EXHIBIT 2.1
Branch Purchase and Assumption Agreement
This Agreement ("Agreement"), made as of the 7th day of April, 2003 by and
between Ameriana Bank and Trust, SB, an Indiana chartered savings bank with its
principal office located at 0000 Xxxxx Xxxxxx, Xxx Xxxxxx, Xxxxxxx, 00000
("Seller") and Peoples Community Bank, a federally chartered savings bank with
its principal office located at 0000 Xxxx Xxxxxxx Xxxx, Xxxx Xxxxxxx, Xxxx 00000
("Purchaser").
WHEREAS, Seller desires to sell certain branch locations and certain assets to
Purchaser wherein Purchaser would assume certain liabilities associated
therewith; and
WHEREAS, Purchaser has determined that it would be in its best interest to
acquire certain of Seller's branch locations and certain assets and assume
certain liabilities associated therewith; and
WHEREAS, Seller and Purchaser wish to provide for certain undertakings,
conditions, warranties, representations and covenants in connection with the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the mutual promises hereinafter contained
and other good and valuable consideration, the parties hereto do, as to those
terms and conditions as contained within those portions of this Agreement to
which each party is specifically set out as a party agreeing to and being bound
thereby, agree as follows:
1. PURCHASE AND ASSUMPTION.
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1.1 Purchase and Sale of Assets. At the Closing defined in Section 6.1
hereof, Purchaser shall purchase and Seller shall sell the assets used
exclusively in or relating exclusively to the banking business
conducted by the branch offices of Seller listed in Schedule A
attached hereto (the "Branches"), pursuant to the terms and conditions
set forth herein and subject to the exceptions set forth herein (such
assets, as more fully described in Section 1.2 hereof, subject to such
exceptions, herein collectively referred to as the "Assets"). The
acquisition by Purchaser from Seller of the Branches pursuant to the
purchase of the Assets on the terms and conditions set forth herein is
sometimes referred to herein as the "Acquisition".
1.2 Transfer of Assets. Subject to the terms and conditions of this
Agreement, Seller shall assign, transfer, convey and deliver to
Purchaser, on and as of the Closing Date defined in Section 6.1
hereof, the Assets, which are the following:
(a) Owned Real Estate. All right, title and interest in and to the
real estate on which the Branches are situated, as listed on
Schedule B attached hereto, together with all of Seller's rights
in and to all improvements thereon; and
(b) Leased Real Estate. All rights of Seller under any and all
assignable real estate leases pertaining to the Branches, both as
lessor and lessee, together
with all of Seller's rights in and to all leasehold improvements
thereon to the extent the same may be conveyed by Seller, said
leases (and any exceptions thereto) being listed on Schedule C
attached hereto; and
(c) Furniture and Equipment. All right, title and interest in and to
all furniture, fixtures and equipment located and used at the
Branches and owned or (to the extent of Seller's interest as
lessee) leased by Seller, as listed on (and subject to any
exceptions noted in) Schedule D attached hereto; and
(d) Safety Deposit Business. All right, title and interest of Seller
in and to the safety deposit business, if any, located at each
Branch as of the close of business on the Closing Date; and
(e) Loans. All loans attributable to and booked at each Branch as of
the close of business on the Closing Date (which transfer shall
be made without any reserve for possible loan losses); provided,
however, that such loans shall not include (i) those loans
secured by single family residences, which loans as of March 31,
2003 are set forth in Schedule E.1, which schedule shall be
updated as of the Closing Date to reflect any new loans secured
by single family residences entered into between March 31, 2003
and the Closing Date, and (ii) those loans set forth in Schedule
E.2, which schedule shall be provided by Purchaser to Seller at
least ten (10) days prior to Closing and shall include those
loans that Purchaser will not purchase as determined by Purchaser
in its sole discretion. The term "Loan Assets" shall mean all
loans being transferred to Purchaser as an Asset as described in
the preceding sentence that are reflected on the books of Seller
related to the Branches as of the close of business on the
Closing Date. Such Loan Assets shall be transferred by means of a
blanket assignment and not individually (except as may otherwise
be required by law). Purchaser shall inform Seller not less than
30 calendar days prior to the Closing Date of any case in which
filing information relating to any collateral for the Loan Assets
will be required for preparation of any assignments of liens; and
(f) Cash on Hand. All cash on hand at the Branches as of the close of
business on the Closing Date.
1.3 Acceptance and Assumptions. Subject to the terms and conditions of
this Agreement, on and as of the Closing Date Purchaser shall:
(a) Assets. Receive and accept only those Assets assigned,
transferred, conveyed and delivered to Purchaser by Seller
pursuant to this Agreement, as set forth in Section 1.2 above;
and
(b) Deposit Liabilities. Assume and thereafter discharge and pay in
full all deposit liabilities of the Branches, together with all
interest accrued
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thereon as of the close of business on the Closing Date, in
accordance with the records of Seller relating to the Branches as
of the Closing Date (the "Deposit Liabilities"). The term
"Deposit Liabilities" means all of Seller's obligations, duties
and liabilities of every type and character relating to deposit
accounts, which, as reflected on the books of Seller as of the
close of business on the Closing Date, are attributable to the
Branches. The deposit accounts referred to in the immediately
proceeding sentence (hereinafter "Deposit Accounts") include,
without limitation, passbook accounts, statement savings
accounts, money market accounts, checking, and NOW accounts,
individual retirement accounts ("IRAs") and certificates of
deposit and shall include any overdrawn deposit account not
otherwise covered by an overdraft protection plan (unless such
overdraft is unpaid for a period exceeding 30 days prior to the
close of business on the Closing Date, and subject to the right
of reimbursement as set forth in Section 7.1(d) hereof); and the
"obligations, duties and liabilities" referred to in the
immediately preceding sentence include, without limitation, the
obligation to pay and otherwise process all Deposit Liabilities
in accordance with applicable law and their respective
contractual terms, and the duty to supply all applicable
reporting forms for post-closing periods, including, without
limitation the Internal Revenue Service reporting forms relating
to the Deposit Liabilities. With regard to each XXX included
within the Deposit Liabilities, Purchaser shall also assume the
plan pertaining thereto and the trustee or custodial arrangement
in connection therewith; and
(c) Liabilities Under Agreements. Assume and thereafter fully and
timely perform and discharge, in accordance with their respective
terms, all of the liabilities and obligations of Seller under all
escrow, fiduciary, lease or rental agreements (including safe
deposit leases, if any) sold, assigned or transferred to
Purchaser by Seller pursuant to this Agreement, all such
agreements in existence as of the date hereof are listed in
Schedule F; and
(d) Safe Deposit Business. Assume and thereafter faithfully honor and
fully and timely perform and discharge all of the duties and
obligations of Seller with respect to:
(i) the safe deposit business of the Branches if any, including,
but not limited to, the maintenance of all necessary
facilities for the use of safe deposit boxes by the renter
thereof during the periods for which such persons have paid
rent therefore in advance to Seller (which rent shall be
prorated between the parties at Closing), subject to the
provisions of the applicable leases or other agreements
relating to such boxes; and
(ii) all safekeeping items and agreements delivered to Purchaser
by Seller pursuant to this Agreement, including, but not
limited to, all
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applicable safekeeping agreements, memoranda, or receipts so
delivered to Purchaser by Seller hereunder.
1.4 Payment of Funds. Subject to the terms and conditions hereof, at the
Closing:
(a) Acquisition Consideration. Purchaser shall pay to Seller, in the
manner specified in Section 6.4 herein, the greater of (i)
$6,500,000 and (ii) an amount equal to the product of six and
91/100 percent (6.91%) multiplied by the sum of the aggregate
book value of the Loan Assets plus the Deposit Liabilities, which
Deposit Liabilities shall be determined as the amount of Deposit
Liabilities seven (7) days prior to the Closing Date, the day of
the Closing and seven (7) days after the Closing Date, divided by
three (the resultant dollar figure which is greater is
hereinafter called the "Acquisition Consideration"), which
Acquisition Consideration shall be deemed to be a premium paid on
and for the Loan Assets and Deposit Liabilities transferred by
Seller and assumed by Purchaser hereunder. With respect to Loan
Assets, book value is the aggregate principal amount of the Loan
Assets, plus accrued and unpaid interest and late charges
thereon, but such value shall not include any loan loss reserves
or general reserve or deferred fees or costs. With respect to
Deposit Liabilities, book value is the amount of the Deposit
Liabilities, including interest accrued thereon but unpaid, as
indicated by the general ledger accounts of the Branches.
(b) Other Funds. Seller shall make available and transfer to
Purchaser, in the manner specified in Section 6.4 herein, funds
equal to the amount of the Deposit Liabilities described in
Section 1.3(b) as of the third business day prior to the Closing
Date, less an amount equal to the sum of:
(i) the aggregate book value plus accrued and unpaid interest
(or, in the case of discount notes, the book value net of
any unearned income), as of the third business day
immediately preceding the Closing Date, of all Loan Assets
transferred to Purchaser pursuant to this Agreement; and
(ii) the aggregate book value, as of the Closing, for those
assets shown on Schedules B, C and D attached hereto,
transferred to Purchaser pursuant this Agreement; and
(iii)the amount of cash on hand at the Branches transferred to
Purchaser on the third business day immediately preceding
the Closing Date.
