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PURCHASE AND ASSUMPTION AGREEMENT
Between
SUNTRUST BANK
and
FLORIDAFIRST BANK
DECEMBER 6, 2001
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PURCHASE AND ASSUMPTION AGREEMENT
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TABLE OF CONTENTS
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ARTICLE I - CERTAIN DEFINITIONS...................................................................................1
Section 1.1 Certain Definitions..................................................................1
ARTICLE II - TRANSFER OF ASSETS AND LIABILITIES...................................................................8
Section 2.1 Transferred Assets...................................................................8
Section 2.2 Purchase Price......................................................................10
Section 2.3 Deposit Liabilities.................................................................13
Section 2.4 Loans...............................................................................14
Section 2.5 Employee Matters....................................................................15
Section 2.6 Security............................................................................18
Section 2.7 Proration; Other Closing Date Adjustments...........................................18
Section 2.8 Title Insurance and Survey for Real Property........................................19
Section 2.9 Environmental Matters...............................................................19
Section 2.10 Assumed Contracts...................................................................20
Section 2.11 Assumption of IRA Account Deposits..................................................20
Section 2.12 Books and Records...................................................................20
Section 2.13 No Duty To Cure.....................................................................21
Section 2.14 No Rights to Huntington Name........................................................21
ARTICLE III - CLOSING AND EFFECTIVE TIME.........................................................................22
Section 3.1 Effective Time......................................................................22
Section 3.2 Closing.............................................................................22
Section 3.3 Post Closing Adjustments............................................................24
ARTICLE IV - TRANSITIONAL MATTERS................................................................................25
Section 4.1 General.............................................................................25
Section 4.2 Notices to Customers and Others.....................................................26
Section 4.3 Direct Deposits.....................................................................27
Section 4.4 Direct Debit........................................................................27
Section 4.5 Interest Reporting and Withholding..................................................28
Section 4.6 ATM/Debit Cards.....................................................................29
Section 4.7 Data Processing Conversion for the Huntington Branches and
Handling of Certain Items...........................................................29
Section 4.8 Notices to Obligors on Loans........................................................30
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ARTICLE V - INDEMNIFICATION......................................................................................31
Section 5.1 Seller's Indemnification of Purchaser...............................................31
Section 5.2 Purchaser's Indemnification of Seller...............................................32
Section 5.3 Claims for Indemnity................................................................32
Section 5.4 Limitations on Indemnification......................................................33
Section 5.5 Treatment of Indemnification Payments...............................................34
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF SELLER............................................................34
Section 6.1 Corporate Organization; Corporate Authority.........................................35
Section 6.2 No Violation........................................................................35
Section 6.3 Enforceable Agreement...............................................................35
Section 6.4 No Brokers..........................................................................35
Section 6.5 Litigation and Regulatory Proceedings...............................................35
Section 6.6 Consents and Approvals..............................................................36
Section 6.7 Community Reinvestment Compliance...................................................36
Section 6.8 FDIC Insurance......................................................................36
Section 6.9 Employment Contracts................................................................36
Section 6.10 Limitation of Representations and Warranties........................................36
ARTICLE VII - REPRESENTATIONS AND WARRANTIES OF PURCHASER........................................................36
Section 7.1 Corporate Organization; Corporate Authority.........................................37
Section 7.2 No Violation........................................................................37
Section 7.3 Enforceable Agreement...............................................................37
Section 7.4 No Brokers..........................................................................37
Section 7.5 Litigation and Regulatory Proceedings...............................................37
Section 7.6 Consents and Approvals..............................................................38
Section 7.7 Regulatory Capital and Condition....................................................38
Section 7.8 Financing...........................................................................38
Section 7.9 Community Reinvestment Act Compliance...............................................38
ARTICLE VIII - OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME..........................................38
Section 8.1 Full Access.........................................................................38
Section 8.2 Application for Approval............................................................39
Section 8.3 Conduct of Business.................................................................40
Section 8.4 Solicitation of Customers and Employees.............................................40
Section 8.5 Efforts to Consummate; Further Assurances...........................................41
Section 8.6 Fees and Expenses...................................................................41
Section 8.7 Third Party Consents................................................................41
Section 8.8 Insurance...........................................................................41
Section 8.9 Public Announcements................................................................42
Section 8.10 Tax Reporting.......................................................................42
Section 8.11 Advise of Changes...................................................................42
Section 8.12 Non-Solicitation of Transactions....................................................43
Section 8.13 Supplements to Schedules............................................................43
Section 8.14 Physical Damage to Huntington Branches..............................................43
Section 8.15 Inspection of Branches and Operating Systems........................................44
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Section 8.16 Vendor Contracts....................................................................44
ARTICLE IX - CONDITIONS TO PURCHASER'S OBLIGATIONS...............................................................45
Section 9.1 Representations and Warranties True.................................................45
Section 9.2 Obligations Performed...............................................................45
Section 9.3 Delivery of Documents...............................................................45
Section 9.4 Regulatory Approval.................................................................45
Section 9.5 No Legal Prohibition................................................................45
Section 9.6 No Litigation.......................................................................45
Section 9.7 No Seller Material Adverse Effect...................................................46
ARTICLE X - CONDITIONS TO SELLER'S OBLIGATIONS...................................................................46
Section 10.1 Representations and Warranties True.................................................46
Section 10.2 Obligations Performed...............................................................46
Section 10.3 Delivery of Documents...............................................................46
Section 10.4 Regulatory Approval.................................................................46
Section 10.5 No Legal Prohibition................................................................47
Section 10.6 Florida Franchise Closing...........................................................47
ARTICLE XI - TERMINATION.........................................................................................47
Section 11.1 Methods of Termination..............................................................47
Section 11.2 Procedure Upon Termination..........................................................48
Section 11.3 Payment of Expenses.................................................................49
ARTICLE XII - MISCELLANEOUS PROVISIONS...........................................................................49
Section 12.1 Amendment and Modification; Waiver..................................................49
Section 12.2 Survival............................................................................49
Section 12.3 Assignment..........................................................................49
Section 12.4 Confidentiality.....................................................................50
Section 12.5 Addresses for Notices, Etc..........................................................50
Section 12.6 Counterparts........................................................................51
Section 12.7 Headings............................................................................51
Section 12.8 Governing Law.......................................................................51
Section 12.9 Entire Agreement....................................................................51
Section 12.10 No Third Party Beneficiaries........................................................51
Section 12.11 Calculation of Dates and Deadlines..................................................52
Section 12.12 Consent to Jurisdiction; Waiver of Jury Trial.......................................52
Section 12.13 Severability........................................................................52
Section 12.14 Specific Performance................................................................52
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PURCHASE AND ASSUMPTION AGREEMENT
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THIS PURCHASE AND ASSUMPTION AGREEMENT (this "Agreement") is entered
into as of December 6, 2001, by and between SUNTRUST BANK, a Georgia state bank
having its principal offices in Atlanta, Georgia ("Seller"), and FLORIDAFIRST
BANK, a federally chartered savings bank having its principal offices in
Lakeland, Florida ("Purchaser"):
W I T N E S S E T H:
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WHEREAS, pursuant to a Purchase and Assumption Agreement among Seller,
Huntington Bancshares Incorporated and The Huntington National Bank dated as of
September 25, 2001 (the "Huntington Agreement"), Seller has agreed to acquire
certain assets, deposits and other liabilities in connection with The Huntington
National Bank's consumer and commercial branch banking business in the State of
Florida (the "Florida Franchise");
WHEREAS, Seller wishes to divest itself of certain assets, deposits and
other liabilities associated with seven (7) branches included as part of the
Florida Franchise and listed on Schedule 1.1(a) to this Agreement (the
"Huntington Branches"); and
WHEREAS, Purchaser wishes to purchase such assets and assume certain
specified liabilities relating to the Huntington Branches upon the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, Seller and Purchaser agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
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Section 1.1 Certain Definitions.
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(a) The terms set forth below are used in this Agreement with the
following meanings:
"ACH" shall have the meaning set forth in Section 4.3.
"ADA" shall mean the United States Americans with Disabilities Act.
"Advisory Agreement" shall have the meaning set forth in the definition
of Brokerage and Advisory Assets.
"Adjustment Payment Date" shall have the meaning set forth in Section
3.3(c).
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlled by, controlling or under common control with
such Person.
"Agreement" shall have the meaning set forth in the recitals hereto.
"Assumed Contracts" shall have the meaning set forth in Section 2.10.
"Assignment and Assumption Agreement" shall have the meaning set forth
in Section 3.2(b)(3).
"ATMs" shall have the meaning set forth in Section 2.1(a)(1).
"Average Deposit Balance" shall mean the average of the daily closing
balances of the Deposits on each calendar day during the thirty (30) day period
ending on (and including) the day prior to February 15, 2001.
"Banking Operations" shall mean the business and operations of the
Huntington Branches.
"Branch Loans" shall have the meaning set forth in Section 2.4(a).
"Brokerage Account Agreement" shall have the meaning set forth in the
definition of Brokerage and Advisory Assets.
"Brokerage and Advisory Assets" shall mean (i) the customer account
agreements between Huntington Investment Company ("HIC"), or Seller, as
applicable, and customers of the Huntington Branches relating to accounts
maintained through one of the Huntington Branches in connection with HIC's or
Seller's business of providing investment products (including mutual funds,
fixed income products, equities, equity options and fixed and variable
annuities) to such customers ("Brokerage Account Agreements"), (ii) all of
Huntington's or Seller's, as applicable, rights to or interests in any
commissions or income arising from the sale of such products pursuant to
Brokerage Account Agreements and not paid prior to the Effective Time and (iii)
the advisory agreements between HIC or Seller, as applicable, and customers of
the Huntington Branches relating to HIC's or Seller's sponsored mutual fund
asset allocation product ("Advisory Agreements").
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banks in Columbus, Ohio, Atlanta, Georgia or the State of Florida
are authorized or required to close for regular banking business.
"Claim Limitation Anniversary" shall have the meaning set forth in
Section 5.3(a).
"Closing" shall have the meaning set forth in Section 3.1.
"Closing Date" shall have the meaning set forth in Section 3.1.
"Closing Statement" shall have the meaning set forth in Section
3.2(b)(5).
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"COBRA" shall mean the continuation coverage requirements of Section
601 et seq. of ERISA and Section 4980B of the Code.
"Code" shall mean the Internal Revenue Code of 1986, as amended to the
date hereof.
"Coins and Currency" shall mean all petty cash, vault cash, teller
cash, ATM cash, and cash equivalents located at the Real Property (exclusive of
the contents of any safe deposit boxes) as of the Effective Time.
"Comparable Job Offer" shall have the meaning set forth in Section
2.5(a).
"Confidentiality Agreement" shall mean the Confidentiality Agreement,
dated as of October 31, 2001, among Seller and Purchaser.
"CRA" shall mean the Community Reinvestment Act of 1977 and the
regulations promulgated thereunder.
"Defect" shall have the meaning set forth in Section 2.13.
