-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, mZcM0ga/pN5Wjcq+x90QMJHa4SQuXM6wjEchLSrO7rBTvEHqilqzwvZWceqnuK8Q SHwEXPI+Sby3JjJ+tEyfsw== 0000906280-95-000059.txt : 19950621 0000906280-95-000059.hdr.sgml : 19950621 ACCESSION NUMBER: 0000906280-95-000059 CONFORMED SUBMISSION TYPE: 424B1 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950620 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MIDSOUTH BANCORP INC CENTRAL INDEX KEY: 0000745981 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 721020809 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B1 SEC ACT: 1933 Act SEC FILE NUMBER: 033-58499 FILM NUMBER: 95548119 BUSINESS ADDRESS: STREET 1: 102 VERSAILLES BLVD CITY: LAFAYETTE STATE: LA ZIP: 70501 BUSINESS PHONE: 3182378343 MAIL ADDRESS: STREET 1: 102 VERSAILLES BLVD CITY: LAFAYETTE STATE: LA ZIP: 70501 424B1 1 Registration No. 33-58499 424(b) MIDSOUTH BANCORP, INC. SUGARLAND BANCSHARES, INC. Supplement to Joint Proxy Statement and Prospectus dated June 20, 1995. The Agreement and Plan of Merger, dated as of December 28, 1994, among Sugarland Bancshares, Inc. and Sugarland State Bank, on the one hand, and MidSouth Bancorp, Inc. and MidSouth National Bank, on the other hand, which is referred to in the Joint Proxy Statement and Prospectus, is attached hereto, without exhibits. This Supplement is dated June 20, 1995. AGREEMENT AND PLAN OF MERGER THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made December 28, 1994, between MidSouth Bancorp, Inc., a Louisiana corporation ("MidSouth") and its wholly owned subsidiary, MidSouth National Bank ("MidSouth Bank"), on the one hand; and Sugarland Bancshares, Inc., a Louisiana corporation ("Holding"), and its wholly owned subsidiary, Sugarland State Bank, a Louisiana state banking association ("Bank"), on the other. WHEREAS, the Board of Directors of MidSouth Bank and the Board of Directors of Bank have each determined that it is desirable and in the best interests of the institution and its sole shareholder that Bank merge into MidSouth Bank (the "Bank Merger") on the terms and subject to the conditions set forth in this Agreement and in the agreement of merger attached hereto as Exhibit A (the "Bank Merger Agreement"); and WHEREAS, the Board of Directors of MidSouth and the Board of Directors of Holding have each determined that it is desirable and in the best interests of the corporation and its shareholders that Holding merge into MidSouth (the "Company Merger" and, together with the Bank Merger, collectively called the "Mergers") on the terms and subject to the conditions set forth in this Agreement and in the certificate of merger attached hereto as Exhibit B (the "Company Merger Certificate"). NOW THEREFORE, in consideration of the representations, warranties, covenants and agreements herein contained, the parties hereto agree as follows: SECTION 1 Mergers and Closing 1.1 Bank Merger. Simultaneously with the execution of this Agreement, MidSouth Bank and Bank will enter into the Bank Merger Agreement, pursuant to which Bank will, subject to the conditions stated herein and therein, merge into MidSouth Bank, which shall be the surviving association. 1.2 Company Merger. Subject to the conditions stated in Section 6, at the Effective Time, as defined below, Holding will merge into MidSouth, which shall be the surviving corporation, and the separate existence of Holding will cease. The Company Merger will have the effects set forth in Section 115 of the Louisiana Business Corporation Law ("BCL"). 1.3 The Closing. The "Closing" of the transactions contemplated hereby will take place in the offices of MidSouth, 102 Versailles Boulevard, Versailles Centre, Lafayette, Louisiana 70501, at 10:00 a.m., local time, on a mutually agreeable date as soon as practicable following satisfaction of the conditions set forth in subparagraphs (a), (b) and (d) of subsection 6.1 hereof, or on any date specified by any party to the others upon ten days' notice following satisfaction of such conditions. The date on which the Closing is to occur is herein called the "Closing Date." If all conditions set forth in Section 6 hereof are satisfied or waived by the party entitled to grant such waiver, at the Closing (a) MidSouth and MidSouth Bank, on the one hand, and Holding and Bank, on the other hand, shall each provide to the other such proof or indication of satisfaction of the conditions set forth in Section 6 as the party whose obligations are conditioned upon such satisfaction may reasonably request, (b) the certificates, letters and opinions required by Section 6 shall be delivered, (c) the appropriate officers of the parties shall execute, deliver and acknowledge the Bank Merger Agreement and the Company Merger Certificate, and (d) the parties shall take such further action as is required to consummate the transactions contemplated by this Agreement and the Bank Merger Agreement. If on any date established for the Closing all conditions in Section 6 hereof have not been satisfied or waived by the party entitled to grant such waiver, then any party, on one or more occasions, may declare a delay of the Closing of such duration, not exceeding 10 business days, as the declaring party shall select, but no such delay shall extend beyond the date set forth in subparagraph (c) of subsection 7.1, and no such delay shall interfere with the right of any party to declare a termination pursuant to Section 7. 1.4 The Effective Date and Time. The Bank Merger Agreement shall be filed and recorded as provided by law with the Office of the Comptroller of the Currency (the "OCC") and the Louisiana Office of Financial Institutions (the "OFI") immediately following or concurrently with the Closing, and the Bank Merger will be effective at the time specified in a certificate or other written record issued by the OCC or the OFI, whichever date is later. The Company Merger Certificate shall be filed with and recorded by the Secretary of State of the State of Louisiana immediately following (or concurrently with) the Closing, and the Company Merger shall be effective at the date and time specified in the Company Merger Certificate. The date on which and the time at which the Company Merger becomes effective are herein referred to as the "Effective Date" and the "Effective Time," respectively. SECTION 2 Conversion of Stock of Holding 2.1 Conversion of Stock of Holding. Except for shares as to which dissenters' rights have been perfected and not withdrawn or otherwise forfeited under Section 131 of the BCL, on the Effective Date, by reason of the Company Merger, each issued and outstanding share of common stock, $1.25 par value per share, of Holding ("Holding Common Stock") shall be converted into a number of shares of Series A cumulative convertible preferred stock (the "Preferred Stock") of MidSouth, having the terms set forth in the form of Articles of Amendment attached hereto as Exhibit C, equal to the quotient of (i) 187,286, divided by (ii) the number of outstanding shares of Holding on the Effective Date. 2.2 Fractional Shares. In lieu of the issuance of any fractional share of Preferred Stock to which a holder of Holding Common Stock may be entitled (after aggregation of all fractional shares to which such holder is entitled), each shareholder of Holding, upon surrender of the certificate or certificates which immediately prior to the Effective Time represented Holding Common Stock held by such shareholder, shall be entitled to receive a cash payment (without interest) equal to such fractional share multiplied by the stated value of a share of Preferred Stock. 2.3 Exchange of Certificates. After the Effective Time, each holder of an outstanding certificate or certificates theretofore representing shares of Holding Common Stock (other than shares as to which dissenters' rights have been perfected and not withdrawn or otherwise forfeited under Section 131 of the BCL), upon surrender thereof to MidSouth, shall be entitled to receive the shares of Preferred Stock into which such shares have been converted as provided in Section 2.1 and cash in lieu of any fractional share as provided in Section 2.2. Until so surrendered, each outstanding certificate shall be deemed for all purposes, other than as provided below with respect to the payment of dividends or other distributions, if any, in respect of the Preferred Stock, to represent the number of whole shares of Preferred Stock into which the shares of Holding Common Stock theretofore represented thereby shall have been converted. MidSouth may, at its option, refuse to pay any dividend or other distribution, if any, payable to the holders of shares of Preferred Stock to the holders of certificates evidencing unsurrendered Holding Common Stock, provided, however, that upon surrender of such certificates there shall be paid to the record holders of the stock certificate or certificates issued in exchange therefor the amount, without interest, of dividends and other distributions, if any, which have become payable with respect to the number of whole shares of Preferred Stock into which the shares of Holding Common Stock theretofore represented thereby shall have been converted and which have not previously been paid, unless such distributions have reverted to MidSouth in full ownership pursuant to its Articles of Incorporation. Whether or not a stock certificate representing Holding Common Stock is surrendered, from and after the Effective Time such certificate shall under no circumstances evidence, represent or otherwise constitute any stock or other interest in Holding or any other person, firm or corporation (other than MidSouth). 2.4 Shares of MidSouth. The shares of capital stock of MidSouth outstanding immediately prior to the Effective Time shall not be changed or converted by virtue of the Company Merger. SECTION 3 Representations and Warranties of Holding and Bank Holding and Bank represent and warrant to MidSouth and MidSouth Bank that, except as set forth in the corresponding subsection of the Schedule of Exceptions that Holding and Bank have delivered to MidSouth and MidSouth Bank: 3.1 Consolidated Group; Organization; Qualification. Holding's "consolidated group", as such term is used in this Agreement, consists of Holding and Bank. Holding is a corporation duly organized and validly existing under the laws of the State of Louisiana and is a bank holding company within the meaning of the Bank Holding Company Act of 1956, as amended (the "Bank Holding Company Act"). Bank is a state chartered banking association duly organized and validly existing under the laws of the State of Louisiana. Each member of Holding's consolidated group has all requisite corporate power and authority to own and lease its property and to carry on its business as it is currently being conducted and is qualified and in good standing as a foreign corporation in all jurisdictions in which the failure to so qualify would have a material adverse effect on such member's financial condition, results of operations, business or prospects. 3.2 Capital Stock; Other Interests. The authorized capital stock of Holding consists of 400,000 shares of Holding Common Stock, of which 187,286 shares are issued and outstanding, and 45,000 shares are held in its treasury. The authorized capital stock of Bank consists of 50,000 shares of common stock, $5.00 par value per share, of which 50,000 shares are issued and outstanding and no shares are held in its treasury. All issued and outstanding shares of capital stock of each member of Holding's consolidated group have been duly authorized and are validly issued, fully paid and (except as provided in La. R.S. 6:262) non-assessable, and all of the outstanding shares of each such member (other than Holding) are owned by Holding, free and clear of all liens, charges, security interests, mortgages, pledges and other encumbrances. No member of Holding's consolidated group has outstanding any stock options or other rights to acquire any shares of its capital stock or any security convertible into such shares, or has any obligation or commitment to issue, sell or deliver any of the foregoing or any shares of its capital stock. The capital stock of each member of Holding's consolidated group has been issued in compliance with all legal requirements and in compliance with any pre-preemptive or similar rights. No member of Holding's consolidated group has a subsidiary or direct or indirect ownership interest exceeding 1% in any corporation, partnership or other business entity except for interests in any other such member. 3.3 Corporate Authorization; No Conflicts. Subject to the approval of this Agreement by the shareholders of Holding in accordance with the BCL, all corporate acts and other proceedings required of each member of Holding's consolidated group for the due and valid authorization, execution, delivery and performance of this Agreement and the Bank Merger Agreement and consummation of the Mergers have been validly and appropriately taken. Subject to such shareholder approval and to such regulatory approvals as are required by law, this Agreement and the Bank Merger Agreement are legal, valid and binding obligations of the members of Holding's consolidated group which are parties thereto, respectively, and are enforceable against such members in accordance with the respective terms of such instruments, except that enforcement may be limited by bankruptcy, reorganization, insolvency and other similar laws and court decisions relating to or affecting the enforcement of creditors' rights generally and by general equitable principles. With respect to each member of Holding's consolidated group, neither the execution, delivery or performance of this Agreement or the Bank Merger Agreement, nor the consummation of the transactions contemplated hereby or thereby will (i) violate, conflict with, or result in a breach of any provisions of, (ii) constitute a default (or event that, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination of or accelerate the performance required by, or (iv) result in the creation of any lien, security interest, charge or encumbrance upon any of its properties or assets under, any of the terms, conditions or provisions of its articles of incorporation or by-laws or any material note, bond, mortgage, indenture, deed of trust, lease, license, agreement or other instrument or obligation to or by which it or any of its assets is bound; or violate any order, writ, injunction, decree, statute, rule or regulation of any governmental body applicable to it or any of its assets. 