PURCHASE AND ASSUMPTION AGREEMENT
This is a Purchase and Assumption Agreement (this "AGREEMENT")
dated as of September 12, 1997, between First Federal Savings Bank of
Leitchfield, a federal savings bank ("PURCHASER"), and Republic Bank & Trust
Company, a Kentucky banking corporation ("SELLER").
WHEREAS, Seller conducts business (the "BUSINESS") at a branch
in Mayfield, Kentucky (the "SELLER OFFICE");
WHEREAS, Purchaser desires to acquire and assume and Seller
desires to sell and assign certain assets and certain deposit liabilities
associated with the Seller Office; and
WHEREAS, Purchaser intends, upon the Closing (defined below),
to assign its interests in the Agreement to its affiliate, First Kentucky Bank
("FKB").
NOW, THEREFORE, in consideration of the mutual promises
hereinafter contained, and other good and valuable consideration, the parties
agree as follows:
ARTICLE I
PURCHASE AND ASSUMPTION
I.1 PURCHASE AND SALE OF ASSETS. At the Closing (defined
below), Purchaser shall purchase and Seller shall sell certain assets relating
to the Seller Office pursuant to the terms and conditions set forth herein. The
assets of the Seller Office, as more fully described in Section 1.02 below, are
hereinafter referred to as the "SELLER ASSETS." At the Closing, Purchaser shall
assume the "Seller Deposit Liabilities" (as hereinafter defined) relating to the
Seller Office. The acquisition by Purchaser from Seller of the Seller Assets and
the assumption of Seller Deposit Liabilities pursuant to the terms and
conditions set forth herein is sometimes referred to herein as the
"ACQUISITION".
I.2 TRANSFER OF ASSETS. Subject to the terms and conditions of
this Agreement, on and as of the close of business on the Closing Date (defined
below), Seller shall assign, transfer, convey and deliver to Purchaser, the
Seller Assets, as described in subparagraphs (a) through (i), inclusive of this
Section 1.02:
(a) REAL ESTATE. The real estate on which the Seller Office is
situated together with all improvements thereon and all easements
associated therewith as provided in the legal description attached to
the general warranty deed to be attached as Annex 1.02(a) (the "REAL
ESTATE"). Seller represents and warrants that it has provided to
Purchaser all title information, surveys, and environmental assessments
or investigations in the possession of, or available to, Seller.
(b) PERSONAL PROPERTY. All of the furniture, fixtures and
equipment and other tangible personal property located at the Seller
Office including the automated teller machine ("ATM") located at the
Seller Office (the "FIXED ASSETS"). The Fixed Assets shall include,
without limitation, the assets to which the Purchase Price is allocated
as shall be set forth on Annex 1.02(b). The Fixed Assets shall not
include the assets specifically to be listed on Annex 1.02(b) as being
retained by Seller.
(c) RECORDS OF THE SELLER OFFICE. All records and original
documents (if available) related to the Seller Assets transferred or
liabilities assumed by Purchaser hereunder including but not limited to
the Seller Deposit Liabilities.
(d) SAFE DEPOSIT BUSINESS. All safe deposit rentals,
agreements, and business attributable to the Seller Office together
with all the records relating thereto (the "SAFE DEPOSIT BUSINESS").
Purchaser agrees to assume, honor and discharge the duties and
obligations of Seller with respect to such Safe Deposit Business and
shall be entitled to any right or benefit heretofore accrued or
hereafter accruing therefrom. The customer agreements relating to the
Safe Deposit Business and the prepaid rentals for the services are to
be set forth on Annex 1.02(d).
(e) CONTRACTS OR AGREEMENTS. Not applicable to this
Agreement.
(f) CASH ON HAND. All cash on hand at the Seller Office
as of the close of business on the Closing Date ("CASH ON HAND").
(g) PREPAID EXPENSES. Those prepaid expenses
attributable to the Seller Office as of the close of business on the
Closing Date, which prepaid expenses shall be identified on Annex
1.02(g).
(h) LOANS. All loans attributable to the Seller Office
(including all interest earned but not collected) that are either (i)
at least 100% collateralized by the Seller Deposit Liabilities and are
not more than twenty (20) days past due as of the close of business on
the Closing Date or otherwise involved in any type of litigation, (ii)
particular loans outstanding pursuant to overdraft lines that are
specifically identified in writing by Purchaser prior to the Closing as
being acquired by Purchaser, or (iii) other loans attributable to the
Seller Office that are specifically identified in writing by Purchaser
prior to the Closing as being acquired by Purchaser (the "LOANS"). The
Loans shall be set forth on Annex 1.02(h).
(i) RESIDUAL ASSETS. All of the remaining intangible assets,
including, without limitation, goodwill (Purchaser understands that
Seller does not have any goodwill reflected on its books with respect
to the Seller Office), associated with the Seller Assets, Seller
Office, and Seller Deposit Liabilities and any claims of Seller against
third parties with respect to such Seller Assets, Seller Office and
Seller Deposit Liabilities, to be transferred to the Purchaser
hereunder.
(j) SAFEKEEPING ITEMS. Not applicable to this Agreement.
I.3 ACCEPTANCE AND ASSUMPTION. Subject to the terms and
conditions of this Agreement on and as of the close of business on the Closing
Date, Purchaser shall:
(a) SELLER ASSETS. Receive and accept all of the Seller
Assets assigned, transferred, conveyed and delivered to Purchaser by
Seller pursuant to this Agreement.
(b) SELLER DEPOSIT LIABILITIES. Assume and thereafter
discharge the "Seller Deposit Liabilities" (as hereinafter defined).
The term "SELLER DEPOSIT LIABILITIES" means all of Seller's
obligations, duties and liabilities under each deposit account which is
attributable to the Seller Office as of the close of business on the
Closing Date (the "DEPOSIT ACCOUNTS"). The Seller Deposit Liabilities
include accrued, but unpaid interest on the Deposit Accounts calculated
through the close of business on the Closing Date. The Seller Deposit
Liabilities do not include (i) escheatable accounts or accounts subject
to or involved in any form of litigation, (ii) accounts that are
overdrawn on the Closing Date, and (iii) affiliate accounts. The
Deposit Accounts referred to in the immediately preceding sentence
include, without limitation, passbook accounts, statement savings
accounts, super NOW accounts, money market accounts, checking accounts
and NOW accounts, Individual Retirement Accounts ("IRAS"), ATM-related
accounts, and certificates of deposit. Annex 1.03(b) shall be a listing
of the Deposit Accounts and their respective balances as of the date
listed therein. Seller represents and warrants that the total balance
of such accounts are approximately equal to $64 million as of this
Agreement's date and that all such deposits are insured by the Bank
Insurance Fund ("BIF") or the Savings Association Insurance Fund
("SAIF") of the Federal Deposit Insurance Corporation ("FDIC"). The
"obligations, duties and liabilities" referred to in this Paragraph
1.03(b) include, without limitation, the obligation to pay and
otherwise process the Seller Deposit Liabilities in accordance with
applicable law and their respective contractual terms as reflected in
Seller's books and records, and the duty to supply all applicable
reporting forms for post-closing periods, including, without
limitation, Form 1099s, relating to the Seller Deposit Liabilities.
Seller shall retain responsibility for all backup withholding and Form
1099 reporting with respect to interest paid by Seller. Seller shall
provide Purchaser or FKB a copy (on paper, microfiche, or other medium
agreed to by Purchaser and Seller) of all Form 1099s relating to the
Seller Deposit Liabilities and shall make employees available to
respond to Purchaser's or FKB's inquiries regarding Form 1099 reporting
prior to and following the Closing.
(c) OTHER LIABILITIES. Not applicable to this Agreement.
(d) NO ASSUMPTION OF LIABILITIES. Except for the Seller
Deposit Liabilities and any other obligations or liabilities
specifically assumed by Purchaser under this Agreement, it is expressly
understood and agreed that Purchaser shall not assume or be liable for
any of the debts, obligations or liabilities of Seller of any kind or
nature whatsoever including, but not limited to, any debt or tax
including any bank shares, franchise or related tax, any liability for
unfair labor practices, any liability or obligation of Seller arising
out of any threatened or pending litigation, any liability with respect
to personal injury or property damage claims, any liability arising out
of claims of employees employed at the Seller Office for bonuses,
salaries, sick leave, vacation, wages or other payments or benefits in
respect of services performed at the Seller Office prior to the
Closing, any liability under or in connection with any "employee
benefit plan" as defined in Section 3(3) of ERISA which is maintained
by Seller and covers any employees at the Seller Office, any liability
Seller may have incurred or will incur in connection with the
transactions contemplated by this Agreement, any liability arising out
of any action or inaction occurring on or prior to the Closing Date and
relating to one or more Seller Deposit Liabilities, including but not
limited to the lack of a taxpayer identification number for an account
holder or the lack of compliance with any federal or state law or
regulation with respect to one or more Seller Deposit Liabilities, or
any other liability Seller may have incurred prior to the Closing in
connection with the operation of the Seller Office.
