UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported):  January 26, 2017

 

Midland States Bancorp, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Illinois

 

001-35272

 

37-1233196

(State or Other Jurisdiction of
Incorporation)

 

(Commission File Number)

 

(IRS Employer Identification No.)

 

1201 Network Centre Drive
Effingham, Illinois 62401
(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code: (217) 342-7321

 

N/A
(Former Name or Former Address, if Changed Since Last Report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

x     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o       Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o       Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


 

Item 1.01.                                        Entry into a Material Definitive Agreement.

 

Merger Agreement

 

On January 26, 2017, Midland States Bancorp, Inc., an Illinois corporation (the “Company” or “Midland”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Centrue Financial Corporation, a Delaware corporation (“Centrue”), and Sentinel Acquisition, LLC, a Delaware limited liability company and wholly owned subsidiary of Midland (“Merger Sub”).  The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Centrue will merge with and into Merger Sub, with Merger Sub surviving as a wholly owned subsidiary of Midland (the “Merger”).  Following the Merger, Centrue’s wholly owned bank subsidiary, Centrue Bank, will merge with and into Midland’s wholly owned bank subsidiary, Midland States Bank (the “Bank Merger”), with Midland States Bank as the surviving entity.

 

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of Centrue common stock will be converted into the right to receive, at the election of the holder, either (i) $26.75 in cash (“Cash Consideration”), (ii) 0.7604 shares of Midland common stock (“Share Consideration”) or (iii) a combination of $9.3625 in cash and 0.4943 shares of Midland common stock, in each case subject to reduction to the extent that Centrue’s adjusted stockholders’ equity at closing is less than $125.9 million.  In the aggregate, Midland will pay 35% of this consideration in cash and 65% in shares of Midland common stock, based on an agreed upon value of $35.18 per share of Midland common stock.  Accordingly, holders of Centrue common stock who elect to receive Cash Consideration or Share Consideration may instead receive a combination of cash and shares of Midland common stock if necessary to maintain the aggregate mix of consideration described above.  In addition, holders of Centrue common stock who do not properly make an election will receive a combination of cash and shares of Midland common stock, to be determined based on the elections made by other stockholders.  In connection with the Merger, Centrue equity awards will vest and be settled in cash at the Effective Time based on the value of the Cash Consideration.

 

Each share of Centrue’s Series B Preferred Stock will be converted into the right to receive a share of a newly created series of preferred stock of Midland with substantially identical terms, and each share of Centrue’s Series D Preferred Stock will be converted into the right to receive a share of a newly created series of preferred stock of Midland with substantially identical terms.

 

The Merger Agreement contains customary representations and warranties for each party, and each party has agreed to customary covenants, including, among others, covenants relating to the conduct of Centrue’s and Midland’s respective businesses prior to closing, Centrue’s obligation to recommend that its stockholders adopt the merger agreement, Midland’s obligation to recommend that its shareholders approve the issuance of Midland common stock in the Merger, and Centrue’s non-solicitation obligations relating to competing acquisition proposals.  Midland and Centrue have also agreed to use their reasonable best efforts to obtain all regulatory approvals required to consummate the transactions contemplated by the Merger Agreement.

 

The parties’ respective obligations to complete the Merger are subject to customary conditions, including, among others, (i) the accuracy of the other party’s representations and warranties, subject to certain materiality exceptions, (ii) the other party’s performance in all material respects of its obligations under the Merger Agreement, (iii) the adoption of the Merger Agreement by Centrue’s stockholders, (iv) the approval of the issuance of shares of Midland common stock in the Merger by Midland’s shareholders, (v) the absence of any proceeding in connection with, or that could prevent, delay, make illegal or interfere with, any of the transactions contemplated by the Merger Agreement, (vi) the receipt of required regulatory approvals, including the approval of certain federal and state banking agencies, (vii) the effectiveness of the registration statement on Form S-4 for the Midland common stock and preferred stock to be issued in the Merger,

 

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(viii) the receipt by such party of an opinion from its counsel to the effect that the Merger will qualify as a reorganization

within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, (ix) the listing on NASDAQ of the shares of Midland common stock issuable in the Merger, and (x) the absence of a material adverse effect on the other party since the date of the Merger Agreement.  In addition, Midland’s obligation to complete the Merger is subject to the receipt of a legal opinion from Centrue’s counsel, and appraisal rights having been exercised (x) by no holder of Centrue’s Series B Preferred Stock or Series D Preferred Stock, (y) by no holder of 3.0% or more of Centrue’s common stock, and (z) by stockholders who, in the aggregate, hold 5.0% or less of Centrue’s common stock.

 

The Merger Agreement provides certain termination rights for both Midland and Centrue and further provides that a termination fee of $7.5 million will be payable by Centrue to Midland in connection with the termination of the Merger Agreement under certain circumstances, and that a termination fee of $2.5 million will be payable by Centrue or Midland to the other party in connection with the termination of the Merger Agreement under certain other circumstances.

 

The foregoing summary of the Merger Agreement is qualified in its entirety by the terms of the Merger Agreement, which is filed herewith as Exhibit 2.1 and incorporated herein by reference.

 

Voting Agreement

 

In connection with the Merger Agreement, Midland and Merger Sub entered into a Voting and Support Agreement (the “Voting Agreement”) with Centrue’s directors and certain of its principal shareholders, who collectively held approximately 34.3% of the outstanding shares of Centrue common stock as of January 26, 2017.  Subject to the terms and conditions of the Voting Agreement, these parties have agreed to vote their shares in favor of the transactions contemplated by the Merger Agreement and against any competing transaction.

 

The foregoing summary of the Voting Agreement is qualified in its entirety by the terms of the Voting Agreement, which is filed herewith as Exhibit 10.1 and incorporated herein by reference.

 

Item 7.01.             Regulation FD Disclosure.

 

On January 26, 2017, the Company issued a joint press release with Centrue announcing the execution of the Merger Agreement.  A copy of the joint press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.

 

The information furnished pursuant to this Item and the related exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

 

Additional Information

 

This disclosure is being made in respect of the Merger and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.

 

Midland will file a registration statement on Form S-4 with the SEC in connection with the proposed transaction. The registration statement will include a joint proxy statement of Midland and Centrue that will also constitute a prospectus of Midland, which will be sent to Midland’s and Centrue’s respective shareholders. Shareholders are advised to read the joint proxy statement/prospectus and other documents that Midland and Centrue file with the SEC when they become available because they will contain important information about Midland, Centrue and the proposed transaction. When filed, this document

 

3



 

and other documents relating to the Merger filed by Midland and Centrue can be obtained free of charge from the website maintained by the Securities and Exchange Commission (the “SEC”) at www.sec.gov. These documents also can be obtained free of charge by accessing Midland’s website at www.midlandsb.com under “Investors” and then under the “SEC Filings” tab or by accessing Centrue’s website at www.centrue.com under “Investor Relations” and then under the “SEC Filings” tab. Alternatively, once they become available any of these documents filed by Midland can be obtained free of charge upon written request to Midland States Bancorp, Inc., Corporate Secretary, 1201 Network Centre Drive, Effingham, Illinois 62401, by calling (217) 342-7321 or by emailing corpsec@midlandsb.com, and any of these documents filed by Centrue can be obtained free of charge upon written request to Centrue Financial Corporation, Investor Relations, 122 West Madison Street, Ottawa, Illinois 61350, by calling (815) 431-8400 or by emailing investor.relations@centrue.com.

 

Participants in this Transaction

 

Midland, Centrue and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from shareholders in connection with the proposed transaction under applicable SEC rules. Information about these participants may be found in the prospectus of Midland relating to its initial public offering of common stock filed with the SEC by Midland on May 24, 2016 and the definitive proxy statement of Centrue relating to its 2016 Annual Meeting of Shareholders filed with the SEC on March 21, 2016. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants will also be included in the joint proxy statement/prospectus regarding the proposed transaction when it becomes available.

 

Forward-Looking Statements

 

This Current Report on Form 8-K may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of Midland and Centrue.  Forward-looking statements, which may be based upon beliefs, expectations and assumptions of Midland’s and Centrue’s management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions.  All statements in this Current Report on Form 8-K speak only as of the date they are made, and neither Midland nor Centrue undertakes any obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond the ability of Midland and Centrue to control or predict, could cause actual results to differ materially from those in its forward-looking statements.  These factors include, among others: (i) the possibility that any of the anticipated benefits of the proposed transaction between Midland and Centrue will not be realized or will not be realized within the expected time period; (ii) the risk that integration of operations of Centrue with those of Midland will be materially delayed or will be more costly or difficult than expected; (iii) the failure of the proposed transaction to close for any other reason; (iv) the effect of the announcement of the transaction on customer relationships and operating results; and (v) the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning Midland and Centrue and their respective businesses, including additional factors that could materially affect Midland’s and Centrue’s financial results, are included in Midland’s and Centrue’s filings with the SEC.

 

4



 

Item 9.01.  Financial Statements and Exhibits.

 

(d)  Exhibits.

 

Exhibit
No.

 

Description

 

 

 

2.1

 

Agreement and Plan of Merger, dated as of January 26, 2017, among Midland States Bancorp, Inc., Sentinel Acquisition, LLC and Centrue Financial Corporation

 

 

 

10.1

 

Voting and Support Agreement, dated as of January 26, 2017, among Midland States Bancorp, Inc., Sentinel Acquisition, LLC and the Principal Stockholders named therein

 

 

 

99.1

 

Press Release, dated January 26, 2017

 

5


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: January 26, 2017

MIDLAND STATES BANCORP, INC.

 

 

 

 

 

 

 

By:

/s/ Douglas J. Tucker

 

Name:

Douglas J. Tucker

 

Title:

Senior Vice President and Corporate Counsel

 

6



 

EXHIBIT INDEX

 

Exhibit
No.

 

Description

 

 

 

2.1

 

Agreement and Plan of Merger, dated as of January 26, 2017, among Midland States Bancorp, Inc., Sentinel Acquisition, LLC and Centrue Financial Corporation

 

 

 

10.1

 

Voting and Support Agreement, dated as of January 26, 2017, among Midland States Bancorp, Inc., Sentinel Acquisition, LLC and the Principal Stockholders named therein

 

 

 

99.1

 

Press Release, dated January 26, 2017

 

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Exhibit 2.1


EXECUTION COPY

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

MIDLAND STATES BANCORP, INC.,

SENTINEL ACQUISITION, LLC

AND

CENTRUE FINANCIAL CORPORATION

DATED AS OF JANUARY 26, 2017



TABLE OF CONTENTS

Article 1 The Merger; Bank Merger

    1  

Section 1.1

 

The Merger

    1  

Section 1.2

 

Closing

    1  

Section 1.3

 

Effective Time

    2  

Section 1.4

 

Effects of the Merger

    2  

Section 1.5

 

Organizational Documents; Officers

    2  

Section 1.6

 

Bank Merger

    2  


Article 2 Conversion of Securities in the Merger


 

 

3

 

Section 2.1

 

Effect on Capital Stock

    3  

Section 2.2

 

Cancellation of Shares

    6  

Section 2.3

 

Exchange of Certificates

    6  

Section 2.4

 

Election Procedures

    8  

Section 2.5

 

Company Equity Awards

    9  


Article 3 Representations and Warranties of the Company


 

 

10

 

Section 3.1

 

Company Organization

    10  

Section 3.2

 

Company Subsidiary Organizations

    10  

Section 3.3

 

Authorization; Enforceability

    10  

Section 3.4

 

No Conflict

    11  

Section 3.5

 

Company Capitalization

    11  

Section 3.6

 

Company Subsidiary Capitalization

    12  

Section 3.7

 

Company SEC Reports; Financial Statements and Reports; Regulatory Filings

    13  

Section 3.8

 

Books and Records

    14  

Section 3.9

 

Properties

    14  

Section 3.10

 

Loans; Loan Loss Reserve

    15  

Section 3.11

 

Taxes

    16  

Section 3.12

 

Employee Benefits

    17  

Section 3.13

 

Compliance with Legal Requirements

    19  

Section 3.14

 

Legal Proceedings; Orders

    19  

Section 3.15

 

Absence of Certain Changes and Events

    19  

Section 3.16

 

Material Contracts

    20  

Section 3.17

 

No Defaults

    21  

Section 3.18

 

Insurance

    21  

Section 3.19

 

Compliance with Environmental Laws

    22  

Section 3.20

 

Transactions with Affiliates

    22  

Section 3.21

 

Voting Requirements

    22  

Section 3.22

 

State Takeover Statutes

    22  

Section 3.23

 

Opinion of Financial Advisor

    22  

Section 3.24

 

Brokerage Commissions

    22  

Section 3.25

 

Approval Delays

    22  

Section 3.26

 

Labor Matters

    23  

Section 3.27

 

Intellectual Property

    23  

Section 3.28

 

Investments

    23  

Section 3.29

 

No Other Representations or Warranties

    24  


Article 4 Representations and Warranties of Acquiror and Merger Sub


 

 

25

 

Section 4.1

 

Organization

    25  

Section 4.2

 

Acquiror Subsidiary Organizations

    25  

Section 4.3

 

Authorization; Enforceability

    25  

Section 4.4

 

No Conflict

    26  

Section 4.5

 

Acquiror Capitalization

    26  

Section 4.6

 

Acquiror Subsidiary Capitalization

    27  

Section 4.7

 

Acquiror SEC Reports; Financial Statements and Reports; Regulatory Filings

    28  

Section 4.8

 

Books and Records

    29  

Section 4.9

 

Loans; Loan Loss Reserve

    29  

Section 4.10

 

Taxes. 