3.4 Financial Statements, Reports and Proxy Statements. Holding has delivered to MidSouth true and complete copies of (a) the consolidated balance sheets as of December 31, 1993 and 1992 of Holding and its subsidiaries, the related consolidated statements of income, shareholders' equity and changes in financial position for the respective years then ended, the related notes thereto, and the report of its independent public accountants with respect thereto (collectively, the "Financial Statements"), (b) the unaudited consolidated balance sheets as of September 30, 1994 and September 30, 1993 of Holding and its subsidiaries, and the related unaudited statements of income, shareholders' equity and changes in financial position for the nine-month periods then ended (collectively, the "Interim Financial Statements"), (c) the annual report to the Board of Governors of the Federal Reserve System ("Federal Reserve Board") for the year ended December 31, 1993, of each member of Holding's consolidated group required to file such reports, (d) all call or similar reports made to the Federal Deposit Insurance Corporation ("FDIC") or the Federal Reserve Board, as the case may be, since December 31, 1991, of each member of Holding's consolidated group required to file such reports, (e) Holding's Annual Report to Shareholders for 1993 and all subsequent Quarterly Reports to Shareholders, and (f) all proxy statements or other reports disseminated to Holding's shareholders or the shareholders of any of its subsidiaries at any time since December 31, 1991. The Financial Statements and the Interim Financial Statements have been prepared in conformity with generally accepted accounting principles applied on a basis consistent with prior periods, except as disclosed therein or in the accountant's report accompanying such statement or statements, and present fairly, in conformity with generally accepted accounting principles, except as disclosed therein or in the accountant's report accompanying such statement or statements, the consolidated results of operations of Holding's consolidated group for the respective periods covered thereby and the consolidated financial condition of its consolidated group as of the respective dates thereof. All call or similar reports referred to above have been filed on the appropriate form and prepared in accordance with such form's instructions and the applicable rules and regulations of the regulating federal agency. No member of Holding's consolidated group has, nor are any of any such member's assets subject to, any material liability, commitment, indebtedness or obligation (of any kind whatsoever, whether absolute, accrued, contingent, known, unknown, matured or unmatured) which is not reflected and adequately reserved against in the latest balance sheet forming part of the Interim Financial Statements (the "Latest Balance Sheet"). The Financial Statements and Interim Financial Statements are supported by and consistent with detailed trial balances of investment securities, loans and loan commitments, depositors' accounts and cash balances on deposit with other institutions, copies of which have been made available to MidSouth. 3.5 Loan and Investment Portfolios. All loans, discounts and financing leases (in which a member of Holding's consolidated group is lessor) reflected on the Latest Balance Sheet (a) have been made for good, valuable and adequate consideration in the ordinary course of business of its consolidated group, (b) are evidenced by notes, agreements or other evidences of indebtedness which are true, genuine and what they purport to be and (c) to the extent secured, have been secured by valid liens and security interests which have been perfected. Accurate lists of all such loans, discounts and financing leases as of the date of the Latest Balance Sheet, and of the investment portfolios of each member of Holding's consolidated group as of such date, have been made available to MidSouth. 3.6 Adequacy of Loan Loss Reserves. Each of the allowances for losses on loans, financing leases and other real estate owned shown on the Latest Balance Sheet is adequate in accordance with applicable regulatory guidelines and generally accepted accounting principles in all material respects, and there are no facts or circumstances known to any executive officer of Holding or Bank which are likely to require in accordance with applicable regulatory guidelines or generally accepted accounting principles a future material increase in any provisions for such losses or a material decrease in any of the allowances therefor reflected in the Latest Balance Sheet. Each of the allowances for losses on loans, financing leases and other real estate owned reflected on the books of Holding's consolidated group at all times from and after the date of the Latest Balance Sheet has been and will be adequate in accordance with applicable regulatory guidelines and generally accepted accounting principles in all material respects. 3.7 Examination Reports. To the extent permitted by applicable law, Holding has made available to MidSouth true and correct copies of all examination reports with respect to each member of Holding's consolidated group made by any federal or state bank or bank holding company regulatory authority since December 31, 1991. 3.8 Absence of Certain Changes or Events. Since the date of the Latest Balance Sheet, there has been no event or condition of any character (whether actual, threatened or contemplated) that has had, or can reasonably be anticipated to have, a material adverse effect on the financial condition, results of operations, business or prospects of any member of Holding's consolidated group. No such member has, since the date of the Latest Balance Sheet: (a) borrowed any money except for deposits or, except in the ordinary course of business consistent with past practices, (i) loaned any money or pledged any of its credit in connection with any aspect of its business, (ii) mortgaged or otherwise subjected to any lien, encumbrance or other liability any of its assets, (iii) sold, assigned or transferred any of its assets in excess of $25,000 in the aggregate, or (iv) incurred any material liability, commitment, indebtedness or obligation (of any kind whatsoever, whether accrued, contingent, known, unknown, matured or unmatured); (b) suffered any material damage, destruction or loss, whether or not covered by insurance; (c) experienced any material change in asset concentrations as to customers or industries or in the nature and source of its liabilities or in the mix of interest-bearing versus non-interest bearing deposits; (d) received notice or had knowledge or reasonable grounds to believe that any material labor unrest exists among any of its employees or that any group, organization or union has attempted to organize any of its employees; (e) received notice or had knowledge or reasonable grounds to believe that any of its substantial customers has terminated or intends to terminate such customer's relationship with it; (f) failed to operate its business in the ordinary course consistent with past practices, or failed to preserve its business organization intact or to preserve the goodwill of its customers and others with whom it has business relations; (g) incurred any material loss except for losses adequately reserved against on the date of this Agreement or waived any material right in connection with any aspect of its business, whether or not in the ordinary course of business; (h) cancelled any debt owed to it, or cancelled any of its claims, or paid any of its noncurrent obligations or liabilities; (i) made any capital expenditure or capital addition or betterment in excess of $25,000 each; (j) entered into any agreement requiring the payment, conditionally or otherwise, of any salary, bonus, extra compensation, pension or severance payment to any of its present or former directors, officers or employees, except such agreements as are terminable at will without any penalty or other payment by it, or increased the compensation (including salaries, fees, bonuses, profit sharing, incentive, pension, retirement or other similar payments) of any such person whose annual compensation would, following such increase, exceed $30,000; (k) changed any accounting practice followed or employed in preparing the Financial Statements or Interim Financial Statements; (l) made any loan, given any discount or entered into any financing lease which has not been (i) made for good, valuable and adequate consideration in the ordinary course of business, (ii) evidenced by notes or other evidences of indebtedness which are true, genuine and what they purport to be, and (iii) fully reserved against in an amount sufficient to provide for all charge-offs reasonably anticipated in the ordinary course of business after taking into account all recoveries reasonably anticipated in the ordinary course of business; or (m) entered into any agreement, contract or commitment to do any of the foregoing. 3.9 Taxes. Each member of Holding's consolidated group has timely filed all federal, state, foreign and local income, franchise, excise, real and personal property, employment and other tax returns, tax information returns and reports required to be filed, has paid all taxes, interest payments and penalties which have become due, has made (and will make) adequate provision for the payment of all taxes accruable for all periods ending on or before the date of this Agreement (and the Closing Date) to any city, parish, state, foreign country, the United States or any other taxing authority, and is not delinquent in the payment of any tax or governmental charge of any nature. The consolidated federal income tax returns of Holding's consolidated group have never been audited. No audit, examination or investigation is presently being conducted or, to the best of such member's knowledge, threatened, by any taxing authority, no material unpaid tax deficiencies or additional liabilities of any sort have been proposed by any governmental representative, and no agreements for extension of time for the assessment of any tax have been entered into by or on behalf of any member of Holding's consolidated group. Each such member has withheld from its employees (and timely paid to the appropriate governmental entity) proper and accurate amounts for all periods in compliance in all material respects with all tax withholding provisions of applicable federal, state, foreign and local laws (including, without limitation, income, social security and employment tax withholding for all forms of compensation). 3.10 Title to Assets. (a) On the date of the Latest Balance Sheet, each member of Holding's consolidated group had and, except with respect to assets disposed of for adequate consideration in the ordinary course of business since such date, now has, good and merchantable title to all real property and good and merchantable title to all other properties and assets reflected on the Latest Balance Sheet, free and clear of all mortgages, liens, pledges, restrictions, security interests, charges and encumbrances of any nature except for (i) mortgages and encumbrances which secure indebtedness which is properly reflected in the Latest Balance Sheet; (ii) liens for taxes accrued but not yet payable; (iii) liens arising as a matter of law in the ordinary course of business with respect to obligations incurred after the date of the Latest Balance Sheet, provided that the obligations secured by such liens are not delinquent or are being contested in good faith; (iv) such imperfections of title and encumbrances, if any, as do not materially detract from the value or interfere with the present use of any of such properties or assets or the potential sale of any of such owned properties or assets; and (v) capital leases and leases, if any, to third parties for fair and adequate consideration. Each member of Holding's consolidated group owns, or has valid leasehold interests in, all material properties and assets used in the conduct of its business. Any real property and other material assets held under lease by any such member are held under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use of such property by such member. (b) With respect to each lease of any real property or a material amount of personal property to which any member of Holding's consolidated group is a party, except for financing leases in which a member of such consolidated group is lessor, (i) such lease is in full force and effect in accordance with its terms; (ii) all rents and other monetary amounts that have become due and payable thereunder have been paid; (iii) there exists no default, or event, occurrence, condition or act, which with the giving of notice, the lapse of time or the happening of any further event, occurrence, condition or act would become a default under such lease; and (iv) neither the Company Merger nor the Bank Merger will constitute a default or a cause for termination or modification of such lease. (c) No member of Holding's consolidated group has any legal obligation, absolute or contingent, to any other person to sell or otherwise dispose of any substantial part of its assets; or to sell or dispose of any of its assets except in the ordinary course of business consistent with past practices. 