I.4 PAYMENT OF FUNDS. Subject to the terms and conditions
hereof, at the Closing:
(a) NET PAYMENT. Seller shall make available and transfer to
Purchaser in the manner specified in Sections 4.04 and 4.05 hereof,
funds equal to the aggregate balance of the Seller Deposit Liabilities
(including interest posted or accrued to such accounts), plus prepaid
rents relating to the Safe Deposit Business, plus any amount payable
pursuant to paragraph 2.05(b), less the amounts provided in
subparagraphs (1)-(4). For all purposes under this Section 1.04, the
amount of the Seller Deposit Liabilities with respect to certificates
of deposit and time deposits shall be determined as if the average
effective interest rate over the term of the deposit accrues throughout
the term of the deposit regardless of whether, under the terms of the
deposit, the interest rate increases or decreases at different times;
for example, if a $100,000 certificate of deposit has an average
effective interest rate of 6%, but, has only paid interest at a 5%
rate, the Seller Deposit Liabilities would include the $100,000
principal plus interest calculated at 6% through the Closing Date minus
any amount of interest already paid out on that certificate of
deposit).
(1) the "DEPOSIT PREMIUM" which shall equal:
(A) seven percent of the Demand
Deposits. "DEMAND DEPOSITS" shall
include all demand deposits included
in the Deposit Accounts and shall
equal the daily average balances of
such accounts (exclusive of accrued
but unpaid interest) for the
thirty-day period ending at the
close of business two business days
before the Closing Date; plus
(B) seven percent of Other Deposits.
"OTHER DEPOSITS" shall include all
deposit accounts included in the
Deposit Accounts other than Demand
Deposits and shall equal the balance
of such accounts (exclusive of
accrued but unpaid interest) as of
the close of business two business
days before the Closing Date;
(2) the amount (net of depreciation) at which the
Real Estate and the Fixed Assets are reflected on Seller's
financial statements (determined in accordance with generally
accepted accounting practices, consistently applied) as of the
close of business on the Closing Date;
(3) the amount of Cash on Hand at the Seller Office
as of the close of business on the Closing Date.
(4) the value of the Loans. For purposes of this
subparagraph (4), "VALUE" means the aggregate of the
outstanding principal balances of the Loans together with
accrued but unpaid interest to the close of business on the
Closing Date.
(b) REIMBURSEMENT AND PRORATION OF CERTAIN EXPENSES. All
expenses due and payable at the time of Closing relating to any prepaid
expenses included in the Seller Assets pursuant to Paragraph 1.02(g)
shall be prorated between Purchaser and Seller as of the close of
business on the Closing Date (including any FDIC insurance premiums,
which premiums will be prorated according to a formula agreed to by the
Seller and Purchaser based upon the standard formula promulgated by the
FDIC, the amount of the Seller Deposit Liabilities assumed by
Purchaser, and the number of days during any period for which Seller
has prepaid premiums to the FDIC to the FDIC that Purchaser will hold
the Seller Deposit Liabilities). Seller shall pay all taxes due and
payable with respect to the Real Estate on or prior to the Closing Date
and a prorated portion of all taxes assessable and first becoming a
lien with respect to the Real Estate during the year in which the
Closing Date occurs. The present tax rates and assessed values shall be
used for the purpose of setting Seller's prorated payment with respect
to the Real Estate taxes if applicable rates and assessed values have
not been set.
ARTICLE II
COVENANTS OF THE PARTIES
II.1 REGULATORY APPROVALS. As promptly as practicable (but in
any case within 30 days) after execution of this Agreement, Purchaser and Seller
shall prepare and submit for filing any and all applications, filings, and
registrations with and notifications to, all state and federal authorities
required on the part of Purchaser and Seller for the transaction contemplated by
this Agreement to be consummated at the Closing. Thereafter, Purchaser and
Seller shall pursue all such applications, filings, registrations, and
notifications diligently and in good faith and shall file such supplements,
amendments, and additional information in connection therewith as may be
reasonably necessary for said transaction to be consummated at such Closing.
Prior to filing any such application, filing, registration or notification, or
amendment or supplement thereto, the filing party shall provide the other party
with reasonable opportunity to review and comment thereon. The filing party
shall provide the other party with final copies of such documents, as filed,
and, promptly after receipt, copies of written communications from the agency or
authority with which such filing was made, or telephonic notice of material
non-written communications. Notwithstanding the foregoing, neither party shall
be required to provide the other party with any such information which
constitutes confidential business information which is subject to
confidentiality pursuant to the Freedom of Information Act or corresponding
state law.
II.2 OPERATION OF OFFICE. Since January 1, 1997, Seller has
conducted the business of the Seller Office only in the ordinary course
consistent with past practice, and there has not been any material adverse
change in the business, prospects, assets, capital, financial condition, results
of operations, liabilities (absolute, accrued, contingent or otherwise) or
commitments of the Seller with respect to the Seller Office. Hereafter, Seller
shall continue to operate the Seller Office in a manner equivalent to that
manner and system of operation employed immediately prior to the date of this
Agreement. Seller will use commercially reasonable efforts to prevent harm or
damage to the reputation of the Seller Office or material reduction of the
existing Seller Deposit Liabilities. Except with the prior written consent of
Purchaser, (which consent shall not be unreasonably withheld or delayed) or as
expressly contemplated or permitted by this Agreement, during the period from
the date of this Agreement and continuing until the Closing, Seller shall not:
(a) conduct business at the Seller Office other than in the
usual, regular and ordinary course or fail to use its best efforts to
preserve the Seller Office intact or to preserve the good will of the
customers at and others having business with the Seller Office;
(b) sell, lease, encumber, or otherwise dispose of, or agree
to sell, lease, encumber or otherwise dispose of, any of the Seller
Assets or any of the collateral securing the Loans;
(c) cause the Seller Office to transfer any Deposits,
including, without limitation, to Seller's or any affiliates' other
operations or branches, except upon the unsolicited request of a
depositor in the ordinary course of business;
(d) agree to increase the salary, remuneration or compensation
(including insurance, pension or other benefit plan) payable or to
become payable to persons employed at the Seller Office other than in
accordance with Seller's customary policies and/or bank-wide changes,
or pay or agree to pay any uncommitted bonus to any such employees
other than regular bonuses granted based on historical practice;
(e) hire any new employees at the Seller Office without
Purchaser's written consent, which will not be unreasonably withheld;
(f) violate any law, statute, rule, governmental regulation,
order or undertaking which violation would have a material adverse
effect on the Seller Assets;
(g) invest in any material amount of Fixed Assets on behalf of
the Seller Office and no Fixed Assets, except for commitments made on
or before the date of the Agreement and for replacements of furniture,
furnishings and equipment and normal maintenance and refurbishing
purchased or made in the ordinary course of business;
(h) offer any special deposit rate promotion with respect to
the Deposit Accounts or potential accounts except those offered by
Seller at all or substantially all of its branch offices;
(i) take any action to artificially inflate the amount of the
Seller Deposit Liabilities.
II.3 INSURANCE. During the period from the date of this
Agreement and continuing until the Closing, Seller shall maintain in effect all
current insurance policies insuring the Seller Assets.
II.4 INFORMATION CONCERNING AND ACCESS TO THE SELLER OFFICE.
Seller shall permit officers and authorized representatives of Purchaser access
upon reasonable notice to Seller to inspect the Seller Office during normal
business hours or at such other time mutually agreed upon by both parties, and
to permit Purchaser to make or cause to be made such reasonable investigation of
information and materials relating to the financial condition, assets and
liabilities of the Seller Office including general and subsidiary ledgers,
deposit records, audit reports and any other information concerning the
business, property, personnel and legal questions concerning the Seller Office
(or related to the physical condition of the Seller Office) as Purchaser
reasonably deems necessary; provided, however, that such access and
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere with the normal operations of the Seller Office;
and provided further, that nothing in this Section 2.04 shall be deemed to
require Seller to breach any obligation of confidentiality not to reveal any
proprietary information, trade secrets, marketing plans, strategic plans or
information not related to the transaction contemplated by this Agreement.