    30  

Section 4.11

 

Compliance with Legal Requirements

    30  

Section 4.12

 

Legal Proceedings; Orders

    31  

Section 4.13

 

Absence of Certain Changes and Events

    31  

Section 4.14

 

Compliance with Environmental Laws

    31  

Section 4.15

 

Brokerage Commissions

    31  

Section 4.16

 

Approval Delays

    32  

Section 4.17

 

Financial Capability

    32  

Section 4.18

 

No Other Representations or Warranties

    32  


Article 5 Covenants of the Company


 

 

32

 

Section 5.1

 

Access and Investigation

    32  

Section 5.2

 

Operation of the Company and Company Subsidiaries

    33  

Section 5.3

 

Notice of Changes

    36  

Section 5.4

 

Stockholders' Meeting

    36  

Section 5.5

 

Information Provided to Acquiror

    37  

Section 5.6

 

Operating Functions

    37  

Section 5.7

 

Company Benefit Plans

    37  

Section 5.8

 

Acquisition Proposals

    37  

Section 5.9

 

Termination of Company Stockholder Agreements

    38  


Article 6 Covenants of Acquiror and Merger Sub


 

 

38

 

Section 6.1

 

Operation of Acquiror and Acquiror Subsidiaries

    38  

Section 6.2

 

Acquiror Shareholders' Meeting

    39  

Section 6.3

 

Information Provided to the Company

    39  

Section 6.4

 

Operating Functions

    39  

Section 6.5

 

Indemnification

    40  

Section 6.6

 

Authorization and Reservation of Acquiror Common Stock and Acquiror Preferred Stock

    41  

Section 6.7

 

Stock Exchange Listing

    41  

Section 6.8

 

Assumption of Debt Instruments

    41  


Article 7 Covenants of All Parties


 

 

41

 

Section 7.1

 

Regulatory Approvals

    41  

Section 7.2

 

SEC Registration

    41  

Section 7.3

 

Publicity

    42  

Section 7.4

 

Reasonable Best Efforts; Cooperation

    42  

Section 7.5

 

Tax Free Reorganization

    43  

Section 7.6

 

Transaction Structure

    43  

Section 7.7

 

Takeover Statutes

    44  

Section 7.8

 

Employees and Employee Benefits

    44  

Section 7.9

 

Section 16 Matters

    45  

Section 7.10

 

Stockholder Litigation

    45  


Article 8 Conditions Precedent to Obligations of Acquiror And Merger Sub


 

 

46

 

Section 8.1

 

Accuracy of Representations and Warranties

    46  

Section 8.2

 

Performance by the Company

    46  

Section 8.3

 

Shareholder Approvals

    46  

Section 8.4

 

No Proceedings, Injunctions or Restraints; Illegality

    46  

Section 8.5

 

Regulatory Approvals

    46  

iii


Section 8.6

 

Registration Statement

    47  

Section 8.7

 

Legal Opinion

    47  

Section 8.8

 

Tax Opinion

    47  

Section 8.9

 

Stock Exchange Listing

    47  

Section 8.10

 

No Material Adverse Effect

    47  


Article 9 Conditions Precedent to Obligations of the Company


 

 

47

 

Section 9.1

 

Accuracy of Representations and Warranties

    47  

Section 9.2

 

Performance by Acquiror

    47  

Section 9.3

 

Shareholder Approvals

    48  

Section 9.4

 

No Injunctions or Restraints; Illegality

    48  

Section 9.5

 

Regulatory Approvals

    48  

Section 9.6

 

Registration Statement

    48  

Section 9.7

 

Tax Opinion

    48  

Section 9.8

 

Stock Exchange Listing

    48  

Section 9.9

 

No Material Adverse Effect

    48  


Article 10 Termination


 

 

48

 

Section 10.1

 

Termination of Agreement

    48  

Section 10.2

 

Effect of Termination or Abandonment

    50  

Section 10.3

 

Fees and Expenses

    51  


Article 11 Miscellaneous


 

 

52

 

Section 11.1

 

Survival

    52  

Section 11.2

 

Governing Law; Venue; Waiver of Jury Trial

    52  

Section 11.3

 

Assignments, Successors and No Third Party Rights

    52  

Section 11.4

 

Modification

    53  

Section 11.5

 

Extension of Time; Waiver

    53  

Section 11.6

 

Notices

    53  

Section 11.7

 

Entire Agreement

    54  

Section 11.8

 

Severability

    54  

Section 11.9

 

FurtherAssurances

    54  

Section 11.10

 

Counterparts

    54  


Article 12 Definitions


 

 

54

 

Section 12.1

 

Definitions

    54  

Section 12.2

 

Principles of Construction

    60  

EXHIBITS

   
 
 


Exhibit A    Form of Bank Merger Agreement


 

 

 

 

iv



INDEX OF DEFINED TERMS

Acquiror

    1  

Acquiror Articles of Incorporation

    59  

Acquiror Bank

    3  

Acquiror Benefit Plan

    59  

Acquiror Board

    59  

Acquiror Bylaws

    60  

Acquiror Capital Stock

    60  

Acquiror Capitalization Date

    28  

Acquiror Common Stock

    60  

Acquiror Disclosure Schedules

    66  

Acquiror Equity Award

    60  

Acquiror ERISA Affiliate

    60  

Acquiror Evaluation Date

    30  

Acquiror Financial Statements

    30  

Acquiror Preferred Stock

    28  

Acquiror SEC Reports

    60  

Acquiror Series G Preferred Stock

    5  

Acquiror Series H Preferred Stock

    5  

Acquiror Share Trading Price

    60  

Acquiror Shareholder Approval

    60  

Acquiror Shareholders' Meeting

    42  

Acquiror Stock Issuance

    60  

Acquiror Stock Plans

    60  

Acquisition Proposal

    61  

Adjusted Equity

    6  

Affiliate

    61  

Agreement

    1  

Available Cash

    3  

Available Shares

    4  

Bank Merger

    3  

Bank Merger Agreement

    3  

Borrowing Affiliate

    36  

Business Day

    61  

Cash Electing Company Share

    3  

Cash Election

    3  

Cash Election Amount

    3  

Certificate of Merger

    2  

CIC Payment

    48  

Closing

    2  

Closing Date

    2  

Code

    1  

Common Stock Merger Consideration

    61  

Company

    1  

Company Adverse Recommendation

    39  

Company Bank

    3  

Company Benefit Plan

    61  

Company Board

    61  

Company Bylaws

    61  

Company Capital Stock

    61  

v


Company Capitalization Date

    12  

Company Certificate of Incorporation

    61  

Company Common Stock

    1  

Company Disclosure Schedules

    66  

Company Employees

    37  

Company Equity Award

    61  

Company ERISA Affiliate

    62  

Company Evaluation Date

    14  

Company Financial Statements

    14  

Company Investment Securities

    25  

Company Loans

    16  

Company Material Contract

    21  

Company Permitted Exceptions

    16  

Company Preferred Stock

    1  

Company Restricted Shares

    10  

Company SEC Reports

    62  

Company Stock Certificates

    7  

Company Stock Option

    10  

Company Stock Plans

    62  

Company Stockholder Agreements

    22  

Company Stockholder Approval

    23  

Company Stockholders' Meeting

    39  

Confidentiality Agreement

    35  

Contemplated Transactions

    62  

Contract

    62  

Control, Controlling or Controlled

    62  

Covered Employees

    47  

CRA

    62  

Deposit Insurance Fund

    62  

Derivative Transactions

    62  

Determination Date

    54  

DGCL

    63  

Dissenting Shares

    5  

Dissenting Stockholder

    5  

DLLCA

    63  

DOL

    63  

Effective Time

    2  

Election Deadline

    9  

Election Form Record Date

    8  

Environment

    63  

Environmental Laws

    63  

ERISA

    63  

Exchange Act

    63  

Exchange Agent

    7  

Exchange Fund

    7  

Exchange Ratio

    4  

Excluded Shares

    63  

FDIC

    63  

Federal Reserve

    63  

Final Acquiror Market Value

    54  

Final Index Price

    54  

vi


Form of Election

    8  

GAAP

    63  

Hazardous Materials

    63  

Indemnified Party

    42  

Index

    54  

Index Ratio

    54  

Initial Acquiror Market Value

    54  

Initial Index Price

    54  

Intangible Assets

    63  

Internal Control Over Financial Reporting

    14  

IRS

    63  

IRS Guidelines

    46  

Joint Proxy Statement

    63  

Knowledge

    64  

Legal Requirement

    64  

Letter of Transmittal

    7  

made available

    67  

Mailing Date

    8  

Material Adverse Effect

    64  

Measurement Date

    6  

Merger

    1  

Merger Sub

    1  

Minimum Equity

    6  

Mixed Consideration Electing Company Share

    4  

Mixed Election

    4  

Mixed Election Cash Consideration

    4  

Mixed Election Share Consideration

    4  

NASDAQ Rules

    64  

New Plans

    47  

Non-Electing Company Share

    4  

Old Plans

    48  

Order

    64  

Ordinary Course of Business

    64  

OREO

    64  

PBGC

    65  

Per Share Value

    3  

Person

    65  

Premium Cap

    43  

Previously Disclosed

    67  

Proceeding

    65  

Pro-Rated Cash Amount

    3  

Pro-Rated Share Amount

    4  

Registration Statement

    65  

Regulatory Authority

    65  

Remaining Cash Amount

    4  

Remaining Share Amount

    4  

Representative

    65  

Requisite Regulatory Approvals

    65  

Schedules

    66  

SEC

    65  

Securities Act

    65  

vii


Series B Exchange Ratio

    5  

Series B Merger Consideration

    5  

Series B Preferred Stock

    1  

Series D Exchange Ratio

    5  

Series D Merger Consideration

    5  

Series D Preferred Stock

    1  

Share Electing Company Share

    4  

Share Election

    3  

Share Election Amount

    4  

Subsidiary

    65  

Superior Proposal

    65  

Surviving Company

    2  

Tax

    66  

Tax Return

    66  

Termination Date

    53  

Termination Fee

    55  

Total Payments

    48  

Transition Date

    66  

Voting Agreement

    1  

viii



AGREEMENT AND PLAN OF MERGER

        THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as of January 26, 2017, by and among Midland States Bancorp, Inc., an Illinois corporation ("Acquiror"), Sentinel Acquisition, LLC, a Delaware limited liability company ("Merger Sub"), and Centrue Financial Corporation, a Delaware corporation (the "Company").


RECITALS

        A.    The boards of directors of Acquiror and the Company and the sole member of Merger Sub have each approved, and the board of directors of the Company has declared advisable, this Agreement and the merger of the Company with and into Merger Sub (the "Merger"), upon the terms and subject to the conditions set forth in this Agreement, whereby: (i) each issued and outstanding share of Common Stock, par value $0.01 per share, of the Company ("Company Common Stock"), other than any Excluded Shares, will be converted into the right to receive the Common Stock Merger Consideration; (ii) each issued and outstanding share of Preferred Stock, no par value per share, of the Company (the "Company Preferred Stock") designated as Series B Preferred Stock (the "Series B Preferred Stock"), other than any Excluded Shares, will be converted into the right to receive the Series B Merger Consideration, and (iii) each issued and outstanding share of Company Preferred Stock designated as Fixed Rate Non-Voting Perpetual Non-Cumulative Preferred Stock, Series D (the "Series D Preferred Stock"), other than any Excluded Shares, will be converted into the right to receive the Series D Merger Consideration.

        B.    The parties intend that the Merger qualify as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1986 (the "Code"), and that this Agreement be, and hereby is adopted as, a "plan of reorganization" within the meaning of Sections 354 and 361 of the Code.

        C.    Contemporaneously with the execution and delivery of this Agreement, and as a material inducement to Acquiror to enter into this Agreement, certain stockholders of the Company are entering into an agreement with Acquiror, pursuant to which such stockholders will agree to take certain actions in furtherance of the Merger (the "Voting Agreement").

        D.    The parties desire to make certain representations, warranties, covenants and agreements in connection with the Merger and the other transactions contemplated by this Agreement and to prescribe certain conditions to the Merger.


AGREEMENTS

        In consideration of the foregoing premises, which are incorporated herein by this reference, and the mutual representations, covenants and agreements of the parties herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:


Article 1

THE MERGER; BANK MERGER

        Section 1.1    The Merger.    Upon the terms and subject to the conditions of this Agreement, and in accordance with the DGCL and the DLLCA, the Company shall be merged with and into Merger Sub at the Effective Time. Following the Effective Time, the separate corporate existence of the Company shall cease and Merger Sub shall continue as the surviving limited liability company (the "Surviving Company") and shall succeed to and assume all the rights and obligations of Merger Sub and the Company in accordance with the DGCL and the DLLCA.

        Section 1.2    Closing.    The closing of the Merger (the "Closing") shall occur at 10:00 a.m., Chicago, Illinois time, at the offices of Barack Ferrazzano Kirschbaum & Nagelberg LLP, Chicago, Illinois, on the later to occur of (i) May 31, 2017 and (ii) the date that is five (5) Business Days after


the satisfaction or waiver (subject to applicable Legal Requirements) of the conditions set forth in Article 8 and Article 9 (other than those conditions that by their terms are to be satisfied or waived at the Closing, but subject to the satisfaction or waiver of those conditions) or at such other time and place as Acquiror and the Company may agree in writing (the "Closing Date"). Subject to Article 10, failure to consummate the Merger on the date and time and at the place determined pursuant to this Section 1.2 will not result in the termination of this Agreement and will not relieve any party of any obligation under this Agreement.

        Section 1.3    Effective Time.    The Merger shall become effective when a Certificate of Merger (the "Certificate of Merger"), executed by Merger Sub in accordance with the relevant provisions of the DGCL and the DLLCA, is duly filed with the Secretary of State of the State of Delaware, or at such later time as Merger Sub and the Company shall agree and is specified in the Certificate of Merger (the "Effective Time"). The filing of the Certificate of Merger shall be made as soon as practicable on the Closing Date after the satisfaction or waiver of the conditions set forth in Article 8 and Article 9.

        Section 1.4    Effects of the Merger.    The Merger shall have the effects set forth in the DGCL, the DLLCA and this Agreement. Without limiting the generality of the foregoing, at the Effective Time, all of the property, rights, privileges, powers and franchises of the Company shall be vested in the Surviving Company, and all debts, liabilities and duties of the Company shall become the debts, liabilities and duties of the Surviving Company.

        Section 1.5    Organizational Documents; Officers.    

        Section 1.6    Bank Merger.    Immediately following the Merger, or at such later time as Acquiror may determine in its sole discretion, Centrue Bank (the "Company Bank"), an Illinois state chartered bank and wholly owned Subsidiary of the Company, will merge with and into Midland States Bank ("Acquiror Bank"), an Illinois state chartered bank and wholly owned Subsidiary of Acquiror (the "Bank Merger"). Acquiror Bank shall be the surviving entity in the Bank Merger and, following the Bank Merger, the separate corporate existence of the Company Bank shall cease. In connection with the execution and delivery of this Agreement, Acquiror Bank and the Company Bank intend to enter into an agreement and plan of merger substantially in the form attached hereto as Exhibit A (such agreement, the "Bank Merger Agreement"). Prior to the Effective Time, Acquiror shall cause Acquiror Bank, and the Company shall cause the Company Bank, to execute such certificates or articles of merger and such other documents and certificates as are necessary to effectuate the Bank Merger.

2



Article 2

CONVERSION OF SECURITIES IN THE MERGER

        Section 2.1    Effect on Capital Stock.    At the Effective Time, by virtue of the Merger and without any action on the part of Acquiror, Merger Sub, the Company or the holder of any shares of capital stock of Acquiror, Merger Sub or the Company:

3


4


5


        Section 2.2    Cancellation of Shares.    At the Effective Time, all shares of Company Common Stock and Company Preferred Stock shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and any certificates (it being understood that any reference herein to a "certificate" shall be deemed to include reference to any book-entry account statement relating to the ownership of Company Common Stock or Company Preferred Stock) that represented Company Common Stock or Company Preferred Stock immediately prior to the Effective Time shall be deemed for all purposes to represent only the right to receive, upon surrender thereof, the Common Stock Merger Consideration, Series B Merger Consideration or Series D Merger Consideration, as applicable, the subject to the terms of this Agreement.

        Section 2.3    Exchange of Certificates.    

6


7


        Section 2.4    Election Procedures.    

8


        Section 2.5    Company Equity Awards.    

9



Article 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

        Except as Previously Disclosed, the Company hereby represents and warrants to Acquiror and Merger Sub as follows:

        Section 3.1    Company Organization.    The Company: (a) is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and is also in good standing in each other jurisdiction in which the nature of the business conducted or the properties or assets owned or leased by it makes such qualification necessary, except where the failure to be so qualified and in good standing would not have a Material Adverse Effect on the Company; (b) is registered with the Federal Reserve as a bank holding company under the Bank Holding Company Act of 1956; and (c) has full power and authority, corporate and otherwise, to operate as a bank holding company and to own, operate and lease its properties as presently owned, operated and leased, and to carry on its business as it is now being conducted. The copies of the Company Certificate of Incorporation and Company Bylaws and all amendments thereto set forth in the Company SEC Reports are true, complete and correct, and in full force and effect as of the date of this Agreement. The Company has no subsidiary other than the subsidiaries listed on Exhibit 21 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

        Section 3.2    Company Subsidiary Organizations.    The Company Bank is an Illinois state chartered bank duly organized, validly existing and in good standing under the laws of the state of Illinois and is a member of the Federal Reserve System. Each Subsidiary of the Company is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and is also in good standing in each other jurisdiction in which the nature of the business conducted or the properties or assets owned or leased by it makes such qualification necessary, except where the failure to be so qualified and in good standing would not have a Material Adverse Effect on the Company. Each Subsidiary of the Company has full power and authority, corporate and otherwise, to own, operate and lease its properties as presently owned, operated and leased, and to carry on its business as it is now being conducted. The deposit accounts of the Company Bank are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by applicable Legal Requirements, and all premiums and assessments required to be paid in connection therewith have been paid when due. The Company has made available to Acquiror true, complete and correct copies of the charter (or similar organizational documents) and bylaws of each Subsidiary of the Company and all amendments thereto, each of which are in full force and effect as of the date of this Agreement.