3.11 Litigation, Pending Proceedings and Compliance with Laws. (a) There are no claims of any kind or any actions, suits, proceedings, arbitrations or investigations pending or threatened, nor does any member of Holding's consolidated group have knowledge of a basis for any claim, in any court or before any governmental agency or instrumentality or arbitration panel or otherwise, against any member of Holding's consolidated group. (b) Each member of Holding's consolidated group has complied with and is not in default in any material respect under (and has not been charged or threatened with or come under investigation with respect to any charge concerning any material violation of any provision of) any federal, state or local law, regulation, ordinance, rule or order (whether executive, judicial, legislative or administrative) or any order, writ, injunction or decree of any court, agency or instrumentality. (c) There are no material uncured violations, or violations with respect to which material refunds or restitution may be required, cited in any compliance report to any member of Holding's consolidated group as a result of examination by any bank or bank holding company regulatory authority. (d) No member of Holding's consolidated group is subject to any written agreement, memorandum or order with or by any bank or bank holding company regulatory authority. 3.12 Employee Benefit Plans. (a) Neither Holding nor Bank sponsors, maintains or contributes to, and neither has at any time sponsored, maintained or contributed to, any employee benefit plan or arrangement. (b) Except as contemplated by Section 5.15 hereof, the consummation of the transactions contemplated hereunder will not (i) result in the imposition of any obligation or liability on Holding, Bank, MidSouth or MidSouth Bank to any employee or former employee of Holding or Bank, or (ii) result in a prohibited transaction as such term is used in Code Section 4975 or ERISA Section 406. 3.13 Insurance Policies. Each member of Holding's consolidated group maintains in force insurance policies and bonds in such amounts and against such liabilities and hazards as are considered adequate. An accurate list of all such insurance policies has been delivered to MidSouth and MidSouth Bank. No member of Holding's consolidated group is now liable, nor will any such member become liable, for any material retroactive premium adjustment. All policies are valid and enforceable and in full force and effect, and no member of Holding's consolidated group has received any notice of a material premium increase or cancellation with respect to any of its insurance policies or bonds. Within the last three years, no member of Holding's consolidated group has been refused any insurance coverage sought or applied for, and no such member has reason to believe that its existing insurance coverage cannot be renewed as and when the same shall expire, upon terms and conditions as favorable as those presently in effect. 3.14 Agreements. No member of Holding's consolidated group is a party to: (a) any collective bargaining agreement; (b) any employment or other agreement or contract with or commitment to any employee except such agreements as are terminable at will without penalty by the employer; (c) any obligation of guaranty or indemnification except, if entered into in the ordinary course of business with respect to customers or any member of Holding's consolidated group, letters of credit, guaranties of endorsements and guaranties of signatures; (d) any agreement, contract or commitment which is or may be materially adverse to the financial condition, results of operations, business or prospects of any member of Holding's consolidated group; or (e) any agreement, contract or commitment containing any covenant limiting the freedom of any member of Holding's consolidated group to engage in any line of business or to compete with any person. The subsection of the Schedule of Exceptions that corresponds to this subsection contains a list of each material agreement, contract or commitment (except those entered into in the ordinary course of business with respect to loans, lines of credit, letters of credit, depositor agreements, certificates of deposit and similar banking activities) to which any member of Holding's consolidated group is a party or which affects any such member. No member of Holding's consolidated group has in any material respect breached, nor is there any pending or threatened claims that it has materially breached, any of the terms or conditions of any of its agreements, contracts or commitments. 3.15 Licenses, Franchises and Governmental Authorizations. Each member of Holding's consolidated group possesses all licenses, franchises, permits and other governmental authorizations necessary for the continued conduct of its business without interference or interruption. The deposits of each such member are insured by the FDIC to the extent provided by applicable law, and there are no pending or threatened proceedings to revoke or modify that insurance or for relief under 12 U.S.C. Section 1818. 3.16 Corporate Documents. Holding has delivered to MidSouth and MidSouth Bank, with respect to each member of Holding's consolidated group, true and correct copies of its articles of incorporation or articles of association, and its by- laws, all as amended. All of the foregoing and all of the corporate minutes and stock transfer records of each member of Holding's consolidated group are current, complete and correct in all material respects. 3.17 Certain Transactions. No past or present director, executive officer or five percent shareholder of any member of Holding's consolidated group has, since January 1, 1991, engaged in any transaction or series of transactions which, if such member had been subject to Section 14(a) of the Exchange Act at all times since that date, would be required to be disclosed in its proxy materials pursuant to Item 404 of Regulation S-K of the Rules and Regulations of the Securities and Exchange Commission ("SEC") without regard to the amount limitations of Item 404. 3.18 Brokers' or Finders' Fees. No agent, broker, investment banker, investment or financial advisor or other person acting on behalf of any member of Holding's consolidated group is entitled to any commission, broker's or finder's fee from any of the parties hereto in connection with any of the transactions contemplated by this Agreement, except for the financial advisor retained by Holding pursuant to a written agreement which has been delivered to MidSouth and MidSouth Bank. 3.19 Environmental Matters. (a) (i) Holding and each member of Holding's consolidated group has obtained all material permits, licenses and other authorizations that are required to be obtained by it under any applicable Environmental Law Requirements (as hereinafter defined) in connection with the operation of its businesses and ownership of its properties (collectively, the "Subject Properties"), including without limitation properties acquired by foreclosure or in settlement of loans; (ii) Holding and each member of its consolidated group is in compliance in all material respects with all terms and conditions of such permits, licenses and authorizations and with all applicable Environmental Law Requirements; (iii)There are no past or present events, conditions, circumstances, activities or plans by any member of Holding's consolidated group related in any manner to Holding or any member of its consolidated group or the Subject Properties that did or would, in any material respect, violate or prevent compliance or continued compliance with any of the Environmental Law Requirements, or give rise to any Environmental Liability, as hereinafter defined; (iv) There is no civil, criminal or administrative action, suit, demand, claim, order, judgment, hearing, notice or demand letter, notice of violation, investigation or proceeding pending or, to the knowledge of any executive officer of Holding or Bank, threatened by any person against Holding or any member of its consolidated group, or any prior owner of any of the Subject Properties and relating to the Subject Properties, and relating in any way to any Environmental Law Requirement or seeking to impose any Environmental Liability; and (v) No member of Holding's consolidated group is subject to or responsible for any material Environmental Liability that is not set forth and adequately reserved against on the Latest Balance Sheet. (b) "Environmental Law Requirement" means all applicable statutes, regulations, rules, ordinances, codes, licenses, permits, orders, approvals, plans, authorizations, concessions, franchises, and similar items, of all governmental agencies, departments, commissions, boards, bureaus, or instrumentalities of the United States, states and political subdivisions thereof and all applicable judicial, administrative, and regulatory decrees, judgments and orders relating to the protection of human health or the environment, including without limitation: (A) all requirements, including but not limited to those (i) pertaining to reporting, licensing, permitting, investigation, and remediation of emissions, discharges, releases, or threatened releases of Hazardous Materials (as such term is defined below), chemical substances, pollutants, contaminants, or hazardous or toxic substances, materials or wastes whether solid, liquid, or gaseous in nature, into the air, surface water, groundwater, or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of Hazardous Materials, chemical substances, pollutants, contaminants, or hazardous or toxic substances, materials or wastes, whether solid, liquid, or gaseous in nature; (B) all requirements pertaining to protection of the health and safety of employees or the public; and (C) all requirements pertaining to the (i) drilling, production, and abandonment of oil and gas wells, (ii) the transportation of produced oil and gas, and (iii) the remediation of sites related to that drilling, production or transportation. (c) "Hazardous Materials" shall mean: (A) Any "hazardous substance" as defined by either the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 USC Section 9601, et seq.) ("CERCLA") as amended from time to time, or regulations promulgated thereunder; (B) asbestos; (C) polychlorinated biphenyls; (D) any "regulated substance" as defined by 40 C.F.R. Section 280.12, or La. Admin. Code 33:XI. 103; (E) any naturally occurring radioactive material ("NORM"), as defined by La. Admin. Code 33:XV, Chapter 14, as amended from time to time, irrespective of whether the NORM is located in Louisiana or another jurisdiction; (F) any non-hazardous oilfield wastes ("NOW") defined under La. R.S. 30:1, et seq., and regulations promulgated thereunder, irrespective of whether those wastes are located in Louisiana or another jurisdiction; (G) any substance the presence of which on the Subject Properties is prohibited by any lawful rules and regulations of legally constituted authorities from time to time in force and effect relating to the Subject Properties; and (H) any other substance which by any such rule or regulation requires special handling in its collection, storage, treatment or disposal. (d) "Environmental Liability" shall mean (i) any liability or obligation (of any kind whatsoever, whether absolute or contingent, accrued or unaccrued, known or unknown) arising under any Environmental Law Requirement, or (ii) any liability or obligation (of any kind whatsoever, whether absolute or contingent, accrued or unaccrued, known or unknown) under any other theory of law or equity (including without limitation any liability for personal injury, property damage or remediation) that results from, or is based upon or related to, the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling, or the emission, discharge, release or threatened release into the environment, of any Hazardous Materials, pollutant, contaminant, chemical, or industrial, toxic or hazardous substance or waste. 3.20 Community Reinvestment Act; Fair Lending. Bank has complied in all material respects with the provisions of the Community Reinvestment Act ("CRA") and the rules and regulations thereunder, has a CRA rating of not less than "satisfactory", and has received no material criticism from regulators with respect to discriminatory lending practices. 3.21 Accuracy of Statements. No warranty or representation made or to be made by any member of Holding's consolidated group in this Agreement, and no information furnished by any such member pursuant to this Agreement, contains or will contain, as of the date of this Agreement, the effective date of the Registration Statement (as defined in subsection 5.16 hereof) and the Closing Date, an untrue statement of a material fact or an omission of a material fact necessary to make the statements contained herein and therein, in light of the circumstances in which they are made, not misleading. SECTION 4 Representations and Warranties of MidSouth and MidSouth Bank MidSouth and MidSouth Bank represent and warrant to Holding and Bank that, except as set forth in the corresponding subsection of the Schedule of Exceptions that MidSouth has delivered to Holding: 4.1 Organization and Qualification. MidSouth's "consolidated group" consists of MidSouth and MidSouth Bank. MidSouth is a corporation duly organized and validly existing under the laws of the State of Louisiana and is a bank holding company within the meaning of the Bank Holding Company Act. MidSouth Bank is a national banking association duly organized and validly existing under the laws of the United States. Each of MidSouth and MidSouth Bank has all requisite corporate power and authority to own and lease its property and to carry on its business as it is currently being conducted and is qualified and in good standing as a foreign corporation in all jurisdictions in which the failure to so qualify would have a material adverse effect on its financial condition, results of operations, business or prospects. 