II.5 INFORMATION CONCERNING THE REAL ESTATE. As soon as
reasonably practicable after the date of this Agreement,
(a) Purchaser shall obtain or waive in writing the right to
obtain commitments issued in the name of Purchaser for an ALTA owner's
policy of title insurance for a "Title Commitment," which Title
Commitment shall (1) be issued by an insurer acceptable to Purchaser,
and (2) contain an agreement to insure, for amounts to be agreed upon
by the parties, merchantable and marketable fee simple title to the
Real Estate, together with (i) an appropriate zoning endorsement, (ii)
a comprehensive endorsement, (iii) a contiguity endorsement, if
applicable, and (iv) such other endorsements as Purchaser shall
reasonably request, free of the standard policy exceptions, and subject
only to the lien of current real property taxes not yet due and
payable, and Permitted Encumbrances (as hereinafter defined). All
exceptions (as hereinafter defined) (or portions thereof) to which
Purchaser does not provide Seller written notice of objection prior to
the Closing (and all exception documents in connection with such Title
Commitment) shall be deemed permitted encumbrances (the "PERMITTED
ENCUMBRANCES"). As used herein, the term "EXCEPTIONS" shall mean those
matters as set forth in Schedule B to each Title Commitment. With
respect to any non-Permitted Encumbrance (or portions thereof) to which
Purchaser objects, Seller shall promptly, at Seller's expense, use its
best efforts to cure, remove or otherwise satisfy such objection to
Purchaser's reasonable satisfaction prior to Closing. If Seller, in the
exercise of Seller's best efforts, is unable to cure any such
Encumbrance, Seller shall notify Purchaser and Purchaser shall have the
right to (i) waive all objectionable Exceptions to title which have not
been cured, in which event all uncured Exceptions shall be deemed
Permitted Encumbrances; (ii) terminate Purchaser's obligation to
purchase the Real Estate, in which case the parties shall meet promptly
to agree in good faith upon an amendment to this Agreement; or (iii)
terminate this Agreement. In the event of any termination pursuant to
clause (ii) or (iii) immediately above, Purchaser and Seller shall each
be released from any and all liability to the other under the terms
hereof to the extent of the transaction pertaining to Real Estate with
regard to the transactions contemplated hereby, as applicable. At
Closing, Seller, at its cost and expense, shall deliver to Purchaser a
policy of title insurance issued in conformity with each Title
Commitment.
(b) Seller shall reimburse up to $1,500 (payable at Closing)
to Purchaser for Seller's actual expenses in obtaining a current Phase
I environmental assessment report of the Real Estate prepared by an
independent environmental engineering firm acceptable to Purchaser (the
"ENVIRONMENTAL REPORT").
II.6 COOPERATION OF PARTIES. Purchaser hereby covenants to
Seller and Seller hereby covenants to Purchaser that, from the date hereof until
the Closing, such party shall cooperate fully with the other party in obtaining
any consents, approvals, permits or authorizations which are required to be
obtained pursuant to any federal or state law, or any federal or state
regulation thereunder, for or in connection with the transactions described and
contemplated in this Agreement. The parties further agree to consult and
cooperate with each other and to get the prior approval of the other regarding
press releases and other media releases in connection with the transaction
contemplated by this Agreement and to otherwise cooperate to effect the smooth
transition of the Seller Assets and Seller Deposit Liabilities to Purchaser. In
addition, within fifteen (15) days of the date hereof, Seller shall provide to
Purchaser (1) a detailed explanation of Seller's file layouts used in connection
with the servicing of the Deposit Accounts, and (2) a computer tape listing the
current balances and account numbers and other account codings for the Deposit
Accounts.
II.7 DISCLOSURES. From the date hereof until and through the
Closing Date, neither party shall, except for the making of filings with the
Securities and Exchange Commission, issue or publicly disclose, or permit any of
its affiliates to issue or publicly disclose, any press release or other
information concerning the transactions contemplated hereby, without first
providing a copy of such press release or other information to, and obtaining a
written approval of, the other party, which approval shall not be unreasonably
withheld.
II.8 CONVERSION. From the date hereof through the Closing
Date, Seller shall cooperate and work with Purchaser to complete the tasks
required to facilitate the conversion. Such tasks include, but are not limited
to, providing Purchaser with updated data on computer media acceptable to
Purchaser, files and other items as are reasonably necessary to complete the
conversion process and related testing procedures. Within fifteen (15) days from
the date hereof, Seller shall provide Purchaser with initial computer data on
media acceptable to Purchaser, reports, and related documentation on the Deposit
Accounts in a format currently used by Seller, and Seller will reasonably
cooperate with Purchaser in Purchaser's conversion of such format to one which
is reasonably acceptable to Purchaser. Seller shall provide to Purchaser on the
day following the Closing, conversion tapes as of the Closing Date. Seller
agrees to reasonably cooperate in resolving any conversion-related issues
arising from the conversion of the Deposit Accounts for a period of ninety (90)
days following the date that the conversion is completed. If Purchaser requests,
Seller shall reformat or data scrub the conversion tapes and Purchaser shall
reimburse Seller for any costs and expenses incurred by Seller in such
reformatting or data scrubbing. Promptly following the Closing, Seller will
provide to its customers final statements, including interest payments/credits
of accrued interest, for all Deposit Accounts, other than for certificates of
deposit and IRA accounts, as of the Closing. Seller shall also provide
microfiche records of the final customer statements to Purchaser.
II.9 SAFE DEPOSIT BUSINESS. All agreements relating to the
Safe Deposit Business are assignable, and Seller shall take all steps necessary
to transfer and assign all Paragraph 1.02(d) items and records relating to the
Safe Deposit Business to Purchaser, including, to the extent necessary,
informing Safe Deposit Business customers of a change in terms of Safe Deposit
Business agreements.
II.10 CONDUCT OF BUSINESS. Between the date hereof and the
Closing Date, Purchaser and its affiliates shall not undertake any marketing or
advertising efforts specifically directed to Seller's customers or take any
other action intended to reduce the amount of the Deposits as of the Closing
Date. Purchaser shall not, between the date of this Agreement and the Closing
Date, conduct its business and operations in such a manner as to intentionally
impair its ability to consummate the transactions contemplated hereunder. Seller
agrees not to offer any special rate promotions with respect to the Seller
Deposit Liabilities except those promotions that may be offered in the normal
course of business at all of Seller's branch offices. Seller will not take any
actions that would act to artificially inflate the amount of the Seller Deposit
Liabilities and specifically will not offer rates on the Seller Deposit
Liabilities above or below those generally offered on similar accounts by other
financial institutions in the Graves County, Kentucky banking market.
II.11 FIDUCIARY RELATIONSHIPS. After the Closing, Purchaser
shall perform all of the fiduciary relationships of Seller arising out of any
IRAs included within the Deposits, and with respect to such accounts, Purchaser
shall assume all of the obligations and duties of Seller as fiduciary and
succeed to all such fiduciary relationships of Seller as fully and to the same
extent as if Purchaser had originally acquired, incurred or entered into such
fiduciary relationship; provided that Purchaser is not hereby assuming any
liability for any breach of fiduciary duty that occurs prior to the Closing.
II.12 NOTICES OF DEFAULT. Seller and Purchaser shall each
promptly give written notice to the other upon becoming aware of the impending
or threatened occurrence of any event which could reasonably be expected to
cause or constitute a material breach of any of their respective
representations, warranties, covenants or agreements contained in this
Agreement.
II.13 REGULATORY MATTERS. Neither Purchaser nor Seller, nor
any of their respective affiliates, has received any indication from any
federal, state or other governmental agency, or has any other reason to believe,
that such agency would oppose or refuse to grant or issue its consent or
approval, if required, or impose any materially adverse condition, with respect
to the transaction contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
III.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to Seller as follows:
(a) GOOD STANDING AND POWER OF PURCHASER. Purchaser is a
federal savings bank, duly organized, and validly existing, and in good
standing under the laws of the United States of America with corporate
power to own its properties and to carry on its business as presently
conducted and to consummate the transactions contemplated hereby. The
deposits of Purchaser are insured by the BIF or SAIF in accordance with
FDIC regulations.
(b) AUTHORIZATION OF AGREEMENT. The execution and delivery of
this Agreement, and the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on the part of
Purchaser, and this Agreement is a valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms.
(c) EFFECTIVE AGREEMENT. Subject to the receipt of any and all
necessary regulatory approvals and required consents, the execution,
delivery, and performance of this Agreement by Purchaser and a
consummation of the transactions contemplated hereby, will not conflict
with, result in the breach of, constitute a violation or default,
result in the acceleration of payment or other obligations, or create a
lien, charge or encumbrance, under any of the provisions of the Charter
or By-laws of Purchaser, under any judgment, decree or order, under any
law, rule or regulation of any government or agency thereof, or under
any contract, agreement or instrument to which Purchaser is subject,
except for any such conflict, breach, violation, default, acceleration
or lien which would not have a material adverse effect on the
Purchaser's ability to perform its obligations hereunder.
(d) NO BROKER. No broker or finder, or other party or agent
performing similar functions, has been retained by Purchaser or is
entitled to be paid based upon any agreements, arrangements or
understandings made by Purchaser in connection with the transaction
contemplated hereby. Any payment to which such a broker or finder is
entitled shall be the sole responsibility of Purchaser.