"Deposits" shall have the meaning set forth in Section 2.3(a).
"Deposit Liabilities" shall have the meaning set forth in Section
2.3(a).
"Effective Time" shall have the meaning set forth in Section 3.1.
"Employees" shall have the meaning set forth in Section 2.5(a).
"Environmental Costs" shall mean any site investigation, monitoring,
cleanup, remedial, removal or restoration costs (and any related claims,
judgments, damages, penalties, fines, costs or loss (including reasonable fees
for attorneys, consultants and experts)) required by any Governmental Authority
(including any court) to be incurred by Purchaser or Seller because of the
presence of Indemnified Environmental Matters as is necessary for the Real
Property and the facilities thereon to be or become in compliance with
applicable Environmental Laws with respect to such Indemnified Environmental
Matters, including the costs of obtaining closure of such matters with the
Florida Department of Protection or other applicable Governmental Authority
within a reasonable period of time.
"Environmental Laws" shall mean any law, statute, rule or regulation
applicable to the Banking Operations or the related Real Property or the
facilities thereon which governs pollution, contamination, emissions, discharges
or releases of hazardous materials into air, surface, water, groundwater, soil,
land surface or subsurface strata, buildings or facilities.
"Environmental Matters" shall mean any pollution, contamination,
emissions, discharges or releases of hazardous materials into air, surface,
water, groundwater, soil, land surface or subsurface strata, buildings or
facilities in violation of applicable Environmental Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974
(as amended from time to time).
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"Excluded Assets" shall have the meaning set forth in Section 2.1(b).
"Excluded Liabilities" shall have the meaning set forth in Section
2.2(c).
"Excluded IRA Account Deposits" shall have the meaning set forth in
Section 2.11(b).
"Existing Environmental Reports" shall have the meaning set forth in
Section 2.9(a).
"Fair Market Value" shall have the meaning set forth in Section 2.2(f).
"Federal Funds Rate" shall mean the average of the high and low rates
quoted for Federal Funds in the Money Rates column of The Wall Street Journal
from the Effective Time adjusted as such average may increase or decrease during
the period between the Effective Time and the date of the applicable payment.
"Federal Reserve Board" shall have the meaning set forth in Section
8.2(b).
"Florida Franchise" shall have the meaning set forth in the recitals
hereto.
"Florida Franchise Closing Date" shall mean the closing date for the
purchase of the Florida Franchise by Seller from Huntington.
"FMLA" shall mean the Family and Medical Leave Act of 1993 (as amended
from time to time).
"Governmental Authority" shall mean any government or any agency,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government having authority in the
United States, whether federal, state or local.
"Huntington" shall mean Huntington Bancshares Incorporated, The
Huntington National Bank, or any of their applicable direct or indirect
subsidiaries.
"Huntington Agreement" shall have the meaning set forth in the recitals
hereto.
"Huntington Branches" shall have the meaning set forth in the recitals
hereto, and shall be the branches at the locations set forth on Schedule 1.1(a).
"Huntington Covenants" shall have the meaning set forth in Section 8.3.
"Huntington Representations and Warranties" shall have the meaning set
forth in the introduction to Article VI.
"Indemnified Environmental Matters" means any Environmental Matters to
the extent identified in the Existing Environmental Reports as being present
prior to the Effective Time in, on or under the Real Property and the facilities
thereon, or, to the knowledge of Seller or Huntington, to the extent identified
in any other environmental assessment conducted by Huntingon or Seller prior to
the Effective Time as being present prior to the Effective Time in, on or under
the Real Property and the facilities thereon.
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"IRA" shall mean an "individual retirement account" or similar account
created by a trust for the benefit of any individual or his beneficiaries in
accordance with the provisions of Section 408 of the Code.
"Knowledge" shall mean, (i) with respect to Seller, the actual
knowledge of the Persons set forth on Annex A following reasonable inquiry into
the matters in question, (ii) with respect to Huntington, the actual knowledge
of the Persons set forth on Annex B following reasonable inquiry into the
matters in question, and (iii) with respect to Purchaser, the actual knowledge
of the Persons set forth on Annex C following reasonable inquiry into the
matters in question.
"Loans" shall have the meaning set forth in Section 2.4(a).
"Loan Broker Contracts" shall mean those contracts and agreements
pursuant to which third-party brokers originate home equity loans and home
equity credit lines that would constitute Loans if arising prior to the
Effective Time.
"Losses" shall mean losses, liabilities, damages, costs and expenses
(including reasonable attorneys' fees) incurred or suffered by the indemnified
party or its Affiliates in connection with the matters described in Article V,
net of any amounts actually recovered by the indemnified party under insurance
policies (other than any self-insurance) with respect to such Loss, and (i)
increased to take account of any net tax cost (other than a reduction in tax
basis) incurred by the indemnified party arising from the receipt of indemnity
payments hereunder (grossed up for such increase) and (ii) reduced to take
account of any net tax benefit actually recognized for tax purposes by the
indemnified party arising from the incurrence or payment of any such Loss, in
each case when and as such tax cost or tax benefit is actually recognized for
tax purposes through an increase or reduction of taxes otherwise due.
"Net Book Value" shall mean (i) with respect to the leasehold
improvements associated with the Personal Property, the other Transferred Assets
(other than the Loans and the Overdrafts) and the Other Liabilities, the value
of those assets and/or liabilities as carried on Huntington's books and records
based on Huntington's internal accounting procedures, or Seller's books and
records based on Seller's internal accounting procedures, as applicable (as such
procedures have been previously disclosed to Purchaser), consistently applied,
and (ii) with respect to the Loans and the Overdrafts, the aggregate principal
amount thereof, plus accrued and unpaid interest thereon and with respect to
Loans, net of loan loss reserves of 240 basis points of Loans as of the Closing
Date.
"Non-Transferred Records" shall have the meaning set forth in Section
2.12(a).
"Order" shall have the meaning set forth in Section 9.4.
"Original Price" shall have the meaning set forth in Section 3.3(b).
"Other Liabilities" shall mean the liabilities of Seller relating to
the Transferred Assets set forth on Schedule 1.1(b) hereto.
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"Overdrafts" shall mean overdrafts of the book balance of any accounts
constituting Deposit Liabilities and all consumer lines of credit made available
to customers of the Huntington Branches as a protection against overdrafts of
such accounts.
"Person" shall mean any individual, association, corporation, limited
liability company, partnership, limited liability partnership, trust or any
other entity or organization, including any Governmental Authority.
"Personal Property" shall mean the personal property of Seller located
at the Real Property consisting of the furniture, fixtures, equipment, security
systems, safe deposit boxes (exclusive of contents), vaults and other tangible
personal property that are owned by Seller and are located on or affixed to the
Real Property, in each case as of the Effective Time, and any of such items on
order at the Effective Time.
"Personal Property Leases" shall mean all leases of Personal Property.
"Pre-Closing Balance Sheet" shall have the meaning set forth in Section
2.2(e).
"Pre-Closing Balance Sheet Date" shall have the meaning set forth in
Section 2.2(e).
"Post-Closing Balance Sheet" shall have the meaning set forth in
Section 3.3(a).
"Post-Closing Balance Sheet Delivery Date" shall have the meaning set
forth in Section 3.3(a).
"Property Price" shall mean the Fair Market Value attributable to each
Huntington Branch.
"Purchase Price" shall have the meaning set forth in Section 2.2(a).
"Purchase Right" shall have the meaning set forth in Section 5.1.
"Purchaser" shall have the meaning set forth in the recitals hereto.
"Purchaser Material Adverse Effect" shall mean an event, occurrence or
circumstance, individually or in the aggregate, that has had or is reasonably
likely to have a material adverse effect on Purchaser's ability to timely
perform its obligations under this Agreement or consummate the transactions
contemplated by this Agreement; provided, that a Purchaser Material Adverse
Effect shall not include (w) events or conditions resulting from general
economic conditions, including changes in interest rates and stock market
valuations, and other economic events or economic conditions generally affecting
the financial services industry either in Florida or nationwide (including as
may result from any terrorist attacks, any war, any armed hostilities or any
other national or international response related thereto), (x) changes in
accounting practices or changes to statutes, regulations or regulatory policies
generally applicable to financial service companies, or (y) events, impacts or
conditions caused by the public announcement of, and response or reaction of
customers, vendors, licensors or Employees to, this Agreement or any of the
transactions contemplated by this Agreement.
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"Purchaser's 401(k) Plan" shall mean any qualified cash or deferred
arrangement (within the meaning of Section 401(k) of the Code) maintained by
Purchaser.
"Real Property" shall have the meaning set forth in Section 2.1(a)(1).
"Regulatory Approvals" shall mean all regulatory approvals that are
required in order to consummate the transactions contemplated by this Agreement,
including those required by Seller in order to purchase the Florida Franchise
from Huntington, and including the expiration of all waiting periods thereunder
(including any extensions thereof).
"Revised Price" shall have the meaning set forth in Section 3.3(b).
"Safe Deposit Contracts" shall mean all safe deposit contracts and
leases for the safe deposit boxes located at the Real Property as of the
Effective Time.
"SEC" shall mean the Securities and Exchange Commission.
"Seller" shall have the meaning set forth in the recitals hereto.
"Seller's 401(k) Plan" shall mean any qualified cash or deferred
arrangement (within the meaning of Section 401(k) of the Code) maintained by
Seller.
"Seller Material Adverse Effect" shall mean an event, occurrence or
circumstance, individually or in the aggregate, that has had or is reasonably
likely to have a material adverse effect on (i) the business, operations or
financial condition of the Huntington Branches, taken as a whole, or (ii)
Seller's ability to timely perform its obligations under this Agreement or
consummate the transactions contemplated by this Agreement; provided, that a
Seller Material Adverse Effect shall not include (w) events or conditions
resulting from general economic conditions, including changes in interest rates
and stock market valuations, and other economic events or economic conditions
generally affecting the financial services industry either in Florida or
nationwide (including as may result from any terrorist attacks, any war, any
armed hostilities or any other national or international response related
thereto), (x) changes in accounting practices or changes to statutes,
regulations or regulatory policies generally applicable to financial service
companies, or (y) events, impacts or conditions caused by the public
announcement of, and response or reaction of customers, vendors, licensors or
Employees to, this Agreement or any of the transactions contemplated by this
Agreement.
"Software Licenses" shall have the meaning set forth in Section
2.1(a)(3).
"Tellers and Platform Employees" shall have the meaning set forth in
Section 2.5(a).
"Tenant Leases" shall have the meaning set forth in Section 2.1(a)(2).
"Title Commitments" shall have the meaning set forth in Section 2.8.
"Transaction Account" shall mean accounts at Huntington Branches in
respect of which deposits there are withdrawable in practice or upon demand or
upon which third party drafts may
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be drawn by the depositor, including checking accounts, negotiable order of
withdrawal (NOW) accounts and money market deposit accounts.
"Transfer Date" shall have the meaning set forth in Section 2.5(a).
"Transferred Assets" shall have the meaning set forth in Section
2.1(a).