4.2 Capital Stock; Other Interests. The authorized capital stock of MidSouth consisted at September 30, 1994, of 5,000,000 shares of common stock, $0.10 par value per share, of which at such date 709,687 shares were issued and outstanding and no shares were held in its treasury; and 5,000,000 shares of preferred stock, no par value per share, of which at such date no shares were issued and outstanding and no shares were held in its treasury. All issued and outstanding shares of capital stock of each member of MidSouth's consolidated group have been duly authorized and are validly issued, fully paid and (except as provided in 12 U.S.C. 62) non-assessable, and all of the outstanding shares of each such member (other than MidSouth) are owned by MidSouth, free and clear of all liens, charges, security interests, mortgages, pledges and other encumbrances. Except with respect to stock options pursuant to MidSouth's stock option plan, the shares of Preferred Stock to be issued pursuant to this Agreement and the shares of MidSouth Common Stock that may be issued upon conversion of the Preferred Stock, as of the date of this Agreement no member of MidSouth's consolidated group has outstanding any stock options or other rights to acquire any shares of its capital stock or any security convertible into such shares, or has any obligation or commitment to issue, sell or deliver any of the foregoing or any shares of its capital stock. The capital stock of each member of MidSouth's consolidated group has been issued in compliance with all legal requirements and in compliance with any pre-preemptive or similar rights. No member of MidSouth's consolidated group has a subsidiary or direct or indirect ownership interest exceeding 1% in any corporation, partnership or other business entity except for interests in any other such member. 4.3 Corporate Authorization; No Conflicts. Subject to the approval of this Agreement by the shareholders of MidSouth in accordance with the BCL or the rules of the American Stock Exchange, if required, and to the approval of this Agreement and the Bank Merger Agreement by MidSouth as sole shareholder of MidSouth Bank, all corporate acts and other proceedings required of MidSouth and MidSouth Bank for the due and valid authorization, execution, delivery and performance of this Agreement and the Bank Merger Agreement and consummation of the Mergers have been validly and appropriately taken. Subject to such shareholder approvals and to such regulatory approvals as are required by law, this Agreement and the Bank Merger Agreement are legal, valid and binding obligations of MidSouth and MidSouth Bank, as the case may be, and are enforceable against them in accordance with the respective terms of such instruments, except that enforcement may be limited by bankruptcy, reorganization, insolvency and other similar laws and court decisions relating to or affecting the enforcement of creditors' rights generally and by general equitable principles. With respect to each of MidSouth and MidSouth Bank, neither the execution, delivery or performance of this Agreement or the Bank Merger Agreement, nor the consummation of the transactions contemplated hereby or thereby will (i) violate, conflict with, or result in a breach of any provision of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination of or accelerate the performance required by, or (iv) result in the creation of any lien, security interest, charge or encumbrance upon any of its properties or assets under, any of the terms, conditions or provisions of its articles of incorporation or by-laws or any material note, bond, mortgage, indenture, deed of trust, lease, license, agreement or other instrument or obligation to or by which it or any of its assets is bound; or violate any order, writ, injunction, decree, statute, rule or regulation of any governmental body applicable to it or any of its assets. 4.4 MidSouth Corporate Documents. MidSouth and MidSouth Bank have delivered to Holding true and correct copies of their articles of incorporation or association, as amended, and by- laws, as amended. 4.5 Financial Statements, Reports and Proxy Statements. MidSouth has delivered to Holding true and complete copies of (a) the consolidated balance sheets as of December 31, 1993 and 1992 of MidSouth and its subsidiaries, the related consolidated statements of income, shareholders' equity and changes in financial position for the respective years then ended, the related notes thereto, and the report of its independent public accountants with respect thereto (collectively, the "Financial Statements"), (b) the unaudited consolidated balance sheets as of September 30, 1994 and September 30, 1993 of MidSouth and its subsidiaries, and the related unaudited statements of income, shareholders' equity and changes in financial position for the nine-month periods then ended (collectively, the "Interim Financial Statements"), (c) the annual report to the Board of Governors of the Federal Reserve System ("Federal Reserve Board") for the year ended December 31, 1993, of each member of MidSouth's consolidated group required to file such reports, (d) all call or similar reports made to the OCC or the Federal Reserve Board, as the case may be, since December 31, 1991, of each member of MidSouth's consolidated group required to file such reports, (e) MidSouth's Annual Report to Shareholders for 1993 and all subsequent Quarterly Reports to Shareholders, and (f) all proxy statements or other reports disseminated to MidSouth's shareholders or the shareholders of any of its subsidiaries at any time since December 31, 1991. The Financial Statements and the Interim Financial Statements have been prepared in conformity with generally accepted accounting principles applied on a basis consistent with prior periods, and present fairly, in conformity with generally accepted accounting principles, except as disclosed therein or in the accountant's report accompanying such statement or statements, the consolidated results of operations of MidSouth's consolidated group for the respective periods covered thereby and the consolidated financial condition of its consolidated group as of the respective dates thereof. All call or similar reports referred to above have been filed on the appropriate form and prepared in accordance with such form's instructions and the applicable rules and regulations of the regulating federal agency. No member of MidSouth's consolidated group has, nor are any of any such member's assets subject to, any material liability, commitment, indebtedness or obligation (of any kind whatsoever, whether absolute, accrued, contingent, known, unknown, matured or unmatured) which is not reflected and adequately reserved against in the latest balance sheet forming part of the Interim Financial Statements (the "Latest Balance Sheet"). The Financial Statements and Interim Financial Statements are supported by and consistent with detailed trial balances of investment securities, loans and loan commitments, depositors' accounts and cash balances on deposit with other institutions, copies of which have been made available to Holding. 4.6 Loan and Investment Portfolios. All loans, discounts and financing leases (in which a member of MidSouth's consolidated group is lessor) reflected on the Latest Balance Sheet (a) have been made for good, valuable and adequate consideration in the ordinary course of business of its consolidated group, (b) are evidenced by notes, agreements or other evidences of indebtedness which are true, genuine and what they purport to be and (c) to the extent secured, have been secured by valid liens and security interests which have been perfected. 4.7 Adequacy of Loan Loss Reserves. Each of the allowances for losses on loans, financing leases and other real estate owned shown on the Latest Balance Sheet is adequate in accordance with applicable regulatory guidelines and generally accepted accounting principles in all material respects, and there are no facts or circumstances known to any executive officer of MidSouth or MidSouth Bank which are likely to require in accordance with applicable regulatory guidelines or generally accepted accounting principles a future material increase in any provisions for such losses or a material decrease in any of the allowances therefor reflected in the Latest Balance Sheet. Each of the allowances for losses on loans, financing leases and other real estate owned reflected on the books of MidSouth's consolidated group at all times from and after the date of the Latest Balance Sheet has been and will be adequate in accordance with applicable regulatory guidelines and generally accepted accounting principles in all material respects. 4.8 Examination Reports. To the extent permitted by applicable law, MidSouth has made available to Holding true and correct copies of all examination reports with respect to each member of MidSouth's consolidated group made by any federal or state bank or bank holding company regulatory authority since December 31, 1991. 4.9 Absence of Certain Changes or Events. Since the date of the Latest Balance Sheet, there has been no event or condition of any character (whether actual, threatened or contemplated) that has had, or can reasonably be anticipated to have, a material adverse effect on the financial condition, results of operations, business or prospects of any member of MidSouth's consolidated group. No such member has, since the date of the Latest Balance Sheet: (a) borrowed any money except for deposits or, except in the ordinary course of business consistent with past practices, (i) loaned any money or pledged any of its credit in connection with any aspect of its business, (ii) mortgaged or otherwise subjected to any lien, encumbrance or other liability any of its assets, (iii) sold, assigned or transferred any of its assets in excess of $150,000 in the aggregate, or (iv) incurred any material liability, commitment, indebtedness or obligation (of any kind whatsoever, whether accrued, contingent, known, unknown, matured or unmatured); (b) suffered any material damage, destruction or loss, whether or not covered by insurance; (c) experienced any material change in asset concentrations as to customers or industries or in the nature and source of its liabilities or in the mix of interest-bearing versus non-interest bearing deposits; (d) received notice or had knowledge or reasonable grounds to believe that any material labor unrest exists among any of its employees or that any group, organization or union has attempted to organize any of its employees; (e) received notice or had knowledge or reasonable grounds to believe that any of its substantial customers has terminated or intends to terminate such customer's relationship with it; (f) failed to operate its business in the ordinary course consistent with past practices, or failed to preserve its business organization intact or to preserve the goodwill of its customers and others with whom it has business relations; (g) incurred any material loss except for losses adequately reserved against on the date of this Agreement or waived any material right in connection with any aspect of its business, whether or not in the ordinary course of business; (h) cancelled any debt owed to it, or cancelled any of its claims, or paid any of its noncurrent obligations or liabilities; (i) made any capital expenditure or capital addition or betterment in excess of $150,000 each; (j) changed any accounting practice followed or employed in preparing the Financial Statements or Interim Financial Statements; (k) made any loan, given any discount or entered into any financing lease which has not been (i) made for good, valuable and adequate consideration in the ordinary course of business, (ii) evidenced by notes or other evidences of indebtedness which are true, genuine and what they purport to be, and (iii) fully reserved against in an amount sufficient to provide for all charge-offs reasonably anticipated in the ordinary course of business after taking into account all recoveries reasonably anticipated in the ordinary course of business; or (l) entered into any agreement, contract or commitment to do any of the foregoing. 4.10 Taxes. Each member of MidSouth's consolidated group has timely filed all federal, state, foreign and local income, franchise, excise, real and personal property, employment and other tax returns, tax information returns and reports required to be filed, has paid all taxes, interest payments and penalties which have become due, has made (and will make) adequate provision for the payment of all taxes accruable for all periods ending on or before the date of this Agreement (and the Closing Date) to any city, parish, state, foreign country, the United States or any other taxing authority, and is not delinquent in the payment of any tax or governmental charge of any nature. The consolidated federal income tax returns of MidSouth's consolidated group have never been audited. No audit, examination or investigation is presently being conducted or, to the best of such member's knowledge, threatened, by any taxing authority, no material unpaid tax deficiencies or additional liabilities of any sort have been proposed by any governmental representative, and no agreements for extension of time for the assessment of any tax have been entered into by or on behalf of any member of MidSouth's consolidated group. Each such member has withheld from its employees (and timely paid to the appropriate governmental entity) proper and accurate amounts for all periods in compliance in all material respects with all tax withholding provisions of applicable federal, state, foreign and local laws (including, without limitation, income, social security and employment tax withholding for all forms of compensation). 