III.2 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller
represents and warrants to Purchaser as follows:
(a) GOOD STANDING AND POWER OF SELLER. Seller is a state
banking corporation, duly organized, and validly existing, and in good
standing under the laws of the Commonwealth of Kentucky, with corporate
power to own its properties and to carry on its business as presently
conducted and to consummate the transactions contemplated hereby. The
deposits of Seller are insured by the BIF or the SAIF in accordance
with FDIC regulations.
(b) AUTHORIZATION OF AGREEMENT. The execution and delivery of
this Agreement, and the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on the part of
Seller, and this Agreement is a valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms.
(c) EFFECTIVE AGREEMENT. Subject to the receipt of any and all
necessary regulatory approvals and required consents, the execution,
delivery, and performance of this Agreement by Seller and a
consummation of the transactions contemplated hereby, will not conflict
with, result in the breach of, constitute a violation or default,
result in the acceleration of payment or other obligations, or create a
lien, charge or encumbrance, under any of the provisions of the
Articles of Incorporation or By-laws of Seller, under any judgment,
decree or order, under any law, rule or regulation of any government or
agency thereof, or under any contract, agreement or instrument to which
Seller is subject, except for any such conflict, breach, violation,
default, acceleration or lien which would not have a material adverse
effect on the Seller Assets or Seller's ability to perform it
obligations hereunder.
(d) TITLE TO SELLER ASSETS. Seller is the sole owner of each
of the Seller Assets and has good, valid, and marketable title thereto,
free and clear of any mortgage, lien or encumbrance. The Real Estate
constitutes all of the real property used in the operation of the
Seller Office, including without limitation, for parking and ingress
and egress. Seller is the sole owner of a fee simple interest in, and
has good and marketable title to, the Real Estate, free and clear of
any mortgage, lien or encumbrance other than the Permitted
Encumbrances, and shall convey the Real Estate to Purchaser by delivery
at Closing of a general warranty deed conveying title subject to said
Permitted Encumbrances. The Real Estate is not located in a flood way,
flood plain, or flood hazard area. There are no encroachments on the
Real Estate. All improvements are located entirely within the bounds of
the Real Estate. All sub-parcels comprising the Real Estate have
continuous and abutting property lines so as to constitute a single
parcel with no gaps or gores.
(e) ZONING MATTERS. There are no uncorrected violations of
zoning and/or building codes relating to the Seller Office.
(f) ENVIRONMENTAL MATTERS. With respect to the Real Estate, to
the best of Seller's knowledge after due inquiry, Seller is, and the
Real Estate is, in compliance with all federal, state, regional and
local laws, statutes, ordinances, judgments, rulings and regulations
relating to any matters of pollution, protection of the environment or
environmental regulation or control (collectively, the "ENVIRONMENTAL
LAWS"). Seller has not placed, held, located, released, transported or
disposed of any Hazardous Waste (as hereinafter defined) on, under, at
or from the Real Estate, and to Seller's knowledge, none of the Real
Estate or soils or groundwaters on, under, at, beneath or within the
Real Estate is contaminated with any Hazardous Waste in excess of
levels allowed by an applicable Environmental Law. Seller has not
placed, held, located, released, transported or disposed of any
Hazardous Waste from the Real Estate at, to or upon any other location.
Seller has not received any written notice relating to its operations
(i) of the violation of any Environmental Law or any other law,
statute, rule or regulation regarding Hazardous Waste, (ii) of the
institution or pendency of any suit, action, claim, proceeding or
investigation by an governmental entity or any third party of any such
violation or (iii) requiring the removal of Hazardous Waste from any of
the Real Estate or any other location, or the remediation of Hazardous
Waste at the Real Estate or any other location, or notifying it of
potential liability for such removal or remediation. Seller has not
used the Real Estate for the storage, sale, and/or distribution of any
petroleum products, and to Seller's knowledge, no petroleum or
petroleum product or byproduct, including but not limited to gasoline,
has been disposed of, spilled, released, percolated or migrated into
the Real Estate. To Seller's knowledge, none of the improvements on the
Real Estate contain asbestos-containing material, and there are no
underground storage tanks at, on, or in the Real Estate. To Seller's
knowledge, Seller is not a potentially responsible party under any
Environmental Law with respect to the Real Estate or with respect to
any location where Hazardous Waste from the Real Estate may have been
taken, stored or disposed. Seller is not the subject of any pending, or
to its knowledge threatened, criminal, civil, or administrative action
under any Environmental Laws. For purposes of this Agreement, the term
"HAZARDOUS WASTE" shall mean radon, regulated radioactive materials,
asbestos or any substances defined as, or included in the definition
of, "hazardous substance," "hazardous waste," "hazardous materials,"
"toxic chemicals" or "hazardous chemicals" under any Environmental Law.
(g) TAXES. Seller shall pay, credit Purchaser for paying, or
make appropriate provision to pay in accordance with ordinary business
practices all federal, state and local income, excise, payroll,
withholding, property, franchise, shares, sales, use and transfer
taxes, if any, which have accrued (whether or not they are due and
payable) through the Closing Date. Any claims for refunds of taxes
which have been paid by Seller shall remain the property of Seller.
(h) THIRD-PARTY CLAIMS. There are no actions, suits or
proceedings, pending or, to the best of Seller's knowledge, threatened
against or affecting Seller of any interest or right of Seller, as such
might relate to the Seller Office or against or affecting the Seller
Assets, the Seller Deposit Liabilities, or the banking business of the
Seller Office.
(i) NO BROKER. No broker or finder, or other party or agent
performing similar functions, has been retained by Seller or is
entitled to be paid based upon any agreements, arrangements or
understandings made by Seller in connection with the transaction
contemplated hereby. Any payment to which such a broker or finder is
entitled shall be the sole responsibility of Seller.
(j) ASSETS. Seller has not received notice nor has knowledge
that any governmental authority considers the Seller Office to violate
or to have violated, fire, zoning, heath, safety, building, hazardous
waste or environmental code or other ordinance, law or regulation or
order of any government or agency, body or subdivision thereof, or any
private covenants, restrictions or easements. The Fixed Assets are used
in the operation of the Seller Office and are in satisfactory
condition, ordinary wear and tear excepted.
(k) COMPLIANCE WITH LAWS. Seller is in material compliance
with all statutes and regulations applicable to the Seller Assets, the
Seller Deposit Liabilities and the conduct of the Seller Office. Seller
has not received notice from any agency or department of federal, state
or local government asserting a violation of any law, regulation,
ordinance, rule or order (whether executive, judicial, legislative or
administrative) that would have a material adverse effect on the
financial condition, results of operations or business of the Seller
Office or the Seller Assets. Seller holds all permits, licenses,
exemptions, orders and approvals of all governmental entities which are
necessary to the operation of the Seller Office and to the best of
Seller's knowledge, is in compliance with the terms thereof. Seller has
filed all Currency Transaction Reports with respect to all transactions
required to be reported under the Bank Secrecy Act and regulations
adopted pursuant thereto. With respect to the Deposit Accounts, Seller
has complied with specified information reporting requirements pursuant
to Section 6723 of the Internal Revenue Code, as amended (the "CODE"),
and any applicable regulations thereunder or established "reasonable
cause" pursuant to Section 6724 of the Code for information returns
required to be filed on or after December 31, 1995.
(l) DEPOSITS. The deposit records of Seller accurately reflect
the Deposit Accounts and are and shall be sufficient to enable
Purchaser to conduct a banking business with respect to the Seller
Office. Seller has not transferred any deposit accounts held by Seller
at the Seller Office to any of Seller's other branches, or to any
branch of any Seller affiliate, except at the express unsolicited
request of the depositor in the ordinary course of business. Seller has
not transferred any deposit accounts from any of Seller's other
branches or from any branches of any affiliate of Seller to the Seller
Office, except at the express unsolicited request of the depositor in
the ordinary course of business. There are no material uncured
violations or violations with respect to which material refunds or
restitution may be required with respect to the Seller Deposit
Liabilities comply in all material respects with all applicable laws
and regulations and have been provided to Purchaser. The Seller Deposit
Liabilities are insured by the FDIC and to the full extent provided by
federal law and regulations. Seller is in material compliance with all
terms and conditions and other documentation applicable to the Seller
Deposit Liabilities. Seller shall deliver to Purchaser as of the
Closing Date (i) TINs (or record of appropriate exemption) for all
holders of Seller Deposit Liabilities; and (ii) all other information
in Seller's possession or reasonably available to Seller required by
applicable law to be provided to the Internal Revenue Service (the
"IRS") with respect to the Seller Assets or Seller Deposit Liabilities
and the holders thereof. Seller hereby certifies that such information,
when delivered, shall accurately reflect the information provided by
Seller's customers. To the best of Seller's knowledge, there are not
any "kiting" schemes associated with any of the Seller Deposit
Liabilities.