"Transferred Employees" shall have the meaning set forth in Section
2.5(a).
"Transferred Liabilities" shall have the meaning set forth in Section
2.2(b).
"Trust Accounts" shall mean Huntington's or Seller's fiduciary and
non-fiduciary trust, custody, estate administration and guardian administration
accounts.
"Trust Account Assets" shall mean all Trust Agreements and any rights
of Huntington or Seller to the physical assets of Trust Accounts or to hold the
physical assets of Trust Accounts in accordance with Trust Agreements.
"Trust Agreement" shall mean any contract or agreement which creates,
modifies or governs a Trust Account.
"WARN" shall have the meaning set forth in Section 2.5(e).
(b) The words "include" and "including" as used herein shall be deemed
to be followed by the phrase "without limitation." References to an Article,
Section, Exhibit or Schedule shall be deemed to be references to an Article or
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. The words "hereof," "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term.
ARTICLE II
TRANSFER OF ASSETS AND LIABILITIES
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Section 2.1 Transferred Assets.
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(a) As of the Effective Time, and subject to the terms and conditions
set forth herein, Seller will sell, assign, transfer, convey, and deliver to
Purchaser, and Purchaser will purchase from Seller any and all right, title and
interest of Seller in and to the following assets attributable to the Huntington
Branches, except as otherwise excluded from sale pursuant to the provisions of
Section 2.1(b) below (collectively, the "Transferred Assets"):
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(1) subject to Sections 2.8 and 2.9 hereof, all of Seller's
transferable fee simple right, title and interest in and to the real estate and
the related improvements and fixtures including automated teller machines
("ATMs") located at the Huntington Branches described on Schedule 2.1(a)(1)
hereto, together with all assignable real property rights and appurtenances
pertaining thereto (collectively, the "Real Property"); provided, however, that
at the election of the Seller prior to the Effective Time, the Seller shall be
entitled to exclude any Real Property from the definition of "Transferred
Assets," so long as at the Effective Time Seller agrees to lease to Purchaser
such Real Property so excluded on commercially reasonable terms based on the
Fair Market Values of such properties as set forth on Schedule 2.2(f); provided,
further, that if Seller shall lease any Real Property to Purchaser, such lease
terms shall include for the benefit of the Purchaser or any successor or
assignee of the Purchaser operating the banking business at such facility, an
initial lease term of five years and a perpetual right of renewal of such lease
not later than twenty-four months prior to any lease term expiration date,
rights of assignment and sublet of such lease without Seller's consent, and a
first option to purchase such Real Property at the then current fair market
values of such Real Property as calculated at the time of the exercise of the
option;
(2) Any leases or subleases of space in any Huntington Branches under
which Huntington or Seller (or one of their Affiliates) are the lessors or
sublessors, as identified in Schedule 2.1(a)(2)(i) (collectively, the "Tenant
Leases"), and the lease relating to the ATM located at the Huntington Branch as
described in Schedule 2.1(a)(2)(ii);
(3) all software licenses relating to the Huntington Branches and
listed on Schedule 2.1(a)(3), to the extent that Purchaser elects prior to the
Effective Time by written notice to Seller to include such software licenses in
the Transferred Assets (the "Software Licenses");
(4) all Personal Property and all Personal Property Leases, a complete
and accurate list of which leases are listed on Schedule 2.1(a)(4);
(5) all Safe Deposit Contracts with two keys to each unrented safe
deposit box located at the Huntington Branches;
(6) all Loans (a complete and accurate list of which, as of the dates
set forth on Schedule 2.1(a)(6), is set forth on such Schedule), including the
collateral therefor and (except to the extent set forth in Section 2.1(b)) the
servicing rights under the Loans for which Huntington has retained servicing
rights;
(7) all Overdrafts;
(8) all Assumed Contracts;
(9) all routing and transit numbers with respect to the Huntington
Branches; and
(10) all Coins and Currency.
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(b) The following items shall be excluded from the Transferred Assets
(collectively, the "Excluded Assets"):
(1) the proprietary merchandising equipment and other assets listed on
Schedule 2.1(b) hereto;
(2) Seller's rights in and to the names "STI", "SunTrust", "SunTrust
Bank", any of its predecessor banks' names, and any of Seller's or Seller's
predecessors' corporate logos, trademarks, trade names, signs, paper stock
forms, and other supplies containing any such logos, trademarks, or trade names;
(3) all Brokerage and Advisory Assets;
(4) all Trust Account Assets;
(5) any regulatory licenses (other than any assignable regulatory
license primarily related to the Transferred Assets, which shall constitute
Transferred Assets) or any other nonassignable licenses and permits;
(6) any deposit account or other service related to the Brokerage and
Advisory Assets and Trust Account Assets of Seller or Huntington at any office
of Seller or Huntington or their Affiliates that may be linked to the Deposits;
(7) any tax refunds, tax credits or deferred tax assets applicable to
periods prior to the Effective Time;
(8) all personal property utilized primarily in the conduct of lines of
business not being transferred hereunder pursuant to this Section 2.1(b);
(9) all software licenses and leases not set forth on Schedule
2.1(a)(3);
(10) the Loan Broker Contracts;
(11) any assets related to any of Seller's benefit plans; and
(12) all of the contracts and agreements listed on Schedule 2.1(b).
Section 2.2 Purchase Price.
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(a) As consideration for the purchase of the Huntington Branches,
Purchaser shall pay Seller a purchase price (the "Purchase Price") equal to the
sum of the following:
(1) the Fair Market Value of the Real Property;
(2) a premium for the Deposits and franchise value assigned to the
Huntington Branches equal to 7.61% of the Average Deposit Balance;
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(3) the Net Book Value of the Loans, the Overdrafts, the Personal
Property and the other Transferred Assets (other than the Real Property, the
Tenant Leases and the Coins and Currency) as of the Effective Time; and
(4) the face amount of the Coins and Currency.
(b) In addition, Purchaser shall assume as of the Effective Time and
pay, perform and discharge as of or after the Effective Time, as the case may
be, all of the duties, obligations, and liabilities of Seller or Huntington from
and after the Effective Time relating to the following (the "Transferred
Liabilities"):
(1) the Deposit Liabilities and all terms and agreements relating
thereto (including all of Seller's or Huntington's responsibilities with respect
to (w) cashier checks issued prior to the Effective Time, (x) the abandoned
property laws of any applicable state, (y) any legal process that is served on
Seller or Huntington on or before the Closing Date with respect to claims
against or for the Deposit Liabilities that does not exceed the amount of the
applicable Deposit(s) (except to the extent attributable to any act or omission
taken or omitted to be taken by Seller or Huntington prior to the Effective
Time) and (z) any other applicable laws (except to the extent attributable to
any act or omission taken or omitted to be taken by Seller or Huntington prior
to the Effective Time in violation of any such laws));
(2) the Real Property and the Personal Property;
(3) the Tenant Leases, the Personal Property Leases and other property
leased under such leases, and the lease relating to the ATM located at the
Huntington Branch as described in Schedule 2.1(a)(2)(ii);
(4) the Software Licenses;
(5) the Safe Deposit Contracts (including all of Seller's or
Huntington's duties, obligations and responsibilities with respect to (x) any
legal process that is served on Seller or Huntington on or before the Closing
Date with respect to claims against or for the contents thereof (except to the
extent attributable to any act or omission taken or omitted to be taken by
Seller or Huntington prior to the Effective Time in violation of the applicable
Safe Deposit Contract or applicable law) and (y) any other applicable laws
(except to the extent attributable to any act or omission taken or omitted to be
taken by Seller or Huntington prior to the Effective Time in violation of any
such laws));
(6) the Loans and the servicing thereof (except to the extent that such
Loan or servicing constitutes an Excluded Asset);
(7) the Overdrafts;
(8) the Assumed Contracts; provided, however that Purchaser shall not
assume any liabilities, duties or obligations arising under any Assumed Contract
that is
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not assigned to Purchaser at the Closing due to the failure to receive a
necessary consent or otherwise; and
(9) all liabilities, duties and obligations expressly assumed by
Purchaser pursuant to Section 2.5 (excluding liabilities and obligations (w)
relating to acts or omissions of Seller or Huntington, (x) under any benefit
plans of Huntington or Seller, (y) relating to compensation, benefits or other
claims or amounts for periods prior to the Effective Time and (z) expressly
retained by Seller or Huntington pursuant to Section 2.5(f)).
(c) Notwithstanding anything to the contrary contained herein,
Purchaser shall not assume any duties, obligations or liabilities of Seller or
Huntington of any kind, whether known, unknown, contingent or otherwise, (i) not
relating to the Transferred Assets or the Transferred Liabilities, (ii)
attributable to any acts or omissions to act taken or omitted to be taken by
Seller or Huntington (or any of their direct or indirect Subsidiaries) prior to
the Effective Time in violation of any applicable laws, contracts or fiduciary
duties, (iii) attributable to any actions, causes of action, claims, suits or
proceedings or violations of law or regulation attributable to any acts or
omissions to act taken or omitted to be taken by Huntington or Seller (or any of
their direct or indirect Subsidiaries) prior to the Effective Time, (iv)
relating to tax accruals of Huntington or Seller (or any of their direct or
indirect Subsidiaries) or (v) arising from circumstances, events or conditions
prior to the Effective Time and not expressly assumed hereunder (the "Excluded
Liabilities"). Without limiting the generality of the foregoing, it is not the
intention that the assumption by Purchaser of the Assumed Liabilities shall in
any way enlarge the rights of any third parties relating thereto. Nothing
contained in this Agreement shall prevent any party hereto from contesting
matters relating to the Assumed Liabilities with any third party obligee. From
and after the Effective Time, (i) Purchaser shall have complete control over the
payment, settlement or other disposition of the Assumed Liabilities and the
right to commence, control and conduct all negotiations and proceedings with
respect thereto, and (ii) Seller shall have complete control over the payment,
settlement or other disposition of the Excluded Liabilities and the right to
commence, control and conduct all negotiations and proceedings with respect
thereto. Except as otherwise provided in Article IV or any transition plan
entered into thereunder, (i) Seller shall promptly notify Purchaser of any claim
made against it with respect to the Assumed Liabilities or the Transferred
Assets and shall not voluntarily make any payment of, settle or offer to settle,
or consent or compromise or admit liability with respect to, any Assumed
Liabilities or Transferred Assets, and (ii) Purchaser shall promptly notify
Seller of any claim made against it with respect to the Excluded Liabilities or
the Excluded Assets and shall not voluntarily make any payment of, settle or
offer to settle, or consent or compromise or admit liability with respect to,
any Excluded Liabilities or Excluded Assets.
(d) All real property sales and transfer taxes that are payable or that
arise as a result of the consummation of the transactions contemplated hereby
shall be paid one-half by Purchaser and one-half by Seller.
(e) Seller shall prepare, in consultation with Purchaser, a balance
sheet (the "Pre-Closing Balance Sheet") as of a date not earlier than thirty
(30) days, or later than three (3) Business Days, prior to the Effective Time
anticipated by the parties (the "Pre-Closing Balance
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Sheet Date") based on Seller's or Huntington's books and records, as applicable.