        Section 3.3    Authorization; Enforceability.    The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Company Board. The Company Board has determined that the Merger, on substantially the terms and conditions set forth in this Agreement, is in the best interests of the Company and its stockholders, and that this Agreement and transactions contemplated hereby are in the best interests of the Company and its stockholders. The Company Board has directed this Agreement be submitted to the Company's stockholders for adoption at a duly held meeting of such stockholders and has resolved to recommend that the Company's stockholders vote in favor of the adoption of this Agreement. The execution, delivery and performance of this Agreement by the Company, and the consummation by it of its obligations under this Agreement, have been authorized by all necessary corporate action, subject to the Company Stockholder Approval, and, subject to the receipt of the Requisite Regulatory Approvals, this Agreement constitutes a legal, valid and binding obligation of the Company enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other Legal Requirements affecting creditors' rights generally and subject to general principles of equity.

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        Section 3.4    No Conflict.    Neither the execution nor delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time): (a) assuming receipt of the Company Stockholder Approval, contravene, conflict with or result in a violation of any provision of the certificate of incorporation, certificate of formation or charter (or similar organizational documents) or bylaws or operating agreement, each as in effect on the date hereof, or any currently effective resolution adopted by the board of directors, stockholders, manager or members of, the Company or any of its Subsidiaries; (b) assuming receipt of the Requisite Regulatory Approvals, contravene, conflict with or result in a violation of any Legal Requirement or any Order to which the Company or any of its Subsidiaries, or any of their respective assets that are owned or used by them, may be subject, except for any contravention, conflict or violation that is permissible by virtue of obtaining the Requisite Regulatory Approvals; or (c) except as listed on Schedule 3.4, contravene, conflict with or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify, or which would result in the creation of any material lien, charge or encumbrance upon or with respect to any of the assets owned or used by the Company or its Subsidiaries under, any Company Material Contract, except (in case of clause (c)) for such contraventions, conflicts, breaches or defaults that, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company. Except for: (i) the filing of applications, filings and notices, as applicable, with the Federal Reserve and approval of such applications, filings and notices; (ii) the filing of applications, filings and notices, as applicable, with the Illinois State Department of Financial and Professional Regulation, Division of Banking and approval of such applications, filings and notices; (iii) the filing of any required applications, filings or notices with the FDIC and approval of such applications; (iv) the filing with the SEC of the Joint Proxy Statement in definitive form and of the Registration Statement and declaration of effectiveness of the Registration Statement; (v) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware; and (vi) such filings and approvals as are required to be made or obtained under the securities or "Blue Sky" laws of various states in connection with the issuance of the shares of Acquiror Common Stock and Acquiror Preferred Stock pursuant to this Agreement and the listing of additional shares of Acquiror Common Stock on the NASDAQ Global Select Market, no consents or approvals of or filings or registrations with any court, administrative agency or commission or other governmental authority or instrumentality are necessary in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

        Section 3.5    Company Capitalization.    

11


        Section 3.6    Company Subsidiary Capitalization.    All of the issued and outstanding shares of capital stock or other equity ownership interests of each Subsidiary of the Company are owned by the

12


Company, directly or indirectly, free and clear of any material liens, pledges, charges, claims and security interests and similar encumbrances, and all of such shares or equity ownership interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. No Subsidiary of the Company has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of capital stock or any other equity security of such Subsidiary or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of such Subsidiary. No Subsidiary of the Company owns or has any Contract to acquire, any equity interests or other securities of any Person or any direct or indirect equity or ownership interest in any other business.

        Section 3.7    Company SEC Reports; Financial Statements and Reports; Regulatory Filings.    

13


        Section 3.8    Books and Records.    The books of account, minute books, stock record books and other records of the Company and its Subsidiaries are complete and correct in all material respects and have been maintained in accordance with the Company's business practices and all applicable Legal Requirements, including the maintenance of an adequate system of internal controls required by such Legal Requirements. The minute books of the Company and each of its Subsidiaries fairly reflect the substance of events and transactions included therein.

        Section 3.9    Properties.    

14


        Section 3.10    Loans; Loan Loss Reserve.    

15


        Section 3.11    Taxes.    

16


        Section 3.12    Employee Benefits.    

17


18


        Section 3.13    Compliance with Legal Requirements.    The Company and each of its Subsidiaries hold all material licenses, certificates, permits, franchises and rights from all appropriate Regulatory Authorities necessary for the conduct of their respective businesses as presently conducted. The Company and each of its Subsidiaries is, and at all times since January 1, 2014, has been, in compliance with each material Legal Requirement that is or was applicable to it or to the conduct or operation of its respective businesses or the ownership or use of any of its respective assets. Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on the Company, neither the Company nor any of its Subsidiaries has received, at any time since April 15, 2015, any notice or other communication (whether oral or written) from any Regulatory Authority or any other Person regarding: (a) any actual, alleged, possible, or potential violation of, or failure to comply with, any Legal Requirement; or (b) any actual, alleged, possible, or potential obligation on the part of the Company or any of its Subsidiaries to undertake, or to bear all or any portion of the cost of, any remedial action of any nature in connection with a failure to comply with any Legal Requirement.

        Section 3.14    Legal Proceedings; Orders.    

        Section 3.15    Absence of Certain Changes and Events.    Except as listed in Schedule 3.15, since December 31, 2015, the Company and its Subsidiaries have conducted their respective businesses only in the Ordinary Course of Business and no event or events have occurred that had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company.

19


        Section 3.16    Material Contracts.    Except for Contracts evidencing Company Loans made by the Company Bank in the Ordinary Course of Business, Schedule 3.16 lists or describes the following with respect to the Company and each of its Subsidiaries (each such agreement or document, a "Company Material Contract") as of the date of this Agreement, true, complete and correct copies of each of which have been made available to Acquiror:

20


        Section 3.17    No Defaults.    Each Company Material Contract is in full force and effect and is valid and enforceable against the Company, and to the Company's Knowledge, against such other party to such Company Material Contract, in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other Legal Requirements affecting creditors' rights generally and subject to general principles of equity. To the Knowledge of the Company, no event has occurred or circumstance exists that (with or without notice or lapse of time) may contravene, conflict with or result in a material violation or breach of, or give the Company, any of its Subsidiaries or other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify, any Company Material Contract, except as listed in Schedule 3.10(c). Except in the Ordinary Course of Business with respect to any Company Loan, neither the Company nor any of its Subsidiaries has given to or received from any other Person, at any time since April 15, 2015, any notice or other communication (whether oral or written) regarding any actual, alleged, possible or potential violation or breach of, or default under, any Company Material Contract, that has not been terminated or satisfied prior to the date of this Agreement. Other than in the Ordinary Course of Business, there are no renegotiations of, attempts to renegotiate or outstanding rights to renegotiate, any material amounts paid or payable to the Company or any of its Subsidiaries under current or completed Company Material Contracts with any Person, and no such Person has made written demand for such renegotiation.

        Section 3.18    Insurance.    Schedule 3.18 lists all insurance policies and bonds owned or held as of the date of this Agreement by the Company and its Subsidiaries with respect to their respective business, operations, properties or assets (including bankers' blanket bond and insurance providing benefits for employees), true, complete and correct copies of each of which have been made available to Acquiror. The Company and its Subsidiaries are insured with reputable insurers against such risks and in such amounts as the management of the Company reasonably has determined to be prudent and consistent with comparable entities engaged in the same business and industry. The Company and its Subsidiaries are in compliance in all material respects with their insurance policies and are not in default under any of the terms thereof. Each such policy is outstanding and in full force and effect and, except for policies insuring against potential liabilities of officers, directors and employees of the Company and its Subsidiaries, the Company or the relevant Subsidiary thereof is the sole beneficiary of such policies. All premiums and other payments due under any such policy have been paid, and all material known claims thereunder have been filed in due and timely fashion. Schedule 3.18 lists and describes all claims that have been filed under such insurance policies and bonds within the past one (1) year prior to the date of this Agreement that individually or in the aggregate exceed One Hundred Thousand Dollars ($100,000) and the current status of such claims. None of the Company or any of its Subsidiaries has had any insurance policy or bond cancelled or nonrenewed by the issuer of the policy or bond within the past one (1) year.

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        Section 3.19    Compliance with Environmental Laws.    There are no actions, suits, investigations, liabilities, inquiries, Proceedings or Orders involving the Company or any of its Subsidiaries or any of their respective assets that are pending or, to the Knowledge of the Company, threatened, nor to the Knowledge of the Company, is there any factual basis for any of the foregoing, as a result of any asserted failure of the Company or any of its Subsidiaries of, or any predecessor thereof, to comply with any Environmental Law. No environmental clearances or other governmental approvals are required for the conduct of the business of the Company or any of its Subsidiaries or the consummation of the Contemplated Transactions. To the Knowledge of the Company, neither the Company nor any of its Subsidiaries is the owner of any interest in real estate on which any substances have been generated, used, stored, deposited, treated, recycled or disposed of, which substances if known to be present on, at or under such property, would require notification to any Regulatory Authority, clean up, removal or some other remedial action under any Environmental Law at such property or any impacted adjacent or down gradient property. The Company and each Subsidiary of the Company has complied in all material respects with all Environmental Laws applicable to it and its business operations.

        Section 3.20    Transactions with Affiliates.    Since January 1, 2014, all transactions required to be disclosed by the Company pursuant to Item 404 of Regulation S-K promulgated under the Securities Act have been disclosed in the Company SEC Reports. Neither the Company nor any of its Subsidiaries is party to any transaction, and no transaction, or series of related transactions, is currently proposed by the Company or any of its Subsidiaries or, to the Knowledge of the Company, by any other Person, to which the Company or any of its Subsidiaries would be a participant, in each case in which any related person had or will have a direct or indirect interest.

        Section 3.21    Voting Requirements.    The affirmative vote of holders of a majority of the outstanding shares of Company Common Stock at the Company Stockholders' Meeting or any adjournment or postponement thereof to adopt this Agreement (the "Company Stockholder Approval") is the only vote of the holders of any class or series of capital stock or voting securities of, or other equity interests in, the Company necessary to adopt this Agreement.

        Section 3.22    State Takeover Statutes.    The Company Board has taken all actions such that the restrictions contained in Section 203 of the DGCL applicable to a "business combination" (as defined in Section 203 of the DGCL) shall not apply to this Agreement, the Bank Merger Agreement, the Voting Agreement or any of the Contemplated Transactions. No other state takeover statute or similar statute or regulation applies to this Agreement, the Bank Merger Agreement, the Voting Agreement or any of the Contemplated Transactions.

        Section 3.23    Opinion of Financial Advisor.    The Company has received the opinion of Sandler O'Neill + Partners, L.P. to the effect that, as of the date of such opinion, the Common Stock Merger Consideration is fair, from a financial point of view, to the holders of shares of Company Common Stock, other than any Excluded Shares and Dissenting Shares. The Company shall deliver an executed copy of such opinion to Acquiror promptly following receipt of such opinion in written form.

        Section 3.24    Brokerage Commissions.    Except for fees payable to Sandler O'Neill + Partners, L.P. pursuant to an engagement letter that has been Previously Disclosed, none of the Company or its Subsidiaries, or any of their respective Representatives, has incurred any obligation or liability, contingent or otherwise, for brokerage or finders' fees or agents' commissions or other similar payment in connection with this Agreement.

        Section 3.25    Approval Delays.    To the Knowledge of the Company, there is no reason why the granting of any of the Requisite Regulatory Approvals would be denied or unduly delayed. The Company Bank's most recent CRA rating was "satisfactory" or better.

22


        Section 3.26    Labor Matters.    

        Section 3.27    Intellectual Property.    Each of the Company and its Subsidiaries has the unrestricted right and authority, and the Surviving Company and its Subsidiaries will have the unrestricted right and authority from and after the Effective Time, to use all patents, trademarks, copyrights, service marks, trade names or other intellectual property owned by them as is necessary to enable them to conduct and to continue to conduct all material phases of the businesses of the Company and its Subsidiaries in the manner presently conducted by them, and, to the Knowledge of the Company, such use does not, and will not, conflict with, infringe on or violate any patent, trademark, copyright, service mark, trade name or any other intellectual property right of any Person.

        Section 3.28    Investments.    

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        Section 3.29    No Other Representations or Warranties    

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Article 4

REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND MERGER SUB

        Except as Previously Disclosed, Acquiror and Merger Sub hereby represent and warrant to the Company as follows:

        Section 4.1    Organization.    Each of Acquiror and Merger Sub: (a) is a corporation or limited liability company duly organized or formed, as applicable, and validly existing and in good standing under the laws of its state of organization of formation, and is also in good standing in each other jurisdiction in which the nature of the business conducted or the properties or assets owned or leased by it makes such qualification necessary, except where the failure to be so qualified and in good standing would not have a Material Adverse Effect on Acquiror; and (b) has full corporate and limited liability company power and authority to own, operate and lease its properties as presently owned, operated and leased, and to carry on its business as it is now being conducted. Acquiror is registered with the Federal Reserve as a financial holding company under the Bank Holding Company Act of 1956, as amended, and has full corporate or limited liability company power and authority to operate as a bank holding company. The copies of the Acquiror Articles of Incorporation and Acquiror Bylaws and all amendments thereto set forth in the Acquiror SEC Reports are true, complete and correct, and in full force and effect as of the date of this Agreement. Acquiror has no subsidiary other than Merger Sub and the subsidiaries listed on Exhibit 21 to Acquiror's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016.

        Section 4.2    Acquiror Subsidiary Organizations.    Acquiror Bank is an Illinois state chartered bank duly organized, validly existing and in good standing under the laws of the State of Illinois and is a member of the Federal Reserve System. Each Acquiror Subsidiary is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and is also in good standing in each other jurisdiction in which the nature of the business conducted or the properties or assets owned or leased by it makes such qualification necessary, except where the failure to be so qualified and in good standing would not have a Material Adverse Effect on Acquiror. Each Subsidiary of Acquiror has full corporate or similar power and authority to own, operate and lease its properties as presently owned, operated and leased, and to carry on its business as it is now being conducted. The deposit accounts of Acquiror Bank are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by applicable Legal Requirements, and all premiums and assessments required to be paid in connection therewith have been paid when due. Acquiror has delivered or made available to the Company copies of the charter (or similar organizational documents) and bylaws of each Subsidiary of Acquiror and all amendments thereto, each of which are true, complete and correct and in full force and effect as of the date of this Agreement.

