of the Code for each of the Merger and the Bank Merger.
Section 3.05 Exchange Procedures. Prior to the Effective Time, Investar will appoint the Exchange Agent for the payment and exchange of the Merger Consideration. Investar will cause as promptly as practicable after the Effective Time, but in no event later than ten (10) Business Days after the Closing Date, the Exchange Agent to mail or otherwise cause to be delivered to each former holder of WFB Common Stock appropriate and customary transmittal materials, which will specify that delivery will be effected, and risk of loss and title to the Certificates or Book-Entry Shares will pass, only upon delivery of the Certificates or Book-Entry Shares to the Exchange Agent, as well as instructions for use in effecting the surrender of the Certificates or Book-Entry Shares in exchange for the Per Share Merger Consideration as provided for in this Agreement (the “Letter of Transmittal”).
Section 3.06 Deposit and Delivery of Merger Considerati.
(a) At or before the Effective Time, Investar will deposit with the Exchange Agent, for the benefit of the Holders, the Cash Consideration and evidence of shares in book entry representing the number of shares of Investar Common Stock in the Exchange Pool. Upon proper surrender of a Certificate or Book-Entry Shares for exchange and cancellation to the Exchange Agent, together with such Letter of Transmittal, properly completed and executed, and such other documents as may reasonably be required by the Exchange Agent or Investar, such former holder of WFB Common Stock will be entitled to receive the aggregate Per-Share Merger Consideration to which such former holder will have become entitled to receive in accordance with, and subject to, Section 3.01(c), of which the Per-Share Stock Consideration will be issued in book entry form. In the event any Certificate will 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, if requested by Investar or the Exchange Agent, the posting by such person of a bond in such amount as Investar or the Exchange Agent may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent or Investar, as applicable, will issue in exchange for such lost, stolen or destroyed Certificate the aggregate Per-Share Merger Consideration to which such former holder will have become entitled to receive in accordance with, and subject to, Section 3.01(c), of which the Per-Share Stock Consideration will be issued in book entry form.
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(b) Any portion of the Merger Consideration that remains unclaimed by the shareholders of WFB for one (1) year after the Effective Time will be delivered by the Exchange Agent to Investar. Any former shareholder of WFB who has not theretofore complied with this Section 3.06 will thereafter look only to Investar for the Merger Consideration and any dividends or distributions on the Investar Common Stock deliverable to such former holder in respect of each share of WFB Common Stock such holder held immediately prior to the Effective Time, as determined pursuant to this Agreement, in each case without any interest thereon. If outstanding Certificates or Book-Entry Shares for shares of WFB Common Stock are not surrendered or the payment for them is not claimed prior to the date on which such shares of Investar Common Stock would otherwise escheat to or become the property of any governmental unit or agency, the unclaimed items will, to the extent permitted by the law of abandoned property and any other applicable Law, become the property of Investar (and to the extent not in its possession will be delivered to it), free and clear of all claims or interest of any Person previously entitled to such property. Neither the Exchange Agent nor any Party will be liable to any former shareholder of WFB for any amounts delivered to a public official pursuant to applicable abandoned property, escheat or similar Laws. Investar and the Exchange Agent will be entitled to rely upon the stock transfer books of WFB to establish the identity of those Persons entitled to receive the Merger Consideration specified in this Agreement, which books will be conclusive with respect thereto. In the event of a dispute with respect to ownership of any shares of WFB Common Stock represented by any Certificate or Book-Entry Share, Investar and the Exchange Agent will be entitled to tender to the custody of any court of competent jurisdiction any Merger Consideration represented by such Certificate or Book-Entry Share and file legal proceedings interpleading all parties to such dispute, and will thereafter be relieved with respect to any claims thereto.
(c) Investar or the Exchange Agent, as applicable, will be entitled to deduct and withhold from any amounts otherwise payable pursuant to this Agreement to any former holder of WFB Common Stock such amounts as Investar is required to deduct and withhold under applicable Law. Any amounts so deducted and withheld will be remitted to the appropriate Governmental Authority and upon such remittance will be treated for all purposes of this Agreement as having been paid to such former holder in respect of which such deduction and withholding was made by Investar or the Exchange Agent, as applicable.
Section 3.07 Rights of Certificate Holders after the Effective Time.
(a) All shares of Investar Common Stock to be issued pursuant to the Merger will be deemed issued and outstanding as of the Effective Time and if ever a dividend or other distribution is declared by Investar in respect of the Investar Common Stock, the record date for which is at or after the Effective Time, that declaration will include dividends or other distributions in respect of all shares of Investar Common Stock issuable pursuant to this Agreement. No dividends or other distributions in respect of the Investar Common Stock will be paid to any holder of any unsurrendered Certificate or Book-Entry Share until such Certificate or Book-Entry Share is surrendered for exchange in accordance with this Article III. Subject to the effect of applicable Laws, following surrender of any such Certificate or Book-Entry Share, there will be issued and/or paid to the holder of shares of Investar Common Stock issued in exchange therefor, without interest, (i) at the time of such surrender, the dividends or other distributions with a record date after the Effective Time theretofore payable with respect to such shares of Investar Common Stock and not paid and (ii) at the appropriate payment date, the dividends or other distributions payable with respect to such shares of Investar Common Stock with a record date after the Effective Time but with a payment date subsequent to surrender.
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(b) If any shares of Investar Common Stock are to be issued in a name other than that in which the Certificate(s) surrendered in exchange therefor is or are registered, it will be a condition of the issuance thereof that the Certificate(s) so surrendered will be properly endorsed (or accompanied by an appropriate instrument of transfer) and otherwise in proper form for transfer, and that the Person requesting such exchange will pay to the Exchange Agent in advance any transfer or other similar Taxes required by reason of the issuance of shares of Investar Common Stock in any name other than that of the registered holder of the Certificate(s) surrendered, or required for any other reason, or will establish to the satisfaction of the Exchange Agent that such Tax has been paid or is not payable.
Section 3.08 Anti-Dilution Provisions. If, prior to the Effective Time, the number of shares of Investar Common Stock issued and outstanding will be increased or decreased, or changed into or exchanged for a different number of kind of shares or securities, in any such case as a result of a stock split, reverse stock split, stock combination, stock dividend, recapitalization, reclassification, reorganization or similar transaction, or there will be any extraordinary dividend or distribution with respect to such stock, and the record date therefor will be prior to the Effective Time, an appropriate and proportionate adjustment will be made to the Per-Share Stock Consideration to give holders of WFB Common Stock the same economic effect as contemplated by this Agreement prior to such event.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WFB
Except as set forth in the disclosure schedule delivered by WFB to Investar prior to or concurrently with the execution of this Agreement with respect to each such Section below (the “WFB Disclosure Schedule”), WFB hereby represents and warrants to Investar as follows:
Section 4.01 Organization and Standing. Each of WFB and its Subsidiaries is (a) an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation and (b) is duly licensed or qualified to do business and in good standing in each jurisdiction where its ownership or leasing of property or the conduct of its business requires such qualification, except where the failure to be so licensed or qualified has not had, and is not reasonably likely to have, a Material Adverse Effect with respect to WFB. WFB is registered as a financial holding company under the Bank Holding Company Act of 1956, as amended. FNB is a national banking association.
Section 4.02 Capital Stock.
(a) The authorized capital stock of WFB consists solely of 1,000,000 shares of WFB Common Stock, par value $1.00 per share, 620,912 of which are issued and outstanding as December 31, 2024 and of the date hereof, respectively. There are no shares of WFB Common Stock held by any of WFB’s Subsidiaries or any tax-qualified employee benefit plan of WFB or its Subsidiaries. Except for the Convertible Subordinated Debt and the WFB Shareholders Agreement, there are no outstanding Rights of any kind issued or granted by, or binding upon, WFB to purchase or otherwise acquire any security of or equity interest in WFB, obligating WFB to issue any shares of, restricting the transfer of or otherwise relating to shares of its capital stock of any class.
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(b) WFB Disclosure Schedule Section 4.02(b) sets forth, as of the date hereof, the name and address, as reflected on the books and records of WFB, of each Holder, and the number and type of shares of WFB Common Stock held by each such Holder. The issued and outstanding shares of WFB Common Stock are duly authorized, validly issued, fully paid, non-assessable and have not been issued in violation of nor are they subject to preemptive rights of any WFB shareholder. All shares of WFB’s capital stock issued and outstanding have been issued in compliance with and not in violation of any applicable federal or state securities Laws. There are no restrictions applicable to the payment of dividends on the shares of WFB Common Stock except pursuant to applicable Laws, and all dividends declared before the date of this Agreement have been paid.
(c) No bonds, debentures, notes, or other indebtedness having the right to vote on any matters on which shareholders of WFB or FNB may vote are issued or outstanding. Set forth on WFB Disclosure Schedule Section 4.02(c) is a true, correct, and complete list of all trust preferred or subordinated debt securities of WFB or any Subsidiary of WFB that are issued and outstanding as of the date of this Agreement, including, with respect to each such security, the outstanding principal and interest as of April 30, 2025, maturity date, call date (if not currently callable), current interest rate, date of the next adjustment of interest rate (if any), and any right to convert to shares of WFB Common Stock. As of the date of this Agreement, neither WFB nor any Affiliate of WFB is deferring interest payments with respect to any trust preferred securities or related junior subordinated debt securities issued by WFB or any of its Affiliates. WFB has administered all such debt securities in accordance with the terms thereof. WFB has made available to Investar true and correct copies of the forms of note or other evidence of indebtedness related to such debt securities.
(d) Except for that certain Shareholders Agreement between WFB and its shareholders, dated February 17, 2005 (the “WFB Shareholders Agreement”), WFB is not subject to any agreements that provide holders of WFB Common Stock with rights as holders of WFB Common Stock that are in addition to those provided by WFB’s certificate of formation, WFB’s bylaws, or by applicable Law. An accurate and complete copy of the WFB Shareholders’ Agreement has been delivered by WFB to Investar.
Section 4.03 Subsidiaries.
(a) WFB Disclosure Schedule Section 4.03(a) sets forth a complete and accurate list of all Subsidiaries of WFB, including the jurisdiction of organization and all jurisdictions in which any such entity is qualified to do business and the number of shares or other equity interests in such Subsidiary held, directly or indirectly, by WFB. With respect to the Subsidiaries of WFB (i) WFB owns, directly or indirectly, all of the issued and outstanding equity securities of each WFB Subsidiary, (ii) no equity securities of any of WFB’s Subsidiaries are or may become required to be issued (other than to WFB) by reason of any contractual right or otherwise, (iii) there are no contracts, commitments, understandings or arrangements by which any of such Subsidiaries is or may be bound to sell or otherwise transfer any of its equity securities (other than to WFB or a wholly-owned Subsidiary of WFB), (iv) there are no contracts, commitments, understandings or arrangements relating to WFB’s rights to vote or to dispose of such securities, (v) all of the equity securities of each such Subsidiary held by WFB, directly or indirectly, are validly issued, fully paid, non-assessable and are not subject to preemptive or similar rights, and (vi) all of the equity securities of each Subsidiary that is owned, directly or indirectly, by WFB or any Subsidiary thereof, are free and clear of all Liens, other than restrictions on transfer under applicable securities or banking Laws.
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(b) Neither WFB nor any of WFB’s Subsidiaries owns any stock or equity interest in any depository institution (as defined in 12 U.S.C. Section 1813(c)(1)) other than FNB. Neither WFB nor any of WFB’s Subsidiaries beneficially owns, directly or indirectly (other than in a bona fide fiduciary capacity or in satisfaction of a debt previously contracted), any equity securities or similar interests of any Person, or any interest in a partnership or joint venture of any kind.
Section 4.04 Corporate Power; Minute Books.
(a) Each of WFB and its Subsidiaries has the corporate or similar power and authority to carry on its business as it is now being conducted and to own or lease all of its properties and assets. WFB has the corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby, subject only to receipt of all necessary approvals of Governmental Authorities, the Regulatory Approvals and the Requisite WFB Shareholder Approval.
(b) WFB has made available to Investar a complete and correct copy of the certificate of formation and bylaws or equivalent organizational documents, each as amended to date, of WFB and each of its Subsidiaries, the minute books of WFB and each of its Subsidiaries, and the stock ledgers and stock transfer books of WFB and each of its Subsidiaries. Neither WFB nor any of its Subsidiaries is in violation of any of the terms of its certificate of formation, bylaws or equivalent organizational documents. The minute books of WFB and each of its Subsidiaries contain records of all meetings held by, and all other corporate or similar actions of, their respective shareholders and boards of directors (including committees of their respective boards of directors) or other governing bodies, which records are complete and accurate in all material respects. The stock ledgers and the stock transfer books of WFB and each of its Subsidiaries contain complete and accurate records of the ownership of the equity securities of WFB and each of its Subsidiaries.
Section 4.05 Corporate Authority. Subject only to the receipt of the Requisite WFB Shareholder Approval at the WFB Meeting, this Agreement and the transactions contemplated hereby have been authorized by all necessary corporate action of WFB and the board of directors of WFB on or prior to the date hereof. The board of directors of WFB, by resolutions adopted at a meeting duly called and held, has (i) determined that this Agreement and the transactions contemplated hereby are fair to and in the best interests of WFB and its shareholders and declared the Merger to be advisable; (ii) approved this Agreement and the transactions contemplated hereby; (iii) recommended that the shareholders of WFB adopt and approve this Agreement and the transactions contemplated hereby; and (iv) directed that this Agreement be submitted to WFB’s shareholders for approval at a meeting of the shareholders and, except for the receipt of the Requisite WFB Shareholder Approval in accordance with the TBOC and WFB’s certificate of formation and bylaws, no other vote or action of the shareholders of WFB is required by Law, the certificate of formation or bylaws of WFB or otherwise to approve this Agreement and the transactions contemplated hereby. WFB has duly executed and delivered this Agreement and, assuming due authorization, execution and delivery by Investar, this Agreement is a valid and legally binding obligation of WFB, enforceable in accordance with its terms (except to the extent that validity and enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or similar Laws affecting the enforcement of creditors’ rights generally or by general principles of equity or by principles of public policy (the “Enforceability Exception”)).
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Section 4.06 Regulatory Approvals; No Defaults.
(a) No consents or approvals of, or waivers by, or filings or registrations with, any Governmental Authority are required to be made or obtained by WFB or any of its Subsidiaries in connection with the execution, delivery or performance by WFB of this Agreement or to consummate the transactions contemplated by this Agreement, except as may be required for (i) filings of applications and notices with, and receipt of consents, authorizations, approvals, exemptions or non-objections from the SEC, Nasdaq, state securities authorities, the Financial Industry Regulatory Authority, Inc., applicable securities, commodities and futures exchanges, and other industry self-regulatory organizations (each, an “SRO”), (ii) filings of applications or notices with, and consents, approvals or waivers by the FRB, the OCC, and the TDB and other banking, regulatory, self-regulatory or enforcement authorities or any courts, administrative agencies or commissions or other Governmental Authorities and approval of or non-objection to such applications, filings and notices (taken together with the items listed in clause (i), the “Regulatory Approvals”), (iii) the filing by Investar with the SEC of the Joint Proxy Statement/Prospectus and the Registration Statement and declaration of effectiveness of the Registration Statement, (iv) the filing of the articles or certificate of merger with the OCC, the Secretary of State of the State of Louisiana and Texas or other applicable Governmental Authorities to cause the Merger and the Bank Merger to become effective and (v) such filings and approvals as are required to be made or obtained under the securities or “Blue Sky” laws of various states in connection with the issuance of the shares of Investar Common Stock pursuant to this Agreement (the “Investar Common Stock Issuance”) and approval of listing of such Investar Common Stock on Nasdaq.
(b) Subject to the receipt of the approvals referred to in the preceding sentence and the Requisite WFB Shareholder Approval, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby by WFB do not and will not (1) constitute a breach or violation of, or a default under, the certificate of formation, bylaws or similar governing documents of WFB or any of its respective Subsidiaries, (2) violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to WFB or any of its Subsidiaries, or any of their respective properties or assets, (3) conflict with, result in a breach or violation of any provision of, or the loss of any benefit under, or a default (or an event which, with or without notice or lapse of time, or both, would constitute a default) under, result in the creation of any Lien under, result in a right of termination or the acceleration of any right or obligation (which, in each case, would have a Material Adverse Effect on WFB or could reasonably be expected to result in a financial obligation or penalty in excess of $50,000) under any permit, license, credit agreement, indenture, loan, note, bond, mortgage, reciprocal easement agreement, lease, instrument, concession, contract, franchise, agreement or other instrument or obligation of WFB or any of its Subsidiaries or to which WFB or any of its Subsidiaries, or their respective properties or assets is subject or bound, or (4) require the consent or approval of any third party or Governmental Authority under any such Law, rule or regulation or any judgment, decree, order, permit, license, credit agreement, indenture, loan, note, bond, mortgage, reciprocal easement agreement, lease, instrument, concession, contract, franchise, agreement or other instrument or obligation that would have a Material Adverse Effect on WFB or result in a material financial penalty.
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(c) As of the date hereof, WFB has no Knowledge of any reason (i) why the Regulatory Approvals referred to in Section 7.01(b) will not be received in customary time frames from the applicable Governmental Authorities having jurisdiction over the transactions contemplated by this Agreement or (ii) why any Burdensome Condition would be imposed.
Section 4.07 Financial Statements; Internal Controls.
(a) WFB has previously delivered or made available to Investar true, correct, and complete copies of WFB’s (i) audited consolidated financial statements (including the related notes and schedules thereto) for the years ended December 31, 2024, 2023 and 2022, accompanied by the unqualified audit reports of Eide Bailly LLP, independent registered accountants (the “Audited Financial Statements”) and (ii) unaudited interim consolidated financial statements, as of and for the quarter ended March 31, 2025 (the “Unaudited Financial Statements,” and collectively and together with the Audited Financial Statements and any unaudited financial statements delivered pursuant to Section 6.08(c), the “Financial Statements”). The Financial Statements (including any related notes and schedules thereto) are accurate and complete in all material respects and fairly present in all material respects the financial condition and the results of operations, changes in shareholders’ equity, and cash flows of WFB and its consolidated Subsidiaries as of the respective dates of and for the periods referred to in such financial statements, all in accordance with GAAP, consistently applied, subject, in the case of the Unaudited Financial Statements, to (i) the absence of consolidated statements of changes in stockholders’ equity, consolidated statements of comprehensive income (loss), and consolidated statements of cash flow, (ii) normal, recurring year-end adjustments (the effect of which has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to WFB), and (iii) the absence of notes and schedules as permitted by GAAP (that, if presented, would not differ materially from those included in the Audited Financial Statements). No financial statements of any entity or enterprise other than WFB’s Subsidiaries are required by GAAP to be included in the consolidated financial statements of WFB. The audits of WFB have been conducted in accordance with GAAP. Since December 31, 2024, neither WFB nor any of its Subsidiaries has any liabilities or obligations of a nature that would be required by GAAP to be set forth on its consolidated balance sheet or in the notes thereto except for liabilities reflected or reserved against in the Financial Statements and current liabilities incurred in the Ordinary Course of Business since December 31, 2024 that are not required by GAAP to be reflected in the Financial Statements.
(b) The records, systems, controls, data and information of WFB and its Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of WFB or its Subsidiaries or accountants (including all means of access thereto and therefrom). WFB and its Subsidiaries have devised and maintain a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. WFB has disclosed, based on its most recent evaluations, to its outside auditors and the audit committee of the board of directors of WFB (i) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect WFB’s ability to record, process, summarize and report financial data and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in WFB’s internal control over financial reporting.
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(c) Since January 1, 2021, neither WFB nor any of its Subsidiaries nor, to WFB’s Knowledge, any director, officer, employee, auditor, accountant or representative of WFB or any of its Subsidiaries has received, or otherwise had or obtained Knowledge of, any complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of WFB or any of its Subsidiaries or their respective internal accounting controls, including any complaint, allegation, assertion or claim that WFB or any of its Subsidiaries has engaged in questionable accounting or auditing practices.
Section 4.08 Regulatory Reports. Since January 1, 2021, WFB and its Subsidiaries have timely filed with the FRB, the OCC, the TDB, any SRO and any other applicable Governmental Authority, in correct form, the material reports, registration statements and other documents required to be filed under applicable Laws, together with any amendments required to be made with respect thereto, and have paid all fees and assessments due and payable in connection therewith, and all such reports were complete and accurate and in compliance in all material respects with the requirements of applicable Laws. Except as set forth on WFB Disclosure Schedule Section 4.08, and other than normal examinations conducted by a Governmental Authority in the Ordinary Course of Business, no Governmental Authority has notified WFB or any of its Subsidiaries that it has initiated any proceeding or, to the Knowledge of WFB, threatened an investigation into the business or operations of WFB or any of its Subsidiaries since January 1, 2021. There is no material and unresolved violation, criticism or exception by any Governmental Authority with respect to any report or statement relating to any examinations or inspections of WFB or any of its Subsidiaries.
Section 4.09 Absence of Certain Changes or Events. The Financial Statements or as otherwise contemplated by this Agreement, since December 31, 2023, (a) WFB and its Subsidiaries have carried on their respective businesses in all material respects in the Ordinary Course of Business, (b) there have been no events, changes or circumstances which have had, or are reasonable likely to have, individually or in the aggregate, a Material Adverse Effect with respect to WFB, and (c) neither WFB nor any of its Subsidiaries has taken any action or failed to take any action prior to the date of this Agreement which action or failure, if taken after the date of this Agreement, would constitute a material breach or violation of any of the covenants and agreements set forth in Section 6.01.
Section 4.10 Legal Proceedings.
(a) Since January 1, 2021, there have been no material civil, criminal, administrative or regulatory actions, suits, demand letters, demands for indemnification, claims, hearings, notices of violation, arbitrations, investigations, orders to show cause, market conduct examinations, notices of non-compliance or other proceedings of any nature pending or, to the Knowledge of WFB, threatened against WFB or any of its Subsidiaries or any of their current or former directors or executive officers in their capacities as such, or to which WFB or any of its Subsidiaries or any of their current or former director or executive officer, in their capacities as such, is a party, including without limitation, any such actions, suits, demand letters, demands for indemnification, claims, hearings, notices of violation, arbitrations, investigations, orders to show cause, market conduct examinations, notices of non-compliance or other proceedings of any nature that would challenge the validity or propriety of the transactions contemplated by this Agreement.
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(b) There is no material injunction, order, judgment or decree or regulatory restriction imposed upon WFB or any of its Subsidiaries, or the assets of WFB or any of its Subsidiaries (or that, upon consummation of the Merger or the Bank Merger would apply to the Surviving Company or any of its Subsidiaries or affiliates), and neither WFB nor any of its Subsidiaries has been advised of the threat of any such action, other than any such injunction, order, judgment or decree that is generally applicable to all Persons in businesses similar to that of WFB or any of WFB’s Subsidiaries.
Section 4.11 Compliance with Laws.
(a) Each of WFB and its Subsidiaries is, and has been since January 1, 2021, in compliance in all material respects with all applicable federal, state, local and foreign Laws applicable thereto or to the employees conducting such businesses, including, without limitation, Laws related to data protection or privacy, the Gramm-Leach-Bliley Act of 1999, the USA PATRIOT Act, the Bank Secrecy Act, the Equal Credit Opportunity Act, the Fair Housing Act, the Home Mortgage Disclosure Act, the Community Reinvestment Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Dodd-Frank Act, Sections 23A and 23B of the Federal Reserve Act, the Sarbanes-Oxley Act, or the regulations implementing such statutes, all other applicable anti-money laundering Laws, fair lending Laws and other Laws relating to discriminatory lending, financing, leasing or business practices and all agency requirements relating to the origination, sale and servicing of mortgage loans. Since January 1, 2021, neither WFB nor any of its Subsidiaries has been advised of any supervisory concerns regarding their compliance with the Bank Secrecy Act or related state or federal anti-money laundering laws, regulations and guidelines, including without limitation those provisions of federal regulations requiring (i) the filing of reports, such as Currency Transaction Reports and Suspicious Activity Reports, (ii) the maintenance of records and (iii) the exercise of due diligence in identifying customers. The boards of directors of WFB and its Subsidiaries have adopted, and WFB and its Subsidiaries, as applicable, have implemented an anti-money laundering program that contains adequate and appropriate customer identification verification procedures, that meets the requirements of Sections 352 and 326 of the USA PATRIOT Act, and that has not been deemed ineffective by any Governmental Authority.
(b) FNB has a Community Reinvestment Act rating of not less than “satisfactory” in its most recent completed exam, has received no oral or written criticism from regulators with respect to discriminatory lending practices and, to the Knowledge of WFB, there are no conditions, facts or circumstances, or pending investigations, that could result in a downgrade of FNB’s Community Reinvestment Act rating to less than “satisfactory” or criticism from regulators or consumers with respect to discriminatory practices. Neither WFB nor any of its Subsidiaries is a party to any agreement with any individual or group regarding Community Reinvestment Act matters.
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(c) WFB and each of its Subsidiaries have all material permits, licenses, authorizations, orders and approvals of, and each has made all filings, applications and registrations with, all Governmental Authorities that are required in order to permit it to own or lease its properties and to conduct its business as presently conducted. All such permits, licenses, certificates of authority, orders and approvals are in full force and effect and, to WFB’s Knowledge, no suspension or cancellation of any of them is threatened.
(d) Neither WFB nor any of its Subsidiaries has received, since January 1, 2021, written or, to WFB’s Knowledge, oral notification from any Governmental Authority (i) asserting that it is not in compliance with any of the Laws which such Governmental Authority enforces, (ii) indicating the initiation of, or the pending initiation of, any proceeding or investigation into the business or operations of WFB or any of its Subsidiaries, or (iii) threatening to revoke any license, franchise, permit or governmental authorization (nor to the WFB’s Knowledge do any grounds for any of the foregoing exist).
(e) Neither WFB nor any of its Subsidiaries (nor, to the Knowledge of WFB, any of their respective directors, executives, officers, employees or representatives) (i) used any corporate funds of WFB or any of its Subsidiaries or any of their respective affiliates for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds of WFB or any of its Subsidiaries or any of their respective affiliates, (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, (iv) made any bribe, unlawful rebate, payoff, influence payment, kickback or other unlawful payment to any Person, private or public, regardless of form, whether in money, property or services, to obtain favorable treatment in securing business to obtain special concessions for WFB or any of its Subsidiaries or any of their respective affiliates, to pay for favorable treatment for business secured or to pay for special concessions already obtained for the WFB or any of its Subsidiaries or any of their respective affiliates, (v) established or maintained any unlawful fund of monies or other assets of WFB or any of its Subsidiaries or any of their respective affiliates, (vi) made any fraudulent entry on the books and records of WFB or any of its Subsidiaries or any of their respective affiliates or (vii) violated or is in violation of the Money Laundering Laws. No action, suit or proceeding by or before any Governmental Entity or any arbitrator involving WFB or any of its Subsidiaries or any of their respective affiliates with respect to the money laundering Laws is pending or, to the Knowledge of WFB, threatened, and there are no conditions, facts or circumstances that could result in WFB or any of its Subsidiaries being deemed to be operating in violation of the Bank Secrecy Act and its implementing regulations (31 C.F.R. Chapter X), the USA PATRIOT Act, any order issued with respect to anti-money laundering by OFAC or any other applicable money laundering Law.
(f) Except as required by the Bank Secrecy Act, to the Knowledge of the WFB, no employee of WFB or any of its Subsidiaries or their respective affiliates has provided or is providing information to any law enforcement agency regarding the commission or possible commission of any crime or the violation or possible violation of any applicable Law by WFB or any of its Subsidiaries or any employee thereof acting in its capacity as such. Neither WFB nor any of its Subsidiaries, nor any officer, employee, contractor, subcontractor or agent of WFB or any of its Subsidiaries, has discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against any employee of WFB or any of its Subsidiaries in the terms and conditions of employment because of any act of such employee described in 18 U.S.C. § 1514A(a).
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(g) Except where such disclosure is prohibited by applicable Law, there: (i) is no written, or to the Knowledge of WFB, oral unresolved violation or exception by any Governmental Authority relating to any examinations or inspections of WFB or any of its Subsidiaries; (ii) have been no written, or to the Knowledge of WFB, oral formal or informal inquiries by, or disagreements or disputes with, any Governmental Authority with respect to the business, operations, policies or procedures of WFB or any of its Subsidiaries since January 1, 2021; and (iii) is not any pending or, to the Knowledge of WFB, threatened, nor has any Governmental Authority indicated an intention to conduct, any investigation or review of the WFB or any of its Subsidiaries.
(h) WFB and its Subsidiaries, as applicable, are the sole owners of all IIPI relating to customers, former customers and prospective customers that will be transferred to Investar or Investar Bank under to this Agreement and the other transactions contemplated hereby. As used in this Section 4.11(h), “IIPI” means any information relating to an identified or identifiable natural person, including “personally identifiable financial information” as that term is defined in 12 CFR Part 1016. WFB and its Subsidiaries have adopted and maintain privacy policies regarding the collection and use of IIPI, and such collection and use of such IIPI and the transfer of such IIPI to Investar or Investar Bank comply with all applicable privacy policies, the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act and, in each case, the rules and regulations promulgated thereunder, and all other applicable state, federal and foreign privacy Laws and with any contract or industry standard relating to privacy.
Section 4.12 WFB Material Contracts; Defaults.
(a) Other than the WFB Benefit Plans and except as set forth in WFB Disclosure Schedule Section 4.12(a), neither WFB nor any of its Subsidiaries is a party to, bound by or subject to any agreement, contract, arrangement, commitment or understanding (whether written or oral) (i) which would entitle any present or former director, officer, employee, consultant or agent of WFB or any of its Subsidiaries to indemnification from WFB or any of its Subsidiaries other than as provided in the certificate of formation, bylaws or similar governing documents of WFB or its Subsidiaries; (ii) which grants any right of first refusal, right of first offer or similar right with respect to any assets or properties of WFB or its respective Subsidiaries; (iii) related to the borrowing by WFB or any of its Subsidiaries of money or any guaranty of any obligation for the borrowing of money, other than deposits of FNB, endorsements made for collection, repurchase or resell agreements, letters of credit or guaranties made in the ordinary course of business; (iv) which provides for payments to be made by WFB or any of its Subsidiaries upon a change in control thereof; (v) relating to the lease of real property or personal property; (vi) relating to any joint venture, partnership, limited liability company agreement or other similar agreement or arrangement; (vii) which relates to capital expenditures and involves future payments in excess of $25,000 individually or $100,000 in the aggregate; (viii) which relates to the disposition or acquisition of assets or any interest in any business enterprise outside the Ordinary Course of Business; (ix) which is not terminable on sixty (60) days or less notice and involving the payment of more than $30,000 per annum; (x) which contains a non-compete or client or customer non-solicit requirement or any other provision that restricts the conduct of any line of business by WFB or any of its Affiliates or upon consummation of the Merger will restrict the ability of the Surviving Company or any of its Affiliates to engage in any line of business (including, for the avoidance of doubt, any exclusivity provision granted in favor of any third party) or which grants any right of first refusal, right of first offer or similar right or that limits or purports to limit the ability of WFB or any of its Subsidiaries (or, following consummation of the transactions contemplated hereby, Investar or any of its Subsidiaries) to own, operate, sell, transfer, pledge or otherwise dispose of any assets or business; (xi) pursuant to which WFB or any of its Subsidiaries may become obligated to invest in or contribute capital to any entity; (xii) with respect to the employment or compensation of any directors, officers or employees (whether current or for which liability remains outstanding) of WFB or any of its Subsidiaries; (xiii) which, upon the execution or delivery or shareholder adoption of this Agreement, or the consummation of the transactions contemplated hereby, will (either alone or upon the occurrence of any additional acts or events) result in any payment or benefit (whether change-of-control, severance pay or otherwise) becoming due from WFB, the Surviving Company or any of their respective Subsidiaries to any officer, director or employee thereof, or which would otherwise provide for a payment or benefit to such Person upon a change-of-control; (xiv) the liabilities or benefits of which will be increased, or the vesting of benefits or payments of which will be accelerated, or funding required, by the occurrence of any of the transactions contemplated by this Agreement, or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement; (xv) that transfers any Intellectual Property rights (other than non-exclusive licenses to generally available commercial software), by way of assignment, license, sublicense, agreement or other permission, to or from WFB or any of its Subsidiaries and that is material; (xvi) to which any Governmental Authority is a party; (xvii) which provide for payments or benefits which, together with other payments or benefits payable to such Person, might render any portion of any such payments or benefits subject to disallowance of deduction therefor as a result of the application of Section 280G of the Code or which provides for a “gross up” or indemnification for Taxes; (xviii) that are Recourse Agreements; (xix) which relates to the solicitation, origination and/or servicing of mortgages, excluding Loan documents; (xx) which would prohibit or delay the consummation of any of the transactions contemplated by this Agreement; or (xxi) that is not otherwise described in clauses (i)-(xx) and would be considered a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC). Each contract, arrangement, commitment or understanding of the type described in this Section 4.12(a) is listed in WFB Disclosure Schedule Section 4.12(a), and is referred to herein as a “WFB Material Contract.” WFB has previously made available to Investar true, complete and correct copies of each such WFB Material Contract, including any and all amendments and modifications thereto.
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(b) Each WFB Material Contract is valid and binding on WFB and any of its Subsidiaries to the extent such Subsidiary is a party thereto, as applicable, and is in full force and effect and enforceable in accordance with its terms (assuming the due execution by each other party thereto, provided that WFB hereby represents and warrants that, to its Knowledge, each WFB Material Contract is duly executed by all such parties), subject to the Enforceability Exception; and neither WFB nor any of its Subsidiaries is in default under any WFB Material Contract or other “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC), to which it is a party, and there has not occurred any event that, with the lapse of time or the giving of notice or both, would constitute such a material default. No power of attorney or similar authorization given directly or indirectly by WFB or any of its Subsidiaries is currently outstanding.
(c) WFB Disclosure Schedule Section 4.12(c) sets forth a true and complete list of all WFB Material Contracts pursuant to which consents, waivers or notices are or may be required to be given thereunder, in each case, prior to the performance by WFB of this Agreement and the consummation of the Merger, the Bank Merger and the other transactions contemplated hereby and thereby.
(d) With respect to any material agreement, commitment, arrangement, lease, insurance policy or other instrument that is of a nature that would be disclosed in WFB Disclosure Schedule Section 4.12(a) but for the fact that it is no longer valid or binding on WFB or any of its Subsidiaries, since January 1, 2021, neither WFB nor any of its Subsidiaries, nor to WFB’s Knowledge, any other party thereto, was in default or breach, nor did any event occur that, with the giving of notice or the passage of time or both, would have constituted a default or breach which would have given rise to any right of notice, modification, acceleration, payment, cancellation or termination of or by another party under, or in any manner release any party thereto from any obligation under, any such material agreement, commitment, arrangement, lease, insurance policy or instrument to which it is a party, by which its assets, business, or operations may have been bound or affected, or under which its assets, business, or operations received benefits.
Section 4.13 Agreements with Regulatory Agencies. Except as set forth on WFB Disclosure Schedule Section 4.13, since January 1, 2021, neither WFB nor any of its Subsidiaries has been subject to any cease-and-desist or other order issued by, or a party to any written agreement, consent agreement or memorandum of understanding with, or a party to any commitment letter, action plan or similar undertaking to, or a recipient of any extraordinary supervisory letter from, or subject to any order or directive by, or has adopted any board resolutions at the request of any Governmental Authority (each a “WFB Regulatory Agreement”) that restricts, has restricted or by its terms will in the future restrict, the conduct of WFB’s or any of its Subsidiaries’ business or that in any manner relates to their capital adequacy, credit or risk management policies, dividend policies, management, business or operations, nor has WFB or any of its Subsidiaries been advised by any Governmental Authority that it is considering issuing, initiating, ordering, requesting, recommending, or otherwise proceeding with (or is considering the appropriateness of any of the aforementioned actions) any WFB Regulatory Agreement. To WFB’s Knowledge, there are no investigations relating to any regulatory matters pending before any Governmental Authority with respect to WFB or any of its Subsidiaries except as related to routine regulatory exams in the Ordinary Course of Business.
Section 4.14 Brokers; Fairness Opinion. Neither WFB, nor any of its Subsidiaries, nor any of their respective officers and directors, has employed any broker or finder or incurred, nor will it incur, any liability for any broker’s fees, commissions or finder’s fees in connection with any of the transactions contemplated by this Agreement, except that WFB has engaged, and will pay a fee or commission to Olsen Palmer LLC (“WFB Financial Advisor”), in accordance with the terms of a letter agreement between WFB Financial Advisor and WFB, a true, complete and correct copy of which has been previously delivered by WFB to Investar. WFB has received the opinion of the WFB Financial Advisor (and, when it is delivered in writing, a copy of such opinion will be promptly provided to Investar) to the effect that, as of the date of this Agreement and based upon and subject to the qualifications and assumptions set forth therein, the Per-Share Merger Consideration is fair, from a financial point of view, to the Holders, and, as of the date of this Agreement, such opinion has not been withdrawn, revoked or modified.
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Section 4.15 Employee Benefit Plans.
(a) WFB Disclosure Schedule Section 4.15(a) sets forth a true and complete list of each WFB Benefit Plan. For purposes of this Agreement, “WFB Benefit Plans” means all benefit and compensation plans, contracts, policies or arrangements (i) covering current or former employees of WFB or any of its Subsidiaries (such current and former employees collectively, the “WFB Employees”), (ii) covering current or former directors of WFB or any of its Subsidiaries, or (iii) with respect to which WFB, any of its Subsidiaries, Controlled Group Members, or ERISA Affiliates has or may have any liability or contingent liability, with respect to any “employee benefit plans” within the meaning of Section 3(3) of ERISA, health/welfare, employment, severance, change-of-control, fringe benefit, deferred compensation, defined benefit plan, defined contribution plan, stock option, stock purchase, stock appreciation rights, stock based, incentive, bonus plans, retirement plans and other policies, plans or arrangements whether or not subject to ERISA and whether or not in writing.
(b) With respect to each WFB Benefit Plan, WFB has provided or made available to Investar true and complete copies of the following, to the extent applicable: (i) such WFB Benefit Plan and all amendments thereto (or a written summary of such WFB Benefit Plan where no plan document exists), (ii) any trust instruments and insurance contracts forming a part of any WFB Benefit Plan, (iii) the most current summary plan descriptions and summaries of material modifications, (iv) IRS Form 5500, including applicable schedules and reports required to be filed therewith for the three (3) most recently completed plan years, (v) the most recent IRS determination, opinion, or advisory letters with respect thereto, (vi) any correspondence from any Governmental Authority, and (vii) for the three (3) most recently completed plan years, any plan financial statements and accompanying accounting reports, service contracts, fidelity bonds and material communications (e.g. award agreements, summary of benefits and coverage, employee and participant annual QDIA notice, safe harbor notice, or fee disclosures notices under 29 CFR 2550.404a-5), and coverage and nondiscrimination testing data and results (e.g. under Code Sections 105(h), 125, 129, 410, 401(k), and 401(m), as applicable).
(c) All WFB Benefit Plans are in compliance in all material respects, in form and operation, with all applicable Laws, including ERISA and the Code. Each WFB Benefit Plan which is intended to be qualified under Section 401(a) of the Code (“WFB 401(a) Plan”) has received a favorable determination letter from the IRS or is entitled to rely on a favorable opinion or advisory letter from the IRS, and, to WFB’s Knowledge, there is not any circumstance that could reasonably be expected to result in revocation of any such favorable determination, opinion or advisory letter, and nothing has occurred that would be expected to result in the WFB 401(a) Plan ceasing to be qualified under Section 401(a) of the Code. All WFB Benefit Plans have been administered in all material respects in accordance with their terms. There is no pending or, to WFB’s Knowledge, threatened litigation or regulatory action relating to the WFB Benefit Plans. Neither WFB nor any of its Subsidiaries has engaged in a transaction with respect to any WFB Benefit Plan that could reasonably be expected to subject WFB or any of its Subsidiaries to a tax or penalty under Section 4975 of the Code or Section 502(i) of ERISA. No WFB 401(a) Plan has been submitted under or been the subject of an IRS voluntary compliance program submission that is still outstanding or that has not been fully corrected in accordance with a compliance statement issued by the IRS with respect to any applicable failures. There are no audits, inquiries, investigations, or proceedings pending or, to WFB’s Knowledge, threatened by any Governmental Authority, or participant claims (other than claims for benefits in the normal course of business), with respect to any WFB Benefit Plan. Neither WFB nor any administrator or fiduciary of any WFB Benefit Plan (or any agent of any of the foregoing) that is an employee of WFB has engaged in any transaction, or acted or failed to act in any manner with respect to any WFB Benefit Plan that could subject it to any direct or indirect material liability (by indemnity or otherwise) for breach of any fiduciary, co-fiduciary, or other duty under ERISA. No oral or written representation or communication with respect to any aspect of the WFB Benefit Plans has been made to WFB Employees that is not in conformity with the written or otherwise preexisting terms and provisions of such plans.
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(d) Neither WFB nor any ERISA Affiliate has ever maintained a plan subject to Title IV of ERISA or Section 412 of the Code. None of WFB or any ERISA Affiliate has contributed to (or been obligated to contribute to) a “multiemployer plan” within the meaning of Section 3(37) of ERISA. WFB has not contributed to (or been obligated to contribute to) a “multiple employer plan” within the meaning of ERISA Sections 4063 or 4064 or Code Section 413(c) at any time. Neither WFB nor any of its Subsidiaries or ERISA Affiliates have incurred, and there are no circumstances under which they could reasonably be expected to incur, liability under Title IV of ERISA. Neither WFB nor any of its Subsidiaries has ever sponsored, maintained or participated in a multiple employer welfare arrangement as defined in ERISA Section 3(40).
(e) All contributions required to be made with respect to all WFB Benefit Plans have been timely made or accrued on WFB’s financial statements.
(f) Except as set forth in WFB Disclosure Schedule Section 4.15(f), no WFB Benefit Plan provides life insurance, medical, surgical, hospitalization or other employee welfare benefits to any WFB Employee, upon or following his or her retirement or termination of employment for any reason, except as may be required by Law.
(g) All WFB Benefit Plans that are group health plans have been operated in all material respects in compliance in all material respects with the group health plan continuation requirements of Section 4980B of the Code, the employer mandate of Section 4980H of the Code and all other applicable sections of ERISA and the Code, and no material liabilities arising thereunder have occurred and no such liabilities are expected to be assessed.
(h) Except as otherwise provided for in this Agreement or as set forth in WFB Disclosure Schedule Section 4.15(h), neither the execution of this Agreement, shareholder approval of this Agreement or consummation of any of the transactions contemplated by this Agreement (individually or in conjunction with any other event) will (i) entitle any WFB Employee to retention or other bonuses, non-competition payments, or any other payment, (ii) entitle any WFB Employee to severance pay or any increase in severance pay, (iii) accelerate the time of payment or vesting (except as required by Law) or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under or increase the amount payable under any of the WFB Benefit Plans, (iv) result in any breach or violation of, or a default under, any of the WFB Benefit Plans, (v) result in any payment of any amount that would, individually or in combination with any other such payment, be an excess “parachute payment” to a “disqualified individual” as those terms are defined in Section 280G of the Code, or (vi) limit or restrict the right of WFB or, after the consummation of the transactions contemplated hereby, Investar or any of its Subsidiaries, to merge, amend or terminate any of the WFB Benefit Plans.
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(i) Each WFB Benefit Plan that is a non-qualified deferred compensation plan or arrangement within the meaning of Section 409A of the Code, and any underlying award, is in compliance in all material respects with Section 409A of the Code. Neither WFB nor any of its Subsidiaries (x) has any obligation to reimburse or indemnify any participant in a WFB Benefit Plan for any of the interest or penalties specified in Section 409A(a)(1)(B) of the Code that may be currently due or triggered in the future, and (y) has been required to report to any Government Authority any correction or taxes due as a result of a failure to comply with Section 409A of the Code.
(j) No WFB Benefit Plan provides for the gross-up or reimbursement of any Taxes imposed by Section 4999 of the Code or otherwise, and neither WFB nor any of its Subsidiaries has any obligation to reimburse or indemnify any party for such Taxes.
(k) WFB has made available to Investar copies of any Code Section 280G calculations (whether or not final) with respect to any disqualified individual, if applicable, in connection with the transactions contemplated by this Agreement.
Section 4.16 Labor Matters.
(a) Except as disclosed on WFB Disclosure Schedule Section 4.16(a), since January 1, 2021, (i) there has not been any union representation or any labor strike, dispute, work stoppage, lockout, or union organizational campaign pending or, to the Knowledge of WFB, threatened, against WFB or any of its Subsidiaries; (ii) WFB and its Subsidiaries have been in compliance in all material respects with all applicable Laws respecting labor and employment, including provisions thereof relating to fair employment practices (including discrimination, harassment, and retaliation), terms and conditions of employment, immigration, workers’ compensation, occupational safety and health requirements, employee classification, plant closings, mass layoffs, wages and hours, withholdings and deductions, disability rights or benefits, equal opportunity, labor relations, concerted activity, employee leave issues and unemployment insurance and related matters; and (iii) there are not and have not been any pending, or, to the Knowledge of WFB, threatened, charges or claims against WFB or any of its Subsidiaries or any of their respective current or former officers, directors, or employees, before any Governmental Authority (including, without limitation, the Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board or any other federal, state or local agency responsible for the prevention or evaluation of unlawful employment practices); (iv) neither WFB nor any of its Subsidiaries has received written notice of an intent by any such Governmental Authority to investigate such entity and, to the Knowledge of WFB, no such investigation is contemplated; (v) all individuals who have provided services to WFB or any of its Subsidiaries have at all times been accurately classified by such entity with respect to such services as common law employees, leased employees, independent contractors or agents, have been properly classified as exempt or non-exempt employees; and have been properly compensated accordingly, as required by applicable Law; and (vi) WFB and its Subsidiaries are in material compliance with and have effectuated a “mass layoff,” “plant closing,” “relocation” or “termination,” nor incurred any liability or obligation under, the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any state or local equivalent Law that remains unsatisfied.
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(b) WFB Disclosure Schedule Section 4.16(b) sets forth a true, correct and complete list of all individuals employed or engaged by the Company as of the date hereof, including: (i) name; (ii) job title; (iii) principal work location; (iv) job classification (exempt/non-exempt/contractor); (v) full or part-time status; (vi) whether active, on a leave of absence (including the nature of the leave and anticipated return to work date) or on layoff status; (vii) method and rate of compensation (including salary or hourly rate, bonus eligibility, commission, incentive pay and/or any other compensation opportunity); (viii) accrued vacation or other paid time off; (ix) any severance pay or other benefit or right upon termination of employment; and (x) whether said employment is subject to any written agreements, including employment agreements, restrictive covenant agreements, equity or incentive agreements, bonus agreements, labor contracts, change of control agreements, or other written terms. To WFB’s Knowledge, no officer or, to the extent related to their service to WFB or its Subsidiaries, former officer of WFB or any of its Subsidiaries is in material violation of any employment contract, confidentiality, non-competition agreement or any other restrictive covenant.
(c) WFB Disclosure Schedule Section 4.16(c) sets forth a true, correct and complete list of any employee terminated from WFB or any of its Subsidiaries within the twelve (12) months preceding the date hereof, including the information described in (i) through (v) above, and the date of and reason for termination. All severance, settlement, or other obligations to any former employee of WFB and its Subsidiaries have been fully satisfied.
(d) WFB has delivered to Investar true, correct and complete copies of all employee manuals and handbooks, disclosure materials, policy statements and other materials relating to the employment of employees of WFB and its Subsidiaries, as well as all written agreements (including all amendments and modifications thereto) required to be identified in WFB Disclosure Schedule Section 4.16(b).
Section 4.17 Environmental Matters. WFB and its Subsidiaries have been and are in material compliance with all applicable Environmental Laws, including obtaining, maintaining and complying with all permits required under Environmental Laws for the operation of their respective businesses, (b) there is no action or investigation by or before any Governmental Authority relating to or arising under any Environmental Laws that is pending or, to the Knowledge of WFB, threatened against WFB or any of its Subsidiaries or any real property or facility presently owned, operated or leased by WFB or any of its Subsidiaries or any predecessor (including in a fiduciary or agency capacity), (c) neither WFB nor any of its Subsidiaries has received any notice of or is subject to any liability, order, settlement, judgment, injunction or decree involving uncompleted, outstanding or unresolved requirements relating to or arising under Environmental Laws, (d) there have been no releases of Hazardous Substances at, on, under or affecting any of the real properties or facilities presently owned, operated or leased by WFB or any of its Subsidiaries or any predecessor (including in a fiduciary or agency capacity) in amount or condition that has resulted in or would reasonably be expected to result in liability to WFB or any of its Subsidiaries relating to or arising under any Environmental Laws, and (e) there are no underground storage tanks on, in or under any property currently owned, operated or leased by WFB or any of its Subsidiaries. WFB has made available to Investar all environmental audits, site assessments, documentation regarding off-site disposal of Hazardous Substances, reports and other material environmental documents related to any immovable property owned by WFB or its Subsidiaries, including non-residential other real estate, and any immovable property formerly owned or operated by WFB or any of its Subsidiaries or any of their respective predecessors. To the WFB’s Knowledge, neither WFB nor any of its Subsidiaries has made or participated in any Loan to any Person who is subject to any suit, claim, action, proceeding, investigation or notice, pending or threatened, with respect to (i) any alleged material noncompliance as to any property securing such Loan with any Environmental Law, or (ii) the release or the threatened release into the environment of any Hazardous Substances at a site owned, leased or operated by such Person on any property securing such Loan.