In the event that the sum of items (i) through (iii) above should be in
excess of the Deposit Liabilities, the full amount of such excess shall
constitute an additional amount due from Purchaser to Seller, to be paid to
Seller at the Closing in the same manner as the Acquisition Consideration.
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(c) Reimbursement and Proration of Certain Expenses. All rents, real
estate taxes, utility payments, insurance policy premiums and similar
expenses relating to the Branches, and the Federal Deposit Insurance
Corporation premium and other expenses relating to the Deposit
Liabilities assumed by Purchaser hereunder, shall be pro-rated between
Seller and Purchaser as of the Closing Date. To the extent any such
item has been prepaid by Seller (including security deposits and other
deposits) for a period extending beyond the Closing Date, there shall
be a proportionate monetary adjustment in favor of Seller. Any
reimbursement payment due from Purchaser to Seller pursuant to the
terms of this Section 1.4 (c) shall be made in the manner specified in
Section 6.4 herein.
2. CONDUCT OF THE PARTIES PRIOR TO CLOSING.
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2.1 Covenants of Seller. Seller hereby covenants to Purchaser that, from
the date hereof until the Closing, it will do or cause the following
to occur:
(a) Operation of Branches. Seller shall continue to operate the
Branches in a manner equivalent to that manner and system of
operation employed immediately prior to the date of this
Agreement and use all reasonable efforts to preserve its business
relationships with depositors, customers and others having
business relationships with it and whose accounts will be
transferred to Purchaser. Seller shall conduct its advertising,
including cost and manner of advertising, consistent with its
past practices and policies. Seller will not knowingly permit any
act or conduct by any employee of the Branches that would cause
material harm or damage to the reputation of the Branches or a
material reduction in the existing Deposit Liabilities of the
Branches. Purchaser and Seller agree to meet via teleconference
on a weekly basis to coordinate rates on the Deposit Liabilities
consistent with the rates Purchaser pays on its deposit products
to the extent that Seller and Purchaser have substantially
similar deposit products. To the extent Seller has a deposit
product that is not offered by Purchaser, Seller agrees to
establish the rate determined by Purchaser in its reasonable
discretion. Seller shall not be deemed to breach any of its
covenants under this Agreement or this Section 2.1(a) as a result
of such coordination of its rates.
(b) Information Concerning Branches. From the date hereof through the
Closing Date, Seller shall ensure that Purchaser is furnished or
otherwise provided reasonable access to, and permitted to make or
cause to be made such reasonable investigation of, information
and materials relating to the financial and legal condition of
the Branches as Purchaser reasonably deems necessary or advisable
to familiarize itself with the Branches and its business and
operations, including the Deposit Liabilities and the Loan
Assets; provided, however, that such access and investigation
shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with the normal
operations of the Branches or
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Seller; and provided further, that nothing in this Section 2.1(b)
shall be deemed to require Seller to breach any obligation of
confidentiality or to reveal any proprietary information, trade
secrets or marketing or strategic plans. In addition to the above
information, Seller will provide Purchaser with instructions
prepared by Seller which provide information on the transfer of
office procedures, electronic data processing and other such
functions of the Branches which are required for the purchase of
Assets and assumption of Deposit Liabilities in this Agreement.
(c) Title Commitment. Seller shall deliver to Purchaser, at
Purchaser's expense, with respect to the real property owned by
Seller constituting the Branches no later than five (5) days
prior to the Closing Date, a commitment or commitments
(collectively, the "Title Commitment") having an effective date
as near as feasible to the date of delivery of such Title
Commitment from a title insurance company authorized to do
business in Ohio designated by Seller and reasonably satisfactory
to Purchaser, to issue to Purchaser as soon as practicable after
the Closing Date an American Land Title Association (ALTA) owners
title insurance policy having an effective date as of the Closing
Date in an amount equal to the book value (as shown on Seller's
records) of the real property owned in fee simple by Seller and
constituting the Branches. Such commitment shall show title
vested in Seller and free of all liens or encumbrances except
Permitted Exceptions, as defined in Section 10.10 herein.
Purchaser shall have the right to update title matters at Closing
for any changes which may have arisen between the date of the
Title Commitment and the Closing Date. If such update indicates
that any title defects (other than Permitted Exceptions) have
been placed of record since the date of the Title Commitment and
Purchaser reasonably objects thereto, Seller may elect to delay
the Closing for up to 30 calendar days while Seller makes a good
faith effort to cure any such title defect to Purchaser's
reasonable satisfaction. If Seller is unable or unwilling to cure
any such title defect within such 30 day period, Purchaser shall
have the option to receive title in the then-existing condition
or to terminate this Agreement upon prompt written notice to
Seller.
(d) Required Authorization: Seller shall obtain and procure all
necessary corporate approvals and authorizations required on its
part to enable it to fully perform all obligations imposed on it
hereunder which must be performed by it at or prior to the
Closing. Seller shall use reasonable best efforts to obtain the
consent of the other party to those contracts requiring consent
to assignment as reflected on Schedule F.
(e) Creation of Liens and Encumbrances: With respect to the real
property owned by Seller constituting any of the Branches, Seller
shall not create or allow any liens, imperfections in title,
charges, easements, restrictions or encumbrances other than
Permitted Exceptions.
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(f) Condemnation. In the event Seller is notified of any pending or
threatened condemnation proceeding relating to the real property
owned by Seller constituting any of the Branches, Seller will
notify Purchaser thereof and Seller and Purchaser shall cooperate
in responding to any such proceeding so as not to prejudice the
rights of Purchaser and Seller to recover in such proceedings.
(g) Insurance Proceeds and Condemnation Payments. Seller shall
maintain adequate insurance equal to full replacement cost on all
property owned by Seller constituting the Branches to be sold. In
the event of any damage, destruction or condemnation affecting
such property between the date hereof and the time of the
Closing, Seller shall deliver to Purchaser any insurance proceeds
and other payments received by Seller as a result thereof and
shall have duly and validly assigned to Purchaser all of Seller's
rights and claims against any third party by reason thereof
unless, in the case of damage or destruction, Seller has repaired
or replaced the damaged or destroyed property. In the event any
such damage, destruction or condemnation materially affects the
value of the Branches as a whole, Purchaser shall have the right
to terminate this Agreement by providing Seller with written
notice of such termination within twenty (20) days after the
Seller provides Purchaser with written notice of the occurrence
of such damage, destruction or condemnation.
(h) Other Acquisitions and Transactions. Seller shall not directly,
or through any existing or future subsidiary or affiliate, take
any action that would be in conflict with, or result in the
delay, denial, termination, or withdrawal of, any of the
regulatory approvals referred to this Agreement.
(i) Reports. Seller shall provide Purchaser, on a monthly basis,
through the Closing Date, reports on or documents regarding,
pending and recently closed loans, trial balance of Deposit
Liabilities, trial balance of Loan Assets and Loan Asset
delinquencies.
2.2 Covenants of Purchaser. Purchaser hereby covenants to Seller that,
from the date hereof until the Closing, it will do or cause the
following to occur:
(a) Certain Applications: As soon as practicable, but in no event
later than thirty (30) days after the date hereof, Purchaser
shall prepare and submit for filing, at no expense to Seller, any
and all applications, filings, and registrations with, and
notification to, all Federal and state authorities required on
the part of Purchaser for the Acquisition to be consummated at
the Closing as contemplated in Section 6.1 herein. Thereafter,
Purchaser shall use its best efforts to pursue all such
applications, filings, registrations, and notifications
diligently and in good faith, and shall promptly file such
supplements, amendments, and additional information in connection
therewith as may be reasonably necessary for the Acquisition to
be consummated at such Closing. Purchaser shall deliver to
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Seller a copy of each and all of such applications, filings,
registrations and notifications (except for any confidential
portions thereof), and any supplement, amendment or item of
additional information, including all correspondence, in
connection therewith (except for any confidential portions
thereof), not later than the date it is filed with such Federal
and state authorities, and Purchaser shall deliver to Seller a
copy of each material notice, order, opinion and other item of
correspondence received by Purchaser from such Federal and state
authorities (except for any confidential portions thereof) within
three (3) days of its receipt by Purchaser and shall advise
Seller, at Seller's reasonable request, of developments and
progress with respect to such matters. Purchaser understands and
acknowledges that time is of the essence with respect to the
obligations set forth in this Section 2.2(a), and that the
failure by Purchaser to comply with any of its obligations
pursuant to this Section 2.2(a) shall be deemed a material breach
of this Agreement by Purchaser.
(b) Other Acquisitions and Transactions. Purchaser shall not directly
or through any existing or future subsidiary or affiliate take
any action that would be in conflict with, or result in the
delay, denial, termination, or withdrawal of, any of the
regulatory approvals referred to in this Agreement.
(c) Required Authorizations. Purchaser shall obtain and procure all
necessary corporate approvals and authorizations required on its
part to enable it to fully perform all obligations imposed on it
hereunder which must be performed by it at or prior to the
Closing.