Seller agrees to pay to Purchaser at the Closing (as defined in Section 3.1
hereof), in immediately available funds, the excess amount, if any, of the sum
of (x) the amount of Deposit Liabilities assumed by Purchaser pursuant to
paragraph (b) above and (y) the Net Book Value of the Other Liabilities, each of
(x) and (y) as reflected by the Pre-Closing Balance Sheet, over the aggregate
Purchase Price computed in accordance with paragraph (a) above, as reflected by
the Pre-Closing Balance Sheet. Purchaser agrees to pay Seller at the Closing, in
immediately available funds, the excess, if any, of the aggregate Purchase Price
computed in accordance with paragraph (a) above, as reflected by the Pre-Closing
Balance Sheet, over the sum of (x) the amount of Deposit Liabilities assumed by
Purchaser pursuant to paragraph (b) above and (y) the Net Book Value of the
Other Liabilities, each of (x) and (y) as reflected by the Pre-Closing Balance
Sheet. All amounts paid at the Closing shall be subject to subsequent adjustment
based on the Post-Closing Balance Sheet (as defined in Section 3.3(a) hereof).
(f) The "Fair Market Value" of the Real Property is set forth on
Schedule 2.2(f) attached hereto, with each Huntington Branch's Property Price
being as indicated in Schedule 2.2(f).
(g) Within (30) days after the Closing Date, Seller and Purchaser shall
agree on the allocation of the Purchase Price, provided that such allocation
shall be consistent with the allocation agreed upon between Seller and
Huntington pursuant to the Huntington Agreement. Seller and Purchaser shall
jointly and properly execute and complete Internal Revenue Service Form 8594,
and any other forms or statements required by the Code, Treasury Regulations or
the Internal Revenue Service, together with any and all attachments required to
be filed therewith. Seller and Purchaser shall timely file any such forms and
statements with the Internal Revenue Service. To the extent consistent with
applicable law, Seller and Purchaser shall not file any tax return or other
documents or otherwise take any position with respect to taxes which is
inconsistent with such allocation of the final Purchase Price, provided,
however, that neither Seller nor Purchaser shall be obligated to litigate any
challenge to such allocation of the final Purchase Price by any Governmental
Authority. Seller and Purchaser shall promptly inform one another of any
challenge by any Governmental Authority to any allocation made pursuant to this
paragraph and agree to consult with and keep one another informed with respect
to the state of, and any discussion, proposal or submission with respect to,
such challenge.
Section 2.3 Deposit Liabilities.
--------------------
(a) "Deposit Liabilities" shall mean all of Seller's rights, duties,
obligations and liabilities relating to the deposits ("Deposits") that are
booked at each of the Huntington Branches (including accrued but unpaid or
uncredited interest thereon and uncollected funds related thereto) as of the
Effective Time (or, solely for the purpose of determining the Average Deposit
Balance, on the dates determined in accordance with the definition of the
Average Deposit Balance) and that constitute "deposits" for purposes of the
Federal Deposit Insurance Act, 12 U.S.C. Section 1813, but excluding (i) deposit
liabilities with respect to accounts registered in the name of a trust for which
Huntington or Seller serves as trustee or accounts for which Huntington or
Seller serves as a fiduciary, unless the transfer of such deposit liabilities to
Purchaser is reasonably necessary to satisfy any Regulatory Approvals and such
deposit liabilities are capable of assignment (in which case the premium
assigned to such specific
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deposits required to be so transferred would be 3.0% of the Average Deposit
Balance of such specific deposits required to be so transferred for purposes of
calculating the Purchase Price), (ii) deposit liabilities with respect to
accounts booked by Huntington at any Huntington Branch for which Huntington
serves as guardian or custodian that, by their terms or by applicable law, are
not capable of assignment, (iii) deposit liabilities with respect to Excluded
IRA Account Deposits, (iv) deposit liabilities with respect to accounts
associated with or securing lines of credit or loans where the line of credit or
loan is excluded in accordance with Section 2.4(b), unless, in the case of
deposit liabilities asssociated with or securing lines of credit or loans
excluded in accordance with Section 2.4(b)(4), either (x) Purchaser by written
notice to Seller during the Election Period elects to include such deposit
liabilities as Deposit Liabilities and Deposits for purposes of this Agreement
or (y) the transfer of such deposit liabilities to Purchaser is reasonably
necessary to satisfy any Regulatory Approvals (in which case, in the case of
this clause (y), the premium assigned to such specific deposits required to be
so transferred would be 3.0% of the Average Deposit Balance of such specific
deposits required to be so transferred for purposes of calculating the Purchase
Price), (v) deposit liabilities with respect to accounts that Huntington or
Seller is not permitted to transfer or otherwise dispose of pursuant to
applicable law or contract, (vi) deposit liabilities to the extent constituting
off balance sheet sweeps and off balance sheet AFI accounts, (vii) deposit
liabilities of customers where the primary customer relationship is through a
trust or brokerage relationship unless the transfer of such deposit liabilities
to Purchaser is reasonably necessary to satisfy any Regulatory Approvals (in
which case the premium assigned to such specific deposits required to be so
transferred would be 3.0% of the Average Deposit Balance of such specific
deposits required to be so transferred for purposes of calculating the Purchase
Price), and (viii) Excluded Liabilities.
(b) Seller does not represent or warrant that any deposit customers
whose accounts are assumed by Purchaser will become or continue to be customers
of Purchaser after the Effective Time.
Section 2.4 Loans.
------
(a) "Loans" shall mean, collectively, all of Seller's rights, duties,
obligations and liabilities relating to loans and other extensions of credit in
connection with the operation of the Huntington Branches as follows: (i) all
loans and other extensions of credit (other than Overdrafts) booked at the
Huntington Branches as of the Effective Time ("Branch Loans"); and (ii) all
residential mortgage loans in the Huntington Branches and booked on Seller's or
an Affiliate's accounting systems as an earning asset as of the Effective Time;
provided that the Loans shall not include any loans or other extensions of
credit described in paragraph (b) below or any servicing rights or obligations
constituting Excluded Assets.
(b) Notwithstanding the provisions of paragraph (a) above, the Loans
shall not include:
(1) any loans excluded from the Transferred Assets under Section
2.1(b);
(2) loans made after July 31, 2001 by Huntington that are not made in a
manner consistent with past practice as relates to the normal and customary
credit
-14-
standards and policies of Huntington and that are identified by Seller to
Huntington (pursuant to the Huntington Agreement) in writing, with a copy to
Purchaser, at least four (4) Business Days prior to the Effective Time;
(3) loans made on or before July 31, 2001 that are materially modified
thereafter (other than collection and work-out procedures undertaken in a manner
consistent with Huntington's past practice) such that the loans, if they had
been made as of the date that they are so modified, would not be consistent with
past practice as relates to the normal and customary credit standards and
policies of Huntington and that are identified by Seller to Huntington and
Purchaser in writing at least four (4) Business Days prior to the Effective
Time;
(4) any consumer purpose loan which as of the date of this Agreement is
past due and delinquent and has been past due and delinquent for at least 60
consecutive days up to and including the date of this Agreement; or
(5) any loan specifically identified on Schedule 2.4(b).
(c) Schedule 2.4(c) identifies the insurance companies who are the
current underwriters of credit life insurance and credit disability insurance
sold in connection with Branch Loans. Prior to the Effective Time, Seller agrees
to notify such insurance companies in writing of the sale of such Branch Loans
to Purchaser. Huntington's records provided to Purchaser will identify Branch
Loans which have credit life or credit disability insurance coverage. Purchaser
agrees to work directly with such insurance companies in the handling and
processing of premium rebates and insurance claims. After the Effective Time,
Seller will promptly deliver to Purchaser: (i) the proceeds of any credit life
insurance and/or credit disability insurance received by it in connection with
any of the Branch Loans sold to Purchaser; and (ii) any written notices or other
correspondence or written inquiries made by any of the relevant insurance
companies and relating to any such proceeds.
(d) All Loans will be transferred without recourse and without any
warranties or representations as to their collectibility or the creditworthiness
of any of the obligors of such Loans, except to the extent there are rights to
indemnification in accordance with Article V herein.
(e) If the balance due on any Loan purchased hereunder has been reduced
by Seller or Huntington as a result of a payment by check received prior to the
Effective Time, which item is returned after the Effective Time, the asset value
represented by the Loan transferred shall be correspondingly increased and an
amount in cash equal to such increase shall be paid by Purchaser to Seller or
Huntington, as applicable, upon proper collection.
Section 2.5 Employee Matters.
-----------------
(a) Purchaser will make Comparable Job Offers (as defined below) to all
"customer service representatives," "customer services representative seniors,"
"customer service representative leaders," "personal bankers," "personal banker
seniors," and "sales and service managers" employed at Huntington Branches who
are satisfactory performers within the meaning discussed by the parties (such
employees, "Tellers and Platform Employees") and shall
-15-
offer employment to such other individuals employed at the Huntington Branches,
as of the Closing Date as Purchaser in its sole discretion shall determine (the
"Employees") effective as of the Effective Time. Schedule 2.5(a) contains a list
of all Employees, their positions, their business locations, their
annual/weekly/hourly rates of compensation, average scheduled hours per week and
their status as full or part-time and active or on leave. Seller will deliver to
Purchaser a revised Schedule 2.5(a) no fewer than ten (10) days prior to
closing. Purchaser will communicate offers of employment in accordance with
legal requirements and in a form determined by Purchaser and which form is not
reasonably objected to by Seller and Huntington. All such Employees shall be
offered employment with Purchaser (i) in a position requiring comparable skills
and abilities as such Employee's position with Huntington or Seller, as
applicable, on the Closing Date, (ii) with annual base salary, or weekly or
hourly rate of pay which is equal to such Employee's pay with Huntington or
Seller, as applicable, on the Closing Date (provided that incentive pay, where
applicable, shall be determined based on incentive compensation programs
provided by Purchaser and its Affiliates to their similarly situated (based on
position and responsibilities, location and rate of compensation) employees from
time to time), (iii) at a work location that does not require such Employee to
travel more than an additional twenty-five miles (one way each day) to work than
such Employee traveled prior to the Closing Date, and (iv) with a work status
(full or part-time, including number of hours-per-week worked) that is not
changed from that in effect with Huntington immediately prior to the Closing
Date (a "Comparable Job Offer"); provided that Purchaser in its sole discretion
shall determine the nature of the employment offered to Employees other than
Tellers and Platform Employees. Each Employee who accepts Purchaser's offer of
employment and commences employment with Purchaser shall be referred to as a
"Transferred Employee" for purposes of this Agreement at the time the Employee
first commences active employment with Purchaser. Purchaser shall provide each
Transferred Employee who has commenced active employment with Purchaser or one
of its Affiliates with employee benefits substantially similar in the aggregate
to the employee benefits provided by Purchaser or its Affiliates to its
similarly situated (based on position and responsibilities, location and rate of
compensation) employees from time to time. With respect to any Employee who
accepts an offer of employment from Purchaser who on the Closing Date is on
military leave, sick leave, maternity leave, short-term disability or other
leave of absence approved by Huntington or Seller, as applicable, except as
required by applicable law, Purchaser need only employ such Employee for the
period beginning after such absence if such Employee returns to employment in
accordance with the terms of such Employee's leave, provided that such Employee
commences active employment with Purchaser no later than six (6) months after
the commencement of the leave. Any Employee who is on leave on the Closing Date
and commences active employment with Purchaser in accordance with the preceding
sentence will cease employment with Seller at the end of such leave of absence
and the date of commencement of active employment with Purchaser shall be
referred to herein as the "Transfer Date."