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Section 4.18 Tax Matters.
(a) Each of WFB and its Subsidiaries has duly and timely filed (taking into account all applicable extensions) all Tax Returns that it was required to file under applicable Laws. All such Tax Returns were correct and complete in all material respects and were prepared in compliance with all applicable Laws. All Taxes due and owing by WFB or any of its Subsidiaries (whether or not shown on any Tax Return) have been fully and timely paid. Neither WFB nor any of its Subsidiaries is currently the beneficiary of any extension of time within which to file any Tax Return. Neither WFB nor any of its Subsidiaries has ever received written notice of any claim by any Governmental Authority in a jurisdiction where WFB or such Subsidiary does not file Tax Returns that it is or may be subject to Taxes by that jurisdiction. There are no Liens for Taxes (other than Taxes not yet due and payable or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP) upon any of the assets of WFB or any of its Subsidiaries.
(b) WFB and each of its Subsidiaries have collected or withheld and paid over to the appropriate Governmental Authority all amounts of Taxes required to have been collected or withheld and paid over by it, and has complied in all respects with all information reporting and backup withholding requirements under all applicable federal, state, local and foreign Laws in connection with amounts paid or owing to any Person, including Taxes required to have been collected or withheld and paid in connection with amounts paid or owing to any employee or independent contractor, creditor, shareholder or other third party, and Taxes required to be collected or withheld and paid pursuant to Sections 1441, 1442, and 3406 of the Code or similar provisions under state, local, or foreign Law.
(c) No foreign, federal, state or local Tax audits or administrative or judicial Tax proceedings are currently being conducted or pending or have been threatened in writing, in each case, with respect to Taxes of WFB or any of its Subsidiaries. Neither WFB nor any of its Subsidiaries has received from any foreign, federal, state or local taxing authority (including jurisdictions where WFB or any of its Subsidiaries have not filed Tax Returns) any (i) written notice indicating an intent to open an audit, action, suit, proceeding, claim, investigation, examination, or other litigation regarding any Tax or other review with respect to Taxes or (ii) written notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted or assessed by any taxing authority against WFB or any of its Subsidiaries which, in either case (i) or (ii), has not been fully paid or settled. There are no agreements, waivers or other arrangements providing for an extension of time with respect to the assessment of any Tax or deficiency against WFB or any of its Subsidiaries, and neither WFB nor any of its Subsidiaries has waived or extended the applicable statute of limitations for the assessment or collection of any Tax or agreed to a Tax assessment or deficiency.
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(d) WFB has delivered or made available to Investar true, correct and complete copies of all income and other material Tax Returns filed with respect to WFB or any of its Subsidiaries with regards to any and all Taxes, and of all examination reports and statements of deficiencies assessed against or agreed to by WFB or any of its Subsidiaries, in each case for which the statute of limitations has not expired and any material correspondence with Governmental Authorities with respect to such Tax Returns.
(e) Neither WFB nor any of its Subsidiaries has been a United States real property holding corporation within the meaning of Code Section 897(c)(2) during the applicable period specified in Code Section 897(c)(1)(A)(ii). Neither WFB nor any of its Subsidiaries is a party to or is otherwise bound by any Tax allocation, sharing agreement or similar agreement pursuant to which it has any material obligation to any Person with respect to Taxes. Neither WFB nor any of its Subsidiaries (i) has been a member of an affiliated group filing a consolidated federal income Tax Return (other than a group the common parent of which was WFB), or (ii) has any liability for the Taxes of any Person (other than WFB and its Subsidiaries) under Regulations Section 1.1502-6 (or any similar provision of foreign, state or local Law), as a transferee or successor, by contract, or otherwise.
(f) The most recent Financial Statements as of the date hereof reflect an adequate reserve, in accordance with GAAP, for all Taxes payable by WFB and its Subsidiaries for all taxable periods through the date of such Financial Statements. Since December 31, 2024, neither WFB nor any of its Subsidiaries has incurred any liability for Taxes arising from extraordinary gains or losses, as that term is used in GAAP, outside the Ordinary Course of Business. Since the most recent Financial Statements, neither WFB nor any of its Subsidiaries has made or is subject to any amendment or other change to any Tax Return, election, agreement, method, practice, or principle regarding Taxes (other than any change resulting from changes in applicable Law).
(g) Neither WFB nor any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Effective Time as a result of any: (i) change in method of accounting pursuant to Section 481 of the Code or any comparable provision under foreign, state or local Law for a taxable period ending on or prior to the Closing Date; (ii) “closing agreement” as described in Code Section 7121 (or any corresponding or similar provision of foreign, state or local Law) executed on or prior to the Closing Date; (iii) intercompany transactions or any excess loss account described in Regulations under Code Section 1502 (or any corresponding or similar provision of foreign, state or local Law); (iv) installment sale or open transaction disposition made on or prior to the Closing Date; or (v) prepaid amount received on or prior to the Closing Date.
(h) Since January 1, 2021, neither WFB nor any of its Subsidiaries has distributed stock of another Person nor had its stock distributed by another Person in a transaction that was intended to be nontaxable and governed in whole or in part by Section 355 or Section 361 of the Code.
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(i) Neither WFB nor any of its Subsidiaries has been a party to any “reportable transaction,” as defined in Section 6707A(c)(1) of the Code and Section 1.6011-4(b)(1) of the Regulations in any tax year.
(j) Neither WFB nor any of its Subsidiaries (i) is a “controlled foreign corporation” as defined in Section 957 of the Code, (ii) is a “passive foreign investment company” within the meaning of Section 1297 of the Code, or (iii) has a permanent establishment (within the meaning of an applicable Tax treaty) or otherwise has an office or fixed place of business in a country other than the country in which it is organized.
(k) Neither WFB nor any of its Subsidiaries has taken or agreed to take any action, or is aware of any fact or circumstance, that would be reasonably likely to prevent the Merger or the Bank Merger from qualifying for U.S. federal income tax purposes as a “reorganization” within the meaning of Section 368(a) of the Code.
(l) Set forth in WFB Disclosure Schedule Section 4.18(l) are the net operating loss, net capital loss, credit, minimum Tax, charitable contribution, and other Tax carryforwards (by type of carryforward and expiration date, if any) of WFB and each of its Subsidiaries. Except as set forth on WFB Disclosure Schedule Section 4.18(l), none of those carryforwards are, as of the Closing Date and without giving effect to the Merger, presently subject to limitation under Sections 382, 383, or 384 of the Code, or the federal consolidated return regulations, or any analogous provision of foreign, state, or local Tax Law.
(m) Neither WFB nor any of its Subsidiaries (i) has been a member of a combined, consolidated, affiliated, or unitary group Tax purposes (other than a group the common parent of which was WFB), and (ii) has any liability for the Taxes of any Person (other than the WFB or any of its Subsidiaries), under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee, successor or as a result of similar liability, operation of law, by contract or otherwise.
(n) Neither WFB nor any of its Subsidiaries filed a Tax Return claiming Employee Retention Credits created under Section 2301 of the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. 116–136.
(o) Neither WFB nor any of its Subsidiaries owns any equity interest in any Person classified as a Partnership for Tax purposes.
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(p) WFB made an election to be treated as an S corporation under Subchapter S of the Code effective January 1, 1998 (“S Election Date”); such election was revoked by WFB in the manner permitted under section 1362 of the Code effective January 1, 2024 (“Revocation Date”); and such election at all times remained validly in effect from the S Election Date through the Revocation Date. Effective as of the S Election Date, WFB made a valid election for FNB to be taxed as a qualified subchapter S subsidiary (within the meaning of section 1361(b)(3)(B) of the Code), and such election at all times remained validly in effect from the S Election Date through the Revocation Date. With respect to each Subsidiary of WFB (other than FNB) owned by WFB at any time between the S Election Date and the Revocation Date, WFB made a valid election for each such Subsidiary to be taxed as a qualified subchapter S subsidiary, effective as of the later of the S Election Date and the date on which WFB acquired such Subsidiary, and such election at all times remained validly in effect from such effective date through the Revocation Date. Neither WFB, nor any Subsidiary or shareholder of WFB, has taken any action that would cause WFB to cease being an S corporation within the meaning of section 1361 of the Code or any such Subsidiary to cease being a qualified subchapter S subsidiary within the meaning of section 1361(b)(3)(B) of the Code. Neither WFB nor FNB has any potential liability for any Tax under section 1374 of the Code.
(q) For any tax year of WFB beginning on or after the S Election Date, no audit by the IRS has commenced or been completed under sections 6241 through 6245 of the Code regarding Subchapter S items. To WFB’s Knowledge, for any tax year of WFB beginning after the S Election Date, each shareholder’s treatment of Subchapter S items with respect to WFB is consistent with the manner in which WFB has filed its Tax Returns, and no audit by the IRS of any shareholder of WFB has occurred.
(r) Neither WFB nor FNB was subject to any disallowance of interest expense under section 291(a)(3) of the Code (or any similar provision of state, local, or foreign Tax law) between the S Election Date and the Revocation Date.
Section 4.19 Investment Securities.
(a) WFB Disclosure Schedule Section 4.19(a) sets forth, as of April 30, 2025, all investment securities owned by WFB or any of its Subsidiaries, including descriptions thereof, CUSIP numbers, designations as securities “available for sale” or securities “held to maturity”, book values and coupon rates, and any unrealized gain or loss with respect to any investment securities.
(b) Each of WFB and its Subsidiaries has good title to all securities and commodities owned by it (except those sold under repurchase agreements), free and clear of any Liens, except as set forth in the Financial Statements and except to the extent such securities or commodities are pledged in the Ordinary Course of Business to secure obligations of WFB or its Subsidiaries. Such securities and commodities are valued on the books of WFB in accordance with GAAP in all material respects. WFB and its Subsidiaries employ investment, securities, commodities, risk management, and other similar policies, practices, and procedures that management of WFB and its Subsidiaries reasonably believes are prudent and reasonable in the context of their respective businesses, and, since January 1, 2021, WFB and each of its Subsidiaries have been in compliance with such policies, practices, and procedures in all material respects. WFB has made available to Investar true, correct and complete copies (or, to the extent not in writing, summaries) of all such policies, practices and procedures.
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Section 4.20 Derivative Transactions. Neither WFB nor any of its Subsidiaries engages in any Derivative Transactions, whether entered into for the account of WFB or any of its Subsidiaries or for the account of a customer of WFB or any of its Subsidiaries.
Section 4.21 Regulatory Capitalization. FNB is “well-capitalized” and “well managed,” as such terms are defined in the rules and regulations promulgated by the OCC. WFB is “well-capitalized” and “well-managed,” as such terms are defined in the rules and regulations promulgated by the FRB.
Section 4.22 Loans; Nonperforming and Classified Assets.
(a) WFB Disclosure Schedule Section 4.22(a) sets forth all loans, loan agreements, notes or borrowing arrangements and other extensions of credit (including, without limitation, leases, credit enhancements, commitments, guarantees and interest-bearing assets) (collectively, “Loans”) in which WFB or any of its Subsidiaries is a creditor which, as of April 30, 2025, was over sixty (60) days or more delinquent in payment of principal or interest.
(b) WFB Disclosure Schedule Section 4.22(b) sets forth, as of April 30, 2025, (i) each Loan of WFB or any of its Subsidiaries that was classified as “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified,” “Criticized,” “Credit Risk Assets,” “Concerned Loans,” “Watch List” or words of similar import by FNB, WFB or any bank examiner, or that has been identified by accountants or auditors (internal or external) as having a significant risk of uncollectibility, together with the principal amount of and accrued and unpaid interest on each such Loan, the allocated or specific allowance for credit losses, and the identity of the borrower thereunder, and the aggregate principal amount of such Loans by category of Loan (e.g., commercial, consumer, etc.), and (ii) each Loan classified by FNB as a Troubled Debt Restructuring as defined by GAAP. No Governmental Authority or third party has: (i) asserted that FNB has violated or has not complied with the representations and warranties applicable with respect to any Loans originated or purchased and subsequently sold, in each case, since January 1, 2021, or sale of Loan servicing rights to a third party; or (ii) imposed restrictions on the activities (including commitment authority) of FNB.
(c) WFB Disclosure Schedule Section 4.22(c) identifies (i) each asset of WFB or any of its Subsidiaries that as of April 30, 2025 was classified as other real estate owned (“OREO”), “other repossessed assets” or an asset to satisfy Loans, and the book value thereof as of April 30, 2025, (ii) each asset classified as OREO, “other repossessed assets” or an asset to satisfy Loans between December 31, 2023 and April 30, 2025, and any sales of such assets between December 31, 2023 and April 30, 2025, reflecting any gain or loss with respect to such asset.
(d) Each Loan held in WFB’s or any of its Subsidiaries’ loan portfolio (each a “WFB Loan”) (i) is evidenced by notes, agreements or other evidences of indebtedness that are true, genuine and what they purport to be, (ii) to the extent secured, is and has been secured by valid Liens which have been perfected, (iii) to the extent guaranteed, such guarantees are valid and enforceable and (iv) is a legal, valid and binding obligation of WFB or the WFB Subsidiary, as applicable, and the obligor named therein, enforceable in accordance with its terms, except as enforceability may be limited by the Enforceability Exception. Except as would not reasonably be expected to be material, all pledges, mortgages, deeds of trust, and other collateral documents and security agreements related to the WFB Loans are legal, valid, binding and enforceable (except as enforceability may be limited by the Enforceability Exception).
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(e) All currently outstanding WFB Loans (i) were solicited, originated and currently exist, and the relevant WFB Loan files are maintained, in material compliance with all applicable requirements of Law, the applicable loan documents, and FNB’s lending policies at the time of origination of such WFB Loans, and (ii) were made or originated for good, valuable, and adequate consideration in the Ordinary Course of Business; and the notes or other credit or security documents with respect to each such outstanding WFB Loan are complete and correct in all material respects. There are no oral modifications or amendments or additional agreements related to the WFB Loans that are not reflected in the written records of WFB or its Subsidiary, as applicable. All such WFB Loans are owned by WFB or its Subsidiary free and clear of any Liens, except for WFB Loans pledged to the Federal Home Loan Bank of Dallas, as set forth on WFB Disclosure Schedule Section 4.22(e). No claims of defense as to the enforcement of any WFB Loan have been asserted in writing against WFB or any of its Subsidiaries for which there is a reasonable possibility of an adverse determination, and WFB has no Knowledge of any acts or omissions which would give rise to any claim or right of rescission, set-off, counterclaim or defense for which there is a reasonable possibility of an adverse determination to WFB or any of its Subsidiaries. No WFB Loans are presently serviced by third parties, and there is no obligation which could result in any WFB Loan becoming subject to any third party servicing.
(f) Neither WFB nor any of its Subsidiaries is a party to any Recourse Agreement, or is otherwise obligated to repurchase from any Person, or provide any indemnification with respect to, any Loan or other asset sold by WFB or any of its Subsidiaries. None of the agreements pursuant to which WFB or any of its Subsidiaries has sold Loans or pools of Loans or participations in Loans or pools of Loans contains any obligation to repurchase such Loans or interests therein solely on account of a payment default by the obligor on any such Loan, and, to the Knowledge of the Company, there are no claims for any such repurchase. WFB Disclosure Schedule Section 4.22(f) sets forth a true, correct and complete report regarding the current status of (i) any repurchase requests received by WFB or any of its Subsidiaries to repurchase any Loan or interests therein, and (ii) the reserves of WFB and its Subsidiaries in respect of potential repurchase requests to repurchase any Loan or interests therein. For purposes of this Agreement, “Recourse Agreements” means agreements or arrangements with any Person that obligate WFB or any of its Subsidiaries to repurchase from any such Person any Loan or other asset sold by WFB or any of its Subsidiaries under any circumstances or that entitles any such Person to pursue any other form of recourse against WFB or any of its Subsidiaries, including indemnification. WFB has made available to Investar true, correct and complete copies of Recourse Agreements and all agreements pursuant to which the WFB or any of its Subsidiaries has sold Loans or pools of Loans or participations in Loans or pools of Loans to any third party.
(g) Neither WFB nor any of its Subsidiaries is now nor has it ever been since January 1, 2021, subject to any fine, suspension, settlement or other contract or other administrative agreement or sanction by, or any reduction in any loan purchase commitment from, any Governmental Authority relating to the origination, sale or servicing of mortgage or consumer Loans.
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(h) Neither WFB nor any of its Subsidiaries has canceled, released or compromised any Loan, obligation, claim or receivable other than in the ordinary course of business.
(i) Neither WFB nor any of its Subsidiaries has, since January 1, 2021, extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal Loan to or for any director, executive officer, or principal shareholder (or equivalent thereof) of WFB or any of its Subsidiaries (as such terms are defined in Regulation O promulgated by the Federal Reserve Board (“Regulation O”)), except as permitted by Regulation O and that have been made in compliance with the provisions of Regulation O. WFB Disclosure Schedule Section 4.22(i) identifies any Loan or extension of credit maintained by WFB or any of its Subsidiaries to which Regulation O applies, and there has been no default on, or forgiveness of waiver of, in whole or in part, any such Loan during the two (2) years preceding the date hereof.
(j) WFB Disclosure Schedule Section 4.22(j) identifies each Loan to a Governmental Authority.
Section 4.23 Allowance for Credit Losses. WFB’s allowance for credit losses as reflected in each of (a) the latest balance sheet included in the Financial Statements and (b) in the balance sheet as of December 31, 2024 included in the Financial Statements, were, in the opinion of management, as of each of the dates thereof, in compliance in all material respects with WFB’s existing methodology for determining the adequacy of its allowance for credit losses as well as the standards established by applicable Governmental Authority, the Financial Accounting Standards Board and GAAP.
Section 4.24 Trust Business; Administration of Fiduciary Accounts. Neither WFB nor any of its Subsidiaries has offered or engaged in providing any individual or corporate trust services or administers any accounts for which it acts as a fiduciary, including, but not limited to, any accounts in which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor.
Section 4.25 Investment Management and Related Activities. None of WFB, any WFB Subsidiary or any of their respective directors, officers or employees, in each of their respective capacities as a director, officer, or employee of WFB or any WFB Subsidiary, is required to be registered, licensed or authorized under the Laws of any Governmental Authority as an investment adviser, a broker or dealer, an insurance agency, a commodity trading adviser, a commodity pool operator, a futures commission merchant, an introducing broker, a registered representative or associated person, investment adviser, representative or solicitor, a counseling officer, an insurance agent, a sales person or in any similar capacity with a Governmental Authority.
Section 4.26 Repurchase Agreements. With respect to all agreements pursuant to which WFB or any of its Subsidiaries has purchased securities subject to an agreement to resell, if any, WFB or any of its Subsidiaries, as the case may be, has a valid, perfected first lien or security interest in the government securities or other collateral securing the repurchase agreement, and the value of such collateral equals or exceeds the amount of the debt secured thereby. WFB has made available to Investar true, correct and complete copies of all such repurchase agreements, including any and all amendments and modifications thereto.
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Section 4.27 Deposit Insurance. The deposits of FNB are insured by the FDIC in accordance with the Federal Deposit Insurance Act (“FDIA”) to the fullest extent permitted by Law, and FNB has paid all premiums and assessments and filed all reports required by the FDIA. No proceedings for the revocation or termination of such deposit insurance are pending or, to WFB’s Knowledge, threatened.
Section 4.28 Transactions with Affiliates. Except as set forth on WFB Disclosure Schedule Section 4.03(a), there are no outstanding amounts payable to or receivable from, or advances by WFB or any of its Subsidiaries to, and neither WFB nor any of its Subsidiaries is otherwise a creditor or debtor to (a) any director, executive officer, five percent (5%) or greater shareholder of WFB or any of its Subsidiaries or to any of their respective Affiliates or Associates, other than as part of the normal and customary terms of such person’s employment or service as a director with WFB or any of its Subsidiaries and other than deposits held by FNB in the Ordinary Course of Business, or (b) any other Affiliate of WFB or any of its Subsidiaries. Neither WFB nor any of its Subsidiaries is a party to any transaction or agreement with any of its respective directors, executive officers or other Affiliates, other than part of the terms of an individual’s employment or service as a director in the Ordinary Course of Business. All agreements between FNB and any of its Affiliates (or any company treated as an affiliate for purposes of such Law) comply, to the extent applicable, with Sections 23A and 23B of the Federal Reserve Act and Regulation W of the FRB. WFB has made available to Investar true, correct and complete copies of all agreements between WFB or FNB and any of their respective Affiliates.
Section 4.29 Tangible Properties and Assets.
(a) WFB Disclosure Schedule Section 4.29(a) sets forth a true, correct and complete list of all real property owned by each of WFB and its Subsidiaries. WFB or its Subsidiaries has good and marketable title to all of the real property owned by WFB or its respective Subsidiary, free and clear of any Lien, except for (i) statutory Liens for amounts not yet delinquent, and (ii) easements, rights of way, and other similar Liens that do not materially affect the value or use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties. There is no pending or, to WFB’s Knowledge, threatened legal, administrative, arbitral or other proceeding, claim, action or governmental or regulatory investigation of any nature with respect to the real property that WFB or any of its Subsidiaries owns, uses or occupies or has the right to use or occupy, now or in the future, including without limitation a pending or threatened taking of any of such real property by eminent domain. True, correct and complete copies of all deeds evidencing ownership of all real property owned by WFB and its Subsidiaries and true, correct and complete copies of the title insurance policies and surveys, if any, for each such property, together with true, correct and complete copies of any mortgages, deeds of trust and security agreements to which such property is subject, have been furnished or made available to Investar.
(b) No Person other than WFB and its Subsidiaries has (or will have, at Closing) (i) any right in any real property owned by WFB or its Subsidiaries or any right to use or occupy any portion of such real property or (ii) any right to use or occupy any portion of the premises subject to any lease. Neither WFB nor any of its Subsidiaries use in its business any material real property other than the real property owned by WFB and its Subsidiaries and the premises subject to the Leases.
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(c) WFB Disclosure Schedule Section 4.29(c) sets forth a true, correct and complete schedule of all leases, subleases, licenses and other agreements under which WFB or any of its Subsidiaries uses or occupies or has the right to use or occupy, now or in the future, real property (the “Leases”). Each of the Leases is valid, binding and in full force and effect and neither WFB nor any of its Subsidiaries has received a written notice of, and otherwise has no Knowledge of any, default or termination with respect to any Lease. To WFB’s Knowledge, there has not occurred any event and no condition exists that would constitute a termination event or a breach by WFB or any of its Subsidiaries of, or default by WFB or any of its Subsidiaries in, the performance of any covenant, agreement or condition contained in any Lease. To WFB’s Knowledge, no lessor under a Lease is in material breach or default in the performance of any material covenant, agreement or condition contained in such Lease. WFB and each of its Subsidiaries has paid all rents and other charges to the extent due under the Leases and are in possession of the properties purported to be leased thereunder. True and complete copies of all Leases for, or other documentation evidencing ownership of or a leasehold interest in, the properties listed in WFB Disclosure Schedule Section 4.29(c), have been furnished or made available to Investar.
(d) WFB and each of its Subsidiaries has good and marketable title to, valid leasehold interests in or otherwise legally enforceable rights to use all of the personal property and other assets (tangible or intangible) used, operated or held for use by it in connection with its business as presently conducted in each case, free and clear of any Lien, except for statutory Liens for amounts not yet delinquent, and other similar Liens that do not materially affect the value or use of the assets subject thereto or affected thereby or otherwise materially impair the use or operation of such property.
(e) All buildings, structures, fixtures, building systems and equipment, and all components thereof, including the roof, foundation, load-bearing walls and other structural elements thereof, heating, ventilation, air conditioning, mechanical, electrical, plumbing and other building systems, environmental control, remediation and abatement systems, sewer, storm and waste water systems, irrigation and other water distribution systems, parking facilities, fire protection, security and surveillance systems, and telecommunications, computer, wiring and cable installations, included in the owned real property or the subject of the Leases are in good condition and repair (normal wear and tear excepted) and sufficient for the operation of the business of WFB and its Subsidiaries.
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Section 4.30 Intellectual Property.
(a) WFB Disclosure Schedule Section 4.30 contains a true, correct and complete list of all Intellectual Property, and all registrations (including domain name registrations) and any applications for registration of any Intellectual Property, owned or purported to be owned by WFB or any of its Subsidiaries and identifies the applicable owner. WFB or one of its Subsidiaries, as applicable, is the sole and exclusive owner of all WFB Intellectual Property owned or purported to be owned by it and holds all of its right, title and interest in and to all owned Intellectual Property and all Intellectual Property licensed by it from third parties free and clear of any Liens. Neither WFB nor any of its Subsidiaries, nor the conduct of any of their respective businesses, has infringed, misappropriated, used without authorization or otherwise violated the Intellectual Property rights of any Person. Each of WFB and its Subsidiaries owns, or otherwise has valid and sufficient rights to use, all Intellectual Property used or held for use in, or necessary for, its business as such business is currently conducted. WFB and its Subsidiaries have taken reasonable steps in accordance with normal industry practice to maintain the confidentiality of all WFB Intellectual Property the value of which is contingent upon maintaining the confidentiality thereof. No Person is infringing, misappropriating or otherwise violating any WFB Intellectual Property, except where such infringement, misappropriation or other violation would not have any adverse impact on WFB and its Subsidiaries. No charges, claims or litigation have been asserted or, to WFB’s Knowledge, threatened against WFB or any of its Subsidiaries (x) contesting the right to use by WFB or any of its Subsidiaries, or the validity of, any of the WFB Intellectual Property; (y) challenging or questioning the validity or effectiveness of any license or agreement pertaining thereto or asserting the misuse thereof; or (z) claiming that WFB or any of its Subsidiaries has infringed, misappropriated or otherwise violated any Intellectual Property rights of any Person, and no valid basis exists for the assertion of any such charge, claim or litigation. the consummation of the transactions contemplated hereby will not result in the material loss or impairment of the right of the Surviving Company or any of its Subsidiaries to own or use any of the WFB Intellectual Property.
(b) WFB and its Subsidiaries (i) have used reasonable care in protecting the confidentiality, integrity, availability, and security of the IT Assets, their networks, and all customer, employee, confidential, proprietary or other sensitive data, (ii) respective IT Assets operate and perform in all material respects as required by WFB and its Subsidiaries in connection with their respective businesses, (iii) respective IT Assets, to WFB’s Knowledge, have not materially malfunctioned or failed since January 1, 2021, and (iv) have implemented reasonable backup, security and disaster recovery technology plans and procedures consistent with industry practices, act in compliance with such plans and procedures and have taken reasonable care to test such plans and procedures on a periodic basis, and such plans and procedures have been proven effective upon such testing in all material respects. As used in this Agreement, “IT Assets” means, with respect to any Person, the computers, computer software, firmware, middleware, servers, workstations, routers, hubs, switches, data, data communications lines and all other information technology equipment, and all associated documentation, owned by such Person or such Person’s Subsidiaries.
(c) WFB and its Subsidiaries (i) are compliant with all applicable data protection and privacy Laws, and their own privacy policies and commitments to their respective customers, consumers and employees, concerning data protection and the privacy and security of personal data and the nonpublic personal information of their respective customers, consumers and employees, (ii) have developed and implemented safeguards, policies, procedures, and training programs to ensure past, current, and ongoing compliance with all applicable data protection and privacy Laws, (iii) since January 1, 2021, have not received any notice asserting any violations of any of the foregoing, (iv) since January 1, 2021, have not been the subject of any data breach or cybersecurity incident in which any customer, employee, confidential, proprietary or other sensitive data was accessed, acquired or used by any unauthorized person, and (v) since January 1, 2021, have not received notice from any third party with whom WFB or any of its Subsidiaries have shared customer, employee, confidential, proprietary or other sensitive data of any unauthorized acquisition, access, use or disclosure of such data received from or on behalf of WFB or any of its Subsidiaries that would trigger a notification or reporting requirement under applicable data protection and privacy Laws. The transfer of all such personal data and nonpublic personal information to Investar’s control in connection with the consummation of the transactions contemplated hereby will not violate any such Laws, privacy policies or commitments.
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Section 4.31 Insurance.
(a) WFB Disclosure Schedule Section 4.31(a) sets forth a true, correct and complete description of all policies of insurance, including fidelity and bond insurance, but excluding BOLI (as defined below), of WFB and its Subsidiaries, including the insurer, policy numbers, amount of coverage, effective and termination dates and any pending claims thereunder involving more than $25,000. WFB and its Subsidiaries are insured with reputable insurers against such risks and in such amounts as the management of WFB and FNB reasonably have determined to be prudent and consistent with industry practice, and WFB and its Subsidiaries are in compliance in all material respects with their insurance policies and are not in default under any of the terms thereof. Each such policy is outstanding and in full force and effect and, except for policies insuring against potential liabilities of current or former officers, directors and employees of WFB and its Subsidiaries, WFB or the relevant Subsidiary thereof is the sole beneficiary of such policies. All premiums and other payments due under any such policy have been paid, and all claims thereunder have been filed in due and timely fashion. There is no claim for coverage by WFB or any of its Subsidiaries pending under any insurance policy as to which coverage has been questioned, denied or disputed by the underwriters of such insurance policy. Neither WFB nor any of its Subsidiaries has received notice of any threatened termination of, material premium increase with respect to, or material alteration of coverage under, any insurance policies. Neither WFB nor any of its Subsidiaries has received written notice that any insurer under any such insurance policy (i) is denying liability with respect to a claim thereunder or defending under a reservation of rights clause or (ii) has filed for protection under applicable bankruptcy or insolvency Laws or is otherwise in the process of liquidating or has been liquidated. Neither WFB nor any of its Subsidiaries has or maintains any self-insurance arrangement. WFB has made available to Investar true, correct and complete copies of all insurance policies included on WFB Disclosure Schedule Section 4.31(a), including any and all amendments and modifications thereto, and copies of all other material documents related thereto.
(b) WFB Disclosure Schedule Section 4.31(b) sets forth a true, correct and complete description of all bank owned life insurance (“BOLI”) owned by WFB or its Subsidiaries, including the value of its BOLI as of the end of the month prior to the date hereof. The value of such BOLI is and has been fairly and accurately reflected in the most recent balance sheet included in the Financial Statements in accordance with GAAP. All BOLI is owned solely by FNB, no other Person has any ownership claims with respect to such BOLI or proceeds of insurance derived therefrom and there is no split dollar or similar benefit under WFB’s BOLI. Neither WFB nor any of WFB’s Subsidiaries has any outstanding borrowings secured in whole or part by its BOLI.
Section 4.32 Antitakeover Provisions. No “control share acquisition,” “business combination moratorium,” “fair price” or other form of antitakeover statute or regulation (each, a “Takeover Statute”) is applicable to WFB with respect to this Agreement and the transactions contemplated hereby.
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Section 4.33 WFB Information. The information relating to WFB and its Subsidiaries that is provided by or on behalf of WFB for inclusion in the Joint Proxy Statement/Prospectus and the Registration Statement will not (with respect to the Joint Proxy Statement/Prospectus, as of the date the Joint Proxy Statement/Prospectus is first mailed to WFB’s shareholders, and with respect to the Registration Statement, as of the time the Registration Statement or any amendment or supplement thereto is declared effective under the Securities Act) contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading. The portions of the Joint Proxy Statement/Prospectus relating to WFB and WFB’s Subsidiaries and other portions thereof within the reasonable control of WFB and its Subsidiaries will comply as to form in all material respects with the provisions of the Exchange Act, and the rules and regulations thereunder.
Section 4.34 Information Security. Except as would not reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect on WFB, to the Knowledge of WFB, no third party has gained unauthorized access to any information technology networks controlled by and material to the operation of the business of WFB and its Subsidiaries.
Section 4.35 Transactional Expenses. WFB Disclosure Schedule Section 4.35 sets forth an accounting of all Transactional Expenses that WFB and its Subsidiaries anticipates incurring or has incurred through the Closing Date, including a good faith estimate of such expenses incurred but as to which invoices have not been submitted as of the Closing Date.
Section 4.36 Deposits. All of the deposits held by FNB (including the records and documentation pertaining to such deposits) have been established and are held in compliance in all material respects with (a) all applicable policies, practices and procedures of FNB, and (b) all applicable Laws, including money laundering Laws and anti-terrorism or embargoed Persons requirements. No deposit of FNB is a “brokered deposit” (within the meaning set forth in 12 C.F.R. § 337.6(a)(2)) or is subject to any encumbrance, legal restraint or other legal process (other than garnishments, pledges, set-off rights escrow limitations and similar actions taken in the ordinary course of business). WFB Disclosure Schedule Section 4.36 sets forth a true, correct and complete schedule of all outstanding overdrafts as of April 30, 2025.
Section 4.37 Disaster Recovery and Business Continuity.
WFB and its Subsidiaries have developed and implemented a contingency planning program in accordance with best industry standards to evaluate the effect of significant events that may adversely affect the customers, assets or employees of WFB and its Subsidiaries. To WFB’s Knowledge, such program ensures that the WFB and its Subsidiaries can recover their mission critical functions, and such program complies in all material respects with the requirements of the Federal Financial Institutions Examination Council, the OCC and applicable Law. WFB has furnished to Investar a true, correct and complete copy of its disaster recovery and business continuity arrangements.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF INVESTAR
Except as set forth (a) in any registration statement, prospectus, report, schedule or definitive proxy statement filed with or furnished to the SEC by Investar between January 1, 2020 and the date hereof (but disregarding disclosures of risks under the heading “Risk Factors” or in any “forward-looking statements” disclaimer or any other statements that are similarly nonspecific or cautionary, predictive, or forward-looking in nature) or (b) in the disclosure schedule delivered by Investar to WFB prior to or concurrently with the execution of this Agreement with respect to each such Section below (the “Investar Disclosure Schedule”), Investar hereby represents and warrants to WFB as follows:
Section 5.01 Organization and Standing. Each of Investar and its Subsidiaries is (a) an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation and (b) is duly licensed or qualified to do business and in good standing in each jurisdiction where its ownership or leasing of property or the conduct of its business requires such qualification, except where the failure to be so licensed or qualified has not had, and is not reasonably likely to have, a Material Adverse Effect with respect to Investar.
Section 5.02 Capital Stock. As of the date of this Agreement, the authorized capital stock of Investar consists of 40,000,000 shares of Investar Common Stock, par value $1.00 per share, and 5,000,000 shares of preferred stock, no par value. As of the date of this Agreement, 9,839,848 shares of Investar Common Stock were issued and outstanding, and except as disclosed on Investar Disclosure Schedule Section 5.02, no shares of preferred stock were issued and outstanding. The outstanding shares of Investar Common Stock have been duly authorized and validly issued and are fully paid and non-assessable and have not been issued in violation of nor are they subject to preemptive rights of any Investar shareholder. The shares of Investar Common Stock to be issued pursuant to this Agreement have been validly authorized and, when issued in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and will not be subject to preemptive rights.
Section 5.03 Corporate Power. Each of Investar and its Subsidiaries has the corporate or similar power and authority to carry on its business as it is now being conducted and to own or lease all of its properties and assets. Investar has the corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby, subject only to receipt of all necessary approvals of Governmental Authorities and the Requisite Investar Shareholder Approval. Investar knows of no reason that the Requisite Investar Shareholder Approval will not be received at the Investar Meeting.
Section 5.04 Corporate Authority. Except for the Requisite Investar Shareholder Approval, no other corporate proceedings on the part of Investar are necessary to approve this Agreement or to consummate the transactions contemplated hereby. Investar has duly executed and delivered this Agreement and, assuming due authorization, execution and delivery by WFB, this Agreement is a valid and legally binding obligation of Investar, enforceable in accordance with its terms, subject to the Enforceability Exception.
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Section 5.05 SEC Documents; Financial Statements.
(a) Except as would not reasonably be expected to have a Material Adverse Effect on Investar, Investar has filed all required reports, forms, schedules, registration statements and other documents with the SEC that it has been required to file since January 1, 2021 (the “Investar Reports”), and has paid all fees and assessments due and payable in connection therewith. As of their respective dates of filing with the SEC (or, if amended or superseded by a subsequent filing prior to the date hereof, as of the date of such subsequent filing), the Investar Reports complied as to form in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Investar Reports, and none of the Investar Reports when filed with the SEC, or if amended prior to the date hereof, as of the date of such amendment, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except, in each case, as would not reasonably be expected to have a Material Adverse Effect on Investar. As of the date of this Agreement, no executive officer of Investar has failed in any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act. As of the date of this Agreement, there are no outstanding comments from or unresolved issues raised by the SEC with respect to any of the Investar Reports.
(b) The consolidated financial statements of Investar included (or incorporated by reference) in the Investar Reports (including the related notes, where applicable) complied as to form, as of their respective dates of filing with the SEC (or, if amended or superseded by a subsequent filing prior to the date hereof, as of the date of such subsequent filing), in all material respects, with all applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto (except, in the case of unaudited statements, as permitted by the rules of the SEC), have been prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be disclosed therein), and fairly present, in all material respects, the consolidated financial position of Investar and its Subsidiaries and the consolidated results of operations, changes in shareholders’ equity and cash flows of such companies as of the dates and for the periods shown. The books and records of Investar and its Subsidiaries have been, and are being, maintained in accordance with GAAP and any other applicable legal and accounting requirements, reflect only actual transactions and there are no material misstatements, omissions, inaccuracies or discrepancies contained or reflected therein.
(c) Investar (i) has established and maintained disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act, and (ii) has disclosed, based on its most recent evaluation, to its outside auditors and the audit committee of Investar’s board of directors (A) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect Investar’s ability to record, process, summarize and report financial data and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in Investar’s internal control over financial reporting. These disclosures were made in writing by management to Investar’s auditors and audit committee. Investar does not have Knowledge of any reason to believe that Investar’s outside auditors and its Chief Executive Officer and Chief Financial Officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act, without qualification, when next due.
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(d) Since January 1, 2021, neither Investar nor any of its Subsidiaries nor, to Investar’s Knowledge, any director, officer, employee, auditor, accountant or representative of Investar or any of its Subsidiaries has received, or otherwise had or obtained Knowledge of, any material complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of Investar or any of its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that Investar or any of its Subsidiaries has engaged in questionable accounting or auditing practices.
Section 5.06 Regulatory Reports. Since January 1, 2021, Investar and each of its Subsidiaries has timely filed with the FRB, OCC, any SRO and any other applicable Governmental Authority, in correct form, all reports, registration statements and other documents required to be filed under applicable Laws and have paid all fees and assessments due and payable in connection therewith, and such reports were complete and accurate and in compliance in all material respects with the requirements of applicable Laws, except where the failure to file such report or statement or to pay such fees and assessments, either individually or in the aggregate, would not reasonably be likely to have a Material Adverse Effect with respect to Investar. Except for normal examinations conducted by a Governmental Authority in the regular course of business of Investar and its Subsidiaries, no Governmental Authority has notified Investar that it has initiated or has pending any proceeding or, to the Knowledge of Investar, threatened an investigation into the business or operations of Investar or any of its Subsidiaries since January 1, 2021, except where such proceedings or investigation would not reasonably be likely to have, either individually or in the aggregate, a Material Adverse Effect with respect to Investar. There is no unresolved violation, criticism or exception by any Governmental Authority with respect to any report filed by, or relating to any examinations or inspections by any such Governmental Authority of Investar or any of its Subsidiaries which would reasonably be likely to have, either individually or in the aggregate, a Material Adverse Effect with respect to Investar.
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Section 5.07 Regulatory Approvals; No Defaults. No consents or approvals of, or waivers by, or filings or registrations with, any Governmental Authority are required to be made or obtained by Investar or any of its Subsidiaries in connection with the execution, delivery or performance by Investar of this Agreement or to consummate the transactions contemplated by this Agreement, including the Bank Merger, except for (i) the Regulatory Approvals; (ii) the filing with the SEC and the filing and declaration of effectiveness of the Registration Statement; (iii) the Requisite Investar Shareholder Approval; (iv) the filing of the Certificates of Merger contemplated by Section 2.01(a) and the filing of documents with the OCC, the Secretaries of State of the States of Louisiana and Texas or other applicable state or federal banking agencies to cause the Bank Merger to become effective, (iv) such other filings and reports as required pursuant to the Exchange Act and the rules and regulations promulgated thereunder, or applicable stock exchange requirements; (v) any consents, authorizations, approvals, filings or exemptions in connection with compliance with the rules and regulations of any applicable SRO and the rules of the Nasdaq; and (vi) such filings and approvals as are required to be made or obtained under the securities or “Blue Sky” laws of various states in connection with the Investar Common Stock Issuance and approval of listing of such Investar Common Stock on the Nasdaq. Subject to the receipt of the approvals referred to in the preceding sentence, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby by Investar do not and will not, (1) constitute a breach or violation of, or a default under, the articles of incorporation and bylaws of Investar, (2) violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to Investar or any of its Subsidiaries, or any of their respective properties or assets, (3) violate, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of Investar or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, contract, agreement or other instrument or obligation to which Investar or any of its Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound. As of the date hereof, Investar has no Knowledge of any reason (i) why the Regulatory Approvals and other necessary consents and approvals will not be received in order to permit consummation of the Merger and Bank Merger on a timely basis and (ii) why a Burdensome Condition would be imposed.
Section 5.08 Investar Information. The information relating to Investar and its Subsidiaries that is supplied by or on behalf of Investar for inclusion or incorporation by reference in the Joint Proxy Statement/Prospectus and the Registration Statement will not (with respect to the Joint Proxy Statement/Prospectus, as of the date the Joint Proxy Statement/Prospectus is first mailed to WFB shareholders, and with respect to the Registration Statement, as of the time the Registration Statement or any amendment or supplement thereto is declared effective under the Securities Act) contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading; provided, however, that any information contained in any Investar Report as of a later date will be deemed to modify information as of an earlier date. The portions of the Joint Proxy Statement/Prospectus relating to Investar and Investar’s Subsidiaries and other portions thereof within the reasonable control of Investar and its Subsidiaries will comply as to form in all material respects with the provisions of the Exchange Act, and the rules and regulations thereunder.
Section 5.09 Absence of Certain Changes or Events. Since December 31, 2024 through the date of this Agreement, (a) there has been no change or development with respect to Investar and its assets and business or combination of such changes or developments which, individually or in the aggregate, has had or is reasonably likely to have a Material Adverse Effect with respect to Investar; and (b) neither Investar nor any of its Subsidiaries has taken any action or failed to take any action prior to the date of this Agreement which action or failure, if taken after the date of this Agreement, would constitute a material breach or violation of any of the covenants and agreements set forth in Section 6.02.
Section 5.10 Investar Regulatory Matters.
(a) Investar is registered as a financial holding company under the Bank Holding Company Act of 1956, as amended.
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(b) The deposits of Investar Bank are insured by the FDIC in accordance with FDIA to the fullest extent permitted by Law, and Investar Bank has paid all premiums and assessments and filed all reports required by the FDIA. No proceedings for the revocation or termination of such deposit insurance are pending or, to Investar’s Knowledge, threatened.
Section 5.11 Agreements with Regulatory Agencies. Neither Investar nor any of its Subsidiaries is subject to any cease-and-desist or other order issued by, or a party to any written agreement, consent agreement or memorandum of understanding with, or a party to any commitment letter or similar undertaking to, or a recipient of any extraordinary supervisory letter from, or subject to any order or directive by, or any board resolutions which have been adopted at the request of any Governmental Authority (each a “Investar Regulatory Agreement”) that restricts, has restricted or by its terms will in the future restrict, the conduct of WFB’s or any of its Subsidiaries’ business or that in any manner relates to their capital adequacy, credit or risk management policies, dividend policies, management, business or operations, nor has Investar or any of its Subsidiaries been advised by any Governmental Authority that it is considering issuing, initiating, ordering, requesting, recommending, or otherwise proceeding with (or is considering the appropriateness of any of the aforementioned actions) any Investar Regulatory Agreement. To Investar’s Knowledge, there are no investigations relating to any regulatory matters pending before any Governmental Authority with respect to Investar or any of its Subsidiaries except as related to routine regulatory exams in the Ordinary Course of Business.
Section 5.12 Brokers. Neither Investar nor any of its officers, directors or any of its Subsidiaries has employed any broker or finder or incurred, nor will it incur, any liability for any broker’s fees, commissions or finder’s fees in connection with any of the transactions contemplated by this Agreement, except that Investar has engaged, and will pay a fee or commission to Janney Montgomery Scott LLC.
Section 5.13 Legal Proceedings.
(a) Neither Investar nor any of its Subsidiaries is a party to any, and there are no pending or, to Investar’s Knowledge, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature against Investar or any of its Subsidiaries or any of their current or former directors or executive officers in their capacities as such that is reasonably likely to have a Material Adverse Effect on Investar, or challenging the validity or propriety of the transactions contemplated by this Agreement.
(b) There is no material injunction, order, judgment, decree or regulatory restriction (other than regulatory restrictions of general application to banks and bank holding companies) imposed upon Investar, any of its Subsidiaries or the assets of Investar or any of its Subsidiaries (or that, upon consummation of the Merger or the Bank Merger would apply to the Surviving Company or any of its Subsidiaries or affiliates), and neither Investar nor any of its Subsidiaries has been advised of the threat of any such action, other than any such injunction, order, judgment or decree that is generally applicable to all Persons in businesses similar to that of Investar or any of Investar’s Subsidiaries.
Section 5.14 Regulatory Capitalization. Investar Bank is “well-capitalized” and “well managed,” as such terms are defined in the rules and regulations promulgated by the OCC. Investar is “well-capitalized” and “well-managed,” as such terms are defined in the rules and regulations promulgated by the FRB.
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Section 5.15 Compliance with Laws
(a) Each of Investar and its Subsidiaries is, and has been since January 1, 2021, in compliance in all material respects with all applicable federal, state, local and foreign Laws applicable thereto or to the employees conducting such businesses, including, without limitation, Laws related to data protection or privacy, the Gramm-Leach-Bliley Act of 1999, the USA PATRIOT Act, the Bank Secrecy Act, the Equal Credit Opportunity Act, the Fair Housing Act, the Home Mortgage Disclosure Act, the Community Reinvestment Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Dodd-Frank Act, Sections 23A and 23B of the Federal Reserve Act, the Sarbanes-Oxley Act, or the regulations implementing such statutes, all other applicable anti-money laundering Laws, fair lending Laws and other Laws relating to discriminatory lending, financing, leasing or business practices and all agency requirements relating to the origination, sale and servicing of mortgage loans. Since January 1, 2021, neither Investar nor any of its Subsidiaries has been advised of any supervisory concerns regarding their compliance with the Bank Secrecy Act or related state or federal anti-money laundering laws, regulations and guidelines, including without limitation those provisions of federal regulations requiring (i) the filing of reports, such as Currency Transaction Reports and Suspicious Activity Reports, (ii) the maintenance of records and (iii) the exercise of due diligence in identifying customers. The boards of directors of Investar and its Subsidiaries have adopted, and Investar and its Subsidiaries, as applicable, have implemented an anti-money laundering program that contains adequate and appropriate customer identification verification procedures, that meets the requirements of Sections 352 and 326 of the USA PATRIOT Act, and that has not been deemed ineffective by any Governmental Authority.
(b) Investar Bank has a Community Reinvestment Act rating of not less than “satisfactory” in its most recent completed exam, has received no oral or written criticism from regulators with respect to discriminatory lending practices and, to the Knowledge of Investar, there are no conditions, facts or circumstances, or pending investigations, that could result in a downgrade of Investar Bank’s Community Reinvestment Act rating to less than “satisfactory” or criticism from regulators or consumers with respect to discriminatory practices. Neither Investar nor any of its Subsidiaries is a party to any agreement with any individual or group regarding Community Reinvestment Act matters.
(c) Neither Investar nor any of its Subsidiaries has received, since January 1, 2021, written or, to Investar’s Knowledge, oral notification from any Governmental Authority (i) asserting that it is not in compliance with any of the Laws which such Governmental Authority enforces, (ii) indicating the initiation of, or the pending initiation of, any proceeding or investigation into the business or operations of Investar or any of its Subsidiaries, or (iii) threatening to revoke any license, franchise, permit or governmental authorization (nor to the Investar’s Knowledge do any grounds for any of the foregoing exist).
