EXHIBIT 10.1
FULTON DIVISION ACQUISITION AGREEMENT
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This FULTON DIVISION ACQUISITION AGREEMENT (the "Agreement"), dated as
of the 1st day of March, 2002, is made and entered into by and between OLD
NATIONAL BANK, a national banking association having its principal office in
Evansville, Indiana (the "Seller"), and HOPKINSVILLE FEDERAL BANK, a federal
savings bank having its principal office in Hopkinsville, Kentucky (the
"Purchaser").
WITNESSETH:
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WHEREAS, the Seller conducts banking and other related activities in
Fulton, Kentucky; and
WHEREAS, the Seller desires to sell the Fulton Division (as hereinafter
defined) to the Purchaser, and the Purchaser desires to purchase the Fulton
Division, upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises, the
representations, warranties and mutual agreements and covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES; PAYMENT
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1.1 The Fulton Division. The Seller presently owns and operates
branch banking offices located at 306 Lake Street, Fulton, Kentucky, and
45-Bypass, Fulton, Kentucky (collectively, the "Branches"). The Branches are all
of the branch banking offices of the Seller in the Fulton Division, which is the
subject of this Agreement. The Seller also owns all of the issued and
outstanding capital stock of Fall & Fall Insurance (as hereinafter defined),
which owns and operates offices located at 101 Main Street, Fulton, Kentucky,
and the NCB Realtor Building, located at 312 Lake Street, Fulton, Kentucky. The
Branches, Fall & Fall Insurance, the NCB Realtor Building and the related
properties and activities are collectively referred to herein as the "Fulton
Division." The Seller hereby conveys the Fulton Division to the Purchaser
through the sale to the Purchaser of certain Assets (as hereinafter defined) and
the assumption by the Purchaser of certain Assumed Liabilities (as hereinafter
defined).
1.2 Time and Place of Closing. The closing of the transactions
contemplated hereby (the "Closing") shall occur at such time and on such date as
may be mutually agreed to by the parties (the "Closing Date"), provided that
both parties shall use their reasonable efforts to close such transactions on or
before June 30, 2002. The Closing shall be held at the offices of Seller in
Evansville, Indiana or at such other location as may be mutually agreed to by
the parties.
1.3 Purchase of Assets. The Seller hereby agrees, subject to
Section 1.4 hereof and the other terms and conditions of this Agreement, to
sell, transfer, convey, assign and deliver to the Purchaser, and the Purchaser
agrees to purchase, accept and receive from the Seller, on the Closing Date the
following assets, properties and rights free and clear of all security
interests, liens, mortgages and encumbrances, except for the security interests,
liens, mortgages and encumbrances that are in favor of the Seller with respect
to the Loans (as hereinafter defined) or that arise under applicable law and
except for the matters disclosed in Section 3.5(a) hereof with respect to the
Real Property (collectively, the "Assets"):
(a) all loans at their respective outstanding principal
amounts plus all accrued but unpaid interest and fees
thereon and related unamortized origination costs or
fees attributed to the Branches as of the close of
business on the day immediately preceding the Closing
Date, together with all security interests, liens,
mortgages, guaranties and collateral related thereto,
but excluding all loan loss reserves related thereto,
such loans to be listed on Exhibit 1.3(a) hereto
delivered to the Purchaser at the Closing
(collectively, the "Loans"), provided, however, that
the Loans shall not include any loans described in
Section 1.4 hereof;
(b) all customer files relating to the Loans and the
Deposit Liabilities (as hereinafter defined), all
promissory notes, loan agreements, security
agreements, mortgages, guaranties and other loan
documents relating to the Loans, all signature cards,
account agreements and other deposit account
documents relating to the Deposit Liabilities and all
contracts and rental agreements relating to the
Seller's safe deposit box business at the Branches;
(c) all overdrafts associated with all Deposit
Liabilities assumed by the Purchaser under Section
1.5 hereof;
(d) all right, title and interest in and to the real
property on which the Fulton Division's activities
are conducted, the legal descriptions of which are
set forth on Exhibit 1.3(d) hereto, and the buildings
and improvements situated thereon (collectively, the
"Real Property");
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(e) all rights, title and interest in and to all personal
property (including Branch automobiles and bank owned
life insurance), furniture, fixtures, equipment and
ATM machines located at the Real Property and owned
or leased by the Seller, as listed on Exhibit 1.3(e)
hereto (collectively, the "Fixed Assets"), together
with any manufacturer's warranties thereon which are
in effect on the Closing Date and which are
assignable to the Purchaser;
(f) all petty, teller, ATM and vault cash maintained at
the Branches as of the close of business on the
Closing Date, the exact amounts of which will be
certified by the Seller as of the Closing Date;
(g) all rights to the extent assignable in, to and under
any vendor single interest insurance or other
insurance on collateral transferred to the Purchaser
with the Loans;
(h) subject to Section 1.7 hereof, all safe deposit
contracts and rental agreements for the safe deposit
boxes located at the Branches;
(i) the local telephone and fax numbers associated
specifically with the Branches; and
(j) all of the issued and outstanding shares of capital
stock of ONB Insurance, Inc. d/b/a/ Fall & Fall
Insurance ("Fall & Fall Insurance").
The Purchaser hereby understands and agrees that it is purchasing only the
Assets and assuming only the Assumed Liabilities (as hereinafter defined)
specifically identified in this Agreement and, except as may be expressly
provided for in this Agreement, the Purchaser has no interest in or right to (y)
any customers of any affiliate of the Seller and (z) any relationship which the
Seller may have with any customer of the Fulton Division or of any other offices
of the Seller, including, without limitation, any deposit, loan, trust,
insurance or securities relationship or any other service of the Seller or any
of its affiliates or of any other offices of the Seller which may be related to
the Deposit Liabilities or the Loans. No right to the use of any sign, trade
mark, trade name, service mark or corporate name of Seller, or any of its
affiliates, is being sold hereunder.
1.4 Excluded Assets. All assets, properties and rights of the
Seller not expressly included in the Assets are excluded from the transactions
contemplated by this Agreement, including, without limitation, the following
(collectively, the "Excluded Assets"):
(a) all trade marks, service marks, trade names,
corporate names (including, without limitation, the
names "Old National", "Old National Bancorp" and "Old
National Bank"), copyrights, medallion program
stamps, signs, logos, URLs, domain names (and
associated e-mail addresses), Internet web sites,
proprietary information, stationery, forms, labels,
shipping materials, brochures, advertising and
marketing materials and other similar
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property or rights owned by, relating to or
referencing the Seller or any of its affiliates,
except for trade marks, service marks, corporate
names, signs, logos, URLs, domain names (and
associated e-mail addresses), Internet web sites,
proprietary information, stationery, forms, labels,
shipping materials, brochures, advertising and
marketing materials and similar property or rights
owned by, relating to or referencing Fall & Fall
Insurance;
(b) the following loans attributed to the Branches as of
the close of business on the day immediately
preceding the Closing Date shall not be sold to the
Purchaser pursuant to this Agreement:
(i) all loans with respect to which on the close
of business on the day immediately preceding
the Closing Date (A) the collateral securing
the loan has been repossessed by the Seller,
(B) the security interest in the collateral
securing the loan has not been perfected, or
(C) collection efforts have been instituted
or delivery or foreclosure proceedings have
been filed,
(ii) all loans attributed to the Branches as of
the close of business on the day immediately
preceding the Closing Date which are
recorded on the Seller's books and records
as non-accrual or which have principal or
interest that is sixty (60) days or more
past due, and
(iii) all loans attributed to the Branches as of
the close of business on the day immediately
preceding the Closing Date with respect to
which the borrower has filed a petition for
relief under the United States Bankruptcy
Code prior to the Closing Date;
(c) all rights of the Seller or any of its affiliates to
solicit and service, and all relationships of the
Seller or any of its affiliates with, any and all
customers of the Seller (whether or not attributed to
the Fulton Division) in connection with annuities,
securities and investment products, including,
without limitation, all rights of the Seller or any
of its affiliates to receive income, premiums, fees
or commissions relating to annuities, securities or
investment products prior to or following the Closing
Date by the Seller or any of its affiliates to
customers attributed to any of the Fulton Division;
(d) all rights of the Seller or any of its affiliates to
solicit and service, and all relationships of the
Seller or any of its affiliates with, any and all
customers of the Seller (whether or not attributed to
the Fulton Division) in connection with trusts,
fiduciary services or activities or portfolio or
investment management services or activities,
including, without limitation, all rights of the
Seller or any of its affiliates to receive income,
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premiums,fees or commissions relating to trusts,
fiduciary services or activities or portfolio or
investment management services or activities prior to
or following the Closing Date from any customers
attributable to the Fulton Division;
(e) all routing numbers of the Seller used in connection
with the Deposit Liabilities or the Branches;
(f) all computer, networking and data processing
equipment, hardware and software located at or
utilized by the Fulton Division, including, without
limitation, servers, workstations, personal
computers, CRTs, printers, routers, modems, network
hubs, data storage media, operating systems, local
area networks, custom software and off-the-shelf
software;
(g) all telephone systems leased by or located at the
Fulton Division, as identified on Exhibit 1.4(g)
hereto;
(h) all records of the Seller, except as expressly
provided in Section 1.3(b) of this Agreement; and
(i) all precious metals maintained in the vault of either
of the Branches.
1.5 Assumption of Liabilities. The Purchaser hereby agrees,
subject to Section 1.6 hereof and the other terms and conditions of this
Agreement, that on and after the Closing Date it shall assume and fully and
timely perform, discharge and pay, in accordance with their respective terms,
all of the liabilities and obligations of the Seller relating to:
(a) the deposit accounts attributed to the Branches as of
the close of business on the day immediately
preceding the Closing Date (including, without
limitation, all checking, savings, certificate of
deposit, individual retirement, Keogh, money market,
time deposit and sweep accounts) together with all
accrued interest relating to such deposit accounts,
such deposit accounts to be listed on Exhibit 1.5(a)
hereto delivered to the Purchaser at the Closing
(collectively, the "Deposit Liabilities");
(b) the Loans;
(c) all obligations relating to all escrow funds and
dealer reserves under the Loans;
(d) the Real Property;
(e) all safe deposit boxes and all rental agreements and
contracts for the safe deposit boxes located at the
Branches as of the Closing Date;
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(f) the operation of the Fulton Division in the ordinary
course of business, including, without limitation,
the payment or provision of salary, compensation and
employee benefits to the Employees (as hereinafter
defined);
(g) deferred compensation which is funded by the bank
owned life insurance; and
(h) all liabilities or obligations which are expressly
identified elsewhere in this Agreement as being
assumed, performed, discharged or paid by the
Purchaser.