2.3 Covenants of All Parties. Seller hereby covenants to Purchaser, and
Purchaser hereby covenants to Seller that, from the date hereof until
the Closing, such party shall cooperate fully with the other party in
attempting to obtain all consents, approvals, permits or
authorizations which are required to be obtained pursuant to any
Federal or state law, or any Federal or state regulation thereunder,
for or in connection with the transactions described and contemplated
in this Agreement.
3. REPRESENTATIONS AND WARRANTIES.
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3.1 Representations and Warranties of Seller. Seller represents and
warrants to Purchaser as follows:
(a) Good Standing and Power of Seller. Seller is a savings bank duly
organized, validly existing, and in good standing under the laws
of the State of Indiana with corporate power to own its
properties and to carry on its business as presently conducted.
Seller is an insured bank, as defined in the Federal Deposit
Insurance Act and applicable regulations thereunder.
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(b) Authorization of Agreement. Seller has the power and authority to
enter into and perform this Agreement. The execution and delivery
of this Agreement, and the transactions contemplated hereby, have
been duly authorized by all necessary corporate action on the
part of Seller, and this Agreement is a valid and binding
obligation of Seller.
(c) Effective Agreement. Subject to the receipt of any and all
necessary regulatory approvals and except for those contracts
designated as requiring consent on Schedule F, the execution,
delivery, and performance of this Agreement by Seller and the
consummation of the transactions contemplated hereby, will not
conflict with, result in the breach of, constitute a violation or
default, result in the acceleration of payment or other
obligations, or create a lien, charge or encumbrance, under any
of the provisions of the Articles, Bylaws or similar governing
documents of Seller, under any judgment, decree or order, under
any law, rule or regulation of any government or agency thereof,
or under any material contract, material agreement or material
instrument to which Seller is subject, which such breach,
conflict, violation, default, acceleration or lien would have a
material adverse effect on the Assets, the Acquisition or
Seller's ability to perform its obligations hereunder.
(d) Title to Assets. Seller is the sole owner of or holds under a
valid lease each of the Assets (other than owned real property)
and each such Asset owned is held free and clear of any mortgage,
lien, encumbrance or restrictions of any kind or nature. As to
the owned real property constituting any of the Branches, Seller
is the sole owner of a fee simple interest in, and has good and
marketable title solely to the parcels of real property described
in Section 1.2(a) hereof, free and clear of any mortgage, lien,
encumbrance or restriction of any kind or nature other than the
Permitted Exceptions and shall convey such real property to
Purchaser by delivery at the Closing of a warranty deed conveying
such title subject to such Permitted Exceptions.
(e) Zoning Variations. As of the date of this Agreement, Seller is
not aware of any uncorrected violations of zoning and/or building
codes relating to any of the real property owned by Seller
constituting the Branches, it being understood and agreed that
Seller has not:
(i) made any inquiry of any government office;
(ii) conducted any search of the records of any government
office; or
(iii)obtained any affirmative confirmation from any government
office that there are not uncorrected violations of zoning
and/or building codes relating to any of the Branches.
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(f) Condemnation Proceedings. Seller has received no written notice
of any pending or threatened, nor is it aware of any
contemplated, condemnation proceeding affecting or relating to
the real property owned by Seller constituting any of the
Branches.
(g) No Broker. Other than its engagement of Xxxxx, Xxxxxxxx & Xxxxx,
Inc., no broker or finder, or other party or agent performing
similar functions, has been retained by Seller or is entitled to
be paid based upon any agreements, arrangements or understandings
made by Seller in connection with the transactions contemplated
hereby, and no brokerage fee or other commission has been agreed
to be paid by Seller on account of the transactions contemplated
hereby.
(h) Loans. All of the loans to be transferred pursuant to this
Agreement have been made for good, valuable and adequate
consideration in the ordinary course of business of Seller, and
are evidenced by notes or other evidences of indebtedness that
are true and genuine. Such documentation is sufficient to enforce
such loans against the obligors and any guarantors thereof in
accordance with the terms of such loans, subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditor's rights generally
and that the remedy by specific performance and injunctive relief
or other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought. There are no material uncured
violations of federal Regulation Z with respect to the loans to
be transferred pursuant to this Agreement that have been cited in
any compliance report to Seller as a result of examination by any
regulatory authority. No material provision of a loan has been
waived, unless approved by the Seller in writing and in its
files. Each loan complies in all material respects with all
requirements of applicable federal, state and local laws and
regulations. Each loan that is secured by collateral is secured
by a perfected mortgage or security interest in the collateral in
favor of Seller as mortgagee or secured party. No collateral has
been released from the interest granted to Seller, unless
approved by Seller in writing and documented in its files.
Purchaser's sole remedy for a breach of the representations and
warranties in this Section 3.1(h) with respect to a loan or loans
shall be Purchaser's right to exclude such loan or loans on
Schedule E.2 and, in such event, such loan or loans shall not be
transferred by Seller to Purchaser pursuant to this Agreement.
(i) Compliance with Laws. Seller is in material compliance with all
statutes and regulations applicable to the operation of the
Branches except where the failure to so comply would not have a
material adverse effect on Seller. Seller holds all necessary
permits, licenses, exemptions, orders and approvals of all
governmental entities which are material to the operation of the
Branches.
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(j) Service Contract. Seller has no contracts or other agreements
with third parties relating to the rendering by third parties of
services to the Branches, except those which have been provided
to Purchaser or the existence of which has been disclosed to
Purchaser by Seller. Each third party contract to be assumed by
Purchaser pursuant to this Agreement is valid and subsisting in
full force and effect and Seller and, to Seller's knowledge, each
other party thereto, has performed in all material respects all
obligations required to be performed thereunder, and no condition
exists which constitutes, or with notice or lapse of time, or
both, would constitute, a material default.
(k) Purchase Price. Seller shall have, at the Closing on the Closing
Date, sufficient funds to enable it to pay any other amounts
required to be paid by Seller at the Closing pursuant to the
terms hereof, and to consummate the Acquisition in accordance
with the terms and conditions of this Agreement.
(l) Employees. Except as set forth in Schedule G, no employee located
in any of the Branches is a party to any collective bargaining,
employment, severance, termination or change of control agreement
or represented by a labor organization of any type other than
Seller's established terms of employment and severance policies.
Seller is unaware of any efforts during the past three years to
unionize or organize the employees of any of the Branches.
(m) Environmental Matters. Seller does not have knowledge of any
pending legal, administrative, arbitral or other proceeding,
claim, action, cause of action or governmental investigation of
any nature seeking to impose on Seller in connection with the
Branches any material liability arising under any Environmental
Laws (as defined below), and Seller has not received any written
notice or is otherwise aware of any threatened proceeding, claim,
action or governmental investigation; and Seller is not subject
to any agreement, order, judgment, decree or memorandum by or
with any court, governmental authority, regulatory agency or
third party imposing any such liability with respect to the
Branches. For purposes of this Agreement, "Environmental Laws"
means all applicable federal, state and local laws and
regulations that relate to pollution or protection of the
environment.
3.2 Representations and Warranties of Purchaser. Purchaser represents and
warrants to Seller as follows:
(a) Good Standing and Power of Purchaser. Purchaser is a federally
chartered savings bank duly organized, validly existing, and in
good standing under the laws of the United States with corporate
power to own or lease its properties and to carry on its business
as presently conducted. Purchaser
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is an insured bank, as defined in the Federal Deposit Insurance
Act and applicable regulations thereunder.
(b) Authorization of Agreement. Purchaser has the power and authority
to enter into and perform this Agreement. Subject to the receipt
of any and all necessary corporate governance approvals, the
execution and delivery of this Agreement, and the transactions
contemplated hereby, have been duly authorized by all necessary
corporate action on the part of Purchaser, and this Agreement is
a valid and binding obligation of Purchaser.
(c) Effective Agreement. Subject to the receipt of any and all
necessary regulatory approvals, the execution, delivery and
performance of this Agreement by Purchaser, and the consummation
of the transaction contemplated hereby, will not conflict with,
result in the breach of, constitute a violation or default,
result in the acceleration of payment or other obligations, or
create a lien, charge or encumbrance, under any of the provisions
of the Charter, Bylaws or similar governing documents of
Purchaser, under any judgment, decree or order, under any law,
rule or regulation of any government or agency thereof, or under
any material agreement, material contract or material instrument
to which Purchaser is subject, which such breach, conflict
violation, default, acceleration, or lien would have a material
adverse effect on the Acquisition or Purchaser's ability to
perform its obligations hereunder.
(d) Broker/Finder. If a broker or finder, or other party or agent
performing similar functions, has been retained by Purchaser or
is entitled to be paid based upon any agreements, arrangements or
understandings made by Purchaser in connection with the
transactions contemplated hereby, and any such brokerage fee or
other commission has been agreed to be paid by Purchaser on
account of the transactions contemplated hereby, such is the sole
obligation and expense of Purchaser at no cost to Seller.