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(d) Neither Investar nor any of its Subsidiaries (nor, to the Knowledge of Investar, any of their respective directors, executives, officers, employees or representatives) (i) used any corporate funds of Investar or any of its Subsidiaries or any of their respective affiliates for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds of Investar or any of its Subsidiaries or any of their respective affiliates, (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, (iv) made any bribe, unlawful rebate, payoff, influence payment, kickback or other unlawful payment to any Person, private or public, regardless of form, whether in money, property or services, to obtain favorable treatment in securing business to obtain special concessions for Investar or any of its Subsidiaries or any of their respective affiliates, to pay for favorable treatment for business secured or to pay for special concessions already obtained for the Investar or any of its Subsidiaries or any of their respective affiliates, (v) established or maintained any unlawful fund of monies or other assets of Investar or any of its Subsidiaries or any of their respective affiliates, (vi) made any fraudulent entry on the books and records of Investar or any of its Subsidiaries or any of their respective affiliates or (vii) violated or is in violation of the Money Laundering Laws. No action, suit or proceeding by or before any Governmental Entity or any arbitrator involving Investar or any of its Subsidiaries or any of their respective affiliates with respect to the money laundering Laws is pending or, to the Knowledge of Investar, threatened, and there are no conditions, facts or circumstances that could result in Investar or any of its Subsidiaries being deemed to be operating in violation of the Bank Secrecy Act and its implementing regulations (31 C.F.R. Chapter X), the USA PATRIOT Act, any order issued with respect to anti-money laundering by OFAC or any other applicable money laundering Law.
(e) Except as required by the Bank Secrecy Act, to the Knowledge of Investar, no employee of Investar or any of its Subsidiaries or their respective affiliates has provided or is providing information to any law enforcement agency regarding the commission or possible commission of any crime or the violation or possible violation of any applicable Law by Investar or any of its Subsidiaries or any employee thereof acting in its capacity as such. Neither Investar nor any of its Subsidiaries, nor any officer, employee, contractor, subcontractor or agent of Investar or any of its Subsidiaries, has discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against any employee of Investar or any of its Subsidiaries in the terms and conditions of employment because of any act of such employee described in 18 U.S.C. § 1514A(a).
(f) Except where such disclosure is prohibited by applicable Law, there: (i) is no written, or to the Knowledge of Investar, oral unresolved violation or exception by any Governmental Authority relating to any examinations or inspections of Investar or any of its Subsidiaries; (ii) have been no written, or to the Knowledge of Investar, oral formal or informal inquiries by, or disagreements or disputes with, any Governmental Authority with respect to the business, operations, policies or procedures of Investar or any of its Subsidiaries since January 1, 2021; and (iii) is not any pending or, to the Knowledge of Investar, threatened, nor has any Governmental Authority indicated an intention to conduct, any investigation or review of the Investar or any of its Subsidiaries.
Section 5.16 Reorganization. Neither Investar nor any of its Subsidiaries has taken or agreed to take any action or is aware of any fact or circumstance that could reasonably be expected to prevent the Merger from being treated as a transaction that qualifies as a “reorganization” within the meaning of Section 368(a) of the Code.
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ARTICLE VI
COVENANTS
Section 6.01 Conduct of Business of WFB. During the period from the date of this Agreement and continuing until the Effective Time or the earlier termination of this Agreement in accordance with its terms, except as expressly contemplated or permitted by this Agreement (including as set forth in the WFB Disclosure Schedule), required by Law or with the prior written consent of Investar, WFB will carry on its business, including the business of each of its Subsidiaries, in the Ordinary Course of Business in all material respects and consistent with prudent banking practice. Without limiting the generality of the foregoing, WFB will use commercially reasonable efforts to (i) preserve its business organizations and assets intact, (ii) keep available to itself and Investar the present services of the current officers and employees of WFB and its Subsidiaries, (iii) preserve for itself and Investar the goodwill of its customers, employees, lessors and others with whom business relationships exist, and (iv) continue diligent collection efforts with respect to any delinquent loans and, to the extent within its control, not allow any material increase in delinquent loans.
Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the Effective Time, except (A) as set forth in WFB Disclosure Schedule Section 6.01, (B) as required by applicable Law or Governmental Authority, (C) as otherwise expressly required by this Agreement, or (D) with the prior written consent of Investar, WFB will not and will not permit its Subsidiaries to:
(a) Stock. (i) Issue (except for the issuance of WFB Common Stock in connection with the conversion of Convertible Subordinated Debt by the holder thereof), sell, grant, pledge, dispose of, encumber or otherwise permit to become outstanding, or authorize the creation of, any additional shares of its stock, any Rights, any new award or grant under the WFB Stock Plans or otherwise, or any other securities (including units of beneficial ownership interest in any partnership or limited liability company), or enter into any agreement with respect to the foregoing, (ii) accelerate the vesting of any existing Rights, or (iii) directly or indirectly change (or establish a record date for changing), adjust, split, combine, redeem, reclassify, exchange, purchase or otherwise acquire any shares of its capital stock, or any other securities (including units of beneficial ownership interest in any partnership or limited liability company) convertible into or exchangeable for any additional shares of stock, including any Rights issued and outstanding prior to the Effective Time.
(b) Stock Certificates. Issue a replacement of any certificate representing securities of WFB or any of its Subsidiaries.
(c) Dividends; Other Distributions. Make, declare, pay or set aside for payment of dividends payable in cash, stock or property on or in respect of, or declare or make any distribution on, any shares of its capital stock, except for dividends from wholly-owned Subsidiaries to WFB.
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(d) Compensation; Employment Agreements, Etc. Enter into or amend or renew any employment, consulting, compensatory, severance, retention or similar agreements or arrangements with any director, officer or employee of WFB or any of its Subsidiaries, or grant any salary, wage or fee increase or increase any employee benefit or pay any incentive or bonus payments, except, in each case, (i) as contemplated by Section 6.11 of this Agreement, or (ii) to satisfy the contractual obligations existing as of the date hereof set forth on WFB Disclosure Schedule Section 4.15(a).
(e) Hiring. Hire any person as an employee or officer of WFB or any of its Subsidiaries, except for at-will employment at an annual rate of base salary not to exceed $75,000 to fill vacancies that may arise from time to time in the Ordinary Course of Business.
(f) Benefit Plans. Enter into, establish, adopt, amend, modify or terminate any WFB Benefit Plan, except (i) as contemplated by Section 6.11 of this Agreement, (ii) as may be required by or to make consistent with applicable Law, or (iii) to satisfy contractual obligations existing as of the date hereof.
(g) Transactions with Affiliates. Except pursuant to agreements or arrangements in effect on the date hereof and set forth in WFB Disclosure Schedule Section 6.01(g), pay, loan or advance any amount to, or sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible) to, or enter into any agreement or arrangement with, any of its officers or directors or any of their immediate family members or any Affiliates or Associates of any of its officers or directors other than compensation or business expense advancements or reimbursements in the Ordinary Course of Business.
(h) Dispositions. Except in the Ordinary Course of Business, sell, license, lease, transfer, mortgage, pledge, encumber or otherwise dispose of or discontinue any of its rights, assets, deposits, business or properties or cancel or release any indebtedness owed to WFB or any of its Subsidiaries.
(i) Acquisitions. Acquire (other than by way of foreclosures or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, in each case in the Ordinary Course of Business) all or any portion of the assets, debt, business, deposits or properties of any other entity or Person.
(j) Capital Expenditures. Make any capital expenditures in amounts exceeding $50,000 individually, or $200,000 in the aggregate, provided that Investar will grant or deny its consent to emergency repairs or replacements necessary to prevent substantial deterioration of the condition of a property within two (2) Business Days of its receipt of a written request from WFB.
(k) Governing Documents. Amend WFB’s certificate of formation or bylaws or any equivalent documents of WFB’s Subsidiaries.
(l) Accounting Methods. Implement or adopt any change in its accounting principles, practices or methods, other than as may be required by applicable Laws or GAAP or applicable accounting requirements of any Governmental Authority, in each case, including changes in the interpretation or enforcement thereof.
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(m) Contracts. Enter into, amend, modify, terminate, renew, extend, or waive any material provision of, any WFB Material Contract, Lease or insurance policy (including BOLI), or make any change in any instrument or agreement governing the terms of any of its securities, or material lease, license or contract, other than normal renewals of contracts, licenses and leases without material adverse changes of terms with respect to WFB or any of its Subsidiaries, or enter into any contract that would constitute a WFB Material Contract if it were in effect on the date of this Agreement, except for any amendments, modifications or terminations reasonably requested by Investar.
(n) Claims. Other than settlement of foreclosure actions in the Ordinary Course of Business (except for settlements in any case in which counterclaims have been asserted), (i) enter into any settlement or similar agreement with respect to any action, suit, proceeding, order or investigation to which WFB or any of its Subsidiaries is a party or becomes a party after the date of this Agreement, which settlement or agreement involves payment by WFB or any of its Subsidiaries of an amount which exceeds $50,000 individually or $200,000 in the aggregate and/or would impose any material restriction on the business of WFB or any of its Subsidiaries or (ii) waive or release any material rights or claims, or agree or consent to the issuance of any injunction, decree, order or judgment restricting or otherwise affecting its business or operations.
(o) Banking Operations. (i) Enter into any material new line of business, introduce any material new products or services, any material marketing campaigns or any material new sales compensation or incentive programs or arrangements; (ii) change in any material respect its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as required by applicable Law, regulation or policies imposed by any Governmental Authority; (iii) make any material changes in its policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service Loans, its hedging practices and policies; and (iv) incur any material liability or obligation relating to retail banking and branch merchandising, marketing and advertising activities and initiatives except in the Ordinary Course of Business.
(p) Derivative Transactions. Enter into any Derivative Transaction.
(q) Indebtedness. Incur any indebtedness for borrowed money other than in the Ordinary Course of Business consistent with past practice with a term not in excess of twelve (12) months (other than creation of deposit liabilities or sales of certificates of deposit in the Ordinary Course of Business), or incur, assume or become subject to, whether directly or by way of any guarantee or otherwise, any obligations or liabilities (absolute, accrued, contingent or otherwise) of any other Person, other than the issuance of letters of credit in the Ordinary Course of Business and in accordance with the restrictions set forth in Section 6.01(t).
(r) Investment Securities. (i) Sell (or otherwise dispose of, but payment at maturity is not a sale) any debt security or equity investment or any certificates of deposits issued by another bank; (ii) purchase (or otherwise acquire) any debt security or equity investment or any certificates of deposits issued by another bank, other than (A) obligations of the U.S. Department of the Treasury (or any agency thereof) with a maturity of one (1) year or less, an AAA rating by at least one nationally recognized ratings agency, and are held as “available for sale”, and (B) certificates of deposits insured by the FDIC with a maturity of one (1) year or less, or (iii) change the classification method for any of the investment securities of WFB and its Subsidiaries from “held to maturity” to “available for sale” or from “available for sale” to “held to maturity,” as those terms are used in ASC 320.
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(s) Deposits. Other than in the Ordinary Course of Business consistent with past practices and consistent with the deposit pricing offered by other financial institutions in FNB’s market, make any changes to deposit pricing; provided, however, no new time deposit with a term exceeding six months shall deviate from the rate sheet to be agreed as between Investar and WFB.
(t) Loans. Make, commit to make, renew, extend the maturity of, or alter any of the material terms of any Loan, as applicable and after aggregating with any related Loan (if any) as set forth in FNB’s policies and 12 C.F.R. Part 32, (i) in excess of $2,000,000, provided that this limit will not apply to any Loan that is a renewal of an existing credit in the ordinary course of business and that is not otherwise described by subsections (ii) through (vii) of this Section 6.01(t); (ii) in excess of $100,000, if unsecured; (iii) that is not is not in compliance with FNB’s written loan policy or is an exception to such policy; (iv) that has been classified as, or, in the exercise of reasonable diligence by FNB or any Governmental Authority with supervisory jurisdiction over FNB, should have been classified as “substandard,” “doubtful,” “loss,” “other loans especially mentioned,” “other assets especially mentioned,” “watch,” “pass/watch” or any comparable classifications by such Persons, in excess of $250,000; (v) to a borrower with an outstanding loan agreement, note or borrowing arrangement with FNB which has been classified as or, in the exercise of reasonable diligence by FNB or any Governmental Authority with supervisory jurisdiction over FNB, should have been classified as “substandard,” “doubtful,” “loss,” “other loans especially mentioned,” “other assets especially mentioned,” “watch,” “pass/watch” or any comparable classifications by such Persons; (vi) that is a construction-to-permanent loan; or (vii) that is a commercial real estate loan to the extent FNB’s Loans exceed, or would exceed as a result of the Loan, the supervisory criteria set forth in the CRE Guidance; provided, however, that Investar’s consent will be deemed to have been given if WFB has made a written request via e-mail to Jeff W. Martin, Chief Credit Officer of Investar, at jeff.martin@investarbank.com, for permission to take any action otherwise prohibited by this paragraph and has provided Investar with information reasonably requested by Investar to make an informed decision with respect to such request, and Investar has failed to respond to such request within three (3) Business Days after Investar’s receipt of such request.
(u) Growth of Consumer Construction Loan Portfolio. Make any consumer residential construction loan that would cause the aggregate principal amount of such loans originated in any single month exceed $2,000,000.
(v) Investments or Developments in Real Estate. Make any investment or commitment to invest in real estate or in any real estate development project other than by way of foreclosure or deed in lieu thereof or make any investment or commitment to develop, or otherwise take any actions to develop any real estate owned by WFB or its Subsidiaries.
(w) Taxes. Make or change any material Tax election, file any material amended Tax Return, enter into any material closing agreement with respect to Taxes, settle or compromise any material liability with respect to Taxes, agree to any material adjustment of any Tax attribute, file any claim for a material refund of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment, provided that, for purposes of this Section 6.01(w), “material” means affecting or relating to $25,000 or more in Taxes or $100,000 or more of taxable income.
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(x) Reorganization Treatment. Take any action or knowingly fail to take any action where such action or failure to act could reasonably be expected to prevent either the Merger or the Bank Merger failing to qualify as a “reorganization” under Section 368(a) of the Code.
(y) Compliance with Agreements. Commit any act or omission which constitutes a material breach or default by WFB or any of its Subsidiaries under any agreement with any Governmental Authority or under any WFB Material Contract, Lease or other material agreement or material license to which WFB or any of its Subsidiaries is a party or by which any of them or their respective properties are bound or under which any of them or their respective assets, business, or operations receives benefits.
(z) Environmental Assessments. Foreclose on or take a deed or title to any real estate other than single-family residential properties without first conducting an ASTM International (“ASTM”) E1527-13 Phase I Environmental Site Assessment (or any applicable successor standard) of the property that satisfies the requirements of 40 C.F.R. Part 312 (“Phase I”), or foreclose on or take a deed or title to any real estate other than single-family residential properties if such environmental assessment indicates the presence or likely presence of any Hazardous Substances under conditions that indicate an existing release, a past release, or a material threat of a release of any Hazardous Substances into structures on the property or into the ground, ground water, or surface water of the property.
(aa) Capital Stock Purchase. Directly or indirectly repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock.
(bb) Facilities. Except as required by Law, file any application or make any contract or commitment for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production or servicing facility or automated banking facility, except for any change that may be requested by Investar.
(cc) Restructure. Merge or consolidate itself or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or dissolve it or any of its Subsidiaries.
(dd) Adverse Actions. Take any action or knowingly fail to take any action not contemplated by this Agreement that is intended or is reasonably likely to (i) prevent, delay or impair WFB’s ability to consummate the Merger or the transactions contemplated by this Agreement or (ii) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.01.
(ee) Commitments. (i) Enter into any contract with respect to, or otherwise agree or commit to do, or adopt any resolutions of its board of directors or similar governing body in support of, any of the foregoing or (ii) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger not being satisfied in any material respect or in a violation of any provision of this Agreement, except, in every case, as may be required by applicable Law.
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Section 6.02 Covenants of Investar.
(a) Affirmative Covenants. From the date hereof until the Effective Time, Investar will carry on its business consistent with prudent banking practices and in compliance in all material respects with all applicable Laws.
(b) Negative Covenants. From the date hereof until the Effective Time, except as expressly permitted or contemplated by this Agreement, or as required by applicable Law or a Governmental Authority, or with the prior written consent of WFB during the period from the date of this Agreement to the Effective Time, Investar will not, and will not permit any of its Subsidiaries to:
(i) Take any action or knowingly fail to take any action where such action or failure to act could reasonably be expected to prevent either the Merger or the Bank Merger failing to qualify as a “reorganization” under Section 368(a) of the Code;
(ii) Take any action or knowingly fail to take any action that is reasonably likely to prevent, delay or impair Investar’s ability to consummate the Merger or the transactions contemplated by this Agreement or Investar Bank’s ability to consummate the Bank Merger or perform any of its obligations under the Bank Merger Agreement; or
(iii) Agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.02.
Section 6.03 Commercially Reasonable Efforts. Subject to the terms and conditions of this Agreement, each of the Parties agrees to use commercially reasonable efforts in good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws, so as to permit consummation of the transactions contemplated hereby as promptly as practicable, including the satisfaction of the conditions set forth in Article VII, and will reasonably cooperate with the other Party to that end.
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Section 6.04 Shareholder Approvals.
(a) Each of Investar and WFB will call, give notice of, convene and hold a meeting of its shareholders (the “Investar Meeting” and the “WFB Meeting,” respectively) as soon as reasonably practicable (subject to applicable notice requirements) after the Registration Statement is declared effective for the purpose of obtaining the Requisite Investar Shareholder Approval and the Requisite WFB Shareholder Approval required in connection with this Agreement and the Merger and, if so desired and mutually agreed, upon other matters of the type customarily brought before an annual or special meeting of shareholders to approve a merger agreement or the issuance of shares contemplated thereby (as applicable). The board of directors of each of Investar and WFB will use its commercially reasonable efforts to obtain from the shareholders of Investar and WFB, as the case may be, the Requisite Investar Shareholder Approval, in the case of Investar, and the Requisite WFB Shareholder Approval, in the case of WFB. Investar or WFB will adjourn or postpone the Investar Meeting or the WFB Meeting, as the case may be, if, as of the time for which such meeting is originally scheduled there are insufficient shares of Investar Common Stock or the WFB Common Stock, as the case may be, represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of such meeting, or if on the date of such meeting Investar or WFB as applicable, has not received proxies representing a sufficient number of shares necessary to obtain the Requisite Investar Shareholder Approval or the Requisite WFB Shareholder Approval. Notwithstanding anything to the contrary herein, unless this Agreement has been terminated in accordance with its terms, each of the Investar Meeting and WFB Meeting will be convened, the Investar Stock Issuance and this Agreement will be submitted to the shareholders of Investar, and this Agreement will be submitted to the shareholders of WFB, at the Investar Meeting and WFB Meeting, respectively, for the purpose of voting on the approval of such proposals and the other matters contemplated hereby, and nothing contained herein will be deemed to relieve either Investar or WFB of such obligation. Investar and WFB will use their commercially reasonable efforts to cooperate to hold the Investar Meeting and WFB Meeting as soon as reasonably practicable (subject to applicable notice requirements) after the Registration Statement is declared effective, and to set the same record date for each such meeting.
(b) Except to the extent provided otherwise in Section 6.09, the board of directors of WFB will at all times prior to and during the WFB Meeting recommend approval of this Agreement by the shareholders of WFB and the transactions contemplated hereby (including the Merger) and any other matters required to be approved by WFB’s shareholders for consummation of the Merger and the transactions contemplated hereby (the “WFB Recommendation”) and will not withhold, withdraw, amend, modify, change or qualify such recommendation in a manner adverse in any respect to the interests of Investar or take any other action or make any other public statement inconsistent with such recommendation and the Joint Proxy Statement/Prospectus will include the WFB Recommendation. In the event that there is present at such meeting, in person or by proxy, sufficient favorable voting power to secure the Requisite WFB Shareholder Approval, WFB will not adjourn or postpone the WFB Meeting unless WFB is advised by counsel that failure to do so would result in a breach of the fiduciary duties of the board of directors of WFB. WFB will keep Investar updated with respect to the proxy solicitation results in connection with the WFB Meeting as reasonably requested by Investar.
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Section 6.05 Registration Statement; Joint Proxy Statement/Prospectus; Nasdaq Listing.
(a) Investar and WFB agree to cooperate in the preparation of the Registration Statement. WFB will use its reasonable best efforts to promptly deliver to Investar such information with respect to WFB and its Subsidiaries, their respective affiliates and the respective holders of their capital stock as may be required in order to prepare and file the Registration Statement, and any other report required to be filed by Investar with the SEC, in each case, in compliance in all material respects with applicable Laws, and will, as promptly as practicable following execution of this Agreement, prepare and deliver drafts of such information to Investar to review. Subject to WFB’s cooperation as provided in this Section 6.05(a), Investar will file with the SEC the Registration Statement. Each of Investar and WFB agree to use their respective commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC as promptly as reasonably practicable after the filing thereof and to maintain such effectiveness for as long as necessary to consummate the Merger and the other transactions contemplated by this Agreement. Investar also agrees to use commercially reasonable efforts to obtain any necessary state securities Law or “blue sky” permits and approvals required to carry out the transactions contemplated by this Agreement. WFB agrees to cooperate with Investar and Investar’s counsel and accountants in requesting and obtaining appropriate opinions, consents and letters from WFB’s independent auditors in connection with the Registration Statement and the Joint Proxy Statement/Prospectus. After the Registration Statement is declared effective under the Securities Act, WFB, at its own expense, will promptly mail or cause to be mailed the Joint Proxy Statement/Prospectus to its shareholders.
(b) The Joint Proxy Statement/Prospectus and the S-4 will comply as to form in all material respects with the applicable provisions of the Securities Act and the Exchange Act and the rules and regulations thereunder. Each of the Parties hereto agrees, as to itself and its Subsidiaries, that none of the information supplied or to be supplied by or on behalf of itself for inclusion or incorporation by reference in (i) the S-4 will, at the time the S-4 is filed with the SEC, at any time it is amended or supplemented or at the time it becomes effective under the Securities Act, 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 not misleading or (ii) the Joint Proxy Statement/Prospectus will, at the date it is first mailed to shareholders of each of Investar and WFB (or such other Persons entitled to vote in respect of matters covered thereby) or at the time of the WFB Meeting and Investar Meeting, as applicable, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements, in light of the circumstances in which they were made, not misleading. If, at any time prior to the Effective Time, any information relating to the parties hereto, or any of their respective affiliates, will be discovered by WFB or Investar that, in the reasonable judgment of Investar, should be set forth in an amendment of, or a supplement to, any of the S-4 or the Joint Proxy Statement/Prospectus, so that any of such documents would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Party which discovers such information will promptly notify the other Party hereto, and the Party hereto will cooperate in the prompt filing with the SEC of any necessary amendment of, or supplement to, the Joint Proxy Statement/Prospectus or the S-4 and, to the extent required by Law, in disseminating the information contained in such amendment or supplement to shareholders of Investar and WFB. Investar will advise the WFB, promptly after Investar receives notice thereof, of the time when the S-4 has become effective, of the issuance of any stop order or the suspension of the qualification of Investar Common Stock issuable for offering or sale in any jurisdiction, or of any request by the SEC for the amendment or supplement of the S-4 or upon the receipt of any comments (whether written or oral) from the SEC or its staff. Investar will provide WFB and its counsel with a reasonable opportunity to review and comment on the S-4, and, except to the extent such response is submitted under confidential cover, all responses to requests for additional information by and replies to comments of the SEC prior to filing such with, or sending such to, the SEC. Investar will provide WFB and its counsel with a copy of all such filings made with the SEC.
(c) Investar will use its commercially reasonable efforts to cause the shares of Investar Common Stock to be issued in connection with the transactions contemplated by this Agreement to be approved for listing on Nasdaq, subject to official notice of issuance, prior to the Effective Time.
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Section 6.06 Regulatory Filings; Consents.
(a) Each of Investar and WFB will, and will cause their respective Subsidiaries to, cooperate and use their respective reasonable best efforts (i) to promptly prepare all documentation, and to effect all applications, notices, and filings, to obtain all permits, consents, approvals and authorizations of all third parties and Governmental Authorities necessary to consummate the transactions contemplated by this Agreement (including the Regulatory Approvals) and required to consummate the Merger in the manner contemplated herein, (ii) to comply with the terms and conditions of such permits, consents, approvals and authorizations and (iii) to cause the transactions contemplated by this Agreement to be consummated as expeditiously as practicable; provided, however, notwithstanding the foregoing or anything to the contrary in this Agreement, nothing contained herein will be deemed to require Investar or any of its Subsidiaries or WFB or any of its Subsidiaries to agree to any increased minimum capital levels, or to take any other non-standard action, or commit to take any such action, or agree to any non-standard condition or restriction, in connection with obtaining the foregoing permits, consents, approvals and authorizations of any Governmental Authority that would reasonably be likely to have a material and adverse effect (measured on a scale relative to WFB) on the condition (financial or otherwise), results of operations, liquidity, assets or deposit liabilities, properties or business of Investar, WFB, the Surviving Company or the Surviving Bank, after giving effect to the Merger (“Burdensome Condition”). Investar and WFB will furnish each other and each other’s counsel with all information concerning themselves, their Subsidiaries, directors, trustees, officers and shareholders and such other matters as may be necessary or advisable in connection with any application, petition or any other statement or application made by or on behalf of Investar or WFB to any Governmental Authority in connection with the transactions contemplated by this Agreement. Each Party will have the right to review and approve in advance all characterizations of the information relating to such party and any of its Subsidiaries that appear in any public portions of such filing made in connection with the transactions contemplated by this Agreement with any Governmental Authority. In addition, Investar and WFB will each furnish to the other for review a copy of the public portions of each such filing made in connection with the transactions contemplated by this Agreement with any Governmental Authority prior to its filing.
(b) WFB will use its commercially reasonable efforts, and Investar will reasonably cooperate with WFB at WFB’s request, to obtain all consents, approvals, authorizations, waivers or similar affirmations described on WFB Disclosure Schedule Section 4.12(c) or that are otherwise required to be obtained under the terms of any WFB Material Contract in order to prevent the consummation of the transactions contemplated by this Agreement from constituting a default under such WFB Material Contract or creating any lien, claim, or charge upon any of the assets of WFB or any of its Subsidiaries. Each Party will notify the other Party promptly and will promptly furnish the other Party with copies of notices or other communications received by such Party or any of its Subsidiaries of any communication from any Person alleging that the consent of such Person (or another Person) is or may be required in connection with the transactions contemplated by this Agreement (and the response thereto from such Party, its Subsidiaries or its representatives). WFB will consult with Investar and its representatives as often as practicable under the circumstances so as to permit WFB and Investar and their respective representatives to cooperate to take appropriate measures to obtain such consents and avoid or mitigate any adverse consequences that may result from the foregoing.
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Section 6.07 Publicity. Investar and WFB will consult with each other before issuing any press release with respect to this Agreement or the transactions contemplated hereby and will not issue any such press release or make any such public statement without the prior consent of the other Party, which will not be unreasonably delayed or withheld; provided, however, that (i) a party may, without the prior consent of the other party (but after such consultation, to the extent practicable in the circumstances), issue such press release or make such public statements as may upon the advice of counsel be required by Law or the rules and regulations of any stock exchanges and (ii) a Party may issue a press release or make a public statement (including, for avoidance of doubt, any filing with the SEC), that is consistent with prior press releases issued or public statements made in compliance with this Section without such consultation. It is understood that Investar will assume primary responsibility for the preparation of joint press releases relating to this Agreement, the Merger and the other transactions contemplated hereby.
Section 6.08 Access; Current Information.
(a) For the purposes of verifying the representations and warranties of the other and preparing for the Merger and the other matters contemplated by this Agreement, upon reasonable notice and subject to applicable Laws, WFB agrees to afford Investar and its officers, employees, counsel, accountants and other authorized representatives such access during normal business hours at any time and from time to time throughout the period prior to the Effective Time to WFB’s and its Subsidiaries’ books, records (including, without limitation, Tax Returns and work papers of independent auditors), information technology systems, business, properties and personnel and to such other information relating to them as Investar may reasonably request and WFB will use its commercially reasonable efforts to provide any appropriate notices to employees and/or customers in accordance with applicable Law and WFB’s privacy policy and, during such period, WFB will furnish to Investar, upon Investar’s reasonable request, all such other information concerning the business, properties and personnel of WFB and its Subsidiaries that is substantially similar in scope to the information provided to Investar in connection with its diligence review prior to the date of this Agreement.
(b) For the purposes of verifying the representations and warranties of the other and preparing for the Merger and the other matters contemplated by this Agreement, during the period of time from the date of this Agreement to the Effective Time, upon reasonable notice and subject to applicable Laws, Investar agrees to furnish to WFB such information as WFB may reasonably request concerning the business of Investar and its Subsidiaries that is substantially similar in scope to the information provided to WFB in connection with its diligence review prior to the date of this Agreement.
(c) As promptly as reasonably practicable after the end of the respective period, WFB will furnish to Investar unaudited monthly and quarterly financial statements for each month and fiscal quarter ended after the date of this Agreement.
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(d) As promptly as reasonably practicable after they become available, WFB will furnish to Investar copies of the board packages distributed to the board of directors of WFB or any of its Subsidiaries, and minutes from the meetings thereof, copies of any internal management financial control reports showing actual financial performance against plan and previous period, and copies of any reports provided to the board of directors of WFB or any committee thereof relating to the financial performance and risk management of WFB.
(e) During the period from the date of this Agreement to the Effective Time, at the reasonable request of either Party, the other Party will cause one or more of its designated representatives to confer with representatives of the requesting Party and to report the general status of the ongoing operations of the other Party and its Subsidiaries. Without limiting the foregoing, WFB agrees to provide to Investar (i) to the extent permitted by applicable Law, a copy of each report filed by WFB or any of its Subsidiaries with a Governmental Authority, (ii) a copy of WFB’s monthly loan trial balance, and (iii) a copy of WFB’s monthly statement of condition and profit and loss statement and, if requested by Investar, a copy of WFB’s daily statement of condition and daily profit and loss statement, in each case, which will be provided as promptly as reasonably practicable after it is filed or prepared, as applicable. WFB further agrees to provide Investar, no later than ten (10) Business Days following the end of each calendar month following the date hereof, any supplements to WFB Disclosure Schedule Section 4.22(a) and WFB Disclosure Schedule Section 4.22(c) that would be required if the references to April 30, 2025 in each corresponding representation and warranty of WFB were changed to the date of the most recently ended calendar month.
(f) No investigation by a Party or its representatives will be deemed to modify or waive any representation, warranty, covenant or agreement of the other Party set forth in this Agreement, or the conditions to the respective obligations of Investar and WFB to consummate the transactions contemplated hereby.
(g) Notwithstanding anything to the contrary in this Section 6.08, WFB will not be required to copy Investar on any documents that disclose confidential discussions of this Agreement or the transactions contemplated hereby, that contain competitively sensitive business or other proprietary information filed under a claim of confidentiality (including any confidential supervisory information) or any other matter that WFB’s board of directors has been advised by counsel that such distribution to Investar may violate a confidentiality obligation or fiduciary duty or any Law or regulation, or may result in a waiver of WFB’s attorney-client privilege. In the event any of the restrictions in this Section 6.08(g) will apply, WFB will use its commercially reasonable efforts to provide appropriate consents, waivers, decrees and approvals necessary to satisfy any confidentiality issues relating to documents prepared or held by third parties (including work papers), the Parties will make appropriate alternate disclosure arrangements, including adopting additional specific procedures to protect the confidentiality of sensitive material and to ensure compliance with applicable Laws.
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Section 6.09 No Solicitation by WFB; Superior Proposals.
(a) Except as permitted by Section 6.09(b), WFB will not, and will cause its Subsidiaries and each of their respective officers, directors and employees not to, and will not authorize any investment bankers, financial advisors, attorneys, accountants, consultants, affiliates or other agents of WFB or any of WFB’s Subsidiaries (collectively, the “WFB Representatives”) to, directly or indirectly, (i) initiate, solicit, induce or knowingly encourage, or take any action to facilitate the making of, any inquiry, offer or proposal which constitutes, or could reasonably be expected to lead to, an Acquisition Proposal; (ii) participate in any discussions or negotiations regarding any Acquisition Proposal or furnish, or otherwise afford access, to any Person (other than Investar) any information or data with respect to WFB or any of its Subsidiaries or otherwise relating to an Acquisition Proposal; (iii) release any Person from, waive any provisions of, or fail to enforce any confidentiality agreement or standstill agreement to which WFB is a party; or (iv) enter into any agreement, confidentiality agreement, agreement in principle or letter of intent with respect to any Acquisition Proposal or approve or resolve to approve any Acquisition Proposal or any agreement, agreement in principle or letter of intent relating to an Acquisition Proposal. Any violation of the foregoing restrictions by any of the WFB Representatives, whether or not such WFB Representative is so authorized and whether or not such WFB Representative is purporting to act on behalf of WFB or otherwise, will be deemed to be a breach of this Agreement by WFB. WFB and its Subsidiaries will, and will cause each of the WFB Representatives to, immediately cease and cause to be terminated any and all existing discussions, negotiations, and communications with any Persons with respect to any existing or potential Acquisition Proposal.
For purposes of this Agreement, “Acquisition Proposal” means any inquiry, offer or proposal (other than an inquiry, offer or proposal from Investar), whether or not in writing, contemplating, relating to, or that could reasonably be expected to lead to, an Acquisition Transaction.
For purposes of this Agreement, “Acquisition Transaction” means (i) any transaction or series of transactions involving any merger, consolidation, recapitalization, share exchange, liquidation, dissolution or similar transaction involving WFB or any of its Subsidiaries; (ii) any transaction pursuant to which any third party or group acquires or would acquire (whether through sale, lease or other disposition), directly or indirectly, a significant portion of the assets of WFB or any of its Subsidiaries; (iii) any issuance, sale or other disposition of (including by way of merger, consolidation, share exchange or any similar transaction) securities (or options, rights or warrants to purchase or securities convertible into, such securities) representing twenty percent (20%) or more of the votes attached to the outstanding securities of WFB or any of its Subsidiaries; (iv) any tender offer or exchange offer that, if consummated, would result in any third party or group beneficially owning twenty percent (20%) or more of any class of equity securities of WFB or any of its Subsidiaries; or (v) any transaction which is similar in form, substance or purpose to any of the foregoing transactions, or any combination of the foregoing.
For purposes of this Agreement, “Superior Proposal” means a bona fide, unsolicited Acquisition Proposal (i) that if consummated would result in a third party (or in the case of a direct merger between such third party and WFB or any of its Subsidiaries, the shareholders of such third party) acquiring, directly or indirectly, more than fifty percent (50%) of the outstanding WFB Common Stock or more than fifty percent (50%) of the assets of WFB and its Subsidiaries, taken as a whole, for consideration consisting of cash and/or securities and (ii) that the board of directors of WFB reasonably determines in good faith, after consultation with its outside financial advisor and outside legal counsel, (A) is reasonably capable of being completed, taking into account all financial, legal, regulatory and other aspects of such proposal, including all conditions contained therein and the Person making such Acquisition Proposal, and (B) taking into account any changes to this Agreement proposed by Investar in response to such Acquisition Proposal, as contemplated by Section 6.09(e), and all financial, legal, regulatory and other aspects of such takeover proposal, including all conditions contained therein and the Person making such proposal, is more favorable to the shareholders of WFB from a financial point of view than the Merger.
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(b) Notwithstanding Section 6.09(a) or any other provision of this Agreement, prior to the adoption of this Agreement by the Holders, WFB may take any of the actions described in Section 6.09(a)(ii) or (iv) if, but only if, (i) WFB has received a bona fide unsolicited written Acquisition Proposal that did not result from a breach of Section 6.09(a); (ii) the board of directors of WFB reasonably determines in good faith, after consultation with and having considered the advice of its outside financial advisor and outside legal counsel, that (A) such Acquisition Proposal constitutes or is reasonably likely to lead to a Superior Proposal and (B) failure to take such actions would constitute a breach of its fiduciary duties to WFB’s shareholders under applicable Law; (iii) WFB has provided Investar with at least five (5) Business Days’ prior notice of such determination; and (iv) prior to furnishing or affording access to any information or data with respect to WFB or any of its Subsidiaries or otherwise relating to an Acquisition Proposal, WFB receives from such Person a confidentiality agreement with terms no less favorable to WFB than those contained in the confidentiality agreement with Investar. WFB will promptly provide to Investar any non-public information regarding WFB or its Subsidiaries provided to any other Person which was not previously provided to Investar, such additional information to be provided no later than the date of provision of such information to such other party.
(c) WFB will promptly (and in any event within twenty-four (24) hours) notify Investar in writing if any proposals or offers are received by, any information is requested from, or any negotiations or discussions are sought to be initiated or continued with, WFB or the WFB Representatives, in each case in connection with any Acquisition Proposal, and such notice will indicate the name of the Person initiating such discussions or negotiations or making such proposal, offer or information request and the material terms and conditions of any proposals or offers (and, in the case of written materials relating to such proposal, offer, information request, negotiations or discussion, providing copies of such materials (including e-mails or other electronic communications) except to the extent that such materials constitute confidential information of the Person making such offer or proposal under an effective confidentiality agreement). WFB agrees that it will keep Investar informed, on a reasonably current basis, of the status and terms of any such proposal, offer, information request, negotiations or discussions (including any amendments or modifications to such proposal, offer or request).
(d) Neither the board of directors of WFB nor any committee thereof will (i) withdraw, qualify, amend or modify, or propose to withdraw, qualify, amend or modify, in a manner adverse to Investar in connection with the transactions contemplated by this Agreement (including the Merger), the WFB Recommendation, fail to reaffirm the WFB Recommendation within three (3) Business Days following a request by Investar, or make any statement, filing or release, in connection with the WFB Meeting or otherwise, inconsistent with the WFB Recommendation (it being understood that taking a neutral position or no position with respect to an Acquisition Proposal will be considered an adverse modification of the WFB Recommendation); (ii) approve or recommend, or propose to approve or recommend, any Acquisition Proposal; or (iii) enter into (or cause WFB or any of its Subsidiaries to enter into) any letter of intent, agreement in principle, acquisition agreement or other agreement (A) related to any Acquisition Transaction (other than a confidentiality agreement entered into in accordance with the provisions of Section 6.09(b)) or (B) requiring WFB to abandon, terminate or fail to consummate the Merger or any other transaction contemplated by this Agreement.
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(e) Notwithstanding Section 6.09(d), prior to the adoption of this Agreement by the Holders, the board of directors of WFB may withdraw, qualify, amend or modify the WFB Recommendation (a “WFB Subsequent Determination”) after the fifth (5^th^) Business Day following Investar’s receipt of a notice (the “Notice of Superior Proposal”) from WFB advising Investar that the board of directors of WFB has decided that a bona fide unsolicited written Acquisition Proposal that it received (that did not result from a breach of Section 6.09(a)) constitutes a Superior Proposal if, but only if, (i) the board of directors of WFB has determined in good faith, after consultation with and having considered the advice of outside legal counsel and its financial advisor, that the failure to take such actions would constitute a breach of its fiduciary duties to WFB’s shareholders under applicable Law, (ii) during the five (5) Business Day period after receipt of the Notice of Superior Proposal by Investar (the “Notice Period”), WFB and the board of directors of WFB will have cooperated and negotiated in good faith with Investar to make such adjustments, modifications or amendments to the terms and conditions of this Agreement as would enable WFB to proceed with the WFB Recommendation without a WFB Subsequent Determination; provided, however, that Investar will not have any obligation to propose any adjustments, modifications or amendments to the terms and conditions of this Agreement and (iii) at the end of the Notice Period, after taking into account any such adjusted, modified or amended terms as may have been proposed by Investar since its receipt of such Notice of Superior Proposal, the board of directors of WFB has again in good faith made the determination (A) in clause (i) of this Section 6.09(e) and (B) that such Acquisition Proposal constitutes a Superior Proposal. In the event of any material revisions to the Superior Proposal, WFB will be required to deliver a new Notice of Superior Proposal to Investar and again comply with the requirements of this Section 6.09(e), except that the Notice Period will be reduced to three (3) Business Days and; provided, further, that WFB shall only be obligated to extend the notice contemplated by this Section 6.09(e) twice, and in the case of a Superior Proposal, Investar and the third party who has submitted the Superior Proposal shall each be required to submit its “best and final” offer or counter-offer, as applicable, by the end of the second Notice Period.
(f) Notwithstanding any WFB Subsequent Determination, and except if this Agreement is terminated by WFB pursuant to Section 8.01(g), this Agreement will be submitted to WFB’s shareholders at the WFB Meeting for the purpose of voting on the approval of this Agreement and the transactions contemplated hereby (including the Merger) and nothing contained herein will be deemed to relieve WFB of such obligation; provided, however, that if the board of directors of WFB will have made a WFB Subsequent Determination with respect to a Superior Proposal, then the board of directors of WFB may recommend approval of such Superior Proposal by the shareholders of WFB and may submit this Agreement to WFB’s shareholders without recommendation either for or against, in which event the board of directors of WFB will communicate the basis for its recommendation of such Superior Proposal and the basis for its lack of a recommendation with respect to this Agreement and the transactions contemplated hereby to WFB’s shareholders in the Joint Proxy Statement/Prospectus or an appropriate amendment or supplement thereto.
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Section 6.10 Indemnification.
(a) For a period of six (6) years from and after the Effective Time, and in any event subject to the provisions of Section 6.10(c), Investar will indemnify and hold harmless the present and former directors and officers of WFB and its Subsidiaries (each an “Indemnified Party”), against all costs, expenses (including reasonable attorney’s fees), judgments, fines, losses, claims, damages or liabilities or amounts that are paid in settlement (which settlement will require the prior written consent of Investar, which consent will not be unreasonably withheld) of or in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative (each a “Claim”), arising out of actions or omissions of such persons in the course of performing their duties for WFB or any of its Subsidiaries occurring at or before the Effective Time (including the Merger and the other transactions contemplated hereby), regardless of whether such Claim is asserted or claimed before, or after, the Effective Time, to the same extent permitted under the organizational documents of WFB and its Subsidiaries in effect on the date of this Agreement to the extent permitted by applicable Law; provided, however, that that notwithstanding anything to the contrary contained in the organizational documents of the WFB or its Subsidiaries, Investar will have no obligation to provide indemnification under this paragraph (a) to any Indemnified Party for any Excluded Claim; provided, further, that Investar’s obligation to indemnify any Indemnified Party under this Section 6.10 will be limited to the coverage provided under and the amounts actually covered by the D&O Insurance (as defined below).
(b) In connection with the indemnification provided pursuant to this Section 6.10, Investar and/or an Investar Subsidiary will advance expenses, promptly after statements therefor are received, to each WFB Indemnified Party, to the same extent permitted under the organizational documents of WFB and its Subsidiaries in effect on the date of this Agreement to the extent permitted by applicable Law (provided the individual to whom expenses are advanced provides an undertaking to repay such advance if it is ultimately determined that such individual is not entitled to indemnification), including the payment of the fees and expenses of one counsel with respect to a matter, and one local counsel in each applicable jurisdiction, if necessary or appropriate, selected by such WFB Indemnified Party or multiple Indemnified Parties, it being understood that they collectively will only be entitled to one counsel and one local counsel in each applicable jurisdiction where necessary or appropriate (unless a conflict will exist between them in which case they may retain separate counsel) and that all such counsel will be reasonably satisfactory to Investar. Investar will have no obligation to advance expenses related to any Excluded Claim.
(c) Any Indemnified Party wishing to claim indemnification under this Section 6.10 will promptly notify Investar upon learning of any Claim, provided that, failure to so notify will not affect the obligation of Investar under this Section 6.10, unless, and only to the extent that, Investar is materially prejudiced in the defense of such Claim as a consequence. In the event of any such Claim (whether asserted or claimed prior to, at or after the Effective Time), (i) Investar will have the right to assume the defense thereof and Investar will not be liable to such Indemnified Parties for any legal expenses or other counsel or any other expenses subsequently incurred by such Indemnified Parties in connection with the defense thereof, (ii) the Indemnified Parties will cooperate in the defense of any such matter, (iii) Investar will not be liable for any settlement effected without its prior written consent, and (iv) Investar will have no obligation hereunder to any Indemnified Party if such indemnification would be in violation of any applicable federal or state banking Laws or regulations, or in the event that a federal or state banking agency or a court of competent jurisdiction will determine that indemnification of an Indemnified Party in the manner contemplated hereby is prohibited by applicable Laws, whether or not related to banking Laws.
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(d) WFB shall obtain, and before the Effective Time, WFB shall fully accrue or pay for, an extended reporting period policy under its current directors and officers liability insurance (“D&O Insurance”) with a claims period of six (6) years from and after the Effective Time, which insurance will contain at least the same coverage and amounts, and contain terms and conditions no less advantageous to the Indemnified Party, as that coverage currently provided by WFB; provided that, if WFB is unable to maintain or obtain the insurance called for by this Section 6.10, WFB will obtain as much comparable insurance as is reasonably available (subject to the limitations described below in this Section 6.10(d)). In no event will the premium amount for such D&O Insurance exceed of an amount equal to two hundred percent (200%) of the annual premiums paid by WFB for D&O Insurance in effect as of the date of this Agreement (the “Maximum D&O Tail Premium”). If the cost of such tail insurance exceeds the Maximum D&O Tail Premium, WFB will obtain tail insurance coverage or a separate tail insurance policy with the greatest coverage reasonably available for a cost not exceeding the Maximum D&O Tail Premium.
(e) This Section 6.10 will survive the Effective Time, is intended to benefit each WFB Indemnified Party (each of whom will be entitled to enforce this Section 6.10 against Investar), and will be binding on all successors and assigns of Investar.
(f) If Investar or any of its successors and assigns (i) will consolidate with or merge into any other corporation or entity and will not be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) will transfer all or substantially all of its property and assets to any individual, corporation or other entity, then, in each such case, proper provision will be made so that the successors and assigns of Investar and its Subsidiaries will assume the obligations set forth in this Section 6.10.
Section 6.11 Employees; Benefit Plans.
(a) Following the Effective Time, Investar will maintain or cause to be maintained employee benefit plans for the benefit of employees who are full time employees of WFB on the Closing Date and who become employees of Investar in connection with the transaction contemplated hereunder (“Covered Employees”) that provide employee benefits which, in the aggregate, are substantially comparable to the employee benefits and cash-based compensation opportunities that are made available on a uniform and non-discriminatory basis to similarly situated employees of Investar; provided, however, that in no event will any Covered Employee be eligible to participate in any closed or frozen plan of Investar. Investar will give the Covered Employees credit for their prior service with WFB for purposes of eligibility (including initial participation and eligibility for current benefits) and vesting under any employee benefit plan maintained by Investar and in which Covered Employees may be eligible to participate to the extent permitted by such employee plan and applicable laws.
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(b) With respect to any employee benefit plan of Investar that is a health, dental, vision or other welfare plan in which any Covered Employee is eligible to participate, for the plan year that includes the Closing, if Covered Employees are eligible to participate in such plans, Investar will use its commercially reasonable efforts to cause any pre-existing condition limitations, eligibility waiting periods or evidence of insurability requirements under such Investar plan to be waived with respect to such Covered Employee and his or her covered dependents to the extent such condition was or would have been covered under the comparable WFB Benefit Plan in which such Covered Employee participated immediately prior to the Effective Time.
(c) Following the Effective Time, Investar Bank will credit each Covered Employee with an amount of paid time off equal to such Covered Employee’s accrued but unused paid time off at FNB (“Carryover PTO”); provided, however, that amount of each employee’s Carryover PTO shall not exceed the maximum amount permitted by Investar Bank’s policies and such Carryover PTO will be forfeited if not used in accordance with the terms of Investar Bank’s policies.
(d) Except for any employee (i) who is listed on WFB Disclosure Schedule Section 6.11(d); or (ii) any employee who receives a retention bonus pursuant to the pool established under Section 6.12 of this Agreement, any employee of WFB or FNB that becomes an employee of Investar or Investar Bank at the Effective Time who is terminated within six (6) months following the Effective Time (other than for cause, death, disability, normal retirement or voluntarily resignation) will receive a lump sum severance payment from Investar in an amount equal to two (2) week’s compensation at such Covered Employee’s base rate of compensation, multiplied by the number of whole years of service by such employee with WFB or FNB as of the Effective Time and Investar at the time of such termination, subject to a minimum of four (4) weeks’ base salary and a maximum of twenty-four (24) weeks’ base salary, and subject to the execution of a release of claims against Investar and its Affiliates in a form provided by Investar. For purposes of this paragraph, the term “cause” means any termination of employment due to the occurrence of one of more of the following events, as determined in the sole and absolute discretion of Investar: (i) the employee’s willful refusal to comply in any material respect with the lawful employment policies of Investar, (ii) the employee’s commission of an act of fraud, embezzlement or theft against Investar, (iii) the conviction or plea of nolo contendere to any crime involving moral turpitude or a felony, or (iv) the failure to substantially perform the duties and responsibilities of his or her position with Investar.