The liabilities and obligations described in this Section 1.5 that the
Purchaser hereby agrees to assume and fully and timely perform, discharge and
pay are referred to collectively in this Agreement as the "Assumed Liabilities".
On and after the Closing Date, the Seller shall have no duties,
responsibilities, liabilities or obligations under or with respect to the
Assumed Liabilities.
1.6 Excluded Liabilities. All liabilities and obligations of the
Seller not expressly included in the Assumed Liabilities are excluded from the
transactions contemplated in this Agreement, including, without limitation, the
following (collectively, the "Excluded Liabilities"):
(a) all deposit accounts attributed to the Branches as of
the close of business on the day immediately
preceding the Closing Date which are subject to any
order, agreement or encumbrance that in any way
restricts the payment of funds representing such
account on the order of the depositor;
(b) all securities brokerage accounts or dealer reserve
accounts maintained by the Seller or any of its
affiliates for a customer attributed to any of the
Branches;
(c) all amounts and deposits held by the Seller relating
to trust accounts or to other customer relationships
not being transferred pursuant to this Agreement;
(d) all liabilities associated with cashier's checks or
other official bank checks and traveler's checks
issued by the Seller at any of the Branches prior to
the Closing Date; and
(e) all liabilities and obligations of the Seller
relating to the Fulton Division that are not
expressly included in the Assumed Liabilities. It is
expressly understood and agreed that, except as set
forth in this Agreement, along with the exhibits and
schedules hereto, the Purchaser shall not assume or
be liable for any of the debts, obligations or
liabilities of the Seller of any kind and nature
whatsoever including, but not limited to: any losses
or
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liabilities due to or arising from forgery, fraud,
defalcation, or any other improper act or omission
occurring on or before the Closing Date; any tax or
debt therefore (except relating to Fall & Fall
Insurance); any liability for unfair practices (such
as wrongful termination or employment
discrimination), any liability or obligation of the
Purchaser arising out of any threatened or pending
litigation, or any liability with respect to personal
injury or property damage claims.
1.7 Safe Deposit Business.
(a) On and after the Closing Date, the Purchaser shall
assume and fully and timely perform and discharge all
of the Seller's obligations with respect to the
Seller's safe deposit box business at the Branches in
accordance with the terms and conditions of the
contracts or rental agreements related to such safe
deposit boxes.
(b) On and after the Closing Date, the Seller shall
transfer the records related to such safe deposit box
business to the Purchaser, and the Purchaser shall
maintain and safeguard all such records and be
responsible for granting proper access to and
protecting the contents of the safe deposit boxes at
the Branches.
(c) All safe deposit box rental payments collected by the
Seller before the Closing Date for the respective
current rental terms shall be prorated between the
parties as of the Closing Date.
1.8 Bills of Sale; Deeds; Assignments; Documentation of
Assumption. On the Closing Date, the Seller shall deliver to the Purchaser such
bills of sale, deeds, assignments and instruments of transfer, reasonably
satisfactory in form and substance to the Seller and the Purchaser, pursuant to
which the Seller will transfer all of its right, title and interest in and to
the Assets to the Purchaser. On the Closing Date, the Purchaser shall deliver to
the Seller such undertakings and agreements, satisfactory in form and substance
to the Seller and the Purchaser, pursuant to which the Purchaser shall assume
and agree to fully and timely perform, discharge and pay, in accordance with
their respective terms, all of the Assumed Liabilities.
1.9 Assumption Subject to Certain Terms. The liabilities and
obligations being assumed by the Purchaser pursuant to this Agreement shall be
assumed subject to the terms and conditions of the lease, deposit, loan,
security, mortgage and other written agreements relating thereto and all
applicable laws, statutes, rules, regulations and other legal requirements.
1.10 Transfers. In consideration of the assumption by the Purchaser
of the Assumed Liabilities, on the Closing Date the Seller shall transfer to the
Purchaser (i) the Assets and (ii) U.S. Treasury securities with a maturity at
issuance of no greater than seven days in an amount equal to the Deposit
Liabilities determined in accordance with Section 1.5(a) hereof reduced by the
sum of (a) the principal amount of the Loans, plus the accrued but unpaid
interest and fees thereon, but net of unearned income and excluding loan loss
and general reserves related thereto,
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as shown on the books and records of the Seller as of the close of business on
the day immediately preceding the Closing Date, (b) the Net Book Value of the
Assets, including the Seller's safe deposit business at the Branches, (c) the
face amount of the teller, ATM and vault cash maintained at the Branches as of
the Closing Date, determined in accordance with Section 1.3(e) hereof, and (d)
the overdrafts associated with the Deposit Liabilities, plus the accrued but
unpaid fees related to such overdrafts, as shown on the books and records of the
Seller as of the close of business on the day immediately preceding the Closing
Date; and such payment formula shall be further adjusted in accordance with
Section 1.11 hereof. It is the intent of the Purchaser to acquire Assets and
U.S. Treasury securities with a value equal to the value of the Assumed
Liabilities, and the Seller and Purchaser agree to amend this Agreement in the
event that such intent is not fulfilled by the payment formula referred to
above. Such payment formula is for the sole purpose of determining the amount of
U.S. Treasury securities transferable at the Closing Date and shall not
constitute an allocation of the purchase price to any particular asset being
transferred or liability being assumed pursuant hereto. "Net Book Value" means
the value of the Assets on the books of the Seller as of the Closing Date
determined in accordance with generally accepted accounting principles.
1.11 Pro-Rated Adjustment of Income and Expenses. All utility
payments, real and personal property taxes and similar expenses and charges
relating to the Real Property and the Fixed Assets, all Federal Deposit
Insurance Corporation ("FDIC") premiums and assessments and all other expenses
relating to the operation of the Branches shall be prorated between the parties
as of the Closing Date on the basis of a 365-day year. To the extent any of such
items has been prepaid by the Seller for a period extending beyond the Closing
Date, there shall be a proportionate monetary adjustment in favor of the Seller.
All taxes, utility payments and other expenses and charges relating to the
Branches which arise or are incurred, assessed or imposed on and after the
Closing Date shall be paid by the Purchaser.
1.12 Allocation of Purchase Price. The purchase price for the
Assets being purchased and the Assumed Liabilities being assumed by the
Purchaser pursuant to this Agreement shall be allocated on an allocation
schedule to be agreed upon by the Purchaser and the Seller within thirty (30)
days after the Closing Date. This allocation is intended to comply with the
allocation method required by Section 1060 of the Internal Revenue Code of 1986,
as amended. The Purchaser and the Seller shall cooperate to comply with all
substantive and procedural requirements of Section 1060 and any regulations
thereunder, and the allocation shall be adjusted if and to the extent necessary
to comply with the requirements of Section 1060.
1.13 Transfer Taxes. The Purchaser shall pay all transfer and
conveyance taxes in connection with the transfer of the Assets to the Purchaser
and all recording fees in connection with the transfer of the Real Property to
the Purchaser.
1.14 Adjustments. It is understood by the parties hereto that the
books and records of the Seller may not be complete as of the Closing Date and
that certain assets and liabilities of the type constituting the Assets and the
Assumed Liabilities may not have been included therein because (a) such Assets
and Assumed Liabilities (i) were not posted on the Closing Date, or (ii) are
carried in the Seller's suspense account, or (b) for other reasons, complete
information with respect to the Assets and the Assumed Liabilities was not
otherwise available. Within thirty (30)
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days after the Closing Date, the Seller and the Purchaser shall prepare a
revised closing statement setting forth the payment required pursuant to
Sections 1.10 and 1.11 of this Agreement taking into account, among other
things, assets and liabilities of the type constituting the Assets and the
Assumed Liabilities and the transactions occurring through the Closing Date.
Within ten (10) days after completion of the revised closing statement, the
Purchaser shall pay to the Seller or the Seller shall pay to the Purchaser, as
appropriate, the difference between the amount paid on the Closing Date and the
amount required to be paid pursuant to the revised closing statement.
1.15 Payment. In consideration of the Assets and securities to be
transferred by the Seller to the Purchaser hereunder, on the first business day
following the Closing Date, the Purchaser shall pay the Seller by wire transfer
of immediately available funds an amount equal to 6.456% of the Deposit
Liabilities and the repurchase agreement liabilities plus interest accrued at a
rate equal to the then effective Federal funds overnight rate as published by
the Federal Reserve Bank.
ARTICLE II
CERTAIN AGREEMENTS OF PURCHASER AND SELLER
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2.1 Regulatory Approvals.
(a) The Purchaser, at its sole obligation and expense,
shall, as soon as practicable following the date of
this Agreement, prepare all applications, as required
by applicable law, and file such applications with
the appropriate federal and state regulatory
authorities for approval to purchase the Assets and
assume the Assumed Liabilities, to establish a branch
at the location of each of the Branches and to effect
in all other respects the transactions contemplated
hereby (the "Governmental Approvals"). The Purchaser
agrees to (i) make draft copies of such applications
(except for any confidential portions thereof)
available to the Seller at least two (2) business
days prior to the filing thereof, (ii) treat and
pursue approval of the applications in a diligent
manner and on a priority basis, (iii) request
confidential treatment by the appropriate federal and
state regulatory authorities of all non-public
information submitted in the applications, (iv)
promptly provide the Seller with a copy of the
applications as filed (except for any confidential
portions thereof) and all approvals, denials,
requests, notices, orders, opinions, correspondence
and other documents with respect thereto, and (v) use
its reasonable efforts to obtain all Governmental
Approvals.
(b) The Seller shall, as soon as practicable following
the date of this Agreement, prepare and file with the
appropriate federal and state regulatory authorities
notice of its intent to cease operation of the
Branches and to consummate the transactions
contemplated hereby and
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thereafter shall use its reasonable efforts to obtain
any required permission or approval of such
regulatory authorities to cease operating the
Branches.
2.2 Access. The Seller shall afford to the Purchaser and its
authorized representatives, upon forty-eight (48) hours prior notice (or upon
less prior notice as agreed by the parties), reasonable access to the
properties, books and records directly related to the Fulton Division in order
that the Purchaser, at Purchaser's sole expense, may have full opportunity to
make a reasonable review and investigation of the Assets and the Assumed
Liabilities at reasonable times during the Seller's regular business hours
without interfering with the normal business and operations of the Fulton
Division or the affairs of the Seller. The Seller shall furnish the Purchaser
with such information as to its business, operations and properties relating to
the Fulton Division as the Purchaser may, from time to time, reasonably request
and as shall be available which is required for inclusion in all governmental
applications necessary to effect the transactions contemplated hereby. Nothing
in this Section 2.2 shall be deemed to require the Seller to breach any
obligation of confidentiality or to reveal any proprietary information, trade
secrets or marketing, business or strategic plans.