(m) LOANS. All of the Loans have been made for good, valuable
and adequate consideration in the ordinary course of business of
Seller, are evidenced by notes or other evidences of indebtedness that
are true, genuine, and enforceable in accordance with their terms. Each
of the Loans is secured by a first priority security interest in a
Deposit Account with a balance greater than that of the Loan. Each such
security interest is evidenced by a security agreement that is true,
genuine, and enforceable in accordance with its terms. No Loan has been
adversely classified in any regulatory examination or by Seller's
internal classification system and no Loan is 20 days or more past due,
has been restructured, or is classified as nonaccrual. There are no
material uncured violations or violations with respect to which
material refunds or restitution may be required with respect to the
Loans that have been cited in any compliance report to Seller as a
result of examination by any regulatory authority and the loan
documentation with respect to the Loans complies in all material
respects with all applicable laws and regulations.
(n) IRAS. Seller shall provide Purchaser with the proper trust
documents for any IRAs assumed by Purchaser under this Agreement. The
terms of the trust documents provide for the designation of Purchaser
and FKB as successor trustees. Seller shall take all steps and provide
all notices necessary for Purchaser and FKB to be designated successor
trustees for such IRAs as of the Closing.
III.3 EMPLOYEE MATTERS. Subject to the continuing discretion
and judgment of Purchaser following the Closing Date, Purchaser may offer to
employ any of the employees of the Seller Office. Seller will terminate the
employment of all of its employees at the Seller Office as of the Closing and
will pay all compensation and benefits owing to such employees through and
including the date of termination. While Purchaser has expressed an interest in
retaining the staff of the Seller Office, nothing in this Agreement shall
obligate Purchaser to employ any of Seller's former employees, or if employed by
Purchaser, to employ any of such persons for any specified period of time, and
all of such employees shall be "at will" employees. On the Closing Date, Seller
shall have given all notices required by law pursuant to the Workers Adjustment
and Retraining Notification Act ("WARN") and shall, to the extent required by
law or by contract, satisfy all obligations to bargain with its employees.
Without limiting Seller's indemnity obligation set forth hereafter, Seller shall
indemnify and hold Purchaser harmless from all loss, cost, damage or expense
arising as a result of any alleged violation of WARN or of any bargaining
obligation to which Seller is subject or is alleged to be subject. Seller will
comply with the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"), for all of Seller's former employees and other qualified
beneficiaries for whom COBRA qualifying events occurred before or coincident
with the Closing and Purchaser shall have no responsibility for any such
coverage.
ARTICLE IV
CLOSING
IV.1 CLOSING AND CLOSING DATE. Unless otherwise agreed to in
writing, the transaction contemplated by this Agreement shall be consummated and
closed (the "CLOSING") at the Seller Office at the close of business on the
third business day after confirmation of all required regulatory approvals
(including approvals relating to Purchaser's assignment to FKB) have been
received by Purchaser and all applicable waiting periods have expired, or such
other time and date which is mutually agreed upon by Purchaser and Seller (the
"CLOSING DATE").
Notwithstanding anything contained in this Section 4.01 to the
contrary, if the Closing does not occur on or before January 31, 1998, either
party may terminate this Agreement, upon written notification to the other
party. Such deadline shall be automatically extended to February 28, 1998 if the
Closing does not occur by the January 31, 1998 deadline due to the failure
(which is beyond the control of Purchaser or Seller) of state or federal
regulatory authorities to approve the transaction by a date which would allow
the Closing to occur by January 31, 1998 (the "TERMINATION DATE"). The parties
may, however, prior to either deadline, agree to an extension of that deadline.
IV.2 PURCHASER'S ACTION AT CLOSING. At the Closing,
Purchaser shall:
(a) execute, acknowledge, and deliver to Seller to evidence
the assumption of the liabilities and obligations of Seller in
connection with the Seller Deposit Liabilities, an instrument or
instruments of assumption in forms reasonably satisfactory to
Purchaser;
(b) receive, accept and acknowledge delivery of the Seller
Assets, and all records and documentation relating thereto, sold,
assigned, transferred, conveyed or delivered to Purchaser by Seller
hereunder;
(c) execute and deliver to Seller such written receipts for
the Seller Assets assigned, transferred, conveyed or delivered to
Purchaser hereunder as Seller may reasonably have requested at or
before the Closing.
IV.3 SELLER'S ACTIONS AT CLOSING. At the Closing, Seller
shall:
(a) deliver to Purchaser a duly executed and recordable
general warranty deed conveying title to the Real estate free and clear
of all claims, liens and encumbrances (other than the Permitted
Encumbrances);
(b) deliver to Purchaser the Seller Assets purchased hereunder
which are capable of physical delivery and such appropriate bills of
sale and other instruments of title as Purchaser may reasonably request
to vest in Purchaser good and marketable title thereto, free and clear
of all encumbrances (other than the Permitted Encumbrances);
(c) assign, transfer, and deliver to Purchaser the records and
original documents pertaining to the Seller Deposit Liabilities;
(d) execute and deliver to Purchaser an instrument which shall
assign and transfer IRAs attributable to the Seller Office to Purchaser
and FKB and which shall additionally appoint Purchaser and FKB as a
successor trustees for such accounts;
(e) assign, transfer and deliver and endorse over to Purchaser
all promissory notes and other credit agreements, together with
corresponding collateral (including without limitation, mortgages and
personal property liens) related to the Loans and all files and records
and original documents pertaining to the Loans;
(f) deliver all other records and original documents
(if available) related to the Seller Assets transferred to, and the
Seller Deposit Liabilities assumed by, Purchaser;
(g) make available and deliver to Purchaser all funds required
to be paid to Purchaser pursuant to the terms of this Agreement; and
(h) deliver such other documents as Purchaser may reasonably
request to demonstrate satisfaction of conditions and compliance with
the agreements set forth in this Agreement.
IV.4 PRE-CLOSING MATTERS/METHOD OF PAYMENT.
(a) Two business days prior to the Closing Date, Seller shall
deliver Annexes to this Agreement, which Annexes shall be subject to
Purchaser's approval.
(b) The parties shall prepare and execute at Closing a
settlement statement (the "SETTLEMENT STATEMENT") supported by
appropriate exhibits, to be attached as Annex 4.04, showing the
computation of the funds due to Purchaser (the "CASH PAYMENT"). The
Cash Payment shall be calculated as set forth pursuant to the terms of
Section 1.04 hereof but determined as if the Closing occurred as of the
close of business of the business day immediately prior to the Closing
Date and shall be made on the Closing Date in immediately available
federal funds. Cash on Hand shall be determined by a count conducted by
Purchaser and Seller together. At least two business days prior to
Closing, Purchaser and Seller shall provide written notice to one
another indicating the account and bank to which such funds shall be
wire transferred.
IV.5 POST CLOSING ADJUSTMENTS.
(a) No later that three (3) business days after the Closing
Date, Seller shall provide Purchaser with updated Annexes 1.02(h) and
1.03(b) that shall accurately reflect the related balances as shown on
the financial records of Seller as of the close of business on the
Closing Date calculated in accordance with generally accepted
accounting principles consistently applied.
(b) Purchaser and its accountants and attorneys shall have the
right to review any and all documents (and to interview any and all
Seller personnel) reasonably necessary or desirable to confirm the
accuracy of the updated Annexes 1.02(h) and 1.03(b). If Purchaser and
Seller do not agree to the contents of the Annexes, then the dispute
shall be submitted to an independent auditor (the "AUDITOR"), who shall
be selected by mutual agreement or if the parties shall fail to agree,
selected by agreement by one independent auditor designated by
Purchaser and one independent auditor designated by Seller. The
decision of the Auditor shall be final and binding. Any Auditor
expenses shall be split evenly by Seller and Purchaser.
(c) Based upon the agreed Annexes 1.02(h) and 1.03(b), the
Cash Payment shall be recalculated. Any difference between the original
Cash Payment and the recalculated Cash Payment shall be settled by
payment by wire transfer.
IV.6 CONDITIONS TO OBLIGATION OF SELLER. The obligations of
Seller to consummate the transactions contemplated hereby are subject to the
satisfaction of the following conditions precedent on or before the Closing, any
of which may be waived by Seller:
(a) the representations and warranties of Purchaser set forth
in Section 3.01 of this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the
Closing as if made on the Closing;
(b) Purchaser, in all material respects, shall have performed
and observed its obligations and covenants as set forth in this
Agreement prior to or on the Closing;
(c) receipt of all permits, consents, approvals and
authorizations from federal and state governmental authorities and
regulatory agencies necessary to effect the transactions contemplated
herein (including the expiration of all applicable waiting periods);
(d) there shall not be threatened, instituted or pending any
action or proceeding before any domestic or foreign court or
governmental agency or other regulatory or administrative agency or
commission, or by any other person (1) challenging the transactions
contemplated by this Agreement or the terms thereof; or (2) seeking to
prohibit the transactions contemplated by this Agreement, which, in the
opinion of Seller's counsel, has a reasonable probability of success.