(e) [Reserved]
(f) Nothing in this Section 6.11 will be construed to limit the right of the Surviving Company to amend or terminate any WFB Benefit Plan or other employee benefit plan, to the extent such amendment or termination is permitted by the terms of the applicable plan, nor will anything in this Section 6.11 be construed to require Surviving Company to retain the employment of any particular Covered Employee for any fixed period of time following the Closing Date, and the continued retention (or termination) by Surviving Company of any Covered Employee subsequent to the Effective Time will be subject in all events to Investar’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance.
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(g) For purposes of this Section 6.11, all references to WFB will include each of the Subsidiaries of WFB and all references to Investar will include each of the Subsidiaries of Investar.
(h) If requested by Investar in writing prior to the Closing Date, WFB will cause the 401(k) plan sponsored or maintained by WFB or FNB (each, a “WFB 401(k) Plan”) to be terminated effective as of the day immediately prior to the Closing Date and contingent upon the occurrence of the Closing. In the event that Investar requests that any WFB 401(k) Plan be terminated, (i) WFB will provide Investar with evidence that such plan has been terminated (the form and substance of which will be subject to reasonable review and comment by Investar) not later than two (2) days immediately preceding the Effective Time and (ii) Covered Employees will be eligible to participate, effective as of the Effective Time, in a 401(k) plan sponsored or maintained by Investar or one of its Subsidiaries (an “Investar 401(k) Plan”). Investar and WFB will take any and all actions as may be required, including amendments to any WFB 401(k) Plan and/or Investar 401(k) Plan, to permit Covered Employees to make rollover contributions to the Investar 401(k) Plan of “eligible rollover distributions” (within the meaning of Section 401(a)(31) of the Code) in an amount equal to the full account balance distributed to such Covered Employee from a WFB 401(k) Plan. If requested by Investar in writing prior to the Closing Date, WFB will also cause other WFB Benefit Plan to be terminated effective as of the day immediately prior to the Closing Date and contingent upon the occurrence of the Closing, and shall provide Investar with evidence that each such plan has been terminated (the form and substance of which will be subject to reasonable review and comment by Investar) not later than two (2) days immediately preceding the Effective Time.
Section 6.12 Retention Bonus Pool. Investar, in consultation with WFB, will establish a retention bonus pool, in the amount to be determined in the sole discretion of Investar but not more than $1,000,000, in order to encourage certain WFB and FNB employees to remain with Investar, thereby assisting Investar with continuity planning following the consummation of the transactions contemplated by this Agreement.
Section 6.13 Notification of Certain Changes. Investar and WFB will promptly advise the other Party of any change or event having, or which could reasonably be expected to have, a Material Adverse Effect or which it believes would, or which could reasonably be expected to, cause or constitute a material breach of any of its representations, warranties or covenants contained herein and WFB will provide on a periodic basis written notice to Investar of any matters that WFB becomes aware of that should be disclosed on a supplement or amendment to the WFB Disclosure Schedule.
Section 6.14 Transition; Informational Systems Conversion. From and after the date hereof, Investar and WFB will use their commercially reasonable efforts to facilitate the integration of WFB with the business of Investar following consummation of the transactions contemplated hereby, and will meet on a regular basis to discuss and plan for the conversion of the data processing and related electronic informational systems of WFB and each of its Subsidiaries (the “Informational Systems Conversion”) to those used by Investar, which planning will include, but not be limited to, (a) discussion of third-party service provider arrangements of WFB and each of its Subsidiaries; (b) non-renewal or changeover, after the Effective Time, of personal property leases and software licenses used by WFB and each of its Subsidiaries in connection with the systems operations; (c) retention of outside consultants and additional employees to assist with the conversion; (d) outsourcing, as appropriate after the Effective Time, of proprietary or self-provided system services; and (e) any other actions necessary and appropriate to facilitate the conversion, as soon as practicable following the Effective Time.
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Section 6.15 [Reserved].
Section 6.16 No Control of Other Party’s Business. Nothing contained in this Agreement will give Investar, directly or indirectly, the right to control or direct the operations of WFB or its Subsidiaries prior to the Effective Time, and nothing contained in this Agreement will give WFB, directly or indirectly, the right to control or direct the operations of Investar or its Subsidiaries prior to the Effective Time. Prior to the Effective Time, each of WFB and Investar will exercise, consistent with the terms and conditions of this Agreement, control and supervision over its and its Subsidiaries’ respective operations.
Section 6.17 Certain Litigation. Each Party will promptly advise the other Party orally and in writing of any actual or threatened shareholder litigation against such Party and/or the members of the board of directors of WFB or the board of directors of Investar related to this Agreement or the Merger and the other transactions contemplated by this Agreement. WFB will: (i) permit Investar to review and discuss in advance, and consider in good faith the views of Investar in connection with, any proposed written or oral response to such shareholder litigation; (ii) furnish Investar’s outside legal counsel with all non-privileged information and documents which outside counsel may reasonably request in connection with such shareholder litigation; (iii) consult with Investar regarding the defense or settlement of any such shareholder litigation, will give due consideration to Investar’s advice with respect to such shareholder litigation and will not settle any such litigation prior to such consultation and consideration; provided, however, that WFB will not settle any such shareholder litigation if such settlement requires the payment of money damages, without the written consent of Investar (such consent not to be unreasonably withheld, conditioned or delayed) unless the payment of any such damages by WFB is reasonably expected by WFB, following consultation with outside counsel, to be fully covered (disregarding any deductible to be paid by WFB) under WFB’s existing director and officer insurance policies, including any tail policy.
Section 6.18 Board Representation; Resignations. At or prior to the Effective Time, Investar will cause the number of directors that comprise the full board of directors of each of Investar and Investar Bank to be increased by two (2) and, effective as of the Effective Time, will appoint the two individuals who are current directors of WFB or FNB as of the date of this Agreement and designated on Investar Disclosure Schedule Section 6.18 (the “Board Representatives”) to serve as directors of the Surviving Company and the Surviving Bank in accordance with the bylaws of the Surviving Company or the Surviving Bank, as applicable, and shall nominate such Board Representatives and recommend such Board Representatives for re-election to the board of directors of each of Investar and Investar Bank at their next annual meeting of shareholders. Prior to the Effective Time, WFB will cause to be delivered to Investar resignations of all the directors and officers of WFB and its Subsidiaries, such resignations to be effective as of the Effective Time.
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Section 6.19 Claims Letters. Concurrently with the execution and delivery of this Agreement and effective upon the Closing, WFB has caused each director and executive officer of WFB and FNB to execute and deliver the Claims Letter in the form attached hereto as Exhibit D.
Section 6.20 Coordination.
(a) Prior to the Effective Time, subject to applicable Laws, WFB and its Subsidiaries will take any actions Investar may reasonably request from time to time to better prepare the parties for integration of the operations of WFB and its Subsidiaries with Investar and its Subsidiaries, respectively. Without limiting the foregoing, senior officers of WFB and Investar will meet from time to time as Investar may reasonably request, and in any event not less frequently than monthly, to review the financial and operational affairs of WFB and its Subsidiaries, and WFB will give due consideration to Investar’s input on such matters, with the understanding that, notwithstanding any other provision contained in this Agreement, neither Investar nor Investar Bank will under any circumstance be permitted to exercise control of WFB or any of its Subsidiaries prior to the Effective Time. WFB will permit representatives of Investar Bank to be onsite at WFB to facilitate integration of operations and assist with any other coordination efforts as necessary, provided such efforts will be done without undue disruption to FNB’s business, during normal business hours and at the expense of Investar or Investar Bank (not to include FNB’s regular employee payroll).
(b) Prior to the Effective Time, subject to applicable Laws, WFB and its Subsidiaries will take any actions Investar may reasonably request in connection with negotiating any amendments, modifications or terminations of any Leases or WFB Material Contracts that Investar may request, including, but not limited to, actions necessary to cause any such amendments, modifications or terminations to become effective prior to (to the extent that the conditions set forth in Article VI of this Agreement have already been satisfied), or immediately upon, the Closing, and will cooperate with Investar and will use its commercially reasonable efforts to negotiate specific provisions that may be requested by Investar in connection with any such amendment, modification or termination.
(c) Prior to the Effective Time, subject to applicable Laws, WFB and its Subsidiaries will cooperate with Investar, upon its request, with respect to any plans by Investar to sell certain loans or other assets of WFB or its Subsidiaries contemporaneously with or immediately following the Closing, including, but not limited to, providing documentation or other information which may be requested by Investar in connection with its negotiation of any such sale or preparations by Investar to prepare for the consummation of such sale; provided however that nothing set forth herein this Section will be deemed to grant legal control to Investar over any such loans or other assets that Investar may desire to contemporaneously with or immediately following the Closing or obligate WFB or any of its Subsidiaries to enter into or consummate such a sale prior to or in the absence of the Closing.
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(d) From and after the date hereof, subject to applicable Laws, the parties will reasonably cooperate (provided that the parties will cooperate to reasonably minimize disruption to WFB’s or FNB’s business) with the other in preparing for the prompt conversion or consolidation of systems and business operations promptly after the Effective Time (including by entering into customary confidentiality, non-disclosure and similar agreements with the other party and appropriate service providers) and WFB will, upon Investar’s reasonable request, introduce Investar and its representatives to suppliers of WFB and its Subsidiaries for the purpose of facilitating the integration of WFB and its business into that of Investar. In addition, after satisfaction of the conditions set forth in Section 7.01(a) and Section 7.01(b), subject to applicable Laws, WFB will, upon Investar’s reasonable request, introduce Investar and its representatives to customers of WFB and its Subsidiaries for the purpose of facilitating the integration of WFB and its business into that of Investar. Any interaction between Investar and WFB’s and any of its Subsidiaries’ customers and suppliers will be coordinated by WFB. WFB will have the right to participate in any discussions between Investar and WFB’s customers and suppliers.
(e) Investar and WFB agree to take all action necessary and appropriate to cause FNB to merge with Investar Bank in accordance with applicable Laws and the terms of the Bank Merger Agreement immediately following the Effective Time or as promptly as practicable thereafter.
Section 6.21 Confidentiality. Prior to the execution of this Agreement and prior to the consummation of the Merger, subject to applicable Laws, each of Investar and WFB, and their respective Subsidiaries, affiliates, officers, directors, agents, employees, consultants and advisors have provided, and will continue to provide one another with information which may be deemed by the party providing the information to be non-public, proprietary and/or confidential, including, but not limited to, trade secrets of the disclosing party. Each Party agrees that it will, and will cause its representatives to, hold any information obtained pursuant to this Agreement in accordance with the terms of that certain letter agreement regarding protection of Confidential Information (as defined therein), dated November 25, 2024, that has previously been entered into between the Parties.
Section 6.22 Section 16 Matters. Investar and WFB agree that, if the parties determine that any officer or director of WFB will be subject to the requirements of Section 16 of the Exchange Act (the “WFB Insiders”) immediately following the Effective Time, the respective boards of Investar and WFB, or in each case a committee of non-employee directors thereof (as such term is defined for purposes of Rule 16b-3(d) under the Exchange Act), will prior to the Effective Time take all such action as may be required to cause the transactions contemplated by this Agreement, including without limitation any dispositions of WFB Common Stock or WFB Equity Awards and any acquisitions of Investar Common Stock by any WFB Insiders, to be exempt from liability pursuant to Rule 16b-3 under the Exchange Act to the fullest extent permitted by applicable Law.
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Section 6.23 Code Section 280G Matters. If, after reviewing the Code Section 280G calculations and other supporting materials prepared by WFB and the WFB Representatives, either WFB or Investar determines that any Person who is a “disqualified individual” has a right to any payments and/or benefits as a result of or in connection with the execution of this Agreement and the consummation of the transactions contemplated hereby that would be deemed to constitute “parachute payments” (as such terms are defined in Section 280G of the Code and the Regulations promulgated thereunder) absent approval by the shareholders of WFB, then WFB will undertake its best efforts to modify its obligations to provide such payments or benefits to the extent necessary such that, after giving effect to such modifications, the modified payments or benefits would not constitute a parachute payment to a disqualified individual based on the Code Section 280G calculations. If, in the opinion of Investar, WFB is not able to modify its obligations to make such payments or benefits comply with the foregoing within thirty (30) days after determining that a payment or benefit would constitute a parachute payment to a disqualified individual, then at least three (3) Business Days prior to the Closing Date, WFB will take all necessary actions (including obtaining any required waivers or consents from each disqualified individual) to submit to a shareholder vote, in a manner that satisfies the shareholder approval requirements for exemption under Section 280G(b)(5)(A)(ii) of the Code and the regulations promulgated thereunder, the right of each disqualified individual to receive or retain, as applicable, any payments and benefits to the extent necessary so that no payment or benefit received by such disqualified person will be deemed a parachute payment. Such vote will establish the disqualified individual’s right to the payment or benefits. WFB will be responsible for all liabilities and obligations related to the matters described in this Section 6.23, including any claims by disqualified individuals that they are entitled to payment or reimbursement for any related excise taxes. WFB will provide to Investar copies of any waivers, consents, and shareholder information statements or disclosures relating to Code Section 280G and the shareholder vote described in this Section 6.23, a reasonable period of time before disseminating such materials to the disqualified individuals and WFB’s shareholders, and will work with Investar in good faith regarding the inclusion of any comments provided by Investar thereto. Prior to the Closing, WFB will deliver to Investar evidence that a vote of WFB’s shareholders who are entitled to vote was solicited in accordance with the foregoing provisions of this Section 6.23 and that the requisite number of shareholder votes was or was not obtained with respect thereto.
Section 6.24 Tax Matters.
(a) The Parties intend that each of the Merger and the Bank Merger will each qualify as a “reorganization” within the meaning of Section 368(a) of the Code and that this Agreement constitute a “plan of reorganization” within the meaning of Section 1.368-2(g) of the Regulations for each of the Merger and the Bank Merger. Except as expressly contemplated or permitted by this Agreement, from and after the date of this Agreement, each of Investar and WFB will use their respective reasonable best efforts to cause each of the Merger and the Bank Merger to qualify as a reorganization within the meaning of Section 368(a) of the Code, and will not take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken which action or failure to act is intended or is reasonably likely to prevent either the Merger or the Bank Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.
(b) Investar will prepare or cause to be prepared and file or cause to be filed all Tax Returns for WFB and its Subsidiaries for all periods ending on or prior to the Closing Date that are filed after the Closing Date; provided, however, that WFB will cause its consolidated federal income Tax Return for the year ended December 31, 2024 to be filed prior to the Closing Date.
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Section 6.25 Assumed Debt. The Parties agree to execute and deliver, or cause to be executed and delivered, at or prior to the Effective Time, one or more supplemental indentures and/or such other documents or instruments as may be required for the due and full assumption by Investar at the Effective Time of WFB’s obligations in respect of any outstanding debt, notes, guarantees, securities, or other instruments, including, without limitation, the trust preferred and subordinated debt securities set forth on Disclosure Schedule Section 4.02(c), to the extent required by the terms thereof. WFB agrees to cooperate as reasonably requested by Investar in connection with such assumption.
Section 6.26 Updated Disclosure Schedules. At least five (5) Business Days prior to the Closing, each Party will deliver to the other Party updated Schedules reflecting any material changes to the Schedules between the date of this Agreement and the Closing Date.
Section 6.27 Takeover Statutes. Neither Investar nor WFB, nor either of their respective boards of directors, will take any action that would cause any Takeover Statute to become applicable to this Agreement, the Merger or any of the other transactions contemplated hereby, and each will take all necessary steps to exempt (or ensure the continued exemption of) the Merger and the other transactions contemplated hereby from any applicable Takeover Statute now or hereafter in effect. If any Takeover Statute may become, or may purport to be, applicable to the transactions contemplated hereby, Investar, WFB and the members of their respective boards of directors will grant such approvals and take such actions as are necessary so that the transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of any Takeover Statute on any of the transactions contemplated by this Agreement, including, if necessary, challenging the validity or applicability of any such Takeover Statute.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 7.01 Conditions to Obligations of the Parties to Effect the Merger. The respective obligations of the Parties to consummate the Merger are subject to the fulfillment or, to the extent permitted by applicable Law, written waiver by the Parties prior to the Closing Date of each of the following conditions:
(a) Shareholder Votes. This Agreement and the transactions contemplated hereby, as applicable, will have received the Requisite WFB Shareholder Approval at the WFB Meeting and the Requisite Investar Shareholder Approval at the Investar Meeting.
(b) Regulatory Approvals; No Burdensome Condition. All Regulatory Approvals required to consummate the Merger and the Bank Merger in the manner contemplated herein will have been obtained and will remain in full force and effect and all statutory waiting periods in respect thereof, if any, will have expired or been terminated, and no such Regulatory Approval will include or contain, or will have resulted in the imposition of, any Burdensome Condition.
(c) No Injunctions or Restraints; Illegality. No judgment, order, injunction or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of any of the transactions contemplated hereby will be in effect. No statute, rule, regulation, order, injunction or decree will have been enacted, entered, promulgated or enforced by any Governmental Authority that prohibits or makes illegal the consummation of any of the transactions contemplated hereby.
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(d) Effective Registration Statement. The Registration Statement will have become effective and no stop order suspending the effectiveness of the Registration Statement will have been issued and no proceedings for that purpose will have been initiated or threatened by the SEC or any other Governmental Authority and not withdrawn.
(e) Tax Opinions Relating to the Merger. Investar and WFB, respectively, will have received opinions from Fenimore Kay Harrison LLP and Bradley Arant Boult Cummings LLP, respectively, each dated as of the Closing Date, in substance and form reasonably satisfactory to Investar and WFB, respectively, to the effect that, on the basis of the facts, representations and assumptions set forth in such opinions, the Merger will be treated for federal income tax purposes as a “reorganization” within the meaning of Section 368(a) of the Code. In rendering their opinions, Fenimore Kay Harrison LLP and Bradley Arant Boult Cummings LLP may require and rely upon representations as to certain factual matters contained in certificates of officers of each of Investar and WFB, in form and substance reasonably acceptable to such counsel.
(f) Nasdaq Listing. The shares of Investar Common Stock that will be issuance pursuant to this Agreement will have been authorized for listing on the Nasdaq, subject to official notice of issuance.
Section 7.02 Conditions to Obligations of WFB. The obligations of WFB to consummate the Merger also are subject to the fulfillment or written waiver by WFB prior to the Closing Date of each of the following conditions:
(a) Representations and Warranties. Each of the representations and warranties of Investar set forth in (i) Section 5.09 and Section 5.12 will be true and correct in all respects as of the date of this Agreement and as of the Closing Date with the same effect as though made as of the Closing Date, (ii) Section 5.01, Section 5.02, Section 5.03, Section 5.04, and Section 5.08 will be true and correct in all material respects as of the date of this Agreement and as of the Closing Date with the same effect as though made as of the Closing Date (except to the extent expressly made as of an earlier date, in which case as of such date) and (iii) set forth in this Agreement, other than those sections specifically identified in clauses (i) or (ii) of this Section 7.02(a), will be true and correct (disregarding all qualifications or limitations as to “materiality”, “Material Adverse Effect” and words of similar import set forth therein) as of the date of this Agreement and as of the Closing Date with the same effect as though made as of the Closing Date (except to the extent expressly made as of an earlier date, in which case as of such date), except, in the case of this clause (iii), where the failure to be true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect with respect to Investar.
(b) Performance of Obligations of Investar. Investar will have performed and complied with all of its obligations under this Agreement in all material respects at or prior to the Closing Date except where the failure of the performance of, or compliance with, such obligation has not had and does not have a Material Adverse Effect on Investar.
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(c) No Material Adverse Effect. Since the date of this Agreement (i) no change or event will have occurred which has resulted in a Material Adverse Effect with respect to Investar, and (ii) no condition, event, fact, circumstance or other occurrence will have occurred that may reasonably be expected to have or result in a Material Adverse Effect with respect to Investar.
Section 7.03 Conditions to Obligations of Investar. The obligations of Investar to consummate the Merger also are subject to the fulfillment or written waiver by Investar prior to the Closing Date of each of the following conditions:
(a) Representations and Warranties. Each of the representations and warranties of WFB set forth in (i) Section 4.09 and Section 4.14 will be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made as of the Closing Date, (ii) Section 4.01, Section 4.02(a), Section 4.04(a), Section 4.05, and Section 4.33, will be true and correct in all material respects as of the date of this Agreement and as of the Closing Date with the same effect as though made as of the Closing Date (except to the extent expressly made as of an earlier date, in which case as of such date) and (iii) set forth in this Agreement, other than those sections specifically identified in clauses (i) or (ii) of this Section 7.03(a), will be true and correct (disregarding all qualifications or limitations as to “materiality”, “Material Adverse Effect” and words of similar import set forth therein) as of the date of this Agreement and as of the Closing Date with the same effect as though made as of the Closing Date (except to the extent expressly made as of an earlier date, in which case as of such date), except, in the case of this clause (iii), where the failure to be true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect with respect to WFB.
(b) Performance of Obligations of WFB. WFB will have performed and complied with all of its obligations under this Agreement in all material respects at or prior to the Closing Date.
(c) No Material Adverse Effect. Since the date of this Agreement (i) no change or event will have occurred which has resulted in a Material Adverse Effect with respect to WFB and (ii) no condition, event, fact, circumstance or other occurrence will have occurred that may reasonably be expected to have or result in a Material Adverse Effect with respect to WFB.
(d) Bank Merger Agreement. The Bank Merger Agreement will have been executed and delivered.
(e) Dissenting Shares. Dissenting Shares will be less than ten percent (10.0%) of the issued and outstanding shares of WFB Common Stock.
(f) Consents and Approvals. WFB has received, in form and substance satisfactory to WFB and Investar, all (i) consents, approvals, waivers and other assurances from all non-governmental third parties which are required to be obtained under any contract, agreement or instrument to which WFB or any of its Subsidiaries is a party or by which any of their respective properties is bound in order to prevent the consummation of the transactions contemplated by this Agreement from constituting a default under such contract, agreement or instrument or creating any lien, claim or charge upon any of the assets of WFB or any of its Subsidiaries, and (ii) consents, approvals, amendments, or cancellation agreements necessary to terminate or fully satisfy obligations of WFB as of the Effective Time under WFB Benefit Plans.
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(g) Convertible Subordinated Debt. Immediately prior to the Effective Time, or earlier upon receipt of consent from TIB-The Independent BankersBank (“TIB”), WFB will have redeemed and paid off any outstanding Convertible Subordinated Debt. In this regard, ISTR agrees to cooperate in good faith in obtaining any consents required of third-parties, particularly, TIB, required to redeem the Convertible Subordinated Debt.
(h) WFB Shareholders Agreement. The WFB Shareholders Agreement will have been terminated.
Section 7.04 Frustration of Closing Conditions. Neither Investar nor WFB may rely on the failure of any condition set forth in Section 7.01, Section 7.02 or Section 7.03, as the case may be, to be satisfied if such failure was caused by such Party’s failure to use its reasonable best efforts to consummate any of the transactions contemplated hereby, as required by and subject to Section 6.03.
ARTICLE VIII
TERMINATION
Section 8.01 Termination. This Agreement may be terminated, and the transactions contemplated hereby may be abandoned, at any time prior to the Effective Time, whether before or after adoption of this Agreement by the shareholders of Investar or WFB:
(a) Mutual Consent. By the mutual consent, in writing, of Investar and WFB if the board of directors of Investar and the board of directors of WFB each so determines by vote of a majority of the members of its entire board.
(b) No Regulatory Approval. By Investar or WFB, if either of their respective boards of directors so determines by a vote of a majority of the members of its entire board, in the event that (i) any Regulatory Approval required for consummation of the transactions contemplated by this Agreement will have been denied by final, non-appealable action by such Governmental Authority, (ii) an application therefor will have been permanently withdrawn at the request of a Governmental Authority; (iii) Investar makes a reasonable determination in good faith after consultation with its counsel that there is a substantial likelihood that any Regulatory Approval will be obtained only upon the imposition of a Burdensome Condition; or (iv) any Governmental Authority will have issued a final nonappealable law or order permanently enjoining or otherwise prohibiting or making illegal the consummation of the Merger or the Bank Merger, provided however that the right to terminative under this Section will not be available to any Party whose failure to comply with any provision of this Agreement has been the cause of, or materially contributed to, such action.
(c) No Shareholder Approval. By either Investar or WFB (provided that such terminating Party will not be in breach of any of its obligations under Section 6.04), if the Requisite Investar Shareholder Approval or the Requisite WFB Shareholder Approval will not have been obtained by reason of the failure to obtain the required vote at a duly held meeting of such shareholders or at any adjournment or postponement thereof.
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(d) Breach of Representations, Warranties, or Covenants. By either Investar or WFB (provided that the terminating Party is not then in material breach of any representation, warranty, covenant or other agreement contained herein in a manner that would entitle the other Party to not consummate this Agreement) if there will have been a breach of any of the covenants or agreements or any of the representations and warranties set forth in this Agreement on the part of the other Party, which breach, either individually or in the aggregate with all other breaches by such Party, would constitute, if occurring or continuing on the Closing Date, the failure of a condition set forth in Section 7.02(a), in the case of a termination by Investar, or Section 7.03(a), in the case of a termination by WFB, and which is not cured within thirty (30) days following written notice to Investar, in the case of a termination by WFB, or WFB, in the case of a termination by Investar, or which, by its nature, cannot be cured during such period (or such fewer days as remain prior to the Expiration Date).
(e) Delay. By either Investar or WFB, if the Merger will not have been consummated on or before March 31, 2026, or such later date as will have been agreed to in writing by Investar and WFB, provided, however, that such date will be automatically extended to June 30, 2026, if the only outstanding condition to Closing under Article VII is the receipt of all Regulatory Approvals (the “Expiration Date”), provided, further, that no Party may terminate this Agreement pursuant to this Section if the failure of the Closing to occur by such date was due to a material breach of this Agreement by the Party seeking to terminate this Agreement.
(f) Failure to Recommend; Etc. In addition to and not in limitation of Investar’s termination rights under Section 8.01(d), by Investar if (i) there will have been a material breach of Section 6.09, or (ii) the board of directors of WFB (1) withdraws, qualifies, amends, modifies or withholds the WFB Recommendation, or makes any statement, filing or release, in connection with the WFB Meeting or otherwise, inconsistent with the WFB Recommendation (it being understood that taking a neutral position or no position with respect to an Acquisition Proposal will be considered an adverse modification of the WFB Recommendation), (2) materially breaches its obligation to call, give notice of and commence the WFB Meeting under Section 6.04(a), (3) approves or recommends an Acquisition Proposal, (4) fails to publicly recommend against a publicly announced Acquisition Proposal within three (3) Business Days of being requested to do so by Investar, (5) fails to publicly reconfirm the WFB Recommendation within three (3) Business Days of being requested to do so by Investar, or (6) resolves or otherwise determines to take, or announces an intention to take, any of the foregoing actions.
(g) Acceptance of Superior Proposal. By WFB in connection with entering into a definitive agreement to effect a Superior Proposal after making an WFB Subsequent Determination in accordance with Section 6.09(e).
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Section 8.02 Termination Fee.
(a) In recognition of the efforts, expenses and other opportunities forgone by Investar while structuring and pursuing the Merger, WFB will pay to Investar a termination fee equal to $3,300,000 (“Termination Fee”), by wire transfer of immediately available funds to an account specified by Investar in the event of any of the following: (i) in the event Investar terminates this Agreement pursuant to Section 8.01(f), WFB will pay Investar the Termination Fee within one (1) Business Day after receipt of Investar’s notification of such termination; (ii) in the event that after the date of this Agreement and prior to the termination of this Agreement, an Acquisition Proposal will have been made known to senior management of WFB or has been made directly to its shareholders generally or any Person will have publicly announced (and not withdrawn) an Acquisition Proposal with respect to WFB and (A) thereafter this Agreement is terminated (x) by either Investar or WFB pursuant to Section 8.01(c) because the Requisite WFB Shareholder Approval will not have been obtained or (y) by Investar pursuant to Section 8.01(d) and (B) prior to the date that is twelve (12) months after the date of such termination, WFB enters into any agreement or consummates a transaction with respect to an Acquisition Proposal (whether or not the same Acquisition Proposal as that referred to above), then WFB will, on the earlier of the date it enters into such agreement and the date of consummation of such transaction, pay Investar the Termination Fee, provided, that for purposes of this Section 8.02(a)(ii), all references in the definition of Acquisition Proposal to “twenty percent (20%)” will instead refer to “fifty percent (50%),” and (iii) in the event WFB terminates this Agreement pursuant to Section 8.01(g), WFB will pay Investar the Termination Fee within one (1) Business Day after WFB’s notification of such termination.
(b) WFB and Investar each agree that the agreements contained in this Section 8.02 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, Investar would not enter into this Agreement; accordingly, if WFB fails promptly to pay any amounts due under this Section 8.02, WFB will pay interest on such amounts from the date payment of such amounts were due to the date of actual payment at the rate of interest equal to the sum of (i) the rate of interest published from time to time in The Wall Street Journal, Eastern Edition (or any successor publication thereto), designated therein as the prime rate on the date such payment was due, plus (ii) 200 basis points, together with the costs and expenses of Investar (including reasonable legal fees and expenses) in connection with such suit. The amounts payable by WFB pursuant to Section 8.02 constitute liquidated damages and not a penalty.
(c) Notwithstanding anything to the contrary set forth in this Agreement, but without limiting the right of any Party to recover liabilities or damages arising out of the other Party’s fraud or willful and material breach of any provision of this Agreement, the Parties agree that if WFB pays or causes to be paid to Investar the Termination Fee in accordance with Section 8.02(a), WFB (or any successor in interest of WFB) will not have any further obligations or liabilities to Investar with respect to this Agreement or the transactions contemplated by this Agreement.
Section 8.03 Effect of Termination. Except as set forth in Section 8.02, in the event of termination of this Agreement by either Investar or WFB as provided in Section 8.01, this Agreement will forthwith become void and have no effect, and none of Investar, WFB, any of their respective Subsidiaries or any of the officers or directors of any of them will have any liability of any nature whatsoever hereunder, or in connection with the transactions contemplated hereby, except that (i) this Section 8.03 and Article X will survive any termination of this Agreement, and (ii) notwithstanding anything to the contrary contained in this Agreement, neither Investar nor WFB will be relieved or released from any liabilities or damages arising out of its willful and material breach of any provision of this Agreement occurring prior to termination.
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ARTICLE IX
DEFINITIONS
Section 9.01 Definitions.
The following terms are used in this Agreement with the meanings set forth below:
“Acquisition Proposal” has the meaning set forth in Section 6.09(a).
“Acquisition Transaction” has the meaning set forth in Section 6.09(a).
“Affiliate” means, with respect to any Person, any other Person controlling, controlled by or under common control with such Person. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means the possession, directly or indirectly, of power to direct or cause the direction of the management and policies of a Person whether through the ownership of voting securities, by contract or otherwise.
“Agreement” has the meaning set forth in the preamble to this Agreement.
“ASC 320” means GAAP Accounting Standards Codification Topic 320.
“Associate” when used to indicate a relationship with any Person means (1) any corporation or organization (other than WFB or any of its Subsidiaries) of which such Person is an officer or partner or is, directly or indirectly, the beneficial owner of ten percent (10%) or more of any class of equity securities, (2) any trust or other estate in which such Person has a substantial beneficial interest or serves as trustee or in a similar fiduciary capacity, or (3) any relative or family member of such Person.
“ASTM” has the meaning set forth in Section 6.01(z).
“Audited Financial Statements” has the meaning set forth in Section 4.07(a).
“Bank Merger” has the meaning set forth in Section 1.03.
“Bank Merger Agreement” has the meaning set forth in the Recitals.
“Bank Secrecy Act” means the Bank Secrecy Act of 1970, as amended.
“Board Representatives” has the meaning set forth in Section 6.18.
“BOLI” has the meaning set forth in Section 4.31(b).
“Book-Entry Shares” means any non-certificated share held by book entry in WFB’s stock transfer book, which immediately prior to the Effective Time represents an outstanding share of WFB Common Stock.
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“Burdensome Condition” has the meaning set forth in Section 6.06(a).
“Business Day” means Monday through Friday of each week, except a legal holiday recognized as such by the U.S. government or any day on which banking institutions in the State of Louisiana are authorized or obligated to close.
“Carryover PTO” has the meaning set forth in Section 6.11(c).
“Cash Consideration” means cash in an amount equal to the sum of (i) $7,200,000 plus (ii) the product of (A) each dollar of WFB Converted Principal multiplied by (B) $0.11.
“Certificate” means any outstanding certificate, which immediately prior to the Effective Time, represents an outstanding share of WFB Common Stock.
“Certificates of Merger” has the meaning set forth in Section 2.01(a).
“Claim” has the meaning set forth in Section 6.10(a).
“Closing” and “Closing Date” have the meanings set forth in Section 2.01(b).
“Code” has the meaning set forth in the Recitals.
“Community Reinvestment Act” means the Community Reinvestment Act of 1977, as amended.
“Controlled Group Members” means, with respect to the applicable entity, any related organizations described in Code Sections 414(b), (c), or (m).
“Convertible Subordinated Debt” means the indebtedness evidenced by those certain Subordinated Promissory Notes Due 2025 and described in more detail on WFB Disclosure Schedule Section 4.02(c).
“Covered Employees” has the meaning set forth in Section 6.11(a).
“CRE Guidance” means Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices, Federal Register, Vol. 71, No. 238, December 12, 2006, pp. 74580–74588.
“D&O Insurance” has the meaning set forth in Section 6.10(d).
“Derivative Transaction” means any swap transaction, option, warrant, forward purchase or sale transaction, futures transaction, cap transaction, floor transaction or collar transaction relating to one or more currencies, commodities, bonds, equity securities, loans, interest rates, catastrophe events, weather-related events, credit-related events or conditions or any indexes, or any other similar transaction (including any option with respect to any of these transactions) or combination of any of these transactions, including collateralized mortgage obligations or other similar instruments or any debt or equity instruments evidencing or embedding any such types of transactions, and any related credit support, collateral or other similar arrangements related to any such transaction or transactions.
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“Director Support Agreement” has the meaning set forth in the Recitals.
“Dissenting Share” has the meaning set forth in Section 3.01(d).
“Dodd-Frank Act” means the Dodd-Frank Wall Street Reform and Consumer Protection Act.
“Effective Time” has the meaning set forth in Section 2.01(a).
“Enforceability Exception” **** has the meaning set forth in Section 4.05.
“Environmental Law” means any federal, state or local Law, regulation, order, decree, permit, authorization, opinion or agency requirement relating to: (a) pollution, the protection or restoration of the indoor or outdoor environment, human health and safety, or natural resources, (b) the handling, use, presence, disposal, release or threatened release of any Hazardous Substance, or (c) any injury or threat of injury to persons or property in connection with any Hazardous Substance. The term Environmental Law includes, but is not limited to, the following statutes, as amended, any successor thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar issues: (a) Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act of 1986, as amended, 42 U.S.C. § 9601 et seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. § 6901, et seq.; the Clean Air Act, as amended, 42 U.S.C. § 7401, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1251, et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. § 2601, et seq.; the Emergency Planning and Community Right to Know Act, 42 U.S.C. § 1101, et seq.; the Safe Drinking Water Act; 42 U.S.C. § 300f, et seq.; the Occupational Safety and Health Act, 29 U.S.C. § 651, et seq.; (b) common Law that may impose liability (including without limitation strict liability) or obligations for injuries or damages due to the presence of or exposure to any Hazardous Substance.
“Equal Credit Opportunity Act” means the Equal Credit Opportunity Act, as amended.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means, with respect to the applicable entity, an organization that is related under Section 4001(b) of ERISA.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exchange Agent” means such exchange agent as may be designated by Investar (which will be Investar’s transfer agent), and reasonably acceptable to WFB, to act as agent for purposes of conducting the exchange procedures described in Article III.
“Exchange Pool” means an aggregate number of shares of Investar Common Stock equal to the sum of (i) 3,955,334 plus (ii) the product of (A) each dollar of WFB Converted Principal multiplied by (B) 0.0425.
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“Exchange Ratio” means the quotient of (i) the Exchange Pool divided by (ii) the aggregate number of issued and outstanding shares of WFB Common Stock (excluding WFB Cancelled Shares) immediately prior to the Effective Time, as the same may be adjusted pursuant to Section 3.08.
“Excluded Claim” means (i) any Claim brought by any Indemnified Party against any other Indemnified Party or Investar or its Subsidiaries (or their respective successors) or (ii) any Claim brought by Investar or its Subsidiaries (or their respective successors) against any Indemnified Party.
“Expiration Date” has the meaning set forth in Section 8.01(e).
“Fair Credit Reporting Act” means the Fair Credit Reporting Act, as amended.
“Fair Housing Act” means the Fair Housing Act, as amended.
“FDIA” has the meaning set forth in Section 4.27.
“FDIC” means the Federal Deposit Insurance Corporation.
“Financial Statements” has the meaning set forth in Section 4.07(a).
“FNB” has the meaning set forth in the Recitals.
“FRB” means the Board of Governors of the Federal Reserve System.
“GAAP” means generally accepted accounting principles in the United States of America, applied consistently with past practice, including with respect to quantity and frequency.
“Governmental Authority” means any U.S. or foreign federal, state or local governmental commission, board, body, bureau or other regulatory authority or agency, including, without limitation, courts and other judicial bodies, bank regulators, insurance regulators, applicable state securities authorities, the SEC, the IRS or any self-regulatory body or authority, including any instrumentality or entity designed to act for or on behalf of the foregoing.
“Hazardous Substance” means any and all substances (whether solid, liquid or gas) defined, listed, or otherwise regulated as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, flammable or explosive materials, radioactive materials or words of similar meaning or regulatory effect under any present or future Environmental Law or that may have a negative impact on human health or the environment, including, but not limited to, petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive materials, flammables and explosives, mold, mycotoxins, microbial matter and airborne pathogens (naturally occurring or otherwise). Hazardous Substance does not include substances of kinds and in amounts ordinarily and customarily used or stored for the purposes of cleaning or other maintenance or operations.
“Holder” means the holder of record of shares of WFB Common Stock.
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“Home Mortgage Disclosure Act” means Home Mortgage Disclosure Act of 1975, as amended.
“Indemnified Party” has the meaning set forth in Section 6.10(a).
“Informational Systems Conversion” has the meaning set forth in Section 6.14.
“Intellectual Property” means (a) trademarks, service marks, trade names, Internet domain names, designs, logos, slogans, and general intangibles of like nature, together with all goodwill, registrations and applications related to the foregoing; (b) patents and industrial designs (including any continuations, divisionals, continuations-in-part, renewals, reissues, and applications for any of the foregoing); (c) copyrights (including any registrations and applications for any of the foregoing); (d) Software (excluding off-the-shelf Software); and (e) technology, trade secrets and other confidential information, know-how, proprietary processes, formulae, algorithms, models, and methodologies.
“Investar” has the meaning set forth in the preamble to this Agreement.
“Investar Bank” has the meaning set forth in the Recitals.
“Investar Common Stock” means the common stock, $1.00 par value per share, of Investar.
“Investar Common Stock Issuance” has the meaning set forth in Section 4.06(a).
“Investar Disclosure Schedule” has the meaning set forth in Article V.
“Investar Meeting” has the meaning set forth in Section 6.04(a).
“Investar Recommendation” will have the meanings set forth in Section 6.01(d).
“Investar Regulatory Agreement” has the meaning set forth in Section 5.11.
“Investar Reports” has the meaning set forth in Section 5.05(a).
“IRS” means the United States Internal Revenue Service.
“Joint Proxy Statement/Prospectus” means the joint proxy statement and prospectus and other proxy solicitation materials of Investar and WFB relating to the Investar Meeting and the WFB Meeting.
“Knowledge” means, with respect to WFB, the actual knowledge of the directors and executive officers of WFB and FNB, after due inquiry of their direct subordinates who would be likely to have knowledge of such matter, and with respect to Investar, the actual knowledge of the directors and executive officers of Investar and Investar Bank, after due inquiry of their direct subordinates who would be likely to have knowledge of such matter.
“Law” means any federal, state, local or foreign Law, statute, ordinance, rule, regulation, judgment, order, injunction, decree, arbitration award, agency requirement, license or permit of any Governmental Authority that is applicable to the referenced Person.
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“LBCA” has the meaning set forth in Section 1.01
“Leases” has the meaning set forth in Section 4.29(c).
“Letter of Transmittal” has the meaning set forth in Section 3.05.
“Liens” means any charge, mortgage, pledge, security interest, restriction, claim, lien or encumbrance, conditional and installment sale agreement, charge, claim, option, rights of first refusal, encumbrances, or security interest of any kind or nature whatsoever (including any limitation on voting, sale, transfer or other disposition or exercise of any other attribute of ownership).
“Loans” has the meaning set forth in Section 4.22(a).
“Material Adverse Effect” with respect to any Party means (i) any change, development or effect that individually or in the aggregate is, or is reasonably likely to be, material and adverse to the condition (financial or otherwise), results of operations, liquidity, assets or deposit liabilities, properties, or business of such Party and its Subsidiaries, taken as a whole, or (ii) any change, development or effect that individually or in the aggregate would, or would be reasonably likely to, materially impair the ability of such Party to perform its obligations under this Agreement or otherwise materially impairs, or is reasonably likely to materially impair, the ability of such Party to consummate the Merger and the transactions contemplated hereby; provided, however, that, in the case of clause (i) only, a Material Adverse Effect will not be deemed to include the impact of (A) changes after the date of this Agreement in banking and similar Laws of general applicability or interpretations thereof by Governmental Authorities (except to the extent that such change disproportionately adversely affects WFB and its Subsidiaries or Investar and its Subsidiaries, as the case may be, compared to other companies of similar size operating in the same industry in which WFB and Investar operate, in which case only the disproportionate effect will be taken into account), (B) changes after the date of this Agreement in GAAP or regulatory accounting requirements applicable to banks or bank holding companies generally (except to the extent that such change disproportionately adversely affects WFB and its Subsidiaries or Investar and its Subsidiaries, as the case may be, compared to other companies of similar size operating in the same industry in which WFB and Investar operate, in which case only the disproportionate effect will be taken into account), (C) changes after the date of this Agreement in global, national or regional political conditions (including the outbreak of war or acts of terrorism) or in economic or market (including equity, credit and debt markets, as well as changes in interest rates) conditions in the United States or the States of Louisiana and Texas affecting the financial services industry generally (except to the extent that such change disproportionately adversely affects WFB and its Subsidiaries or Investar and its Subsidiaries, as the case may be, compared to other companies of similar size operating in the same industry in which WFB and Investar operate, in which case only the disproportionate effect will be taken into account), (D) public disclosure of the transactions contemplated hereby or actions expressly required by this Agreement or actions or omissions that are taken with the prior written consent of the other Party, or as otherwise expressly permitted or contemplated by this Agreement, (E) any failure by WFB or Investar to meet any internal or published industry analyst projections or forecasts or estimates of revenues or earnings for any period (it being understood and agreed that the facts and circumstances giving rise to such failure that are not otherwise excluded from the definition of Material Adverse Effect may be taken into account in determining whether there has been a Material Adverse Effect), (F) changes in the trading price or trading volume of Investar Common Stock, and (G) the impact of this Agreement and the transactions contemplated hereby on relationships with customers or employees (including the loss of personnel subsequent to the date of this Agreement).
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“Maximum D&O Tail Premium” has the meaning set forth in Section 6.10(d).
“Merger” has the meaning set forth in the Recitals.
“Merger Consideration” means the aggregate Per-Share Merger Consideration payable to Holders of WFB Common Stock hereunder.
“Nasdaq” means The Nasdaq Global Market.
“National Labor Relations Act” means the National Labor Relations Act, as amended.
“Notice of Superior Proposal” has the meaning set forth in Section 6.09(e).
“Notice Period” has the meaning set forth in Section 6.09(e).
“OCC” means the Office of the Comptroller of the Currency.
“Ordinary Course of Business” means the ordinary, usual and customary course of business of WFB and WFB’s Subsidiaries consistent with past practice, including with respect to frequency and amount.
“OREO” has the meaning set forth in Section 4.22(c).
“Party” or “Parties” have the meaning set forth in the preamble to this Agreement.
“Per-Share Cash Consideration” means the quotient of (i) the Cash Consideration divided by (ii) the aggregate number of issued and outstanding shares of WFB Common Stock (excluding WFB Cancelled Shares) immediately prior to the Effective Time.
“Per-Share Merger Consideration” has the meaning set forth in Section 3.01(c).
“Per-Share Stock Consideration” means a number of validly issued, fully paid and nonassessable shares of Investar Common Stock equal to the Exchange Ratio.
“Person” means any individual, bank, corporation, partnership, association, joint-stock company, business trust, limited liability company, unincorporated organization or other organization or firm of any kind or nature.
“Phase I” has the meaning set forth in Section 6.01(z).
“Registration Statement” means the Registration Statement on Form S-4 to be filed with the SEC by Investar in connection with the Investar Common Stock Issuance (including the Joint Proxy Statement/Prospectus constituting a part thereof).
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“Regulations” means the final and temporary regulations promulgated under the Code by the United States Department of the Treasury.
“Regulatory Approval” has the meaning set forth in Section 4.06(a).
“Requisite Investar Shareholder Approval” means approval of this Agreement and the transactions contemplated hereby, including the issuance of Investar Common Stock as contemplated by this Agreement, by a vote (in person or by proxy) of the greater of (i) two-thirds of the voting power present in person or by proxy at the Investar Meeting; or (ii) a majority of the outstanding shares of Investar Common Stock entitled to vote thereon at the Investar Meeting.
“Requisite WFB Shareholder Approval” means approval of this Agreement by a vote (in person or by proxy) of two-thirds of the outstanding shares of WFB Common Stock entitled to vote thereon at the WFB Meeting.
“Rights” means, with respect to any Person, warrants, options, rights, convertible securities and other arrangements or commitments which obligate the Person to issue or dispose of any of its capital stock or other ownership interests.
“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended.
“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Software” means computer programs, whether in source code or object code form (including any and all software implementation of algorithms, models and methodologies), databases and compilations (including any and all data and collections of data), and all documentation (including user manuals and training materials) related to the foregoing.
“SRO” has the meaning set forth in Section 4.06.
“Subsidiary” means, with respect to any Party, any corporation or other entity of which a majority of the capital stock or other ownership interest having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Party. Any reference in this Agreement to a Subsidiary of WFB means, unless the context otherwise requires, any current or former Subsidiary of WFB.
“Superior Proposal” has the meaning set forth in Section 6.09(a).
“Surviving Bank” has the meaning set forth in Section 1.03.
“Surviving Company” has the meaning set forth in the Recitals.
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“Tax” and “Taxes” means all federal, state, local, and foreign taxes, charges, fees, levies, imposts, duties, or other like assessments, including assessments for unclaimed property, as well as income, gross receipts, excise, employment, sales, use, transfer, intangible, recording, license, payroll, franchise, severance, documentary, stamp, occupation, windfall profits, environmental, federal highway use, commercial rent, customs duties, capital stock, paid-up capital, profits, withholding, Social Security, single business and unemployment, disability, real property, personal property, registration, ad valorem, value added, alternative or add-on minimum, estimated, or other tax or governmental fee of any kind whatsoever, or any amount in respect of unclaimed property or escheat, imposed by or required to be paid or withheld by the United States or any state, local, or foreign government or subdivision or agency thereof, whether disputed or not, including any related interest, penalties, and additions imposed thereon or with respect thereto, and including any liability for Taxes of another Person pursuant to a contract, as a transferee or successor, under Treasury Regulation Section 1.1502-6 or analogous provision of state, local or foreign Law or otherwise.
“Tax Returns” means any report, return, declaration, claim for refund, information return or statement relating to Taxes, including any associated schedules, forms, attachments or amendments and any related or supporting information, estimates, elections, or statements provided or required to be provided to a taxing authority in connection with Taxes, including any return of an Affiliated or combined or unitary group that includes a Party or its Subsidiaries and including without limitation any estimated Tax return.
“TBOC” has the meaning set forth in Section 3.01(d).
“TDB” means the Texas Department of Banking.
“Termination Fee” has the meaning set forth in Section 8.02(a).
“The date hereof” or “the date of this Agreement” means the date first set forth above in the preamble to this Agreement.
“Transaction Expenses” any transaction expenses related to the Merger, this Agreement and the transactions contemplated hereby, including (i) the amount of any costs, fees, expenses and commissions payable to any broker, finder, financial advisor or investment banking firm in connection with this Agreement or the transactions contemplated hereby; (ii) the amount of all legal and accounting fees and other expenses incurred in connection with the negotiation, execution or performance of this Agreement or the consummation of the transactions contemplated hereby; (iii) the accrual of any costs, fees, expenses, contract payments, penalties or liquidated damages associated with or incurred in connection with the expected termination of any Material Contracts, including, but not limited to, the termination of any data processing contract following the Closing Date and any associated deconversion fees; (iv) amounts payable upon a change in control event under any WFB Material Contract; (v) the amount of any payments to be made or expenses to be incurred pursuant to any existing employment, change in control, salary continuation, deferred compensation or other similar agreements or arrangements or severance, noncompetition, retention or bonus arrangements between WFB or FNB and any other Person, including upon termination of such agreements, regardless of whether payment under such agreement or arrangement is triggered by the transactions set forth in this Agreement; (vi) the accrual of any future benefit payments due under any salary continuation, deferred compensation or other similar agreements through the date of final payment; (vii) the amount of any additional accruals or costs to fully fund and liquidate any WFB Benefit Plan and to pay all related expenses and fees to the extent such termination is requested by Investar; and (vii) all costs associated with the assumption of the trust preferred and subordinated debt securities contemplated in Section 6.25.