        Section 4.3    Authorization; Enforceability.    Each of Acquiror and Merger Sub has the requisite corporate or limited liability company power and authority to enter into and perform its obligations under this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Acquiror Board and the board of directors of Merger Sub. The Acquiror Board and the board of directors of Merger Sub have each determined that the Merger, on substantially the terms and conditions set forth in this Agreement, is in the best interests of its respective shareholders, and that this Agreement and transactions contemplated hereby are in the best interests of its respective shareholders. To the extent required by NASDAQ Rules, the Acquiror Board has directed the Acquiror Stock Issuance be submitted to Acquiror's shareholders for consideration at a duly held meeting of such shareholders and has resolved to recommend that Acquiror's shareholders vote in favor of the Acquiror Stock Issuance. The execution, delivery and performance of this Agreement by Acquiror, and the consummation by it of its obligations under this Agreement, have been authorized by all necessary corporate action, subject to the Acquiror Shareholder Approval, and, subject to the receipt of the Requisite Regulatory Approvals,

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this Agreement constitutes a legal, valid and binding obligation of Acquiror enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other Legal Requirements affecting creditors' rights generally and subject to general principles of equity.

        Section 4.4    No Conflict.    Neither the execution nor delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time): (a) assuming receipt of the Acquiror Shareholder Approval, as necessary, contravene, conflict with or result in a violation of any provision of the articles of incorporation, certificate of formation or charter (or similar organizational documents) or bylaws or operating agreement, each as in effect on the date hereof, or any currently effective resolution adopted by the board of directors, shareholders, manager or members of, Acquiror or any of its Subsidiaries; or (b) assuming receipt of the Requisite Regulatory Approvals, contravene, conflict with or result in a violation of any Legal Requirement or any Order to which Acquiror or any of its Subsidiaries, or any of their respective assets that are owned or used by them, may be subject, except for any contravention, conflict or violation that is permissible by virtue of obtaining the Requisite Regulatory Approvals. Except for: (i) the filing of applications, filings and notices, as applicable, with the Federal Reserve and approval of such applications, filings and notices; (ii) the filing of applications, filings and notices, as applicable, with the Illinois State Department of Financial and Professional Regulation, Division of Banking and approval of such applications, filings and notices; (iii) the filing of any required applications, filings or notices with the FDIC and approval of such applications, filings and notices; (iv) the filing with the SEC of the Joint Proxy Statement in definitive form and of the Registration Statement and declaration of effectiveness of the Registration Statement; (v) the filing of certificates of designation for the Acquiror Series G Preferred Stock and Acquiror Series H Preferred Stock with the Secretary of State of the State of Illinois, (vi) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware; and (vi) such filings and approvals as are required to be made or obtained under the securities or "Blue Sky" laws of various states in connection with the issuance of the shares of Acquiror Common Stock and Acquiror Preferred Stock pursuant to this Agreement and the listing of additional shares of Acquiror Common Stock on the NASDAQ Global Select Market, no consents or approvals of or filings or registrations with any court, administrative agency or commission or other governmental authority or instrumentality are necessary in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

        Section 4.5    Acquiror Capitalization.    

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        Section 4.6    Acquiror Subsidiary Capitalization.    Except as disclosed in the Acquiror SEC Reports, as of the date hereof all of the issued and outstanding shares of capital stock or other equity ownership interests of each Subsidiary of Acquiror are owned by Acquiror, directly or indirectly, free and clear of any material liens, pledges, charges, claims and security interests and similar encumbrances, and all of such shares or equity ownership interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. No Subsidiary of Acquiror has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling

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for the purchase or issuance of any shares of capital stock or any other equity security of such Subsidiary or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of such Subsidiary.

        Section 4.7    Acquiror SEC Reports; Financial Statements and Reports; Regulatory Filings.    

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        Section 4.8    Books and Records.    The books of account, minute books, stock record books and other records of Acquiror and its Subsidiaries are complete and correct in all material respects and have been maintained in accordance with Acquiror's business practices and all applicable Legal Requirements, including the maintenance of an adequate system of internal controls required by such Legal Requirements. The minute books of Acquiror and each of its Subsidiaries fairly reflect the substance of events and transactions included therein.

        Section 4.9    Loans; Loan Loss Reserve.    

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        Section 4.10    Taxes.    

        Section 4.11    Compliance with Legal Requirements.    Acquiror and each of its Subsidiaries hold all material licenses, certificates, permits, franchises and rights from all appropriate Regulatory Authorities necessary for the conduct of their respective businesses as presently conducted. Acquiror and each of its Subsidiaries is, and at all times since January 1, 2015, has been, in compliance with each Legal Requirement that is or was applicable to it or to the conduct or operation of its respective businesses or the ownership or use of any of its respective assets, except where noncompliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Acquiror. Except as would not reasonably be expected, individually or in the aggregate, to have Material Adverse Effect on Acquiror, neither Acquiror nor any of its Subsidiaries has received, at any time since January 1, 2015, any notice or other communication (whether oral or written) from any Regulatory Authority or any other Person regarding: (a) any actual, alleged, possible, or potential violation of, or failure to comply with, any Legal Requirement; or (b) any actual, alleged, possible, or potential obligation on the part of Acquiror or any of its Subsidiaries to undertake, or to bear all or any portion

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of the cost of, any remedial action of any nature in connection with a failure to comply with any Legal Requirement.

        Section 4.12    Legal Proceedings; Orders.    

        Section 4.13    Absence of Certain Changes and Events.    Since December 31, 2015, no event or events have occurred that had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Acquiror.

        Section 4.14    Compliance with Environmental Laws.    There are no actions, suits, investigations, liabilities, inquiries, Proceedings or Orders involving Acquiror or any of its Subsidiaries or any of their respective assets that are pending or, to the Knowledge of Acquiror, threatened, nor to the Knowledge of Acquiror, is there any factual basis for any of the foregoing, as a result of any asserted failure of Acquiror or any of its Subsidiaries of, or any predecessor thereof, to comply with any Environmental Law. No environmental clearances or other governmental approvals are required for the conduct of the business of Acquiror or any of its Subsidiaries or the consummation of the Contemplated Transactions. To the Knowledge of Acquiror, neither Acquiror nor any of its Subsidiaries is the owner of any interest in real estate on which any substances have been generated, used, stored, deposited, treated, recycled or disposed of, which substances if known to be present on, at or under such property, would require notification to any Regulatory Authority, clean up, removal or some other remedial action under any Environmental Law at such property or any impacted adjacent or down gradient property, except where such action would not reasonably be expected to have a Material Adverse Effect on Acquiror. Except for any matters that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Acquiror, Acquiror and each Subsidiary of Acquiror has complied in all material respects with all Environmental Laws applicable to it and its business operations.

        Section 4.15    Brokerage Commissions.    Except for fees payable to Stephens Inc. by Acquiror pursuant to an engagement letter that has been Previously Disclosed, none of Acquiror or its Subsidiaries, or any of their respective Representatives, has incurred any obligation or liability, contingent or otherwise, for brokerage or finders' fees or agents' commissions or other similar payment in connection with this Agreement.

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        Section 4.16    Approval Delays.    To the Knowledge of Acquiror, there is no reason why the granting of any of the Requisite Regulatory Approvals would be denied or unduly delayed. Acquiror Bank's most recent CRA rating was "satisfactory" or better.

        Section 4.17    Financial Capability.    Acquiror has, and will have prior to the Effective Time, sufficient funds to pay the aggregate cash consideration payable pursuant to Section 2.1 and Section 2.5, and to perform its other obligations contemplated by this Agreement.

        Section 4.18    No Other Representations or Warranties.    


Article 5

COVENANTS OF THE COMPANY

        Section 5.1    Access and Investigation.    

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        Section 5.2    Operation of the Company and Company Subsidiaries.    

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        Section 5.3    Notice of Changes.    The Company will give prompt notice to Acquiror of any fact, event or circumstance known to it that: (a) is reasonably likely, individually or taken together with all other facts, events and circumstances known to it, to result in a Material Adverse Effect on the Company; or (b) would cause or constitute a material breach of any of the Company's representations, warranties, covenants or agreements contained herein that reasonably could be expected to give rise, individually or in the aggregate, to the failure of a condition in Article 8.

        Section 5.4    Stockholders' Meeting.    Subject to the other provisions of this Agreement and unless there has been a Company Adverse Recommendation, the Company shall, as promptly as reasonably practicable, and in any event within thirty (30) days, after the date the Registration Statement is declared effective, take all action necessary, including as required by and in accordance with the DGCL, Company Certificate of Incorporation and Company Bylaws to duly call, give notice of, convene and hold a meeting of its stockholders (the "Company Stockholders' Meeting") for the purpose of obtaining the Company Stockholder Approval. The Company and Company Board will use their reasonable best efforts to obtain from its stockholders the votes in favor of the adoption of this Agreement required by the DGCL, including by recommending that its stockholders vote to adopt this Agreement, and the Company and Company Board will not withhold, withdraw, qualify or adversely modify (or publicly propose or resolve to withhold, withdraw, qualify or adversely modify) Company Board's recommendation to the Company's stockholders that the Company's stockholders vote in favor of the adoption of this Agreement (a "Company Adverse Recommendation"). However, if, prior to the time the Company Stockholder Approval is obtained, the Company Board, after consultation with outside counsel, determines in good faith it is reasonably likely that to, or to continue to, recommend this Agreement to its stockholders would result in a violation of its fiduciary duties under applicable

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Legal Requirements, then the Company Board may make a Company Adverse Recommendation or publicly propose or resolve to make a Company Adverse Recommendation.

        Section 5.5    Information Provided to Acquiror.    The Company agrees that the information concerning the Company or any of its Subsidiaries that is provided or to be provided by the Company to Acquiror in connection with the preparation of, or that is included in, the Registration Statement or Joint Proxy Statement and any other documents to be filed with any Regulatory Authority in connection with the Contemplated Transactions will: (a) at the respective times such documents are filed and, in the case of the Registration Statement, when it becomes effective and, with respect to the Joint Proxy Statement, when mailed, not be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; or (b) in the case of the Joint Proxy Statement or any amendment thereof or supplement thereto, at the time of the Company Stockholders' Meeting, not be false or misleading with respect to any material fact, or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of any proxy for the meeting in connection with which the Joint Proxy Statement shall be mailed. Notwithstanding the foregoing, the Company shall have no responsibility for the truth or accuracy of any information with respect to Acquiror or any of its Subsidiaries or any of their Affiliates contained in the Registration Statement or the Joint Proxy Statement or in any document submitted to, or other communication with, any Regulatory Authority.

        Section 5.6    Operating Functions.    The Company and the Company Bank shall cooperate with Acquiror and Acquiror Bank in connection with planning for the efficient and orderly combination of the parties and the operation of the Company Bank and Acquiror Bank, and in preparing for the consolidation of the banks' appropriate operating functions to be effective on the Effective Date or such later date as the parties may mutually agree.

        Section 5.7    Company Benefit Plans.    

        Section 5.8    Acquisition Proposals.    

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        Section 5.9    Termination of Company Stockholder Agreements.    The Company shall, within ten (10) Business Days after the date hereof, terminate each Company Stockholder Agreement pursuant to one or more written agreements in form and substance satisfactory to Acquiror in its sole discretion, copies of which shall be promptly delivered to Acquiror.


Article 6

COVENANTS OF ACQUIROR AND MERGER SUB

        Section 6.1    Operation of Acquiror and Acquiror Subsidiaries.    

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        Section 6.2    Acquiror Shareholders' Meeting.    Subject to the other provisions of this Agreement, Acquiror shall, as promptly as reasonably practicable after the date the Registration Statement is declared effective, take all action necessary, including as required by and in accordance with NASDAQ Rule 5635(a), the Acquiror Articles of Incorporation and the Acquiror Bylaws to duly call, give notice of, convene and hold a meeting of its stockholders (the "Acquiror Shareholders' Meeting") for the purpose of obtaining the Acquiror Shareholder Approval. Acquiror and the Acquiror Board will use their reasonable best efforts to obtain from its stockholders the votes in favor of the Acquiror Stock Issuance if required by NASDAQ Rule 5635(a), including by recommending that its stockholders vote in favor of the Acquiror Stock Issuance, and Acquiror and the Acquiror Board will not withhold, withdraw, qualify or adversely modify (or publicly propose or resolve to withhold, withdraw, qualify or adversely modify) such recommendation to Acquiror's shareholders.

        Section 6.3    Information Provided to the Company.    Acquiror agrees that the information concerning Acquiror or any of its Subsidiaries that is included in the Registration Statement or Joint Proxy Statement and any other documents to be filed with any Regulatory Authority in connection with the Contemplated Transactions will: (a) at the respective times such documents are filed and, in the case of the Registration Statement, when it becomes effective and, with respect to the Joint Proxy Statement, when mailed, not be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; or (b) in the case of the Joint Proxy Statement or any amendment thereof or supplement thereto, at the time of the Acquiror Shareholders' Meeting, not be false or misleading with respect to any material fact, or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of any proxy for the meeting in connection with which the Joint Proxy Statement shall be mailed. Notwithstanding the foregoing, Acquiror shall have no responsibility for the truth or accuracy of any information with respect to the Company or any of its Subsidiaries or any of their Affiliates contained in the Registration Statement or the Joint Proxy Statement or in any document submitted to, or other communication with, any Regulatory Authority.

        Section 6.4    Operating Functions.    Acquiror and Acquiror Bank shall cooperate with the Company and the Company Bank in connection with planning for the efficient and orderly combination of the parties and the operation of the Company Bank and Acquiror Bank, and in preparing for the consolidation of the banks' appropriate operating functions to be effective on the Effective Date or such later date as the parties may mutually agree.

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        Section 6.5    Indemnification.    

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        Section 6.6    Authorization and Reservation of Acquiror Common Stock and Acquiror Preferred Stock.    The Acquiror Board shall authorize and reserve the maximum number of shares of Acquiror Common Stock to be issued pursuant to this Agreement, and shall authorize, create and reserve the maximum number of shares of Acquiror Series G Preferred Stock and Acquiror Series H Preferred Stock to be issued pursuant to this Agreement.

        Section 6.7    Stock Exchange Listing.    Acquiror shall use its reasonable best efforts to cause all shares of Acquiror Common Stock issuable or to be reserved for issuance under this Agreement to be approved for listing on the NASDAQ Global Select Market prior to the Closing Date.

        Section 6.8    Assumption of Debt Instruments.    Acquiror agrees to execute and deliver, or cause to be executed and delivered, by or on behalf of the Surviving Company, at or prior to the Effective Time, one or more supplemental indentures, guarantees, and other instruments required for the due assumption of the Company's outstanding debt, subordinated debentures, guarantees, securities, and other agreements to the extent required by the terms of such debt, subordinated debentures, guarantees, securities, and other agreements.


Article 7

COVENANTS OF ALL PARTIES

        Section 7.1    Regulatory Approvals.    Acquiror and the Company and their respective Subsidiaries will cooperate and use all reasonable best efforts to as promptly as possible prepare, but in no event later than forty-five (45) days following the date hereof, file, effect and obtain all Requisite Regulatory Approvals, and the parties will comply with the terms of such Requisite Regulatory Approvals. Each of Acquiror and the Company will have the right to review in advance, and to the extent practicable each will consult with the other, in each case subject to applicable Legal Requirements relating to the exchange of information, with respect to all substantive written information submitted to any Regulatory Authority in connection with the Requisite Regulatory Approvals. In exercising the foregoing right, each of the parties will act reasonably and as promptly as practicable. Each party agrees that it will consult with the other party with respect to obtaining all permits, consents, approvals and authorizations of all Regulatory Authorities necessary or advisable to consummate the Contemplated Transactions, and each party will keep the other party apprised of the status of material matters relating to completion of the Contemplated Transactions. Acquiror and the Company will, upon request, furnish the other party with all information concerning itself, its Subsidiaries, directors, officers and stockholders and such other matters as may be reasonably necessary or advisable in connection with any filing, notice or application made by or on behalf of such other party or any of its Subsidiaries with or to any Regulatory Authority in connection with the Contemplated Transactions.