IV.7 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations
of Purchaser to consummate the transactions contemplated by this Agreement is
subject to the satisfaction of the following conditions precedent on or before
the Closing, any of which may be waived by Purchaser:
(a) the representations and warranties of Seller set forth in
Section 3.02 of this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the
Closing as if made on the Closing;
(b) Seller, in all material respects, shall have performed
and observed its obligations and covenants as set forth in this
Agreement prior to or at the Closing;
(c) Receipt of all permits, consents, approvals and
authorizations from federal and state governmental authorities and
regulatory agencies necessary to effect the transactions contemplated
hereby (including Purchaser's assignment to FKB) and the operation of
the Seller Office (including the expiration of all applicable waiting
periods), on terms and conditions satisfactory to Purchaser (other than
standard terms and conditions);
(d) there shall not be threatened, instituted or pending any
action or proceeding before any domestic or foreign court or
governmental agency or other regulatory or administrative agency or
commission, or by any other person (1) challenging the transactions
contemplated by this Agreement or the terms thereof or (2) seeking to
prohibit the transactions contemplated by this Agreement which, in the
opinion of Purchaser's counsel, has a reasonable probability of
success;
(e) there shall have been no material adverse change in the
business, financial condition, or operations of the Seller Office
(other than changes resulting from or attributable to (i) changes in
laws and regulations, or (ii) economic conditions (including without
limitation interest rates), in either case that affect banking
institutions generally or the ability to conduct banking operations at
the Seller Office, or in the physical condition of the Seller Assets
from the physical condition that exists as of the date of this
Agreement, or in the quality of the Loans (taken as a whole) from the
quality that exists as of the date of this Agreement; and
(f) the Environmental Report provided pursuant to Paragraph
2.05(c) shall be satisfactory to Purchaser in Purchaser's sole
discretion.
ARTICLE V
GENERAL COVENANTS AND INDEMNIFICATIONS
V.1 CONFIDENTIALITY OBLIGATIONS OF SELLER. From and after the
date hereof, Seller shall, and shall cause its subsidiaries and affiliates to,
treat all information received from Purchaser concerning the business, assets,
operations, and financial condition of Purchaser as confidential, unless and to
the extent that Seller can demonstrate that such information was already known
to Seller or such subsidiary or affiliates or in the public domain or was
subsequently independently developed by Seller; and Seller shall, and shall
cause its subsidiaries and affiliates to, not use any such information (so
required to be treated as confidential) for any purposes except in furtherance
of the transactions contemplated hereby. From and after the Closing Date, Seller
shall, and shall cause its subsidiaries and affiliates to, treat all information
regarding the Seller Office as confidential, and Seller shall, and shall cause
its subsidiaries and affiliates to, not use any such information so required to
be treated as confidential for any purpose. Upon the termination of this
Agreement, Seller shall, and shall cause its affiliates to, promptly return all
documents and work papers containing, and all copies of, any such information
(so required to be treated as confidential) received from or on behalf of
Purchaser in connection with the transactions contemplated hereby. The covenants
of Seller contained in this Section 5.01 shall survive any termination of this
Agreement; provided, however, that neither Seller nor any of its affiliates
shall be deemed to have violated the covenants set forth in this Section 5.01 if
Seller or any of such affiliates shall in good faith disclose any of such
confidential information in compliance with any legal process, order or decree
issued by any court or agency of government of competent jurisdiction, provided
that prior to such disclosure, Seller shall give Purchaser reasonable prior
notice thereof.
V.2 CONFIDENTIALITY OBLIGATIONS OF PURCHASER. From and after
the date hereof, Purchaser shall, and shall cause its subsidiaries and
affiliates to, treat all information received from Seller concerning the
business, assets, operations, and financial condition of Seller, as
confidential, unless and to the extent that Purchaser can demonstrate that such
information was already known to Purchaser or such subsidiary or affiliates or
in the public domain or was subsequently independently developed by Purchaser;
and Purchaser shall, and shall cause its subsidiaries and affiliates to, not use
any such information (so required to be treated as confidential) for any
purposes except in furtherance of the transactions contemplated hereby. Upon the
termination of this Agreement, Purchaser shall, and shall cause its affiliates
to, promptly return all documents and work papers containing, and all copies of,
any such information (so required to be treated as confidential) received from
or on behalf of Seller in connection with the transactions contemplated hereby.
The covenants of Purchaser contained in this Section 5.02 shall survive any
termination of this Agreement; provided, however, that neither Purchaser nor any
of its affiliates shall be deemed to have violated the covenants set forth in
this Section 5.02 if Purchaser or any of such affiliates shall in good faith
disclose any of such confidential information in compliance with any legal
process, order or decree issued by any court or agency of government of
competent jurisdiction, provided that, prior to such disclosure, Purchaser shall
give Seller reasonable prior notice thereof.
V.3 INDEMNIFICATION BY BOTH PARTIES. Purchaser, on the one
hand, and Seller, on the other hand mutually agree to indemnity and hold each
other harmless from, and to reimburse each other promptly for, any and all
losses, liabilities, damages, expenses and other costs (including court costs,
costs of investigation and reasonable attorneys' fees) ("LOSSES") that one party
may suffer as the result of the material breach by the other party of any
covenant, representation or warranty of that other party set forth in this
Agreement.
V.4 INDEMNIFICATION BY SELLER. Seller shall indemnify, hold
harmless and defend Purchaser from and against any and all Losses arising out of
any actions, suits, or other proceedings, claims or demands commenced by any
third party prior to or after the Closing, which arise out of, or are in any way
related to, (i) the operations of the Seller Office (including but not limited
to claims for personal injuries arising from incidents occurring prior to the
Closing) or the administration of any of the Deposit Accounts or Loans by Seller
prior to the Closing, (ii) the Fixed Assets and related records, insofar as the
basis for such action, suit, or other proceedings, claim or demand arose prior
to the Closing, or (iii) the fiduciary duties of Seller arising prior to Closing
with respect to the IRAs included in the Seller Deposit Liabilities.
V.5 INDEMNIFICATION BY PURCHASER. Purchaser shall indemnity,
hold harmless and defend Seller from and against all Losses arising out of any
actions, suits or other proceedings, claims or demands, which arise out of, or
are in any way related to, (i) the operations of the Seller Office or the
administration of any of the Seller Deposit Liabilities or Loans by Purchaser
subsequent to the Closing, (ii) Fixed Assets and related records, insofar as the
basis for such action, suit or other proceeding, claim or demand arises
subsequent to the Closing, or (iii) the fiduciary duties of Purchaser arising
subsequent to Closing with respect to the IRAs included in the Seller Deposit
Liabilities.
V.6 CLAIMS.
(a) DEFENSE OF CLAIMS. Should any claim be made, or suit or
proceeding be instituted against Purchaser or Seller (an "INDEMNIFIED
PARTY"), which, if valid or prosecuted successfully, would be a matter
for which such Indemnified Party is entitled to indemnification under
this Agreement (a "Claim") from the other party (the "INDEMNIFYING
PARTY"), the Indemnified Party shall notify the Indemnifying Party in
writing concerning the same promptly after the assertion or
commencement thereof. The Indemnified Party shall in the first instance
file in a timely manner any answer or pleading with respect to a suit
or proceeding if such action is necessary to avoid default or other
material adverse results. The party having the greater risk of
financial loss with respect to such Claim (the "LEAD PARTY") shall
control the defense thereof and shall use reasonable efforts to defeat
or minimize any loss resulting from such Claim. The Lead Party shall
provide the other party (the "NON-LEAD PARTY") with such information
and opportunity for consultation (including estimations regarding costs
and fees) as may reasonably be requested and the Non-Lead Party shall
be entitled, at its own expense, to participate in the defense of a
claim and to engage counsel for such purpose. All costs and expenses
incurred by the Lead Party in connection with the defense of a Claim
shall in the first instance be paid by the Lead Party. Any reasonable
costs and expenses so paid by the Indemnified Party shall be subject to
the Indemnified Party's rights to indemnification under this Agreement.
(b) SETTLEMENT OF CLAIMS. No settlement of a Claim involving
liability of an Indemnified Party subject to indemnification under this
Agreement shall be made without prior written consent by or on behalf
of the Indemnifying Party, which consent shall not be reasonably
withheld or delayed. For these purposes, consent shall be presumed in
the case of settlements of $5,000 or less wherein the Indemnifying
Party has not responded within ten (10) business days of written notice
of a proposed settlement. In the event of any dispute regarding the
reasonableness of a proposed settlement, the party which will bear the
larger financial loss resulting from such settlement and the
application of the indemnification provisions set forth in this
Agreement will make the final determination in respect thereto, which
determination will be final and binding on all involved parties.