4.11 Title to Assets. (a) On the date of the Latest Balance Sheet, each member of MidSouth's consolidated group had and, except with respect to assets disposed of for adequate consideration in the ordinary course of business since such date, now has, good and merchantable title to all real property and good and merchantable title to all other properties and assets reflected on the Latest Balance Sheet, free and clear of all mortgages, liens, pledges, restrictions, security interests, charges and encumbrances of any nature except for (i) mortgages and encumbrances which secure indebtedness which is properly reflected in the Latest Balance Sheet; (ii) liens for taxes accrued but not yet payable; (iii) liens arising as a matter of law in the ordinary course of business with respect to obligations incurred after the date of the Latest Balance Sheet, provided that the obligations secured by such liens are not delinquent or are being contested in good faith; (iv) such imperfections of title and encumbrances, if any, as do not materially detract from the value or interfere with the present use of any of such properties or assets or the potential sale of any of such owned properties or assets; and (v) capital leases and leases, if any, to third parties for fair and adequate consideration. Each member of MidSouth's consolidated group owns, or has valid leasehold interests in, all material properties and assets used in the conduct of its business. Any real property and other material assets held under lease by any such member are held under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use of such property by such member. (b) With respect to each lease of any real property or a material amount of personal property to which any member of MidSouth's consolidated group is a party, except for financing leases in which a member of such consolidated group is lessor, (i) such lease is in full force and effect in accordance with its terms; (ii) all rents and other monetary amounts that have become due and payable thereunder have been paid; (iii) there exists no default, or event, occurrence, condition or act, which with the giving of notice, the lapse of time or the happening of any further event, occurrence, condition or act would become a default under such lease; and (iv) neither the Company Merger nor the Bank Merger will constitute a default or a cause for termination or modification of such lease. (c) No member of MidSouth's consolidated group has any legal obligation, absolute or contingent, to any other person to sell or otherwise dispose of any substantial part of its assets; or to sell or dispose of any of its assets except in the ordinary course of business consistent with past practices. 4.12 Litigation, Pending Proceedings and Compliance with Laws. (a) Except as described in the list referred to in subparagraph (e) below, there are no claims of any kind or any actions, suits, proceedings, arbitrations or investigations pending or threatened, nor does any member of MidSouth's consolidated group have knowledge of a basis for any claim, in any court or before any governmental agency or instrumentality or arbitration panel or otherwise, against any member of MidSouth's consolidated group. (b) Each member of MidSouth's consolidated group has complied with and is not in default in any material respect under (and has not been charged or threatened with or come under investigation with respect to any charge concerning any material violation of any provision of) any federal, state or local law, regulation, ordinance, rule or order (whether executive, judicial, legislative or administrative) or any order, writ, injunction or decree of any court, agency or instrumentality. (c) There are no material uncured violations, or violations with respect to which material refunds or restitution may be required, cited in any compliance report to any member of MidSouth's consolidated group as a result of examination by any bank or bank holding company regulatory authority. (d) No member of MidSouth's consolidated group is subject to any written agreement, memorandum or order with or by any bank or bank holding company regulatory authority. (e) The subsection of the Schedule of Exceptions that corresponds to this subsection lists each claim, action, suit, proceeding, arbitration, or investigation, pending or known to be threatened, in which any material claim or demand is made or threatened to be made against any member of MidSouth's consolidated group. 4.13 Employee Benefit Plans. With respect to any employee benefit plans covered by ERISA ("Erisa Plans") all contributions required to be made by MidSouth or MidSouth Bank have been made, all insurance premiums required have been paid and each of the ERISA Plans has been maintained and administered in all material respects in compliance with its terms, the provisions of ERISA and all other applicable laws, and, where applicable, the provisions of the Internal Revenue Code of 1986, as amended (the "Code"). With respect to each of the ERISA Plans, no transaction has occurred that could result in the imposition of a tax or penalty on prohibited transactions or party-in-interest transactions pursuant to Section 4975 of the Code or Section 502(i) of ERISA; there is no matter relating to any of the ERISA Plans pending or, to the knowledge of Holding or Bank, threatened, nor, to the knowledge of MidSouth or MidSouth Bank, are there any facts or circumstances existing that could lead to (other than routine filings such as qualification determination filings) proceedings before, or administrative actions by, any governmental agency; there are no actions, suits or claims pending or, to the knowledge of MidSouth or MidSouth Bank, threatened (including, without limitation, breach of fiduciary duty actions, but excluding routine uncontested claims for benefits) against any of the ERISA Plans or the assets thereof, where applicable. MidSouth and MidSouth Bank have complied in all material respects with the reporting and disclosure requirements of ERISA and the Code. None of the ERISA Plans are multi-employer plans within the meaning of Section 3(37) of ERISA. Except as set forth on the Schedule of Exceptions, a favorable determination letter has been issued by the Internal Revenue Service with respect to each ERISA Plan that is intended to be qualified under Section 401(a) of the Code, the Internal Revenue Service has taken no action to revoke any such letter and nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification. Neither MidSouth nor MidSouth Bank has sponsored, maintained or made contributions to any plan, fund or arrangement subject to Title IV of ERISA or the requirements of Section 412 of the Code or providing for post-retirement medical benefits. (b) All group health plans of MidSouth and MidSouth Bank to which Section 4980B(f) of the Code or Section 601 of ERISA applies are in full compliance in all material respects with the continuation coverage requirements of Section 4980B(f) of the Code and Section 601 of ERISA and any prior violations of such Sections have been cured prior to the date hereof. (c) Except as contemplated by Section 5.15 hereof, the consummation of the transactions contemplated hereunder will not (i) result in the imposition of any obligation or liability on Holding, Bank, MidSouth or MidSouth Bank to any employee benefit plan, fund or arrangement of, or to any employee or former employee of, MidSouth or MidSouth Bank, or (ii) result in a prohibited transaction as such term is used in Code Section 4975 or ERISA Section 406. (d) Each plan, fund or arrangement previously sponsored or maintained by MidSouth or MidSouth Bank or to which MidSouth or MidSouth Bank previously made contributions which has been terminated by MidSouth or MidSouth Bank was terminated in accordance with ERISA, the Code and the terms of such plan, fund or arrangement and no event has occurred and no condition exists that would subject Holding, Bank, MidSouth or MidSouth Bank to any tax, penalty, fine or other liability as a result of, directly or indirectly, the termination of such plan, fund or arrangement. 4.14 Insurance Policies. Each member of MidSouth's consolidated group maintains in force insurance policies and bonds in such amounts and against such liabilities and hazards as are considered adequate. No member of Holding's consolidated group is now liable, nor will any such member become liable, for any material retroactive premium adjustment. All policies are valid and enforceable and in full force and effect, and no member of MidSouth's consolidated group has received any notice of a material premium increase or cancellation with respect to any of its insurance policies or bonds. Within the last three years, no member of MidSouth's consolidated group has been refused any insurance coverage sought or applied for, and no such member has reason to believe that its existing insurance coverage cannot be renewed as and when the same shall expire, upon terms and conditions as favorable as those presently in effect. 4.15 Agreements. No member of MidSouth's consolidated group is a party to: (a) any collective bargaining agreement; (b) any obligation of guaranty or indemnification except, if entered into in the ordinary course of business with respect to customers or any member of MidSouth's consolidated group, letters of credit, guaranties of endorsements and guaranties of signatures; (c) any agreement, contract or commitment which is or may be materially adverse to the financial condition, results of operations, business or prospects of any member of MidSouth's consolidated group; or (d) any agreement, contract or commitment containing any covenant limiting the freedom of any member of MidSouth's consolidated group to engage in any line of business or to compete with any person. No member of MidSouth's consolidated group has in any material respect breached, nor is there any pending or threatened claims that it has materially breached, any of the terms or conditions of any of its agreements, contracts or commitments. 4.16 Licenses, Franchises and Governmental Authorizations. Each member of MidSouth's consolidated group possesses all licenses, franchises, permits and other governmental authorizations necessary for the continued conduct of its business without interference or interruption. The deposits of each such member are insured by the FDIC to the extent provided by applicable law, and there are no pending or threatened proceedings to revoke or modify that insurance or for relief under 12 U.S.C. Section 1818. 4.17 Environmental Matters. (a) (i) MidSouth and each member of MidSouth's consolidated group has obtained all material permits, licenses and other authorizations that are required to be obtained by it under any applicable Environmental Law Requirements (as hereinafter defined) in connection with the operation of its businesses and ownership of its properties (collectively, the "Subject Properties"), including without limitation properties acquired by foreclosure or in settlement of loans; (ii) MidSouth and each member of its consolidated group is in compliance in all material respects with all terms and conditions of such permits, licenses and authorizations and with all applicable Environmental Law Requirements; (iii)There are no past or present events, conditions, circumstances, activities or plans by any member of MidSouth's consolidated group related in any manner to MidSouth or any member of its consolidated group or the Subject Properties that did or would, in any material respect, violate or prevent compliance or continued compliance with any of the Environmental Law Requirements, or give rise to any Environmental Liability, as hereinafter defined; (iv) There is no civil, criminal or administrative action, suit, demand, claim, order, judgment, hearing, notice or demand letter, notice of violation, investigation or proceeding pending or, to the knowledge of any executive officer of MidSouth or MidSouth Bank, threatened by any person against MidSouth or any member of its consolidated group, or any prior owner of any of the Subject Properties and relating to the Subject Properties, and relating in any way to any Environmental Law Requirement or seeking to impose any Environmental Liability; and (v) No member of MidSouth's consolidated group is subject to or responsible for any material Environmental Liability that is not set forth and adequately reserved against on the Latest Balance Sheet. (b) "Environmental Law Requirement" means all applicable statutes, regulations, rules, ordinances, codes, licenses, permits, orders, approvals, plans, authorizations, concessions, franchises, and similar items, of all governmental agencies, departments, commissions, boards, bureaus, or instrumentalities of the United States, states and political subdivisions thereof and all applicable judicial, administrative, and regulatory decrees, judgments and orders relating to the protection of human health or the environment, including without limitation: (A) all requirements, including but not limited to those (i) pertaining to reporting, licensing, permitting, investigation, and remediation of emissions, discharges, releases, or threatened releases of Hazardous Materials (as such term is defined below), chemical substances, pollutants, contaminants, or