2.3 Confidentiality. The Purchaser shall, and shall cause its
directors, officers, employees, agents and representatives to, hold in strict
confidence and not disclose to any other person or entity without the prior
written consent of the Seller (a) the terms of this Agreement and (b) all
information received by the Purchaser or its directors, officers, employees,
agents or representatives from or with respect to the Seller, the Branches, the
Assets, the Assumed Liabilities, the customers or the transactions contemplated
hereby, except such information (i) as may be publicly available other than
through a breach of this Agreement or the wrongful dissemination of such
information by the Purchaser or its directors, officers, employees, agents or
representatives, (ii) as may be required to be disclosed by applicable law, or
(iii) as required to obtain the Government Approvals. The Seller and the
Purchaser agree that neither shall issue any news or press release or provide
information to any reporter or the media regarding this Agreement or the
transactions contemplated hereby, except as is required by applicable law,
without obtaining the prior approval of the other party. In addition to the
foregoing, the Seller and the Purchaser are parties to a separate
confidentiality agreement relating to the Branches and the transactions
contemplated hereby which shall remain binding upon the parties and in full
force and effect in accordance with its terms (the "Confidentiality Agreement").
2.4 Conversion of Accounts; Transfer and Delivery of Assets and
Deposit Liabilities.
(a) Prior to the Closing Date, the Purchaser shall use
its best efforts to assure that its data processing
systems are capable of receiving the Assets and the
Deposit Liabilities on the Closing Date.
(b) On the Closing Date, the Seller shall:
(i) deliver to the Purchaser such of the
Assets as shall be capable of
physical delivery;
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(ii) execute, acknowledge and deliver to
the Purchaser all such endorsements,
assignments, bills of sale, deeds
(which with respect to the Real
Property shall be warranty deeds)
and other instruments of conveyance,
assignment and transfer as, in the
reasonable judgment of the
Purchaser, shall be necessary and
appropriate to consummate the sale
and transfer of the Assets to the
Purchaser and to vest in the
Purchaser the legal and equitable
title to the Assets, free and clear
of all liens and encumbrances,
except as otherwise permitted in
this Agreement;
(iii) assign, transfer and deliver to the
Purchaser such of the following
records pertaining to the Deposit
Liabilities as exist and are
available in whatever form or medium
is maintained by the Seller:
(A) all orders, agreements and
contracts between the Seller and
depositors attributed to the
Branches and records of similar
character, including signature
cards; and
(B) all records of account
maintained for each depositor
attributed to the Branches;
(iv) produce a bank statement for each of the
Loans transferred and Deposit Liabilities
assumed and mail, at its expense, a
statement dated as of the day immediately
prior to the Closing Date to the customer
with respect to each of the Deposit
Liabilities; and
(v) assign, transfer and deliver to the
Purchaser the promissory notes, security
agreements, mortgages and related agreements
and loan files relating to or evidencing all
Loans to the extent the same exist and in
whatever form or medium is maintained by the
Seller.
2.5 Retention of and Access to Files and Records Following the
Closing Date.
(a) The Purchaser agrees that it shall maintain, preserve
and safely keep, for as long as may be required by
applicable law and in accordance with customary
business practices, all of the files, books of
account and records relating to the Fulton Division
(including, without limitation, the Assets and the
Assumed Liabilities) for the joint benefit of itself
and the Seller, and that it shall permit the Seller
and its employees and representatives, at any
reasonable time and at the Seller's expense, to
inspect, make extracts from or copies of any such
files, books of account and records as the Seller
shall deem reasonably necessary.
(b) In the event that some of the Seller's records
concerning the Deposit Liabilities cannot reasonably
be segregated from the Seller's records
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regarding accounts not transferred pursuant to this
Agreement, the Seller shall not deliver such records
to the Purchaser but shall maintain, preserve and
safely keep such records for as long as may be
required by applicable law. The Seller shall permit
the Purchaser or Purchaser's employees and
representatives, at reasonable times and at the
Purchaser's expense, to inspect, make extracts from
or copies of such records which relate to any such
records.
2.6 Safekeeping. The Seller agrees to transfer and deliver to the
Purchaser on the Closing Date all safe deposit box contents, including without
limitation, securities, papers, valuables and other items (collectively,
"Safekeeping Items"), held by the Seller in safekeeping for its customers at the
Branches, together with all records relating thereto (in whatever form or medium
is maintained by the Seller). The Purchaser agrees to assume, honor and
discharge, from and after the Closing Date, the duties and obligations of the
Seller with respect to such safe deposit boxes and the Safekeeping Items and
shall be entitled to any right or benefit arising from such safekeeping business
from and after the Closing Date. The Purchaser agrees to execute as of the
Closing Date a receipt for such Safekeeping Items.
2.7 Employees.
(a) The active employees of the Seller who are assigned
to the Fulton Division as of the Closing Date (the
"Employees") shall, as of the Closing Date, be
terminated by the Seller and become employees-at-will
of the Purchaser at the base salary at least
equivalent to the rate of base salary paid by the
Seller to each of the Employees, other than the
current area President, on the day immediately
preceding the Closing Date. The Seller shall be
responsible for the filing of Forms W-2 with the
Internal Revenue Service and all required filings
with state tax authorities with respect to wages and
benefits paid to each such employee for all periods
ending prior to the Closing Date.
(b) Immediately following the Closing, the Purchaser
shall make available to the Employees substantially
the same employee benefits on substantially the same
terms and conditions as the Purchaser offers to its
similarly situated employees. Years of service of
each of the Employees with the Seller, and any
predecessors, prior to the Closing shall be credited
for purposes of (i) eligibility under the Purchaser's
employee welfare benefit plans, and (ii) eligibility
and vesting, but not for purposes of benefit accrual
or contributions, under all other employee benefit
plans of the Purchaser, including, without
limitation, all pension, retirement, profit sharing,
401(k) and employee stock ownership plans. The Seller
shall be responsible for and pay all salary,
compensation and employee benefits (including,
without limitation, vacation, sick, personal and
other paid time off), and all payroll taxes in
connection therewith, for the Employees accrued,
owned or earned for all periods prior to the Closing
Date. The Purchaser shall be responsible for and pay
all salary, compensation and
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employee benefits (including, without limitation,
vacation, sick personal and other paid time off),
and all payroll taxes in connection therewith, for
the Employees accrued, owned or earned for all
periods on and after the Closing Date.
(c) In accordance with the provisions of the Health
Insurance Portability and Accountability Act
("HIPAA") and the terms of the Purchaser's group
health, hospitalization, medical, dental and
disability plans (collectively, the "Purchaser's
Plans"), the Employees who become participants in the
Purchaser's Plans shall be given "creditable
coverage" credit for their coverage under the
Seller's group health, hospitalization, medical,
dental and disability plans under the pre-existing
condition limitation provisions of the Purchaser's
Plans. In addition, if a condition was not a
"pre-existing condition" for a participant in the
Seller's group health, hospitalization, medical,
dental and disability plans, then it shall not be
considered to be a pre-existing condition under the
Purchaser's Plans; provided, however, that if an
Employee's condition is being excluded as a
pre-existing condition under the relevant Seller's
plan of the Closing Date, then the Purchaser may
treat such condition as a pre-existing condition
under the relevant Purchaser's Plan for the period
such condition would have been treated as a
pre-existing condition under the Seller's plan.
(d) With respect to any Employee on short term disability
or temporary leave of absence, upon conclusion of his
or her short term disability or temporary leave of
absence, subject to the terms and conditions of the
applicable plans and policies of the Purchaser and
applicable law, each Employee on such disability or
leave shall receive the salary and vacation benefits
effective when he or she went on disability or leave
and, to the extent practicable, shall be offered by
the Purchaser the same or a substantially equivalent
position to his or her position with the Seller.
(e) The Purchaser is not assuming, nor shall it have
responsibility for the continuation of, or any
liability under or in connection with (i) any
employment contract, collective bargaining agreement,
plan or arrangement providing for insurance coverage
or for deferred compensation (except that which is
funded by the bank owned life insurance), bonuses,
stock options or other forms or incentive
compensation or post-retirement compensation or
benefits which are entered into or maintained, as the
case may be, by the Seller; (ii) any "employee
benefit plan" as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), which is subject to any provision
of ERISA and is maintained, administered or
contributed to by the Seller; (iii) any withholding
or payroll taxes or penalty related thereto; (iv) any
employee benefits; or (v) any other obligation
arising prior to or as a result of actions by the
Seller whether prior to or subsequent to the Closing
Date.
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(f) This Agreement is not intended to create and does not
create any contractual or legal rights in or
enforceable by any Employee. The Purchaser agrees to
obtain prior approval of the Seller before sending
any communications to any Employee concerning the
subject matter of this Section 2.7, which approval
shall not be unreasonably withheld. This Agreement
may be amended or terminated without liability to any
Employee.
2.8 Payment of Items After the Closing Date. Following the
Closing Date:
(a) The Purchaser agrees to pay in accordance with
applicable law and customary banking practices all
properly drawn and presented checks, drafts and
withdrawal orders presented to the Purchaser by mail,
over the counter or through the check clearing system
of the banking industry by depositors related to the
Deposit Liabilities, whether drawn on the checks,
withdrawal or draft forms provided by the Seller or
by the Purchaser, and in all other respects to
discharge, in the usual course of the banking
business, the duties and obligations of the Seller
with respect to the balances due and owing to the
depositors with respect to whom the Purchaser has
assumed the Deposit Liabilities.
(b) If any of such depositors, instead of accepting the
obligation of the Purchaser to pay the Deposit
Liabilities, shall demand payment for all or any part
of any such Deposit Liabilities, the Seller shall not
be liable or responsible for making such payment.
(c) After the Closing, the Seller shall have the rights
and obligations of a "Collecting bank" or
"Intermediary bank" under Article 4 of the Uniform
Commercial Code as adopted in Chapter 355 of the
Kentucky Revised Statutes with respect to items drawn
on the Deposit Liabilities which are received by
Seller for processing. Items received for processing
against the Deposit Liabilities shall be grouped and
delivered to the Purchaser within the time limits
provided by the Kentucky Uniform Commercial Code in a
special cash letter separately identified as
"Transferred Accounts Cash Letter." For purposes of
paying the Purchaser's obligations to the Seller
under this Section 2.8, the Purchaser will establish
a settlement account with the Seller at the Closing
Date in a collected amount equal to One Hundred
Thousand Dollars ($100,000), which amount shall be
maintained by the Purchaser for a period of sixty
(60) days following the Closing Date, against which
will be (i) debited the checks, returns, ACH charges
or debits and items hereafter referred to in this
sentence, and (ii) charged amounts in accordance with
this Section 2.8(c) to provide, among other things,
for the settlement by the Purchaser of checks, ACH
charges or debits, returns and items which are
presented to the Seller within sixty (60) days after
the Closing Date and which are
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drawn on or chargeable to Deposit Liabilities
transferred to the Purchaser. After the expiration of
such 60-day period following the Closing Date, the
Seller shall dishonor all checks, drafts, withdrawal
orders and other instruments and items drawn on the
Deposit Liabilities which are presented in any manner
to the Seller, unless the Seller and the Purchaser
agree to extend such 60-day period and extend the
provision for a settlement account as necessary. The
Purchaser agrees to arrange for the transportation
directly and to pay the expenses of transporting from
the Seller to the Purchaser all checks, drafts,
orders of withdrawal, cash letters, magnetic tapes
and other items related to the Seller's receipt of
items relating to the Deposit Liabilities after the
Closing Date. Such transportation expenses may be
charged against the settlement account of the
Purchaser. The Seller shall terminate all ACH
arrangements relating to the Deposit Liabilities on
or prior to the Closing Date.