(e) Purchase Price; Adequate Capitalization. Purchaser shall have, at
the Closing on the Closing Date, sufficient funds to enable it to
pay the Acquisition Consideration and any other amounts required
to be paid by Purchaser at the Closing pursuant to the terms
hereof, and to consummate the Acquisition in accordance with the
terms and conditions of this Agreement. Following the
consummation of all of the transactions contemplated by this
Agreement (including, without limitation, the sale and transfer
of the Assets and the assumption of the liabilities hereunder by
Purchaser), Purchaser will be "well capitalized" as such term is
defined in the rules and regulations promulgated by the Federal
Deposit Insurance Corporation.
12
4. ACTIONS RESPECTING EMPLOYEES AND PENSION AND EMPLOYEE BENEFIT PLANS.
--------------------------------------------------------------------
4.1 Actions to be Taken by Seller and Purchaser. Purchaser covenants to
Seller, and Seller covenants to Purchaser, that it will do or cause
the following actions to occur that relate to such party:
(a) Employees of Branches. Purchaser will use its reasonable best
efforts to offer employment to all employees actively employed by
Seller at the Branches as of the Closing Date (including
full-time and part time employees) (the "Branch Employees"),
provided however, that Purchaser shall have no obligation to
employ, or continue the employment, of any such person and
nothing contained in this Agreement shall give any employee of
the Seller a right to continuing employment with the Purchaser
after the Closing.
(i) Each Branch Employee hired by Purchaser shall be employed at
base wages, incentive compensation and salaries no less
favorable than the wages, incentive compensation and
salaries currently being paid by Purchaser to its employees
in positions with comparable responsibilities as to each
such Branch Employee.
(ii) Each Branch Employee who becomes an employee of Purchaser as
of the Closing Date shall be eligible to participate in (i)
the employee benefit plans and programs available to
employees of Purchaser on substantially the same basis as
any employee of Purchaser in a comparable position and (ii)
the group hospitalization, medical, dental, life, disability
and other welfare benefit plans and programs available to
employees of Purchaser, subject in each case to the terms of
such plans and programs. Except as expressly provided for in
this Section 4.1, each Branch Employee hired by Purchaser
shall be treated as a new hire by the Purchaser as of the
Closing Date, provided, however, that such Branch Employees
will be entitled to participate in the medical benefit plans
of Purchaser as of the Closing Date without regard to
pre-existing conditions or waiting periods. Except as
specifically provided in this Section 4.1 and as otherwise
prohibited by law, the service of each Branch Employee with
Seller who becomes an employee of Purchaser shall be
recognized as service with Purchaser for purposes of
eligibility to participate and vesting, if applicable (but
not for purposes of benefit accrual), under the Purchaser's
benefit plans, subject to applicable break-in-service rules.
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(b) Employment Practices. After the execution of this Agreement,
Seller will continue its normal employment practices in staffing
the Branches; however, Seller makes no representations or
warranties about whether any of the Branch Employees who become
employees of Purchaser will remain employed at the Branches after
the Closing. Seller will use its reasonable best efforts to:
(i) maintain the Branch Employees as employees of Seller at the
Branches until the Closing Date;
(ii) not discourage any Branch Employee from accepting an offer
of employment with Purchaser; and
(iii)not transfer or recruit Branch Employees for alternate
positions with Seller.
(c) Purchaser's Examination and Inspection. After the execution of
this Agreement and subject to any legal restrictions, Seller
shall permit Purchaser, at reasonable times and upon reasonable
notice, to examine and inspect Seller's records relating to
Branch Employees and to meet with Branch Employees for training
and other purposes which are consistent with the purposes of this
Agreement.
(d) Stay Payment. Each Branch Employee who is an employee of the
Seller as of the date hereof and whose employment continues
through the Closing Date shall be entitled to receive a bonus in
an amount equal to 5% of such Branch Employee's base salary for
2003 (the "Stay Payment"). Seller shall be liable for and shall
pay the cost of all such Stay Payments.
(e) Limitation on Purchaser's Liability. Purchaser is not assuming,
nor shall it have any responsibility for continuing, nor shall it
have any liability under or in connection with the Pension Plan
(as defined in Section 4.2(b)(i) below) or any other employee
benefit programs maintained by Seller prior to the close of
business on the Closing Date, including, without limitation, any
employment contract, collective bargaining agreement, plan or
arrangement, or any bonus or incentive plan.
4.2 Actions to be Taken by Seller. Seller covenants to Purchaser that it
will do or cause the following to occur:
(a) Solicitation of Branch Employees. For twelve (12) months
following the Closing Date, Seller will not directly compete for
or solicit as officers or employees of Seller any Branch
Employees; provided, however, that this provision shall not
preclude Seller from hiring any such Branch Employees who elect
not to become or remain employed by Purchaser or whose employment
has been terminated by Purchaser.
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(b) Seller's Responsibility for Branch Employees' Retirement and
Other Benefits. Seller will provide monthly pension and
other benefits to Branch Employees, in accordance with the
following provisions of this Subsection 4.2(b):
(i) Seller's Pension Plan. At the Closing, or as soon
thereafter as is practicable, Branch Employees will
cease accruing benefits under Seller's defined benefit
retirement plan for its employees (hereinafter referred
to as the "Pension Plan"). Any vested benefits of
Branch Employees will be payable in accordance with the
terms of the Pension Plan.
(ii) Seller's Other Employee Benefit Programs. Seller shall
continue Seller's other employee benefit programs in
full force and effect as benefit programs for Branch
Employees until the Closing Date, but without increase
in benefits without Purchaser's advance written
consent. Seller shall retain after the Closing the
responsibility and liability for the funding and
payment of all claims incurred under Seller's employee
benefit programs prior to the close of business on the
Closing Date.
(iii)Limitation on Seller's Liability. Seller shall have no
liability under the Pension Plan or under any other
employee benefit program with respect to matters
involved in the Acquisition except as specifically
provided in this Subsection 4.2(b).
4.3 Actions to be Taken by Seller and Purchaser. After the Closing, Seller
and Purchaser each will cooperate with the other in providing
reasonable access to all information required for the operation of, or
the preparation and submission of reports or notices required in
connection with the operation of the Pension Plan, or any other
employee benefit plan or program maintained by Seller or Purchaser
which covers any of the Branch Employees, including, without
limitation, the preparation and submission of reports or notices to
the Pension Benefit Guaranty Corporation, the Department of Labor, the
Internal Revenue Service, or any other agency of the U.S. Government
or the State of Ohio. After the Closing Date, Purchaser and Seller
will take all necessary actions, including the filing of any necessary
documents with the Internal Revenue Service, to transfer the account
balances of Branch Employees who accept employment with the Purchaser
from Seller's 401(k) Plan.
5. CONDITIONS PRECEDENT TO CLOSING.
--------------------------------
5.1. Conditions to Seller's Obligations. The obligations of Seller to
consummate the acquisition are subject to the satisfaction, or the
waiver by Seller to the extent permitted by applicable law, of the
following conditions at or prior to the Closing.
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(a) Prior Regulatory Approval. All filings and registrations with,
and notifications to, all Federal and state authorities required
for consummation of the Acquisition shall have been made, all
approvals and authorizations of all Federal and state authorities
required for consummation of the Acquisition shall have been
received and shall be in full force and effect, and all
applicable waiting periods shall have passed.
(b) Corporate Action. The Board of Directors of Purchaser shall have
taken all corporate action necessary by it to effectuate this
Agreement and the Acquisition; and Purchaser shall have furnished
Seller with a certified copy of each such resolution adopted by
the Board of Directors (or, if applicable, the shareholders) of
Purchaser evidencing the same.
(c) Representations and Warranties. The representations and
warranties of Purchaser set forth in this Agreement shall be true
and correct in all material respects on the Closing Date with the
same effect as though all such representations and warranties had
been made on and as of such date, and Purchaser shall have
delivered to Seller a Certificate to that effect, dated as of the
Closing Date.
(d) Covenants. Each and all of the covenants and agreements of
Purchaser to be performed or complied with at or prior to Closing
pursuant to this Agreement shall have been duly performed or
complied with in all material respects by Purchaser, or waived by
Seller, and Purchaser shall have delivered to Seller a
Certificate to that effect, dated as of the Closing Date.
(e) No Proceedings or Prohibition. At the time of the Closing on the
Closing Date, there shall not be any litigation, investigation,
inquiry or proceeding pending or threatened in or by any court or
agency of any government or by any third party which in the
judgment of the executive officers of Seller, with the advice of
counsel, presents a bona fide claim to restrain, enjoin or
prohibit consummation of the transactions contemplated by this
Agreement or which might result in divestiture or rescission in
connection with such transactions; and Seller shall have been
furnished with a Certificate, dated as of the Closing Date and
signed by the Chairman or President of Purchaser, to the effect
that no such litigation, investigation, inquiry or proceeding is
pending, or, to the best of his knowledge, threatened.
5.2. Conditions to Purchaser's Obligations. The obligations of Purchaser to
consummate the Acquisition are subject to the satisfaction, or the
waiver by Purchaser to the extent permitted by applicable law, of the
following conditions at or prior to the Closing:
(a) Prior Regulatory Approval. All filings and registrations with,
notifications to, all Federal and state authorities required for
consummation of the
16
Acquisition shall have been made, all approvals and
authorizations of all Federal and state authorities required for
consummation of the Acquisition shall have been received and
shall be in full force and effect, and all applicable waiting
periods shall have passed.