(b) Purchaser agrees to give all Transferred Employees service credit
for all employment and employee benefits related purposes (including but not
limited to for purposes of FMLA entitlement), for all periods of employment with
each of Huntington and Seller and their Affiliates (or their predecessor
entities) prior to the Closing Date, and with respect to employee benefits for
purposes of eligibility, participation and vesting under any employee benefit or
compensation plan, program and arrangement adopted or maintained by Purchaser or
any of its Affiliates in which Transferred Employees are eligible to
participate, except with regard to
-16-
Purchaser's Employee Stock Ownership Program. Notwithstanding the foregoing,
service completed with and compensation received from Huntington or Seller and
their Affiliates shall not be used for purposes of benefit accruals or
calculation of the amount of any benefit under any defined benefit pension plan
of Purchaser or any of its Affiliates. To the extent that any Transferred
Employee has satisfied in whole or in part any annual deductible under a welfare
benefit plan, or has paid any out-of-pocket expenses pursuant to any welfare
benefit plan co-insurance provision, in each case, with respect to the calendar
year in which the Closing Date (or commencement of participation in such new
plan occurs), Purchaser shall use commercially reasonable efforts to provide
that such amount shall be counted toward the satisfaction of any applicable
deductible or out-of-pocket expense maximum, respectively, under the comparable
benefit plans and programs provided to Transferred Employees by Purchaser and
its Affiliates for such calendar year. In any event, the welfare benefit plans
and programs of Purchaser and its Affiliates shall be applied without regard to
any limitations relating to preexisting conditions, waiting periods or required
physical examinations to the extent such individuals were covered by plans of
Huntington or Seller.
(c) Purchaser shall offer and pay severance benefits as described in
this Section 2.5(c) to any Transferred Employee terminated by Purchaser within
one (1) year of the Closing Date, provided that such Transferred Employee is not
terminated for cause. In addition, from and after the Closing Date, Purchaser
shall determine in its sole discretion whether a Transferred Employee who has a
termination of employment following the Closing Date meets the requirements of
severance payments and shall provide, and be solely liable for, severance
benefits to each Transferred Employee whose employment ceases during the period
that commences on the Closing Date and ends on the one-year anniversary thereof;
provided, however that such Transferred Employee is not terminated for cause and
that Purchaser shall not be responsible for the payment of severance or
transition benefits to any individual, or for the payment of any amount to any
Employee who is offered, but does not accept, a Comparable Job Offer (provided
that for purposes of this proviso, the proviso to the definition of Comparable
Job Offer shall be ignored). Severance benefits payable under this Section
2.5(c) shall be equal to the amount of severance payments that would be payable
under the applicable plan of Huntington effective immediately prior to the
Closing Date (without giving effect to the transactions contemplated by this
Agreement) as set forth on Schedule 2.5(c). Purchaser, in its sole discretion,
may determine to pay such severance amounts in a lump sum instead of
installments.
(d) Each Transferred Employee who participated or who was eligible to
participate in Huntington's or Seller's 401(k) Plan immediately prior to the
Closing shall be immediately eligible to participate, without any waiting time,
in Purchaser's 401(k) Plan applicable to the Transferred Employees. Seller shall
cause Seller's 401(k) Plan, and Seller shall use its commercially reasonable
efforts to cause Huntington pursuant to the Huntington Agreement to cause
Huntington's 401(k) Plan, to provide the Transferred Employees with the option
to voluntarily rollover their eligible account balances from Seller's 401(k)
Plan or Huntington's 401(k) Plan, as applicable, into Purchaser's 401(k) Plan
(or into an Individual Retirement Account of the Transferred Employee's
choosing), and Purchaser shall use commercially reasonable efforts to cause
Purchaser's 401(k) Plan to accept such eligible rollovers from the Transferred
Employees.
-17-
(e) Purchaser shall be responsible for the administration of and shall
assume any and all obligations, if any, arising under COBRA with respect to the
Transferred Employees and their beneficiaries. Seller shall be responsible for
providing any notice required pursuant to the United States Federal Worker
Adjustment and Retraining Notification Act of 1988, any successor United States
federal law, and any other applicable plant closing notification law
(collectively, "WARN") with respect to a layoff or plant closing relating to the
Huntington Branches that occurs prior to or on the Closing Date and Purchaser
shall be responsible for providing any notice required pursuant to WARN with
respect to a layoff or plant closing relating to the Huntington Branches that
occurs after the Closing Date.
(f) Seller shall, or shall use its commercially reasonable efforts to
cause Huntington pursuant to the Huntington Agreement, as applicable, to be
responsible for the filing of Forms W-2 with the Internal Revenue Service and
any required filing with state tax authorities, with respect to wages and
benefits paid to each Transferred Employee for periods ending on or prior to the
Closing Date or the Transfer Date, as applicable.
(g) Seller and Purchaser shall cooperate and Seller shall use its
commercially reasonable efforts to cause Huntington to cooperate pursuant to the
Huntington Agreement, in order to permit Purchaser to train Employees who choose
to accept employment with Purchaser, and Seller shall use its commercially
reasonable efforts to cause Huntington pursuant to the Huntington Agreement to,
as scheduled by Purchaser for reasonable periods of time and subject to Seller's
and Huntington's reasonable approval, such that Huntington's or Seller's ongoing
operations at the applicable Huntington Branches shall not be materially
disrupted, excuse such employees from their duties at the Huntington Branches
for the purpose of training and orientation by Purchaser. To the extent such
employees are paid overtime compensation as a result of Purchaser's training,
Purchaser shall reimburse Huntington or Seller, as directed by Seller, for such
overtime expenses.
(h) Subject to the provisions of this Section 2.5, Purchaser shall not
assume any liabilities and/or obligations under any benefit plans of Huntington
or Seller.
Section 2.6 Security.
---------
As of the Effective Time, Purchaser shall be solely responsible for the
security of and insurance on all Persons and property located in or about the
Real Property.
Section 2.7 Proration; Other Closing Date Adjustments.
------------------------------------------
(a) Except as otherwise specifically provided in this Agreement, it is
the intention of the parties that Seller or Huntington, as applicable, will
operate the Huntington Branches, hold the Transferred Assets and retain the
Transferred Liabilities for their own account until the Effective Time, and that
Purchaser shall operate the Huntington Branches, hold the Transferred Assets and
assume the Transferred Liabilities for its own account as of such time. Thus,
except as otherwise expressly provided in this Agreement, items of income and
expense, as defined herein, shall be prorated as of the Effective Time, and
settled between Seller and Purchaser on the Closing Date, whether or not such
adjustment would normally be made as of such time. Items of proration will be
handled at Closing as an adjustment to the Purchase Price
-18-
unless otherwise agreed by the parties hereto. In furtherance of the foregoing,
Purchaser shall promptly forward to Seller complete and accurate copies of all
invoices, billing statements and similar documents received by Purchaser after
the Effective Time and relating to the Banking Operations conducted prior to the
Effective Time, and Seller shall promptly forward to Purchaser complete and
accurate copies of all invoices and billing statements received by Seller
relating to the Banking Operations conducted after the Effective Time. To the
extent the exact amounts of any real property taxes or other items to be
prorated are not known on the Closing Date, the parties shall make reasonable
estimates of such taxes or other items for purposes of making prorations at
Closing and shall thereafter adjust the prorations as promptly as practicable
after such exact amounts are finally ascertained.
(b) For purposes of this Agreement, items of proration and other
adjustments shall include, without limitation: (i) rental payments under the
Tenant Leases; (ii) personal and real property taxes and assessments arising
from Real Property or otherwise from the Banking Operations (determined by
assuming that the taxable year or period ended at the Effective Time); (iii)
FDIC deposit insurance assessments for the deposits transferred at Closing based
upon the number of days remaining in such assessment period and the actual rate
paid; (iv) custodian fees on IRA accounts that are transferred to Purchaser as
part of the Transferred Assets; (v) prepaid expenses and items and accrued but
unpaid liabilities a portion of which is attributable to periods after the
Effective Time (it being understood that Purchaser shall have no liability for
any accrued but unpaid liabilities attributable to Excluded Assets or Excluded
Liabilities), as of the close of business on the Closing Date; and (vi) safe
deposit rental payments previously received by Seller or Huntington.
Section 2.8 Title Insurance and Survey for Real Property.
---------------------------------------------
Seller has delivered to Purchaser on or prior to the date hereof an
ALTA title insurance commitment or a title report in the form provided by
Huntington to Seller (as the case may be, the "Title Commitments") for each
Huntington Branch, issued by First American Title Insurance Company by and
through its agent, Porter, Wright, Morris & Arthur, LLP, which indicates the
state of title for each Huntington Branch. Seller shall also deliver to
Purchaser within fifteen (15) days after the date of this Agreement, without any
representation or warranty of any kind, a copy of any surveys, including those
received from Huntington, in its possession for the Real Property. Except as
expressly provided in Article VI hereof, Seller makes no representations or
warranties regarding the title to any of the Real Property.
Section 2.9 Environmental Matters.
----------------------
Seller has made available to Purchaser complete copies of all
environmental studies, reports and audits in Seller's possession, including
those received from Huntington, related to the Real Property (the "Existing
Environmental Reports"). Seller does not make any representation or warranty
regarding any aspect of any study, report or audit delivered to Purchaser,
including without limitation, the accuracy or completeness of such study, report
or audit, its preparation, or any information upon which it is based. Any
reliance on the report or any information contained in the report shall be at
Purchaser's risk. Seller makes no representations or warranties regarding the
environmental condition of any of the Real Property.
-19-
Section 2.10 Assumed Contracts.
------------------
Attached as Schedule 2.10 is a list of all service or similar contracts
in effect as of the date hereof (which Schedule Seller shall modify on or prior
to the 7th day prior to the Closing Date to reflect any such contracts that have
been terminated or modified or have been entered into in the ordinary course of
business since the date hereof) that relate to the Real Property, the Banking
Operations subject to this Agreement (and not to Huntington's or Seller's
operations generally) and that are capable of assignment in connection herewith
("Assumed Contracts"). Purchaser shall assume all such Assumed Contracts at the
Closing.
Section 2.11 Assumption of IRA Account Deposits.