(d) The Purchaser agrees to pay promptly to the Seller
(i) an amount equal to the amount of any checks,
drafts and withdrawal orders credited by the Seller
before the Closing Date with respect to any of the
Deposit Liabilities that are returned to the Seller
unpaid after the Closing Date, and (ii) for a period
not to exceed thirty (30) days from the Closing Date,
an amount equal to the amount of any checks, drafts
and withdrawal orders credited by the Seller after
the Closing Date with respect to any of the Deposit
Liabilities that are returned to the Seller unpaid
after the Closing Date. Upon receipt thereof, the
Seller shall immediately forward any such check,
draft, withdrawal order or other item to the
Purchaser, and subject to the time limitations
referenced herein, the Purchaser shall remit to the
Seller the amount of each such check, draft,
withdrawal order and other item.
2.9 Loan Payments and Information Received After the Closing Date.
(a) Following the Closing Date, the Seller agrees:
(i) to forward promptly to the Purchaser all
payments (properly endorsed without
recourse) which are received by the Seller
on or after the Closing Date that relate to
the Loans and to provide sufficient
information so that any such payments may be
properly applied to the extent such
information is available to the Seller; and
(ii) to forward promptly to the Purchaser all
notices or other correspondence received on
or after the Closing Date that relate to the
Deposit Liabilities, the Loans or any of the
other Assets.
(b) The Purchaser shall have forty-five (45) days
following the Closing to notify the Seller in writing
of any Loan that should have been excluded at
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the Closing from the Assets under Section 1.4 hereof.
If such Loan is properly excluded from the Assets,
the Seller agrees to promptly repurchase such Loan
for an amount equal to the amount paid therefor by
the Purchaser.
(c) The Purchaser shall be liable for all returned checks
representing payments received by the Seller on or
prior to the Closing Date on any Loan. The Seller
shall promptly deliver each such returned check
received by it to the Purchaser, and the Purchaser
shall promptly pay to the Seller the face amount
thereof.
2.10 Notices to Customers. The Purchaser, at Purchaser's cost and
expense, shall deliver within five (5) business days following the Closing Date
by first class mail, postage prepaid, (a) to each customer whose deposit account
is included in the Deposit Liabilities, written notice approved by the Seller
indicating that such customer's deposit account has been assumed by the
Purchaser and, in addition, furnish each such customer with instructions to
utilize the Purchaser's form of checks and to destroy all unused checks on the
form of the Seller, and (b) to each customer whose loan is included in the
Loans, written notice approved by the Seller indicating that such customer's
loan has been sold and transferred to the Purchaser and directing that all
payments with respect to such loan is required to be paid, on and after the date
of receipt of such notice, to an address specified by the Purchaser.
2.11 Seller Signage and Other Identification. On the Closing Date,
the Purchaser, at its expense, shall substitute its name and logo for the name
and logo of the Seller on all signs at the Branches and shall remove and make
available to the Seller at the Branches all signs which carry the name or logo
of the Seller. The Seller agrees, at its expense, to remove from the Branches as
promptly as practicable after the Closing Date such signs. The Purchaser agrees
to replace promptly all written, printed and electronic materials bearing the
Seller's or any of its affiliate's name and/or logo used at the Branches with
written, printed or electronic materials bearing the Purchaser's name and/or
logo, including, without limitation, coupon books for Loans, stationery, forms
and marketing, advertising and other materials or brochures. All such materials
so replaced shall be removed by the Seller, at its expense, from the Branches as
promptly as practicable after the Closing Date.
2.12 Right to Intervene. In the event that any claim, demand, suit or
other proceeding is instituted or threatened against the Purchaser relating to
this Agreement, the Assets or the Assumed Liabilities, the Seller shall have the
right, at its discretion and expense, to intervene in such matter, and the
Purchaser hereby agrees to give prompt and prior notice thereof to the Seller
and consents to such intervention.
2.13 Assumption of Risks.
(a) If any of the Real Property or the Fixed Assets shall
be destroyed or materially damaged by fire, wind,
water or other casualty prior to the Closing Date and
shall not have insurance coverage which in the
reasonable determination of the Purchaser is
sufficient to repair or replace
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such Real Property or Fixed Assets, the Purchaser
shall have the right to terminate this Agreement with
regard to the affected Real Property or Fixed Assets
or to accept the affected Real Property or Fixed
Assets as destroyed or damaged, together with any
rights of the Seller to receive insurance proceeds
with respect to such destroyed or damaged Real
Property or Fixed Assets.
(b) On and after the Closing Date, the Seller shall
discontinue all casualty, liability and other
insurance coverage maintained with respect to the
Fulton Division and the Assets. The Purchaser shall
be solely responsible for all losses and liability
claims whatsoever relating to the Fulton Division,
the Assets and the Assumed Liabilities arising on and
after the Closing Date.
(c) On and after the Closing Date, the Seller shall
discontinue providing any security for persons and
property at the Fulton Division. The Purchaser shall
be solely responsible and liable for all liabilities
and claims arising out of injury or damage to
persons, property or assets on or at the Fulton
Division on and after the Closing Date.
(d) On and after the Closing Date, the Purchaser shall
maintain adequate insurance with respect to the
losses described in (b) and (c) above and otherwise
with respect to the operation of the Fulton Division.
2.14 Information Reporting.
(a) Subject to Section 2.14(b) hereof, with respect to
the Loans purchased and the Deposit Liabilities
assumed by the Purchaser pursuant to this Agreement,
(i) the Purchaser agrees to report to the customer
and to the Internal Revenue Service (and any state or
local taxing authority as required) all interest and
other amounts paid or earned by the Seller and the
applicable customer during the entire year in which
the Closing Date occurs, and (ii) the Seller agrees
to provide the Purchaser with information about the
Deposit Liabilities and the Loans through the close
of business on the day immediately preceding the
Closing Date necessary for the Purchaser to comply
with the requirements of this Section 2.14; and the
Seller shall have no responsibility or obligation to
provide such information to any customer or the
Internal Revenue Service or any state or local taxing
authority.
(b) The Purchaser shall comply with its obligations under
Section 2.14(a)(i) hereof, but if the Purchaser is
unable to so comply, then with written notice thereof
to the Seller prior to the Closing Date (i) the
Seller shall be responsible for reporting to the
customer and to the Internal Revenue Service (and any
state or local taxing authority) all interest paid or
earned on the Deposit Liabilities and the Loans prior
to Closing Date, and (ii) the
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Purchaser shall be responsible for reporting to the
customer and to the Internal Revenue Service (and any
state or local taxing authority) all interest paid or
earned on the Deposit Liabilities and the Loans on or
after the Closing Date.
2.15 Environmental Study. Within thirty (30) days after the date of
this Agreement, the Purchaser may, at the Purchaser's sole cost and expense,
obtain a completed Phase I environmental report ("Phase I") of any and all Real
Property conducted by an independent environmental investigation and testing
firm selected by the Purchaser and reasonably acceptable to the Seller. In the
event the Phase I discloses any potential environmental condition that in the
reasonable belief of the Purchaser warrants further review or investigation, the
Purchaser shall give notice of the same to the Seller within such thirty (30)
day period with respect to the specific Real Property involved. The Purchaser
shall purchase any and all Real Property for which specific notice is not
provided within such thirty (30) day period. Upon giving the notice required
hereby, the Purchaser may, within an additional fifteen (15) day period obtain a
completed Phase II environmental report ("Phase II") by the same environmental
investigation and testing firm that prepared the Phase I report; provided,
however, that all testing and sampling conducted by such firm shall be agreed
upon in advance by both the Purchaser and the Seller. All costs and expenses
associated with the Phase II testing and report shall be divided equally between
the Purchaser and the Seller. The Purchaser shall purchase any and all Real
Property for which (a) the Phase I or Phase II report reveals potential levels
of environmental contaminants not in excess of federal or state action limits,
or (b) the Purchaser shall have been provided confirmation from governmental
authorities with applicable jurisdiction that no action is required. If the
Phase II report reveals levels of environmental contaminants in excess of
federal or state action limits on any Real Property, the Purchaser may purchase
such Real Property on terms and conditions mutually agreeable to the Purchaser
and the Seller. In the event that the Purchaser and the Seller fail to reach
such agreement within sixty (60) days following the date of this Agreement, the
Purchaser shall lease any such Real Property on terms and conditions mutually
agreeable to the Purchaser and the Seller. The Purchaser and its employees,
agents and representatives shall hold the contents of all Phase I or Phase II
reports confidential and disclose the contents thereof only with the prior
written consent of the Seller or as may be required under applicable law. The
Purchaser shall provide copies of the Phase I and Phase II reports, if any, to
the Seller within the time periods required above for obtaining the same.
2.16 Cooperation and Further Assurances. Each party agrees that on
and before the Closing Date (a) it shall cooperate with the other in
accomplishing the terms and conditions of this Agreement, and (b) at any time
and from time to time after the Closing Date, it shall execute and deliver to
the other party such further instruments, agreements and documents as the other
party may reasonably request to give effect to the transactions contemplated by
this Agreement.
2.17 Condition of Assets. The Purchaser has inspected the Fixed
Assets and the Real Property, observed their physical characteristics and
existing conditions and has been afforded the opportunity to conduct such
inspection, investigation and study on and of the Fixed Assets and the Real
Property as it deems necessary for the purpose of acquiring the Fixed Assets and
the Real Property for the Purchaser's intended use. On and after the Closing
Date, the Purchaser
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hereby waives any and all objections to or claims with respect to any and all
physical characteristics and existing conditions of the Fixed Assets and the
Real Property. The Purchaser further acknowledges and agrees that the Fixed
Assets and the Real Property are to be transferred, assigned, sold and conveyed
to, and purchased and accepted by, the Purchaser in their present condition "AS
IS, WHERE IS" and without any representations or warranties other than as
expressly stated in this Agreement.