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“Truth in Lending Act” means the Truth in Lending Act of 1968, as amended.
“Unaudited Financial Statements” has the meaning set forth in Section 4.07(a).
“USA PATRIOT Act” means the USA PATRIOT Act of 2001, Public Law 107-56, and the regulations promulgated thereunder.
“Voting Agreement” or “Voting Agreements” will have the meaning set forth in the Recitals.
“WFB” has the meaning set forth in the preamble to this Agreement.
“WFB Benefit Plans” has the meaning set forth in Section 4.15(a).
“WFB Cancelled Shares” has the meaning set forth in Section 3.01(b).
“WFB Common Stock” means the common stock, $1.00 par value per share, of WFB.
“WFB Converted Principal” means the amount of principal of the Convertible Subordinated Debt that was converted from indebtedness to shares of WFB Common Stock after December 31, 2024 up to the Effective Time.
“WFB Disclosure Schedule” has the meaning set forth in Article IV.
“WFB Employees” has the meaning set forth in Section 4.15(a).
“WFB Financial Advisor” has the meaning set forth in Section 4.14.
“WFB 401(a) Plan” has the meaning set forth in Section 4.15(c).
“WFB Insiders” has the meaning set forth in Section 6.22.
“WFB Intellectual Property” means the Intellectual Property used in or held for use in the conduct of the business of WFB and its Subsidiaries.
“WFB Loan” has the meaning set forth in Section 4.22(d).
“WFB Material Contracts” has the meaning set forth in Section 4.12(a).
“WFB Meeting” has the meaning set forth in Section 6.04(a).
“WFB Recommendation” has the meaning set forth in Section 6.04(b).
“WFB Regulatory Agreement” has the meaning set forth in Section 4.13.
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“WFB Representatives” has the meaning set forth in Section 6.09(a).
“WFB Subsequent Determination” has the meaning set forth in Section 6.09(e).
ARTICLE X
MISCELLANEOUS
Section 10.01 Survival. No representations, warranties, agreements or covenants contained in this Agreement will survive the Effective Time, except for those agreements or covenants contained herein that by their express terms are to be performed in whole or in part after the Effective Time, including, without limitation, Section 6.10.
Section 10.02 Waiver; Amendment. Prior to the Effective Time and to the extent permitted by applicable Law, any provision of this Agreement may be (a) waived by the Party benefited by the provision, provided such waiver is in writing and signed by such Party, or (b) amended or modified at any time, by an agreement in writing among the Parties executed in the same manner as this Agreement, except that after the Investar Meeting or the WFB Meeting no amendment will be made which by Law requires further approval by the shareholders of Investar or WFB, as applicable, without obtaining such approval. The waiver by any Party of a breach of any provision of this Agreement will not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach.
Section 10.03 Governing Law; Jurisdiction.
(a) This Agreement will be governed by, and interpreted and enforced in accordance with, the internal, substantive laws of the State of Louisiana, without regard for conflict of law provisions.
(b) Each Party agrees that it will bring any action or proceeding in respect of any claim arising out of or related to this Agreement or the transactions contemplated hereby exclusively in any federal or state court of competent jurisdiction located in the State of Louisiana (the “Louisiana Courts”), and, solely in connection with claims arising under this Agreement or the transactions that are the subject of this Agreement, (i) irrevocably submits to the exclusive jurisdiction of the Louisiana Courts, (ii) waives any objection to laying venue in any such action or proceeding in the Louisiana Courts, (iii) waives any objection that the Louisiana Courts are an inconvenient forum or do not have jurisdiction over any Party and (iv) agrees that service of process upon such Party in any such action or proceeding will be effective if notice is given in accordance with Section 10.06.
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Section 10.04 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE EXTENT PERMITTED BY LAW AT THE TIME OF INSTITUTION OF THE APPLICABLE LITIGATION, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY; AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.04.
Section 10.05 Expenses. Except as otherwise provided in Section 8.02, each Party will bear all expenses incurred by it in connection with this Agreement and the transactions contemplated hereby, including fees and expenses of its own financial consultants, accountants and counsel. Nothing contained in this Agreement will limit either Party’s rights to recover any liabilities or damages arising out of the other Party’s willful breach of any provision of this Agreement.
Section 10.06 Notices. All notices, requests and other communications hereunder to a Party, will be in writing and will be deemed properly given if delivered (a) personally, (b) by registered or certified mail (return receipt requested), with adequate postage prepaid thereon, (c) by properly addressed electronic mail delivery (with confirmation of delivery receipt), or (d) by reputable courier service to such Party at its address set forth below, or at such other address or addresses as such Party may specify from time to time by notice in like manner to the Parties. All notices will be deemed effective upon delivery.
(a) if to Investar, to:
Investar Holding Corporation
10500 Coursey Boulevard, 3^rd^ Floor
Baton Rouge, Louisiana 70816
Attention: John D’Angelo, President
E-mail: john.dangelo@investarbank.com
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with copies (which will not constitute notice to Investar) to:
Investar Holding Corporation
10500 Coursey Boulevard, 3^rd^ Floor
Baton Rouge, Louisiana 70816
Attention: Elizabeth A. Tranchina, General Counsel
E-mail: elizabeth.tranchina@investarbank.com
and:
Fenimore Kay Harrison LLP
420 Nichols Road, Second Floor
Kansas City, Missouri 64112
Attention: Stephanie E. Kalahurka
E-mail: skalahurka@fkhpartners.com
(b) if to WFB, to:
Wichita Falls Bancshares, Inc.
3801 Fairway Boulevard
Wichita Falls, Texas 76310
Attention: Sam Beard, Chairman of the Board
E-mail: sbeard@fnbtx.com
with a copy (which will not constitute notice to WFB) to:
Bradley Arant Boult Cummings LLP
1445 Ross Avenue, Suite 3600
Dallas, Texas 75202
Attention: Robert N. Flowers
E-mail: rflowers@bradley.com
Section 10.07 Entire Understanding; No Third Party Beneficiaries. This Agreement represents the entire understanding of the Parties and thereto with reference to the transactions contemplated hereby, and this Agreement supersedes any and all other oral or written agreements heretofore made. Except for the Indemnified Parties’ rights under Section 6.10, Investar and WFB hereby agree that their respective representations, warranties and covenants set forth herein are solely for the benefit of the other Party, in accordance with and subject to the terms of this Agreement, and this Agreement is not intended to, and does not, confer upon any Person (including any person or employees who might be affected by Section 6.11), other than the Parties, any rights or remedies hereunder, including, the right to rely upon the representations and warranties set forth herein. The representations and warranties in this Agreement are the product of negotiations between the Parties and are for the sole benefit of the Parties. Any inaccuracies in such representations and warranties are subject to waiver by the Parties hereto in accordance herewith without notice or liability to any other Person. In some instances, the representations and warranties in this Agreement may represent an allocation among the Parties hereto of risks associated with particular matters regardless of the Knowledge of any of the Parties hereto. Consequently, Persons other than the Parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.
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Section 10.08 Severability. In the event that any one or more provisions of this Agreement will for any reason be held invalid, illegal or unenforceable in any respect, by any court of competent jurisdiction, such invalidity, illegality or unenforceability will not affect any other provisions of this Agreement and the Parties will use their commercially reasonable efforts to substitute a valid, legal and enforceable provision which, insofar as practical, implements the purposes and intents of this Agreement.
Section 10.09 Enforcement of the Agreement. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties will be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction without having to show or prove economic damages and without the requirement of posting a bond, this being in addition to any other remedy to which they are entitled at law or in equity.
Section 10.10 Interpretation.
(a) When a reference is made in this Agreement to sections, exhibits or schedules, such reference will be to a section of, or exhibit or schedule to, this Agreement unless otherwise indicated. The table of contents and captions and headings contained in this Agreement are included solely for convenience of reference; if there is any conflict between a caption or heading and the text of this Agreement, the text will control. Whenever the words “include,” “includes” or “including” are used in this Agreement, they will be deemed to be followed by the words “without limitation.”
(b) The Parties have participated jointly in the negotiation and drafting of this Agreement and the other agreements and documents contemplated herein. In the event an ambiguity or question of intent or interpretation arises under any provision of this Agreement or any other agreement or document contemplated herein, this Agreement and such other agreements or documents will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of authorizing any of the provisions of this Agreement or any other agreements or documents contemplated herein.
(c) The WFB Disclosure Schedule and the Investar Disclosure Schedule, as well as all other schedules and all exhibits to this Agreement, will be deemed part of this Agreement and included in any reference to this Agreement. Any matter disclosed pursuant to any section of either Disclosure Schedule will be deemed disclosed for purposes of any other section of Article IV or Article V, respectively, to the extent that applicability of the disclosure to such other section is reasonably apparent on the face, notwithstanding the absence of a specific cross-reference, of such disclosure. No item is required to be set forth in either Disclosure Schedule as an exception to a representation or warranty if its absence would not result in the related representation or warranty being deemed untrue or incorrect. The mere inclusion of an item in either Disclosure Schedule as an exception to a representation or warranty will not be deemed an admission by either Party that such item represents a material exception or fact, event or circumstance or that such item is reasonably likely to result in a Material Adverse Effect, or that any breach or violation of applicable Laws or any contract exists or has actually occurred. This Agreement will not be interpreted or construed to require any person to take any action, or fail to take any action, if to do so would violate any applicable Law.
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(d) Any reference contained in this Agreement to specific statutory or regulatory provisions or to any specific Governmental Authority will include any successor statute or regulation, or successor Governmental Authority, as the case may be. Unless the context clearly indicates otherwise, the masculine, feminine, and neuter genders will be deemed to be interchangeable, and the singular includes the plural and vice versa. As used herein, (i) the term “made available” means any document or other information that was (a) provided by one Party or its representatives to the other Party or its representatives prior to the date hereof, (b) included in the virtual data room of a Party prior to the date hereof, or (c) included in any registration statement, prospectus, report, schedule or definitive proxy statement filed with or furnished by Investar to the SEC and which is publicly available, and (ii) the word “or” is not exclusive.
(e) Unless otherwise specified, the references to “Section” and “Article” in this Agreement are to the Sections and Article of this Agreement. When used in this Agreement, words such as “herein”, “hereinafter”, “hereof”, “hereto”, and “hereunder” refer to this Agreement as a whole, unless the context clearly requires otherwise.
Section 10.11 Assignment. No Party may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of the other Party, and any purported assignment in violation of this Section 10.11 will be void. Subject to the preceding sentence, this Agreement will be binding upon and will inure to the benefit of the Parties and their respective successors and permitted assigns.
Section 10.12 Counterparts. This Agreement may be executed and delivered by facsimile or by electronic data file and in one or more counterparts, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party, it being understood that all Parties need not sign the same counterpart.
Section 10.13 Delivery by Facsimile or Electronic Transmission. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments or waivers hereto or thereto, to the extent signed and delivered by means of a facsimile machine or by e-mail delivery of a “.pdf” format data file, will be treated in all manner and respects as an original agreement or instrument and will be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No Party hereto or to any such agreement or instrument will raise the use of a facsimile machine or e-mail delivery of a “.pdf” format data file to deliver a signature to this Agreement or any amendment hereto or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or e-mail delivery of a “.pdf” format data file as a defense to the formation of a contract and each Party hereto forever waives any such defense.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in counterparts by their duly authorized officers, all as of the day and year first above written.
| INVESTAR HOLDING CORPORATION | |
|---|---|
| By: | /s/ John D’Angelo |
| John D’Angelo | |
| President and Chief Executive Officer | |
| WICHITA FALLS BANCSHARES, INC. | |
| By: | /s/ Sam Beard |
| Sam Beard | |
| Chairman of the Board |
ex_834653.htm
Exhibit 3.1
ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
INVESTAR HOLDING CORPORATION
First: Investar Holding Corporation, a Louisiana corporation (the “Corporation”), through its undersigned Executive Vice President and Chief Financial Officer, does hereby certify that on June 24, 2025, the Board of Directors of the Corporation (the “Board”), in accordance with Article IV of the Restated Articles of Incorporation of the Corporation and Section 1-602 of the Louisiana Business Corporation Act, unanimously adopted an amendment to the Restated Articles of Incorporation (these “Articles of Amendment”) pursuant to which the Restated Articles of Incorporation was amended to add a new Article IV-A, immediately following Article IV, which reads in its entirety as follows:
“ARTICLE IV-A
6.5% Series A Non-Cumulative Perpetual Convertible Preferred Stock
| 1. | Designation of Series; Number of Shares; Status of Acquired or Converted Shares. There is hereby created out of the authorized and unissued shares of preferred stock of the Corporation a series of serial preferred stock designated as the “6.5% Series A Non-Cumulative Perpetual Convertible Preferred Stock”, no par value per share (the “Series A Preferred Stock”). The total number of authorized shares constituting the Series A Preferred Stock will be 32,500 shares. Shares of outstanding Series A Preferred Stock that are purchased or otherwise acquired by the Corporation will be cancelled and will revert to authorized but unissued shares of preferred stock undesignated as to series. Shares of outstanding Series A Preferred Stock that are converted into common stock of the Corporation (the “Common Stock”) in accordance with the Articles of Incorporation will revert to authorized but unissued shares of preferred stock undesignated as to series. The Corporation may from time to time take such appropriate action as may be necessary to reduce the authorized number of shares of Series A Preferred Stock, but not below the number of shares of Series A Preferred Stock then outstanding. |
|---|---|
| 2. | Definitions. As used herein, the following terms will have the following meanings, unless the context otherwise requires: |
| --- | --- |
(a) “Additional Tier 1 Capital” means Additional Tier 1 capital for purposes of capital adequacy regulations of the Federal Reserve Board (or any successor regulatory authority with jurisdiction over bank holding companies), as then in effect and applicable to the Corporation.
(b) “Applicable Procedures” means, with respect to any action with respect to beneficial interests in Series A Preferred Stock issued as a global security, the rules and procedures of the Depositary.
(c) “Applicable Regulatory Approval” is defined in Section 7(g).
(d) “Articles of Incorporation” means the Restated Articles of Incorporation of the Corporation, as amended, restated and/or supplemented from time to time.
(e) “Business Day” means any day except a Saturday, a Sunday or other day on which the Securities and Exchange Commission or banks in the City of New York are authorized or required by law to be closed.
(f) “Buy-In” is defined in Section 10(e)(iv).
(g) “Capital Event” means the receipt by the Corporation of a legal opinion from counsel experienced in such matters to the effect that, as a result of any change, event, occurrence, circumstance or effect occurring on or after the Effective Date, the Series A Preferred Stock does not constitute, or within ninety calendar days of the date of such legal opinion will not constitute, Additional Tier 1 Capital (or such equivalent if the Corporation were subject to such capital requirement).
(h) “Closing Price” of the Common Stock on any date of determination means the NASDAQ Official Closing Price or, if no NASDAQ Official Closing Price is reported, the last reported sale price of the shares of the Common Stock on the NASDAQ Global Market on such date. If the Common Stock is not traded on the NASDAQ Global Market on any date of determination, the Closing Price of the Common Stock on such date of determination means the closing sale price as reported in the composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock is so listed or quoted, or, if no closing sale price is reported, the last reported sale price on the principal U.S. national or regional securities exchange on which the Common Stock is so listed or quoted, or if the Common Stock is not so listed or quoted on a U.S. national or regional securities exchange, the last reported sale price, or if not, the last quoted bid price for the Common Stock in the over-the-counter market as reported by Pink Sheets LLC or similar organization, or, if that sale price or bid price is not available, the market price of the Common Stock on that date as determined by a nationally recognized independent investment banking firm retained by the Corporation for this purpose. All references herein to the “Closing Price” and “last reported sale price” of the Common Stock on the NASDAQ Global Market will be such closing sale price and last reported sale price as reflected on the website of the NASDAQ Global Market (http://www.nasdaq.com).
(i) “Common Stock” is defined in Section 1.
(j) “Conversion Agent” means the Person serving as the agent of the Corporation with respect to the conversion of Series A Preferred Stock, and its successors and assigns.
(k) “Conversion Date” means, (i) with respect to a conversion of Series A Preferred Stock pursuant to Section 8, the date on which the last of the items set forth in Section 10(e)(ii) is delivered to the Corporation, and (ii) the Mandatory Conversion Date.
(l) “Conversion Rate” means for each share of Series A Preferred Stock, 47.619 shares of Common Stock, subject to adjustment as set forth herein.
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(m) “Conversion Share” or “Conversion Shares” means the shares of Common Stock issued or issuable upon conversion of the Series A Preferred Stock.
(n) “Corporation” as used in this Article IV-A, means Investar Holding Corporation.
(o) “Current Market Price” means, on any date, the average of the daily Closing Price per share of the Common Stock or the closing price of any other securities on each of the five consecutive Trading Days preceding the earlier of the day before the date in question and the day before the Ex-Date with respect to the issuance or distribution giving rise to an adjustment to the Conversion Rate in accordance with Section 11.
(p) “Depositary” means DTC or its nominee or any successor depositary appointed by the Corporation.
(q) “Dividend Parity Stock” is defined in Section 4(f).
(r) “Dividend Payment Date” is defined in Section 4(b).
(s) “Dividend Period” is defined in Section 4(b).
(t) “Dividend Rate” means 6.5%.
(u) “DRS” is defined in Section 10(e)(iii).
(v) “DTC” means The Depository Trust Company and its successors or assigns.
(w) “Effective Date” means the date on which shares of the Series A Preferred Stock are first issued.
(x) “Eligible Market” means the New York Stock Exchange, the NYSE American, The Nasdaq Capital Market, The Nasdaq Global Market or The Nasdaq Global Select Market.
(y) “Exchange Property” is defined in Section 12(b).
(z) “Ex-Date,” when used with respect to any issuance, dividend or distribution, means the first date on which the Common Stock or other securities trade without the right to receive the issuance, dividend or distribution giving rise to an adjustment to the Conversion Rate in accordance with Section 11.
(aa) “Holder” means the Person in whose name the shares of the Series A Preferred Stock are registered, which may be treated by the Corporation, Transfer Agent, Registrar, paying agent and Conversion Agent as the absolute owner of the shares of Series A Preferred Stock for the purpose of making payment and settling the related conversions and for all other purposes.
(bb) “Internal Revenue Code” is defined in Section 24(a).
(cc) “Issuer Redemption” is defined in Section 7(c).
(dd) “Issuer Redemption Notice” is defined in Section 7(c).
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(ee) “Junior Securities” is defined in Section 3.
(ff) “Liquidity Conditions” will be satisfied with respect to a mandatory conversion pursuant to Section 9 or an Issuer Redemption pursuant to Section 7 if:
| (i) | either (x) each Conversion Share issuable upon conversion of the shares of Series A Preferred Stock subject to the applicable mandatory conversion or Issuer Redemption, as the case may be, would be eligible to be offered, sold or otherwise transferred by such Holder of such share pursuant to Rule 144 under the Securities Act (or any successor rule thereto), without any requirements as to volume, manner of sale, availability of current public information (whether or not then satisfied) or notice; or (y) the offer and sale of such Conversion Shares by such Holder is registered pursuant to an effective registration statement under the Securities Act and such registration statement is reasonably expected by the Corporation to remain effective and usable by such Holder to sell such Conversion Shares continuously during the period from, and including, the date the related Notice of Mandatory Conversion or Issuer Redemption Notice, as the case may be, is delivered to such Holder, and including, the thirtieth (30th) calendar day thereafter; |
|---|---|
| (ii) | each Conversion Share issuable upon conversion of the shares of Series A Preferred Stock subject to the applicable mandatory conversion or Issuer Redemption, as the case may be, (x) will, when sold or otherwise transferred pursuant to, in the case of clause (i)(x) above, Rule 144, or, in the case of clause (i)(y) above, the registration statement referred to in such clause) be admitted for book-entry settlement through the Depositary with an “unrestricted” CUSIP number, (y) will not be represented by any certificate that bears a legend referring to transfer restrictions under the Securities Act or other securities laws; and (iii) will, when issued, be listed and admitted for trading, without suspension or material limitation on trading, on an Eligible Market); |
| --- | --- |
| (iii) | each Conversion Share issuable upon conversion of the shares of Series A Preferred Stock subject to the applicable mandatory conversion or Issuer Redemption, as the case may be, may be issued in full without violating Sections 9(d) or 9(e) hereof and without violating the rules or regulations of the applicable Eligible Market on which the Common Stock is then listed for trading; |
| --- | --- |
| (iv) | the Corporation has not received any written threat or notice of delisting or suspension by the applicable Eligible Market with a reasonable prospect of delisting, after giving effect to all applicable notice and appeal periods; and (ii) no such delisting or suspension is reasonably likely to occur or is pending based on the Corporation falling below the minimum listing maintenance requirements of such exchange; |
| --- | --- |
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| (v) | the Corporation has not delivered a notice pursuant to Section 12(e) with respect to an anticipated Reorganization Event; and |
|---|---|
| (vi) | the Corporation shall not have provided such Holder any information that, at any time during the period from the date the applicable Notice of Mandatory Conversion is delivered to such Holder through and including the related Mandatory Conversion Date, or, from the date the applicable Issuer Redemption Notice is delivered to such Holder through and including the related date such Issuer Redemption is consummated, as the case may be, constitutes material non-public information under the U.S. federal securities laws regarding the Company. |
| --- | --- |
(gg) “Mandatory Conversion Date” is defined in Section 9(a).
(hh) “Mandatory Conversion Price Condition” is defined in Section 9(a).
(ii) “Notice of Mandatory Conversion” is defined in Section 9(c).
(jj) “Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company or trust.
(kk) “Record Date” is defined in Section 4(b).
(ll) “Registrar” means the Person acting in its capacity as registrar for the Series A Preferred Stock, and its successors and assigns.
(mm) “Reorganization Event” is defined in Section 12(a).
(nn) “Securities Act” means the Securities Act of 1933, as amended.
(oo) “Series A Preferred Stock” is defined in Section 1.
(pp) “Trading Day” means a day on which the shares of Common Stock:
(i) are not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business; and
(ii) have traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Stock.
(qq) “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, for the applicable Eligible Market with respect to the Common Stock that is in effect on the date of delivery of an applicable conversion notice, which as of the Effective Date was “T+1.”
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(rr) “Transfer Agent” means the Person serving as the agent of the Corporation with respect to the registration of transfer of Series A Preferred Stock, and its successors and assigns.
(ss) “USRPHC Asset Base” is defined in Section 24(b).
(tt) “Voting Security” has the meaning set forth in 12 C.F.R. § 225.2(q) or any successor provision thereto.
| 3. | Ranking. The Series A Preferred Stock will rank, with respect to the payment of dividends and distributions upon liquidation, dissolution or winding-up, whether voluntary or involuntary, (1) on a parity with each class or series of preferred stock or capital stock the Corporation may issue in the future the terms of which expressly provide that such class or series will rank on a parity with the Series A Preferred Stock as to dividend rights and rights on liquidation, winding up and dissolution of the Corporation, and (2) senior to the Common Stock and each other class or series of preferred stock or capital stock the Corporation may issue in the future the terms of which do not expressly provide that such class or series will rank on a parity with or senior to the Series A Preferred Stock as to dividend rights and/or rights on liquidation, winding-up and dissolution of the Corporation (the “Junior Securities”). |
|---|---|
| 4. | Dividends. |
| --- | --- |
(a) From and after the Effective Date, Holders will be entitled to receive, when, as and if authorized by the Board of Directors and declared by the Corporation, out of legally available funds, on a non-cumulative basis, cash dividends by wire transfer of immediately available funds in the amount determined as set forth in Section 4(c), and no more.
(b) Subject to Section 4(a) and Section 4(c), dividends will be payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year (each such date, a “Dividend Payment Date”) commencing on October 1, 2025. Each dividend will be payable to Holders of record as they appear in the records of the Corporation at the close of business on the fifteenth day of the month immediately preceding the relevant Dividend Payment Date (each, a “Record Date”). Each period from and including a Dividend Payment Date (or, with respect to the initial Dividend Payment Date following the Effective Date, the Effective Date) to but excluding the following Dividend Payment Date is herein referred to as a “Dividend Period.”
(c) Dividends, if, when and as authorized by the Board of Directors and declared by the Corporation, will be, for each outstanding share of Series A Preferred Stock, at an annual rate equal to the Dividend Rate on the liquidation preference of $1,000 per share, without regard to, or accumulation of, any undeclared dividends. Dividends payable for a Dividend Period will be computed on the basis of a 360-day year of twelve 30-day months. If a scheduled Dividend Payment Date falls on a day that is not a Business Day, the dividend will be paid on the next Business Day as if it were paid on the scheduled Dividend Payment Date, and no interest or other amount will accrue on the dividend so payable for the period from and after that Dividend Payment Date to the date the dividend is paid. No interest or sum of money in lieu of interest will be paid on any dividend payment on a Series A Preferred Stock paid later than the scheduled Dividend Payment Date.
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(d) Dividends on the Series A Preferred Stock are non-cumulative. If the Board of Directors does not authorize and the Corporation does not declare a dividend on the Series A Preferred Stock or if the Board of Directors authorizes and the Corporation declares less than a full dividend in respect of any Dividend Period, the Holders will have no right to receive any dividend or a full dividend, as the case may be, for such Dividend Period, and the Corporation will have no obligation to pay a dividend or to pay full dividends for such Dividend Period, whether or not dividends are authorized, declared and paid for any future Dividend Period with respect to the Series A Preferred Stock or the Common Stock or any other class or series of the Corporation’s preferred stock. No interest, or sum of money in lieu of interest, will be payable in respect of any dividend payment or failure to make any dividend payment.
(e) So long as any share of Series A Preferred Stock remains outstanding, no dividend will be declared or paid on the Common Stock or any other shares of Junior Securities (other than any dividend in connection with the implementation of a shareholders’ rights plan or the redemption or repurchase of any rights under any such plan), unless full dividends for the last preceding Dividend Period on all outstanding shares of Series A Preferred Stock have been declared and paid (or declared and a sum sufficient for the payment thereof has been set aside). The Corporation and its subsidiaries will not purchase, redeem or otherwise acquire, directly or indirectly, for consideration any shares of Common Stock or other Junior Securities (other than (i) as a result of a reclassification of such Junior Securities for or into other Junior Securities, (ii) the exchange or conversion of one share of such Junior Securities for or into another share of such Junior Securities, (iii) purchases, redemptions or other acquisitions of shares of Junior Securities in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants or (iv) the purchase of fractional interests in shares of Junior Securities pursuant to the conversion or exchange provisions of such securities or the security being converted or exchanged) nor will the Corporation pay or make available any monies for a sinking fund for the redemption of any shares of Common Stock or any other shares of Junior Securities during a Dividend Period, unless the full dividends for the most recently completed Dividend Period on all outstanding shares of Series A Preferred Stock have been declared and paid (or declared and a sum sufficient for the payment thereof has been set aside).
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(f) When dividends are not paid in full upon the shares of Series A Preferred Stock and other equity securities ranking on a parity with the Series A Preferred Stock as to payment of dividends (“Dividend Parity Stock”), all dividends declared and unpaid for payment on a dividend payment date with respect to the Series A Preferred Stock and the Dividend Parity Stock will be shared ratably by the Holders and holders of any Dividend Parity Stock, in proportion to the respective amounts of the declared and unpaid dividends relating to the current dividend period. To the extent a dividend period with respect to any Dividend Parity Stock coincides with more than one Dividend Period with respect to the Series A Preferred Stock, for purposes of the immediately preceding sentence the Board of Directors will treat such dividend period as two or more consecutive dividend periods, none of which coincides with more than one Dividend Period with respect to the Series A Preferred Stock, or will treat such dividend period(s) with respect to any Dividend Parity Stock and Dividend Period(s) with respect to the Series A Preferred Stock for purposes of the immediately preceding sentence in any other manner that it deems to be fair and equitable in order to achieve ratable payments of dividends on such Dividend Parity Stock and the Series A Preferred Stock. To the extent a Dividend Period with respect to the Series A Preferred Stock coincides with more than one dividend period with respect to any Dividend Parity Stock, for purposes of the first sentence of this paragraph the Board of Directors will treat such Dividend Period as two or more consecutive Dividend Periods, none of which coincides with more than one dividend period with respect to such Dividend Parity Stock, or will treat such Dividend Period(s) with respect to the Series A Preferred Stock and dividend period(s) with respect to any Dividend Parity Stock for purposes of the first sentence of this paragraph in any other manner that it deems to be fair and equitable in order to achieve ratable payments of dividends on the Series A Preferred Stock and such Dividend Parity Stock. The term “dividend period” as used in this paragraph means such dividend periods as are provided for in the terms of any Dividend Parity Stock and, in the case of shares of Series A Preferred Stock, Dividend Periods applicable to shares of Series A Preferred Stock; and the term “dividend payment dates” as used in this paragraph means such dividend payment dates as are provided for in the terms of any Dividend Parity Stock and, in the case of shares of Series A Preferred Stock, Dividend Payment Dates applicable to shares of Series A Preferred Stock.
(g) Subject to the foregoing, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors (or a duly authorized committee of the Board) may be declared and paid on any securities, including Common Stock, any other Junior Securities and any Dividend Parity Stock, from time to time out of any funds legally available for such payment.
(h) Payments of cash dividends on the Series A Preferred Stock will be delivered to the Holder or, in the case of global certificates, through a book-entry transfer through DTC or any successor Depositary.
(i) If the Conversion Date applicable to any conversion of shares of Series A Preferred Stock is on or prior to the Record Date for any declared dividend for the Dividend Period with respect to such shares, such Holder will not have the right to receive any declared dividends on such shares for that Dividend Period. If the Conversion Date applicable to any conversion of shares of Series A Preferred Stock is after the Record Date for any declared dividends with respect to such shares and prior to the Dividend Payment Date, such Holder will receive that dividend on the relevant Dividend Payment Date if such Holder was the Holder of record on the Record Date for that dividend.
| 5. | Liquidation. |
|---|
(a) In the event the Corporation voluntarily or involuntarily liquidates, dissolves or winds up, each Holder at the time thereof will be entitled to receive cash liquidating distributions in an amount equal to the greater of (i) the liquidation preference of $1,000 per share of Series A Preferred Stock, plus all declared but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends, and (ii) the amount that such Holder would have received in respect of the Common Stock issuable upon conversion of Series A Preferred Stock held thereby had such Holder converted such share of Series A Preferred Stock immediately prior to such time, in each case out of assets or proceeds thereof legally available for distribution to the Corporation’s stockholders, before any distribution of assets or proceeds is made to or set aside for the holders of the Common Stock or any other Junior Securities. After payment of the full amount of such liquidating distributions, the Holders will not be entitled to any further participation in any distribution of assets by, and will have no right or claim to any remaining assets or proceeds of, the Corporation.
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(b) In the event the assets or proceeds of the Corporation available for distribution to stockholders upon any liquidation, dissolution or winding-up of the affairs of the Corporation, whether voluntary or involuntary, will be insufficient to pay in full the amounts payable with respect to all outstanding shares of the Series A Preferred Stock and the corresponding amounts payable on all outstanding securities of the Corporation ranking equally with the Series A Preferred Stock upon liquidation, the amounts paid to the Holders and to the holders of all such other securities ranking equally with the Series A Preferred Stock upon liquidation will share ratably in any distribution of assets or proceeds of the Corporation in proportion to the full respective liquidating distributions to which they would otherwise be respectively entitled, and prior to the distribution of assets or proceeds is made to, or set aside for, the holders of the Common Stock or any other Junior Securities.
(c) The Corporation’s consolidation or merger with or into any other entity, the consolidation or merger of any other entity with or into the Corporation, or the sale of all or substantially all of the Corporation’s property or business, will not constitute its liquidation, dissolution or winding up.
(d) In determining whether a distribution (other than upon voluntary or involuntary liquidation) on the Series A Preferred Stock, by dividend, redemption or other acquisition of shares of stock of the Corporation or otherwise, is permitted under applicable law, amounts that would be needed, if the Corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of holders of shares of Series A Preferred Stock will not be added to the Corporation’s total liabilities.
| 6. | Maturity. The Series A Preferred Stock will be perpetual unless converted in accordance with the Articles of Incorporation. |
|---|---|
| 7. | Redemptions. |
| --- | --- |
(a) The Corporation, at the option of the Board of Directors or any duly authorized committee of the Board of Directors, may redeem, from time to time, out of assets legally available therefor, in whole or in part, the shares of Series A Preferred Stock then outstanding on any Dividend Payment Date (and, for the avoidance of doubt, following the payment of any dividend payable on such Dividend Payment Date) occurring on or after the fifth anniversary of the Effective Date. The redemption price for shares of Series A Preferred Stock redeemed pursuant to the preceding sentence will be equal to $1,000 per share, plus all declared, but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends.
(b) In addition and notwithstanding the above, the Corporation, at the option of the Board of Directors or any duly authorized committee of the Board of Directors, may redeem out of assets legally available therefor, in whole but not in part, the shares of Series A Preferred Stock then outstanding at any time following a Capital Event. The redemption price for shares of Series A Preferred Stock redeemed pursuant to this Section 7(b) will be equal to $1,000 per share, plus all declared, but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends.
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(c) Any redemption made by the Corporation under this Section 7 (the “Issuer Redemption”) will be made by providing thirty calendar days’ advance written notice (the “Issuer Redemption Notice”) to each Holder notifying such Holders of the redemption to be effected, specifying the number of shares of Series A Preferred Stock to be redeemed from such Holder, specifying the Dividend Payment Date on which such redemption will occur, the redemption price, the place at which payment may be obtained and calling upon such Holder to surrender to the Corporation, in the manner and at the place designated, his, her or its certificate or certificates representing the shares to be redeemed, if applicable, or such other or additional information required by DTC pursuant to its Applicable Procedures.
(d) Upon receipt of an Issuer Redemption Notice, a Holder of shares of Series A Preferred Stock may elect to convert such shares into shares of Common Stock in accordance with Section 8 hereof at any time prior to such Issuer Redemption.
(e) The Corporation may not deliver to a Holder an Issuer Redemption Notice unless on or prior to the date of delivery of such Issuer Redemption Notice, the Corporation will have segregated on the books and records of the Corporation an amount of cash sufficient to pay all amounts to which the Holders of shares of Series A Preferred Stock are entitled upon such redemption pursuant to this Section 7. Any Issuer Redemption Notice delivered will be irrevocable. Notwithstanding the foregoing, the Corporation will not exercise its right to effect Issuer Redemption pursuant to this Section 7, or otherwise send an Issuer Redemption Notice, with respect to any Series A Preferred Stock unless the Liquidity Conditions are satisfied (or waived in writing by such Holder) with respect to such Issuer Redemption.
(f) The price per share of Series A Preferred Stock required to be paid by the Corporation under this Section 7 will be paid in cash to the Holders whose Series A Preferred Stock is being redeemed on the date of such Issuer Redemption. The redemption price for any shares of Series A Preferred Stock will be payable against surrender of the certificate(s), if any, evidencing such shares to the Corporation.
(g) Any redemption of the Series A Preferred Stock will be subject to receipt by the Corporation of any required prior approval of the Board of Governors of the Federal Reserve System or other applicable governmental authority (“Applicable Regulatory Approval”) and to the satisfaction of any conditions set forth in the capital guidelines or regulations of the Board of Governors of the Federal Reserve System applicable to redemption of the Series A Preferred Stock.
(h) The Series A Preferred Stock will not be subject to redemption at the option of the Holder.
| 8. | Conversion at the Option of the Holder. |
|---|
(a) Each Holder will have the right, at any time and from time to time after the Effective Date, at such Holder’s option, to convert all or any portion of such Holder’s Series A Preferred Stock into shares of Common Stock at the Conversion Rate per share of Series A Preferred Stock (subject to the conversion procedures contained in Section 10) plus cash in lieu of fractional shares as provided herein.
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(b) Notwithstanding anything to the contrary in this Article IV-A, the Corporation will not be required to effect a conversion under this Section 8 with respect to shares of the Series A Preferred Stock of any Holder the conversion of which would be subject to any Applicable Regulatory Approval unless, with respect to such Holder, the Applicable Regulatory Approval has been obtained and remains in effect.
(c) Notwithstanding any other provision of this Article IV-A, the Corporation will not be required to effect a conversion under this Section 8 with respect to shares of Series A Preferred Stock held by any Holder that would result in such Holder owning, together with its affiliates, more than 9.9% of the outstanding shares of Common Stock (or of any class of Voting Securities issued by the Corporation) after giving effect to such conversion, calculated in accordance with the regulations of the Board of Governors of the Federal Reserve System at 12 C.F.R. § 225.9(a). Those shares of Series A Preferred Stock that are not convertible under the preceding sentence will remain outstanding unless or until such shares may be converted or otherwise redeemed in accordance herewith.
| 9. | Mandatory Conversion at the Corporation’s Option. |
|---|
(a) On or after July 1, 2028, the Corporation will have the right, at its option, from time to time on any Dividend Payment Date (and, for the avoidance of doubt, following the payment of any dividend payable on such Dividend Payment Date) (a “Mandatory Conversion Date”), to cause some or all of the Series A Preferred Stock to be converted into shares of Common Stock at the Conversion Rate if, for twenty Trading Days within the period of thirty consecutive Trading Days (including the last Trading Day of such period), ending on the Trading Day preceding the date the Corporation delivers a Notice of Mandatory Conversion, the Closing Price of the Common Stock exceeds $26.25 (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction relating to the Common Stock occurring after the Effective Date) (the “Mandatory Conversion Price Condition”). Notwithstanding the foregoing, the Corporation will not exercise its right to effect a mandatory conversion pursuant to this Section 9, or otherwise send a Notice of Mandatory Conversion, with respect to any Series A Preferred Stock unless the Liquidity Conditions and the Mandatory Conversion Price Condition are satisfied (or waived in writing by such Holder) with respect to such mandatory conversion.
(b) If the Corporation elects to cause less than all of the shares of Series A Preferred Stock to be converted under Section 9(a), the Conversion Agent will select the Series A Preferred Stock to be converted by lot, on a pro rata basis or by another method the Conversion Agent considers fair and appropriate, including any method required by DTC or any successor Depositary. If the Conversion Agent selects a portion of a Holder’s Series A Preferred Stock for partial mandatory conversion and such Holder also elects or has elected to convert a portion of its shares of Series A Preferred Stock, the mandatory converted portion will first be deemed to be from the portion selected for optional conversion under Section 8.
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(c) In order to exercise the mandatory conversion right described in this Section 9, the Corporation will provide written notice of such conversion to each Holder (such notice, a “Notice of Mandatory Conversion”). In addition to any information required by applicable law or regulation, the Notice of Mandatory Conversion will state, as appropriate:
(i) the Mandatory Conversion Date;
(ii) the number of shares of Common Stock to be issued upon conversion of each share of Series A Preferred Stock;
(iii) the number of shares of Series A Preferred Stock to be converted;
(iv) that such Notice of Mandatory Conversion shall be deemed automatically rescinded with respect to such Holder if any of the Liquidity Conditions and/or the Mandatory Conversion Price Condition are not satisfied (or waived in writing by such Holder) at any time prior to the applicable Mandatory Conversion Date; and
(v) any other or additional information required by DTC pursuant to its Applicable Procedures.
(d) Notwithstanding anything to the contrary in this Article IV-A, no Holder will be required to effect a conversion under this Section 9 with respect to shares of the Series A Preferred Stock of any Holder the conversion of which would be subject to any Applicable Regulatory Approval unless, with respect to such Holder, the Applicable Regulatory Approval has been obtained and remains in effect.
(e) Notwithstanding any other provision of this Article IV-A, no Holder will be required to effect a conversion under this Section 9 with respect to shares of Series A Preferred Stock held by any Holder that would result in such Holder owning, together with its affiliates, more than 9.9% of the outstanding shares of Common Stock (or of any class of Voting Securities issued by the Corporation) after giving effect to such conversion, calculated in accordance with the regulations of the Board of Governors of the Federal Reserve System at 12 C.F.R. § 225.9(a). Those shares of Series A Preferred Stock that are not convertible under the preceding sentence will remain outstanding unless or until such shares may be converted or otherwise redeemed in accordance herewith.
| 10. | Conversion Procedures. |
|---|
(a) Effective immediately prior to the close of business on the Conversion Date, the shares of Series A Preferred Stock subject to conversion will cease to be outstanding, and dividends will no longer be authorized and declared on any converted shares of Series A Preferred Stock, subject to the right of Holders to receive any authorized, declared and unpaid dividends on such shares and any other payments to which they are otherwise entitled hereunder.
(b) No allowance or adjustment, except pursuant to Section 11, will be made in respect of dividends payable to holders of the Common Stock of record as of any date prior to the close of business on the Conversion Date.
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(c) Prior to the close of business on the Conversion Date, shares of Common Stock issuable upon conversion of, or other securities issuable upon conversion of, any shares of Series A Preferred Stock will not be deemed outstanding for any purpose, and Holders will have no rights with respect to the Common Stock or other securities issuable upon conversion (including voting rights, rights to respond to tender offers for the Common Stock or other securities issuable upon conversion and rights to receive any dividends or other distributions on the Common Stock or other securities issuable upon conversion) by virtue of holding shares of Series A Preferred Stock.
(d) The Person or Persons entitled to receive the Common Stock and/or cash, securities or other property issuable upon conversion of Series A Preferred Stock will be treated for all purposes as the record holder(s) of such shares of Common Stock and/or securities as of the close of business on the Conversion Date. In the event that a Holder will not by written notice designate the name in which shares of Common Stock and/or cash, securities or other property (including payments of cash in lieu of fractional shares) to be issued or paid upon conversion of shares of Series A Preferred Stock should be registered or paid or the manner in which such shares should be delivered, the Corporation will be entitled to register and deliver such shares, and make such payment, in the name of the Holder and in the manner shown on the records of the Corporation or, in the case of global certificates or uncertificated shares, through book-entry transfer through the Depositary.
(e) Conversion into shares of Common Stock will occur as follows:
(i) On the Mandatory Conversion Date, shares of Common Stock will be issued to Holders or their designee upon presentation and surrender of the certificate evidencing the Series A Preferred Stock to the Conversion Agent, if shares of the Series A Preferred Stock are held in certificated form, and, if required, the furnishing of appropriate endorsements and transfer documents and the payment of all transfer and similar taxes. If a Holder’s interest is a beneficial interest in a global certificate representing Series A Preferred Stock, a book-entry transfer through the Depositary will be made by the Conversion Agent upon compliance with the Applicable Procedures for converting a beneficial interest in a global security.
(ii) On the date of any conversion at the option of a Holder pursuant to Section 8 or Section 12, if a Holder’s interest is in certificated form, a Holder must do each of the following in order to convert:
(A) complete and manually sign the conversion notice provided by the Conversion Agent, or a facsimile or email of the conversion notice, and deliver such irrevocable notice to the Conversion Agent;
(B) surrender the shares of Series A Preferred Stock to the Conversion Agent;
(C) if required, furnish appropriate endorsements and transfer documents; and
(D) if required, pay all transfer or similar taxes.
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If a Holder’s interest is a beneficial interest in a global certificate representing Series A Preferred Stock, in order to convert, such Holder must comply with paragraphs (C) and (D) of this clause (ii) and comply with the Applicable Procedures for converting a beneficial interest in a global security. The date on which a Holder complies with the procedures in this clause (ii), in the reasonable discretion of the Conversion Agent, will be deemed the “Conversion Date” with respect to a conversion at the option of the Holder.
(iii) The Conversion Agent will, on a Holder’s behalf, convert the Series A Preferred Stock into shares of Common Stock, in accordance with the terms of the notice delivered by such Holder described in Section 10(e)(ii). The Corporation shall, or shall cause its Conversion Agent to, promptly (but in no event later than the number of Trading Days comprising the Standard Settlement Period following the applicable Conversion Date), upon the request of such Holder, cause the Conversion Agent to credit such aggregate number of shares of Common Stock specified by such Holder in the applicable conversion notice and to which the Holder is entitled pursuant to such conversion to (i) such Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal At Custodian system or (ii) in book-entry form via a direct registration system (“DRS”) maintained by or on behalf of the Conversion Agent, in each case, so long as either (A) there is an effective registration statement permitting the issuance of the Conversion Shares to or the resale of such Conversion Shares by such Holder or (B) the Conversion Shares are eligible for resale by such Holder without volume or manner-of-sale restrictions pursuant to Rule 144 promulgated under the Securities Act. If (A) and (B) above are not true, the Corporation shall cause the Conversion Agent to either (i) record the Conversion Shares in the name of such Holder or its designee on the certificates reflecting the Conversion Shares with an appropriate legend regarding restriction on transferability, which shall be issued and dispatched by overnight courier to the address as specified in the applicable conversion notice, and on the Corporation’s share register or (ii) issue such Conversion Shares in the name of such Holder or its designee in restricted book-entry form in the Corporation’s share register. Such Holder, or any Person so designated by such Holder to receive Conversion Shares, shall be deemed to have become the holder of record of such Conversion Shares as of the applicable Conversion Date, irrespective of the date such Conversion Shares are credited to the Holder’s DTC account, the date of the book entry positions or the date of delivery of the certificates evidencing such Conversion Shares, as the case may be.
(iv) In addition to any other rights available to any Holder, if the Corporation fails to cause the Conversion Agent to deliver to such Holder or its designee Conversion Shares in the manner required pursuant to this Section 10 within the Standard Settlement Period following the applicable Conversion Date and such Holder or such Holder’s broker on its behalf purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which such Holder anticipated receiving upon such conversion (a “Buy-In”) but did not receive within the Standard Settlement Period, then the Corporation shall, within two (2) Trading Days after such Holder’s request and in such Holder’s sole discretion, either (i) promptly honor its obligation to deliver to such Holder or its designee the Conversion Shares and pay cash to such Holder in an amount equal to the excess (if any) of such Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased in the Buy-In, less the product of (A) the number of shares of Common Stock purchased in the Buy-In, times (B) the Closing Price of a share of Common Stock on the applicable Conversion Date or (ii) pay cash to such Holder in an amount equal to such Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased, at which point the Corporation’s obligation to deliver the Conversion Shares shall terminate. Such Holder shall provide the Corporation written notice promptly after the occurrence of a Buy-In, indicating the amounts payable to such Holder in respect of the Buy-In together with applicable confirmations and other evidence reasonably requested by the Corporation.
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| 11. | Anti-Dilution Adjustments. |
|---|
(a) In order to prevent the dilution of the conversion rights granted hereunder, the Conversion Rate will be subject to the following adjustments:
(i) Stock Dividends and Distributions. If the Corporation pays dividends or other distributions on the Common Stock in shares of Common Stock, then the Conversion Rate in effect immediately prior to the Ex-Date for such dividend or distribution will be multiplied by the following fraction:
OS1
OS0
where,
OS0 = the number of shares of Common Stock outstanding immediately prior to the Ex-Date for such dividend or distribution; and
OS1 = the sum of the number of shares of Common Stock outstanding immediately prior to the Ex-Date for such dividend or distribution plus the total number of shares of Common Stock constituting such dividend or distribution.
The adjustment pursuant to this clause (i) will become effective at 9:00 a.m., New York City time on the Ex-Date for such dividend or distribution. If any dividend or distribution described in this clause (i) is authorized and declared but not so paid or made, the Conversion Rate will be readjusted, effective as of the date the Board of Directors publicly announces its decision not to make such dividend or distribution, to such Conversion Rate that would be in effect if such dividend or distribution had not been declared.
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(ii) Subdivisions, Splits and Combination of the Common Stock. If the Corporation subdivides, splits or combines the shares of Common Stock, then the Conversion Rate in effect immediately prior to the effective date of such share subdivision, split or combination will be multiplied by the following fraction:
OS1
OS0
where,
OS0 = the number of shares of Common Stock outstanding immediately prior to the effective date of such share subdivision, split or combination.
OS1 = the number of shares of Common Stock outstanding immediately after the opening of business on the effective date of such share subdivision, split or combination.
The adjustment pursuant to this clause (ii) will become effective at 9:00 a.m., New York City time on the Ex-Date for such subdivision, split or combination. If any subdivision, split or combination described in this clause (ii) is announced but the outstanding shares of Common Stock are not subdivided, split or combined, the Conversion Rate will be readjusted, effective as of the date the Board of Directors publicly announces its decision not to subdivide, split or combine the outstanding shares of Common Stock, to such Conversion Rate that would be in effect if such subdivision, split or combination had not been announced.