hazardous or toxic substances, materials or wastes whether solid, liquid, or gaseous in nature, into the air, surface water, groundwater, or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of Hazardous Materials, chemical substances, pollutants, contaminants, or hazardous or toxic substances, materials or wastes, whether solid, liquid, or gaseous in nature; (B) all requirements pertaining to protection of the health and safety of employees or the public; and (C) all requirements pertaining to the (i) drilling, production, and abandonment of oil and gas wells, (ii) the transportation of produced oil and gas, and (iii) the remediation of sites related to that drilling, production or transportation. (c) "Hazardous Materials" shall mean: (A) Any "hazardous substance" as defined by either the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 USC Section 9601, et seq.) ("CERCLA") as amended from time to time, or re- gulations promulgated thereunder; (B) asbestos; (C) polychlorinated biphenyls; (D) any "regulated substance" as defined by 40 C.F.R. Section 280.12, or La. Admin. Code 33:XI.103; (E) any naturally occurring radioactive material ("NORM"), as defined by La. Admin. Code 33:XV, Chapter 14, as amended from time to time, irrespective of whether the NORM is located in Louisiana or another jurisdiction; (F) any non-hazardous oilfield wastes ("NOW") defined under La. R.S. 30 :1, et seq., and regulations promulgated thereunder, irrespec- tive of whether those wastes are located in Louisiana or another jurisdiction; (G) any substance the presence of which on the Subject Properties is prohibited by any lawful rules and re- gulations of legally constituted authorities from time to time in force and effect relating to the Subject Properties; and (H) any other substance which by any such rule or regulation requires special handling in its collection, storage, treatment or disposal. (d) "Environmental Liability" shall mean (i) any liability or obligation (of any kind whatsoever, whether absolute or contingent, accrued or unaccrued, known or unknown) arising under any Environmental Law Requirement, or (ii) any liability or obligation (of any kind whatsoever, whether absolute or contingent, accrued or unaccrued, known or unknown) under any other theory of law or equity (including without limitation any liability for personal injury, property damage or remediation) that results from, or is based upon or related to, the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling, or the emission, discharge, release or threatened release into the environment, of any Hazardous Materials, pollutant, contaminant, chemical, or industrial, toxic or hazardous substance or waste. 4.18 Community Reinvestment Act; Fair Lending. MidSouth Bank has complied in all material respects with the provisions of the Community Reinvestment Act ("CRA") and the rules and regulations thereunder, has a CRA rating of not less than "satisfactory", and has received no material criticism from regulators with respect to discriminatory lending practices. 4.19 Legality of MidSouth Securities. All shares of Preferred Stock to be issued pursuant to this Agreement have been duly authorized and, when issued pursuant to this Agreement will be validly issued, fully paid and non-assessable. 4.20 Brokers' or Finders' Fees. No agent, broker, investment banker, investment or financial advisor or other person acting on behalf of MidSouth or MidSouth Bank is entitled to any commission, broker's or finder's fee from any of the parties hereto in connection with any of the transactions contemplated by this Agreement. 4.21 Accuracy of Statements. No warranty or representation made or to be made by any member of Holding's consolidated group in this Agreement, and no information furnished by any such member pursuant to this Agreement, contains or will contain, as of the date of this Agreement, the effective date of the Registration Statement (as defined in subsection 5.16 hereof) and the Closing Date, an untrue statement of a material fact or an omission of a material fact necessary to make the statements contained herein and therein, in light of the circumstances in which they are made, not misleading. SECTION 5 Covenants and Conduct of Parties Prior to the Effective Date The parties covenant and agree with each other as follows: 5.1 Cooperation and Best Efforts. Each of the parties will cooperate with the other parties and use its best efforts to (a) procure all necessary consents and approvals, (b) complete all necessary filings, registrations and certificates, (c) satisfy all requirements prescribed by law for, and all conditions set forth in this Agreement to, the consummation of the Mergers and the transactions contemplated hereby and by the Bank Merger Agreement, and (d) effect the transactions contemplated by this Agreement and the Bank Merger Agreement at the earliest practicable date. 5.2 Information for, and Preparation of, Proxy Statement. (a) Each of the parties will cooperate in the preparation of the Registration Statement referred to in subsection 5.16 and a proxy statement of Holding (the "Proxy Statement"), which complies with the requirements of the Securities Act of 1933 (the "Securities Act"), for the purpose of submitting this Agreement and the transactions contemplated hereby to MidSouth's and Holding's shareholders for approval. Each of the parties will as promptly as practicable after the date hereof furnish all such data and information relating to it and its subsidiaries as any of the other parties may reasonably request for the purpose of including such data and information in the Proxy Statement and the Registration Statement. (b) MidSouth will indemnify Holding and Bank, each of their directors and officers, and each controlling person of Holding within the meaning of the Securities Act against any claims insofar as they arise out of or are based upon an untrue statement or omission or alleged untrue statement or omission of material fact in the Registration Statement or the Proxy Statement, and will reimburse each such person for expenses reasonably incurred in connection with investigating or defending any such claim; provided, that MidSouth will not be liable to the extent that any such claim arises out of or is based upon any untrue statement or omission or alleged untrue statement or omission made in reliance on and in conformity with information furnished to MidSouth by Holding. (c) Any indemnified person wishing to claim indemnification under paragraph (b), upon learning of any claim, shall promptly notify MidSouth thereof. MidSouth shall have the right to assume the defense thereof and shall not be liable for any expenses subsequently incurred by such indemnified person in connection with the defense thereof, except that if MidSouth does not assume such defense, or counsel for the indemnified person advises in writing that there are material substantive issues that raise conflicts of interest between MidSouth and the indemnified person, the indemnified person may retain counsel satisfactory to him, and MidSouth shall pay all reasonable fees and expenses of such counsel, provided that (i) MidSouth shall be obligated to pay for only one counsel for all indemnified persons in any jurisdiction, (ii) the indemnified persons will cooperate in the defense of any such claim, and (iii) MidSouth shall not be liable for any settlement effected without its prior written consent. 5.3 Approval of Bank Merger Agreement. MidSouth, as the sole shareholder of MidSouth Bank, and Holding, as the sole shareholder of Bank, shall take all action necessary to effect shareholder approval of the Bank Merger Agreement. 5.4 Press Releases. MidSouth and Holding will cooperate with each other in the preparation of any press releases announcing the execution of this Agreement or the consummation of the transactions contemplated hereby. Without the prior written consent of the chief executive officer of MidSouth, no member of Holding's consolidated group will issue any press release or other written statement for general circulation relating to the transactions contemplated hereby, except as may otherwise be required by law. 5.5 [LEFT BLANK INTENTIONALLY] 5.6 Investigations; Planning. The parties shall continue to provide to each other and to their authorized representatives full access during all reasonable times to their premises, properties, books and records (including, without limitation, all corporate minutes and stock transfer records), and to furnish such financial and operating data and other information of any kind respecting their business and properties as the others shall from time to time reasonably request. Any investigation shall be conducted in a manner which does not unreasonably interfere with the operation of the business of a party. Each member of Holding's consolidated group agrees to cooperate with MidSouth and MidSouth Bank in connection with planning for the efficient and orderly combination of the parties and the operation of MidSouth and MidSouth Bank after consummation of the Mergers. In the event of termination of this Agreement prior to the Effective Date, each party shall return, without retaining copies thereof, all confidential or non-public documents, work papers and other materials obtained from the others in connection with the transactions contemplated hereby and, for a period of not less than two years following such termination, shall keep such information confidential, not disclose such information to any other person or entity except as may be required by legal process, and not use such information in connection with its business, in each case unless and until such information shall come into the public domain through no fault of such party. 5.7 Preservation of Business. Each party will use its best efforts to preserve the possession and control of all of its assets other than those consumed or disposed of for value in the ordinary course of business, to preserve the goodwill of customers and others having business relations with it and to do nothing knowingly to impair its ability to keep and preserve its business as it exists on the date of this Agreement. 5.8 Conduct of Business in the Ordinary Course. Each member of Holding's consolidated group shall conduct its business only in the ordinary course and, except as otherwise provided herein, it shall not, without the prior written consent of the chief executive officer of MidSouth or his duly authorized designee: (a) declare, set aside, increase or pay any dividend, or declare or make any distribution on, or directly or indirectly combine, redeem, reclassify, purchase, or otherwise acquire, any shares of its capital stock or authorize the creation or issuance of or issue any additional shares of its capital stock or any securities or obligations convertible into or exchangeable for its capital stock, provided that this subparagraph shall not apply to prevent dividends or distributions from any member of Holding's consolidated group to any other member of such consolidated group; (b) amend its articles of incorporation or association or by-laws or adopt or amend any resolution or agreement concerning indemnification of its directors or officers; (c) enter into or modify any agreement so as to require the payment, conditionally or otherwise, of any salary, bonus, extra compensation, pension or severance payment to any of its present or former directors, officers or employees or increase the compensation (including salaries, fees, bonuses, profit sharing, incentive, pension, retirement or other similar benefits and payments) of any such person except for budgeted bonuses or other incentive payments in amounts previously disclosed to the Chief Executive office of MidSouth; (d) except in the ordinary course of business consistent with past practices, place or suffer to exist on any of its assets or properties any mortgage, pledge, lien, charge or other encumbrance, except those of the character described in subsection 3.10 hereof, or cancel any material indebtedness owing to it or any claims which it may have possessed, or waive any right of substantial value or discharge or satisfy any material noncurrent liability; (e) merge or consolidate with another entity, or sell or otherwise dispose of a substantial part of its assets or, except in the ordinary course of business consistent with past practices, sell any of its assets; (f) commit or omit to do any act which act or omission would cause a breach of any covenant of Holding or Bank contained in this Agreement or would cause any representation or warranty of Holding or Bank contained in this Agreement to become untrue, as if each such representation and warranty were continuously made from and after the date hereof; (g) violate in any material respect any law, statute, rule, governmental regulation or order; (h) fail to maintain its books, accounts and records in the usual manner on a basis consistent with that heretofore employed; (i) fail to pay, or to make adequate provision for the payment of, all taxes, interest payments and penalties due and payable (and/or accruable for all periods up to the Effective Date, including that portion of its fiscal year to and including the Effective Date) to any city, parish, state, foreign country, the United States or any other taxing authority, except those being contested in good faith by appropriate proceedings and for which sufficient reserves have been established; (j) acquire or dispose of investment securities having an aggregate market value greater than 10% of the aggregate book value of its investment securities portfolio on the date of the Latest Balance Sheet; acquire any investment securities that are less than investment grade; or acquire or dispose of investment securities except in the ordinary course of business; (k) enter into any new line of business; (l) charge off (except as may otherwise be required by law or by regulatory authorities or by generally accepted accounting principles consistently applied) or sell (except for a price not less than the book value thereof) any of the its portfolio of loans, discounts or financing leases; or sell any asset held as other real estate or other foreclosed assets for an amount less than 100% of its book value at the date of the Latest Balance Sheet; or sell any asset held as other real estate or other foreclosed assets that had a book value at the date of the Latest Balance Sheet in excess of $25,000; or (m) make any extension of credit which, when added to all other extensions of credit to the borrower and its affiliates, would exceed $100,000 or, unless reasonable prior notice is provided to the chief executive officer of MidSouth or his authorized designee, commit or otherwise become obligated to make any extension of credit in excess of $50,000. 