(b) Corporate Action. Seller shall have taken all corporate action
necessary to effectuate this Agreement and the Acquisition; and
Seller shall have furnished Purchaser with a certified copy of
such resolution adopted by the Board of Directors of Seller
evidencing or authorizing the same.
(c) Representations and Warranties. The representations and
warranties of Seller set forth in this Agreement shall be true
and correct in all material respects on the Closing Date with the
same effect as though all such representations and warranties had
been made on and as of such date, and Seller shall have delivered
to Purchaser a Certificate to that effect, dated as of the
Closing Date.
(d) Covenants. Each and all of the covenants and agreements of Seller
to be performed or complied with pursuant to this Agreement shall
have been duly performed or complied with in all material
respects by Seller, or waived by Purchaser, and Seller shall have
delivered to Purchaser a Certificate to that effect, dated as of
the Closing Date.
(e) No Proceedings or Prohibition. At the time of the Closing on the
Closing Date, there shall not be any litigation, investigation,
inquiry, or proceeding pending or threatened in or by any court
or agency of any government or by any third party which in the
judgment of the executive officers of Purchasers, with the advice
of counsel, presents a bona fide claim to restrain, enjoin, or
prohibit consummation of the transactions contemplated by this
Agreement or which might result in divestiture or rescission in
connection with such transactions; and Purchaser shall have been
furnished with a Certificate, dated as of the Closing Date and
signed by the Chairman or President or a Senior Vice President of
Seller, to the effect that no such litigation, investigation,
inquiry or proceeding is pending, or to the best of his
knowledge, threatened.
5.3 Non-Satisfaction of Conditions Precedent. The non-occurrence or delay
of the closing of the Acquisition by reason of the failure of timely
satisfaction of all conditions precedent to the obligations of any
party hereto to consummate the Acquisition shall in no way relieve
such party of any liability to the other party hereto, nor be deemed a
release or waiver of any claims the other party hereto may have
against such party, if and to the extent the failure of timely
satisfaction of such conditions precedent is attributable to the
actions or inaction of such party.
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6. CLOSING.
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6.1. Closing and Closing Date. The Acquisition contemplated by this
Agreement shall be consummated and closed (the "Closing") in the
offices of Stradley, Ronon, Xxxxxxx & Xxxxx, LLP in Washington, D.C.,
or at such other location as may be mutually agreed upon by Seller and
Purchaser, at a date and time to be mutually established by Seller and
Purchaser and confirmed by written notice of Seller to Purchaser (the
"Closing Date") no later than thirty (30) days after the receipt of
necessary regulatory approvals to consummate the Acquisition and all
regulatory waiting periods have expired; provided, however, (i) the
Closing Date shall be established for a Friday (unless a legal holiday
and in that event the prior business day); and (ii) the Closing shall
commence at a time sufficient to conclude the Closing prior to the
time established for the normal close of business at the Branch.
6.2. Seller's Actions at Closing. At the Closing, Seller shall, with
respect to the Branches:
(a) deliver to Purchaser such of the Assets purchased hereunder as
shall be capable of physical delivery; and
(b) execute, acknowledge and deliver to Purchaser all such deeds,
endorsements, assignments, assignment of leases related to real
property, furniture, fixtures and equipment, and bills of sale
relating to furniture and fixtures and other instruments of
conveyance, assignment and transfer as shall reasonably be
necessary or advisable to consummate the sale, assignment and
transfer of the Assets sold or assigned to Purchaser hereunder;
and
(c) assign, transfer and deliver to Purchaser such of the following
records (in whatever form or medium then maintained by Seller)
pertaining to the Deposit Liabilities and accrued interest
thereon of the Branches assumed by Purchaser hereunder as exist
and are available:
(i) signature cards, orders and contracts between Seller and
Branch depositors, and records of similar character; and
(ii) cancelled checks or negotiable orders of withdrawal
representing charges to depositors (except to the extent the
same have been returned to such depositors); and
(iii) a trial balance listing of records of account; and
(d) assign, transfer and deliver to Purchaser all other property and
other records, if any, held by the Branches for their customers
as of the Closing Date (subject to the terms and agreements or
receipts relating to the same); and
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(e) assign, transfer and deliver to Purchaser such safe deposit and
safekeeping files and records (in whatever form or medium then
maintained by Seller) pertaining to the safe deposit business, if
any, of the Branches transferred to Purchaser hereunder as exist,
together with the contents of the safe deposit boxes, if any,
maintained at the Branches as the same exist as of the Closing
Date (subject to the terms and conditions of the agreements or
receipts relating to the same) and all other property and other
records, if any, held by the Branches for their customers as of
the Closing Date (subject to the terms and agreements or receipts
relating to the same); and
(f) make available and transfer to Purchaser any funds required by
the terms of Section 1.4(b) hereof; and
(g) execute, acknowledge and deliver to Purchaser all Certificates
and other documents required to be delivered to Purchaser by
Seller at the Closing pursuant to the terms hereof.
6.3. Purchaser's Actions at Closing. At the Closing, Purchaser shall, with
respect to the Branch:
(a) execute, acknowledge, and deliver to Seller, to evidence the
assumption of the Deposit Liabilities and obligations of Seller
by Purchaser hereunder, an instrument of assumption in the form
set forth in Schedule H to this Agreement, and Seller shall then
accept, execute and acknowledge such instrument. Copies of such
instrument may be recorded in the public records at the option of
either party hereto. The execution and acknowledgement of such
instrument shall not be deemed to be a waiver of any rights or
obligations of any party to this Agreement; and
(b) receive, accept and acknowledge delivery of all Assets, and all
records and documentation relating thereto, sold, assigned,
transferred, conveyed or delivered to Purchaser by Seller
hereunder; and
(c) execute and deliver to Seller such written receipts for the
Assets, properties, records, and other materials assigned,
transferred, conveyed or delivered to Purchaser hereunder as
Seller may reasonably have requested at or before the Closing;
and
(d) pay to Seller the Acquisition Consideration specified in Section
1.4(a) hereof, and any other funds required to be paid to Seller
pursuant to the terms of Section 1.4(b) hereof; and
(e) pay to Seller all amounts required to reimburse Seller pursuant
to the terms of Section 1.4(c) hereof; and
(f) execute, acknowledge and deliver to Seller all Certificates and
other documents required to be delivered to Seller by Purchaser
at the Closing pursuant to the terms hereof.
19
6.4. Methods of Payment. The Acquisition Consideration specified in Section
1.4(a) hereof due to Seller and the transfer of the funds, if any, due
to Purchaser or to Seller, as the case may be, pursuant to the terms
of Section 1.4(b) hereof, shall be calculated and adjusted as provided
in this Section 6.4 and payment shall be made in immediately available
United States Federal Funds to the account of the respective party at
the Federal Home Loan Bank or a commercial bank, designated by such
party, pursuant to wire transfer through a Federal Reserve Bank. At
least two business days prior to the Closing, each party hereto shall
provide written notice to the other party hereto indicating the
account and bank to which such funds shall be wire transferred. Unless
otherwise mutually agreed by such parties, prorations and expenses
required to be paid by Seller or Purchaser pursuant to this Agreement
(including without limitation, those required pursuant to the terms of
Section 1.4(c) hereof) shall be settled between the parties and paid
at the Closing pursuant to corporate check(s) issued by the applicable
party and drawn on a bank located in the States of Indiana or Ohio.
Prorations and expenses that cannot be reasonably calculated at the
Closing shall be settled and paid in the same manner as soon as
practicable after the Closing. In order to facilitate the Closing, the
parties agree:
(a) that the Acquisition Consideration to be paid or credited by
Purchaser on the Closing Date shall be computed as described in
Section 1.4(a) except that for purposes of calculating the
Acquisition Consideration, the amount of Deposit Liabilities
shall be estimated based on the average of the amount of Deposit
Liabilities indicated by the general ledger accounts of the
Branches seven (7) days prior to the Closing Date and at the
close of business on the business day prior to the Closing Date;
and
(b) that the amounts of funds and dollar amount of loans to be
transferred on the Closing Date, pursuant to Section 1.4 hereof,
shall be computed as described in Section 1.4(b); and
(c) Purchaser assumes and agrees to perform all duties associated
with the ownership and maintenance of the Assets and Deposit
Liabilities as of the close of business on the Closing Date; and
(d) that within fifteen (15) business days after the Closing, the
parties shall make appropriate post-closing adjustments through
the close of business on the Closing Date, consistent with the
provisions of Section 1.4 hereof, based upon actual Deposit
Liabilities and Loan Assets and cash on hand transactions which
took place prior to the close of business on the Closing Date but
which were not reflected as of the close of business on the third
business day immediately preceding the Closing Date. In addition,
prorations of prepaid and deferred expenses, if any, that cannot
be reasonably calculated at the Closing shall be settled and paid
based on actual figures as soon as possible after the Closing.
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6.5. Availability of Closing Documents. The documents proposed to be used
and delivered at the Closing shall be made available for examination
by the respective parties not later than 12:00 noon, EDT on the fifth
(5th) business day prior to the Closing Date.