-----------------------------------
(a) With respect to Deposits in IRAs, prior to the Closing Date, Seller
will, or will use its commercially reasonable efforts to cause Huntington
pursuant to the Huntington Agreement, to accomplish either the appointment of
Purchaser as successor custodian or the delegation to Purchaser (or to an
Affiliate of Purchaser) of Huntington's or Seller's, as applicable, authority
and responsibility as custodian of all such IRA deposits (except self-directed
IRA deposits), each to be effective as of the Effective Time, including, but not
limited to, sending to the depositors thereof appropriate notices, cooperating
with Purchaser (or such Affiliate) in soliciting consents from such depositors,
and filing any appropriate applications with applicable regulatory authorities.
If any such delegation is made to Purchaser (or such Affiliate), Purchaser (or
such Affiliate) will perform all of the duties so delegated and comply with the
terms of Huntington's or Seller's, as applicable, agreement with the depositor
of the IRA deposits affected thereby.
(b) If, notwithstanding the foregoing, as of the Closing Date,
Purchaser shall be unable to retain deposit liabilities in respect of an IRA,
such deposit liabilities shall be excluded from Deposits for purposes of this
Agreement and shall constitute "Excluded IRA Account Deposits."
Section 2.12 Books and Records.
------------------
(a) As of the Effective Time, Seller shall deliver to Purchaser, or use
its commercially reasonable efforts to cause Huntington pursuant to the
Huntington Agreement to deliver to Purchaser, all files, documents and records
in Seller's or Huntington's possession that pertain to and are utilized by
Seller or Huntington to administer, monitor, evidence or record information
respecting the business or conduct of the Huntington Branches, including all
such files, documents and records maintained on electronic or magnetic media in
the electronic data base system of Huntington or Seller that are reasonably
accessible on a branch-by-branch basis. Notwithstanding the foregoing, all
files, documents and records (i) that contain information regarding customers
and/or accounts not being transferred to Purchaser hereunder where such
information is not reasonably separable from the files, documents or records
otherwise to be delivered to Purchaser hereunder, or (ii) that are contained in
digitally imaged files ("Non-Transferred Records") shall remain in the
possession of Huntington or Seller. Purchaser agrees, at Seller's expense, to
return to Seller or Huntington, as applicable, all files, documents and records
contained in any Huntington Branch that Purchaser believes do not relate to the
business or conduct of the Huntington Branches.
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(b) As of the Effective Time, Purchaser shall become responsible for
maintaining the files, documents and records transferred to it pursuant to this
Agreement. Purchaser will preserve and hold such files, documents and records in
safekeeping as required by applicable law and in accordance with Purchaser's
customary practices.
(c) Subject to compliance with applicable law, after the Effective
Time, Purchaser will permit Seller and Huntington and their representatives, at
reasonable times and upon reasonable written notice, to examine, inspect, copy
and reproduce any such files, documents or records, and to access Seller's or
Huntington's former employees, to the extent reasonably required in connection
with any third party claim, action, litigation or other proceeding involving
Huntington, Seller or their Affiliates or in connection with any legal
obligation owed by Huntington, Seller or their Affiliates to any present or
former depositor or other customer or any Governmental Authority, including for
purposes of preparing regulatory and tax reports and returns. After the
Effective Time, Seller will permit Purchaser and its representatives, at
reasonable times and upon reasonable notice, to examine, inspect, copy and
reproduce files, documents or records retained by Seller (or if retained by
Huntington, Seller will request Huntington's cooperation in such regard)
regarding the Transferred Assets and Transferred Liabilities (including
Non-Transferred Records) to the extent reasonably required in connection with
any third party claim, action, litigation or other proceeding involving
Purchaser or its Affiliates or in connection with any legal obligation owed by
Purchaser or its Affiliates to any present or former depositor or other customer
or any Governmental Authority, including for purposes of preparing regulatory
and tax reports and returns.
(d) For a period of 180 days after the Effective Time, the party
providing copies of records hereunder shall do so without charge, and thereafter
it may charge its customary rate for providing such copies.
(e) It is understood that certain of Seller's or Huntington's records
may be available only in electronic or magnetic form, or in the form of
photocopies, film copies or other non-original and non-paper media, or held by
third-parties.
Section 2.13 No Duty To Cure.
----------------
Notwithstanding any provision of this Agreement to the contrary, Seller
shall not have any obligation or duty to cure, with respect to any of the Real
Property, any title defect, any defect in the environmental condition, or any
other defect in the condition (any of the foregoing a "Defect"), either before
or after the Closing, and Seller shall not have any liability for or in
connection with any Defect after the Closing except as provided in Article V.
Purchaser's only rights in connection with any Defect shall be the rights set
forth in Sections 2.1(a)(1), 2.8 and 2.9 and Article V.
Section 2.14 No Rights to Huntington Name.
-----------------------------
Purchaser shall have no rights in and to the names "Huntington" and any
of its predecessor banks' names and any of Huntington's or Huntington's
predecessors' corporate logos,
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trademarks, trade names, signs, paper stock forms, and other supplies containing
any such logos, trademarks or trade names.
ARTICLE III
CLOSING AND EFFECTIVE TIME
--------------------------
Section 3.1 Effective Time.
---------------
The purchase of assets and assumption of liabilities provided for in
this Agreement, and the conversion referred to in Sections 4.1 and 4.7 (unless
otherwise mutually agreed to by the parties hereto), shall occur at a closing
(the "Closing") to be held at the offices of Seller in Atlanta, Georgia, at
11:00 a.m., local time, or at such other time, place, and manner as the parties
shall mutually agree, on a date to be mutually agreed upon between the parties,
which date shall occur not earlier than three (3) days nor later than ten (10)
days following the satisfaction or, where legally permitted, waiver of all
conditions set forth in Article IX and Article X (other than those conditions
that by their nature are to be satisfied at the Closing); provided that such
time and date shall not be before the closing of the purchase and assumption of
the Florida Franchise by Seller pursuant to the Huntington Agreement, which
Agreement provides that the closing shall not be before February 15, 2002 and
may be extended until March 15, 2002, if such extension is necessary to permit
the consummation of the sale of all the Huntington Branches by Seller to
Purchaser and any other branches of the Florida Franchise to other purchasers
where such sales are required in connection with any Regulatory Approval. The
effective time (the "Effective Time") shall be 11:59 p.m., local time in
Atlanta, Georgia, on the day on which the Closing occurs (the "Closing Date").
Each of Purchaser and Seller shall use their reasonable best efforts to effect
the Closing as of February 15, 2002, or as promptly as reasonably practicable
thereafter, subject to the satisfaction or waiver, where permitted by law, of
the conditions to Closing set forth in Articles IX and X.
Section 3.2 Closing.
--------
(a) All actions taken and documents delivered at the Closing shall be
deemed to have been taken and executed simultaneously, and no action shall be
deemed taken nor any document delivered until all have been taken and delivered.
(b) At the Closing, subject to all the terms and conditions of this
Agreement, including receipt of all consents and approvals hereunder, Seller
shall, or shall use its commercially reasonable efforts to cause Huntington
pursuant to the Huntington Agreement, to execute and deliver to Purchaser the
following:
(1) special warranty deeds executed by Seller or Huntington, as
applicable, transferring all of such Seller's or Huntington's, as applicable,
right, title and interest in and to each parcel of Real Property to Purchaser,
in substantially the form attached hereto as Exhibit 3.2(b)(1) and consistent
with the Title Commitments received by Purchaser from Seller prior to the date
hereof;
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(2) a Bill of Sale, in substantially the form attached hereto as
Exhibit 3.2(b)(2), transferring to Purchaser all of Seller's or Huntington's, as
applicable, interest in the Personal Property and the Coins and Currency;
(3) an Assignment and Assumption Agreement in substantially the form
attached hereto as Exhibit 3.2(b)(3), with respect to the Transferred
Liabilities ("Assignment and Assumption Agreement");
(4) a certificate of a proper officer of Seller, dated as of the
Closing Date, certifying as to the satisfaction of the conditions set forth in
Section 9.1 and Section 9.2;
(5) a Closing Statement using amounts shown on the Pre-Closing Balance
Sheet, substantially in the form attached hereto as Exhibit 3.2(b)(5) (the
"Closing Statement");
(6) an affidavit of Seller or Huntington, as applicable, certifying
that such entity is not a "foreign Person" as defined in the federal Foreign
Investment in Real Property Tax Act of 1980 and a "No Lien Affidavit," in the
forms attached hereto as Exhibit 3.2(b)(6);
(7) immediately available funds in the net amount shown as owing to
Purchaser by Seller on the Closing Statement, if any;
(8) a limited power of attorney to allow Purchaser, in the name of
Seller or Huntington, as applicable, to effect transfers of Transferred Assets
after the Closing, which shall be in substantially the form attached hereto as
Exhibit 3.2(b)(8); and
(9) such certificates and other documents as the parties determine to
be reasonably necessary in connection with the consummation of the transactions
contemplated hereby and which do not alter the parties' respective obligations
or liability hereunder.
(c) At the Closing, subject to all the terms and conditions of this
Agreement, Purchaser shall execute and deliver to Seller:
(1) the Assignment and Assumption Agreement;
(2) a certificate and receipt acknowledging the delivery and receipt of
possession of the Transferred Assets and records referred to in this Agreement;
(3) immediately available funds in the net amount shown as owing to
Seller by Purchaser on the Closing Statement, if any;
(4) a certificate of a proper officer of Purchaser, dated as of the
Closing Date, certifying as to the satisfaction of the conditions set forth in
Section 10.1 and Section 10.2; and
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(5) such certificates and other documents as the parties determine to
be reasonably necessary in connection with the consummation of the transactions
contemplated hereby and which do not alter the parties' respective obligations
or liability hereunder.
Section 3.3 Post Closing Adjustments.
-------------------------
(a) Not later than the close of business on the 65th day after the
Effective Time (such actual date of delivery, the "Post-Closing Balance Sheet
Delivery Date"), Seller shall deliver to Purchaser a balance sheet dated as of
the Effective Time based on Huntington's or Seller's books and records, as
applicable, and using the internal accounting procedures of Huntington or
Seller, as applicable, consistently applied reflecting the assets sold and
assigned and the liabilities transferred and assumed hereunder (the
"Post-Closing Balance Sheet"), together with a copy of Seller's calculation of
the Purchase Price as adjusted hereunder and the amounts payable thereunder.
Seller shall afford Purchaser and its accountants and attorneys the opportunity
to review all work papers and documentation related solely to the Huntington
Branches used by Seller in preparing the Post-Closing Balance Sheet.