5.9 Additional Information. Each party will provide the other (a) with prompt written notice of any material adverse change in the financial condition, results of operations, business or prospects of any member of its consolidated group, (b) as soon as they become available, copies of any financial statements, reports and other documents of the type referred to in Section 3 or 4 with respect to each member of its consolidated group, and (c) promptly upon its dissemination, any report disseminated to its shareholders. 5.10 Holding Shareholder Approval. Holding's Board of Directors shall submit this Agreement to its shareholders for approval in accordance with the BCL at a special meeting of shareholders duly called and convened for that purpose as soon as practicable. 5.11 Loan Policy. No member of Holding's consolidated group will make any loans, or enter into any commitments to make loans, which vary from its written loan policies, a true and correct copy of which loan policies have been provided to MidSouth, provided that this covenant shall not prohibit Bank from extending or renewing credit or loans in connection with the workout or renegotiation of loans currently in its loan portfolio. 5.12 Prohibited Negotiations. (a) Prior to the Effective Date or until the termination of this Agreement, no member of Holding's consolidated group shall, without the prior approval of the chief executive officer of MidSouth or his designee, directly or indirectly, solicit, initiate or encourage inquiries or proposals with respect to, or furnish any information relating to, or participate in any negotiations or discussions concerning, any transaction of the type that is referred to in clauses (B)(i)(ii) and (iii) of subparagraph (e) of subsection 7.01 of this Agreement (and in no event will any such information be supplied except pursuant to a confidentiality agreement), and each such member shall instruct its officers, directors, agents and affiliates to refrain from doing any of the above, and will notify MidSouth immediately if any such inquiries or proposals are received by, any such information is requested from, or any such negotiations or discussions are sought to be initiated with, it or any of its officers directors, agents and affiliates; provided, however, that nothing contained herein shall be deemed to prohibit any officer or director of Holding or Bank from taking any action that in the written opinion of counsel is required by law or is required to discharge his fiduciary duties to Holding's consolidated group and its shareholders. (b) Neither the Board of Directors of Holding nor any committee thereof shall (i) withdraw or modify, or propose to withdraw or modify, in a manner adverse to MidSouth, the approval or recommendation to shareholders of this Agreement or the Mergers, (ii) approve or recommend, or propose to recommend, any takeover proposal with respect to Holding or Bank, except such action that is required in the written opinion of its counsel to discharge his or her fiduciary duties to Holding's shareholders, or (iii) modify or waive or release any party from any provision of, or fail to enforce any provision of, if MidSouth requests such enforcement, any confidentiality agreement entered into by Holding or Bank with any prospective acquiror after the date of this Agreement or within two years prior to such date. 5.13 Operating Functions. Each member of Holding's consolidated group agrees to cooperate in the consolidation of appropriate operating functions with MidSouth and MidSouth Bank to be effective on the Effective Date, provided that the foregoing shall not be deemed to require any action which, in the opinion of such member's Board of Directors, would adversely affect its operations if the Mergers were not consummated. 5.14 Application to Regulatory Authorities. MidSouth shall prepare, as promptly as practicable, all regulatory applications and filings which are required to be made with respect to the Mergers. 5.15 Benefits Provided to Employees of Holding's Consolidated Group. From and after the Effective Date, MidSouth and MidSouth Bank shall offer to all persons who were employees of Holding or Bank immediately prior to the Effective Date and who become employees of MidSouth or MidSouth Bank immediately following the Effective Date, the same employee benefits (including benefits under MidSouth's retirement, 401(k), flexible benefit, vacation, severance and sick leave plans or policies) as are offered by MidSouth or MidSouth Bank, as the case may be, to its employees, except that there shall be no waiting period for coverage under any of its plans and no employee who is in an active employee on the Effective Date shall be denied benefits under such plans for a pre-existing condition. Full credit shall be given for prior service by such employees with Holding or Bank for eligibility and vesting purposes under all of their benefit plans and policies, except that credit for prior service shall not be given for eligibility, vesting or benefit accrual purposes under MidSouth's Retirement Plan. All benefits accrued through the Effective Date under benefit plans of Holding or Bank shall be paid by MidSouth or MidSouth Bank, as the case may be, to the extent such benefits are not otherwise provided to such employees through the benefit plans of MidSouth or MidSouth Bank, as the case may be. MidSouth and MidSouth Bank shall not be obligated to continue any employee benefit or ERISA Plan maintained by Holding or Bank. 5.16 MidSouth Registration Statement and Listing of Preferred Stock. MidSouth will prepare and file on Form S-4 a registration statement (the "Registration Statement") under the Securities Act (which will include the Proxy Statement) complying with all the requirements of the Securities Act applicable thereto, for the purpose, among other things, of registering the Preferred Stock which will be issued to the holders of Holding Common Stock pursuant to the Company Merger. MidSouth shall use its best efforts to cause the Registration Statement to become effective as soon as practicable, to qualify the Preferred Stock under the securities or blue sky laws of such jurisdictions as may be required and to keep the Registration Statement and such qualifications current and in effect for so long as is necessary to consummate the transactions contemplated hereby. MidSouth will use its best efforts to cause the Preferred Stock to be listed for trading on the American Stock Exchange Emerging Companies market. SECTION 6 Conditions of Closing 6.1 Conditions of All Parties. The obligations of each of the parties hereto to consummate the Mergers are subject to the satisfaction of the following conditions at or prior to the Closing: (a) Shareholder Approval. This Agreement shall have been duly approved by the shareholders of MidSouth and Holding, and this Agreement and the Bank Merger Agreement shall have been duly approved by Holding, as the sole shareholder of Bank and by MidSouth as sole shareholder of MidSouth Bank. (b) Effective Registration Statement. The Registration Statement shall have become effective prior to the mailing of the Proxy Statement, no stop order suspending the effectiveness of the Registration Statement shall have been issued, and no proceedings for that purpose shall have been instituted or, to the knowledge of any party, shall be contemplated, and MidSouth shall have received all state securities law permits and authorizations necessary to consummate the transactions contemplated hereby. (c) No Restraining Action. No action or proceeding shall have been threatened or instituted before a court or other governmental body to restrain or prohibit the transactions contemplated by the Bank Merger Agreement or this Agreement or to obtain damages or other relief in connection with the execution of such agreements or the consummation of the transactions contemplated hereby or thereby; and no governmental agency shall have given notice to any party hereto to the effect that consummation of the transactions contemplated by the Bank Merger Agreement or this Agreement would constitute a violation of any law or that it intends to commence proceedings to restrain consummation of either of the Mergers. (d) Statutory Requirements and Regulatory Approval. All statutory requirements for the valid consummation of the transactions contemplated by the Bank Merger Agreement and this Agreement shall have been fulfilled; all appropriate orders, consents and approvals from all regulatory agencies and other governmental authorities whose order, consent or approval is required by law for the consummation of the transactions contemplated by this Agreement and the Bank Merger Agreement shall have been received; and the terms of all requisite orders, consents and approvals shall then permit the effectuation of the Mergers without imposing any material conditions with respect thereto except for any such conditions that are acceptable to MidSouth and MidSouth Bank. (e) Accountant's Letters. The parties shall have received an opinion from DeLoitte & Touche, dated as of the Closing Date, to the effect that the Mergers will constitute a reorganization within the meaning of Section 368(c) of the Code and that the shareholders of Holding will recognize no gain or loss with respect to the shares of Preferred Stock received on consummation of the Company Merger. 6.2 Additional Conditions of MidSouth and MidSouth Bank. The obligation of MidSouth and MidSouth Bank to consummate the Mergers are also subject to the satisfaction of the following additional conditions at or prior to the Closing: (a) Representations, Warranties and Covenants. Each of the representations and warranties of Holding and Bank contained in this Agreement shall be true and correct on the Closing Date, with the same effect as though made at such date, except to the extent of changes permitted by the terms of this Agreement, and each of Holding and Bank shall have performed all obligations and complied with all covenants required by this Agreement and the Bank Merger Agreement to be performed or complied with by it at or prior to the Closing. In addition, each of Holding and Bank shall have delivered to MidSouth and MidSouth Bank its certificate dated as of the Closing Date and signed by its chief executive officer and chief financial officer to the effect that, except as specified in such certificate, such persons do not know, and have no reasonable grounds to know, of any material failure or breach of any representation, warranty or covenant made by it in this Agreement. (b) No Material Adverse Change. There shall not have occurred any material adverse change from the date of the Latest Balance Sheet to the Closing Date in the financial condition, results of operations, business or prospects of Holding's consolidated group. (c) Opinion of Counsel. MidSouth shall have received from McGlinchey Stafford Lang, A Law Corporation, counsel for Holding's consolidated group, an opinion dated as of the Closing Date, in form and substance satisfactory to MidSouth and MidSouth Bank, to the effect set forth in Exhibit D to this Agreement. (d) Joinder of Shareholders; Confirmation. Within 5 days prior to the mailing of the Proxy Statement a Joinder of Shareholders in the form of Exhibit E annexed hereto ("Joinder of Shareholders") shall have been executed by each person who serves as an executive officer or director of Holding or Bank or who owns 5% or more of the Holding Common Stock outstanding; and MidSouth shall have received from each person who executes a Joinder of Shareholders a written confirmation dated not earlier than 5 days prior to the Closing Date to the effect that each representation made by such person in the Joinder of Shareholders is true and correct as of the date of such confirmation and that such person has complied with all of his or her covenants therein through the date of such confirmation. (e) Accountants' Letters. MidSouth and MidSouth Bank shall have received letters from Mixon, Roy, Metz & Mixon, independent public accountants for Holding, dated, respectively, the date of the Proxy Statement and immediately prior to the Closing Date, in form and substance satisfactory to MidSouth and MidSouth Bank, to the effect set forth in Exhibit F to this Agreement. (f) Tier 1 Capital. MidSouth shall have received satisfactory assurances from the Federal Reserve Board or delegated authority that the Series A Preferred Stock will be treated as Tier 1 Capital of MidSouth for purposes of the capital adequacy guidelines of the Federal Reserve Board, provided that if this condition is not met as a result of any term or provision of the Series A Preferred Stock, MidSouth shall propose a revision of such term or provision that would cause the Series A Preferred Stock to be treated as Tier 1 Capital and Holding shall have 15 days from receipt of such proposal to accept it and permit this condition to be met. 6.3 Additional Conditions of Holding and Bank. The obligations of Holding and Bank to consummate the Mergers are also subject to the satisfaction of the following additional conditions at a prior to the Closing: (a) Representations, Warranties and Covenants. Each of the representations and warranties of MidSouth and MidSouth Bank contained in this Agreement shall be true and correct on the Closing Date, with the same effect as though made at such date, except to the extent of changes permitted by the terms of this Agreement, and MidSouth and MidSouth Bank shall have performed all obligations and complied with all covenants required by this Agreement and the Bank Merger Agreement to be performed or complied with by it at or prior to the Closing. In addition, MidSouth and MidSouth Bank shall have delivered to Holding and Bank its certificate dated as of the Closing Date and signed by its chief executive officer and chief financial officer to the effect that, except as specified in such certificate, such persons so not know, and have no reasonable grounds to know, of any material failure or breach of any representation, warranty or covenant made by it in this Agreement. (b) Opinion of Counsel. Holding shall have received from Correro, Fishman & Casteix, counsel for MidSouth and MidSouth Bank, an opinion, dated as of the Closing Date, in form and substance satisfactory to Holding and Bank, to the effect set forth in Exhibit G to annexed to this Agreement. 