(iii) Debt or Asset Distributions. If the Corporation distributes to all or substantially all holders of shares of Common Stock evidences of indebtedness, shares of capital stock, securities, cash or other assets (excluding any dividend or distribution referred to in clause (i) of this Section 11(a), any dividend or distribution paid exclusively in cash, any consideration payable in connection with a tender or exchange offer of indebtedness made by the Corporation or any of its subsidiaries, and any dividend of shares of capital stock of any class or series, or similar equity interests, of or relating to a subsidiary or other business unit in the case of certain spin-off transactions as described below), then the Conversion Rate in effect immediately prior to the Ex-Date for such distribution will be multiplied by the following fraction:
SP0
SP0 - FMV
where,
SP0 = the Current Market Price per share of Common Stock on such date.
FMV = the fair market value of the portion of the distribution applicable to one share of Common Stock on such date as determined by the Board of Directors; provided that, if “FMV” as set forth above is equal to or greater than “SP0” as set forth above, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder will receive on the date on which such distribution is made to holders of Common Stock, for each share of Series A Preferred Stock, the amount of such distribution such Holder would have received had such holder owned a number of shares of Common Stock equal to the Conversion Rate on the Ex-Date for such distribution.
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In a “spin-off,” where the Corporation makes a distribution to all or substantially all holders of shares of Common Stock consisting of capital stock of any class or series, or similar equity interests of, or relating to, a subsidiary or other business unit, the Conversion Rate will be adjusted on the fifteenth Trading Day after the effective date of the distribution by multiplying such Conversion Rate in effect immediately prior to such fifteenth Trading Day by the following fraction:
MP0 + MPS
MP0
where,
MP0 = the average of the Closing Prices of the Common Stock over the first ten Trading Days commencing on and including the fifth Trading Day following the effective date of such distribution.
MPS = the average of the Closing Prices of the capital stock or equity interests representing the portion of the distribution applicable to one share of Common Stock over the first ten Trading Days commencing on and including the fifth Trading Day following the effective date of such distribution, or, if not traded on a national or regional securities exchange or over-the-counter market, the fair market value of the capital stock or equity interests representing the portion of the distribution applicable to one share of Common Stock on such date as determined by the Board of Directors.
Any adjustment pursuant to this clause (iii) will become effective immediately prior to 9:00 a.m., New York City time, on the Ex-Date for such distribution. In the event that such distribution described in this clause (iii) is not so paid or made, the Conversion Rate will be readjusted, effective as of the date the Board of Directors publicly announces its decision not to pay or make such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.
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(iv) Cash Distributions. If the Corporation makes a distribution consisting exclusively of cash to all or substantially all holders of the Common Stock, excluding (a) any regular cash dividend on the Common Stock, (b) any cash that is distributed in a Reorganization Event or as part of a “spin-off” referred to in clause (iii) of this Section 11(a), (c) any dividend or distribution in connection with the Corporation’s liquidation, dissolution or winding up, and (d) any consideration payable in connection with a tender or exchange offer of indebtedness made by the Corporation or any of its subsidiaries, then in each event, the Conversion Rate in effect immediately prior to the Ex-Date for such distribution will be multiplied by the following fraction:
SP0
SP0 - DIV
where,
SP0 = the Closing Price per share of Common Stock on the Trading Day immediately preceding the Ex-Date.
DIV = the amount per share of Common Stock of the dividend or distribution.
In the event that any distribution described in this clause (iv) is not so made, the Conversion Rate will be readjusted, effective as of the date the Board of Directors publicly announces its decision not to pay such distribution, to the Conversion Rate which would then be in effect if such distribution had not been declared.
(v) Self Tender Offers and Exchange Offers. If the Corporation or any of its subsidiaries successfully completes a tender or exchange offer for the Common Stock where the cash and the value of any other consideration included in the payment per share of the Common Stock exceeds the Closing Price per share of the Common Stock on the Trading Day immediately succeeding the expiration of the tender or exchange offer, then the Conversion Rate in effect at the close of business on such immediately succeeding Trading Day will be multiplied by the following fraction:
AC + (SP0 x OS1)
OS0 x SP0
where,
SP0 = the Closing Price per share of Common Stock on the Trading Day immediately succeeding the expiration of the tender or exchange offer.
OS0 = the number of shares of Common Stock outstanding immediately prior to the expiration of the tender or exchange offer, including any shares validly tendered and not withdrawn.
OS1 = the number of shares of Common Stock outstanding immediately after the expiration of the tender or exchange offer.
AC = the aggregate cash and fair market value of the other consideration payable in the tender or exchange offer, as determined by the Board of Directors.
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Any adjustment made pursuant to this clause (v) will become effective immediately prior to 9:00 a.m., New York City time, on the Trading Day immediately following the expiration of the tender or exchange offer. In the event that the Corporation, or one of its subsidiaries, is obligated to purchase shares of Common Stock pursuant to any such tender offer or exchange offer, but the Corporation, or such subsidiary, is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Conversion Rate will be readjusted to be such Conversion Rate that would then be in effect if such tender offer or exchange offer had not been made.
(vi) Rights Plans. To the extent that the Corporation has a rights plan in effect with respect to the Common Stock on any Conversion Date, upon conversion of any shares of the Series A Preferred Stock, Holders will receive, in addition to the shares of Common Stock, the rights under the rights plan, unless, prior to such Conversion Date, the rights have separated from the shares of Common Stock, in which case the Conversion Rate will be adjusted at the time of separation as if the Corporation had made a distribution to all holders of the Common Stock as described in clause (iii) of this Section 11(a), subject to readjustment in the event of the expiration, termination or redemption of such rights.
(b) The Corporation may make such increases in the Conversion Rate, in addition to any other increases required by this Section 11, if the Board of Directors deems it advisable to avoid or diminish any income tax to holders of the Common Stock resulting from any dividend or distribution of shares of Common Stock (or issuance of rights or warrants to acquire shares of Common Stock) or from any event treated as such for income tax purposes or for any other reason.
(c) All adjustments to the Conversion Rate will be calculated to the nearest 1/10,000th of a share (or, if there is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a share) of Common Stock. No adjustment in the Conversion Rate will be required unless such adjustment would require an increase or decrease of at least one percent (1.0%) therein; provided, however, that any adjustments which by reason of this subparagraph are not required to be made will be carried forward and taken into account in any subsequent adjustment; provided further that on any Conversion Date, adjustments to the Conversion Rate will be made with respect to any such adjustment carried forward and which has not been taken into account before such date.
(d) No adjustment to the Conversion Rate will be made if Holders may participate in the transaction that would otherwise give rise to an adjustment, as a result of holding the Series A Preferred Stock, without having to convert the Series A Preferred Stock, as if they held the full number of shares of Common Stock into which a share of the Series A Preferred Stock may then be converted.
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(e) The Conversion Rate will not be adjusted:
(i) upon the issuance of any shares of the Common Stock or rights or warrants to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Corporation or any of its subsidiaries;
(ii) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security outstanding as of the date shares of the Series A Preferred Stock were first issued, provided that such option, warrant or right are not amended after the date shares of the Series A Preferred Stock were first issued to extend the term thereof, to increase the number of shares issuable upon exercise, exchange or conversion thereof or decrease the price at which such option, warrant or right is exercisable, exchangeable or convertible;
(iii) for a change in the par value or no par value of the Common Stock; or
(iv) for accrued and unpaid dividends on the Series A Preferred Stock.
(f) Whenever the Conversion Rate is to be adjusted in accordance herewith, the Corporation will:
(i) as soon as practicable following the occurrence of an event that requires an adjustment to the Conversion Rate pursuant to Section 11, taking into account the one percent (1.0%) threshold set forth above (or if the Corporation is not aware of such occurrence, as soon as practicable after becoming so aware), provide, or cause to be provided, a written notice to the Holders of the occurrence of such event; and
(ii) as soon as practicable following the determination of the revised Conversion Rate in accordance with Section 11(a), provide, or cause to be provided, a written notice to the Holders setting forth in reasonable detail the method by which the adjustment to the Conversion Rate was determined and setting forth the revised Conversion Rate.
| 12. | Reorganization Events. |
|---|
(a) A “Reorganization Event” will mean:
(i) any consolidation, merger or similar business combination of the Corporation with or into another Person, in each case pursuant to which the Common Stock will be converted into cash, securities or other property of the Corporation or another Person;
(ii) any sale, transfer, lease or conveyance to another Person of all or substantially all of the property and assets of the Corporation and its subsidiaries, taken as a whole, in each case pursuant to which the Common Stock will receive a distribution of cash, securities or other property of the Corporation or another Person;
(iii) any reclassification of the Common Stock into securities including securities other than the Common Stock; or
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(iv) any statutory exchange of the outstanding shares of Common Stock for securities of another Person (other than in connection with a merger or acquisition).
(b) Upon the occurrence of a Reorganization Event prior to an applicable Conversion Date, each share of Series A Preferred Stock outstanding immediately prior to such Reorganization Event will, without the consent of any Holders, be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether capital or surplus) available for distribution to stockholders of the Corporation, and after satisfaction of all liabilities and obligations to creditors of the Corporation and subject to the rights of any securities ranking senior to the Series A Preferred Stock, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other Junior Securities, in full, the greater of the (i) amount per share equal to the liquidation value of $1,000 per share, plus all declared but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends, and (ii) amount equal to the distribution amount of such assets or proceeds of the Corporation as was receivable by a holder of the number of shares of Common Stock into which such share of Series A Preferred Stock was convertible immediately prior to such Reorganization Event (such payment, the “Exchange Property”).
(c) In the event that holders of the shares of Common Stock have the opportunity to elect the form of consideration to be received in such transaction, the Holders will also be entitled to make such election on the same basis as the holders of Common Stock.
(d) The above provisions of this Section 12 will similarly apply to successive Reorganization Events and the provisions of Section 11 will apply to any shares of capital stock of the Corporation (or any successor) received by the holders of the Common Stock in any such Reorganization Event.
(e) The Corporation (or any successor) will, at least twenty days prior to the occurrence of any Reorganization Event, provide written notice to the Holders of the anticipated occurrence of such event and of the type and amount of the cash, securities or other property that constitutes the Exchange Property. Failure to deliver such notice will not affect the operation of this Section 12.
| 13. | Voting Rights. |
|---|
(a) Notwithstanding any stated or statutory voting rights, except as set forth in Section 13(b), the Holders will not be entitled to vote (in their capacity as Holders) on any matter submitted to a vote of the stockholders of the Corporation.
21
(b) So long as any shares of Series A Preferred Stock are outstanding, the Corporation will not, without the written consent or affirmative vote, given in person or by proxy, at a meeting called for that purpose by holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting as a single and separate class, amend, alter or repeal (including by merger, consolidation or otherwise, and whether in a single transaction or a series of related transactions, other than a Reorganization Event pursuant to which the Series A Preferred Stock is treated in accordance with Section 12) any provision of (i) this Article IV-A of the Articles of Incorporation or (ii) the Articles of Incorporation, in either case, that would alter, modify or change the preferences, rights, privileges or powers of the Series A Preferred Stock so as to, or in a manner that would, significantly and adversely affect the preferences, rights, privileges or powers of the Series A Preferred Stock; provided that any such amendment or alteration to any provision of this Article IV-A or the Articles of Incorporation that alters, modifies or changes the preferences, rights, privileges or powers of a particular Holder so as to, or in a manner that would, significantly and adversely affect the preferences, rights, privileges or powers of such Holder in a manner disproportionate from any other Holder will require the prior written consent of such significantly and adversely affected Holder; provided, further, that (x) any increase in the amount of the authorized or issued Series A Preferred Stock or any securities convertible into Series A Preferred Stock or (y) the creation and issuance, or an increase in the authorized or issued amount, of any series of preferred stock of the Company, or any securities convertible into preferred stock of the Company, ranking equal with and/or senior to the Series A Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution of assets upon the Corporation’s liquidation, dissolution or winding up, in either case, will, in and of itself, be deemed to significantly and adversely affect the preferences, rights, privileges or powers of the Series A Preferred Stock or any Holder.
(c) Notwithstanding the foregoing, the Corporation will not, without the written consent or affirmative vote, given in person or by proxy, at a meeting called for that purpose by the unanimous consent of the holders of the outstanding shares of Series A Preferred Stock, amend, alter or repeal (including by merger, consolidation or otherwise, and whether in a single transaction or a series of related transactions, other than a Reorganization Event pursuant to which the Series A Preferred Stock is treated in accordance with Section 12) the definition of Conversion Rate or Dividend Rate, or the liquidation preference of Series A Preferred Stock under this Article IV-A.
(d) Section 13(b) will not apply if, at or prior to the time when the act with respect to which the vote would otherwise be required will be effected, all outstanding shares of Series A Preferred Stock will have been converted into shares of Common Stock or otherwise reacquired by the Corporation.
(e) Except as expressly provided in this Section 13, each holder of Series A Preferred Stock will have one vote per share on any matter on which holders of Series A Preferred Stock are entitled to vote, including any action by written consent.
| 14. | Fractional Shares. |
|---|
(a) No fractional shares of Common Stock will be issued as a result of any conversion of shares of Series A Preferred Stock.
(b) In lieu of any fractional share of Common Stock otherwise issuable in respect of any conversion, the Holder will be entitled to receive an amount in cash (computed to the nearest cent) equal to the same fraction of the Closing Price of the Common Stock determined as of the second Trading Day immediately preceding the Conversion Date.
(c) If more than one share of the Series A Preferred Stock is surrendered for conversion at one time by or for the same Holder, the number of full shares of Common Stock issuable upon conversion thereof will be computed on the basis of the aggregate number of shares of the Series A Preferred Stock so surrendered.
22
| 15. | Reservation of Common Stock. |
|---|
(a) The Corporation will at all times reserve and keep available out of its authorized and unissued Common Stock, solely for issuance upon the conversion of shares of Series A Preferred Stock as provided in the Articles of Incorporation, free from any preemptive or other similar rights, such number of shares of Common Stock as will from time to time be issuable upon the conversion of all the shares of Series A Preferred Stock then outstanding at the Conversion Rate (as may be adjusted pursuant to Section 11). For purposes of this Section 15(a), the number of shares of Common Stock that will be deliverable upon the conversion of all outstanding shares of Series A Preferred Stock will be computed as if at the time of computation all such outstanding shares were held by a single Holder.
(b) All shares of Common Stock delivered upon conversion of the Series A Preferred Stock will be duly authorized, validly issued, fully paid and non-assessable.
(c) The Corporation covenants and agrees that, if at any time the Common Stock will be listed on any national securities exchange or automated quotation system, the Corporation will, if permitted by the rules of such exchange or automated quotation system, list and keep listed, so long as the Common Stock will be so listed on such exchange or automated quotation system, all Common Stock issuable upon conversion of the Series A Preferred Stock.
| 16. | Transfer Agent, Registrar, Paying Agent and Conversion Agent. The duly appointed Transfer Agent, Registrar, paying agent and Conversion Agent for the Series A Preferred Stock will initially be Equiniti Trust Company, LLC. The Corporation may, in its sole discretion, remove the Transfer Agent, Registrar, paying agent and/or Conversion Agent; provided that the Corporation will appoint a successor to such position(s) who will accept such appointment prior to the effectiveness of such removal. |
|---|---|
| 17. | Replacement Stock Certificates. If any of the Series A Preferred Stock certificates will be mutilated, lost, stolen or destroyed, upon the making of an affidavit of that fact by the Holder claiming such certificate to be mutilated, lost, stolen or destroyed and, if required by the Corporation, the posting by such Holder of a bond or security in such amount as the Corporation may determine is necessary as indemnity against any claim that may be made against it with respect to such certificate, the Corporation will, at the expense of the Holder, issue, in exchange and in substitution for and upon cancellation of the mutilated Series A Preferred Stock certificate, or in lieu of and substitution for the Series A Preferred Stock certificate lost, stolen or destroyed, a new Series A Preferred Stock certificate of like tenor and representing an equivalent amount of shares of Series A Preferred Stock. |
| --- | --- |
| 18. | Notices. All notices referred to in this Article IV-A will be in writing, and, unless otherwise specified herein, all notices hereunder will be deemed to have been given upon the earlier of receipt thereof or three Business Days after the mailing thereof if sent by registered or certified mail (unless first-class mail will be specifically permitted for such notice under the terms of this Article IV-A) with postage prepaid, addressed: (i) if to the Corporation, to the principal executive office of the Corporation or to the Transfer Agent at its principal office in the United States of America, or other agent of the Corporation designated as permitted by the Articles of Incorporation, or (ii) if to any Holder or holder of shares of Common Stock, as the case may be, to such Holder at the address of such Holder as listed in the stock record books of the Corporation (which may include the records of any transfer agent for the Series A Preferred Stock or the Common Stock, as the case may be) or, as applicable, or by delivery electronically through the Applicable Procedures of the Depositary prescribed for giving such notice, or (iii) to such other address as the Corporation or any such Holder, as the case may be, will have designated by notice similarly given. |
| --- | --- |
23
| 19. | Exclusion of Other Rights. The shares of Series A Preferred Stock will not have any voting powers except as expressly described herein, and, except as may otherwise be required by applicable law, will not have any preferences or relative, participating, optional or other special rights, other than those specifically set forth herein (as this Article IV-A may be amended from time to time) and in the Articles of Incorporation. The shares of Series A Preferred Stock will have no preemptive or subscription rights. |
|---|---|
| 20. | Severability of Provisions. If any voting powers, preferences or relative, participating, optional or other special rights of the Series A Preferred Stock and qualifications, limitations and restrictions thereof set forth in this Article IV-A (as this Article IV-A may be amended from time to time) are invalid, unlawful or incapable of being enforced by reason of any rule of law, all other voting powers, preferences and relative, participating, optional and other special rights of Series A Preferred Stock and qualifications, limitations and restrictions thereof set forth in this Article IV-A (as so amended) that can be given effect without the invalid, unlawful or unenforceable voting powers, preferences or relative, participating, optional or other special rights of Series A Preferred Stock and qualifications, limitations and restrictions thereof shall, nevertheless, remain in full force and effect, and no voting powers, preferences or relative, participating, optional or other special rights of Series A Preferred Stock or qualifications, limitations and restrictions thereof herein set forth will be deemed dependent upon any other such voting powers, preferences or relative, participating, optional or other special rights of Series A Preferred Stock or qualifications, limitations and restrictions thereof unless so expressed herein. |
| --- | --- |
| 21. | Determinations. The Corporation will have the sole right to make all calculations called for hereunder. Absent fraud or manifest error, such calculations shall be final and binding on all Holders. The Corporation will have the power to resolve any ambiguity and its action in so doing, as evidenced by a resolution of the Board of Directors, will be final and conclusive unless clearly inconsistent with the intent hereof. |
| --- | --- |
| 22. | Repurchases. Subject to the limitations imposed herein, the Corporation may purchase shares of Series A Preferred Stock from time to time to such extent, in such manner, and upon such terms as the Board of Directors or any duly authorized committee of the Board may determine; provided that any repurchase of shares of Series A Preferred Stock by the Corporation will be subject to any Applicable Regulatory Approval. |
| --- | --- |
| 23. | No Sinking Fund. Shares of Series A Preferred Stock are not subject to the operation of a sinking fund. |
| --- | --- |
24
| 24. | Taxes. |
|---|
(a) For U.S. federal income tax purposes the Corporation and each Holder intends to treat the Series A Preferred Stock as participating stock and not as preferred stock as defined under Treasury Regulations promulgated under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), Section 1.305.5 and shall complete any reporting in a manner consistent with such treatment.
(b) In the event that the Corporation reasonably determines in good faith that 40% or more of the Corporation’s USRPHC Asset Base (as defined below) consists of “United States real property interests” (within the meaning of Section 897(c)(1) of the Internal Revenue Code), the Corporation shall promptly notify the Holders of such determination in writing. For purposes of the foregoing, the Corporation’s “USRPHC Asset Base” shall mean the amount determined under Section 897(c)(2)(B) of the Internal Revenue Code.
(c) The Corporation and each Holder will bear their own respective costs, fees and expenses in connection with any conversion contemplated hereby, except that the Corporation will pay any and all transfer taxes, stamp taxes or duties, documentary taxes, or other similar taxes imposed upon the issuance of shares of Common Stock on account of any conversion contemplated hereby; provided that the Corporation will not be required to pay any such tax to the extent such tax is payable because a Holder requests Common Stock to be registered in a name other than such registered holder’s name, and no such Common Stock will be so registered unless and until the registered holder making such request has paid such taxes to the Corporation or has established to the satisfaction of the Corporation that such taxes have been paid or are not payable.
Second: The “6.5% Series A Non-Cumulative Perpetual Convertible Preferred Stock of the Corporation has been classified and designated by the Board, under the authority contained in Article IV of the Restated Articles of Incorporation of the Corporation and Section 1-602 of the Louisiana Business Corporation Act.
Third: These Articles of Amendment have been approved by the Board in the manner required by applicable law, and shareholder approval was not required.
Fourth: The undersigned Executive Vice President and Chief Financial Officer of the Corporation acknowledges these Articles of Amendment to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned Executive Vice President and Chief Financial Officer of the Corporation acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties of perjury.
[Signature Page Follows]
25
IN WITNESS WHEREOF, these Articles of Amendment are executed in the name and on behalf of the Corporation on this 27^th^ day of June, 2025.
| INVESTAR HOLDING CORPORATION | |
|---|---|
| By: | |
| John R. Campbell | |
| Executive Vice President and Chief Financial Officer |
26
ACKNOWLEDGMENT
| STATE OF LOUISIANA | § |
|---|---|
| PARISH OF EAST BATON ROUGE | § |
On this 27^th^ day of June, 2025, before me, the undersigned authority, personally came and appeared John R. Campbell, to me personally known, who, being by me duly sworn, declared and acknowledged before me and the undersigned competent witnesses, that he is the Executive Vice President and Chief Financial Officer of Investar Holding Corporation, a Louisiana corporation (the “Corporation”), and that in such capacity he was duly authorized to and did execute the foregoing Articles of Amendment to the Restated Articles of Incorporation of the Corporation, on behalf of and in the name of the Corporation, for the purposes therein expressed and as his and the Corporation’s free act and deed.
IN WITNESS WHEREOF, the appearer, witnesses and I have hereunto affixed our hands on this 27^th^ day of June, 2025, in the aforesaid parish and state.
| John R. Campbell<br><br> <br>Executive Vice President and Chief Financial Officer<br><br> <br>Investar Holding Corporation |
|---|
WITNESSES:
| Print Name: | Print Name: |
|---|---|
| ____________________________________<br> Notary Public<br><br> <br>Name: _______________________________<br><br> <br><br><br> <br>My Commission Expires:________________<br><br> <br><br><br> <br>Notarial ID No./Bar Roll No.: ____________ | |
| --- |
27
ex_834287.htm
Exhibit 4.1
| Number **** | **** Shares |
|---|---|
| 6.5% SERIES A NON-CUMULATIVE<br> PERPETUAL CONVERTIBLE<br><br> <br>PREFERRED STOCK | 6.5% SERIES A NON-CUMULATIVE<br> PERPETUAL CONVERTIBLE<br><br> <br>PREFERRED STOCK |
| INVESTAR HOLDING CORPORATION<br><br> <br>A CORPORATION FORMED UNDER THE<br><br> <br>LAWS OF THE STATE OF LOUISIANA | SEE REVERSE FOR IMPORTANT NOTICE<br><br> <br>ON TRANSFER RESTRICTIONS<br><br> <br>AND OTHER INFORMATION |
| CUSIP 46134L 204 (144A) | |
| ISIN US46134L2043 | |
| CUSIP 46134L 303 (Accredited) | |
| ISIN US46134L3033 | |
| This Certifies that [SPECIMEN] | |
| is the record holder of ************ |
FULLY PAID AND NON-ASSESSABLE SHARES OF 6.5% SERIES A NON-CUMULATIVE
PERPETUAL CONVERTIBLE PREFERRED STOCK, NO PAR VALUE PER SHARE, OF
INVESTAR HOLDING CORPORATION (the “Corporation”)
transferable on the books of the Corporation by the holder hereof in person or by its duly authorized attorney, upon surrender of this certificate properly endorsed. This certificate and the shares represented hereby are issued and will be held subject to all of the provisions of the Restated Articles of Incorporation of the Corporation (the “Articles of Incorporation”), including the Articles of Amendment to the Articles of Incorporation creating the 6.5% Series A Non-Cumulative Perpetual Convertible Preferred Stock effective June 30, 2025, and the Bylaws of the Corporation, and any amendments thereto. This certificate is not valid unless countersigned and registered by the transfer agent and registrar.
Dated:
| Secretary | President |
|---|
[SEAL]
IMPORTANT NOTICE
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, THE RELATIVE RIGHTS, PREFERENCES AND LIMITATIONS OF EACH CLASS OF STOCK OF THE CORPORATION AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND RIGHTS, AND THE VARIATIONS IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR EACH SERIES, WHICH ARE FIXED BY THE ARTICLES OF INCORPORATION OF THE CORPORATION, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, AND THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE CORPORATION AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE SERIES. SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE SECRETARY OF THE CORPORATION OR TO THE TRANSFER AGENT. THE BOARD OF DIRECTORS MAY REQUIRE THE OWNER OF A LOST OR DESTROYED STOCK CERTIFICATE, OR HIS LEGAL REPRESENTATIVES, TO GIVE THE CORPORATION A BOND TO INDEMNIFY IT AND ITS TRANSFER AGENTS AND REGISTRARS AGAINST ANY CLAIM THAT MAY BE MADE AGAINST THEM ON ACCOUNT OF THE ALLEGED LOSS OR DESTRUCTION OF ANY SUCH CERTIFICATE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND WERE OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE SECURITIES MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS PURSUANT TO REGISTRATION OR EXEMPTION FROM REGISTRATION REQUIREMENTS THEREUNDER, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, OTHER THAN PURSUANT TO RULE 144, UNLESS THE CORPORATION HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN AGREEMENT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
2
The following abbreviations, when used in the inscription on the face of this Certificate, will be construed as though they were written out in full according to applicable laws or regulations:
| UNIF GIFT MIN ACT | Custodian | ||||
|---|---|---|---|---|---|
| TEN COM - | as tenants in common | (Custodian) | (Minor) | ||
| TEN ENT - | as tenants by the entireties | under Uniform Gifts to Minors Act of | |||
| JT TEN - | as joint tenants with right of | ||||
| survivorship and not as | (State) | ||||
| tenants in common | |||||
| Custodian |
Additional abbreviations may also be used though not in the above list.
For Value Received, hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
(Please Print or Typewrite Name and Address, Including Zip Code, of Assignee)
Shares of the 6.5% Series A Non-Cumulative Perpetual Convertible Preferred Stock, no par value per share, of the Corporation represented by the within certificate, and do hereby irrevocably constitute and appoint _________________ attorney to transfer the said shares on the books of the within named Corporation with full power of substitution in the premises.
Dated:
| X | |
|---|---|
| X | |
| NOTICE: THE SIGNATURE(S) TO THIS<br><br> <br>ASSIGNMENT MUST CORRESPOND WITH<br><br> <br>THE NAME(S) AS WRITTEN UPON THE<br><br> <br>FACE OF THE CERTIFICATE IN EVERY<br><br> <br>PARTICULAR, WITHOUT ALTERATION<br><br> <br>OR ENLARGEMENT OR ANY CHANGE<br><br> <br>WHATEVER | |
| Signature(s) Guaranteed | |
| By | |
| THE SIGNATURE(S) MUST BE GUARANTEED BY<br><br> <br>AN ELIGIBLE GUARANTOR INSTITUTION<br><br> <br>(BANKS, STOCKBROKERS, SAVINGS AND LOAN<br><br> <br>ASSOCIATIONS AND CREDIT UNIONS WITH<br><br> <br>MEMBERSHIP IN AN APPROVED SIGNATURE<br><br> <br>GUARANTEE MEDALLION PROGRAM),<br><br> <br>PURSUANT TO S.E.C. RULE 17Ad-15. |
ex_834288.htm
Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (the “Agreement”) is entered into as of July 1, 2025, by and among Investar Holding Corporation, a Louisiana corporation (the “Company”), and the purchasers, severally and not jointly, listed on signature pages hereto (collectively, the “Purchasers” and each, a “Purchaser”).
RECITALS
WHEREAS, the Company is offering for sale to the Purchasers approximately $32,500,000 in aggregate subscription amount of its 6.5% Series A Non-Cumulative Perpetual Convertible Preferred Stock (the “Shares”) on the terms and subject to the conditions contained herein;
WHEREAS, the Company has engaged Janney Montgomery Scott LLC as its exclusive placement agent (“Placement Agent”) for the offering of the Shares;
WHEREAS, each of the Purchasers is an accredited investor as that term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), or a qualified institutional buyer as that term is defined in Rule 144A promulgated under the Securities Act (“QIB”);
WHEREAS, the offer and sale of the Shares by the Company is being made in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated under the Securities Act; and
WHEREAS, each Purchaser has agreed to purchase from the Company Shares having a subscription amount set forth on such Purchaser’s signature page hereto in accordance with the terms, subject to the conditions and in reliance on, the recitals, representations, warranties, covenants and agreements set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements herein contained and other good and valuable consideration, the receipt of which is acknowledged, the undersigned parties agree as follows:
AGREEMENT
| 1. | DEFINITIONS; INTERPRETATION. |
|---|
1.1 Defined Terms. In this Agreement, unless the context otherwise requires or unless otherwise specifically provided in this Agreement:
“Action” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or, to the Company’s Knowledge, threatened in writing against the Company, any Subsidiary or any of their respective properties or any officer, director or employee of the Company or any Subsidiary acting in his or her capacity as an officer, director or employee before or by any Governmental Entity.
1
“Affiliate(s)” means, with respect to any Person, such Person’s immediate family members, partners, members or parent and subsidiary corporations, and any other Person directly or indirectly controlling, controlled by, or under common control with said Person and their respective Affiliates. For purposes of this definition, “control” when used with respect to any Person has the meaning specified in Rule 12b-2 promulgated under the Exchange Act; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Agency” means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home Administration (now known as Rural Housing and Community Development Services), the Federal National Mortgage Association, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture or any other federal or state agency with authority to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased or serviced by the Company or any of its Subsidiaries or (ii) originate, purchase, or service mortgage loans, or otherwise promote mortgage lending, including state and local housing finance authorities.
“Agreement” is defined in the preamble.
“Amendment” means the amendment to the Restated Articles of Incorporation of the Company, in the form set forth in Exhibit A hereto, to be filed by the Company with the Secretary of State of the State of Louisiana prior to the Closing.
“Bank” means Investar Bank, National Association, a national banking association and wholly owned subsidiary of the Company.
“Board of Directors” means the Board of Directors of the Company.
“BHC Act” means the Bank Holding Company Act of 1956, as amended.
“BHC Act Control” is defined in Section 3.43.
“Business Day” means any day except a Saturday, a Sunday or other day on which the SEC or banks in the City of New York are authorized or required by law to be closed.
“Chosen Courts” is defined in Section 7.4.
“Closing” is defined in Section 2.2.
“Closing **** Date” is defined in Section 2.2.
“Common Stock” means the common stock, par value $1.00 per share, of the Company.
“Company” is defined in the preamble and will include any successors to the Company.
“Company Financial Statements” mean (i) the audited financial statements of the Company for the year ended December 31, 2024; and (ii) the unaudited financial statements of the Company for the quarter ended March 31, 2025.
2
“Company Reports” is defined in Section 3.9.
“Covered Person” means, with respect to the Company as an “issuer” for purposes of Rule 506 of Regulation D promulgated under the Securities Act, any person listed in the first paragraph of Rule 506(d)(1) of Regulation D promulgated under the Securities Act.
“Disclosure Materials” is defined in Section 3.6.
“Disclosure Time” means, (i) if this Agreement is signed after 9:00 a.m. (New York City time) and before midnight (New York City time) on any Business Day, 9:01 a.m. (New York City time) on the Business Day immediately following the date hereof, or (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any Business Day, no later than 9:01 a.m. (New York City time) on the date hereof.
“Disqualification Events” is defined in Section 3.26.
“DTC” means The Depository Trust Company.
“ERISA” is defined in Section 3.38.
“Environmental Laws” is defined in Section 3.15.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor statute thereto, and the rules and regulations of the SEC promulgated thereunder.
“FDIC” means the Federal Deposit Insurance Corporation.
“Federal Reserve” means the Board of Governors of the Federal Reserve System.
“GAAP” means generally accepted accounting principles in effect from time to time in the United States of America.
“Governmental Entity” means, individually or collectively, any arbitrator, court, governmental body, commission, board, regulatory body, administrative agency or authority or agency with jurisdiction over the Company or any Subsidiary of the Company or any of their respective properties, assets or operations.
“Holder” is defined in Section 5.1(c).
“Indebtedness” is defined in Section 3.3(c).
“Indemnified Party” is defined in Section 6.3.
“Indemnifying Party” is defined in Section 6.3.
“Insurer” means a Person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loans originated, purchased or serviced by the Company or any of its Subsidiaries, including the Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such mortgage loans or the related collateral.
3
“Intellectual Property” is defined in Section 3.28.
“Internal Revenue Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Investor Presentation” means the presentation dated June 2025 prepared by the Company concerning the offering of the Shares described in this Agreement and the proposed acquisition of Wichita Falls Bancshares, Inc.
“Knowledge” means the knowledge of such party based on the actual knowledge of such party’s Chief Executive Officer and Chief Financial Officer or such other persons holding equivalent offices or individuals performing similar functions after due inquiry of all employees in the direct reporting line of such officer.
“Law” is defined in Section 3.18.
“Lien” is defined in Section 3.3(b).
“Loan Investor” means any Person (including an Agency) having a beneficial interest in any mortgage loan originated, purchased or serviced by the Company or any of its Subsidiaries or a security backed by or representing an interest in any such mortgage loan
“Losses” is defined in Section 6.2.
“Material Adverse Effect” means any change or effect that (i) is or would be reasonably likely to be material and adverse to the condition (financial or otherwise), results of operations, assets, properties or business of the Company and its Subsidiaries taken as a whole, or (ii) would materially impair the ability of the Company to timely perform its obligations under any of the Transaction Documents or otherwise materially impede the consummation of the transactions contemplated by the Transaction Documents.
“NASDAQ” means the NASDAQ Global Market.
“OFAC” is defined in Section 3.35.
“Person” means an individual, a corporation (whether or not for profit), a partnership, a limited liability company, a joint venture, an association, a trust, an unincorporated organization, a government or any department or agency thereof (including a Governmental Entity) or any other entity or organization.
“Placement Agent” is defined in the recitals.
“Press Release” is defined in Section 5.6.
“Previously Disclosed” with regard to the Company means any information set forth in, or incorporated by reference into, any filing made by the Company under the Exchange Act with the SEC.
4
“Purchaser” or “Purchasers” is defined in the preamble.
“Purchase Price” is defined in Section 2.1.
“Purchaser-Related Parties” is defined in Section 6.2.
“QIB” is defined in the recitals.
“Registration Rights Agreement” means that certain agreement, by and among the Company and each of the Purchasers, dated as of the date of this Agreement, providing certain resale registration rights with respect to the Underlying Shares under the Securities Act.
“Regulation D” is defined in the recitals.
“Regulatory Agreement” is defined in Section 3.20.
“Rule 144” means Rule 144 promulgated under the Securities Act and any successor provision.
“SEC” means the U.S. Securities and Exchange Commission.
“SEC Reports” is defined in Section 3.6.
“Securities” means the Shares and the Underlying Shares.
“Securities Act” is defined in the recitals.
“Shares” is defined in the recitals.
“Significant Subsidiary” is defined in Rule 1-02 of Regulation S-X promulgated under the Exchange Act.
“Standard Settlement Period” means the standard settlement period, expressed in a number of trading days, on NASDAQ, or the Company’s then primary national exchange with respect to the Common Stock, as in effect on the date of delivery of the applicable request to remove legends of Securities.
“Subsidiary” means with respect to any Person, any corporation or entity in which a majority of the outstanding equity interests is directly or indirectly owned by such Person.
“Transaction Documents” means this Agreement, the Registration Rights Agreement and the Amendment.
“Underlying Shares” means the shares of Common Stock issued and issuable upon conversion of the Shares in accordance with the terms of the Company’s Restated Articles of Incorporation, as amended by the Amendment.
“U.S. Sanctions Laws” is defined in Section 4.16.
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1.2 Interpretation. The foregoing definitions are equally applicable to both the singular and plural forms of the terms defined. The words “hereof,” “herein” and “hereunder” and words of like import when used in this Agreement will refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “including” when used in this Agreement without the phrase “without limitation,” will mean “including, without limitation.” With respect to any reference in this Agreement to any defined term, (i) if such defined term refers to a Person, then it will also mean all heirs, legal representatives and permitted successors and assigns of such Person, and (ii) if such defined term refers to a document, instrument or agreement, then it will also include any amendment, replacement, extension or other modification thereof. All headings and subheadings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. Whenever the context may require, any pronoun includes the corresponding masculine, feminine, and neuter forms. Further, the parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof will arise favoring or disfavoring any party hereto by virtue of the authorship of any provisions of this Agreement.
| 2. | Purchase; Closing. |
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2.1 Purchase. On the basis of the representations, warranties, agreements and covenants herein contained and subject to the terms and conditions herein set forth, the Company will issue and sell to each Purchaser, severally and not jointly, and each Purchaser, severally and not jointly, will purchase from the Company, the number of Shares set forth on such Purchaser’s signature page hereto, at a purchase price of $1,000 per Share (the “Purchase Price”). Notwithstanding anything in this Agreement to the contrary and as may be agreed to among the Company and one or more Purchaser, a Purchaser shall not be required to wire the Purchase Price for its purchased Shares until it confirms receipt of a book-entry statement from the Company’s transfer agent evidencing the issuance of the Shares to such Purchaser on and as of the Closing Date.
2.2 Closing. The closing of the purchase of the Shares by the Purchasers (the “Closing”) will occur at 10:00 a.m., Central time, on the date hereof at the offices of the Company, or remotely via the electronic or other exchange of documents and signature pages, or such other date or location as agreed by the parties. The date of the Closing is referred to as the “Closing Date.”
2.3 Company Closing Deliverables. In conjunction with and as additional (but independent) supporting evidence for certain of the covenants, representations and warranties made by the Company herein, at the Closing, the Company will deliver or cause to be delivered to each Purchaser each of the following, the delivery of which will be a condition to the Purchaser’s obligation to purchase the Shares:
(a) The Agreement, duly executed by the Company;
(b) Evidence of the filing and acceptance of the Amendment from the Secretary of State of the State of Louisiana;
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(c) One or more certificates representing the Shares in definitive form (or facsimile or “.pdf” copies of such certificates for purposes of Closing with the original certificates to be delivered by the Company or its transfer agent by overnight delivery on the next Business Day after the Closing Date in accordance with the written delivery instructions of the Purchaser) or, at the election of the Purchaser, evidence of the book entry issuance of the Shares, in each such case, free and clear of all restrictive legends (except as expressly provided in Section 5.1(b)) and registered in the name of such Purchaser or its nominees in accordance with Purchaser’s written delivery instructions.
(d) A certificate of the Secretary of the Company, (i) attaching a certified copy of the Restated Articles of Incorporation of the Company, as in effect immediately prior to the filing of the Amendment, (ii) certifying as to and attaching a copy of the Amended and Restated Bylaws of the Company, and (iii) certifying as to and attaching a copy of the resolutions of the Board of Directors authorizing the issuance of the Securities, reservation of the Underlying Shares for issuance to the Holders upon conversion of the Shares in accordance with the terms of the Company’s Restated Articles of Incorporation, as amended by the Amendment, and the execution, delivery and performance of the Transaction Documents;
(e) A certificate of the Chief Executive Officer and Chief Financial Officer of the Company representing, warranting and certifying that (i) the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date, as though made on and as of such date (except for such representations and warranties that speak as of a specific date), and (ii) the Company has performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing;
(f) A good standing certificate of the Company issued by the Secretary of State of the State of Louisiana;
(g) An incumbency certificate of the Secretary of the Company certifying the names of the officer or officers of the Company authorized to sign the Transaction Documents, together with a sample of the true signature of each such officer;
(h) An opinion of counsel to the Company, dated as of the Closing Date, in the form of Exhibit B attached hereto and addressed to the Purchasers; and
(i) The Registration Rights Agreement, duly executed by the Company.
2.4 Purchaser Closing Deliverables. In conjunction with and as additional (but independent) supporting evidence for certain of the covenants, representations and warranties made by each Purchaser herein, at the Closing, each Purchaser, severally and not jointly, will deliver or cause to be delivered to the Company each of the following, the delivery of which will be a condition to the Company’s obligation to issue the Shares to the Purchaser:
(a) The Agreement, duly executed by such Purchaser;
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(b) The full amount of the Purchase Price for the Shares being purchased hereunder by such Purchaser, in immediately available funds, by wire transfer to an account designated by the Company;
(c) The Registration Rights Agreement, duly executed by such Purchaser; and
(d) A fully completed and duly executed Accredited Investor Questionnaire in the form attached hereto as Exhibit C.
| 3. | Representations and Warranties of the Company. |
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The Company represents and warrants to each Purchaser as of the date hereof as follows:
3.1 Organization and Authority. The Company has no direct or indirect Significant Subsidiaries, except as set forth in Exhibit 21 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Each of the Company and its Subsidiaries is a corporation, bank or other entity duly organized, validly existing and good standing under the Laws of the jurisdiction of its incorporation or organization, is duly qualified to do business and is in good standing as a foreign corporation or other entity in all other jurisdictions where its ownership or leasing of property and assets or the conduct of its business requires it to be so qualified except where any failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and has the corporate or other organizational power and authority to own its properties and assets and to carry on its business as it is now being conducted. The Company is duly registered as a bank holding company under the BHC Act and applicable state Laws. The Bank is an insured depository institution under Section 3(c)(2) of the Federal Deposit Insurance Act, as amended.
3.2 Company Subsidiaries. The Company owns, directly or indirectly, all of the capital stock and other comparable entity interests of each Subsidiary of the Company free and clear of any and all Liens, and all of the issued and outstanding shares of capital stock or comparable equity interests of each Subsidiary are validly issued and fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities, except to the extent provided in 12 U.S.C §55. The Bank is the only banking Subsidiary of the Company, and the deposit accounts of the Bank are insured by the FDIC up to the fullest extent permitted by the Federal Deposit Insurance Act, as amended, and the rules and regulations of the FDIC thereunder, and all premiums and assessments required to be paid in connection therewith have been paid when due (after giving effect to any applicable extensions). The Company beneficially owns all of the outstanding capital securities and has sole BHC Act Control of the Bank.
3.3 Authorization; No Conflicts; No Default.
(a) The Company has the corporate power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and to perform its obligations thereunder. The execution, delivery and performance of the Transaction Documents by the Company and the consummation of the transactions contemplated thereby have been duly authorized by all necessary corporate action on the part of the Company. No further corporate action is necessary or required by the Company, the Board of Directors or the Company’s shareholders for the execution and delivery by the Company of the Transaction Documents, the performance by it of its obligations thereunder or the consummation by it of the transactions contemplated thereby, including the issuance and sale of the Shares and the reservation of the Underlying Shares. Each of the Transaction Documents has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by each Purchaser, is the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general applicability relating to or affecting creditors’ rights or by general equity principles (whether applied in equity or at law).
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(b) Neither the execution, delivery or performance by the Company of the Transaction Documents, nor the consummation by the Company of the transactions contemplated thereby, nor compliance by the Company with any of the provisions hereof or thereof, will (i) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any lien, charge, adverse right or claim, pledge, covenant, title defect, security interest and other encumbrance of any kind (“Lien”) upon any of the properties or assets of the Company or any Subsidiary of the Company, under any of the terms, conditions or provisions of (1) the articles of incorporation, charter or bylaws (or similar governing documents) of the Company or any of its Subsidiaries or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of its Subsidiaries is a party or by which it may be bound, or to which the Company or any of its Subsidiaries, or any of the properties or assets of the Company or any of its Subsidiaries may be subject, or (ii) violate any Law or regulation applicable to the Company or any of its Subsidiaries or any of their respective properties or assets, except in the case of clauses (i)(2) and (ii) of this paragraph for such violations, conflicts and breaches as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(c) None of the Company, the Bank or any other Subsidiary of the Company is in violation or default (i) of any provision of its articles of incorporation, charter or bylaws (or similar governing documents), or (ii) in the performance, observance or fulfillment of any of the terms, obligations, covenants, conditions or provisions contained in any indenture or other agreement creating, evidencing or securing Indebtedness of any kind or pursuant to which any such Indebtedness is issued, or other agreement or instrument to which the Company, Bank or any other Subsidiary of the Company is a party or by which the Company, the Bank or any other Subsidiary of the Company or their respective properties may be bound or affected, except, in the case of clause (ii), only such defaults that would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect. For purposes of this Agreement, “Indebtedness” means: (1) all items arising from the borrowing of money that, according to GAAP as in effect from time to time, would be included in determining total liabilities as shown on the consolidated balance sheet of the Company; and (2) all obligations secured by any Lien in property owned by the Company whether or not such obligations will have been assumed; provided, however, Indebtedness will not include deposits or other indebtedness created, incurred or maintained in the ordinary course of the Company’s or the Bank’s business (including, without limitation, federal funds purchased, advances from any Federal Home Loan Bank, Federal Reserve Bank, secured deposits of municipalities and repurchase arrangements) and consistent with customary banking practices and applicable Laws and regulations.
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3.4 Issuance of Securities. The Securities being purchased by each Purchaser hereunder have been duly authorized and, when issued, sold, and delivered in accordance with the terms of this Agreement for the consideration expressed herein (including upon conversion of the Shares into the Underlying Shares), will be duly and validly issued, fully paid, and nonassessable, and will be free of restrictions on transfer other than restrictions under applicable state and federal securities Laws.
3.5 Capitalization. The authorized capital stock of the Company consists of (i) 40,000,000 shares of Common Stock, of which 9,839,848 were issued and outstanding as of the date of this Agreement (excluding the Underlying Shares issuable upon the conversion of the Shares) and (ii) 5,000,000 shares of preferred stock, none of which are issued and outstanding (excluding the Shares to be issued under this Agreement). All issued and outstanding shares of the Company’s capital stock have been duly authorized and validly issued and are fully paid and nonassessable. There are no outstanding rights or obligations of the Company to repurchase or redeem any of its capital stock. No shares of the Company’s capital stock are subject to preemptive rights or other similar rights. Except for the Registration Rights Agreement, there are no agreements or arrangements under which the Company is obligated to register the sale of any shares of the Company’s capital stock under the Securities Act. There are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities.
3.6 Reporting Company; Form S-3. The Company has filed all reports, forms, statements and other documents required to be filed by it under the Exchange Act, including under Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports” and together with this Agreement and the exhibits hereto, the Investor Presentation, the other Transaction Documents, and any other factual information concerning by the Company furnished in connection with the offering of the Shares, the “Disclosure Materials”), on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective filing dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. To the Company’s Knowledge, there are no facts or circumstances that reasonably would be expected to prohibit or materially delay the preparation and filing of a registration statement on Form S-3 in accordance with the Registration Rights Agreement for the resale of the Underlying Shares by the Purchasers.
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3.7 Governmental and Other Consents. No orders, permissions, consents, approvals, waivers or authorizations from any Governmental Entity are required to be obtained by the Company or any of its Subsidiaries that have not been obtained, and no notice, registrations, declarations, applications or filings are required to be filed by the Company or any of its Subsidiaries that have not been filed in connection with, or, in contemplation of, the execution and delivery of, and performance under, the Transaction Documents, except for applicable requirements, if any, of the Securities Act, the Exchange Act or state securities Laws or “blue sky” Laws of the various states, and the rules and regulations of NASDAQ.
3.8 Financial Statements. The Company Financial Statements (including the related notes, where applicable) included in the SEC Reports: (i) have been prepared from, and are in accordance with, the books and records of the Company; (ii) fairly present in all material respects the results of operations, cash flows, changes in stockholders’ equity and financial position of the Company and its consolidated Subsidiaries, for the respective fiscal periods or as of the respective dates therein set forth (subject in the case of unaudited statements to recurring year-end audit adjustments normal in nature and amount), as applicable; (iii) complied as to form, as of their respective dates of filing in all material respects with applicable accounting and banking requirements as applicable, with respect thereto; and (iv) have been prepared in accordance with GAAP consistently applied during the periods involved, except, in each case, as indicated in such statements or in the notes thereto.
3.9 Reports. Since December 31, 2023, the Company and each Subsidiary of the Company have filed all reports, registrations, documents, filings, statements and submissions, together with any required amendments thereto, that were required to be filed with any Governmental Entity (collectively, the “Company Reports”) and have paid all fees and assessments due and payable in connection therewith. As of their respective filing dates, the Company Reports complied in all material respects with all Laws, as the case may be.