V.7 REQUEST FOR INDEMNIFICATION. If at any time or from time
to time any party shall determine that it is entitled to indemnification under
this Agreement, such party shall give written notice to the other party
specifying the basis on which indemnification is sought, the amount of the
asserted loss, damage or expense, as the case may be, and requesting
indemnification. If indemnification is required under this Agreement with
respect to a Claim, the parties contemplate that payment shall be made to the
Indemnified Party at or about the time the Indemnified Party shall be required
to make payment with respect to the Claim, unless there shall be a dispute as to
the Indemnified Party's entitlement to indemnification, in which case adjustment
will be made upon resolution of said dispute. Upon receipt of any request for
indemnification, the Indemnifying Party may object thereto by delivering written
notice of such objection to the Indemnified Party specifying in reasonable
detail the basis on which such objection is made. In the case of objection to a
request for indemnification as to a Claim, such objection shall be made within
thirty (30) business days of notice from the Indemnified Party's requesting
payment, unless the Indemnifying Party shall have earlier agreed to such
liability. Failure on the part of the Indemnifying Party so to object shall
constitute acceptance by such party of the request to indemnify as to such
matter.
V.8 FURTHER ASSURANCES. From and after the date hereof, each
party agrees to execute and deliver such instruments and to take such other
actions as the other party hereto may reasonably request in order to carry out
and implement this Agreement. The covenants of each of the parties hereto
pursuant to this Section 5.08 shall survive the Closing.
ARTICLE VI
TERMINATION
VI.1 TERMINATION BY MUTUAL AGREEMENT. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned by mutual
consent and agreement of the parties hereto.
VI.2 TERMINATION BY PURCHASER. This Agreement may be
terminated and the transaction contemplated hereby abandoned by Purchaser.
(a) Upon written notice to Seller, if at the time of such
termination any of the conditions set forth in Section 4.07 hereof are
not satisfied and cannot reasonably be expected to be satisfied before
the Termination Date.
(b) If any regulatory approval required for consummation of
this transaction is denied by the applicable regulatory authority or is
granted upon satisfaction of the conditions unacceptable in the
reasonable judgment of Purchaser or Seller, or in the event that at any
time prior to the Closing Date it shall become reasonably certain to
Purchaser, with the advice of counsel, that a regulatory approval
required for consummation of the transaction will not be obtained. For
purposes hereof, a condition may be deemed "unacceptable" if in the
reasonable, good faith judgment of Purchaser, it is reasonably probable
that it would have a material adverse effect on the business,
operations, assets or financial condition of Purchaser upon completion
of the acquisition contemplated hereby or materially impair the value
of the Business to be acquired hereunder, provided that in each case no
such term or condition imposed by any regulatory authority shall be
deemed to have such an effect unless it materially differs from terms
and conditions customarily imposed by such an authority in connection
with approvals of similar such transactions.
(c) In accordance with Section 4.01.
(d) In accordance with Section 2.05.
VI.3 TERMINATION BY SELLER. This Agreement may be terminated
and the transaction contemplated hereby abandoned by Seller:
(a) Upon written notice to Purchaser, if at the time of such
termination any of the conditions set forth in Section 4.06 hereof are
not satisfied and cannot reasonably be expected to be satisfied before
the Termination Date.
(b) If any regulatory approval required for consummation of
this transaction is denied by the applicable regulatory authority or is
granted upon satisfaction of conditions unacceptable in the reasonable
judgment of Seller, or in the event that at any time prior to the
Closing Date it shall become reasonably certain to Seller, with the
advice of counsel, that a regulatory approval required for consummation
of the transaction will not be obtained. For purposes hereof, a
condition may be deemed "unacceptable" if in the reasonable, good faith
judgment of Seller, it is reasonably probable that it would have a
material adverse effect on the business, operations, assets or
financial condition of Seller, provided that in each case no such term
or condition imposed by any regulatory authority shall be deemed to
have such an effect unless it materially differs from terms and
conditions customarily imposed by such an authority in connection with
approvals of similar such transactions.
(c) In accordance with Section 4.01.
VI.4 TERMINATION BY EITHER PARTY. Upon written notice by
either party, at any time prior to the day of the Closing if and only if such
party is not in material breach of this Agreement and if the other party has
breached in any material respect any covenant or undertaking contained herein
and such breach is not cured within thirty (30) days of the date the
non-breaching party gives notice of such breach to the breaching party (provided
no cure period shall be available for any breach which, due to the nature of the
breach, cannot be cured, or for any breach which is the same or substantially
similar to a prior breach for which a cure period has been given).
VI.5 NOTICE OF TERMINATION. To exercise the right to terminate
as provided in this Section, the exercising party must advise the other party in
writing, which notice shall be effective immediately upon its being delivered as
referenced in Section 7.09 hereof.
VI.6 EFFECT OF TERMINATION. The termination of this Agreement
pursuant to Sections 6.02 or 6.03 of this Agreement shall not release a party
hereto from any liability or obligation to the other party hereto arising from a
breach of any provision of this Agreement occurring prior to the termination
hereof. No termination of this Agreement shall affect or diminish the parties'
obligations under Sections 5.01 and 5.02 of this Agreement, which shall survive
the termination.
ARTICLE VII
MISCELLANEOUS PROVISIONS
VII.1 NO SOLICITATION. For a period of one (1) year after
the Closing Date:
(a) Seller shall not target or solicit customers of the Seller
Office or residents of Graves County, Kentucky, for the provision of
deposit services offered by or competitive with deposit services
offered by Purchaser or FKB in Graves County, Kentucky. In addition,
Seller will not, for a period of three (3) years after the Closing
Date, establish a banking, thrift, loan or other office (including any
ATM) in Graves County, Kentucky; provided however that nothing herein
shall prevent Seller from acquiring and operating a branch in Graves
County, Kentucky through the purchase of a financial institution whose
main office is not located in Graves County, Kentucky, but that
operates a branch in Graves County, Kentucky.
(b) Purchaser shall not specifically target customers of
Seller who are residents of Graves County, Kentucky, who have
outstanding loans from Seller as of the Closing Date (that are not
among the Loans) (the "SELLER LOANS") for the purpose of having the
customers rewrite the Seller Loans as Purchaser loans. Notwithstanding
the foregoing limitation on rewriting Seller Loans, nothing in this
subparagraph shall prevent Purchaser from soliciting or lending to
Seller Loan customers; nor shall this subparagraph prohibit Purchaser
from rewriting a Seller Loan upon a customer's request or inquiry.
VII.2 NOTICES TO DEPOSITORS. Seller shall provide Purchaser
with a customer list (on paper and on a computer medium acceptable to Purchaser)
of the Deposit Accounts to be assumed as of forty-five (45) days prior to the
Closing. On the Closing Date, Seller shall provide a final customer list (on
paper and on a computer medium acceptable to Purchaser) of the Seller Deposit
Liabilities. With Seller's prior consent (which shall not be unreasonably
withheld), Purchaser may, prior to the Closing, communicate and mail
information, brochures, bulletins, press release, and other communications to
depositors of the Seller Office concerning the business and operations of
Purchaser.
VII.3 POST CLOSING RECONCILIATION.
(a) INCLEARING ITEMS. As of the opening of business on the
Closing Date, Seller shall expedite the clearing and sorting of all
checks, drafts, instruments and other commercial paper relative to the
Deposit Accounts (hereinafter collectively referred to as the "PAPER
Items"). For a period of ninety (90) days following the Closing Date
(the "INCLEARING PERIOD"), Seller shall continue to process checks or
drafts drawn on Deposits which are not intercepted by the Federal
Reserve Bank. On each banking day during the Inclearing Period, Seller
shall send to Purchaser by same-day courier all inclearing items
received for payment that day. Upon expiration of the Inclearing
Period, Seller shall cease honoring inclearing items presented against
the Deposit Accounts and such items shall be returned marked "Refer to
Maker." Seller and Purchaser shall settle amounts due under this
Section 7.03 by payment by wire transfer.