2.18 Customers.
(a) Immediately following the Closing, the Purchaser
shall take all actions necessary to effectuate its
succession to and purchase and assumption of the
Assets and the Assumed Liabilities; provided,
however, that the Purchaser understands and agrees
that the Seller does not make in this Agreement, and
has not otherwise made, any representation, warranty,
covenant, agreement or assurance that any of the
customers attributed to the Fulton Division will
become or continue to be customers of the Purchaser,
the same being at the sole discretion of such
customers.
(b) The Purchaser understands and agrees that the Seller
does not make in this Agreement, and has not
otherwise made, any representation, warranty,
covenant, agreement or assurance with respect to or
relating in any manner to the credit risk or
creditworthiness of any obligor or guarantor under,
or the collectibility of, any of the Loans or the
value of any collateral, chattel or asset securing
any of the Loans.
2.19 Conduct of Business Pending Closing Date. From the date of
this Agreement and until the earlier of the Closing Date or the termination of
this Agreement, the Seller shall:
(a) conduct business, including the pricing of Deposit
Liabilities, at the Fulton Division in the ordinary
course substantially in the manner as conducted on
the date of this Agreement, except for activities or
transactions contemplated by this Agreement;
(b) not take any action or fail to take any action
outside of the ordinary course of business which will
materially and adversely affect the business
relationship of the customers attributed to the
Fulton Division with the Seller;
(c) except as set forth in Exhibit 2.19 hereto, not grant
any increase in pay or benefits to any of the
Employees of the Fulton Division;
(d) not enter into any employment, severance or similar
agreement with any of the Employees of the Fulton
Division;
(e) not hire any new employees at the Fulton Division or
transfer any employees to the Fulton Division (i)
except as is reasonably necessary in
19
the Seller's business judgment to operate the Fulton
Division, or (ii) otherwise with the prior written
consent of the Purchaser; and
(f) continue to have the right and ability to terminate,
with or without cause, any Employees of the Seller
assigned to the Fulton Division prior to the Closing
Date.
2.20 Title Matters.
(a) The Seller, at its sole expense, shall deliver to the
Purchaser not later than thirty (30) days after the
date hereof, with respect to the Real Property,
commitments for issuance of ALTA Owner's Policies of
Title Insurance (collectively, the "Title
Commitments" and individually, a "Title Commitment")
dated subsequent to the date of this Agreement but
prior to the Closing Date in the amount of One
Million Dollars ($1,000,000) and issued by a title
company authorized to do business in the Commonwealth
of Kentucky.
(b) Within ten (10) days after receipt by the Purchaser
of a Title Commitment, the Purchaser shall be
entitled to give the Seller written notice of any
defect disclosed in such Title Commitment that (i) is
not included in the standard pre-printed exceptions
specifically identified on the Title Commitment, (ii)
is not an easement, right-of-way or restriction of
record, if any, (iii) does not constitute unpaid
taxes, assessments or charges not yet delinquent,
(iv) materially and adversely affects the business of
the Fulton Division situated upon such Real Property,
or (v) is not reasonably approved by the Purchaser.
(c) If the notice referred to in (b) above is timely
given by the Purchaser, the Seller shall, within ten
(10) days of such notice, notify the Purchaser as to
whether the Seller shall cure or remove any defect.
If the Seller provides notice to the Purchaser that
the Seller elects not to cure or remove any such
defect, then the Seller and the Purchaser shall
attempt to renegotiate the terms and conditions of
the purchase of the affected Real Property. In the
event the Seller and the Purchaser are unable to
renegotiate such terms and conditions within fifteen
(15) days following the Purchaser's receipt of the
Seller's notice that the Seller shall not cure or
remove such defect, either the Purchaser or the
Seller may terminate this Agreement as to the
affected Fulton Division and the Real Property,
Assets and Assumed Liabilities related thereto.
(d) The Seller shall cause the title company to update
the Title Commitments as of the business day prior to
the Closing Date. In the event that the updated Title
Commitment as to any Real Property discloses any
defect not included in the original Title Commitment,
the procedure set forth in (b) and (c) above shall
apply.
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2.21 Covenant Not to Compete and Agreement with Respect to Seller
Solicitations. Seller hereby covenants and agrees that following the
consummation of this transaction and for a period of three (3) years thereafter,
neither it nor any of its affiliates will (a) open a de-novo branch, operate,
control or otherwise have an interest in any financial institution, branch or
similar facility that has a place of business within a twenty-five (25) mile
radius of the Branches (the "Restricted Area") or (b) establish an electronic
funds transfer terminal, of any type or description, within the Restricted Area.
Provided, however, that the foregoing shall not be applicable to locations in
which the Seller is currently operating a banking facility, other than the
Branches. Nor shall it, in any way, prevent the Seller from merging with another
financial institution which operates a banking facility within the Restricted
Area or relocating any current branch within the Restricted Area. Seller further
agrees that from the date of this Agreement and for a period of one (1) year
following the Closing Date, the Seller shall not specifically solicit persons or
entities who are customers attributed to the Fulton Division on the Closing
Date; provided, however, that the Seller shall not be restricted or prohibited
from engaging in or using general mass mailings, telemarketing programs,
newspaper, radio, television or print advertisements, the internet, the Seller's
web site, electronic advertisements or communications and other types of
communications that are directed to the general public, to existing or potential
customers of the Seller generally or to persons defined by criteria other than
solely their status as loan or deposit customers attributed to a Branch; and
provided further, however, that this covenant shall not prohibit or restrict the
Seller from soliciting or servicing persons, entities or customers (including
loan and deposit customers attributed to the Fulton Division) with respect to
any products, services, activities or relationships specifically excluded from
the transactions contemplated hereby, including, without limitation, the
products, services, activities or relationships referenced in Sections 1.4(c)
and (d) of this Agreement.
2.22 Future Filings and Recordings. Following the Closing, the
Purchaser shall, at its sole cost and expense, promptly make all filings and
recordings with and otherwise take all other actions with respect to all
governmental agencies or authorities and recorder's offices required by law or
as the Purchaser may deem necessary or advisable to reflect its purchase of the
Assets and assumption of the Assumed Liabilities and to reflect the Purchaser as
the holder of all promissory notes and the secured party with respect to all
liens, security interests, mortgages, certificates of title and other loan
documents relating to the Loans.
2.23 Certain Withholdings. On or before the Closing Date, the
Seller shall deliver to the Purchaser a list of all customers who have received
"B" or "C" notices issued by the Internal Revenue Service (the "IRS") relating
to the Deposit Liabilities. On and after the Closing Date, the Seller shall
promptly deliver to the Purchaser (a) any and all similar notices regarding the
Deposit Liabilities received from the IRS, and (b) all notices received from the
IRS releasing any governmental agency restrictions on such Deposit Liabilities.
Any amounts required by any governmental agency to be withheld from any Deposit
Liabilities (the "Withholding Obligations") and any related penalties imposed by
any governmental agency will be handled as follows:
(a) Any Withholding Obligation required to be remitted to
the appropriate governmental agency on or prior to
the Closing Date shall be withheld and
21
remitted by the Seller, and any other Withholding
Obligation withheld by the Seller prior to the
Closing Date also shall be remitted by the Seller to
the appropriate governmental agency on or prior to
the time due;
(b) Any Withholding Obligation required to be remitted to
the appropriate governmental agency after the Closing
Date and not withheld as set forth in Section 2.23(a)
above shall be withheld and remitted by the Purchaser
on or prior to the time such Withholding Obligation
is due. Within five (5) days of receipt of any such
notice by the Seller, the Seller shall notify the
Purchaser, and the Purchaser shall comply with the
applicable notification requirements;
(c) Any penalties described on "B" notices from the IRS
or any similar penalties which relate to the Deposit
Liabilities shall be paid by the Seller promptly upon
receipt of the notice, providing such penalty
assessment resulted from the Seller's acts, policies
or omissions prior to the Closing Date and any
efforts to reduce such penalties shall be the
responsibility of the Seller; and
(d) Any penalties assessed due to information missing
from information filings regarding the Deposit
Liabilities which were due prior to the Closing Date,
including without limitation 1099 forms, shall be
paid by the Seller promptly upon receipt of the
notice providing such penalty assessments resulting
from the Seller's acts, policies or omissions, and
any efforts to reduce such penalties shall be the
responsibility of the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
--------------------------------------------
As an inducement to cause the Purchaser to enter into this Agreement,
the Seller hereby represents and warrants to the Purchaser as follows, which
representations and warranties shall not survive the Closing:
3.1 Corporate Organization. The Seller is a national banking
association duly organized, validly existing and in good standing under the laws
of the United States of America having its principal office in Evansville,
Indiana. The Seller has the power and authority to (a) own the Assets and hold
the Deposit Liabilities, (b) carry on its business at the Fulton Division as
presently conducted, (c) execute, deliver and perform this Agreement, and (d)
effect the transactions contemplated hereby.
3.2 Fall & Fall Insurance. Fall & Fall Insurance is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Kentucky having its principal office in Fulton, Kentucky. The
authorized capital stock of Fall & Fall Insurance
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consists of ten thousand (10,000) shares, no par value, of which 100 shares are
duly authorized and validly issued, outstanding, fully paid, non-assessable and
owned by the Seller. There are no outstanding options, warrants or agreements of
any kind for the issuance or sale of, or outstanding securities convertible
into, any shares of capital stock of any class of Fall & Fall Insurance. At the
Closing, the Seller will have complete and unrestricted power to sell, convey,
assign, transfer and deliver such shares to the Purchaser. Upon delivery of such
shares to the Purchaser pursuant to this Agreement, the Purchaser will have
good, valid and marketable title to all the outstanding shares of capital stock
of Fall & Fall Insurance, and such shares will be, when delivered, duly
authorized, validly issued, fully paid and non-assessable, and free and clear of
any and all liens, encumbrances, charges or claims. To the best of its knowledge
after due inquiry, the Seller does not know of any basis for the assertion
against Fall & Fall Insurance of any liability of any nature or in any amount
not disclosed in Exhibit 3.2.
3.3 Authorization. The execution, delivery and performance of this
Agreement, and the other instruments, agreements and documents contemplated
hereby by the Seller, and the consummation by the Seller of the transactions
contemplated hereby and thereby, have been duly authorized by all necessary
corporate action on the part of the Seller. This Agreement, and all other
instruments, agreements and documents contemplated hereby executed and delivered
by the Seller, have been duly executed and delivered by the Seller and
constitute the valid and binding obligations of the Seller enforceable against
the Seller in accordance with their respective terms, subject to the provisions
of applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, receivership and conservatorship laws and all other laws relating to
or affecting the enforcement of creditors' rights generally, now or hereafter in
effect, and subject to public policy and general principles of equity.