6.4 Waiver of Conditions. Any condition to a party's obligations hereunder may be waived by that party, other than the conditions specified in subparagraphs (a), (b) and (d) of subsection 6.1. The failure to waive any condition hereunder shall not be deemed a breach of subsection 5.2 hereof. SECTION 7 Termination 7.1 Termination. This Agreement may be terminated at any time before the time at which the Mergers become effective: (a) Mutual Consent. By the mutual consent of the Boards of Directors of MidSouth and Holding. (b) Material Breach. By the Board of Directors of either MidSouth or Holding in the event of a material breach by any member of the consolidated group of the other of them of any representation or warranty contained in this Agreement or of any covenant contained in this Agreement, which in either case cannot be cured within 10 days after written notice of such breach is given to the entity committing such breach, provided that the right to effect such cure shall not extend beyond the date set forth in subparagraph (c) below. (c) Abandonment. By the Board of Directors of either MidSouth or Holding if (i) all conditions to Closing required by Section 6 have not been met or waived by June 30, 1995, or (ii) any such condition cannot be met by such date and has not been waived by each party in whose favor such condition runs or (iii) the Mergers have not occurred by such date. (d) Dissenting Shareholders. By the Board of Directors of MidSouth, if the number of shares of Holding Common Stock as to which the holders thereof are, at the time of the Closing, legally entitled to assert dissenting shareholder's rights exceeds 5% of the total number of shares of Holding Common Stock issued and outstanding on the Closing Date. (e) Holding Recommendation. By the Board of Directors of MidSouth if the Board of Directors of Holding (A) shall withdraw, modify or change its recommendation to its shareholders of this Agreement or the Mergers or shall have resolved to do any of the foregoing; (B) shall have recommended to the shareholders of Holding (i) any merger, consolidation, share exchange, business combination or other similar transaction (other than the transactions contemplated by this Agreement), (ii) any sale, lease, transfer or other disposition of all or substantially all of the assets of any member of Holding's consolidated group, or (iii) any acquisition, by any person or group, of the beneficial ownership of one-third or more of any class of Holding capital stock; or (C) shall have made any announcement of a proposal, plan or intention to do any of the foregoing or agreement to engage in any of the foregoing. 7.2 Effect of Termination; Survival. Upon termination of this Agreement pursuant to this Section 7, the Bank Merger Agreement shall also terminate, and this Agreement and the Bank Merger Agreement shall be void and of no effect, and there shall be no liability by reason of this Agreement or the Bank Merger Agreement, or the termination thereof, on the part of any party or their respective directors, officers, employees, agents or shareholders except for any liability of a party hereto arising out of a breach of any representation, warranty or covenant in this Agreement prior to the date of termination or any covenant that survives pursuant to the following sentence. The following provisions shall survive any termination of this Agreement: the last sentence of subsection 5.6; subsection 7.2; and subsection 9.3. SECTION 8 Indemnification of Directors and Officers of Holding and Bank 8.1 From and after the Effective Time of the Mergers, MidSouth and MidSouth Bank agree to indemnify and hold harmless each person who is or was at any time since December 31, 1992 an officer or director of Holding or Bank (an "Indemnified Person") from and against all damages, liabilities, judgments and claims (and related expenses, including, but not limited to, attorneys' fees and amounts paid in settlement) based upon or arising from his capacity as an officer or director of Holding or Bank, to the same extent as he would have been indemnified under the articles of association (or articles of incorporation) or bylaws of Holding or Bank, as appropriate, as such articles of association (or articles of incorporation) or bylaws were in effect on the date of execution of this Agreement. 8.2 The rights granted to the Indemnified Persons hereby will be contractual rights inuring to the benefit of all Indemnified Persons and shall survive this Agreement and any merger, consolidation or reorganization of MidSouth or MidSouth Bank. 8.3 The rights to indemnification granted by this Section 8 are subject to the following limitations: (a) the total aggregate indemnification to be provided by MidSouth and MidSouth Bank pursuant to Section 8.1 hereof will not exceed, as to all of the Indemnified Persons described herein as a group, the sum of $1.2 million and MidSouth and MidSouth Bank will have no responsibility to any Indemnified Person for the manner in which such sum is allocated among that group (but the Indemnified Persons may seek reallocation among themselves); (b) a director of officer who would otherwise be an Indemnified Person under this Section 8 shall not be entitled to the benefits hereof unless such director or officer has executed a Joinder of Shareholders; (c) amounts otherwise required to be paid by MidSouth or MidSouth Bank to an Indemnified Person pursuant to this Section 8 will be reduced by any amounts that such Indemnified Person recovers by virtue of the claim for which indemnification is sought; (d) no Indemnified Person shall be entitled to indemnification for any claim made or threatened prior to the Closing Date of which such Indemnified Person, Holding or Bank was aware but did not disclose to MidSouth prior to the execution of this Agreement, if the claim or threatened claim was known on or before such time, or prior to the Closing Date, if such claim became known after execution of this Agreement; and (e) any claim for indemnification pursuant to this Section 8 must be submitted in writing to the Chief Executive Officer of MidSouth within five years of the date of this Agreement. 8.4 MidSouth and MidSouth Bank agree that the indemnification limits set forth in Section 8.3(a) will not apply to any damages, liabilities, judgments and claims (and related expenses, including, but not limited to, attorney's fees and amounts paid in settlement) insofar as they are subject to the provisions of subsections 5.2(b) and (c). SECTION 9 Miscellaneous 9.1 Notices. Any notice, communication, request, reply, advice or disclosure (hereinafter severally and collectively called "notice") required or permitted to be given or made by any party to another in connection with this Agreement or the Bank Merger Agreement or the transactions herein or therein contemplated must be in writing and may be given or served by depositing the same in the United States mail, postage prepaid and registered or certified with return receipt requested, or by delivering the same to the address of the person or entity to be notified, or by sending the same by a national commercial courier service (such as Federal Express, Emery Air Freight, Network Courier, Purolator or the like) for next-day delivery, provided such delivery is confirmed in writing by such courier. Notice deposited in the mail in the manner hereinabove described shall be effective 48 hours after such deposit, and notice delivered in person or by commercial courier shall be effective at the time of delivery. A party delivering notice shall endeavor to obtain a receipt therefor. For purposes of notice, the addresses of the parties shall, until changed as hereinafter provided, be as follows: If to MidSouth or MidSouth Bank: MidSouth Bancorp, Inc. 102 Versailles Boulevard Versailles Centre Lafayette, Louisiana 70501 Attention: C. R. Cloutier With copies to: Correro, Fishman & Casteix, L.L.P. 47th Floor Place St. Charles New Orleans, Louisiana 70170 Attention: Anthony J. Correro, III If to Holding or Bank: Sugarland Bancshares, Inc. 1527 W. Main Street Jeanerette, Louisiana 70544 Attention: D. J. Tranchina With copies to: McGlinchey Stafford Lang 643 Magazine Street New Orleans, Louisiana 70130 Attention: Bennet S. Koren or such substituted persons or addresses of which any of the parties may give notice to the other in writing. 9.2 Waiver. The failure by any party to enforce any of its rights hereunder shall not be deemed to be a waiver of such rights, unless such waiver is an express written waiver which has been signed by the waiving party and expressly approved by its Board of Directors. Waiver of any one breach shall not be deemed to be a waiver of any other breach of the same or any other provision hereof. 9.3 Expenses. Regardless of whether the Mergers are consummated, all expenses incurred in connection with this Agreement and the Bank Merger Agreement and the transactions contemplated hereby and thereby shall be borne by the party incurring them, except as otherwise provided herein. 9.4 Headings. The headings in this Agreement have been included solely for reference and shall not be considered in the interpretation or construction of this Agreement. 9.5 Exhibits and Schedules. The exhibits and schedules to this Agreement are incorporated herein by this reference and expressly made a part hereof. 9.6 Integrated Agreement. This Agreement, the Bank Merger Agreement, the exhibits and schedules hereto and all other documents and instruments delivered in accordance with the terms hereon constitute the entire understanding and agreement among the parties hereto with respect to the subject matter hereof, and there are no agreements, understanding, restrictions, representations or warranties among the parties other than those set forth herein or therein or herein or therein provided for, all prior agreements and understandings being superseded hereby. 9.7 Choice of Law. The validity of this Agreement and the Bank Merger Agreement, the construction of their terms and the determination of the rights and duties of the parties hereto in accordance therewith shall be governed by and construed in accordance with the laws of the United States and those of the State of Louisiana applicable to contracts made and to be performed wholly within such State. 9.8 Parties in Interest. This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns, except that this Agreement may not be transferred or assigned by any member of Holding's consolidated group without the prior written consent of MidSouth, including any transfer or assignment by operation of law. Nothing in this Agreement or the Bank Merger Agreement is intended or shall be construed to confer upon or to give any person other than the parties hereto any rights or remedies under or by reason of this Agreement or the Bank Merger Agreement, except as expressly provided for herein and therein. 9.9 Amendment. The parties may, by mutual agreement of their respective Boards of Directors, amend, modify or supplement this Agreement, the Bank Merger Agreement, or any exhibit or schedule of any of them, in such manner as may be agreed upon by the parties in writing, at any time before or after approval of this Agreement and the Bank Merger Agreement and the transactions contemplated hereby and thereby by the shareholders of the parties hereto. This Agreement and any exhibit or schedule to this Agreement may be amended at any time and, as amended, restated by the chief executive officers of the respective parties (or their respective designees) without the necessity for approval by their respective Boards of Directors or shareholders, to correct typographical errors or to change erroneous references or cross references, or in any other manner which is not material to the substance of the transactions contemplated hereby. 9.10 Counterparts. This Agreement may be executed by the parties in one or more counterparts, all of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. MIDSOUTH BANCORP, INC. SUGARLAND BANCSHARES, INC. By: By: C. R. Cloutier D. J. Tranchina President President MIDSOUTH NATIONAL BANK SUGARLAND STATE BANK By: By: C. R. Cloutier D. J. Tranchina President President -----END PRIVACY-ENHANCED MESSAGE-----