(b) ACH TRANSACTIONS. At least thirty (30) days prior to the
Closing Date, Seller shall deliver to Purchaser (i) copies of all ACH
origination forms for social security payments, and (ii) all other
records and information necessary for Purchaser to administer the ACH
transactions. For a period of one hundred twenty (120) days following
the Closing Date, Seller agrees to continue to accept and immediately
forward to Purchaser by telefacsimile all automated clearinghouse
entries ("ACH") and corresponding funds. Seller also agrees to include
the originator identification number, and Purchaser agrees to
immediately notify and instruct the originator of the ACH to reroute
the entries directly to Purchaser. Upon expiration of such one hundred
twenty (120) day period, Seller shall discontinue accepting and
forwarding ACH transactions to the Purchaser. Transactions will be
returned to the originators marked "Branch Sold to Another DFI," with
code R12 included as the reason for the return. All returns received by
Seller after the Closing Date for ACH transactions processed on or
before the Closing Date for any of the Deposit Accounts will be
provided by telefacsimile to Purchaser as received for appropriate
posting to the Deposit Accounts. Simultaneously, Seller shall make or
receive payment by wire transfer, as appropriate. Purchaser shall
notify Seller of any ACH returns which it initiates after the Closing
Date with respect to ACH transactions processed on or before the
Closing Date for any of the Deposit Accounts and Seller shall make any
payments by wire transfer.
(c) OVER-THE-COUNTER RETURNED ITEMS. For a period of ninety
(90) days following the Closing Date, Seller shall, by facsimile,
provide Purchaser with a list of any over-the-counter returned items on
the day they are received by Seller. Over-the-counter returned items
are those items that are included within the Seller Deposit Liabilities
transferred to Purchaser but that are returned unpaid to Seller after
the Closing Date. Seller shall send such items by same-day courier to
Purchaser for "next banking day" delivery. On the same day by wire
transfer, Purchaser shall credit Seller the sum of over-the-counter
returned items for which sufficient available funds were in the
applicable accounts to cover the over-the-counter returned items, and
Seller shall refund to Purchaser any Deposit Premium paid with respect
to such amounts. Purchaser agrees to prohibit withdrawals from, or
debits to, any Deposit Accounts which do not have a sufficient
available funds balance to cover any over-the-counter returned items
until such over-the-counter returned items are paid to Seller.
Notwithstanding the foregoing, Seller shall bear all liability for
items deposited or negotiated at the Seller Office prior to or on the
Closing Date and subsequently returned as uncollectible to the extent
that an overdraft is created immediately after (i) the exercise of
Purchaser's lawful rights of offset and (ii) the application of any
availability under any overdraft line of credit relating to the
affected account or accounts, provided that Purchaser shall handle
returned items expeditiously under the permanent rules established by
the Federal Reserve Bank in Regulation J and Regulation CC.
(d) WITHHOLDING. Seller shall deliver to Purchaser (i) 10
business days before and on the Closing Date, a list of all "B" (TINs
do not match) and "C" (under reporting/IRS imposed withholding) notices
from the IRS imposing withholding restrictions and (ii) for a period of
one hundred twenty (120) calendar days after the Closing Date, all
notices received by Seller from the IRS imposing or releasing
withholding restrictions on the Seller Deposit Liabilities. Any amounts
withheld by Seller up to and including the Closing Date shall be
remitted by Seller to the appropriate governmental agency on or prior
to the time they are due. Any withholding obligations required to be
remitted to the appropriate governmental agency up to and including the
Closing Date will be withheld and remitted by Seller. Any withholding
obligations required to be remitted to the appropriate governmental
agency after the Closing Date with respect to withholding obligations
after the Closing Date and not withheld by Seller as set forth above
will be remitted by Purchaser. Any penalties described on a "B" notice
from the IRS or any similar penalties that relate to the Seller Deposit
Liabilities opened by Seller prior to the Closing Date will be paid by
Seller promptly upon receipt of the notice (subject to Seller's rights
to contest such penalties).
(e) REPORTING OBLIGATIONS. Seller shall comply with all
federal and state income tax reporting requirements with respect to the
Seller Deposit Liabilities and interest paid thereon and all required
reporting with respect to IRAs through the Closing. Purchaser shall
comply with all federal and state income tax reporting requirements
with respect to the Seller Deposit Liabilities and interest paid
thereon and all required reporting with respect to IRAs after the
Closing. Seller shall provide TINs and any other information that may
be required by Purchaser in this regard.
(f) LOAN PAYMENTS. After the Closing Date, Seller will
forward to Purchaser loan payments received by Seller with respect to the Loans.
VII.4 EFFECT OF TRANSITIONAL ACTION. Except as and to the
extent expressly set forth in this Article VII, nothing contained in this
Article VII shall be construed to be an abridgement or nullification of the
rights, customs, and established practices under applicable banking laws and
regulations as they affect any of the matters addressed in this Article VII.
VII.5 EXPENSES. Except as and to the extent specifically
allocated otherwise herein, each of the parties hereto shall bear its own
expense, whether or not the transactions contemplated hereby are consummated.
VII.6 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES.
Respective covenants, representations and warranties of Purchaser and Seller
contained or referred to in this Agreement shall survive the Closing for a
period of five years and shall not be deemed to merge therewith or terminate
thereby.
VII.7 SUCCESSORS AND ASSIGNS. All of the obligations of the
parties hereunder, including without limitation, the indemnification obligations
in Sections 5.03, 5.04, and 5.05 shall be binding upon the successors and
assigns of the parties.
VII.8 WAIVERS. Each party hereto, by written instrument signed
by duly authorized officers of such party, may extend the time for the
performance of any of the obligations or other acts of the other party hereto
and may waive, but only as affects the party signing such instruments:
(a) Any inaccuracies in the representations or warranties of
the other party contained or referred to in this Agreement or in any
document delivered pursuant hereto.
(b) Compliance with any of the covenants or agreements of the
other party contained in this Agreement.
(c) The performance (including performance to the satisfaction
of a party or its counsel) by the other party of such of its
obligations set out herein.
(d) Satisfaction of any condition to the obligations of the
waiving party pursuant to this Agreement.
VII.9 NOTICES. Any notice or other communication required or
permitted pursuant to this Agreement shall be effective only if it is in writing
and delivered personally, by facsimile transmission, or by registered or
certified return-receipt mail, postage prepaid addressed as follows:
IF TO SELLER: REPUBLIC BANK & TRUST COMPANY
601 West Market Street
Louisville, Kentucky 40202-2700
Attention: Bill Petter, Chief Financial Officer
WITH COPIES TO: REPUBLIC BANK & TRUST COMPANY
601 West Market Street
Louisville, Kentucky 40202-2700
Attention: Steve Trager, Vice Chairman
IF TO PURCHASER: FIRST FEDERAL SAVINGS
BANK OF LEITCHFIELD
211 North Main Street
Leitchfield, Kentucy 42754
Attn: Robert T. Crawford, President
WITH COPIES TO: NATIONAL CITY BANCSHARES, INC.
227 Main Street
P.O. Box 868
Evansville, Indiana 47705-0868
Attn: Robert A. Keil, President
AND TO: BAKER & DANIELS
300 North Meridian Street, Suite 2700
Indianapolis, Indiana 46204-1782
Attn: David C. Worrell
or to such other person or address as any such party may designate by notice to
the other parties and shall be deemed to have been given as of the date
received.
VII.10 COOPERATION ON OPEN ITEMS AND OTHER MATTERS. After
Closing the parties agree to cooperate with each other with respect to the
processing of outstanding checks, ATM transactions and other open items which
originated prior to Closing.
VII.11 PARTIES IN INTEREST; ASSIGNMENT; AMENDMENT. This
Agreement is binding upon and is for the benefit of the parties hereto and their
respective successors, legal representatives, and assigns, and no person who is
not a party hereto (or a successor or assignee of such party, including FKB)
shall have any rights or benefits under this Agreement, either as a third party
beneficiary or otherwise. This Agreement cannot be assigned (except by operation
of law due to a merger of Purchaser or Seller with a third party or by
assignment to FKB or other banking affiliate of the assigning party who agrees
in writing to assume all of the obligations of the assigning party hereunder),
and this Agreement cannot be amended or modified, except by a written agreement
executed by the parties hereto or their respective successor and assigns.
VII.12 ENTIRE AGREEMENT. This Agreement supersedes any and all
oral or written agreements and understandings heretofore made relating to the
subject matter hereof and contains the entire agreement of the parties relating
to the subject matter hereof. Annexes and Appendices to this Agreement are
incorporated into this Agreement by reference and made a part hereof.
VII.13 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Kentucky, except
to the extent precluded by federal law of mandatory application.
VII.14 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
VII.15 RISK OF LOSS. Legal title, equitable title, and risk of
loss with respect to the Seller Assets shall not pass to Purchaser until the
Closing.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by the respective officers thereunto duly
authorized, all as of the date first above written.
FIRST FEDERAL SAVINGS BANK OF LEITCHFIELD
By: /s/
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Its:
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ATTEST:
By: /s/
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Its:
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REPUBLIC BANK & TRUST COMPANY
By: /s/
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Its:
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ATTEST:
By: /s/
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Its
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The exhibits to the Agreement have been omitted from this filing in reliance on
Rule 601(b)(2) of Regulation S-K. Republic Bancorp, Inc. will furnish
supplemental a copy of any omitted exhibit to the Securities and Exchange
Commission upon request.