3.4 No Conflicts. Neither the execution, delivery or performance
by the Seller of this Agreement or any of the other instruments, agreements or
documents contemplated hereby nor the consummation by the Seller of the
transactions contemplated hereby or thereby, does or will (after the giving of
notice, the lapse of time or otherwise) violate, conflict with, result in a
breach of or result in a default under (a) the Articles of Association or
By-Laws of the Seller, (b) any provision of any promissory note, mortgage,
indenture, lease or agreement, or (c) any law, statute, rule or regulation or
any decree or order of any court or governmental authority other than in
connection with the Governmental Approvals. The Seller has received no notice
from any federal, state or other governmental agency indicating that such agency
would oppose or not grant or issue its consent or approval, if required, with
respect to the transactions contemplated hereby.
3.5 No Litigation. Except for suits, actions or proceedings
involving the collection of delinquent accounts and garnishment proceedings in
the ordinary course of business, there are no suits, actions, proceedings,
arbitrations or mediations in any court or before any government agency or
authority, arbitration panel or mediator pending or, to the knowledge of the
Seller, threatened against or affecting the Assets or the Assumed Liabilities or
which would prevent consummation of the transactions contemplated by this
Agreement by the Seller.
3.6 Assets.
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(a) The Seller has good and marketable title to the
Assets free and clear of all liens, security
interests and mortgages, other than (i) liens for
unpaid taxes, assessments and charges not yet
delinquent on the Real Property and the Fixed Assets,
(ii) liens required to be granted in connection with
repurchase or reverse repurchase agreements, (iii)
imperfections of title or other matters which do not
materially detract from the current value or present
use thereof, (iv) liens, security interests and
mortgages where the Seller is the secured party, and
(v) with respect to the Real Property, easements,
rights-of-way and other matters of record on the
Closing Date, liens and other matters disclosed in
the Title Commitments, zoning and land use laws and
matters that would be shown by a survey of the Real
Property. Except as contemplated by this Agreement,
the Seller has not sold, transferred, assigned or
pledged any of the Assets.
(b) There is no condemnation proceeding pending or, to
the knowledge of the Seller, threatened which would
preclude or impair the use of the Real Property as
presently being used in the conduct of business of
the Fulton Division.
(c) The Real Property and the Fixed Assets, taken as a
whole, are in good operating condition and repair,
giving consideration to their age and use and subject
to ordinary wear and tear, and will be received by
the Purchaser in "AS IS, WHERE IS" condition, with no
warranties or guarantees by the Seller as to
condition, future performance, fitness for a
particular purpose, merchantability or otherwise,
except those warranties related to title.
(d) No notice of any violation of zoning laws, building
or fire codes or other laws, statutes, rules,
regulations, ordinances or codes relating to the
operation of the Fulton Division has been received by
the Seller.
3.7 Loans.
(a) The Seller is the sole owner of each of the Loans,
with no participation therein having been sold; none
of the Loans is pledged to a third party; the
principal balance and amount of accrued but unpaid
interest and fees of each of the Loans as shown on
the Seller's books and records as of the close of
business on the day immediately preceding the Closing
Date will be true and correct; and each of the Loans
(and all notes, other evidences of indebtedness,
mortgages, loan agreements and security agreements
associated therewith) are transferred to the
Purchaser hereunder without recourse and without any
representations or warranties as to the
collectibility of the Loans, the value of the
collateral securing the Loans or the creditworthiness
of any Obligors (as hereinafter defined) of any
Loans.
24
(b) Each of the Loans was made in the ordinary course of
business and is accruing interest in accordance with
the respective terms thereof. To the knowledge of the
Seller, except as may otherwise be indicated in the
applicable Loan file, (i) each of the Loans is the
legal, valid and binding obligation of the obligor,
maker, co-maker, endorser or debtor (the "Obligors")
thereof, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium, receivership and conservatorship laws and
all other laws relating to or affecting creditor's
rights generally and to public policy and general
principles of equity, (ii) each of the Loans is
evidenced by notes, agreements, mortgages or other
instruments which are legal, valid, binding and
enforceable in accordance their respective terms,
subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium,
receivership and conservatorship laws and all other
laws relating to or affecting creditor's rights
generally and to public policy and general principles
of equity, and (iii) no valid and legal defense,
offset, counterclaim or set-off has been asserted
with respect to any of the Loans. The Seller may
transfer or assign each of the Loans to Buyer without
the approval or consent of any Obligor.
(c) To the extent that a Loan is secured by a security
interest or mortgage naming the Seller as a secured
party or mortgagee, such security interest or
mortgage is legal, valid, binding and enforceable in
accordance its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, receivership and
conservatorship laws and all other laws relating to
or affecting creditor's rights generally and to
public policy and general principles of equity.
3.8 Deposits. The balance of each deposit account included in the
Deposit Liabilities as shown on the Seller's books and records as of the close
of business on the day immediately preceding the Closing Date will be true and
correct. All of the Deposit Liabilities are insured by the FDIC to the maximum
extent provided by law. The Seller has the right to transfer or assign each of
the Deposit Liabilities to the Purchaser, subject to any pledges, liens,
judgments, court orders and restrictions on transfer.
3.9 Compliance with Laws. To the knowledge of the Seller after due
inquiry, the Seller has complied with all material laws, statutes, rules and
regulations applicable to the Real Property, the Fixed Assets, the Deposit
Liabilities and the Loans.
3.10 No Brokers, Etc. The Seller has not employed or retained any
broker, or finder or investment banker or incurred any liability for any
brokerage, finder's, investment banker's or similar fees, commissions or
expenses in connection with this Agreement or the transactions contemplated
hereby other than Professional Bank Services, Inc. All fees, commissions,
compensation and expenses of Professional Bank Services, Inc. for its services
rendered to the Seller shall be paid by the Seller.
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3.11 Environmental Matters. The Real Property (a) currently is and
has in the past been owned and operated in compliance with all material
applicable laws, statutes, rules and regulations relating to hazardous
substances or materials and to the environment, and (b) currently is not and has
in the past not been contaminated such that any remediation is or has been
required by applicable law, statute, rule or regulation.
3.12 Records and Documents. The records and documents to be
delivered to the Purchaser are and shall be sufficient to enable the Purchaser
to conduct a proper banking business with respect to the Branches.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
As an inducement to cause Seller to enter into this Agreement, the
Purchaser hereby represents and warrants to the Seller as follows, which
representations and warranties shall not survive the Closing:
4.1 Corporate Organization. The Purchaser is a federal savings
bank duly organized, validly existing and in good standing under the laws of the
United States having its principal office in Hopkinsville, Kentucky. The
Purchaser has the power and authority to (a) own the Assets being acquired
hereunder and assume, perform, discharge and pay the Assumed Liabilities, (b)
operate the Branches, (c) execute, deliver and perform this Agreement, and (d)
effect the transactions contemplated hereby.
4.2 Authorization. The execution and delivery of this Agreement,
and all other instruments, agreements and documents contemplated hereby, by the
Purchaser, and the consummation of the transactions contemplated hereby, have
been duly authorized by all necessary corporate action on the part of the
Purchaser. This Agreement, and all other instruments, agreements and documents
contemplated hereby executed and delivered by the Purchaser, have been duly
executed and delivered by the Purchaser and constitute the valid and binding
obligations of the Purchaser enforceable against the Purchaser in accordance
with their respective terms, subject to the provisions of applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium, receivership and
conservatorship laws and all other laws relating to or affecting the enforcement
of creditors' rights generally, now or hereafter in effect, and subject to
public policy and general principles of equity.
4.3 No Conflicts. Neither the execution, delivery or performance
by the Purchaser of this Agreement or any other instruments, agreements or
documents contemplated hereby nor the consummation by the Purchaser of the
transactions contemplated hereby or thereby does or will (after the giving of
notice, the lapse of time or otherwise) violate, conflict with, result in a
breach of or result in a default under (a) the Federal Stock Charter or Bylaws
of the Purchaser, (b) any provision of any promissory note, mortgage, indenture,
lease or agreement, or (c) any law, statute, rule or regulation or any decree or
order of any court or governmental authority once the Governmental Approvals are
obtained. No approval, authorization or consent of any third party
26
(other than the regulatory approvals and consents referred to in Section 5.5
hereof) is necessary to enable the Purchaser to purchase the Assets and assume
the Assumed Liabilities as contemplated by this Agreement or to enable the
Purchaser otherwise to perform its obligations hereunder.
4.4 No Litigation. There are no suits, actions, proceedings,
arbitrations or mediations in any court or before any government agency or
authority, arbitration panel or mediator pending or, to the knowledge of the
Purchaser, threatened against or affecting the Purchaser which would prevent
consummation of the transactions contemplated by this Agreement by the
Purchaser.
4.5 Regulatory Matters. The Purchaser has received no notice or
communication from any state or federal banking regulatory agency or authority
indicating that such agency or authority would, and the Purchaser has no reason
to believe any such agency or authority would, object to, or withhold any
approval or consent necessary for, the consummation by the Purchaser of the
transactions contemplated hereby. As of the date of this Agreement, there is no
pending or, to the best of the Purchaser's knowledge, threatened legal or
governmental proceedings against the Purchaser or any affiliate of the Purchaser
that would affect the Purchaser's ability to obtain the regulatory approvals
required in order to consummate the transactions contemplated hereby.
4.6 No Brokers, Etc. The Purchaser has not employed or retained
any broker, finder or investment banker or incurred any liability for any
brokerage, finder's, investment banker's or similar fees, commissions or
expenses in connection with this Agreement or the transactions contemplated
hereby other than Feldman Financial Advisors, Inc. All fees, commissions,
compensation and expenses of Feldman Financial Advisors, Inc. for its services
rendered to the Purchaser shall be paid by the Purchaser.
4.7 Pro Forma Capital Requirements. The Purchaser is and, on a pro
forma basis giving effect to the transactions and the financing/capital
injection contemplated by the Purchaser, will be (a) at least "adequately
capitalized", as defined for purposes of the Federal Deposit Insurance Act, and
(b) in compliance with all capital requirements, standards and ratios required
by each state or federal regulator with jurisdiction over the Purchaser,
including, without limitation, any such higher requirement, standard or ratio as
shall apply to institutions engaging in the acquisition of insured institution
deposits, assets or branches, and no such regulator is likely to, or has
indicated that it will, condition any of the Government Approvals upon an
increase in the Purchaser's capital or compliance with any capital requirement,
standard or ratio.
4.8 Antitrust. The Purchaser has no knowledge that it will be
required to divest deposit liabilities, branches, loans or any business or line
of business as a condition to the receipt of any of the Government Approvals.