6.6. Effectiveness of Closing. Upon the satisfactory completion of such
Closing, the Acquisition shall be deemed to be effective, and the
Closing shall be deemed to have occurred.
7. CERTAIN TRANSITIONAL MATTERS.
-----------------------------
7.1. Transitional Action by Purchaser. Prior to and after the Closing,
unless otherwise indicated:
(a) After the Closing, Purchaser shall:
(i) pay in accordance with the law and customary banking
practices all properly drawn and presented checks, drafts,
debits and withdrawal orders presented to Purchaser by mail,
over the counter, through electronic media, or through the
check clearing system of the banking industry, by depositors
of the accounts assumed by Purchaser hereunder, whether
drawn on checks, drafts or withdrawal order forms provided
by Seller or by Purchaser; and
(ii) in all other respects discharge, in the usual course of the
banking business, the duties and obligations of Seller with
respect to the balances due and owing to the depositors
whose accounts are assumed by Purchaser hereunder; provided,
however, that Purchaser's obligations pursuant to this
Section 7.1 to honor checks, drafts and withdrawal orders on
forms provided by Seller and carrying its imprint (including
its name and transit routing number) shall not apply to any
such check, draft or withdrawal order presented to Purchaser
more than one hundred eighty (180) days following the
Closing Date; and
(b) After the Closing, if any depositors of the accounts assumed by
Purchaser hereunder, instead of accepting the obligation of
Purchaser to pay the Deposit Liabilities (including accrued
interest thereon) assumed hereunder, shall demand payment from
Seller for all or any part of any such assumed Deposit
Liabilities (including accrued interest thereon), Purchaser shall
acknowledge that Seller shall not be liable or responsible for
making such payment. If any such depositors draw a check, draft
or withdrawal order against the Deposit Liabilities (including
accrued interest thereon) assumed by Purchaser hereunder which is
presented or charged to Seller after the Closing Date, and Seller
elects to pay the same, Purchaser shall immediately, upon demand,
reimburse Seller for any such payments or charges but only to the
extent funds are available in such depositor's
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Deposit Liability account; provided, however, that Seller shall
not be deemed to have made any representations or warranties to
Purchaser with respect to any such checks, drafts or withdrawal
orders and any such representations or warranties implied by law
are hereby disclaimed; and
(c) Purchaser shall make appropriate arrangements with Seller at or
prior to the Closing to provide for settlement by Purchaser of
checks, returns and other items which are presented to Seller
after the Closing Date and which are drawn on or chargeable to
accounts which have been assumed by Purchaser hereunder; and
(d) On that date which is thirty (30) days after the Closing Date,
Seller shall pay to Purchaser an amount equal to the lesser of:
(i) the amount of any overdraft which existed as of the Closing
Date on each Deposit Account assumed by Purchaser hereunder;
or
(ii) the amount of any remaining overdraft, which continues to
exist on each Deposit Account that was originally overdrawn
as of the close of business on the business day immediately
preceding the Closing Date. However, for an account which
had an overdraft as of the Closing Date, which overdraft has
been reduced to zero with collected funds at any time during
such thirty day period, no amount shall be payable by Seller
to Purchaser; and
(e) Purchaser and Seller shall, at a mutually agreeable time which in
no event shall be earlier than the time of procurement of all
regulatory approvals required for consummation of the transaction
contemplated by this Agreement nor later than twenty-five (25)
days prior to the Closing Date, notify all depositors of the
Branches by a joint mailing containing a mutually acceptable text
to Seller and Purchaser calculated to provide necessary and
specific information to the owners of particular types of
accounts, of Purchaser's pending assumption of the Deposit
Liabilities hereunder, including specific information about
procedures for the delivery of necessary forms and checks of
Purchaser and, in appropriate instances, notify depositors that
on and after the Closing Date those Seller deposit-related
services which will be terminated. Each party shall bear its own
cost for the design and printing of the material included in such
joint mailing which pertains to that party. The cost for the
purchase of the envelopes used in each joint mailing shall be
shared equally. Purchaser shall have the responsibility for
placing such joint mailing into the mail and shall invoice Seller
for one-half of the postage paid with respect to such mailing.
Seller shall provide Purchaser with two (2) sets of all
appropriate mailing labels of applicable customer addresses at
Seller's expense; and
22
(f) Prior to the Closing Date, Purchaser shall separately furnish
appropriate depositors by mail with brochures, forms and other
written materials related or necessary to the assumption of the
Deposit Liabilities by Purchaser and the conversion of said
accounts to Purchaser accounts, including provisions for checks
to appropriate depositors using the forms of Purchaser with
instructions to such depositors to utilize such Purchaser checks
on and after the Closing Date and thereafter to destroy any
unused checks on Seller's forms. The mailing containing such
brochures, forms or other written materials of Purchaser shall be
sent no later than the earlier of fifteen (15) days or such other
period as may otherwise be required by applicable laws, rules and
regulations prior to the Closing Date and no later than the time
prior to the Closing Date reasonably deemed necessary by
Purchaser to provide depositors with all necessary forms to
accomplish the assumption of the Deposit Liabilities, provided
that no check forms of Purchaser shall be provided to depositors
earlier than five (5) days prior to the Closing Date or later
than five (5) days after the Closing Date. The expenses of the
printing, processing and mailing of such information of Purchaser
shall be borne by Purchaser. The expenses of providing new
Purchaser checks and other forms and written materials to
appropriate customers shall be that of Purchaser. Before Closing,
except as provided in this paragraph, Purchaser will not contact
Seller's customers except as may occur in connection with
advertising or solicitations directed to the public generally or
except as necessary to accomplish an orderly transition of the
Deposit Accounts to Purchaser, provided that such contacts do not
occur until after the mailing of the material described in
Section 7.1(e) hereof; and
(g) All tasks and obligations concerning the provision of data
processing services to or for the Assets and Deposit Liabilities
after the Closing, other than those specifically set forth in,
and to the extent assumed by Seller pursuant to Section 7.2(b)
herein, are the sole and exclusive responsibility of, and shall
be performed solely and exclusively by, Purchaser.
7.2. Transitional Action by Seller. Prior to and after the Closing, unless
otherwise indicated:
(a) Seller shall use its best efforts to cooperate with Purchaser in
assuring an orderly transition of ownership of the Branches'
Assets and responsibility for the Deposit Liabilities and other
liabilities assumed by Purchaser hereunder; and
(b) Seller shall cooperate with and permit Purchaser, at Purchaser's
option and expense and at no expense to Seller, to make provision
for the installation of teller equipment in the Branch; provided,
however, that Purchaser shall arrange for the installation of
such equipment at such times and in a manner that does not
significantly interfere with the normal business activities and
operation of Seller or the Branches.
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8. GENERAL COVENANTS AND INDEMNIFICATION.
--------------------------------------
8.1. Information After Closing. For a period of seven (7) years following
the Closing, upon written request of Seller or Purchaser, as the case
may be, each party shall provide the other party with reasonable
access to, or copies of, information and records relating to the
Branches which is in the possession or control of Seller or Purchaser,
as the case may be, reasonably necessary to permit the other party or
any of its subsidiaries, successors or affiliates to comply with or
contest any applicable legal, tax, banking, accounting or regulatory
policies or requirements, or any legal or regulatory proceeding
thereunder.
8.2. Confidentiality Obligations of Purchaser. From and after the date
hereof, Purchaser shall cause its affiliates (for all purposes of this
Section 8.2, including Purchaser's and their respective directors,
officers, employees and advisers) to, treat all information received
from Seller concerning the business, assets, operations and financial
condition of Seller (including, without limitation, the Branches), as
confidential, unless and to the extent that Purchaser can demonstrate
that such information was already known to Purchaser or in the public
domain, and Purchaser shall not use any such information (so required
to be treated as confidential) for any purpose except in furtherance
of the transactions contemplated hereby. The covenants of Purchaser
contained in this Section 8.2 are of the essence and shall survive any
termination of this Agreement but shall terminate at the Closing with
respect to any information that is limited to the Branches.
8.3. Confidentiality Obligations of Seller. From and after the date hereof,
Seller shall, and shall cause its subsidiaries and affiliates (for all
purposes of this Section 8.3, including Seller's and their respective
directors, officers, employees and advisers) to, treat all information
received from Purchaser concerning Purchaser's business, assets,
operations and financial condition as confidential, unless and to the
extent Seller can demonstrate that such information was already known
to Seller or such affiliates or subsidiaries or in the public domain,
and Seller shall, and shall cause its subsidiaries and affiliates to,
not use any such information (so required to be treated as
confidential) for any purpose except in furtherance of the
transactions contemplated hereby.