        Section 7.2    SEC Registration.    As soon as practicable following the date of this Agreement, but in no event more than thirty (30) days after the later of the filing of Acquiror's and the Company's respective Annual Report on Form 10-K for the year ended December 31, 2016, the Company and Acquiror shall prepare and file with the SEC the Joint Proxy Statement and Acquiror shall prepare and file with the SEC the Registration Statement, in which the Joint Proxy Statement will be included. Acquiror shall use its reasonable best efforts to have the Registration Statement declared effective under the Securities Act as promptly as practicable after such filing and to keep the Registration Statement effective as long as is necessary to consummate the Merger and the Contemplated Transactions. Prior to the filing of the Registration Statement, Acquiror shall consult with the Company with respect to such filing and shall afford the Company and its representatives reasonable opportunity to review and comment thereon. The Registration Statement and the Joint Proxy Statement shall include all information reasonably requested by the Company to be included. The Company will use its reasonable best efforts to cause the Joint Proxy Statement to be mailed to the Company's stockholders, and Acquiror will use its reasonable best efforts to cause the Joint Proxy Statement to be mailed to

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Acquiror's shareholders, in each case as promptly as practicable after the Registration Statement is declared effective under the Securities Act. Acquiror shall also take any action required to be taken under any applicable Legal Requirement in connection with the Acquiror Stock Issuance, and each party shall furnish all information concerning itself and its stockholders as may be reasonably requested in connection with any such action. Acquiror will advise the Company, promptly after it receives notice thereof, of the time when the Registration Statement has become effective or any supplement or amendment has been filed, the issuance of any stop order, the suspension of the qualification of Acquiror Capital Stock issuable in connection with the Merger for offering or sale in any jurisdiction, or any request by the SEC to amend the Joint Proxy Statement or the Registration Statement or comments thereon and responses thereto or requests by the SEC for additional information, and the Company will advise Acquiror, promptly after it receives notice thereof, of any request by the SEC to amend the Joint Proxy Statement or comments thereon and responses thereto or requests by the SEC for additional information. The parties shall use reasonable best efforts to respond (with the assistance of the other party) as promptly as practicable to any comments of the SEC with respect thereto. If prior to the Effective Time any event occurs with respect to the Company, Acquiror or any Subsidiary of the Company or Acquiror, respectively, or any change occurs with respect to information supplied by or on behalf of the Company or Acquiror, respectively, for inclusion in the Joint Proxy Statement or the Registration Statement that, in each case, is required to be described in an amendment of, or a supplement to, the Joint Proxy Statement or the Registration Statement, the Company or Acquiror, as applicable, shall promptly notify the other of such event (including, prior to entering into any agreement providing for any merger, consolidation, amalgamation, share exchange, business combination, issuance of securities, acquisition of securities, tender offer, exchange offer or other similar transaction involving Acquiror or any of its Subsidiaries), and the Company or Acquiror, as applicable, shall cooperate in the prompt filing with the SEC of any necessary amendment or supplement to the Joint Proxy Statement and the Registration Statement and, as required by applicable Legal Requirements, in disseminating the information contained in such amendment or supplement to the Company's stockholders and to Acquiror's shareholders. Acquiror shall take all action (other than qualifying to do business in any jurisdiction in which it is not now so qualified) required to be taken under the Securities Act, the Exchange Act, any application foreign or state securities or "blue sky" Legal Requirements and the rules and regulations thereunder in connection with the Merger and the issuance of Acquiror Common Stock and Acquiror Preferred Stock as consideration hereunder.

        Section 7.3    Publicity.    Neither the Company nor Acquiror shall, and neither the Company nor Acquiror shall permit any of its Subsidiaries to, issue or cause the publication of any press release or other public announcement with respect to, or otherwise make any public statement or, except as otherwise specifically provided in this Agreement, any disclosure of nonpublic information to a third party, concerning, the Contemplated Transactions without the prior consent (which shall not be unreasonably withheld or delayed) of Acquiror, in the case of a proposed announcement, statement or disclosure by the Company, or the Company, in the case of a proposed announcement, statement or disclosure by Acquiror; provided, however, that either party may, without the prior consent of the other party (but after prior consultation with the other party to the extent practicable under the circumstances), issue or cause the publication of any press release or other public announcement to the extent required by applicable Legal Requirements or by the NASDAQ Rules.

        Section 7.4    Reasonable Best Efforts; Cooperation.    Each of Acquiror and the Company agrees to exercise good faith and use its reasonable best efforts to satisfy the various covenants and conditions to Closing in this Agreement, and to consummate the Contemplated Transactions as promptly as practicable. Neither Acquiror nor the Company will intentionally take or intentionally permit to be taken any action that would be a breach of the terms or provisions of this Agreement. Between the date of this Agreement and the Closing Date, each of Acquiror and the Company will, and will cause each Subsidiary of Acquiror and the Company, respectively, and all of their respective Affiliates and Representatives to, cooperate with respect to all filings that any party is required by any applicable

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Legal Requirements to make in connection with the Contemplated Transactions. Subject to applicable Legal Requirements and the instructions of any Regulatory Authority, each party shall keep the other party reasonably apprised of the status of matters relating to the completion of the Contemplated Transactions, including promptly furnishing the other party with copies of notices or other written communications received by it or any of its Subsidiaries from any Regulatory Authority with respect to such transactions.

        Section 7.5    Tax Free Reorganization.    

        Section 7.6    Transaction Structure.    Acquiror may at any time change the method of effecting the Merger or the Bank Merger if and to the extent requested by Acquiror, and the Company agrees to enter into such amendments to this Agreement as Acquiror may reasonably request in order to give

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effect to such restructuring; provided, however, that no such change or amendment: (a) alters or changes the amount or kind of the Common Stock Merger Consideration, Series B Merger Consideration or Series D Merger Consideration; (b) adversely affects the Tax treatment of the Merger with respect to the Company's stockholders; (c) is reasonably likely to cause the Closing to be delayed or the receipt of the Requisite Regulatory Approvals to be prevented or delayed, in each case beyond the Termination Date; or (d) requires submission to or approval of the Company's stockholders after the Merger has been approved by the Company's stockholders.

        Section 7.7    Takeover Statutes.    No party shall take any action that would cause any Takeover Statute to become applicable to this Agreement, the Bank Merger Agreement, the Voting Agreement or any of the Contemplated Transactions, and each party shall take all necessary steps to exempt (or ensure the continued exemption of) the Merger, the Bank Merger and the other Contemplated Transactions from any applicable Takeover Statute now or hereafter in effect. If any "moratorium," "control share," "fair price," "affiliate transaction," "business combination" or other anti-takeover Legal Requirement is or may become applicable to the Merger, the parties shall use their respective commercially reasonable efforts to (a) take such actions as are reasonably necessary so that the transactions contemplated hereunder may be consummated as promptly as practicable on the terms contemplated by this Agreement and (b) otherwise take all such actions as are reasonably necessary to eliminate or minimize the effects of any such Legal Requirement on the Merger and the transactions contemplated by this Agreement.

        Section 7.8    Employees and Employee Benefits.    

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        Section 7.9    Section 16 Matters.    Prior to the Effective Time, the parties will each take such steps as may be necessary or appropriate to cause (a) any disposition of shares of Company Capital Stock or conversion of any derivative securities in respect of shares of Company Capital Stock in connection with the consummation of the Contemplated Transactions to be exempt under Rule 16b-3 promulgated under the Exchange Act and (b) any acquisitions of Acquiror Common Stock from Acquiror by virtue of the Merger and the other transactions contemplated by this Agreement, by each individual who will become subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to Acquiror immediately following the Effective Time, to be exempt under Rule 16b-3 promulgated under the Exchange Act.

        Section 7.10    Stockholder Litigation.    Each of the Company and Acquiror shall give the other the reasonable opportunity to consult concerning the defense of any stockholder litigation against the Company or Acquiror, as applicable, or any of their respective directors or officers relating to the Contemplated Transactions.

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Article 8

CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR AND MERGER SUB

        The obligations of Acquiror and Merger Sub to consummate the Merger are subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Acquiror in whole or in part):

        Section 8.1    Accuracy of Representations and Warranties.    Each of the representations and warranties of the Company: (i) set forth in Section 3.3, Section 3.5(a) and Section 3.5(b) shall be true and correct in all respects, except for inaccuracies which are de minimis in amount and effect; (ii) set forth in Section 3.21, Section 3.22 and Section 3.24 shall be true and correct in all material respects; and (iii) set forth in this Agreement (other than those referred to in clauses (i) and (ii)), disregarding any exception or qualification as to materiality or Material Adverse Effect, shall be true and correct in all respects, except where any such failures to be so true and correct individually or in the aggregate have not had and would not reasonably be expected to have a Material Adverse Effect on the Company, in each of the foregoing clauses (i), (ii) and (iii), as of the date hereof and as of the Closing Date as though made on the Closing Date, except to the extent such representations and warranties are expressly made as of an earlier date, in which case as of such earlier date. Acquiror shall have received a certificate signed by the chief executive officer and chief financial officer of the Company, dated the Closing Date, to the foregoing effect.

        Section 8.2    Performance by the Company.    The Company shall have performed or complied in all material respects with all of the covenants and obligations to be performed or complied with by it under the terms of this Agreement on or prior to the Closing Date. Acquiror shall have received a certificate signed by the chief executive officer and chief financial officer of the Company, dated the Closing Date, to the foregoing effect.

        Section 8.3    Shareholder Approvals.    Each of the Company Stockholder Approval and, if required, the Acquiror Shareholder Approval shall have been obtained. As of the Closing Date: no Persons shall have demanded appraisal for shares of Company Capital Stock in accordance with the DGCL and not subsequently withdrawn or otherwise lost the ability to become a Dissenting Stockholder, other than Persons holding not more than three percent (3.0%) individually (together with their Affiliates), or five percent (5.0%) in the aggregate, of the shares of Company Common Stock issued and outstanding as of the Closing Date.

        Section 8.4    No Proceedings, Injunctions or Restraints; Illegality.    Since the date of this Agreement, there must not have been commenced or threatened any Proceeding: (a) involving any challenge to, or seeking damages or other relief in connection with, any of the Contemplated Transactions; or (b) that may have the effect of preventing, delaying, making illegal or otherwise interfering with any of the Contemplated Transactions, in either case that would reasonably be expected by the Acquiror Board to have a Material Adverse Effect on Acquiror and its Subsidiaries on a consolidated basis. No order, injunction or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger or any of the other Contemplated Transactions shall be in effect. No statute, rule, regulation, order, injunction or decree shall have been enacted, entered, promulgated or enforced by any governmental authority which prohibits or makes illegal consummation of the Merger.

        Section 8.5    Regulatory Approvals.    All Requisite Regulatory Approvals shall have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired or been terminated and no such Requisite Regulatory Approval shall have imposed a restriction or condition on, or requirement of, such approval that would, after the Effective Time, reasonably be expected by the Acquiror Board to materially restrict or burden Acquiror or its Subsidiaries measured on a consolidated basis.

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        Section 8.6    Registration Statement.    The Registration Statement shall have been declared effective under the Securities Act. No stop order shall have been issued or threatened by the SEC that suspends the effectiveness of the Registration Statement, and no Proceeding shall have been commenced or be pending or threatened for such purpose.

        Section 8.7    Legal Opinion.    Acquiror shall have received a written opinion of Howard & Howard Attorneys PLLC, counsel to the Company, in the form set forth in Schedule 8.7, dated as of the Closing Date.

        Section 8.8    Tax Opinion.    Acquiror shall have received a written opinion of Barack Ferrazzano Kirschbaum & Nagelberg LLP, tax counsel to Acquiror, in form and substance reasonably satisfactory to the Company and Acquiror, dated as of the Closing Date, to the effect that: (a) the Merger will constitute a reorganization within the meaning of Section 368(a) of the Code; (b) each of the Company and Acquiror will be a party to such reorganization within the meaning of Section 368(b) of the Code; and (c) no gain or loss will be recognized by holders of Company Common Stock upon the receipt of shares of Acquiror Common Stock in exchange for their shares of Company Common Stock, except to the extent of any cash consideration received in the Merger and any cash received in lieu of fractional shares of Acquiror Common Stock.

        Section 8.9    Stock Exchange Listing.    Acquiror shall have filed with the NASDAQ Stock Market, LLC a notification form for the listing of all shares of Acquiror Common Stock to be delivered in the Merger, and the NASDAQ Stock Market, LLC shall not have objected to the listing of such shares of Acquiror Common Stock.

        Section 8.10    No Material Adverse Effect.    From the date of this Agreement to the Closing, there shall be and have been no change in the financial condition, assets or business of the Company or any of its Subsidiaries that has had or would reasonably be expected to have a Material Adverse Effect on the Company.


Article 9

CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY

        The obligation of the Company to consummate the Merger is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by the Company, in whole or in part):

        Section 9.1    Accuracy of Representations and Warranties.    Each of the representations and warranties of Acquiror and Merger Sub: (i) set forth in Section 4.3, Section 4.5(a) and Section 4.5(b) shall be true and correct in all respects, except for inaccuracies which are de minimis in amount and effect; and (ii) set forth in this Agreement (other than those referred to in clause (i)), disregarding any exception or qualification as to materiality or Material Adverse Effect, shall be true and correct in all respects, except where any such failures to be so true and correct individually or in the aggregate have not had and would not reasonably be expected to have a Material Adverse Effect on Acquiror, in each of the foregoing clauses (i) and (ii), as of the date hereof and as of the Closing Date as though made on the Closing Date, except to the extent such representations and warranties are expressly made as of an earlier date, in which case as of such earlier date. The Company shall have received a certificate signed by the chief executive officer and chief financial officer of Acquiror, dated the Closing Date, to the foregoing effect.

        Section 9.2    Performance by Acquiror.    Acquiror and Merger Sub shall have performed or complied in all material respects with all of the covenants and obligations to be performed or complied with by them under the terms of this Agreement on or prior to the Closing Date. The Company shall have received a certificate signed by the chief executive officer and chief financial officer of Acquiror, dated the Closing Date, to the foregoing effect.

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        Section 9.3    Shareholder Approvals.    Each of the Company Stockholder Approval and, if required, the Acquiror Shareholder Approval shall have been obtained.

        Section 9.4    No Injunctions or Restraints; Illegality.    Since the date of this Agreement, there must not have been commenced or threatened any Proceeding: (a) involving any challenge to, or seeking damages or other relief in connection with, any of the Contemplated Transactions; or (b) that may have the effect of preventing, delaying, making illegal or otherwise interfering with any of the Contemplated Transactions, in either case that would reasonably be expected by the Company Board to have a Material Adverse Effect on the Surviving Entity. No order, injunction or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger or any of the other Contemplated Transactions shall be in effect. No statute, rule, regulation, order, injunction or decree shall have been enacted, entered, promulgated or enforced by any governmental authority which prohibits or makes illegal consummation of the Merger.