4.9 CRA Rating. Each of the subsidiaries or affiliates of the
Purchaser that is an insured depository institution was rated "Satisfactory" or
"Outstanding" following its most recent Community Reinvestment Act examination
by the regulator responsible for its
27
supervision. The Purchaser has received no notice of and has no knowledge of any
planned or threatened objection by any community group to the transactions
contemplated hereby.
4.10 Financing Available. Not later than the Closing Date, the
Purchaser shall have available sufficient cash or other liquid assets or
financing pursuant to binding agreements or commitments which may be used to
fund the transactions contemplated hereby. The Purchaser's ability to consummate
the transactions contemplated hereby is not contingent upon raising any equity
capital, obtaining specific financing therefor, obtaining the consent of any
lender or any other matter.
4.11 Operation of the Branches. Following the Closing, the
Purchaser intends to continue to provide retail and business banking services in
the geographical area served by the Branches.
ARTICLE V
CONDITIONS TO SELLER'S OBLIGATIONS
The obligation of the Seller to consummate the transactions
contemplated by this Agreement are conditioned upon the satisfaction, on or
before the Closing Date, of each of the following conditions (all or any of
which may be waived in whole or in part by the Seller, except for the conditions
in Section 5.5, which cannot or will not be waived by the Seller):
5.1 Representations and Warranties True. The representations and
warranties made by the Purchaser in this Agreement shall be true, complete and
correct in all material respects on and as of the Closing Date as though such
representations and warranties were made on and as of such date.
5.2 Covenants Performed. The Purchaser shall have performed and
complied in all material respects with all obligations, covenants and agreements
required by this Agreement to be performed or complied with by it on or prior to
the Closing Date.
5.3 No Adverse Litigation. No claim, action, suit or proceeding
shall be pending or threatened against the Purchaser or the Seller as of the
Closing Date which might reasonably be expected to (a) materially and adversely
affect the Branches, the Assets or the Assumed Liabilities, or (b) materially
and adversely affect the transactions contemplated by this Agreement.
5.4 Officer's Certificate. The Purchaser shall have delivered to
the Seller a certificate of its President and Chief Executive Officer, dated as
of the Closing Date, certifying to the satisfaction of each of the foregoing
conditions.
5.5 Regulatory Approvals. The Purchaser shall have received from
the appropriate regulatory authorities all Governmental Approvals relating to
(a) the transactions contemplated by this Agreement, and (b) the operation of
the Branches by the Purchaser. The Seller shall not have been notified by any
regulatory authority that the discontinued operation of the Fulton
28
Division by the Seller would be a violation of any law, statute, rule or
regulation or any policy of any governmental authority.
5.6 Closing Documents. The Purchaser shall have delivered to the
Seller, in form and substance reasonably satisfactory to the Seller, (a) an
Assignment and Assumption Agreement executed by the Purchaser pursuant to which
the Purchaser shall assume and fully and timely perform, discharge and pay the
Assumed Liabilities, (b) the receipt for the items in the safe deposit boxes
contemplated by Section 2.6 hereof, and (c) all other agreements, instruments
and documents executed by the Purchaser as are required by this Agreement to
consummate the transactions contemplated hereby.
5.7 Board Resolutions. The Purchaser shall have delivered to the
Seller copies of the resolutions, certified by a duly authorized officer of the
Purchaser, duly adopted by the Purchaser's Board of Directors authorizing and
approving this Agreement and the agreements, instruments, documents and
transactions contemplated hereby.
5.8 Related Agreements. At or prior to the Closing, the Purchaser
shall have executed and delivered to the Seller all agreements, instruments,
documents and certificates contemplated by this Agreement required to be
executed and delivered by the Purchaser.
ARTICLE VI
CONDITIONS TO PURCHASER'S OBLIGATIONS
-------------------------------------
The obligation of the Purchaser to consummate the transactions
contemplated by this Agreement are conditioned upon the satisfaction, on or
before the Closing Date, of each of the following conditions (all or any of
which may be waived in whole or in part by the Purchaser, except for the
conditions in Section 6.5, which cannot be waived by the Purchaser):
6.1 Representations and Warranties True. The representations and
warranties made by the Seller in this Agreement shall be true, complete and
correct in all material respects on and as of the Closing Date as though such
representations and warranties were made on such date.
6.2 Covenants Performed. The Seller shall have performed and
complied in all material respects with all obligations, covenants and agreements
required by this Agreement to be performed or complied with by it on or prior to
the Closing Date.
6.3 No Adverse Litigation. No claim, action, suit or proceeding
shall be pending or threatened against the Purchaser or the Seller as of the
Closing Date which might reasonably be expected to (a) materially and adversely
affect the Branches, the Assets or the Assumed Liabilities, or (b) materially
and adversely affect the transactions contemplated by this Agreement.
29
6.4 Officer's Certificate. The Seller shall have delivered to the
Purchaser a certificate of its Chairman, President or any Executive Vice
President, dated as of the Closing Date, certifying to the satisfaction of each
of the foregoing conditions.
6.5 Regulatory Approvals. The Purchaser shall have received from
the appropriate regulatory authorities all Governmental Approvals relating to
(a) the transactions contemplated by this Agreement, and (b) the operation of
the Fulton Division by the Purchaser. The Seller shall not have been notified by
any regulatory authority that the discontinued operation of the Fulton Division
by the Seller would be a violation of any law, statute, rule or regulation or
any policy of any governmental authority.
6.6 Closing Documents. The Seller shall have delivered to the
Purchaser, in form and substance reasonably satisfactory to the Purchaser, (a)
an Assignment and Assumption Agreement executed by the Seller pursuant to which
the Seller shall assign the Assumed Liabilities to the Purchaser, (b) a Bill of
Sale for the Fixed Assets, (c) Corporate Warranty Deeds for the Real Property,
and (d) all other agreements, instruments and documents executed by the Seller
as are required by this Agreement to consummate the transactions contemplated
hereby.
6.7 Board Resolutions. The Seller shall have delivered to the
Purchaser copies of the resolutions, certified by a duly authorized officer of
the Seller, duly adopted by the Seller's Board of Directors authorizing and
approving this Agreement and the agreements, instruments, documents and
transactions contemplated hereby.
6.8 Related Agreements. At or prior to the Closing, the Seller
shall have executed and delivered to the Purchaser all agreements, instruments,
documents and certificates contemplated by this Agreement required to be
executed and delivered by the Seller.
6.9 Data Processing Systems. Prior to the Closing, the Purchaser
shall have received assurance that its data processing systems are capable of
receiving the Assets and the Deposit Liabilities on the Closing Date.
ARTICLE VII
TERMINATION
-----------
7.1 Methods of Termination. This Agreement and the transactions
contemplated hereby may be terminated in any one of the following ways:
(a) at any time on or before the Closing Date by the
agreement in writing of the Purchaser and the Seller;
(b) on the Closing Date by the Seller in writing if the
conditions set forth in Article V of this Agreement
shall not have been satisfied or waived in writing by
the Seller;
30
(c) on the Closing Date by the Purchaser in writing if
the conditions set forth in Article VI of this
Agreement shall not have been satisfied or waived in
writing by the Purchaser;
(d) at any time on or before the Closing Date by the
Purchaser or the Seller in writing if the other shall
have breached any of its respective representations
or warranties contained herein in any material
respect or any of its respective covenants,
agreements or obligations contained herein in any
material respect, and such breach has not been cured
by the earlier of (i) fifteen (15) days after the
giving of notice to the breaching party of such
breach, or (ii) the Closing Date; provided, however,
that neither party hereto may terminate this
Agreement on account of its own breach hereof;
(e) by either the Seller or the Purchaser in writing at
any time after any of the regulatory authorities has
denied any application, notice or request of the
Purchaser for approval of the transactions
contemplated hereby or has imposed a condition or
requirement that is unacceptable to either party; or
(f) by either the Seller or the Purchaser in writing if
the transactions contemplated hereby are not
consummated on or before September 30, 2002, unless
extended by a written agreement by the Seller and
Purchaser.
7.2 Procedure Upon Termination. In the event of termination
pursuant to Section 7.1 hereof, this Agreement shall thereupon terminate and be
of no further force or effect immediately upon receipt of the written notice
required hereby or, in the case of Section 7.1(d), upon the passage of fifteen
(15) days following such notice if no cure of a breach has occurred. If this
Agreement is terminated as provided herein:
(a) each party shall (and shall cause its respective
employees, agents and representatives to) return to
the party furnishing the same all information,
documents, work papers and other materials
(regardless of whether the same is in printed,
electronic or computerized form and including,
without limitation, all copies and summaries thereof)
of the other party or relating to the other party,
its customers or employees or the transactions
contemplated hereby, whether obtained before or after
the execution hereof, and
(b) all information received by either party hereto with
respect to the business, operations and customers of
the other party (except information which is
available to the public or which has heretofore been
or is hereafter filed as public information with any
governmental authority, other than through a breach
of this Agreement) shall not at any time be used for
any business purpose by such party or disclosed by
such party to any other person or entity.
31
The requirements of this Section 7.2 shall be deemed to survive the termination
of this Agreement.
7.3 Liabilities Upon Termination. In the event of the termination of
this Agreement pursuant to the terms and provisions hereof, neither party hereto
shall have any liability hereunder of any nature whatsoever to the other,
including, without limitation, any liability for monetary damages; provided,
however, that (a) the foregoing shall not preclude liability from attaching to a
party who has intentionally breached or violated any of the provisions hereof,
and (b) the termination of this Agreement shall not terminate or affect any of
the provisions contained in Article VIII hereof or the agreements of the parties
hereto with respect to confidentiality contained in Section 2.3 hereof and in
the Confidentiality Agreement.
ARTICLE VIII
INDEMNIFICATION
8.1 The Purchaser's Indemnity.
(a) The Purchaser hereby agrees to indemnify, save and
hold harmless the Seller and its affiliates and its
and their directors, officers, employees and agents
from and against any and all claims, liabilities,
costs, expenses and obligations (including, without
limitation, reasonable costs and expenses of counsel)
arising out of or relating to (1) the Loans, the
other Assets and the Deposit Liabilities, the other
Assumed Liabilities and any and all liabilities,
obligations, requirements and duties with respect
thereto arising from activities conducted by the
Purchaser or its affiliates after the Closing Date,
(2) the conduct of business by the Purchaser at the
Branches after the Closing Date or (3) the breach of
any representation or warranty of the Purchaser
contained in this Agreement or the failure of the
Purchaser to comply with any of the terms of this
Agreement.