3.10 Books and Records; Internal Accounting and Disclosure Controls. The books and records of the Company and its Subsidiaries are complete and correct in all material respects. No written or, to the Knowledge of the Company, oral notice or allegation of any material inaccuracies or discrepancies in such books and records has been received by the Company. The records, systems, controls, data and information of the Company and its Subsidiaries are recorded, stored, maintained and operated under means, including any electronic, mechanical or photographic process, whether computerized or not, that are under the exclusive ownership and direct control of the Company or its Subsidiaries or accountants, including all means of access thereto and therefrom, except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
3.11 Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries and an unconsolidated or other affiliated entity that is required to be disclosed by the Company on the Company Financial Statements that is not so disclosed or that otherwise would be reasonably likely to have a Material Adverse Effect.
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3.12 Risk Management Instruments. All material derivative instruments, including swaps, caps, floors and option agreements entered into for the Company’s or any of its Subsidiaries’ own account were entered into only in the ordinary course of business, in accordance with prudent practices and in all material respects with all applicable Laws, and with counterparties believed to be financially responsible at the time; and each of them constitutes the valid and legally binding obligation of the Company or its Subsidiary, as applicable, enforceable in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general applicability relating to or affecting creditors’ rights or by general equity principles, whether applied in equity or at law. Neither the Company nor, to its Knowledge, any other parties thereto is in breach of any of its material obligations under any such agreement or arrangement.
3.13 No Undisclosed Liabilities. There are no liabilities of the Company or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, except for liabilities adequately reflected or reserved against in accordance with GAAP in the Company Financial Statements and liabilities that have arisen in the ordinary and usual course of business and consistent with past practice since December 31, 2024, and that have not or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
3.14 Absence of Certain Changes. Since the date of the latest audited financial statements included in the SEC Reports, except as Previously Disclosed, (i) the Company and the Company Subsidiaries have conducted their respective businesses in all material respects in the ordinary and usual course of business consistent with past practices, (ii) none of the Company or any Company Subsidiary has incurred any material liability or obligation, direct or contingent, for borrowed money, except borrowings in the ordinary course of business, (iii) the Company has not made or declared any distribution in cash or in kind to its shareholders or issued or repurchased any shares of its capital stock, except for quarterly dividends to holders of Common Stock, (iv) through (and including) the date of this Agreement, no fact, event, change, condition, development, circumstance or effect has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (v) no material default (or event which, with notice or lapse of time, or both, would constitute a material default) exists on the part of the Company or any Company Subsidiary or, to the Knowledge of the Company, on the part of any other party, in the due performance and observance of any term, covenant or condition of any agreement to which the Company or any Company Subsidiary is a party and which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
3.15 Environmental Matters. Neither the Company nor any of its Subsidiaries (i) is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), (ii) owns or operates any real property contaminated with any substance that is in violation of any Environmental Laws, (iii) is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or (iv) is subject to any claim relating to any Environmental Laws; in each case, which violation, contamination, liability or claim has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and, to the Company’s Knowledge, there is no pending or threatened investigation that might lead to such a claim.
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3.16 Litigation. There is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) except as Previously Disclosed, is reasonably likely to have a Material Adverse Effect, individually or in the aggregate, if there were an unfavorable decision. Except as Previously Disclosed, neither the Company nor any Company Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities Laws or a claim of breach of fiduciary duty. There has not been, and to the Company’s Knowledge there is not pending or contemplated, any investigation by the SEC involving the Company or any current or former director or officer of the Company. The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any of its Subsidiaries under the Exchange Act or the Securities Act. There are no outstanding orders, judgments, injunctions, awards or decrees of any court, arbitrator or governmental or regulatory body against the Company or any executive officers or directors of the Company in their capacities as such, which individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
3.17 Employment Matters. No labor dispute exists or, to the Company’s Knowledge, is imminent with respect to any of the employees of the Company which would have or reasonably be expected to have a Material Adverse Effect. None of the Company’s employees is a member of a union that relates to such employee’s relationship with the Company, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and each Company Subsidiary believes that its relationship with its employees is good. To the Company’s Knowledge, no executive officer is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of a third party, and to the Company’s Knowledge, the continued employment of each such executive officer does not subject the Company or any Company Subsidiary to any liability with respect to any of the foregoing matters. The Company is in compliance with all Laws relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
3.18 Compliance with Laws. The Company and each of its Subsidiaries have all permits, licenses, franchises, authorizations, consents, orders and approvals of, and have made all filings, applications and registrations with, Governmental Entities that are required in order to permit them to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of the Company and each such Subsidiary, except where the failure to have such permits, licenses, franchises, authorizations, consents, orders and approvals, or to have made such filings, applications and registrations, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (“Material Permits”), and, except as disclosed in the SEC Reports, (i) neither the Company nor any of its Subsidiaries has received any notice in writing of proceedings relating to the revocation or material adverse modification of any such Material Permits and (ii) the Company is unaware of any facts or circumstances that would give rise to the revocation or material adverse modification of any Material Permits. The Company and each Subsidiary of the Company have complied in all material respects and (i) are not in default or violation in any respect of, (ii) to the Company’s Knowledge, are not under investigation with respect to, and (iii) to the Company’s Knowledge, have not been threatened to be charged with or given notice of any material violation of, any applicable domestic (federal, state or local) or foreign law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental Entity, including all laws and regulations restricting activities of bank holding companies and banking organizations (each, a “Law”), other than such noncompliance, defaults or violations that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Except for statutory or regulatory restrictions of general application, no Governmental Entity has placed any material restriction on the business or properties of the Company or any of its Subsidiaries. As of the date hereof, the Bank has a Community Reinvestment Act rating of “satisfactory” or better and the Company maintains it status as a “financial holding company” as defined in 12 CFR 225.81. To the Company’s Knowledge, there are no facts or circumstances that would cause the Bank to be deemed not to be in satisfactory compliance with the Community Reinvestment Act and the regulations promulgated thereunder or to be assigned a CRA rating of lower than “satisfactory”. Company further represents that it has not received any notice of, nor is it aware of any investigation, regulatory action, or facts or circumstances, that would reasonably be expected to impair it status as a financial holding company.
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3.19 Listing Compliance. The Company is in material compliance with the requirements of the NASDAQ for continued listing of the Common Stock thereon. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or the listing of the Common Stock on the NASDAQ, nor has the Company received any notification that the SEC or the NASDAQ is contemplating terminating such registration or listing. The transactions contemplated by this Agreement will not contravene in any material respect the rules and regulations of the NASDAQ.
3.20 Agreements with Regulatory Agencies. Neither the Company nor any Company Subsidiary (i) is subject to any cease-and-desist or other similar order or enforcement action issued by, (ii) is a party to any written agreement, consent agreement or memorandum of understanding with, (iii) is a party to any commitment letter or similar undertaking to, (iv) is subject to any capital directive by, or (v) has adopted any board resolutions at the request of, any Governmental Entity that currently restricts in any material respect the conduct of its business or that in any manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk management or compliance policies, its internal controls, its management, or its operations or business (each item in this sentence, a “Regulatory Agreement”), nor has the Company or any of its Subsidiaries been advised by any Governmental Entity that it is considering issuing, initiating, ordering, or requesting any such Regulatory Agreement.
3.21 Brokers and Finders. Except for commissions paid to the Placement Agent, neither the Company nor any Affiliate of the Company is obligated to pay any brokerage commission or finder’s fee to any Person in connection with the transactions contemplated by this Agreement.
3.22 Tax Matters. The Company (i) has prepared and filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, whether or not shown or determined to be due on such returns, reports and declarations, except those being contested in good faith, with respect to which adequate reserves have been set aside on the books of the Company and (iii) has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply, except, in the case of clauses (i) and (ii) above, where the failure to so pay or file any such tax, assessment, charge or return would not have or reasonably be expected to have a Material Adverse Effect. No deficiencies for any taxes have been proposed or assessed in writing against the Company or any of its Subsidiaries and there is no outstanding audit, assessment, dispute or claim concerning any tax liability of the Company or any of its Subsidiaries. The Company is not, and it has never been, a “United States real property holding corporation” within the meaning of Section 897 of the Internal Revenue Code, and the Company has filed with the IRS all statements, if any, that are required under Section 1.897-2(h) of the Treasury Regulations.
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3.23 Offering of Securities. Neither the Company nor any Person acting on its behalf has taken any action which would subject the offering, issuance or sale of the Securities to the registration requirements of the Securities Act. Neither the Company nor any Person acting on its behalf has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Securities. Assuming the accuracy of each Purchaser’s representations and warranties set forth in this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Purchasers.
3.24 Integration; Other Issuances of Shares. Neither the Company nor its Subsidiaries or any Affiliates, nor any Person acting on its or their behalf, has issued any shares of Common Stock, or any securities or instruments convertible into, exchangeable for or otherwise entitling the holder thereof to acquire shares of Common Stock, that would be integrated with the sale of the Shares to the Purchasers for purposes of the Securities Act, except as contemplated by this Agreement, nor will the Company or its Subsidiaries or Affiliates take any action or steps that would require registration of the Shares offered hereby under the Securities Act, except as provided in the Transaction Documents, or cause the offering of the Shares to be integrated with other securities offerings.
3.25 Investment Company Status. The Company is not, and upon consummation of the issuance and sale of the Shares will not be, an “investment company,” a company controlled by an “investment company” or an “affiliated Person” of, or “promoter” or “principal underwriter” of, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.
3.26 No “Bad Actor” Disqualification. The Company has exercised reasonable care, in accordance with SEC rules and guidance, and has conducted a factual inquiry including the procurement of relevant questionnaires from each Covered Person or other means, the nature and scope of which reflect reasonable care under the relevant facts and circumstances, to determine whether any Covered Person is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (“Disqualification Events”). To the Company’s Knowledge, after conducting such sufficiently diligent factual inquiries, no Covered Person is subject to a Disqualification Event, except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has complied, to the extent applicable, with any disclosure obligations under Rule 506(e) under the Securities Act.
3.27 Title to Assets. The Company and its Subsidiaries have good and marketable title to all real property and tangible personal property owned by them which is material to the business of the Company and its Subsidiaries, taken as a whole, in each case free and clear of all Liens except such as do not materially affect the value of such property or do not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real property and facilities held under lease by the Company and any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.
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3.28 Patents and Trademarks. The Company and its Subsidiaries own, possess, license or have other rights to use all foreign and domestic patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, inventions, trade secrets, technology, Internet domain names, know-how and other intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of their respective businesses as now conducted or as proposed to be conducted in the SEC Reports, except where the failure to own, possess, license or have such rights would not have or reasonably be expected to have a Material Adverse Effect. Except where such violations or infringements would not have or reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (i) there are no rights of third parties to any such Intellectual Property; (ii) there is no infringement by third parties of any such Intellectual Property; (iii) there is no pending or threatened Action by others challenging the Company’s and its Subsidiaries’ rights in or to any such Intellectual Property; (iv) there is no pending or threatened Action by others challenging the validity or scope of any such Intellectual Property; and (v) there is no pending or threatened action by others that the Company or any Company Subsidiary infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others.
3.29 Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company believes to be prudent and customary in the businesses and locations in which the Company and the Subsidiaries are engaged. All premiums due and payable under all such policies and bonds have been timely paid, there has been no lapse in coverage during the terms of such policies and bonds, and the Company and its Subsidiaries are in material compliance with the terms of such policies and bonds. Neither the Company nor any of its Subsidiaries has received any notice of cancellation of any such insurance, nor, to the Company’s Knowledge, will it or any Subsidiary be unable to renew their respective existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not be materially higher than their existing insurance coverage.
3.30 Internal Control Over Financial Reporting. Except as Previously Disclosed, the Company maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and such internal control over financial reporting is effective.
3.31 Sarbanes-Oxley; Disclosure Controls. The Company is in compliance in all material respects with all of the provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it. Except as Previously Disclosed, the Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act), and such disclosure controls and procedures are effective.
3.32 Unlawful Payments. Neither the Company nor any of its Subsidiaries, nor to the Company’s Knowledge, any directors, officers, employees, agents or other Persons acting at the direction of or on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company: (i) directly or indirectly, used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to foreign or domestic political activity; (ii) made any direct or indirect unlawful payments to any foreign or domestic governmental officials or employees or to any foreign or domestic political parties or campaigns from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or (iv) made any other unlawful bribe, rebate, payoff, influence payment, kickback or other material unlawful payment to any foreign or domestic government official or employee.
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3.33 Application of Takeover Protections; Rights Agreements. Except as Previously Disclosed, the Company has not adopted any stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of the Company. The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Restated Articles of Incorporation or other organizational documents or the Laws of the jurisdiction of its incorporation or otherwise which is or could become applicable to any Purchaser solely as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of the Securities and any Purchaser’s ownership of the Securities.
3.34 Absence of Manipulation. The Company has not, and to the Company’s Knowledge no one acting on its behalf has, taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities.
3.35 OFAC. Neither the Company nor any Subsidiary nor, to the Company’s Knowledge, any director, officer, agent, employee, Affiliate or Person acting on behalf of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”), and the Company will not knowingly use the proceeds of the sale of the Securities towards any sales or operations in Cuba, Iran, Libya, North Korea, Syria, the Crimea region of Ukraine, the so-called “Donetsk People’s Republic” and “Luhansk People’s Republic”, Sudan, Burma/Myanmar or any other country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.
3.36 No Additional Agreements. The Company does not have any agreement or understanding with any Purchaser with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.
3.37 Well Capitalized.
(a) As of March 31, 2025, the Bank met or exceeded the standards necessary to be considered “well capitalized” under the FDIC’s regulatory framework for prompt corrective action.
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(b) As of the Closing and the consummation of the transactions contemplated by the Agreement, the Shares will qualify as “Additional Tier 1 capital” under the Federal Reserve’s regulatory framework.
3.38 ERISA. The Company is in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”); no “reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Company would have any liability; the Company has not incurred and does not expect to incur liability under Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan” or Sections 412 or 4971 of the Internal Revenue Code; and each “Pension Plan” for which the Company would have liability that is intended to be qualified under Section 401(a) of the Internal Revenue Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification.
3.39 Shell Company Status. The Company is not, and has never been, an issuer identified in Rule 144(i)(1).
3.40 No More Favorable Terms. Except for the number of Shares being purchased hereunder by each Purchaser, each Purchaser is receiving Shares on the same terms and conditions as all other Purchasers, including the Purchase Price for the Shares.
3.41 Mortgage Banking Business. Except as has not had and would not reasonably be expected to have a Material Adverse Effect:
(a) Each of the Company and the Bank has complied with, and all documentation in connection with the origination, processing, underwriting and credit approval of any mortgage loan originated, purchased or serviced by the Company or the Bank satisfied, (A) all applicable Laws with respect to the origination, insuring, purchase, sale, pooling, servicing, subservicing, or filing of claims in connection with mortgage loans, including all laws relating to real estate settlement procedures, consumer credit protection, truth in lending laws, usury limitations, fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (B) the responsibilities and obligations relating to mortgage loans set forth in any agreement between the Company or the Bank and any Agency, Loan Investor or Insurer, (C) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan Investor or Insurer and (D) the terms and provisions of any mortgage or other collateral documents and other loan documents with respect to each mortgage loan; and
(b) No Agency, Loan Investor or Insurer has (A) claimed in writing that the Company or the Bank has violated or has not complied with the applicable underwriting standards with respect to mortgage loans sold by the Company or the Bank to a Loan Investor or Agency, or with respect to any sale of mortgage servicing rights to a Loan Investor, (B) imposed in writing restrictions on the activities (including commitment authority) of the Company or the Bank or (C) indicated in writing to the Company or the Bank that it has terminated or intends to terminate its relationship with the Company or the Bank for poor performance, poor loan quality or concern with respect to the Company’s or the Bank’s compliance with Laws.
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3.42 Change in Control. The issuance of the Securities to the Purchasers as contemplated by this Agreement will not trigger any rights under any “change of control” provision in any of the agreements to which the Company or any of its Subsidiaries is a party, including any employment, “change in control,” severance or other compensatory agreements and any benefit plan, which results in payments to the counterparty or the acceleration of vesting of benefits.
3.43 Common Control. The Company is not and, to the Company’s Knowledge after giving effect to the offering and sale of the Securities, will not be under the control (as defined in the BHC Act and the Federal Reserve’s Regulation Y (“BHC Act Control”)) of any “company” (as defined in the BHC Act and the Federal Reserve’s Regulation Y). The Company is not in BHC Act Control of any federally insured depository institution other than the Bank. The Bank is not under the BHC Act Control of any “company” (as defined in the BHC Act and the Federal Reserve’s Regulation Y) other than Company. Other than the Company’s ownership of the Bank, neither the Company nor the Bank controls, in the aggregate, more than five percent of the outstanding voting class, directly or indirectly, of any federally insured depository institution. The Bank is not subject to the liability of any commonly controlled depository institution under Section 5(e) of the Federal Deposit Insurance Act.
3.44 No Misstatement. None of the representations, warranties, covenants and agreements made in this Agreement or in any certificate or other document delivered to the Purchasers by or on behalf of the Company under or in connection with this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein not misleading in light of the circumstances when made or furnished to Purchasers and as of the date of this Agreement and as of the Closing Date.
| 4. | Representations and Warranties of the Purchasers. |
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Each Purchaser, severally and not jointly, represents and warrants to the Company as of the date hereof as follows:
4.1 Legal Power and Authority. Purchaser has all necessary power and authority to execute, deliver and perform its obligations under the Transaction Documents and to consummate the transactions contemplated hereby. If an entity, Purchaser is duly organized, validly existing and in good standing under the Laws its jurisdiction of organization.
4.2 Authorization and Execution. The execution, delivery and performance of the Transaction Documents have been duly authorized by all necessary action on the part of such Purchaser, and assuming due authorization, execution and delivery by the Company, each of the Transaction Documents is a legal, valid and binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws relating to or affecting creditors’ rights generally or by general equitable principles.
4.3 No Conflicts. Neither the execution, delivery or performance by the Purchaser of the Transaction Documents nor the consummation of any of the transactions contemplated thereby will conflict with, violate, constitute a breach of or a default (whether with or without the giving of notice or lapse of time or both) under (i) Purchaser’s organizational documents, (ii) any agreement to which it is party, (iii) any Law applicable to it, or (iv) any order, writ, judgment, injunction, decree, determination or award binding upon or affecting it, except in the case of clauses (ii) – (iv) above, for such conflicts, violations, breaches or defaults which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect of the ability of such Purchaser to perform its obligations under the Transaction Documents.
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4.4 Governmental and Other Consents. Assuming the accuracy of the representations and warranties of the Company contained herein, no orders, permissions, consents, approvals, authorizations or non-objections from any Governmental Entity are required to be obtained by the Purchaser that have not been obtained in connection with, or, in contemplation of, the execution and delivery of, and performance under, this Agreement.
4.5 Purchase for Investment. Purchaser is purchasing the Securities for its own account and not with a view to distribution and with no present intention of reselling, distributing or otherwise disposing of the same. Purchaser has no present or contemplated agreement, undertaking, arrangement, obligation, indebtedness or commitment providing for, or which is likely to compel, a disposition of the Securities in any manner.
4.6 Accredited Investor. Purchaser is (i) an “accredited investor” as such term is defined in Rule 501(a) of Regulation D, or (ii) a QIB.
4.7 Financial and Business Sophistication. Purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the prospective investment in the Securities and of making an informed investment decision, and has so evaluated the merits and risks of such investment. Purchaser has relied solely upon its own knowledge of, and/or the advice of its own legal, financial or other advisors with regard to, the legal, financial, tax and other considerations involved in deciding to invest in the Securities.
4.8 Ability to Bear Economic Risk of Investment. Purchaser recognizes that an investment in the Securities involves substantial risk. Purchaser has the ability to bear the economic risk of the prospective investment in the Securities or any other securities of the Company, including the ability to hold the Securities indefinitely, and further including the ability to bear a complete loss of all of its investment in the Company. Purchaser understands that the Securities are not savings or deposit accounts or other obligations of the Bank or any other Company Subsidiary, and the Securities are not insured by the FDIC or any other Governmental Entity.
4.9 Information. Purchaser acknowledges that: (i) it is not being provided with the disclosures that would be required if the offer and sale of the Securities were registered under the Securities Act, nor is it being provided with any offering circular or prospectus prepared in connection with the offer and sale of the Securities or any other securities of the Company; (ii) it has conducted its own examination of the Company and its business, as well as the terms and conditions of the Securities to the extent it deems necessary to make its decision to invest in the Securities; (iii) it has availed itself of publicly available financial and other information concerning the Company to the extent it deems necessary to make its decision to purchase the Securities (including meeting with representatives of the Company); and (iv) it has not received nor relied on any form of advertising, or, to its knowledge, general solicitation within the meaning of Regulation D. Purchaser has reviewed or had access to the information set forth in the Disclosure Materials.
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4.10 Access to Information. Purchaser acknowledges that it has had the opportunity to review the Disclosure Materials and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities and any such questions have been answered to such Purchaser’s reasonable satisfaction; (ii) access to information about the Company and its Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment; and (iv) the opportunity to ask questions of management and any such questions have been answered to such Purchaser’s reasonable satisfaction.
4.11 Investment Decision. Purchaser has made its own investment decision based upon its own judgment, due diligence and advice from such advisors as it has deemed necessary and not upon any view expressed by any other Person, including the Placement Agent. Neither such inquiries nor any other due diligence investigations conducted by it or its advisors or representatives, if any, will modify, amend or affect its right to rely on the Company’s representations and warranties contained herein. Purchaser is not relying upon, and has not relied upon, any advice, statement, representation or warranty made by any Person by or on behalf of the Company, including, without limitation, the Placement Agent, except for the express statements, representations and warranties of the Company made or contained in the Transaction Documents. Furthermore, Purchaser acknowledges that (i) the Placement Agent has not performed any due diligence review on behalf of it and (ii) nothing in this Agreement or any other Disclosure Materials presented by or on behalf of the Company to it in connection with the purchase of the Securities constitutes legal, tax or investment advice.
4.12 Private Placement; No Registration. Purchaser understands and acknowledges that the Securities are characterized as “restricted securities” under the Securities Act and are being sold by the Company in a transaction not involving a public offering and without registration under the Securities Act in reliance on the exemption from federal and state registration set forth in, respectively, Rule 506(b) of Regulation D promulgated under Section 4(a)(2) of the Securities Act and Section 18 of the Securities Act, or any state securities Laws, and accordingly, may be resold, pledged or otherwise transferred only in compliance with the registration requirements of federal and state securities Laws or if exemptions from the Securities Act and applicable state securities Laws are available to it.
4.13 Placement Agent. Purchaser will purchase the Securities directly from the Company and not from the Placement Agent and understands that neither the Placement Agent nor any other broker or dealer has any obligation to make a market in the Securities.
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4.14 Short Sales. Since the time such Purchaser was first contacted by the Placement Agent, such Purchaser has not taken, and prior to the public announcement of the transaction after the Closing such Purchaser will not take, any action that has caused or will cause such Purchaser to have, directly or indirectly, sold or agreed to sell any shares of Common Stock, effected any short sale, whether or not against the box, established any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act with respect to the Common Stock, granted any other right (including, without limitation, any put or call option)) with respect to the Common Stock or with respect to any security that includes, relates to or derived any significant part of its value from the Common Stock. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of the assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect short sales or similar transactions in the future.
4.15 No Group. Other than Affiliates of such Purchaser who are also purchasing Securities under this Agreement, such Purchaser is not under common control with or acting in concert with any other person and is not part of a “group” within the meaning of Section 13(d)(3) of the Exchange Act and Rule 13d-5(b)(1) thereunder with respect to the purchase of the Securities under this Agreement.
4.16 OFAC and Anti-Money Laundering. Such Purchaser understands, acknowledges, represents and agrees that (i) such Purchaser is not the target of any sanction, regulation, or law promulgated by the OFAC, the Financial Crimes Enforcement Network or any other U.S. Governmental Authority (“U.S. Sanctions Laws”); (ii) such Purchaser is not owned by, controlled by, under common control with, or acting on behalf of any person that is the target of U.S. Sanctions Laws; (iii) such Purchaser is not a “foreign shell bank” and is not acting on behalf of a “foreign shell bank” under applicable anti-money laundering laws and regulations; (iv) such Purchaser’s entry into this Agreement or consummation of the transactions contemplated hereby will not contravene U.S. Sanctions Laws or applicable anti-money laundering laws or regulations; (v) such Purchaser will promptly provide to any regulatory or law enforcement authority such information or documentation as may be required to comply with U.S. Sanctions Laws or applicable anti-money laundering laws or regulations; and (vi) the Company, if required, may provide to any regulatory or law enforcement authority information or documentation regarding, or provided by, such Purchaser for the purposes of complying with U.S. Sanctions Laws or applicable anti-money laundering laws or regulations.
4.17 Accuracy of Representations. Purchaser understands that each of the Placement Agent, and the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by this Agreement.
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| 5. | ADDITIONAL AGREEMENTS. |
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5.1 Transfer Restrictions.
(a) Compliance with Laws. Notwithstanding any other provision of this Article 5, each Purchaser covenants that it understands that it may not sell or transfer the Securities except under an effective registration statement under, and in compliance with the requirements of, the Securities Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and in compliance with any applicable state, federal or foreign securities Laws. In connection with any sale or transfer of the Securities other than (i) under an effective registration statement, (ii) to the Company or (iii) under Rule 144 (provided that the transferor provides the Company with reasonable assurances (in the form of a seller representation letter and, if applicable, a broker representation letter) that such securities may be sold under such rule), the Company may require the transferor thereof to provide to the Company and the Company’s transfer agent, at the transferor’s expense, an opinion of counsel selected by the transferor and reasonably acceptable to the Company and the transfer agent, the form and substance of which opinion will be reasonably satisfactory to the Company and the transfer agent, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer (other than under clauses (i), (ii) or (iii) of the preceding sentence), any such transferee will agree in writing to be bound by the terms of this Agreement.
(b) Legends. Certificates evidencing the Securities will bear any legend as required by the “blue sky” Laws of any state and a restrictive legend in the following form, until such time as they are not required under Section 5.1(c) or applicable Law:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND WERE OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE SECURITIES MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS PURSUANT TO REGISTRATION OR EXEMPTION FROM REGISTRATION REQUIREMENTS THEREUNDER, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, OTHER THAN PURSUANT TO RULE 144, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN AGREEMENT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”
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(c) Removal of Legends. The restrictive legend set forth in Section 5.1(b) above will be removed and the Company will issue a certificate or book entry statement without such restrictive legend or any other restrictive legend to the holder of the applicable Securities (the “Holder”) or issue to such Holder by electronic delivery at the applicable balance account at DTC, if (i) such Securities are registered for resale under the Securities Act, (ii) such Securities are sold or transferred in accordance with Rule 144 (if the transferor is not an Affiliate of the Company), or (iii) such Securities are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such securities and without volume or manner of sale restrictions. Any fees associated with the removal of such legend, other than with respect to a Purchaser’s or Holder’s counsel, will be borne by the Company. If the legend is no longer required as a result of the foregoing, the Company will, within the earlier of (i) one (1) business day and (ii) the Standard Settlement Period and following the delivery by a Purchaser or Holder to the Company of a legended certificate or instrument representing such Securities, properly endorsed or with stock powers attached, signatures guaranteed, and together with such other documents as may reasonably requested by the Company, the Company will deliver or cause to be delivered to such Purchaser or Holder a certificate or instrument, as the case may be, representing such Securities without such legend.
(d) Stop Transfer. The Company may cause the Securities to be subject to a stop transfer order with the Company’s transfer agent that restricts the transfer of such Securities in a manner consistent with this Section 5.1 and will promptly cancel such stop transfer order upon the date that the restrictive legend is eligible for removal from all Securities under Section 5.1(c).
(e) Sale of Securities. Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates (or reasonable evidence of issuance by book entry, as applicable) representing Securities as set forth in this Section 5.1 is predicated upon the Company’s reliance upon this understanding
5.2 Information Available to Facilitate Resales. With a view to making available to the Purchasers or Holders the benefits of certain rules and regulations of the SEC permitting the sale of the Underlying Shares without registration as soon as allowed, the Company will, for so long as any Securities are outstanding, maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and timely file all reports required to be filed by the Company after the date hereof under the Exchange Act. So long as any Securities are outstanding, if the Company is not required to file reports under such laws, it will prepare and furnish to the Purchasers or Holders and make publicly available the information with respect to the Company described in Rule 144(c) or any similar or analogous rules promulgated under the Securities Act, if the provision of such information will allow resales of the Underlying Shares under Rule 144.
5.3 Form D and Blue Sky. The Company will timely file a Form D with respect to the Securities as required under Regulation D. The Company, on or before the Closing Date, will take such action as the Company will reasonably determine is necessary in order to obtain an exemption for or to qualify the Securities for sale to the Purchasers at the Closing under this Agreement under applicable securities or “blue sky” Laws of the states of the United States (or to obtain an exemption from such qualification). The Company will make all filings and reports relating to the offer and sale of the Securities required under applicable securities or “blue sky” Laws of the states of the United States following the Closing Date.
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5.4 No Integration. The Company will not, and will use its commercially reasonable efforts to ensure that no Affiliate of the Company will, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that will be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Purchasers.
5.5 Conversion Procedures. The procedures included in the Restated Articles of Incorporation, as amended by the Amendment, sets forth the totality of the procedures required of the Purchasers in order to convert the Shares. No additional legal opinion, other information or instructions will be required of the Purchasers to convert the Shares. The Company will honor conversion of the Shares and deliver the Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents and the Restated Articles of Incorporation, as amended by the Amendment.
5.6 Securities Laws Disclosure; Publicity. Subject to the provisions of Section 7.13 hereof, the Company will, by the Disclosure Time, (i) issue one or more press releases (collectively, the “Press Release”) reasonably acceptable to the Purchasers disclosing all material terms of the transactions contemplated hereby and by the other Transaction Documents and any other material, nonpublic information that the Company, the Bank or any of their respective officers, directors or employees or the Placement Agent may have provided any Purchaser at any time prior to the filing of the Press Release, and (ii) file a Current Report on Form 8-K with the SEC describing the material terms of the Transaction Documents (and including as exhibits to such Current Report on Form 8-K forms of the material Transaction Documents). Notwithstanding the foregoing, the Company will not publicly disclose the name of any Purchaser or any Affiliate or investment adviser of any Purchaser, or include the name of any Purchaser or any Affiliate or investment adviser of any Purchaser in any press release or filing with the SEC or any regulatory agency or NASDAQ, without the prior written consent of such Purchaser, except (i) as required by Law in connection with any registration statement contemplated by the Registration Rights Agreement and (ii) to the extent such disclosure is required by Law, at the request of the staff of the SEC or NASDAQ regulations, in which case the Company will provide the Purchasers with prior written notice of and an opportunity to review and comment on such disclosure permitted under this subclause (ii). From and after the issuance of the Press Release, no Purchaser will be in possession of any material, non-public information received from the Company, the Bank or any of their respective officers, directors or employees or the Placement Agent. The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting securities transactions. From and after the issuance of the Press Release, the Company shall not provide material non-public information to any Purchaser, unless otherwise specifically agreed in writing by such Purchaser prior to any such disclosure. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until the earlier of (i) the Disclosure Time and (ii) the issuance of the Press Release, such Purchaser will maintain the confidentiality of the existence and terms of the transaction contemplated herein (other than to other Persons party to this Agreement and to its advisors and agents who had a need to know such information). Upon the earlier of (i) the Disclosure Time and (ii) the issuance of the Press Release, each Purchaser shall no longer be subject to any confidentiality or similar obligations under any agreement, whether written or oral, with the Company or any of its officers, directors, affiliates, employees or agents, including the Placement Agent.
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5.7 Listing of Common Stock. The Company shall use commercially reasonable efforts to maintain the listing and trading of its Common Stock on NASDAQ and, in accordance therewith, will use reasonable best efforts to comply in all material respects with the Company’s reporting, filing and other obligations under the rules and regulations of NASDAQ. Prior to the Closing Date, the Company shall have filed with NASDAQ a Notification Form: Listing of Additional Shares for the listing of the Underlying Shares and NASDAQ shall have raised no objection to such notice and the transactions contemplated hereby.
5.8 No Control. Each Purchaser agrees that it will not, without the prior consent of the Company, contribute capital to the Company or acquire an amount of voting securities of the Company that in either case would cause such Purchaser to be deemed to control the Company for purposes of the BHC Act or the Change in Bank Control Act of 1978, as amended, or applicable state Law.
5.9 Transfer Taxes. On the Closing Date, all transfer or other similar taxes which are required to be paid in connection with the sale and transfer of the Shares to be sold to the Purchasers hereunder will be, or will have been, fully paid or provided for by the Company, and all Laws imposing such taxes will be or will have been complied with in all material respects.
5.10 Use of Proceeds. The Company intends to use the net proceeds from the issuance of the Shares hereunder to support the acquisition of Wichita Falls Bancshares, Inc. and for general corporate purposes, including organic growth and other potential acquisitions.
5.11 Reservation of Common Stock. The Company will take all action necessary to at all times have authorized, and reserved for the purpose of issuance from and after the Closing Date, an aggregate number of shares of the Company’s common stock sufficient for issuance upon conversion of the Shares.
6. Indemnification.
6.1 Survival of Agreement; Survival of Company Representations and Warranties. Notwithstanding any investigation made by any party to this Agreement or by the Placement Agent, all representations, warranties, covenants and agreements made by the Company and the Purchaser herein will survive the execution of this Agreement, the delivery to the Purchaser of the Shares being purchased and the payment therefor. Each Purchaser will be responsible only for its own representations and warranties, agreements and covenants hereunder. The representations and warranties made by the Company and each Purchaser herein survive for a period of three (3) years following the date of this Agreement.
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6.2 Indemnification by the Company. The Company will indemnify the Purchasers and its current and former officers, directors, partners, members, managers, shareholders, accountants, attorneys, agents and employees (collectively, “Purchaser Related Parties”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses (collectively, “Losses”) incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way related to, (i) any breach of any of the representations, warranties or covenants made by or of the Company contained in the Transaction Documents, provided that such claim for indemnification relating to a breach of the representations or warranties is made prior to the expiration of such representations or warranties, or (ii) any Action instituted against a Purchaser Related Party in any capacity by any shareholder of the Company (who is not an Affiliate of such Purchaser) with respect to any of the transactions contemplated by this Agreement. The Company will not be liable to any Purchaser Related Party under this Agreement to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Related Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Related Party in the Transaction Documents. Notwithstanding anything herein to the contrary, the Company’s aggregate liability for Losses under this Section 6.2 will not exceed the aggregate Purchase Price received by it for the Securities sold under this Agreement.
6.3 Indemnification Procedure. Promptly after any Purchaser Related Party (hereinafter, the “Indemnified Party”) has received notice of any indemnifiable claim hereunder, or the commencement of any Action by a third Person, which the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement, the Indemnified Party will give the indemnitor or indemnitors hereunder (the “Indemnifying Party”) written notice of such claim or the commencement of such Action, but failure to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure. Such notice will state the nature and the basis of such claim to the extent then known. The Indemnifying Party will have the right to defend and settle, at its own expense and by its own counsel who will be reasonably acceptable to the Indemnified Party, any such matter as long as the Indemnifying Party pursues the same diligently and in good faith. If the Indemnifying Party undertakes to defend or settle, it will promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party will cooperate with the Indemnifying Party and its counsel in all commercially reasonable respects in the defense thereof and the settlement thereof. Such cooperation will include, but will not be limited to, furnishing the Indemnifying Party with any books, records and other information reasonably requested by the Indemnifying Party and in the Indemnified Party’s possession or control. Such cooperation of the Indemnified Party will be at the cost of the Indemnifying Party. After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party will not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such asserted liability; provided, however, that the Indemnified Party will be entitled (i) at its expense, to participate in the defense of such asserted liability and the negotiations of the settlement thereof and (ii) if (1) the Indemnifying Party has failed to assume the defense or employ counsel reasonably acceptable to the Indemnified Party or (2) if the defendants in any such Action include both the Indemnified Party and the Indemnifying Party and counsel to the Indemnified Party will have concluded that there may be reasonable defenses available to the Indemnified Party that are different from or in addition to those available to the Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to conflict with the interests of the Indemnifying Party, then the Indemnified Party will have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such Action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the Indemnifying Party as incurred. Notwithstanding any other provision of this Agreement, the Indemnifying Party will not settle any indemnified claim without the written consent of the Indemnified Party, unless the settlement thereof imposes no liability or obligation on, and includes a complete release from liability of, and does not include any admission of wrongdoing or malfeasance by, the Indemnified Party.
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| 7. | Miscellaneous. |
|---|
7.1 Successors and Assigns. Neither the Company nor any Purchaser may assign its rights or delegate its duties under this Agreement without the prior written consent of the other party provided that a Purchaser may, without the prior consent of the Company, assign its rights to purchase the Securities hereunder to any of its affiliates or to any other investment funds or accounts managed or advised by the investment manager who acts on behalf of such Purchaser (provided each such assignee agrees to be bound by the terms of this Agreement and makes the same representations and warranties set forth in Section 4 ). The provisions of this Agreement will inure to the benefit of and be binding upon the respective successors and permitted assigns of the Company and each of the Purchasers.
7.2 Notices. Any notices, requests, instructions and other communications required or permitted to be given under this Agreement after the date of this Agreement by any party hereto to any other party may be delivered personally or by nationally recognized overnight courier service or sent by U.S. mail or by facsimile transmission or electronic mail, at the respective addresses or transmission numbers set forth below and is deemed delivered (i) in the case of personal delivery, facsimile transmission or electronic mail, when received; (ii) in the case of mail, upon the earlier of actual receipt or five Business Days after deposit in the United States Postal Service, first class certified or registered mail, postage prepaid, return receipt requested; and (iii) in the case of an overnight courier service, one Business Day after delivery to such courier service with instructions for overnight delivery. Each party may change its contact information by written notice to all other parties, sent as provided in this Section. All communications must be in writing and addressed as follows:
if to the Company: Investar Holding Corporation
10500 Coursey Boulevard, 3rd Floor
Baton Rouge, Louisiana 70816
Attention: John J. D’Angelo
with a copy to: Fenimore Kay Harrison LLP
812 San Antonio Street, Suite 600
Austin, Texas 78701
Attn: Geoffrey S. Kay
if to a Purchaser: To the address indicated on the Purchaser’s signature page
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7.3 Governing Law. This Agreement will be governed by and construed in accordance with the Laws of the State of Louisiana without giving effect to its laws or principles of conflict of laws.
7.4 Submission to Jurisdiction; Venue; Waiver of Trial by Jury. Each party agrees that it will bring any Action in respect of any claim arising out of or related to this Agreement or the transactions contemplated hereby exclusively in any federal or state court of competent jurisdiction located in the State of Louisiana (the “Chosen Courts”), and, solely in connection with claims arising under this Agreement or the transactions that are the subject of this Agreement, (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such Action in the Chosen Courts, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party and (iv) agrees that service of process upon such party in any such Action will be effective if notice is given in accordance with Section 7.2. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE, EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY; AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH IN THIS SECTION 7.4.
7.5 Specific Performance. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties will be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity.
7.6 Severability. Any provision of this Agreement which is unenforceable or invalid or contrary to Law, or the inclusion of which would adversely affect the validity, legality or enforcement of this Agreement, will be of no effect and, in such case, all the remaining terms and provisions of this Agreement will subsist and be fully effective according to the tenor of this Agreement the same as though any such invalid portion had never been included herein. Notwithstanding any of the foregoing to the contrary, if any provisions of this Agreement or the application thereof are held invalid or unenforceable only as to particular persons or situations, the remainder of this Agreement, and the application of such provision to persons or situations other than those to which it will have been held invalid or unenforceable, will not be affected thereby, but will continue valid and enforceable to the fullest extent permitted by Law.
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7.7 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and may not be modified or amended in any manner other than by supplemental written agreement executed by the parties hereto as set forth herein. No party, in entering into this Agreement, has relied upon any representation, warranty, covenant, condition or other term that is not set forth in this Agreement.
7.8 No Third Party Beneficiary. This Agreement is made for the sole benefit of Company and the Purchasers, and no other Person will be deemed to have any privity of contract hereunder nor any right to rely hereon to any extent or for any purpose whatsoever, nor will any other Person have any right of action of any kind hereon or be deemed to be a third party beneficiary hereunder; provided, however, that the Placement Agent may rely on the representations and warranties contained herein to the same extent as if it were a party hereto.
7.9 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered will be deemed to be an original and all of which taken together will constitute but one and the same instrument. In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such signature will create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.
7.10 Expenses. Except as otherwise provided in this Agreement, each of the parties will bear and pay all other costs and expenses incurred by it or on its behalf in connection with the transactions contemplated by this Agreement.
7.11 Independent Nature of Purchasers’ Obligations and Rights. The obligations of the Purchaser under this Agreement are several and not joint with the obligations of any other Purchaser, and no Purchaser will be responsible in any way for the performance of the obligations of any other Purchaser under the Agreement. The decision of each Purchaser to purchase the Securities under the Agreement has been made by such Purchaser independently of any other Purchaser. Nothing contained in the Agreement, and no action taken by any Purchaser pursuant thereto, will be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group (including a “group” within the meaning of Section 13(d)(3) of the Exchange Act) with respect to such obligations or the transactions contemplated by the Agreement and the Company acknowledges that the Purchasers are not acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement. It is expressly understood that each provision contained in this Agreement is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers. Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Securities or enforcing its rights under this Agreement. Each Purchaser will be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it will not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.
30
7.12 Waiver or Amendment. No amendment or waiver of any provision of this Agreement will be effective with respect to any party unless made in writing and signed by an officer of a duly authorized representative of such party. No failure or delay by any party in exercising any right, power or privilege hereunder will operate as a waiver thereof nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. No waiver of any party to this Agreement will be effective unless it is in a writing signed by a duly authorized officer of the waiving party that makes express reference to the provision or provisions subject to such waiver. The rights and remedies herein provided will be cumulative and not exclusive of any rights or remedies provided by Law.
7.13 Public Announcements. Subject to each party’s disclosure obligations imposed by Law, each of the parties hereto will cooperate with each other in the development and distribution of all news releases and other public information disclosures with respect to this Agreement and the transactions contemplated by this Agreement, and except as otherwise permitted in the next sentence, neither the Company nor any Purchaser will make any such news release or public disclosure that identifies the other party without first consulting with the other, and, in each case, also receiving the other’s consent, and all parties will coordinate with the party whose consent is required with respect to any such news release or public disclosure. In the event a party hereto is advised by its outside legal counsel that a particular disclosure that identifies the other party is required by Law, such party will be permitted to make such disclosure but will be obligated to use commercially reasonable efforts to consult with the other party hereto and take its comments into account with respect to the content of such disclosure before issuing such disclosure.
7.14 Waiver of Conflict of Interest. Each party is aware and acknowledges that Jones Walker LLP has previously performed and may continue to perform certain legal services for the Company in matters unrelated to Jones Walker LLP’s representation of the Placement Agent in this matter. By signing this Agreement and the Transaction Documents, each party represents, warrants, covenants, acknowledges and agrees that (i) Jones Walker LLP, serves as counsel to the Placement Agent and that Jones Walker LLP does not serve as counsel to any Purchaser, the Company or to any other party, (ii) each party, individually, does not have an attorney-client relationship with Jones Walker LLP, and that no such relationship will arise by virtue of Jones Walker LLP’s representation of the Placement Agent in this matter, (iii) each party will not seek the removal of Jones Walker LLP as counsel to the Placement Agent for any purported conflict of interest or attorney-client relationship allegedly existing between Jones Walker LLP and any other party, (iv) the terms of the Transaction Documents were negotiated between the parties and are fair and reasonable and waive any potential conflict of interest arising out of such representation (including any future representation of such parties) or such possession of confidential information, and (v) each party has had the opportunity to be, or has been, represented by independent counsel in giving the waivers contained in this Section 7.14.
[Signature Pages Follow]
31
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized representative as of the date first above written.
| COMPANY:<br><br> <br><br><br> <br>INVESTAR HOLDING CORPORATION | |
|---|---|
| By: | |
| John J. D’Angelo | |
| President and Chief Executive Officer |
[Signature Page to Securities Purchase Agreement]
IN WITNESS WHEREOF, the Purchaser has caused this Agreement to be executed by its duly authorized representative as of the date first above written.
| PURCHASER:<br><br> <br><br><br> <br>[ ] | |
|---|---|
| By: | |
| Name: | |
| Title: | |
| Tax ID No: | |
| --- | |
| Number of Shares: | |
| --- | |
| Subscription Amount: $ | |
| --- | |
| Notice Address of Purchaser: | |
| --- | |
| Attention: | |
| --- | |
| Telephone: | |
| Facsimile: | |
| Email: | |
| Delivery instructions<br><br> <br>(if different than Notice Address): | |
| --- |
[Signature Page to Securities Purchase Agreement]
EXHIBIT A
FORM OF AMENDMENT
[See attached.]
EXHIBIT B
OPINION OF COUNSEL
1. Each of the Company and its Significant Subsidiaries (i) has been organized or formed, as the case may be, is validly existing and is in good standing under the laws of its jurisdiction of organization, (ii) has all requisite power and authority to carry on its business as currently conducted and to own, lease and operate its properties and assets as described in the Company Financial Statements and SEC Reports and (iii) is duly qualified or licensed to do business and is in good standing as a foreign corporation, partnership or other entity as the case may be, in each jurisdiction in which such qualification or licensing is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Material Adverse Effect.
2. The Company is a registered bank holding company under the Bank Holding Company Act of 1956, as amended.
3. The Bank is an insured depository institution under Section 3(c)(2) of the Federal Deposit Insurance Act, as amended.
4. The Company has all necessary corporate power and authority to execute, deliver and perform its obligations under the Transaction Documents and to consummate the transactions contemplated by the Transaction Documents.
5. Each of the Transaction Documents has been duly authorized, executed and delivered by the Company. Each of the Transaction Documents constitutes a legal valid and binding obligation of Company, enforceable against Company in accordance with its terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance, fraudulent transfer or other similar Laws now or hereafter in effect relating to creditors’ rights generally and (ii) general principles of equity (whether applied by a court of law or equity) and the discretion of the court before which any proceeding therefor may be brought.
- The Securities have been duly authorized and, when issued in accordance with the Agreement upon receipt by the Company of the consideration provided for therein (including upon conversion of the Shares into the Underlying Shares), will be validly issued, fully paid and non-assessable. The Underlying Shares have been reserved for issuance upon conversion of the Shares.
7. Assuming the accuracy of the representations and warranties of each of the Purchasers and the Company set forth in the Agreement, the Securities to be issued and sold by the Company to the Purchasers in accordance with the Agreement will be issued in a transaction exempt from the registration requirements of the Securities Act, it being understood that counsel expresses no opinion as to any subsequent transfer, sale or conveyance of the Securities.
The opinion letter of Company’s counsel will be subject to customary limitations and carveouts, and such counsel may rely as to matters of fact upon such certificates of the officers of Company and Bank or governmental officials as such counsel deems appropriate.
2
EXHIBIT C
QIB/ACCREDITED INVESTOR QUESTIONNAIRE
To: Investar Holding Corporation
This QIB/Accredited Investor Questionnaire (“Questionnaire”) must be completed by each potential investor in connection with the offer and sale by Investar Holding Corporation, a Louisiana corporation (the “Company”), of shares of its 6.5% Series A Non-Cumulative Perpetual Convertible Preferred Stock (the “Shares”). The Shares are being offered and sold by the Company without registration under the Securities Act of 1933, as amended (the “Act”), and the securities laws of certain states, in reliance on the exemptions contained in Section 4(a)(2) of the Act and on Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. The purpose of this Questionnaire is to assure the Company that each investor will meet the applicable suitability requirements. The information supplied will be used in determining whether the investor meets the criteria, and reliance upon the private offering exemption from registration is based in part on the information supplied.
This Questionnaire does not constitute an offer to sell or a solicitation of an offer to buy any security. Your answers will be kept strictly confidential. However, by signing this Questionnaire, you authorize the Company to provide a completed copy of this Questionnaire to such parties as the Company deems appropriate to ensure that the offer and sale of the Shares will not result in a violation of the Act or the securities laws of any state and that you otherwise satisfy the suitability standards applicable to purchasers of the Shares. Please print or type all responses and attach additional sheets of paper if necessary to complete answers to any item.
PART A. BACKGROUND INFORMATION
| Name of Purchaser of the Shares: |
|---|
| Social Security or Taxpayer Identification No: |
| --- |
If a corporation, partnership, limited liability company, trust or other entity:
| Business Address: | |||
|---|---|---|---|
| (Number and Street) | |||
| (City) | (State) | (Zip Code) | |
| --- | --- | --- | |
| Telephone Number: | ( ) | - | Type of entity: |
| --- | --- | --- | --- |
Was the entity formed for the purpose of investing in the securities being offered (check one)?