(b) Except as otherwise expressly provided herein, the determination of
the Post-Closing Balance Sheet shall be final and binding on the parties hereto
unless within thirty (30) days after receipt by Purchaser of the Post-Closing
Balance Sheet, Purchaser shall notify Seller in writing of its disagreement with
any amount included therein or omitted therefrom, in which case, if the parties
are unable to resolve the disputed items within ten (10) Business Days of the
receipt by Seller of notice of such disagreement, such items shall be determined
by a "big five" independent accounting firm selected by mutual agreement between
Seller and Purchaser; provided, however, that in the event the fees of such firm
as estimated by such firm would exceed fifty percent (50%) of the net amount in
dispute, the parties agree that such firm will not be engaged by either party
and that such net amount in dispute will be equally apportioned between Seller,
on the one hand, and Purchaser, on the other hand. Such accounting firm shall be
instructed to resolve the disputed items within ten (10) Business Days of
engagement, to the extent reasonably practicable. The determination of such
accounting firm shall be final and binding on the parties hereto. The fees of
any such accounting firm shall be divided equally between Seller, on the one
hand, and Purchaser, on the other hand. Notwithstanding the foregoing provisions
of this Section 3.3(b), if at any time within 85 days after the Post-Closing
Balance Sheet Delivery Date either party discovers an error in the calculation
of the Post-Closing Balance Sheet that resulted in the Purchase Price actually
paid, as adjusted pursuant to this Section 3.3 ("Original Price"), being at
least $50,000, individually or in the aggregate with all such errors, more or
less than the Purchase Price would have been but for such error ("Revised
Price"), and notifies the other party thereof, the parties agree to cooperate in
good faith to correct the error. If the parties disagree on the existence or
magnitude of an error within ten (10) Business Days after notice thereof, such
matter shall be resolved by an independent accounting firm in the same manner as
described above for resolving disputed items; provided, however, that in the
event the fees of such firm as estimated by such firm would exceed fifty percent
(50%) of the net amount in dispute, the parties agree that such firm will not be
engaged by either party and that such net amount in dispute will be equally
apportioned between Seller, on the one hand, and Purchaser, on the other hand.
Upon the determination of the Revised Price, the appropriate party shall pay an
amount to the other that is the difference between the amount actually paid by
such
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party pursuant to Section 2.2 and the amount that such party would have paid to
the other if the Original Price had been equal to the Revised Price, together
with interest thereon computed from the Effective Time up to but not including
the Adjustment Payment Date at the applicable Federal Funds Rate.
(c) Not later than the close of business on the 15th day following the
determination of the Post-Closing Balance Sheet (the "Adjustment Payment Date"),
Seller and Purchaser shall meet at the offices of Seller in Atlanta, Georgia, or
such other location as may be mutually agreed, to effect the transfer of any
funds as may be necessary to reflect changes in such assets and liabilities
between the Pre-Closing Balance Sheet and the Post-Closing Balance Sheet and
resulting changes in the Purchase Price, together with interest thereon computed
from the Effective Time up to but not including the Adjustment Payment Date at
the applicable Federal Funds Rate.
ARTICLE IV
TRANSITIONAL MATTERS
--------------------
Section 4.1 General.
--------
(a) Seller and Purchaser shall, and Seller shall use its commercially
reasonable efforts to cause Huntington pursuant to the Huntington Agreement to,
cooperate in good faith to assure an orderly transition of ownership of the
Transferred Assets and Transferred Liabilities to Purchaser hereunder.
Commencing promptly following the date hereof, appropriate personnel of Seller
and Purchaser shall, and Seller shall use its commercially reasonable efforts to
cause Huntington pursuant to the Huntington Agreement to, meet to discuss and
draft a mutually acceptable transition plan covering operational aspects of the
transition consistent with the terms of this Agreement, including handling and
settlement of the following, as applicable: checks on deposit accounts and home
credit line accounts, loan payments, direct deposits and direct debits through
ACH or otherwise, point of sale transactions, ATM transactions, error resolution
matters pursuant to Regulations E and Z of the Federal Reserve Board,
miscellaneous account adjustments, daily settlement, and other settlement and
transition items. The parties shall have the transition plan completed by
December 31, 2001.
(b) In furtherance of the foregoing, appropriate personnel of Seller
and Purchaser shall, and Seller shall use its commercially reasonable efforts to
cause Huntington pursuant to the Huntington Agreement to, meet to discuss
transaction settlement procedures and specifications, files (including without
limitation conversion sample files) and schedules for the transfer of data
processing responsibilities relating to the Huntington Branches (which shall be
Seller's or Huntington's format, as applicable) from Huntington or Seller, as
applicable, to Purchaser, to be effective as of the Closing. Purchaser will have
responsibility for all product mapping and the creation of all conversion
programs and procedures but Seller will, and Seller shall use its commercially
reasonable efforts to cause Huntington pursuant to the Huntington Agreement to,
provide qualified personnel to reasonably consult and confer with Purchaser to
facilitate this process. Not later than fifteen (15) days following the date
hereof, Seller shall use its commercially reasonable efforts to obtain from
Huntington and deliver to Purchaser, or Seller
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shall use its commercially reasonable efforts to cause Huntington pursuant to
the Huntington Agreement, to deliver the specifications and conversion sample
files in Huntington's possession and, as promptly as reasonably practicable
following the date hereof, shall deliver to Purchaser such specifications and
conversion sample files held by third parties and relating to the Banking
Operations. Seller shall have no obligation to furnish, or use its commercially
reasonable efforts to cause Huntington pursuant to the Huntington Agreement to
furnish, Purchaser with any customer information other than that which is
necessary for purposes of the ongoing operation of the Huntington Branches.
(c) Not later than twenty-eight (28) days prior to the Closing Date,
Seller shall deliver to Purchaser, or use its commercially reasonable efforts to
cause Huntington pursuant to the Huntington Agreement to deliver to Purchaser, a
complete and accurate list of all applicable customer routing and transit
numbers and account numbers.
Section 4.2 Notices to Customers and Others.
--------------------------------
(a) Not earlier than January 16, 2002 nor later than thirty (30) days
prior to the Closing Date (or such other time as may be required by law), Seller
and Purchaser shall, together with Huntington pursuant to Huntington's
obligations under the Huntington Agreement, jointly, at Purchaser's expense,
notify customers with Deposits that, subject to the terms and conditions of this
Agreement, Purchaser will be assuming all Deposit Liabilities and each of Seller
and Purchaser shall, together with Huntington pursuant to Huntington's
obligations under the Huntington Agreement, join in providing where appropriate,
all notices to customers of the Huntington Branches and all other Persons as
Seller or Purchaser, together with Huntington pursuant to Huntington's
obligations under the Huntington Agreement, as the case may be, is or are
required to give under applicable law or the terms of any agreements between
Seller or Huntington, as applicable, and any customer in connection with the
transactions contemplated hereby. No earlier than January 16, 2002, Purchaser
may communicate with and deliver information to depositors and other customers
of the Huntington Branches concerning this Agreement and the business of
Purchaser. When requested, upon request by Purchaser, Seller will provide, or
will use its commercially reasonable efforts to cause Huntington pursuant to the
Huntington Agreement to provide, reasonable assistance to Purchaser in mailing
or causing to be mailed such communications, at Purchaser's expense. Purchaser
and Seller (with Huntington's approval) shall jointly approve in good faith the
content of all notices and communications under this Section 4.2 prior to the
distribution of any such notices and communications.
(b) A party proposing to send or publish any notice or communication
pursuant to any paragraph of this Article IV shall furnish to the other party a
copy of the proposed form of such notice or communication at least five (5) days
in advance of the proposed date of the first mailing, posting, or other
dissemination thereof to customers, and shall incorporate any changes in such
notice as the other party reasonably proposes as necessary to comply with
applicable law or which the other party reasonably requests for any proper
business purpose. All costs and expenses of any notice or communication sent or
published by Purchaser or Seller shall be the responsibility of the party
sending such notice or communication and all costs and expenses of any joint
notice or communication shall be shared equally by Seller on the one hand, and
Purchaser, on the other hand.
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(c) Without limiting the generality of the foregoing, Seller shall use
its commercially reasonable efforts to cause Huntington pursuant to the
Huntington Agreement to send, or permit Purchaser to send, on Purchaser's behalf
and at Purchaser's sole cost and expense, such notices to customers as are
reasonably requested by Purchaser, subject to the timing restrictions in Section
4.2(a) and subject to the fourth sentence of Section 4.2(a).
Section 4.3 Direct Deposits.
----------------
Seller will transfer, or use its commercially reasonable efforts to
cause Huntington pursuant to the Huntington Agreement to transfer, to Purchaser
not later than the Closing Date all of those Automated Clearing House ("ACH")
and FedWire direct deposit arrangements related (by agreement or other standing
arrangement) to Deposits. As soon as practicable after the receipt of all
Regulatory Approvals (except for the expiration of statutory waiting periods),
Seller will deliver, or use its commercially reasonable efforts to cause
Huntington pursuant to the Huntington Agreement to deliver, to Purchaser a
listing in Huntington's or Seller's format, as applicable, of all such direct
deposit records which Seller or Huntington, in the exercise of all reasonable
efforts, are able to identify. In connection with the obligations under Section
4.1, Purchaser and Seller shall, and Seller shall use its commercially
reasonable efforts to cause Huntington pursuant to the Huntington Agreement to,
cooperate in good faith (i) to determine the method and timing for remitting to
Purchaser and settling, for a 180-day period following the Florida Franchise
Closing Date, ACH direct deposits and FedWire direct deposits relating to
accounts constituting Deposits, as well as such other matters relating thereto
as may be necessary or advisable for purposes of assuring an orderly transition
of ownership of the Deposit Liabilities to Purchaser hereunder, and (ii) to
determine the method and timing for remitting to Seller or Huntington, as
applicable, and settling, for a 180-day period following the Florida Franchise
Closing Date, ACH direct deposits and FedWire direct deposits relating to
deposit accounts of Seller or Huntington that are not Deposits, but which
transactions are nonetheless routed to Purchaser as a result of the transfer to
Purchaser of the routing and transit numbers or for other reasons, as well as
such other matters relating thereto as may be necessary or advisable for
purposes of assuring the orderly processing of transactions routed to Purchaser
that relate to deposit accounts of Seller or Huntington that are not Deposits.
Section 4.4 Direct Debit.
-------------
As soon as practicable after the receipt of all Regulatory Approvals
(except for the expiration of statutory waiting periods), and after the notice
provided in Section 4.2(a), Purchaser will send appropriate notice to all
customers having accounts constituting Deposits the terms of which provide for
direct debit of such accounts by third parties, instructing such customers
concerning transfer of customer direct debit authorizations from Seller or
Huntington, as applicable, to Purchaser. Seller shall, and Seller shall use its
commercially reasonable efforts to cause Huntington pursuant to the Huntington
Agreement to, cooperate in soliciting the transfer of such authorizations. Such
notice shall be in a form agreed to by the parties acting in good faith, and
approved by Huntington. In connection with the obligations under Section 4.1,
Purchaser and Seller shall, and Seller shall use its commercially reasonable
efforts to cause Huntington pursuant to the Huntington Agreement to, cooperate
in good faith, (i) to determine the method and timing for forwarding to
Purchaser and settling, for a 180-day period following the Florida Franchise
Closing Date, all direct debits relating to accounts constituting Deposits, as
well as
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such other matters relating thereto as may be necessary or advisable for
purposes of assuring an orderly transition of ownership of the Deposit
Liabilities to Purchaser hereunder, and (ii) to determine the method and timing
for forwarding to Seller or Huntington, as applicable, and settling, for a
180-day period following the Florida Franchise Closing Date, all direct debits
relating to deposit accounts of Seller that are not Deposits, but which
transactions are nonetheless routed to Purchaser as a result of the transfer to
Purchaser of the routing and transit numbers or for other reasons, as well as
such other matters relating thereto as may be necessary or advisable for
purposes of assuring the orderly processing of transactions routed to Purchaser
that relate to deposit accounts of Seller or Huntington that are not Deposits.