(b) In the event that the Seller shall receive notice of
a claim subject to indemnification pursuant to the
preceding Section 8.1(a), the Seller shall notify the
Purchaser of such claim within thirty (30) business
days, and the Purchaser shall defend, discharge,
satisfy and/or settle such claim at the Purchaser's
sole cost and expense. In the event that the
Purchaser shall fail or refuse to defend, discharge,
satisfy or settle such claim, the Seller may defend,
discharge, satisfy or settle such claim and shall be
reimbursed by the Purchaser for any and all costs and
expenses (including, without limitation, reasonable
attorneys' fees) incurred by the Seller in respect of
such matter.
8.2 Seller's Indemnity.
(a) The Seller hereby agrees to indemnify, save and hold
harmless the
32
Purchaserand its affiliates and its and their
directors, officers, employees and agents from and
against any and all claims, liabilities, costs,
expenses and obligations (including, without
limitation, reasonable costs and expenses of counsel)
arising out of or relating to (1) the Loans, the
other Assets, the Deposit Liabilities, the other
Assumed Liabilities and any and all liabilities,
obligations, requirements and duties of the Seller
with respect thereto arising from activities
conducted by the Seller or its affiliates on or prior
to the Closing Date, (2) the conduct of business by
the Seller at the Branches on or prior to the Closing
Date or (3) the breach of any representation or
warranty of the Seller contained in this Agreement or
the failure of the Seller to comply with any of the
terms of this Agreement.
(b) In the event that the Purchaser shall receive notice
of a claim subject to indemnification pursuant to the
preceding Section 8.2(a), the Purchaser shall notify
the Seller of such claim within thirty (30) business
days, and the Seller shall defend, discharge, satisfy
and/or settle such claim at the Seller's sole cost
and expense. In the event that the Seller shall fail
or refuse to defend, discharge, satisfy or settle
such claim, the Purchaser may defend, discharge,
satisfy or settle such claim and shall be reimbursed
by the Seller for any and all costs and expenses
(including, without limitation, reasonable attorneys'
fees) incurred by the Purchaser in respect to such
matter.
8.3 Duration of Indemnity Obligation. The respective indemnity
obligations of Purchaser and Seller under this Agreement shall expire and
terminate one (1) year following the Closing Date.
8.4 Minimum Claims. The Purchaser and its affiliates on the one
hand and the Seller and its affiliates on the other hand shall be entitled to
seek indemnification of the other party hereunder only when, and only with
respect to amounts by which, the aggregate of all such claims of the Purchaser
or the Seller and/or their respective affiliates exceeds $25,000. At such time,
if any, as the aggregate claim of either party exceeds $25,000, such party shall
have the right to seek indemnification from the other party for the excess .
ARTICLE IX
MISCELLANEOUS
-------------
9.1 Entire Agreement. This Agreement, the Exhibits hereto, the
Confidentiality Agreement and the instruments, agreements, certificates and
documents contemplated hereby supersede all other prior or contemporaneous
understandings, commitments, representations, negotiations, discussions and
agreements, whether oral or written or express or implied, between the parties
hereto relating to the matters contemplated hereby and constitute the entire
agreement between the parties hereto relating to the transactions contemplated
hereby.
33
9.2 Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that neither party may assign this
Agreement without the prior written consent of the other party, except that no
consent shall be required if this Agreement is assigned to any affiliate of
either party or is assigned by operation of law pursuant to a statutory merger
or share exchange involving either party.
9.3 Amendment and Modification. The parties hereto may amend,
modify or supplement this Agreement only by an agreement in writing executed by
the Seller and the Purchaser.
9.4 Waiver or Extension. Either party hereto may by an instrument
in writing waive the performance by the other of any of the covenants or
agreements to be performed by such other party under this Agreement; provided,
however, that neither party may waive the requirement for obtaining the
Governmental Approvals. The failure of either party hereto at any time to insist
upon the strict performance of any covenant, agreement or provision of this
Agreement shall not be construed as a waiver or relinquishment of the right to
insist upon strict performance of such covenant, agreement or provision at a
future time. The waiver by any party hereto of a breach of or noncompliance with
any provision of this Agreement shall not operate or be construed as a
continuing waiver or a waiver of any other or subsequent breach or noncompliance
hereunder.
9.5 Payment of Expenses. Except as otherwise expressly provided in
this Agreement, each party hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with this Agreement and the
transactions contemplated hereunder. Except as otherwise expressly provided
herein, all expenses, fees and costs (including, without limitation, filing
fees) necessary for any Government Approvals or for any notice to depositors of
the assumption of the Deposit Liabilities or to customers of the purchase of the
Loans shall be paid by the Purchaser.
9.6 Notices. All notices, requests and other communications
hereunder shall be in writing (which shall include facsimile communication) and
shall be deemed to have been duly given if (a) delivered by hand and receipted
for, (b) sent by certified United States Mail, return receipt requested, first
class postage pre-paid, (c) delivered by receipted overnight delivery service or
(d) delivered by facsimile transmission if such fax is confirmed immediately
thereafter by also mailing a copy of such notice, request or other communication
by certified United States Mail, return receipt requested, first class postage
pre-paid, as follows:
If to the Seller to: with a copy to (which shall not
constitute notice):
Jeffrey L. Knight, Esq. Nicholas J. Chulos, Esq.
Senior Vice President, Krieg DeVault, LLP
Corporate Secretary and General Counsel One Indiana Square, Suite 2800
34
Old National Bancorp Indianapolis, Indiana 46204-2017
420 Main Street ATTN: Nicholas J. Chulos, Esq.
Evansville, Indiana 47708 Telephone: (317) 238-6224
Telephone: (812) 464-1363 Facsimile: (317) 636-1507
Facsimile: (812) 464-1567
If to the Purchaser to: with a copy to (which shall not
constitute notice):
John E. Peck Edward B. Crosland, Jr., Esq.
President and Chief Executive Officer Cozen O'Connor
Hopkinsville Federal Bank 1667 K Street, N.W., Suite 500
2700 Fort Campbell Boulevard Washington, D.C. 20006
Hopkinsville, Kentucky 42240
Telephone: (270) 885-1171 Telephone: (202) 912-4800
Facsimile: (270) 889-0313 Facsimile: (202) 912-4830
or such substituted address or person as either party has given to the other in
writing.
All such notices, requests and other communications shall be effective
(a) if delivered by hand, when delivered, (b) if mailed in the manner provided
herein, two (2) business days after deposit with the United States Postal
Service, (c) if delivered by overnight express delivery service, on the next
business day after deposit with such service, and (d) if by facsimile
transmission, on the date indicated on the fax confirmation page of the sender
if such fax also is confirmed by mail in the manner provided herein.
9.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same agreement.
9.8 Headings. The headings and defined terms in this Agreement
have been inserted and used solely for ease of reference and shall not be
considered in the interpretation, construction or enforcement of this Agreement.
9.9 Governing Law. This Agreement (including, without limitation,
any and all demands, controversies, claims, actions, causes of action, suits,
proceedings and litigation between or among the parties hereto arising out of or
relating to this Agreement or its breach, the construction of its terms or the
interpretation of the rights and duties of the parties) shall be governed by and
construed in accordance with the laws of the State of Indiana, without giving
effect to any choice or conflict of law provisions, principles or rules (whether
of the State of
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Indiana or any other jurisdiction) that would cause the application of any laws
of any jurisdiction other than the State of Indiana.
9.10 Severability. In case any one or more of the provisions (or
any portion thereof) contained herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision or provisions (or portion thereof) had never been contained herein.
9.11 No Third-Party Rights. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person or entity, other than the parties
hereto, or their respective permitted successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
9.12 Construction. This Agreement is the product of negotiation by
both parties hereto and shall be deemed to have been drafted by both parties
hereto. This Agreement shall be construed in accordance with the fair meaning of
its provisions and its language shall not be strictly construed against, nor
shall ambiguities be resolved against, either party.
9.13 Certain References. Whenever in this Agreement a singular word
is used, it also shall include the plural wherever required by the context and
vice-versa. All references to the masculine, feminine or neuter genders herein
shall include any other gender, as the context requires.
9.14 Exhibits. The exhibits attached hereto are incorporated into
and made a part of this Agreement.
9.15 Facsimile. This Agreement may be executed and delivered by
either hereto party by facsimile transmission. For purposes of this Agreement,
any signature page signed and transmitted by facsimile machine or telecopier
shall be treated as an original document, and the signature of either party
thereon, for purposes hereof, shall be considered as an original signature and
the document transmitted shall be considered to have the same binding effect as
an original signature on an original document. Neither party may raise the use
of a facsimile machine or telecopier or the fact that any signature was
transmitted through the use of a facsimile machine or telecopier in accordance
with this Section as a defense to the enforcement of this Agreement, any
amendment hereto or any other document contemplated hereby.
9.16 Limitation on Damages. Notwithstanding anything in this
Agreement to the contrary, in no event shall either party hereto be entitled to
recover from the other party hereto special, punitive, incidental or
consequential damages (including without limitation damages based upon lost
profits or lost business opportunities) arising out of or relating to a breach
by such other parties of any of its representations, warranties, covenants or
obligations under this Agreement, even if the party in breach has been advised
of the possibility of such damages.
9.17 Survival of Representations, Warranties and Covenants. All
representations and warranties of the Seller and the Purchaser, respectively,
contained in this Agreement shall not
36
survive the Closing and shall terminate and cease to be of any force or effect
as of the Closing, and thereafter no party shall have any liability to the other
with respect thereto. All covenants, obligations, agreements, understandings and
acknowledgments of the Seller and the Purchaser, respectively, contained in this
Agreement or in any certificate, instrument or other agreement or document
contemplated hereby shall survive the Closing and shall continue to be in full
force and effect following the Closing in accordance with this Agreement and any
such certificate, instrument or other agreement or document.
9.18 Definition of "Affiliates". For purposes of this Agreement,
the term "affiliate" or "affiliates" shall mean with respect to the Seller or
the Purchaser, as required by the context, any and all (a) direct and indirect
parent corporations and subsidiaries of the Seller or the Purchaser, (b) direct
and indirect subsidiaries of the Seller's or the Purchaser's parent corporation,
and (c) entities controlled by or controlling the Seller or the Purchaser.
* * *
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IN WITNESS WHEREOF, the parties hereto have made, entered into,
executed and delivered this Agreement as of the day and year first above
written.
OLD NATIONAL BANK
By:
---------------------------------
Name & Title:
------------------------
ATTEST:
By:
-----------------------------------
Jeffrey L. Knight
Senior Vice President, Corporate
Secretary and General Counsel
HOPKINSVILLE FEDERAL BANK
By:
------------------------------------
John E. Peck
President and Chief Executive Officer
ATTEST:
By:
-----------------------------------
Billy C. Duvall
Vice President, Chief Financial
Officer and Treasurer
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