        Section 9.5    Regulatory Approvals.    All Requisite Regulatory Approvals shall have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired or been terminated and no such Requisite Regulatory Approval shall have imposed a restriction or condition on, or requirement of, such approval that would, after the Effective Time, reasonably be expected by the Company Board to materially restrict or burden the Surviving Company.

        Section 9.6    Registration Statement.    The Registration Statement shall have become effective under the Securities Act. No stop order shall have been issued or threatened by the SEC that suspends the effectiveness of the Registration Statement, and no Proceeding shall have been commenced or be pending or threatened for such purpose.

        Section 9.7    Tax Opinion.    The Company shall have received a written opinion of RSM US LLP, tax accountants to the Company, in form and substance reasonably satisfactory to the Company and Acquiror, dated as of the Closing Date, to the effect that: (a) the Merger will constitute a reorganization within the meaning of Section 368(a) of the Code; (b) each of the Company and Acquiror will be a party to such reorganization within the meaning of Section 368(b) of the Code; and (c) no gain or loss will be recognized by holders of Company Common Stock upon the receipt of shares of Acquiror Common Stock in exchange for their shares of Company Common Stock, except to the extent of any cash consideration received in the Merger and any cash received in lieu of fractional shares of Acquiror Common Stock.

        Section 9.8    Stock Exchange Listing.    Acquiror shall have filed with the NASDAQ Stock Market, LLC a notification form for the listing of all shares of Acquiror Common Stock to be delivered in the Merger, and the NASDAQ Stock Market, LLC shall not have objected to the listing of such shares of Acquiror Common Stock.

        Section 9.9    No Material Adverse Effect.    From the date of this Agreement to the Closing, there shall be and have been no change in the financial condition, assets or business of Acquiror or any of its Subsidiaries that has had or would reasonably be expected to have a Material Adverse Effect on Acquiror.


Article 10

TERMINATION

        Section 10.1    Termination of Agreement.    This Agreement may be terminated only as set forth below, whether before or after approval of the matters presented in connection with the Merger by the stockholders of the Company or Acquiror:

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        For purposes of this Agreement, the following terms shall have the following meanings:

        Section 10.2    Effect of Termination or Abandonment.    Upon the termination of this Agreement and the abandonment of the Merger pursuant to Section 10.1, this Agreement shall become null and void, and there shall be no liability of one party to the other or any restrictions on the future activities on the part of any party to this Agreement, or its respective directors, officers or stockholders, except that: (i) the Confidentiality Agreement, Section 10.2, Section 10.3 and Article 11 shall survive such termination and abandonment; and (ii) no such termination shall relieve the breaching party from liability resulting from its fraud or any willful and material breach by that party of this Agreement.

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        Section 10.3    Fees and Expenses.    

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Article 11

MISCELLANEOUS

        Section 11.1    Survival.    Except for covenants that are expressly to be performed after the Closing, none of the representations, warranties and covenants contained herein shall survive beyond the Closing.

        Section 11.2    Governing Law; Venue; Waiver of Jury Trial.    All questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by the internal laws of the State of Delaware applicable to Contracts made and to be performed in such state without regard to conflicts of laws. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts located in Illinois solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby, and hereby waives, and agrees not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said court or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such court, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such court. The parties hereby consent to and grant any such court jurisdiction over the person of such parties and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided under Section 11.6 or in such other manner as may be permitted by applicable law shall be valid and sufficient service thereof. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO IT THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH HEREIN.

        Section 11.3    Assignments, Successors and No Third Party Rights.    Neither party to this Agreement may assign any of its rights under this Agreement (whether by operation of law or otherwise) without the prior written consent of the other party. Any purported assignment in contravention hereof shall be null and void. Subject to the preceding sentence, this Agreement and every representation, warranty, covenant, agreement and provision hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Except for Section 6.5, nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties to this Agreement any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement. Any inaccuracies in such representations and warranties are subject to waiver by the parties hereto in accordance with Section 11.5 without notice or liability to any other Person. In some instances, the representations and warranties in this Agreement may represent an allocation among the parties hereto of risks associated with particular matters regardless of the knowledge of any of the parties hereto. Consequently, persons other than the parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.

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        Section 11.4    Modification.    This Agreement may be amended, modified or supplemented by the parties at any time before or after the Company Stockholder Approval and/or the Acquiror Shareholder Approval is obtained; provided, however, that after the Company Stockholder Approval and/or the Acquiror Shareholder Approval is obtained, there may not be, without further approval of the Company's stockholders and/or Acquiror's shareholders, respectively, any amendment of this Agreement that requires further approval under applicable Legal Requirements. This Agreement may not be amended, modified or supplemented except by an instrument in writing signed on behalf of each of the parties.

        Section 11.5    Extension of Time; Waiver.    At any time prior to the Effective Time, the parties may, to the extent permitted by applicable Legal Requirements: (a) extend the time for the performance of any of the obligations or other acts of the other party; (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement; or (c) waive compliance with or amend, modify or supplement any of the agreements or conditions contained in this Agreement which are for the benefit of the waiving party. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party. Neither the failure nor any delay by any party in exercising any right, power or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. Except as provided in Article 10, the rights and remedies of the parties to this Agreement are cumulative and not alternative. To the maximum extent permitted by applicable Legal Requirements: (x) no claim or right arising out of this Agreement or the documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party; (y) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (z) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

        Section 11.6    Notices.    All notices, consents, waivers and other communications under this Agreement shall be in writing (which shall include facsimile communication) and shall be deemed to have been duly given if delivered by hand or by nationally recognized overnight delivery service or sent by facsimile (with confirmation) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

        If to Acquiror or Merger Sub, to:

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Except as otherwise provided herein, all such notices, consents, waivers and other communications shall be effective: (a) if delivered by hand, when delivered; (b) if delivered by overnight delivery service, on the next Business Day after deposit with such service; and (c) if by facsimile, on the next Business Day.

        Section 11.7    Entire Agreement.    This Agreement, the Bank Merger Agreement and the Schedules and the Confidentiality Agreement constitute the entire understanding and agreement of the parties hereto and supersede all other prior agreements and understandings, written or oral, relating to such subject matter between the parties.

        Section 11.8    Severability.    Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Legal Requirements, but if any provision of this Agreement is held to be prohibited by or invalid under applicable Legal Requirements, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement unless the consummation of the Contemplated Transactions is adversely affected thereby.

        Section 11.9    Further Assurances.    The parties agree: (a) to furnish upon request to each other such further information; (b) to execute and deliver to each other such other documents; and (c) to do such other acts and things; all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement.

        Section 11.10    Counterparts.    This Agreement and any amendments thereto may be executed in any number of counterparts (including by facsimile, PDF or other electronic means), each of which shall be deemed an original, but all of which together shall constitute one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other party, it being understood that each party need not sign the same counterpart.


Article 12

DEFINITIONS

        Section 12.1    Definitions.    In addition to those terms defined throughout this Agreement, the following terms, when used herein, shall have the following meanings:

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        Section 12.2    Principles of Construction.    

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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGE FOLLOWS]

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        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers on the day and year first written above.

MIDLAND STATES BANCORP, INC.   CENTRUE FINANCIAL CORPORATION

By:

 

/s/ LEON J. HOLSCHBACH


 

By:

 

/s/ KURT R. STEVENSON

    Name:   Leon J. Holschbach       Name:   Kurt R. Stevenson
    Title:   Chief Executive Officer and President       Title:   President and Chief Executive Officer

SENTINEL ACQUISITION, LLC

 

 

 

 

 

 

By:

 

/s/ LEON J. HOLSCHBACH


 

 

 

 

 

 
    Name:   Leon J. Holschbach            
    Title:   President            

   

[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]



EXHIBIT A

FORM OF BANK MERGER AGREEMENT

        THIS BANK MERGER AGREEMENT (this "Agreement") is made as of [                        ], 2017, between MIDLAND STATES BANK, an Illinois chartered member bank with its main office located at 1201 Network Centre Drive, Effingham, County of Effingham, in the State of Illinois ("Midland," or where appropriate, the "Continuing Bank"), and CENTRUE BANK, an Illinois chartered member bank with its main office located at 201 East Main Street, Streator, County of La Salle, in the State of Illinois (the "Centrue").


RECITALS

        A.    As of September 30, 2016, Midland had capital stock outstanding of $400,000, divided into 200,000 shares of issued and outstanding common stock, $2.00 par value per share, surplus of approximately $275.6 million, retained earnings of approximately $91.4 million and accumulated other comprehensive income (including a market value adjustment for available-for-sale securities) of approximately $9.3 million.

        B.    As of September 30, 2016, Centrue had capital stock outstanding of $1.27 million, divided into 12,700 shares of issued and outstanding common stock, $100 par value per share, surplus of approximately $173.8 million, negative retained earnings of approximately $40.0 million and accumulated other comprehensive loss (including a market value adjustment for available-for-sale securities) of approximately $2.1 million.

        C.    Midland States Bancorp, Inc., an Illinois corporation with its main office in Effingham, Illinois ("Acquiror"), is the sole stockholder of Midland, and at the time of the merger of Centrue with and into, and under the charter of, Midland (the "Bank Merger"), will be the sole shareholder of Centrue.

        D.    Pursuant to that certain Agreement and Plan of Merger, dated as of January 26, 2017 (the "Holding Company Agreement"), by and between Acquiror, its wholly owned Delaware limited liability company subsidiary ("Merger Sub"), and Centrue Financial Corporation, a Delaware corporation with its main office in Streator, Illinois, and the sole stockholder of Centrue (the "Company"), the Company will be merged with and into Merger Sub (the "Holding Company Merger").

        E.    Following the effectiveness of the Holding Company Merger, Centrue is to be merged with and into Midland, with Midland as the surviving bank and a wholly owned subsidiary of Acquiror.

        F.     The Continuing Bank will have capital stock outstanding of $400,000, divided into 200,000 shares of issued and outstanding common stock, $2.00 par value per share, and the assets, liabilities, surplus and retained earnings set forth on the pro forma financial statement attached as SCHEDULE A.

        G.    Each of the boards of directors of Midland and Centrue has approved this Agreement and authorized its execution.


AGREEMENTS

        IN CONSIDERATION OF THE FOREGOING PREMISES, and the mutual covenants herein contained and for the purpose of prescribing the terms and conditions of the Bank Merger, the manner of carrying the same into effect, the treatment of Centrue's common stock and such other details and provisions as are deemed necessary or desirable, the parties hereby agree as follows:


Article 1
GENERAL

        Section 1.1    The Bank Merger.    Pursuant to the terms and conditions of this Agreement and the provisions of Section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. §1828(c)), and Section 5/22 of Chapter 205 of the Illinois Compiled Statutes, Centrue shall be merged into, and under the charter of, Midland, and Midland shall be the Continuing Bank.


        Section 1.2    Effective Time.    The Bank Merger shall become effective at such time upon satisfaction of all requirements of law and the terms and conditions specified in this Agreement, including, among other conditions, receipt of the approval of the Board of Governors of the Federal Reserve System (the "Federal Reserve") and the Illinois Department of Financial and Professional Regulation (the "DFPR") and, if appropriate, approvals of other bank regulatory agencies. The time of such effectiveness is referred to in this Agreement as the "Effective Time."

        Section 1.3    Name, Offices, Charter and Bylaws of the Continuing Bank.    

        Section 1.4    Board of Directors.    The Board of Directors of the Continuing Bank shall consist of those persons as set forth in EXHIBIT A attached hereto. Each director shall hold office from and after the time of his or her qualification as a director of the Continuing Bank and until his or her successor is elected and has qualified.

        Section 1.5    Senior Executive Officers.    The senior executive officers of the Continuing Bank shall consist of those persons as set forth in EXHIBIT B attached hereto, each to hold office in accordance with the bylaws of the Continuing Bank as in effect at and after the Effective Time.


Article 2
TREATMENT OF COMMON STOCK
AND CAPITALIZATION OF THE CONTINUING BANK

        Section 2.1    Treatment of Common Stock.    The treatment of the shares of common stock of each of Midland and Centrue shall be as follows:

        Section 2.2    Capitalization of the Continuing Bank.    The Continuing Bank will have capital stock of $400,000, divided into 200,000 shares of common stock, par value of $2.00 per share. Accordingly, as of September 30, 2016, the capital accounts of the Continuing Bank would have been as set forth on the pro forma financial statement attached asSCHEDULE A.

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ARTICLE 3
EFFECT OF THE BANK MERGER UPON CENTRUE AND MIDLAND

        Section 3.1    General.    Except as specifically set forth herein, at the Effective Time, the identity, existence, purposes, powers, objects, franchises, privileges, rights and immunities of Midland shall continue unaffected and unimpaired by the Bank Merger and the corporate franchise, existence and rights of Centrue shall be merged with and into the Continuing Bank. The separate existence and corporate organization of Centrue and Midland, except insofar as either may be continued by statute, shall cease at the Effective Time. The Continuing Bank shall at and after the Effective Time possess all of the rights, privileges, immunities, powers and franchises, including appointments, designations and nominations, and all other rights and interests as trustee, executor, administrator, registrar or transfer agent of stocks and bonds, guardian, conservator, assignee, receiver, and in every other fiduciary capacity, in the same manner and to the same extent as was held or enjoyed by Centrue and Midland at the Effective Time.

        Section 3.2    Properties of the Continuing Bank.    At the Effective Time, all property, real, personal and mixed, and all debts due on whatever account and all other choses in action and all and every other interest, of or belonging to, or due to, Centrue and Midland, shall be taken and deemed to be transferred to and vested in the Continuing Bank without further act or deed, and the title to all real estate, or any interest therein, under the laws of Illinois or of any other state or of the United States, vested in Centrue and Midland shall vest in the Continuing Bank and shall not revert or be in any way impaired by reason of the Bank Merger. Centrue and Midland shall execute all such instruments of transfer, if any, as shall be necessary under the laws of the State of Illinois or of any other state or of the United States to vest all the right, title and interest of Centrue and Midland in and to its assets in the Continuing Bank.

        Section 3.3    Liabilities of the Continuing Bank.    The Continuing Bank at and after the Effective Time shall be responsible and liable for and assume all of the liabilities, deposits, contracts and obligations of Centrue and Midland in the same manner and to the same extent as if the Continuing Bank had itself incurred the same or contracted therefor, and any claim existing or action or proceeding pending by or against Centrue and Midland may be prosecuted to judgment as if the Bank Merger had not taken place, or the Continuing Bank may be substituted in place of Centrue and Midland. Neither the rights of creditors nor any liens upon the property of Centrue and Midland shall be impaired by reason of the Bank Merger, but such liens shall be limited to the property upon which they were liens immediately prior to the Effective Time.


Article 4
CONDITIONS

        Section 4.1    Conditions to Consummation.    This Agreement is subject to, and consummation of the Bank Merger herein provided for, is conditioned upon the fulfillment prior to the Effective Time of each of the following conditions:

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Article 5
TERMINATION

        Notwithstanding anything herein to the contrary, this Agreement may be terminated by agreement of the parties and shall automatically terminate, without any action by either party hereto, immediately upon the termination of the Holding Company Agreement.


Article 6
MISCELLANEOUS

        Section 6.1    Expenses.    Whether or not the Bank Merger is approved, the parties to this Agreement shall pay expenses incurred by each of them, respectively, in connection with the transactions contemplated herein, and each of the parties shall pay their proportionate share of all examination expenses as may be incurred by the DFPR in connection with the Bank Merger.

        Section 6.2    Counterparts; Captions.    This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. The title of this Agreement and the headings herein set out are for convenience of reference only and shall not be deemed a part of this Agreement.