8.4. Indemnification by Seller. From and after the Closing Date, Seller
shall indemnify, hold harmless, and defend Purchaser from and against
all claims, losses and liabilities, demands and obligations, including
reasonable attorneys' fees and expenses, arising out of any actions,
suits or proceedings commenced prior to the Closing Date (other than
proceedings to prevent or limit the consummation of the Acquisition)
relating to the Assets transferred to or the Deposit Liabilities
assumed by Purchaser; and Seller shall further indemnify, hold
harmless and defend Purchaser from and against all losses and
liabilities, including reasonable attorneys' fees and expenses,
arising out of any actions, suits or proceedings commenced on or after
the Closing Date to the extent the same relate to the Assets
transferred to or the Deposit Liabilities and the other
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obligations and liabilities assumed by Purchaser, but arising out of
occurrences prior to or on the Closing Date. The obligations of Seller
under this Section 8.4 shall be contingent upon Purchaser giving
Seller written notice (i) of receipt by Purchaser of any process
and/or pleadings in or relating to any actions, suits, or proceedings
of the kinds described in this Section 8.4, including copies thereof,
and (ii) of the assertion of any claim or demand relating to the
Assets transferred to or the Deposit Liabilities and the other
obligations and liabilities assumed by Purchaser as of the close of
business on the Closing Date, including, to the extent known to
Purchaser, the identity of the person(s) or entity(ies) asserting such
claim or making such demand and the nature thereof, and including
copies of any correspondence or other writings relating thereto. All
notices required by the preceding sentence shall be given within
twenty (20) days of the receipt by Purchaser of any such process or
pleadings or any oral or written notice of the assertion of any such
claims or demands. Seller shall have the right to take over
Purchaser's defense in any such actions, suits, or proceedings through
counsel selected by Seller, to compromise and/or settle the same and
to prosecute any available appeals or reviews of any adverse judgment
or ruling that may be entered therein. Seller's obligations under this
Section 8.4 shall not extend to transactions or occurrences which
involve checks, negotiable orders of withdrawal or drafts which were
drawn or otherwise dated prior to the Closing Date but not presented
to Seller as of the close of business on the Closing Date. The
obligations of Seller pursuant to this Section 8.4 shall survive the
Closing.
8.5. Indemnification by Purchaser. From and after the Closing Date,
Purchaser shall indemnify, hold harmless and defend Seller from and
against all claims, losses, liabilities, demands and obligations,
including, without limitation, reasonable attorneys' fees and
expenses, real estate taxes, sale and use taxes, social security and
unemployment taxes, all accounts payable and operating expenses
(including, but not limited to, salaries, rents and utility charges),
which Seller may receive, suffer, or incur in connection with
operations and transactions occurring on or after the Closing Date and
which involve the Assets transferred, the Deposit Liabilities and
other obligations and liabilities assumed pursuant to this Agreement.
The obligations of Purchaser under this Section 8.5 shall be
contingent upon Seller giving Purchaser written notice (i) of the
receipt by Seller of any process and/or pleadings in or relating to
any actions, suits, or proceedings of the kinds described in this
Section 8.5, including copies thereof, and (ii) of the assertion of
any claim or demand relating to the Assets transferred to and/or the
Deposit Liabilities and the other obligations and liabilities assumed
by Purchaser on or after the Closing Date, including, to the extent
known to Seller, the identity of the person(s) or entity(ies)
asserting such claim or making such demand and the nature thereof, and
including copies of any correspondence or other writings relating
thereto. All notices required by the preceding sentence shall be given
within twenty (20) days of the receipt by Seller of any such process
or pleadings or any oral or written notice of the assertion of any
such claims or demands. Purchaser shall have the right to take over
Seller's defense in any such actions, suits, or proceedings through
counsel selected by Purchaser, to compromise and/or settle the same
and to prosecute any available appeals or reviews of any
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adverse judgment or ruling that may be entered therein. The
obligations of Purchaser pursuant to this Section 8.5 shall survive
the Closing.
8.6. Solicitation of Customers by Purchaser Prior to Closing. At any time
prior to the Closing Date, Purchaser will not conduct any marketing,
media or customer solicitation campaign, or customer calling program
which is specifically targeted to induce customers whose deposit
account liabilities are to be assumed by Purchaser pursuant to this
Agreement to open accounts with Purchaser prior to the Closing Date
and/or to discontinue their account relationships with Seller, except:
(i) as may occur in connection with advertising or solicitations
directed to the public generally; or (ii) as may occur as a result of
the solicitations by it of deposits or loans from or to a major or
statewide depositor such as, for example, a company with more than one
location or state or federal government; or (iii) as may occur as a
result of the solicitation by it of deposits or loans outside of the
county within which the Branches are situated; or (iv) as may occur as
a result of any lending, deposit, trust, credit card or other banking
relationship existing prior to the Closing Date and attributable to or
domiciled at any other branch offices or other facilities of it which
are not acquired by Purchaser pursuant to this Agreement; provided,
however, that nothing herein shall prevent Purchaser from forwarding
to all depositors having Deposit Accounts at the Branches a notice of
the transactions described in Sections 7.1(e) and (f) of this
Agreement or any notice required by any governmental agency or by any
law, rule or regulation in connection with the Acquisition.
8.7. Solicitation of Customers by Seller After Closing. On and after the
Closing Date and ending on that date which is eighteen (18) months
after the Closing Date, Seller will not conduct any marketing, media
or customer solicitation campaign which is specifically targeted to
induce customers whose deposit account liabilities are assumed by
Purchaser pursuant to this Agreement to discontinue their account
relationships with Purchaser; except: (i) as may occur in connection
with advertising or solicitations directed to the public generally; or
(ii) as may occur as a result of the solicitations by it of deposits
or loans from or to a major or statewide depositor such as, for
example, a company with more than one location or a local or state
government; or (iii) as may occur as a result of the solicitation by
deposits or loans outside of the county within which the Branches are
situated; provided, however, that nothing herein shall prevent Seller
from forwarding to all depositors having Deposit Accounts at the
Branches any notice required by any governmental agency or by any law,
rule or regulation in connection with the Acquisition.
8.8. Further Assurances. From and after the date hereof, each party hereto
agrees to execute and deliver such instruments and to take such other
actions as the other party hereto may reasonably request in order to
carry out and implement this Agreement. Without limiting the
foregoing, Seller agrees to execute and deliver such deeds, bills of
sale, acknowledgements and other instruments of conveyance and
transfer as shall be necessary and appropriate to vest in Purchaser
the legal and equitable title to the Assets of Seller being conveyed
to Purchaser hereunder.
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The covenants of each of the parties hereto pursuant to this Section
8.8 shall survive the Closing.
8.9. Right to Intervene. From and after the date hereof, in the event that
any claim, protest, suit or other proceedings is instituted against
Purchaser pursuant to or in connection with this Agreement, Seller
shall have the right, at its discretion and expense, to intervene in
such matter. The right of Seller to intervene pursuant to this Section
8.9 shall survive the Closing.
From and after the date hereof, in the event that any claim, protest,
suit or other proceedings is instituted against Seller pursuant to or
in connection with this Agreement, Purchaser shall have the right, at
its discretion and expense, to intervene in such matter. The right of
Purchaser to intervene pursuant to this Section 8.9 shall survive the
Closing.
8.10.Operation of Branches. Purchaser shall use its best efforts to
operate each Branch and serve customers of each Branch from and after
the Closing. Purchaser understands and acknowledges that, after the
Closing Date, neither Seller nor any of its subsidiaries or affiliates
shall be obligated to provide for any managerial, financial, business
or other services to the Branches, including, without limitation, any
personal, employee benefit, data processing, accounting, risk
management, or other services or assistance that may have been
provided to the Branches prior to the Closing Date, and Purchaser
shall take such action as may in its judgment appear to be necessary
or advisable to provide for the ongoing operation and management of,
and the provision of services and assistance to, the Branches on and
after the Closing Date. Not later than the Closing Date, Purchaser:
(i) shall change the legal name of the Branches to a name that does
not include the words "Ameriana"; and (ii) except for any documents or
materials in possession of the customers of the Branches (including,
but not limited to, deposit tickets and checks), shall not use and
shall cause the Branches to cease using any signage, stationery,
advertising, documents or printed or written materials that refer to
such Branches by any name that includes the words "Ameriana" and any
trademark or service xxxx registered in the name of, or otherwise
owned by Seller, Ameriana Bancorp or any subsidiary or affiliate of
either of them.
9. TERMINATION.
------------
9.1. Termination by Mutual Agreement. This Agreement may be terminated and
the transactions contemplated hereby may be abandoned by a vote of a
majority of the Board of Directors of each of Seller and Purchaser.
9.2. Termination by Seller. This Agreement may be terminated and the
transactions contemplated hereby abandoned by a vote of a majority of
the Board of Directors of Seller;
(a) in the event of a material breach by Purchaser of this Agreement;
or
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(b) in the event any of the conditions precedent specified in Section
5.1 of this Agreement has not been met as of the date required by
this Agreement and, if not so met, has not been waived by Seller,
which waiver shall have been consented to in writing; or
(c) in the event any final regulatory approval required for
consummation of the Acquisition is denied by the applicable
regulatory authority or has not been received within six (6)
months from the date of this Agreement; or
(d) in the event of damage, destruction or condemnation that
materially affects the value of the Branches as a whole as
provided in Section 2.1(g) hereof.
9.3. Termination by Purchaser. This Agreement may be terminated and the
transactions contemplated hereby abandoned by a vote of a majority of
the Board of Directors of Purchaser.