Yes ☐ No ☐
| In what U.S. State was the investment decision with respect to the Shares made: |
|---|
3
If a natural person:
| Residence Address: | ||
|---|---|---|
| (Number and Street) | ||
| (City) | (State) | (Zip Code) |
| --- | --- | --- |
Telephone Number: ( ) -
Age: Citizenship: Where registered to vote:
In what U.S. State do you maintain your residence:
PART B. QIB/ACCREDITED INVESTOR QUESTIONNAIRE
In order for the Company to offer and sell the Shares in accordance with state and federal securities laws, the following information must be obtained regarding your investor status. Please mark each category **** applicable to you as a Purchaser of Shares.
| ☐ | A qualified institutional buyer within the meaning of Rule 144A(a)(1) promulgated under the Act |
|---|---|
| ☐ | A bank as defined in Section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity |
| --- | --- |
| ☐ | A broker or dealer registered under Section 15 of the Securities Exchange Act of 1934 |
| --- | --- |
| ☐ | An investment adviser registered under Section 203 of the Investment Advisers Act of 1940, or registered under the laws of state |
| --- | --- |
| ☐ | An investment adviser relying on the exemption from registering with the SEC under Section 203(l) or (m) of Investment Advisors Act of 1940 |
| --- | --- |
| ☐ | An insurance company as defined in Section 2(a)(13) of the Act |
| --- | --- |
| ☐ | An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act |
| --- | --- |
| ☐ | A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958 |
| --- | --- |
| ☐ | A Rural Business Investment Company as defined in Section 384A of the Consolidated Farm and Rural Development Act, as amended |
| --- | --- |
4
| ☐ | A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000 |
|---|---|
| ☐ | An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors |
| --- | --- |
| ☐ | A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940 |
| --- | --- |
| ☐ | Either (1) an organization described in Section 501(c)(3) of the Internal Revenue Code, or (2) a corporation, a Massachusetts or similar business trust, a partnership, limited liability company or other entity, which has not been formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000 |
| --- | --- |
| ☐ | An entity of a type not listed herein and was not formed for the specific purpose of acquiring the Shares and owns investments of in excess of $5,000,000 |
| --- | --- |
| ☐ | A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Company |
| --- | --- |
| ☐ | A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his or her purchase exceeds $1,000,000 |
| --- | --- |
| ☐ | A natural person who had an individual income in excess of $200,000 in each of the two most recent years, or joint income with that person’s spouse in excess of $300,000 in each of those years, and in either case, has a reasonable expectation of reaching the same income level in the current year |
| --- | --- |
| ☐ | An executive officer or director of the Company |
| --- | --- |
| ☐ | A natural person who holds, in good standing, one of the following professional licenses: the General Securities Representative license (Series 7), the Private Securities Offerings Representative license (Series 82), or the Investment Adviser Representative license (Series 65) |
| --- | --- |
| ☐ | A natural person who is a “knowledgeable employee” (as defined in Rule 3c-5(a)(4) under the Investment Company Act of 1940) of the Company |
| --- | --- |
| ☐ | A “family office” (as defined in Rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940) that has assets under management in excess of $5,000,000, is not formed for the specific purpose of acquiring the Shares, and has a person directing the prospective investment who has such knowledge and experience in financial and business matters so that the family office is capable of evaluating the merits and risks of the prospective investment |
| --- | --- |
5
| ☐ | a “family client” (as defined in Rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940) of a family office meeting the requirements of a “family office” (as defined in Rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940) and whose prospective investment in the Shares is directed by that family office by a person who has such knowledge and experience in financial and business matters so that the family office is capable of evaluating the merits and risks of the prospective investment |
|---|---|
| ☐ | An entity in which all of the equity owners qualify under any of the above subparagraphs. If the undersigned belongs to this investor category only, list the equity owners of the undersigned, and the investor category which each such equity owner satisfies |
| --- | --- |
NOTE: For purposes of calculating net worth above, the person’s primary residence will not be included as an asset; indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, will not be included as a liability (unless the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, in which case the amount of such excess will be included as a liability); and indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities will be included as a liability.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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If a natural person:
| Date | |
|---|---|
| Print Name: |
If an entity:
| Date | Print Entity Name |
|---|---|
| By: | |
| --- | |
| Print Name: | |
| Title: |
[Signature Page to Accredited Investor Questionnaire]
ex_834654.htm
Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “Agreement”) is made and entered into as of July 1, 2025, by and among Investar Holding Corporation, a Louisiana corporation (the “Company”), and the several purchasers signatory hereto (each a “Purchaser” and collectively, the “Purchasers”).
This Agreement is made pursuant to that certain Securities Purchase Agreement, dated as of the date hereof between the Company and each Purchaser (the “Purchase Agreement”).
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are acknowledged, the Company and each of the Purchasers agree as follows:
1. Definitions.
In this Agreement, unless the context otherwise requires or unless otherwise specifically provided in this Agreement:
“Advice” has the meaning set forth in Section 3(e).
“Affiliate(s)” means, with respect to any Person, such Person’s immediate family members, partners, members or parent and subsidiary corporations, and any other Person directly or indirectly controlling, controlled by, or under common control with said Person and their respective Affiliates. For purposes of this definition, “control” when used with respect to any Person has the meaning specified in Rule 12b-2 promulgated under the Exchange Act; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Agreement” has the meaning set forth in the Preamble.
“Allowable Grace Period” has the meaning set forth in the Section 2(d).
“Business Day” means any day except a Saturday, a Sunday or other day on which the SEC or banks in the City of New York are authorized or required by law to be closed.
“Closing Date” has the meaning set forth in the Purchase Agreement.
“Common Stock” means the common stock of the Company, par value $1.00 per share, and any securities into which such shares of common stock may hereinafter be reclassified.
“Company” has the meaning set forth in the Preamble.
“Effective Date” means the date that the Registration Statement filed under Section 2(a) is first declared effective by the SEC.
“Effectiveness Deadline” means, with respect to the Initial Registration Statement or the New Registration Statement, the earlier of (i) the 120^th^ calendar day following the Closing Date (or the 150^th^ calendar day following the Closing Date in the event that such registration statement is subject to review by the SEC) and (ii) the 5^th^ Trading Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be “reviewed” or will not be subject to further review; provided, however, that if the Effectiveness Deadline falls on a Saturday, Sunday or other day that the SEC is closed for business, the Effectiveness Deadline will be extended to the next Business Day on which the SEC is open for business.
“Effectiveness Period” has the meaning set forth in Section 2(b).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor statute thereto, and the rules and regulations of the SEC promulgated thereunder.
“Filing Deadline” means, with respect to the Initial Registration Statement required to be filed under Section 2(a), the 60^th^ calendar day following the Closing Date; provided, however, that if the Filing Deadline falls on a Saturday, Sunday or other day that the SEC is closed for business, the Filing Deadline will be extended to the next Business Day on which the SEC is open for business.
“FINRA” means the Financial Industry Regulatory Authority, Inc.
“Grace Period” has the meaning set forth in Section 2(d).
“Holder” or “Holders” means the Purchasers and permitted assignees of the Purchasers under the Agreement, in each case to the extent that they continue to hold Registrable Securities.
“Indemnified Party” has the meaning set forth in Section 5(c).
“Indemnifying Party” has the meaning set forth in Section 5(c).
“Initial Registration Statement” has the meaning set forth in Section 2(a).
“Losses” has the meaning set forth in Section 5(a).
“New Registration Statement” has the meaning set forth in Section 2(a).
“Opt-Out Notice” has the meaning set forth in Section 2(f).
“Person” means an individual, a corporation (whether or not for profit), a partnership, a limited liability company, a joint venture, an association, a trust, an unincorporated organization, a government or any department or agency thereof (including a governmental agency) or any other entity or organization.
“Preferred Stock” means the shares of 6.5% Series A Non-Cumulative Perpetual Convertible Preferred Stock of the Company issued or issuable by the Company to the Purchasers in accordance with the Purchase Agreement.
“Principal Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of the Closing Date, is the Nasdaq Global Market.
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“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
“Purchase Agreement” has the meaning set forth in the Preamble.
“Purchaser” or “Purchasers” has the meaning set forth in the Preamble.
“Registrable Securities” means, as of any date of determination, all of the Shares, and any other securities issued or issuable with respect to any such Shares by way of share split, share dividend, distribution, recapitalization, merger, exchange, replacement or similar event or otherwise (excluding, for the avoidance of doubt, any shares of Preferred Stock); provided, however, that any such securities will cease to be Registrable Securities (and the Company will not be required to maintain the effectiveness of any Registration Statement hereunder with respect thereto) upon the earliest to occur of the date: (i) such securities are sold or otherwise transferred under an effective registration statement under the Securities Act, (ii) such securities cease to be outstanding, (iii) such securities are transferred in a transaction in which the Purchaser’s rights under this Agreement are not assigned to the transferee of the securities, (iv) such securities are sold in accordance with Rule 144, and (v) such securities become eligible for resale without volume or manner-of-sale restrictions under Rule 144 (or any successor rule then in effect) and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144.
“Registration Statement” or “Registration Statements” means any one or more registration statements of the Company filed under the Securities Act covering the resale of any of the Registrable Securities in accordance with the provisions of this Agreement (including without limitation the Initial Registration Statement, the New Registration Statement and any Remainder Registration Statements), amendments and supplements to such Registration Statements, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such Registration Statements.
“Remainder Registration Statement” has the meaning set forth in Section 2(a).
“Rule 144” means Rule 144 promulgated under the Securities Act and any successor provision.
“Rule 415” means Rule 415 promulgated under the Securities Act and any successor provision.
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“Rule 424” means Rule 424 promulgated under the Securities Act and any successor provision.
“SEC” means the U.S. Securities and Exchange Commission.
“SEC Guidance” means (i) any publicly-available written or oral guidance, comments, requirements or requests of the SEC staff and (ii) the Securities Act.
“Securities Act” means the Securities Act of 1933, as amended, and any successor statute thereto, and the rules and regulations of the SEC promulgated thereunder.
“Selling Stockholder Questionnaire” means a questionnaire in the form attached as Annex B, or such other form of questionnaire as may reasonably be adopted by the Company from time to time.
“Shares” means the shares of Common Stock issued and issuable upon conversion of shares of Preferred Stock in accordance with the organizational documents of the Company.
“Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Market, or (ii) if the Common Stock is not listed on a Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink sheets” by OTC Markets Group Inc. (or any similar organization or agency succeeding to its functions of reporting prices); provided, however, that in the event that the Common Stock is not listed or quoted as set forth in clause (i) or (ii) above, then Trading Day will mean a Business Day.
“Trading Market” means whichever of the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the applicable OTC Markets Group Inc. tier on which the Common Stock is listed or quoted for trading on the date in question.
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2. Registration.
(a) On or prior to the Filing Deadline, the Company will prepare and file with the SEC a Registration Statement covering the resale of all of the Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis under Rule 415 or, if Rule 415 is not available for offers and sales of the Registrable Securities, by such other means of distribution of Registrable Securities as the Company may reasonably determine (the “Initial Registration Statement”). The Initial Registration Statement will be on Form S-3 (except if the Company is then ineligible to register for resale the Registrable Securities on Form S-3, in which case such registration will be on such other form available to the Company to register for resale the Registrable Securities as a secondary offering) and will contain (except if otherwise required in accordance with written comments received from the SEC upon a review of such Registration Statement) the “Plan of Distribution” section substantially in the form attached as Annex A, or such other reasonable method of distribution elected by the Holders. Notwithstanding the registration obligations set forth in this Section 2, in the event the SEC informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company will promptly (i) inform each of the Holders thereof and use its commercially reasonable efforts to file amendments to the Initial Registration Statement as required by the SEC and/or (ii) withdraw the Initial Registration Statement and file a new registration statement (a “New Registration Statement”), in either case covering the maximum number of Registrable Securities permitted to be registered by the SEC, on Form S-3 or such other form available to the Company to register for resale the Registrable Securities as a secondary offering; provided, however, that prior to filing such amendment or New Registration Statement, the Company will be obligated to use its commercially reasonable efforts to advocate with the SEC for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09. Notwithstanding any other provision of this Agreement, if any SEC Guidance sets forth a limitation of the number of Registrable Securities or other shares of Common Stock permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the SEC for the registration of all or a greater number of Registrable Securities), the number of Registrable Securities or other shares of Common Stock to be registered on such Registration Statement will be reduced on a pro rata basis among all Purchasers based on the amount of Registrable Securities then held by each such Purchaser. In the event the Company amends the Initial Registration Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its commercially reasonable efforts to file with the SEC, as promptly as allowed by the SEC or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other form available to the Company to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended, or the New Registration Statement (the “Remainder Registration Statement”). No Holder will be named as an “underwriter” in any Registration Statement without such Holder’s prior written consent. Notwithstanding anything in this Agreement to the contrary, in the event (i) the Company includes securities in any Registration Statement other than Registrable Securities and (ii) the Commission requires the Company to cutback the number of securities included in such Registration Statement in order for the offering pursuant to such Registration Statement to be deemed a secondary offering, or for any other reason, first, such other securities shall be cutback in full prior to any cutback of any Registrable Securities.
(b) The Company will use its commercially reasonable efforts to cause each Registration Statement to be declared effective by the SEC as soon as practicable and, with respect to the Initial Registration Statement or the New Registration Statement, as applicable, no later than the Effectiveness Deadline, and will use its commercially reasonable efforts to keep each Registration Statement continuously effective under the Securities Act with respect to a Holder until the date upon which such Holder no longer holds any Registrable Securities (the “Effectiveness Period”). The Company will request effectiveness of a Registration Statement as of 5:00 p.m. New York City time on a Trading Day. The Company will promptly notify the Holders via facsimile or electronic mail of a “pdf” format data file of the effectiveness of a Registration Statement within one Business Day of the Effective Date. The Company will, by 9:30 a.m. New York City time on the first Trading Day after the Effective Date, file a final Prospectus with the SEC, as required by Rule 424(b).
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(c) Each Holder will furnish to the Company a completed Selling Stockholder Questionnaire not more than ten Trading Days following the date of this Agreement. At least five Trading Days prior to the first anticipated filing date of a Registration Statement for any registration under this Agreement, the Company will notify each Holder of the information the Company reasonably requires from that Holder other than the information contained in the Selling Stockholder Questionnaire, if any, which will be completed and delivered to the Company promptly upon request and, in any event, within two Trading Days following such request. Each Holder further agrees that it will not be entitled to be named as a selling securityholder in the Registration Statement or use the Prospectus for offers and resales of Registrable Securities at any time, unless such Holder has returned to the Company a completed and signed Selling Stockholder Questionnaire and a response to any requests for further information as described in the previous sentence. If a Holder of Registrable Securities returns a Selling Stockholder Questionnaire or a request for further information, in either case, after its respective deadline, the Company will use its commercially reasonable efforts at the expense of the Holder who failed to return the Selling Stockholder Questionnaire or to respond for further information to take such actions as are required to name such Holder as a selling security holder in the Registration Statement or any pre-effective or post-effective amendment thereto and to include (to the extent not theretofore included) in the Registration Statement the Registrable Securities identified in such late Selling Stockholder Questionnaire or request for further information. Each Holder acknowledges and agrees that the information in the Selling Stockholder Questionnaire or request for further information as described in this Section 2(c) will be used by the Company in the preparation of the Registration Statement and consents to the inclusion of such information in the Registration Statement.
(d) Notwithstanding anything to the contrary herein, at any time after the Registration Statement has been declared effective by the SEC, the Company may delay the disclosure of material non-public information concerning the Company if the disclosure of such information at the time is not, in the good faith judgment of the Company, in the best interests of the Company (a “Grace Period”); provided, however, the Company will promptly (i) notify the Holders in writing of the existence of material non-public information giving rise to a Grace Period (provided that the Company will not disclose the content of such material non-public information to the Holders) or the need to file a post-effective amendment, as applicable, and the date on which such Grace Period will begin, (ii) use reasonable best efforts to terminate a Grace Period as promptly as practicable and (iii) notify the Holders in writing of the date on which the Grace Period ends; provided, further, that (x) no single Grace Period will exceed 30 consecutive days, and (y) during any 365-day period, there will be no more than two Grace Periods and the aggregate of all such Grace Periods will not exceed an aggregate of 60 days (each Grace Period complying with these provisions being an “Allowable Grace Period”). For purposes of determining the length of a Grace Period, the Grace Period will be deemed to begin on and include the date the Holders receive the notice referred to in clause (i) above and will end on and include the later of the date the Holders receive the notice referred to in clause (iii) above and the date referred to in such notice; provided, however, that no Grace Period will be longer than an Allowable Grace Period. Notwithstanding anything to the contrary, the Company will cause the Transfer Agent to deliver unlegended Common Stock to a transferee of a Holder in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which a Holder has entered into a contract for sale prior to the Holder’s receipt of the notice of a Grace Period and for which the Holder has not yet settled.
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(e) In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company will (i) use commercially reasonable efforts to register the resale of the Registrable Securities on another appropriate form and (ii) undertake to use commercially reasonable efforts to register the Registrable Securities on Form S-3 promptly after such form is available; provided, however, that the Company will use commercially reasonable efforts to maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC.
(f) Each Holder may deliver written notice (an “Opt-Out Notice”) to the Company requesting that such Holder not receive notices from the Company otherwise required by this Agreement; provided, however, that such Holder may later revoke any such Opt-Out Notice in writing. Following receipt of an Opt-Out Notice from a Holder (unless subsequently revoked), (a) the Company shall not deliver any notices pursuant to this Agreement to such Holder and such Holder shall no longer be entitled to the rights associated with any such notice and (b) each time prior to such Holder’s intended use of an effective Registration Statement, such Holder will notify the Company in writing at least two (2) Business Days in advance of such intended use, and if a notice of an Allowable Grace Period was previously delivered (or would have been delivered but for the provisions of this Section 2(f)) and the related suspension period remains in effect, the Company will so notify such Holder, within one (1) Business Day of such Holder’s notification to the Company, by delivering to such Holder a copy of such previous notice of an Allowable Grace Period, and thereafter will provide such Holder with the related notice of the conclusion of such Allowable Grace Period immediately upon the conclusion thereof (which notices shall not contain any material and non-public information concerning the Company or subject such Holder to any duty of confidentiality).
3. Registration Procedures
The following procedures will apply in connection with the registration obligations set forth under this Agreement:
(a) Not less than three (3) Trading Days prior to the filing of a Registration Statement and not less than two (2) Trading Days prior to the filing of any related Prospectus or any amendment or supplement thereto (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any similar or successor reports), the Company will, furnish to the Holder copies of such Registration Statement, Prospectus or amendment or supplement thereto, as proposed to be filed, which documents will be subject to the review of such Holder (it being acknowledged and agreed that if a Holder does not object to or comment on the aforementioned documents within such three (3) Trading Day or two (2) Trading Day period, as the case may be, then the Holder will be deemed to have consented to and approved the use of such documents). The Company will not file any Registration Statement or amendment or supplement thereto in a form to which a Holder reasonably objects in good faith, provided that the Company is notified of such objection in writing within the three Trading Day or two (2) Trading Day period described above, as applicable.
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(b) The Company will prepare and file with the SEC such amendments (including post-effective amendments) and supplements, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for its Effectiveness Period (except during an Allowable Grace Period).
(c) The Company will respond as promptly as reasonably practicable to any comments received from the SEC with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably possible, provide the Holders true and complete copies of all correspondence from and to the SEC relating to such Registration Statement that pertains to the Holders as “Selling Stockholders” but not any comments that would result in the disclosure to the Holders of material and non-public information concerning the Company or subject the Holders to any duty of confidentiality.
(d) The Company will comply with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement until such time as all of such Registrable Securities will have been disposed of (subject to the terms of this Agreement) in accordance with the intended methods of disposition by the Holders thereof as set forth in such Registration Statement as so amended or in such Prospectus as so supplemented; provided, however, that each Purchaser will be responsible for the delivery of the Prospectus to the Persons to whom such Purchaser sells any of the Registrable Securities in accordance with Rule 172 under the Securities Act, and each Purchaser will dispose of Registrable Securities in compliance with the plan of distribution described in the Registration Statement and otherwise in compliance with applicable federal and state securities laws.
(e) The Company will notify the Holders as promptly as reasonably practicable (i) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed and, with respect to such Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC or other federal or state governmental authority for amendments or supplements to such Registration Statement or related Prospectus or to amend or to supplement such Prospectus or for additional information, (iii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose; and (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they were made), not misleading. Each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in clauses (ii)-(v), such Holder will discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.
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(f) The Company will use commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, as soon as practicable.
(g) The Company will, if requested by a Holder, furnish to such Holder, without charge, at least one conformed copy of each Registration Statement and each amendment thereto and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the SEC; provided, however, that the Company will have no obligation to provide any document under this clause that is available on the SEC’s EDGAR system.
(h) The Company will, prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, however, that the Company will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.
(i) The Company will cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee under the Registration Statement, which certificates will be free, to the extent permitted by the Purchase Agreement and under law, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may reasonably request. Certificates for Registrable Securities free from all restrictive legends may be transmitted by the transfer agent to a Holder or transferee by crediting the account of such Person’s prime broker with DTC as directed by such Holder.
(j) The Company will, following the occurrence of any event contemplated by Section 3(e)(ii)-(v), as promptly as reasonably practicable (taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, but subject to the provisions of Section 2(d)), prepare and file a supplement or amendment, including a post‑effective amendment, to the affected Registration Statements or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they were made), not misleading.
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(k) The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Preferred Stock and Common Stock beneficially owned by such Holder and any Affiliate thereof, any FINRA affiliations, any natural persons who have the power to vote or dispose of the Preferred Stock and Common Stock, including the Registrable Securities, and any other information as may be requested by the SEC, FINRA or any state securities commission. If any Holder fails to furnish such information within three Trading Days of the Company’s request, the Company’s obligations with respect to the registration of Registrable Securities will be tolled until the third Business Day following the date on which such information is delivered to the Company.
(l) The Company will cooperate with any registered broker through which a Holder proposes to resell its Registrable Securities in effecting a filing with FINRA under FINRA Rule 5110 as requested by any such Holder and the Company will pay the filing fee required for the first such filing within two Business Days of the request therefor.
(m) Provided the Company is eligible to use Form S-3 as of the date of this Agreement or becomes eligible to use Form S-3 during the term of this Agreement, the Company will use its commercially reasonable efforts to maintain eligibility for use of Form S-3 (or any successor form thereto) for the registration of the resale of Registrable Securities.
(n) If requested by a Holder, the Company will promptly incorporate in a Prospectus supplement or post-effective amendment to the Registration Statement such information as the Company reasonably agrees should be included therein and make all required filings of such Prospectus supplement or such post-effective amendment as soon as reasonably practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment.
4. Registration Expenses.
All fees and expenses incident to the Company’s performance of or compliance with its obligations under this Agreement (excluding any underwriting discounts and selling commissions and all legal fees and expenses of legal counsel for any Holder) will be borne by the Company whether or not any Registrable Securities are sold under a Registration Statement. The fees and expenses referred to in the foregoing sentence consist of (i) registration and filing fees, (ii) printing expenses, if the printing of Prospectuses is reasonably requested by the holders of a majority of the Registrable Securities included in the Registration Statement, (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated hereby; provided, however, that such expenses will not include any underwriting and placement discounts and commissions, agency and placement fees, brokers’ commissions and transfer taxes, if any, relating to the sale or disposition of any Registrable Securities, as well as any other legal expenses or other costs incurred by such Holders in connection with the transactions contemplated hereby.
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5. Indemnification.
(a) Indemnification by the Company. The Company will, notwithstanding any termination of this Agreement, indemnify, defend and hold harmless each Holder, the officers, directors, agents, partners, members, managers, stockholders, Affiliates, investment advisers and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, partners, members, managers, stockholders, agents, investment advisers and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and investigation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, that arise out of or are based upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (ii) violations of the Securities Act or the Exchange Act, except to the extent, but only to the extent, that (i) such untrue statements, alleged untrue statements, omissions or alleged omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and approved by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that each Holder has approved Annex A for this purpose), or (ii) in the case of an occurrence of an event of the type specified in Section 3(e)(ii)-(v), related to the use by a Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 3(e), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. The Company will notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity will remain in full force and effect regardless of any investigation made by or on behalf of an Indemnified Party and will survive the transfer of the Registrable Securities by the Holders.
(b) Indemnification by Holders. Each Holder will, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising out of or are based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein. In no event will the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.
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(c) Conduct of Indemnification Proceedings. If any Proceeding will be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party will promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party will have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable fees and expenses incurred in connection with defense thereof; provided, however, that the failure of any Indemnified Party to give such notice will not relieve the Indemnifying Party of its obligations or liabilities under this Agreement, except to the extent that it will be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure will have materially and adversely prejudiced the Indemnifying Party.
An Indemnified Party will have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel will be at the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party has agreed in writing to pay such fees and expenses; (ii) the Indemnifying Party will have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (iii) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party will have been advised by counsel that a conflict of interest exists if the same counsel were to represent such Indemnified Party and the Indemnifying Party; provided, however, that the Indemnifying Party will not be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties. The Indemnifying Party will not be liable for any settlement of any such Proceeding effected without its written consent, which consent will not be unreasonably withheld, delayed or conditioned. No Indemnifying Party will, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.
Subject to the terms of this Agreement, all fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section 5(c)) will be paid to the Indemnified Party, as incurred, within 20 Trading Days of written notice thereof to the Indemnifying Party; provided, however, that the Indemnified Party will promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally judicially determined to not be entitled to indemnification hereunder.
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(d) Contribution. If a claim for indemnification under Section 5(a) or Section 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, will contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party will be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses will be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 5 was available to such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if contribution under this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder will be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section 5 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties and are not in diminution or limitation of the indemnification provisions under the Purchase Agreement.
6. Miscellaneous.
(a) Remedies. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties will be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity.
(b) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities under a Registration Statement and will sell the Registrable Securities only in accordance with a method of distribution described in the Registration Statement.
13
(c) Amendments and Waivers. No provision of this Agreement may be amended, modified or supplemented, or waived except in writing and signed by the Company and Holders holding at least two-thirds of the then outstanding Registrable Securities; provided, however, that any party may give a waiver as to itself. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of all of the Registrable Securities to which such waiver or consent relates.
(d) Notices. Any notices, requests, instructions and other communications required or permitted to be provided hereunder will be delivered as set forth in the Purchase Agreement; provided, however, that all documents required to be delivered to a Holder under Section 3(a) hereof may be delivered to the Holder by e-mail to the e-mail address(es) provided by such Holder to the Company solely for such specific purpose.
(e) Successors and Assigns. This Agreement will inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and will inure to the benefit of each Holder. The Company may not assign its rights, except by merger or in connection with another entity acquiring all or substantially all of the Company’s assets, or obligations hereunder without the prior written consent of all the Holders of the then outstanding Registrable Securities. Each Holder may assign its respective rights hereunder only in the manner as permitted under the Purchase Agreement.
(f) Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered will be deemed to be an original and all of which taken together will constitute but one and the same instrument. In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such signature will create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.
(g) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement will be determined in accordance with the provisions of the Purchase Agreement.
(h) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.
(i) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein will remain in full force and effect and will in no way be affected, impaired or invalidated, and the parties will use their good faith reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction.
14
(j) Interpretation. When a reference is made in this Agreement to a Section or Annex, such reference is to a Section or Annex of this Agreement unless otherwise indicated. Any statute, rule or regulation defined or referred to in this Agreement means such statute, rule or regulation as of the date of this Agreement as the same may be amended from time to time. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of the Agreement. All headings and subheadings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. Whenever the context may require, any pronoun includes the corresponding masculine, feminine, and neuter forms. Further, the parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof will arise favoring or disfavoring any party hereto by virtue of the authorship of any provisions of this Agreement.
(k) No Third Party Beneficiary. This Agreement is made for the sole benefit of Company and the Holders, and no other Person will be deemed to have any privity of contract hereunder nor any right to rely hereon to any extent or for any purpose whatsoever, nor will any other Person have any right of action of any kind hereon or be deemed to be a third party beneficiary hereunder.
(l) Independent Nature of Holders’ Obligations and Rights. The obligations of a Holder under this Agreement are several and not joint with the obligations of any other Holder, and no Holder will be responsible in any way for the performance of the obligations of any other Holder under the Agreement. Nothing contained in this Agreement, and no action taken by any Holder in accordance herewith, will be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Agreement. Each Holder will be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it will not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose.
(m) Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and may not be modified or amended in any manner other than by supplemental written agreement executed by the parties hereto as set forth herein. No party, in entering into this Agreement, has relied upon any representation, warranty, covenant, condition or other term that is not set forth in this Agreement.
(n) Expenses. Except as set forth in Section 4, all fees, costs, and expenses incurred in connection with this Agreement and the transactions contemplated hereby, including accounting and legal fees, will be paid by the party incurring such expenses.
[Signature Page Follows]
15
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized representative as of the date first above written.
| COMPANY:<br><br> <br><br><br> <br>INVESTAR HOLDING CORPORATION | |
|---|---|
| By: | |
| John J. D’Angelo | |
| President and Chief Executive Officer |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Purchaser has caused this Agreement to be executed by its duly authorized representative as of the date first above written.
| PURCHASER:<br><br> <br><br><br> <br>[ ] | |
|---|---|
| By: | |
| Name: | |
| Title: |
[Signature Page to Registration Rights Agreement]
Annex A
PLAN OF DISTRIBUTION
We are registering the shares of our common stock issuable upon conversion of preferred stock issued to the selling stockholders named herein to permit the resale of those shares by the holders of such shares from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale of shares of our common stock by the selling stockholders. We will bear all fees and expenses incident to our obligation to register the common stock.
The selling stockholders may sell all or a portion of the common stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the common stock is sold through underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The common stock may be sold on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale, in the over-the-counter market or in transactions otherwise than on these exchanges or systems or in the over-the-counter market and in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions. The selling stockholders may use any one or more of the following methods when selling common stock:
| ● | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
|---|---|
| ● | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| --- | --- |
| ● | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| --- | --- |
| ● | an exchange distribution in accordance with the rules of the applicable exchange; |
| --- | --- |
| ● | privately negotiated transactions; |
| --- | --- |
| ● | settlement of short sales; |
| --- | --- |
| ● | broker-dealers may agree with the selling stockholders to sell a specified number of such securities at a stipulated price per share; |
| --- | --- |
| ● | through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise; |
| --- | --- |
| ● | a combination of any such methods of sale; and |
| --- | --- |
| ● | any other method permitted under applicable law. |
| --- | --- |
A-1
The selling stockholders also may resell all or a portion of the common stock in open market transactions in reliance upon Rule 144 under the Securities Act, as permitted by that rule, or Section 4(a)(1) under the Securities Act, if available, rather than under this prospectus, provided that they meet the criteria and conform to the requirements of those provisions.
Broker-dealers engaged by the selling stockholders may arrange for other broker-dealers to participate in sales. If the selling stockholders effect such transactions by selling shares of our common stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of the common stock for whom they may act as agent or to whom they may sell as principal. Such commissions will be in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction will not be in excess of a customary brokerage commission in compliance with FINRA Rule 2121.
In connection with sales of the common stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging in positions they assume. The selling stockholders may also sell common stock short, the selling stockholders may deliver common stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge common stock to broker-dealers that in turn may sell such shares, to the extent permitted by applicable law. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
The selling stockholders and any broker-dealer or agents participating in the distribution of the common stock may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act in connection with such sales. In such event, any commissions paid, or any discounts or concessions allowed to, any such broker-dealer or agent and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Selling stockholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the applicable prospectus delivery requirements of the Securities Act and may be subject to certain statutory liabilities of, including but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.
A-2
Each selling stockholder has informed the Company that it is not a registered broker-dealer and does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the common stock. Upon the Company being notified in writing by a selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of common stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, under Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the common stock was sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In no event will any broker-dealer receive fees, commissions and markups, which, in the aggregate, would exceed 8.0%.
Under the securities laws of some states, the common stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the common stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
There can be no assurance that any selling stockholder will sell any or all of the common stock registered under the registration statement of which this prospectus forms a part.
Each selling stockholder and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act, and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the common stock by the selling stockholder and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the common stock to engage in market-making activities with respect to the common stock. All of the foregoing may affect the marketability of the common stock and the ability of any person or entity to engage in market-making activities with respect to the common stock.
We will pay all expenses of the registration of the common stock under the registration rights agreement, including, without limitation, SEC filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, that each selling stockholder will pay all underwriting discounts and selling commissions, if any and any related legal expenses incurred by it. We will indemnify the selling stockholders against certain liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreement, or the selling stockholders will be entitled to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling stockholders specifically for use in this prospectus, in accordance with the related registration rights agreements, or we may be entitled to contribution.
A-3
Annex B
INVESTAR HOLDING CORPORATION
SELLING STOCKHOLDER NOTICE AND QUESTIONNAIRE
The undersigned holder of shares of 6.5% Series A Non-Cumulative Perpetual Convertible Preferred Stock (“Preferred Stock”) of Investar Holding Corporation, a Louisiana corporation (the “Company”), issued under that certain Securities Purchase Agreement by and among the Company and the Purchasers named therein, dated as of July 1, 2025, and/or shares of common stock, par value $1.00 per share, of the Company issued upon the conversion of such Preferred Stock (“Common Stock”), understands that the Company intends to file with the Securities and Exchange Commission a registration statement on Form S-3 (the “Resale Registration Statement”) for the registration and the resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities in accordance with the terms of that certain Registration Rights Agreement by and among the Company and the Purchasers named therein, dated as of July 1, 2025 (the “Agreement”). All capitalized terms not otherwise defined herein will have the meanings ascribed thereto in the Agreement.
In order to sell or otherwise dispose of any Registrable Securities under the Resale Registration Statement, a holder of Registrable Securities generally will be required to be named as a selling stockholder in the related prospectus or a supplement thereto (as so supplemented, the “Prospectus”), deliver the Prospectus to purchasers of Registrable Securities (including under Rule 172 under the Securities Act) and be bound by the provisions of the Agreement (including certain indemnification provisions, as described below). Holders must complete and deliver this Notice and Questionnaire in order to be named as selling stockholders in the Prospectus. Holders of Registrable Securities who do not complete, execute and return this Notice and Questionnaire within ten Trading Days following the date of the Agreement will not be named as selling stockholders in the Resale Registration Statement or the Prospectus and may not use the Prospectus for resales of Registrable Securities.
Certain legal consequences arise from being named as a selling stockholder in the Resale Registration Statement and the Prospectus. Holders of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not named as a selling stockholder in the Resale Registration Statement and the Prospectus.
NOTICE
The undersigned holder (the “Selling Stockholder”) of Registrable Securities hereby gives notice to the Company of its intention to sell or otherwise dispose of Registrable Securities owned by it and listed below in Item (3), unless otherwise specified in Item (3), under the Resale Registration Statement. The undersigned, by signing and returning this Notice and Questionnaire, understands and agrees that it will be bound by the terms and conditions of this Notice and Questionnaire and the Agreement.
The undersigned provides the following information to the Company and represents and warrants that such information is accurate and complete:
B-1
QUESTIONNAIRE
| 1. | Name. |
|---|---|
| (a) | Full legal name of Selling Stockholder: |
| --- | --- |
| (b) | Full legal name of registered holder (if not the same as (a) above) of shares of Preferred Stock and Common Stock listed in Item 3 below: |
| --- | --- |
| (c) | Full legal name of natural control person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the shares of the Preferred Stock and Common Stock covered by the questionnaire): |
| --- | --- |
| 2. | Contact information for notices to Selling Stockholder: |
| --- | --- |
| Address: | |
| Telephone: | |
| Fax: | |
| Contact Person | |
| E-mail Address for Contact Person | |
| 3. | Beneficial Ownership of Registrable Securities: |
| --- | --- |
| (a) | Type and number of shares of Preferred Stock and Common Stock beneficially owned: |
| --- | --- |
B-2
| (b) | Number of shares of Common Stock to be registered under this Notice for resale: |
|---|---|
| 4. | Broker-Dealer Status: |
| --- | --- |
| (a) | Are you a broker-dealer? |
| --- | --- |
Yes ☐ No ☐
| (b) | If “yes” to Section 4(a), did you receive your shares of Preferred Stock or Common Stock as compensation for investment banking services provided to the Company or any of its Affiliates? |
|---|
Yes ☐ No ☐
| Note: | If no, the SEC’s staff has indicated that you should be identified as an underwriter in the Registration Statement. |
|---|---|
| (c) | Are you an affiliate of a broker-dealer? |
| --- | --- |
Yes ☐ No ☐
| Note: | If yes, provide a narrative explanation below: |
|---|---|
| (c) | If you are an affiliate of a broker-dealer, do you certify that you bought the shares of Preferred Stock and Common Stock in the ordinary course of business, and at the time of the purchase of the shares to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the shares? |
| --- | --- |
Yes ☐ No ☐
| Note: | If no, the SEC’s staff has indicated that you should be identified as an underwriter in the Registration Statement. |
|---|
| 5. | Beneficial Ownership of other Company Securities Owned by Selling Stockholder. |
|---|---|
| Except as set forth below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the shares of Preferred Stock and Common Stock listed above in Item 3. | |
| Type and amount of other securities beneficially owned: | |
| 6. | Relationships with the Company: |
| --- | --- |
| Except as set forth below, neither the undersigned nor any of its Affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years. | |
| State any exceptions here: | |
| 7. | Plan of Distribution: |
| --- | --- |
| The undersigned has reviewed the form of Plan of Distribution attached as Annex A to the Agreement, and hereby confirms that, except as set forth below, the information contained therein regarding the undersigned and its plan of distribution is correct and complete. | |
| State any exceptions here: |
***********
By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items (1) through (7) above and the inclusion of such information in the Resale Registration Statement and the Prospectus. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of any such Registration Statement and the Prospectus. The undersigned will promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof; provided, that the undersigned shall not be required to notify the Company of any changes to the number of securities held or owned by the undersigned or its affiliates subsequent to the date hereof.
By signing below, the undersigned acknowledges that it understands its obligation to comply, and agrees that it will comply, with the provisions of the Exchange Act and the rules and regulations thereunder, particularly Regulation M in connection with any offering of shares of the Common Stock under the Resale Registration Statement. The undersigned also acknowledges that it understands that the answers to this Questionnaire are furnished for use in connection with Registration Statements filed under the Registration Rights Agreement and any amendments or supplements thereto filed with the SEC under the Securities Act.
B-4
The undersigned confirms that, to the best of its knowledge and belief, the foregoing statements (including without limitation the answers to this Questionnaire) are correct.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Questionnaire to be executed and delivered either in person or by its duly authorized agent.
| Dated: | Beneficial Owner: |
|---|---|
| By: | |
| --- | |
| Name: | |
| Title: |
B-5
ex_834289.htm
Exhibit 99.1
Investar Holding Corporation Announces Merger with Wichita Falls Bancshares, Inc.
and $32.5 Million Capital Raise
BATON ROUGE, LA (July 1, 2025) – Investar Holding Corporation (“Investar”) (NASDAQ:ISTR), the holding company for Investar Bank, N.A., and Wichita Falls Bancshares, Inc. (“Wichita Falls”), the holding company for First National Bank, Wichita Falls, Texas, jointly announced today that they have entered into a definitive agreement pursuant to which Investar will acquire Wichita Falls for cash and stock consideration. In connection with the proposed acquisition, Investar also announced today a private placement of $32.5 million of its newly designated 6.5% Series A Non-Cumulative Perpetual Convertible Preferred Stock.
Wichita Falls Transaction
Headquartered in Wichita Falls, Texas, Wichita Falls’ wholly-owned subsidiary, First National Bank, operates seven branches and two mortgage offices in north Texas and had approximately $1.5 billion in assets at March 31, 2025. First National Bank, chartered in 1986, operates as a full-service community bank, providing banking solutions including personal and business checking accounts, savings accounts, certificates of deposit, personal and business loans, and mortgage solutions and services. Additionally, the bank offers online and mobile banking platforms. First National Bank serves small business owners, taxing authorities, cities, counties, school districts, water districts, hospital districts, and government entities.
Dr. David Flack, President of Wichita Falls said, "The merger of First National Bank and Investar Bank brings together two banks that share a common tradition, culture and commitment to community banking. This merger will allow us to bring new products and services to our customers while keeping the same banking locations and trusted local bankers. We believe this merger creates more long-term value for our customers, communities and shareholders."
Stan Pinkham, President & Chief Executive Officer of First National Bank stated, “This merger provides a great opportunity to enhance strategic synergies through combined resources, and to build greater shareholder value. Aligning with Investar creates a combined bank with over $4 billion in assets, resulting in a larger lending capacity and enhanced services to our customers.”
For Investar, the merger represents the continued execution of its multi-state expansion strategy with its second acquisition in Texas and first in the north Dallas market, further bolstering its geographic footprint within Texas and positioning the Bank to continue to build on its existing record of growth and client service under the leadership of its current management team. For First National Bank, the transaction is expected to provide the benefits of additional financial strength and the expanded resources of a larger banking enterprise. Although First National Bank will transition to the Investar Bank name, experienced bank staff is expected to remain substantially intact, continuing to provide exemplary and personal service to its growing customer base.
“Today marks a pivotal moment in the history of Investar Bank and a defining milestone for our company,” said John D’Angelo, President and Chief Executive Officer of Investar. “This is a water-shed moment for our bank and our shareholders. This is more than a strategic move; it’s a powerful alignment of values and purpose. Our partner came from humble beginnings as did Investar. Although the banks began in different geographies and times, our shared vision is representative of the gap that larger institutions left in our markets. We responded by delivering true community banking. The most attractive thing to me about this partnership is the combined company focus and commitment to excellent service where employees know their customers by name, and service is personal, not transactional. First National Bank, its employees, leadership, and the board are united with us in building something exceptional. Together, we look forward to creating an even stronger, customer-focused community bank.”
The definitive agreement has been unanimously approved by the boards of directors of Investar and Wichita Falls, and the closing of the transaction, which is expected to occur in the fourth quarter of 2025, is subject to customary conditions, including shareholder and regulatory approvals. The definitive agreement provides that upon the closing of the transaction, Wichita Falls shareholders will be entitled to receive an aggregate of 3,955,334 shares of Investar common stock, and cash consideration of $7.2 million, in exchange for their shares, subject to adjustment under certain circumstances. Based on the closing price of $19.32 for Investar common stock on June 30, 2025, the transaction would result in aggregate consideration of approximately $83.6 million, or $134.67 per share of Wichita Falls common stock.
Janney Montgomery Scott LLC acted as financial advisor, and Fenimore Kay Harrison LLP served as legal counsel, to Investar on the merger transaction. Bradley Arant Boult Cummings LLP served as legal counsel, and Olsen Palmer LLC served as financial advisor, to Wichita Falls.
Private Placement of Series A Preferred Stock
Investar also announced today that it has entered into binding purchase agreements in a private placement of 32,500 shares of its newly designated 6.5% Series A Non-Cumulative Perpetual Convertible Preferred Stock (the “Series A preferred stock”) with selected institutional and other accredited investors at a price of $1,000 per share, for aggregate gross proceeds of $32.5 million. Investar estimates the net proceeds of the private placement will be approximately $30.4 million, after deducting placement agent fees and other offering-related expenses. Dividends are payable on the Series A preferred stock from the date of issuance at a rate of 6.5% per annum, quarterly in arrears, on January 1, April 1, July 1 and October 1 of each year, beginning on October 1, 2025, when, as, and if declared by the board of directors of Investar. Shares of Series A preferred stock are convertible in whole or in part at any time and from time to time by the holders, and under certain circumstances by Investar beginning July 1, 2028, at a conversion rate of 47.619 shares of Investar common stock for each converted share of Series A preferred stock, subject to certain adjustments and satisfaction or waiver of certain conditions. In addition, shares of Series A preferred stock are subject to redemption at a price equal to $1,000 per share, plus all declared and unpaid dividends thereon (without regard to, or accumulation of, any undeclared dividends), in whole or in part by Investar on any dividend payment date, beginning July 1, 2030, and in whole any time upon the occurrence of certain events and subject to satisfaction or waiver of certain conditions. The Series A preferred stock is not subject to redemption at the option of the holders. The Series A preferred stock is intended to qualify as additional tier 1 capital for regulatory capital purposes. Holders of the Series A preferred stock will have no voting rights, except with respect to certain changes in the terms of the Series A preferred stock, certain fundamental business transactions and as otherwise required by applicable law. The Series A preferred stock will rank senior to Investar’s common stock and each other series of preferred stock or capital stock that Investar may issue in the future the terms of which do not express provide that such series will rank on a parity with or senior to the Series A preferred stock as to dividend rights or rights on liquidation, winding-up or dissolution.
Investar has also agreed to take steps following the closing of the private placement to register with the United States Securities and Exchange Commission (the “SEC”) the resale of the Investar common stock issuable upon conversion of the Series A preferred stock. Additional information regarding the Series A preferred stock will be included in a Current Report on Form 8-K to be filed with the SEC.
Investar intends to use the net proceeds from the offering to support the acquisition of Wichita Falls and for general corporate purposes, including organic growth and other potential acquisitions.
Janney Montgomery Scott LLC served as lead placement agent, and Hovde Group, LLC acted as co-placement agent for the private placement. Fenimore Kay Harrison LLP served as legal counsel to Investar, and Jones Walker LLP served as legal counsel to the placement agents, for the offering.
About Investar Holding Corporation
Investar, headquartered in Baton Rouge, Louisiana, provides full banking services, excluding trust services, through its wholly-owned banking subsidiary, Investar Bank, National Association. Investar Bank currently operates 29 branch locations serving south Louisiana, southeast Texas, and southwest Alabama. At March 31, 2025, Investar had 329 full-time equivalent employees and total assets of approximately $2.7 billion.
Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as “may,” “will,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “forecast,” and other words and terms of similar meaning. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Investar cautions readers that any forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. Such forward-looking statements include, but are not limited to: statements about the benefits of the proposed merger involving Investar and Wichita Falls, including future financial and operating results; statements about Investar’s plans, objectives, expectations and intentions; statements about the expected timing of completion of the proposed merger; and other statements that are not historical facts. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include risks and uncertainties relating to: (i) the ability to obtain the requisite shareholder approvals; (ii) the risk that Investar may be unable to obtain governmental and regulatory approvals required to consummate the proposed merger, or required governmental and regulatory approvals may delay the merger or result in the imposition of conditions that could cause the parties to abandon the merger; (iii) the risk that a condition to closing may not be satisfied; (iv) the timing to consummate the proposed merger; (v) the risk that the businesses will not be integrated successfully; (vi) the risk that the cost savings and any other synergies from the proposed merger may not be fully realized or may take longer to realize than expected; (vii) disruption from the proposed merger making it more difficult to maintain relationships with customers, employees or vendors; (viii) the diversion of management time on merger-related issues; and (ix) other factors which Investar discusses or refers to in the “Risk Factors” section of its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q filed with the SEC. Each forward-looking statement speaks only as of the date of the particular statement and Investar undertakes no obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
Additional Information about the Proposed Merger and Where to Find It
In connection with the proposed merger, Investar intends to file with the SEC a registration statement on Form S-4 (the “Form S-4”) that will include a joint proxy statement of Investar and Wichita Falls and a prospectus of Investar with respect to the shares of Investar common stock to be issued in the proposed merger (the “proxy statement/prospectus”). Investar may also file other relevant documents with the SEC regarding the proposed merger. This document is not a substitute for the Form S-4 or proxy statement/prospectus or any other document that Investar may file with the SEC. The definitive proxy statement/prospectus (if and when available) will be mailed to stockholders of each of Investar and Wichita Falls. Investors and security holders are urged to read the Form S-4, the proxy statement/prospectus and any other relevant documents that may be filed with the SEC, as well as any amendments or supplements to these documents, carefully and in their entirety if and when they become available because they contain or will contain important information about the proposed merger. Investors and security holders will be able to obtain free copies of the Form S-4 and the proxy statement/prospectus (if and when available) and other documents containing important information about Investar, Wichita Falls and the proposed merger, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with, or furnished to, the SEC by Investar will be available free of charge in the “Investor Relations” section of Investar’s website at www.investarbank.com. The information included on, or accessible through, Investar’s website is not incorporated by reference into this communication.
Participants in the Solicitation
Investar and Wichita Falls and their respective directors and officers may be deemed to be participants in the solicitation of proxies from their respective shareholders in connection with the proposed merger. Information about Investar’s directors and executive officers and their ownership of Investar’s securities is set forth in Investar’s filings with the SEC, including its most recent Annual Report on Form 10-K filed with the SEC. To the extent that holdings of Investar’s securities have changed since the amounts printed in most recent Annual Report on Form 10-K filed with the SEC, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Additional information regarding the interests of those persons and other persons who may be deemed participants in the proposed merger may be obtained by reading the proxy statement/prospectus regarding the proposed merger. You may obtain free copies of these documents as described in the preceding paragraph.
No Offer or Solicitation
The information contained in this press release is not an offer to sell or the solicitation of an offer to buy any securities of Investar. The Series A preferred stock and the shares of Investar common stock issuable upon the conversion of the Series A preferred stock have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act.
For further information contact:
Investar Holding Corporation
John Campbell
Executive Vice President and Chief Financial Officer
(225) 227-2215
John.Campbell@investarbank.com
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Exhibit 99.2