        Section 6.3    Amendment.    At any time before or after approval and adoption hereof by the respective shareholders of Midland and Centrue, this Agreement may be amended by agreement between Midland and Centrue.

        Section 6.4    Governing Law.    This Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the laws of the State of Illinois, except as otherwise required.

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        IN WITNESS WHEREOF, Midland and Centrue have caused this Agreement to be executed in counterparts by their duly authorized officers as of the date first above written.

MIDLAND STATES BANK   CENTRUE BANK

By:

 

 


 

By:

 

    
    Name:
Title:
          Name:
Title:
   

   

[SIGNATURE PAGE TO BANK M ERGER AGREEMENT]



SCHEDULE A

PRO FORMA FINANCIAL STATEMENT


MIDLAND STATES BANK

(dollars in thousands)

 
  September 30, 2016  

Total assets

  $ [                ]  

Total liabilities

  $ [                ]  

Equity capital:

       

Common stock

  $ [                ]  

Surplus

    [                ]  

Retained earnings

    [                ]  

Other comprehensive income

    [                ]  

Total equity capital

  $ [                ]  


EXHIBIT A

BOARD OF DIRECTORS OF CONTINUING BANK

John Schultz

Leon Holschbach

Jerry McDaniel

Dwight Miller

Richard Ramos

Robert Schultz

Thomas Shaw

Jeffrey Smith



EXHIBIT B

SENIOR EXECUTIVE OFFICERS OF CONTINUING BANK

NAME
  TITLE
Leon Holschbach   Chief Executive Officer

Jeffrey Ludwig

 

President

Douglas Tucker

 

Senior Vice President and Corporate Counsel

Kevin Thompson

 

Chief Financial Officer

Jeff Mefford

 

Executive Vice President

Sharon Schaubert

 

Senior Vice President

James Stewart

 

Chief Risk Officer



QuickLinks

AGREEMENT AND PLAN OF MERGER BY AND AMONG MIDLAND STATES BANCORP, INC., SENTINEL ACQUISITION, LLC AND CENTRUE FINANCIAL CORPORATION DATED AS OF JANUARY 26, 2017
TABLE OF CONTENTS
INDEX OF DEFINED TERMS
AGREEMENT AND PLAN OF MERGER
RECITALS
AGREEMENTS
Article 1 THE MERGER; BANK MERGER
Article 2 CONVERSION OF SECURITIES IN THE MERGER
Article 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Article 4 REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND MERGER SUB
Article 5 COVENANTS OF THE COMPANY
Article 6 COVENANTS OF ACQUIROR AND MERGER SUB
Article 7 COVENANTS OF ALL PARTIES
Article 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR AND MERGER SUB
Article 9 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
Article 10 TERMINATION
Article 11 MISCELLANEOUS
Article 12 DEFINITIONS
EXHIBIT A FORM OF BANK MERGER AGREEMENT
RECITALS
AGREEMENTS
Article 1 GENERAL
Article 2 TREATMENT OF COMMON STOCK AND CAPITALIZATION OF THE CONTINUING BANK
ARTICLE 3 EFFECT OF THE BANK MERGER UPON CENTRUE AND MIDLAND
Article 4 CONDITIONS
Article 5 TERMINATION
Article 6 MISCELLANEOUS
SCHEDULE A PRO FORMA FINANCIAL STATEMENT MIDLAND STATES BANK (dollars in thousands)
EXHIBIT A BOARD OF DIRECTORS OF CONTINUING BANK
EXHIBIT B SENIOR EXECUTIVE OFFICERS OF CONTINUING BANK

Exhibit 10.1

 

EXECUTION COPY

 

VOTING AND SUPPORT AGREEMENT

 

THIS VOTING AND SUPPORT AGREEMENT (this “Agreement”) is entered into as of January 26, 2017, by and among Midland States Bancorp, Inc., an Illinois corporation (“Acquiror”), Sentinel Acquisition, LLC, a Delaware limited liability company (“Merger Sub”), and those stockholders of the Company whose names appear on the signature page of this Agreement (such stockholders collectively referred to in this Agreement as the “Principal Stockholders,” and individually as a “Principal Stockholder”).

 

RECITALS

 

A.                           As of the date hereof, each Principal Stockholder is the owner and controls voting power of the number of shares of the Company’s common stock, $0.01 par value per share (“Company Common Stock”), as is set forth opposite such Principal Stockholder’s name on the signature page attached hereto.

 

B.                           Acquiror is contemplating the acquisition of Centrue Financial Corporation, a Delaware corporation (the “Company”), by means of a merger (the “Merger”) of the Company with and into Merger Sub, all pursuant to an Agreement and Plan of Merger to be dated as of January 26, 2017 (the “Merger Agreement”), among Acquiror, Merger Sub and the Company.

 

C.                           Acquiror and Merger Sub are unwilling to expend the substantial time, effort and expense necessary to implement the Merger, including applying for and obtaining necessary approvals of regulatory authorities, unless all of the Principal Stockholders enter into this Agreement.

 

D.                           Each Principal Stockholder believes it is in his, her or its best interest as well as the best interest of the Company for Acquiror, Merger Sub and the Company to consummate the Merger.

 

AGREEMENTS

 

In consideration of the foregoing premises, which are incorporated herein by this reference, and the covenants and agreements of the parties herein contained, and as an inducement to Acquiror and Merger Sub to enter into the Merger Agreement and to incur the expenses associated with the Merger, the parties hereto, intending to be legally bound, hereby agree as follows:

 

Section 1.              Representations and Warranties.  Each Principal Stockholder represents and warrants that as of the date hereof, he, she or it: (a) owns beneficially and of record the number of shares of Company Common Stock as is set forth opposite such Principal Stockholder’s name on the signature page attached hereto; (b) has the sole, or joint with any other Principal Stockholder, voting power with respect to such shares of Company Common Stock; and (c) has all necessary power and authority to enter into this Agreement, and further represents and warrants that this Agreement is the legal, valid and binding agreement of such Principal Stockholder, and is enforceable against such Principal Stockholder in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally and subject to general principles of equity.

 

Section 2.              Voting Agreement.  Each Principal Stockholder hereby agrees that at any meeting of the Company’s stockholders however called, and any adjournment or postponement thereof, and in any action by written consent of the Company’s stockholders, such Principal Stockholder shall vote, or cause to be voted, all shares of Company Common Stock owned or controlled by him, her or it at the time of such meeting of the Company’s stockholders: (a) in favor of adoption of the Merger Agreement and the approval of the Merger and the other transactions contemplated by the Merger Agreement; (b) against any tender or exchange offer to acquire more than fifteen percent (15%) of the voting power in the Company or any of its subsidiaries, any proposal for a merger, consolidation or other

 



 

business combination involving the Company or any of its subsidiaries, or any other proposal or offer to acquire in any manner more than fifteen percent (15%) of the voting power in, or more than fifteen percent (15%) of the business, assets or deposits of, the Company or any of its subsidiaries, other than the transactions contemplated by the Merger Agreement, in each case involving any party other than Acquiror or an affiliate of Acquiror (an “Acquisition Proposal”); and (c) against any action or agreement that could reasonably be expected to result in a material breach of any covenant, representation or warranty or any other obligation of the Company under the Merger Agreement, or in any manner prevent or materially impede, interfere with or delay the Merger, the adoption of the Merger Agreement or the consummation of any of the transactions involving Acquiror and Merger Sub contemplated by the Merger Agreement.

 

Section 3.              Additional Covenants.  Except as required by law, each Principal Stockholder agrees that he, she or it will:

 

(a)                                 not engage in any activities, discussions or negotiations with any persons or entities other than Acquiror with respect to any Acquisition Proposal;

 

(b)                                 not vote or execute any written consent to rescind or amend in any manner any prior vote or written consent to approve or adopt the Merger Agreement or any of the transactions contemplated thereby;

 

(c)                                  use his, her or its best efforts to cause any necessary meeting of the Company’s stockholders to be duly called and held, or any necessary consent of stockholders to be obtained, for the purpose of approving or adopting the Merger Agreement and the transactions contemplated thereby;

 

(d)                                 cause each of his, her or its affiliates to cooperate fully with Acquiror in connection with the Merger Agreement and the transactions contemplated thereby; and

 

(e)                                  execute and deliver such additional instruments and documents and take such further action as may be reasonably necessary to effectuate and comply with his, her or its respective obligations under this Agreement.

 

Section 4.              No Dissent.  Each Principal Stockholder hereby waives, and agrees that he, she or it will not exercise, any rights of dissent or appraisal provided under the Merger Agreement, any applicable laws (including the General Corporation Law of the State of Delaware (the “DGCL”)) or otherwise in connection with the approval of the Merger or any of the other transactions contemplated by the Merger Agreement.

 

Section 5.              Termination.  Notwithstanding any other provision of this Agreement, this Agreement shall automatically terminate on the earlier of:  (a) the second anniversary of the date hereof, (b) the date of termination of the Merger Agreement in accordance with its terms; and (c) the date, if any, on which the Company publicly discloses that the board of directors of the Company (the “Company Board”) has withdrawn, qualified or adversely modified its recommendation to the stockholders of the Company that the Company’s stockholders vote in favor of the adoption of the Merger Agreement, in each case because the Company Board has determined in good faith, after consultation with outside counsel, that to, or to continue to, recommend the Merger Agreement to the Company’s stockholders would result in a violation of its fiduciary duties under applicable law.  In addition, each Principal Stockholder’s obligations under Section 2 and Sections 3(a) — (c) of this Agreement shall terminate upon the adoption of the Merger Agreement by the Company’s stockholders in accordance with the requirements of the DGCL; provided such Principal Stockholder has complied in all respects with its obligations under Sections 2 and 3.

 

2



 

Section 6.              Amendment and Modification.  This Agreement may be amended, modified or supplemented at any time by the written approval of such amendment, modification or supplement by Acquiror, Merger Sub and all of the Principal Stockholders.

 

Section 7.              Entire Agreement.  This Agreement evidences the entire agreement among the parties hereto with respect to the matters provided for herein and there are no agreements, representations or warranties with respect to the matters provided for herein other than those set forth herein and in the Merger Agreement and any written agreements related thereto.  Except for the Merger Agreement, this Agreement supersedes any agreements among any of the Principal Stockholders and Acquiror or Merger Sub concerning the acquisition, disposition or control of any shares of Company Common Stock or shares of Preferred Stock, no par value per share, of the Company (the “Company Preferred Stock” and, together with the Company Common Stock, the “Company Capital Stock”).

 

Section 8.              No Economic Benefit; Absence of Control.  Nothing contained in this Agreement shall be deemed to vest in Acquiror any direct or indirect ownership or incidence of ownership of or with respect to any of the Company Capital Stock.  All rights, ownership and economic benefits of and relating to the Company Capital Stock shall remain and belong to the applicable stockholder and Acquiror shall have no power or authority to direct any stockholder in the voting of any of the Company Capital Stock or the performance by any stockholder of his, her or its duties or responsibilities as a stockholder of the Company, except as otherwise provided herein.  Subject to any specific provisions of this Agreement, it is the intent of the parties to this Agreement that neither Acquiror nor Merger Sub, by reason of this Agreement, shall be deemed (until consummation of the transactions contemplated by the Merger Agreement) to control, directly or indirectly, the Company and shall not exercise, or be deemed to exercise, directly or indirectly, a controlling influence over the management or policies of the Company.  For the avoidance of doubt, this Agreement is a voting and support agreement only, and is not to be interpreted as a written consent to the Merger or as granting Acquiror a proxy to vote the Company Common Stock subject to this Agreement.

 

Section 9.              Informed Action.  Each Principal Stockholder acknowledges that he, she or it has had an opportunity to be advised by counsel of his, her or its choosing with regard to this Agreement and the transactions and consequences contemplated hereby.  Each Principal Stockholder further acknowledges that he, she or it has received a copy of the Merger Agreement and is familiar with its terms.

 

Section 10.       Severability.  The parties agree that if any provision of this Agreement shall under any circumstances be deemed invalid or inoperative, this Agreement shall be construed with the invalid or inoperative provisions deleted and the rights and obligations of the parties shall be construed and enforced accordingly.

 

Section 11.       Notices.  All notices, requests, claims, demands, and other communications hereunder shall be in writing and shall be deemed to have been given:  (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a portable data file (pdf) of the document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the fifth (5th) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.  Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 11):

 

3



 

If to Acquiror or Merger Sub, to:

 

Midland States Bancorp, Inc.

1201 Network Centre Drive

Effingham, IL 62401

Facsimile:

(217) 342-9462

Attention:  

Jeffrey G. Ludwig

 

Executive Vice President

 

with copies, which shall not constitute notice, to:

 

Barack Ferrazzano Kirschbaum & Nagelberg LLP

200 W. Madison Street, Suite 3900

Chicago, Illinois 60606

Electronic Mail: dennis.wendte@bfkn.com

Facsimile:

(312) 984-3150

Attention:

Dennis R. Wendte

 

If to a Principal Stockholder, to the mailing address, e-mail address or facsimile number set forth for such Principal Stockholder on the signature page hereof

 

with copies, which shall not constitute notice, to:

 

Howard & Howard Attorneys PLLC

200 S. Michigan Ave. #1100

Chicago, Illinois 60604

Electronic Mail: mbr@h2law.com

Facsimile:

(312) 939-5617

Attention:

Mark Ryerson

 

Section 12.       Counterparts; Facsimile/PDF Signatures.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Agreement may be executed and accepted by facsimile or portable data file (pdf) signature and any such signature shall be of the same force and effect as an original signature.

 

Section 13.       Governing Law; Venue; Waiver of Jury Trial.  All questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by the internal laws of the State of Delaware applicable to Contracts made and to be performed in such state without regard to conflicts of laws.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts located in Illinois solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby, and hereby waives, and agrees not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said court or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such court, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such court.  The parties hereby consent to and grant any such court jurisdiction over the person of such parties and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided under Section 11 or in such other manner as may be permitted by applicable law shall be valid and sufficient service thereof.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND

 

4



 

THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO IT THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH HEREIN.

 

Section 14.       Successors; Assignment.  This Agreement shall be binding upon and inure to the benefit of Merger Sub and Acquiror, and their successors and permitted assigns, and the Principal Stockholders and their respective directors and officers, successors and assigns, spouses, executors, personal representatives, administrators, heirs, legatees, guardians and other legal representatives.  This Agreement shall survive the death or incapacity of any Principal Stockholder.  This Agreement may be assigned only by Acquiror, and then only to an Affiliate of Acquiror.

 

Section 15.       Interpretation.  In this Agreement, unless otherwise stated or the context otherwise requires, the following uses apply: (i) references to a statute shall refer to the statute, as amended from time to time, and any successor statute, and to all regulations promulgated under or implementing the statute or its successor, as in effect at the relevant time; (ii) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including,” and the words “to,” “until” and “ending on” (and the like) mean “to, but excluding”; (iii) “including” means “including, but not limited to”; (iv) all words used in this Agreement will be construed to be of such gender or number as the circumstances and context require; (v) the captions and headings of articles and sections of Agreement have been inserted solely for convenience of reference and shall not be considered a part of this Agreement nor shall any of them affect the meaning or interpretation of this Agreement or any of its provisions; and (vi) any reference to a document or set of documents in this Agreement, and the rights and obligations of the parties under any such documents, means such document or documents as amended from time to time, and any and all modifications, extensions, renewals, substitutions or replacements thereof.  With regard to each and every term and condition of this Agreement and any and all agreements and instruments subject to the terms hereof, the parties hereto understand and agree that the same have or has been mutually negotiated, prepared and drafted, and that if at any time the parties hereto desire or are required to interpret or construe any such term or condition or any agreement or instrument subject hereto, no consideration shall be given to the issue of which party hereto actually prepared, drafted or requested any term or condition of this Agreement or any agreement or instrument subject hereto.