(a) in the event of a material breach by Seller of this Agreement; or
(b) in the event any of the conditions precedent specified in Section
5.2 of this Agreement has not been met as of the date required by
this Agreement and, if not so met, has not been waived by
Purchaser; or
(c) in the event any final regulatory approval required for
consummation of the Acquisition is denied by the applicable
regulatory authority or has not been received within six (6)
months from the date of this Agreement; or
(d) in the event of damage, destruction or condemnation that
materially affects the value of the Branches as a whole as
provided in Section 2.1(g) hereof.
9.4. Effect of Termination. The termination of this Agreement pursuant to
this Article 9 shall not release any party hereto from any liability
or obligation to the other party hereto arising from a breach of any
provision of this Agreement occurring prior to the termination hereof.
10. MISCELLANEOUS PROVISIONS.
-------------------------
10.1.Expenses. Except as and to the extent specifically allocated otherwise
herein, each of the parties hereto shall bear its own expenses;
provided, however, that in the event any governmental agency or taxing
authority later determines that any sales or use tax, documentary
stamp tax or other intangible tax should be assessed in connection
with the Acquisition, which such taxes by statute or regulation would
be imposed on or borne by the Purchaser in similar transactions,
Purchaser agrees to pay all such taxes. The provision of this Section
10.1 relating to the payment of such expenses and taxes are of the
essence and shall survive the Closing and the termination of this
Agreement.
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10.2.Certificates. All statements contained in any certificate
("Certificate") delivered by or on behalf of Seller or Purchaser
pursuant to this Agreement or in connection with the transactions
contemplated hereby shall be deemed to be representations and
warranties of the party delivering the Certificate by a duly
authorized officer of such party.
10.3.Termination of Representations and Warranties. The respective express
representations and warranties of Seller and Purchaser contained or
referred to in this Agreement or in any Certificate, schedule or other
instrument delivered or to be delivered pursuant to this Agreement
shall survive and continue after the Closing, except for those
representations and warranties in Section 3.1(h) which shall terminate
at Closing and shall not survive the Closing.
10.4.Transfer of Loans Without Recourse. All loans and all interest of
Seller in or to collateral securing such loans, including, but not
limited to, collateral held by Seller (and any notes, evidences of
indebtedness, security instruments and other documents associated
therewith) transferred to Purchaser pursuant to this Agreement shall
be transferred without recourse and without any representations or
warranties as to the collectability of any such loans, the
creditworthiness of any obligors or guarantors thereunder, or the
value or adequacy of such collateral except as otherwise specifically
set forth herein. Seller specifically disclaims any such
representations and warranties, including any warranties implied by
law. Purchaser hereby acknowledges and consents to all such
disclaimers by Seller.
10.5.Limitation and Disclaimer of Representations and Warranties. Except
as expressly stated in this Agreement, no party to this Agreement
makes any representations or warranties to any other party hereto.
Without limiting the foregoing, each party hereto specifically
disclaims any and all representations and warranties not expressly
stated in this Agreement, including, without limitation: (a) any
representation or warranty implied by law; (b) any representation or
warranty concerning the credit quality or collectability of any asset
of the Branch; and (c) any representation or warranty concerning the
amount of deposits that the Branches will have at or after the
Closing.
10.6.Waivers. Each party hereto, by written instrument signed by an
officer of such party, may extend the time for the performance of any
of the obligations or other acts of the other party hereto and may
waive, but only as affects the party signing such instrument: (a) any
inaccuracies in the representations or warranties of the other party
contained or referred to in this Agreement or in any document
delivered pursuant hereto; (b) compliance with any of the covenants or
agreements of the other party contained in this Agreement; (c) the
performance (including performance to the satisfaction of a party or
its counsel) by the other party of such of its obligations set out
herein; and (d) satisfaction of any condition to the obligations of
the waiving party pursuant to this Agreement.
10.7.Notices. Any notice or other communication required or permitted
pursuant to this Agreement shall be effective only if it is in writing
and delivered personally,
29
by facsimile transmission, or by registered or certified return
receipt mail, postage prepaid, addressed as follows:
If to Seller: Ameriana Bank and Trust, SB
0000 Xxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, President
If to Purchaser: Peoples Community Bank
0000 Xxxx Xxxxxxx Xxxx
Xxxx Xxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx, President
Or other person or address as any such party may designate by notice
to the other party, and shall be deemed to have been given as of the
date received.
10.8.Parties in Interest; Assignment; Amendment. This Agreement is binding
upon and is for the benefit of the parties hereto and their respective
successors, legal representatives and assigns, and no person who is
not a party hereto (or a successor or assignee of such party) shall
have any rights or benefits under this Agreement, either as a third
party beneficiary or otherwise. This Agreement cannot be assigned, and
this Agreement cannot be amended or modified, except by a written
agreement executed by the parties hereto or their respective
successors and assigns.
10.9.Headings. The headings in this Agreement are inserted for convenience
of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
10.10.Terminology. The specific terms of art that are defined in various
provisions of this Agreement shall apply through this Agreement
(including, without limitation, each Schedule hereto), unless
expressly indicated otherwise. In addition, the following terms and
phrases shall have the meanings set forth for purposes of this
Agreement (including each such Schedule):
(a) The term "business day" shall mean any day other than a Saturday,
Sunday or a day in which Seller is closed in accordance with the
laws of the State in which the Seller's principal office is
located or the United States of America. Any action, notice or
right which is to be taken or given or which is to be exercised
or lapse on or by a given date which is not a business day may be
taken, given or exercised, and shall not lapse, until the next
business day following.
(b) The term "affiliate" shall mean, with respect to any person, any
other person directly or indirectly controlling, controlled by or
under common control with such person. For purposes of this
definition, "control" shall mean the possession, directly or
indirectly, of the power to direct or cause
30
the direction of the management and policies of a person, whether
through the ownership of voting securities or by contract or
otherwise.
(c) The term "Permitted Exceptions" shall mean any or all of the
following: (i) the standard preprinted exceptions contained in
Schedule B of the ALTA Form B exceptions referenced in the Title
Commitment to be delivered by Seller to Purchaser pursuant to
this Agreement; (ii) statutory liens for current taxes or
assessments not yet due, or if due not yet delinquent, or the
validity of which is being contested in good faith by appropriate
proceedings; (iii) mechanics', carriers', workers', repairers'
and other similar liens arising or incurred in the ordinary
course of business relating to obligations as to which there is
no default on the part of Seller; and (iv) such other liens,
imperfections in title, charges, easements, restrictions and
encumbrances which, individually and in the aggregate, do not
materially detract from the value of, or materially interfere
with the present use of, any property subject thereto or affected
thereby.
(d) The term "person" shall mean any individual, corporation,
partnership, association, trust or other entity, whether
business, personal or otherwise.
(e) Unless expressly indicated otherwise in a particular context, the
terms "herein", "hereunder", "hereto", "hereof" and similar
references refer to this Agreement in its entirety and not to
specific articles, sections, schedules or subsections of this
Agreement. Unless expressly indicated otherwise in a particular
context, references in this Agreement to enumerated articles,
sections and subsections refer to designated portions of this
Agreement (but do not refer to portions of any Schedule unless
such Schedule is specifically referenced) and do not refer to any
other document.
(f) The term "subsidiary" shall mean a corporation, partnership,
joint venture or other business organization more than 50% of the
voting securities of which are beneficially owned or controlled
by the indicated parent of such entity.
10.11. Flexible Structure. References in this Agreement to federal or state
laws or regulations, jurisdictions or chartering or regulatory
authorities shall be interpreted broadly to allow maximum flexibility
in consummating the transactions contemplated hereby in light of
changing business, economic and regulatory conditions. Without
limiting the foregoing, in the event Seller and Purchaser agree in
writing to alter the legal structure of the Acquisition contemplated
by this Agreement, references in this Agreement to such laws,
regulations, jurisdictions and authorities shall be deemed to be
altered to reflect the laws, regulations, jurisdictions and
authorities that are applicable in light of such change.
31
10.12. Written Action. Any vote that is required to be taken, and any
resolution that is required to be adopted, by or in connection with
this Agreement may be taken or adopted pursuant to a written consent
action (rather than pursuant to a formal meeting) adopted pursuant to
applicable law, if and to the extent such written consent action is
sufficient, pursuant to applicable law, to authorize, approve and
document the matter or matters covered thereby.
10.13. Press Releases. Seller and Purchaser shall consult with one another
concerning the form and substance of any press release or other public
disclosure of any matters relating to this Agreement and shall
mutually agree to the time and method of such disclosure; provided,
however, that nothing in this Section 10.13 shall be deemed to
prohibit any party hereto from making any disclosure which its legal
counsel deems necessary to order to fulfill such party's disclosure
obligations imposed by law.
10.14. Entire Agreement. This Agreement supersedes any and all oral or
written agreements and understanding heretofore made relating to the
subject matter hereof. All schedules, exhibits and appendices to this
Agreement are incorporated into this Agreement by reference and made a
part hereof. 10.15. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Ohio,
without regard to its conflicts of laws provisions.
10.16. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized, all as of the
date first above written.
SELLER:
AMERIANA BANK AND TRUST, SB
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------
Its: President and Chief Executive Officer
-------------------------------------------
PURCHASER:
PEOPLES COMMUNITY BANK
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------------
Its: President
-------------------------------------------
33