 

Section 16.       Directors and Officers.  The parties hereto acknowledge that each Principal Stockholder is entering into this Agreement solely in his, her or its capacity as a stockholder of the Company and, notwithstanding anything to the contrary in this Agreement, nothing in this Agreement is intended or shall be construed to require any Principal Stockholder, in his or her capacity as a director and/or officer of the Company and/or Centrue Bank, as applicable, to act or fail to act in accordance with his, her or its fiduciary duties in such director and/or officer capacity.  Furthermore, no Principal Stockholder makes any agreement or understanding herein in his, her or its capacity as a director and/or officer of the Company and/or Centrue Bank.

 

[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

 

[SIGNATURE PAGES FOLLOW]

 

5



 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement individually, or have caused this Agreement to be executed by their respective officers, on the day and year first written above.

 

 

MIDLAND STATES BANCORP, INC.

 

 

 

 

 

By:

/s/ Douglas J. Tucker

 

Douglas J. Tucker

 

Senior Vice President & Corporate Counsel

 

 

 

 

 

SENTINEL ACQUISITION, LLC

 

 

 

 

 

By:

/s/ Douglas J. Tucker

 

Douglas J. Tucker

 

Secretary

 

[SIGNATURE PAGE OF VOTING AND SUPPORT AGREEMENT]

 


 

 

 

NUMBER & 

 

 

CLASS OF 

PRINCIPAL STOCKHOLDERS

 

SHARES OWNED

 

 

 

/s/ Kurt Stevenson

 

30,007

Signature

 

 

 

 

Common

 

 

 

Kurt Stevenson

 

 

Printed Name

 

 

 

[SIGNATURE PAGE OF VOTING AND SUPPORT AGREEMENT CONTINUED]

 



 

 

 

NUMBER & 

 

 

CLASS OF 

PRINCIPAL STOCKHOLDERS

 

SHARES OWNED

 

 

 

/s/ Dennis Battles

 

6,250

Signature

 

 

 

 

Common

 

 

 

Dennis Battles

 

 

Printed Name

 

 

 

[SIGNATURE PAGE OF VOTING AND SUPPORT AGREEMENT CONTINUED]

 



 

 

 

NUMBER & 

 

 

CLASS OF 

PRINCIPAL STOCKHOLDERS

 

SHARES OWNED

 

 

 

/s/ David Butler

 

4,166

Signature

 

 

 

 

Common

 

 

 

David Butler

 

 

Printed Name

 

 

 

[SIGNATURE PAGE OF VOTING AND SUPPORT AGREEMENT CONTINUED]

 



 

 

 

NUMBER & 

 

 

CLASS OF 

PRINCIPAL STOCKHOLDERS

 

SHARES OWNED

 

 

 

/s/ Randall Ganim

 

8,895

Signature

 

 

 

 

Common

 

 

 

Randall Ganim

 

 

Printed Name

 

 

 

[SIGNATURE PAGE OF VOTING AND SUPPORT AGREEMENT CONTINUED]

 



 

 

 

NUMBER & 

 

 

CLASS OF 

PRINCIPAL STOCKHOLDERS

 

SHARES OWNED

 

 

 

/s/ Richard Peterson

 

8,333

Signature

 

 

 

 

Common

 

 

 

Richard Peterson

 

 

Printed Name

 

 

 

[SIGNATURE PAGE OF VOTING AND SUPPORT AGREEMENT CONTINUED]

 



 

 

 

NUMBER & 

 

 

CLASS OF 

PRINCIPAL STOCKHOLDERS

 

SHARES OWNED

 

 

 

/s/ Scott Sullivan

 

6,518

Signature

 

 

 

 

Common

 

 

 

Scott Sullivan

 

 

Printed Name

 

 

 

[SIGNATURE PAGE OF VOTING AND SUPPORT AGREEMENT CONTINUED]

 



 

 

 

NUMBER & 

 

 

CLASS OF 

PRINCIPAL STOCKHOLDERS

 

SHARES OWNED

 

 

 

/s/ Bradley Cooper

 

0

Signature

 

 

 

 

Common

 

 

 

Bradley Cooper

 

 

Printed Name

 

 

 

[SIGNATURE PAGE OF VOTING AND SUPPORT AGREEMENT CONTINUED]

 



 

 

 

NUMBER & 

 

 

CLASS OF 

PRINCIPAL STOCKHOLDERS

 

SHARES OWNED

 

 

 

/s/ Derek Ferber

 

0

Signature

 

 

 

 

Common

 

 

 

Derek Ferber

 

 

Printed Name

 

 

 

[SIGNATURE PAGE OF VOTING AND SUPPORT AGREEMENT CONTINUED]

 



 

PRINCIPAL STOCKHOLDERS

 

NUMBER & 
CLASS OF 
SHARES OWNED

 

 

 

CAPITAL Z PARTNERS CENTRUE AIV,

 

1,533,333

L.P.

 

 

 

 

Common

 

 

 

By:

Capital Z Partners III, Ltd.,

 

 

 

its ultimate general partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ Craig Fisher

 

 

Signature

 

 

 

 

 

 

 

 

Craig Fisher

 

 

Printed Name

 

 

 

 

 

 

 

 

General Counsel

 

 

Title

 

 

 

[SIGNATURE PAGE OF VOTING AND SUPPORT AGREEMENT CONTINUED]

 



 

PRINCIPAL STOCKHOLDERS

 

NUMBER &
CLASS OF
SHARES OWNED

 

 

 

FINANCIAL OPPORTUNITY FUND LLC

 

125,000

 

 

 

By:

FJ Capital Management LLC

 

Common

 

its Managing Member

 

 

 

 

 

 

 

 

 

 

By:

/s/ Martin Friedman

 

 

Signature

 

 

 

 

 

 

 

 

Martin Friedman

 

 

Printed Name

 

 

 

 

 

 

 

 

Managing Member

 

 

Title

 

 

 

 

 

 

 

 

BRIDGE EQUITIES III, LLC

 

511,911

 

 

 

 

 

Common

 

 

 

By:

/s/ Martin Friedman

 

 

Signature

 

 

 

 

 

 

 

 

Martin Friedman

 

 

Printed Name

 

 

 

 

 

 

 

 

Managing Member of FJ Capital

 

 

Management LLC

 

 

Title

 

 

 

[SIGNATURE PAGE OF VOTING AND SUPPORT AGREEMENT CONTINUED]

 




Exhibit 99.1

 

 

For Immediate Release

 

MIDLAND STATES BANCORP, INC. TO

ACQUIRE CENTRUE FINANCIAL CORPORATION

 

Highlights of the Announced Transaction

 

·                  Strengthens Midland’s franchise in northern Illinois markets

 

·                  Adds a high quality, low-cost core deposit franchise with a cost of deposits of 18 basis points

 

·                  Transaction expected to be 8-9% accretive to Midland’s earnings per share in 2018

 

Effingham, IL and Ottawa, IL, January 26, 2017 — Midland States Bancorp, Inc. (NASDAQ: MSBI) (the “Company” or “Midland”) and Centrue Financial Corporation (NASDAQ: CFCB) (“Centrue”) today announced that they have entered into a definitive agreement under which Midland will acquire Centrue for estimated total consideration of $175.1 million, or $26.75 per share of Centrue common stock.  Midland expects the transaction to be 8-9% accretive to earnings per share in 2018, the first full year of combined operations.

 

Centrue Financial Corporation, the parent company of Centrue Bank, is headquartered in Ottawa, Illinois and had total assets of $978 million, net loans of $677 million and total deposits of $740 million as of December 31, 2016.  Established in 1874, Centrue is a regional, full-service community bank offering commercial, retail and mortgage banking services.  Centrue has 20 bank branches located principally in northern Illinois and has a top 5 deposit market share in Kankakee and LaSalle Counties.

 

Leon J. Holschbach, President and Chief Executive Officer of Midland, commented,  “Centrue has built a highly attractive franchise through a commitment to superior customer service and being deeply invested in the success of the communities it serves.  Having competed against Centrue in our northern Illinois markets for many years, we are very familiar with their franchise and believe they will be an excellent cultural fit with Midland.  Indeed, Kurt Stevenson and I have known each other going way back and he has done an excellent job at Centrue.  With $978 million in assets, Centrue will add significant scale to our operations, provide meaningful opportunities to enhance our overall efficiencies, and increase our earnings power.  We look forward to welcoming the customers, employees and shareholders of Centrue to the Midland family.”

 

Kurt R. Stevenson, President and CEO of Centrue, said, “Midland is an excellent merger partner for Centrue and the combination of our two companies will create an exceptionally strong community banking franchise with more than $4.0 billion in total assets.  As part of a larger financial institution with deeper resources, this transaction will significantly improve our ability to serve the needs of our customers, who will benefit from having access to a wider selection of financial products and services. Moreover, we will have an improved ability to accommodate the growth of our commercial banking relationships by offering increased borrowing capacity.”

 



 

The earnings per share accretion estimates for this transaction are based on estimated cost savings of approximately 40% of Centrue’s non-interest expense, with all cost savings expected to be phased in by 2018.  The earnings per share accretion estimates do not include any assumption of revenue synergies.  Midland expects $18.2 million in one-time transaction-related charges.  Midland also expects to incur tangible book value per share dilution of less than 1.5% upon the closing of the transaction, with an expected earn-back period of approximately two years.

 

Expected benefits of the transaction include:

 

·                  Increased earnings power driven by earnings accretion and greater operating scale;

 

·                  An expanded base of stable, low-cost deposits;

 

·                  Significant cross-selling opportunities with Midland’s broader product and service offerings;

 

·                  Greater penetration of key markets in northern Illinois and adds to Midland’s already significant St. Louis MSA presence; and

 

·                  The #1 and #2 deposit market share positions in the Kankakee and Ottawa-Peru, IL MSAs, respectively

 

Transaction Details

 

The estimated total consideration of $175.1 million (which includes cash consideration for outstanding equity awards) will be paid 65% in Midland common stock and 35% in cash.  Under the terms of the definitive agreement, upon consummation of the transaction, holders of Centrue common stock will have the right to receive a fixed exchange ratio of 0.7604 shares of Midland common stock, a fixed consideration of $26.75 in cash, or a combination of cash and stock for each share of Centrue common stock they own, subject to proration based on achieving the aforementioned consideration mix, and subject to potential adjustment based on Centrue’s adjusted stockholders’ equity at closing.  For purposes of determining the exchange ratio, the transaction utilizes Midland’s 10-day volume-weighted average stock price through January 13, 2017, or $35.18 per share.  In addition, holders of Centrue preferred stock will have the right to receive newly issued shares of Midland preferred stock having similar terms.

 

The transaction is expected to close in mid-2017, subject to regulatory approvals, the approval of Centrue’s and Midland’s shareholders, and the satisfaction of customary closing conditions.

 

Barack Ferrazzano Kirschbaum & Nagelberg LLP served as legal counsel to Midland States Bancorp, Inc. and Stephens Inc. served as financial advisor and provided a fairness opinion to Midland States Bancorp, Inc.  Howard & Howard Attorneys PLLC served as legal counsel to Centrue Financial Corporation and Sandler O’Neill + Partners, L.P. served as financial advisor and provided a fairness opinion to Centrue Financial Corporation.

 

About Midland States Bancorp, Inc.

 

Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. Midland had assets of approximately $3.2 billion, and its Midland Wealth Management Group had assets under administration of approximately $1.7 billion as of December 31, 2016.  Midland provides a full range of commercial and consumer banking products and services, merchant credit card services, trust and investment management, and insurance and financial planning services. In addition, commercial equipment leasing services are provided through Heartland Business Credit, and multi-family and healthcare facility FHA financing is provided through Love Funding, Midland’s non-bank subsidiaries. Midland has more than 80

 

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locations across the United States. For additional information, visit www.midlandsb.com or follow Midland on LinkedIn at https://www.linkedin.com/company/midland-states-bank.

 

About Centrue Financial Corporation

 

Centrue Financial Corporation is a regional financial services company headquartered in Ottawa, Illinois and devotes special attention to personal service. Centrue serves a market area which extends from the far western and southern suburbs of the Chicago metropolitan area across Central Illinois and metropolitan St. Louis.  Further information about Centrue is available at its website at http://www.centrue.com.

 

Forward-Looking Statements

 

Readers should note that in addition to the historical information contained herein, this press release includes “forward-looking statements,” including but not limited to statements about Midland’s expected loan production, operating expenses future earnings levels and other projections relating to the proposed transaction.  These statements are subject to many risks and uncertainties, including (i) the possibility that any of the anticipated benefits of the proposed transaction will not be realized within the expected time period or at all; (ii) the risk that integration of Centrue’s operations will be materially delayed or will be more costly or difficult than expected; (iii) the failure of the proposed transaction to close for any other reason; (iv) the effect of the announcement of the transaction on customer relationships and operating results; (v) the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; and (vi) other risks detailed from time to time in filings made by Midland and Centrue with the Securities and Exchange Commission (the “SEC”). Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “will,” “propose,” “may,” “plan,” “seek,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue,” or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

 

Additional Information

 

This communication is being made in respect of the merger involving Midland and Centrue. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.

 

Midland will file a registration statement on Form S-4 with the SEC in connection with the proposed transaction. The registration statement will include a joint proxy statement of Midland and Centrue that will also constitute a prospectus of Midland, which will be sent to Midland’s and Centrue’s respective shareholders. Shareholders are advised to read the joint proxy statement/prospectus when it becomes available because it will contain important information about Midland, Centrue and the proposed transaction. When filed, this document and other documents relating to the proposed transaction filed by Midland and Centrue can be obtained free of charge from the website maintained by the SEC at www.sec.gov. These documents also can be obtained free of charge by accessing Midland’s website at www.midlandsb.com under “Investors” and then under the “SEC Filings” tab or by accessing Centrue’s website at www.centrue.com under “Investor Relations” and then under the “SEC Filings” tab. Alternatively, these documents, when available, can be obtained free of charge from Midland upon written request to Midland States Bancorp, Inc., Corporate Secretary, 1201 Network Centre Drive, Effingham, Illinois, 62401 or by calling (217) 342-7321 or emailing corpsec@midlandsb.com, or from

 

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Centrue, upon written request to Centrue Financial Corporation, Investor Relations, 122 West Madison Street, Ottawa, Illinois 61350 or by calling (815) 431-8400 or emailing investor.relations@centrue.com.

 

Participants in this Transaction

 

Midland, Centrue and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from shareholders in connection with the proposed transaction under applicable SEC rules. Information about these participants may be found in the prospectus of Midland relating to its initial public offering of common stock filed with the SEC by Midland on May 24, 2016 and the definitive proxy statement of Centrue relating to its 2016 Annual Meeting of Shareholders filed with the SEC on March 21, 2016. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants will also be included in the joint proxy statement/prospectus regarding the proposed transaction when it becomes available.

 

CONTACTS:

 

For Midland:

 

Douglas J. Tucker, Sr. V.P., Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321

 

For Centrue:

 

Daniel R. Kadolph, Chief Financial Officer, at daniel.kadolph@centrue.com or (815) 431-2838

 

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