Section 4.5 Interest Reporting and Withholding.
-----------------------------------
(a) Unless otherwise agreed to by the parties, Seller will report, or
will use its commercially reasonable efforts to cause Huntington pursuant to the
Huntington Agreement to report, to applicable taxing authorities and holders of
Deposits, with respect to the period from January 1 of the year in which the
Closing occurs through the Closing Date, all interest (including for purposes
hereof dividends and other distributions with respect to money market accounts)
credited to, withheld from and any early withdrawal penalties imposed upon the
Deposits. Purchaser will report to the applicable taxing authorities and holders
of Deposits, with respect to all periods from the day after the Closing Date,
all such interest credited to, withheld from and early withdrawal penalties
imposed upon such Deposits. Any amounts required by any governmental agencies to
be withheld from any of the Deposits through the Closing Date will be withheld
by Seller (or Seller will use its commercially reasonable efforts to cause
Huntington to withhold pursuant to the Huntington Agreement), as applicable, in
accordance with applicable law or appropriate notice from any governmental
agency and will be remitted by Seller (or Seller will use its commercially
reasonable efforts to cause Huntington to remit pursuant to the Huntington
Agreement), as applicable, to the appropriate agency on or prior to the
applicable due date. Any such withholding required to be made subsequent to the
Closing Date shall be withheld by Purchaser in accordance with applicable law or
the appropriate notice from any governmental agency and will be remitted by
Purchaser to the appropriate agency on or prior to the applicable due date.
Promptly after the Closing Date, but in no event later than the date Purchaser
is obligated to remit such amounts to the applicable governmental agency, Seller
will pay to Purchaser, or cause Huntington to pay to Purchaser, that portion of
any sums theretofore withheld by Seller or Huntington, as applicable, from any
Deposits which are required to be remitted by Purchaser pursuant to the
foregoing and shall directly remit to the applicable governmental agency that
portion of any such sums which are required to be remitted by Seller.
(b) Unless otherwise agreed by the parties, Seller shall be
responsible, or shall use its commercially reasonable efforts to cause
Huntington pursuant to the Huntington Agreement to be responsible, for
delivering to payees all IRS notices with respect to information reporting and
tax identification numbers required to be delivered through the Closing Date
with respect to the Deposits, and Purchaser shall be responsible for delivering
to payees all such notices required to be delivered following the Closing Date
with respect to the Deposits. Purchaser and Seller shall, prior to the Closing
Date, consult and Seller shall, or shall use its commercially reasonable efforts
to cause Huntington pursuant to the Huntington Agreement to, take reasonable
actions as are necessary to permit Purchaser to timely deliver such IRS notices
required to be delivered following the Closing Date.
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(c) Unless otherwise agreed by the parties, Seller will, or will use
its commercially reasonable efforts to cause Huntington pursuant to the
Huntington Agreement to, make all required reports to applicable Tax authorities
and to obligors on Loans purchased on the Closing Date, with respect to the
period from January 1 of the year in which the Closing occurs through the
Closing Date, concerning all interest and points received by Huntington or
Seller, as applicable. Purchaser will make all required reports to applicable
Tax authorities and to obligors on Loans purchased on the Closing Date, with
respect to all periods from the day after the Closing Date, concerning all such
interest and points received.
Section 4.6 ATM/Debit Cards.
- ----------- ----------------
Seller will provide, or will use its commercially reasonable efforts to
cause Huntington pursuant to the Huntington Agreement to provide, Purchaser with
a list of ATM access/debit cards (including any point-of-sale cards) issued by
Seller or Huntington to depositors of any Deposits, and a data processing record
in Seller's or Huntington's standard format, as applicable, containing all
addresses therefor and all related information required to support an automated
conversion, as soon as practicable after the receipt of all Regulatory Approvals
(except for the expiration of any statutory waiting periods). At or promptly
after the Closing, Seller will provide, or use its commercially reasonable
efforts to cause Huntington pursuant to the Huntington Agreement to provide,
Purchaser with a revised data processing record through the Closing, and, within
thirty days (30) following the date hereof, all customer PINs or algorithms or
logic used to generate PINs. Purchaser shall reissue ATM access/debit cards to
depositors of any Deposits prior to the Closing Date, which cards shall be
effective as of the Closing Date.
Section 4.7 Data Processing Conversion for the Huntington Branches and
Handling of Certain Items.
------------------------------------------------------------
(a) The conversion of the data processing with respect to the
Transferred Assets and Transferred Liabilities will be completed on the Closing
Date unless otherwise agreed by the parties. Seller and Purchaser agree, and
Seller will use its commercially reasonable efforts to cause Huntington pursuant
to the Huntington Agreement, to cooperate to facilitate the orderly transfer of
data processing information in connection with the transactions contemplated
hereby. Within fifteen (15) days of the date of this Agreement, Seller shall use
its commercially reasonable efforts to cause Huntington pursuant to the
Huntington Agreement to permit Purchaser and/or its representatives access
(subject to the provisions of Section 8.1) to review each Huntington Branch for
the purpose of installing automated equipment for use by the personnel of the
Huntington Branches. Following the receipt of all Regulatory Approvals (except
for the expiration of statutory waiting periods), Seller shall use its
commercially reasonable efforts to cause Huntington pursuant to the Huntington
Agreement to permit Purchaser, at its expense, to install and test
communications lines, both internal and external, from each site and prepare for
the installation of automated equipment on the Closing Date.
(b) During the one hundred eighty (180) day period after the Florida
Franchise Closing Date, (i) Seller shall pay, or use its commercially reasonable
efforts to cause Huntington pursuant to the Huntington Agreement to pay, all
Transaction Account drafts presented to it for payment that are drawn on
accounts constituting Deposits and (ii) Purchaser shall pay all Transaction
Account drafts presented to it for payment that are drawn on deposit
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accounts of Huntington or Seller that are not Deposits, but which items are
nonetheless routed to Purchaser as a result of the transfer to Purchaser of the
routing and transit numbers or for other reasons. Each party shall make
available to the other or Huntington, as applicable, on a next-day basis such
drafts that it pays. Each party shall promptly reimburse the other or
Huntington, as applicable, on a daily settlement basis for the amount of all
such drafts paid by the other party or by Huntington. Neither party shall return
any such drafts to the other, but shall handle any returns directly with the
payee bank or other parties in the clearing process.
(c) Purchaser agrees to accept from Seller or Huntington, and reimburse
Seller or Huntington, as applicable, on a daily settlement basis, for all
returns of the following items: (i) any item which Seller or Huntington credited
for deposit to or cashed against a Deposit account or posted as payments to a
Loan account before Closing and the item is returned to Seller or Huntington
after the Closing; and (ii) any item which Seller or Huntington credited for
deposit to or cashed against a Deposit account or posted as payments to a Loan
account within the ninety (90) day period following the Florida Franchise
Closing Date and the item is returned to Seller or Huntington.
(d) Purchaser agrees to pay in accordance with law and customary
banking practices all properly drawn and presented checks, drafts and withdrawal
orders presented to Purchaser by mail, over the counter or through the check
clearing system of the banking industry, by depositors of the accounts assumed,
whether drawn on the checks, withdrawal orders or draft forms provided by
Seller, or Huntington or by Purchaser, and in all other respects to discharge,
in the usual course of the banking business, the duties and obligations of
Seller or Huntington with respect to the balances due and owing to the
depositors whose accounts are assumed by Purchaser.
Section 4.8 Notices to Obligors on Loans.
-----------------------------
(a) Purchaser shall no earlier than January 16, 2002 nor later than
fifteen (15) days prior to the Closing Date prepare and transmit, at Purchaser's
sole cost and expense, to each obligor on each Loan, a notice in a form
satisfying all legal requirements and reasonably acceptable to Seller to the
effect that the Loan will be transferred to Purchaser and directing that
payments be made after the Closing Date to Purchaser at any address of Purchaser
specified by Purchaser, with Purchaser's name as payee on any checks or other
instruments used to make as payments, and, with respect to all such Loans on
which payment notices or coupon books have been issued, to issue new notices or
coupon books reflecting the name and address of Purchaser as the Person to whom
and the place at which payments are to be made. To the extent that Purchaser's
notice pursuant to the prior sentence shall be legally insufficient, Seller
agrees, at Purchaser's sole expense, to provide, or to use its commercially
reasonable efforts to cause Huntington pursuant to the Huntington Agreement to
provide, all Loan obligors with all required notices of the assignment and
transfer of the Loans.
(b) Seller will, or will use its commercially reasonable efforts to
cause Huntington pursuant to the Huntington Agreement to, render a final
statement to each depositor of a Deposit account assumed under this Agreement
for which statements are provided as to transactions occurring through the
Effective Time and will comply with all laws, rules and regulations regarding
tax reporting of transactions of such accounts through the Effective Time.
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Seller, or Huntington, as applicable, will be entitled to impose normal fees and
service charges on a per-item basis, but Seller will not, and Seller will use
its commercially reasonable efforts to cause Huntington pursuant to the
Huntington Agreement to not, impose periodic fees or blanket charges in
connection with such final statements. Purchaser will comply with all laws,
rules and regulations regarding tax reporting of transactions of such accounts
after the Effective Time.
(c) To the extent that any of the Loans transferred from Seller or
Huntington, as applicable, to Purchaser involve a transfer of servicing as
defined and governed by the Real Estate Settlement Procedure Act (12 U.S.C.
Section 2601 et seq.), Seller and Purchaser will jointly coordinate any
appropriate required customer notices and Seller will use its commercially
reasonable efforts to cause Huntington pursuant to the Huntington Agreement to
cooperate with Seller and Purchaser in connection with such notices, provided
that no such notices shall be sent prior to January 16, 2002.
ARTICLE V
INDEMNIFICATION
---------------
Section 5.1 Seller's Indemnification of Purchaser.
- ----------- --------------------------------------
Subject to any limitations in this Section 5.1 through Section 5.4,
Seller shall indemnify, hold harmless, and defend the Purchaser from and against
any Losses that Purchaser incurs as a result of (a) any breach by Seller of any
of its covenants or agreements contained herein occurring prior to the Effective
Time, (b) any breach by Seller of any of its representations and warranties
contained herein, (c) any breach by Huntington of any of the Huntington
Representations and Warranties (as hereinafter defined) or of any of the
Huntington Covenants (as hereinafter defined) (other than the representations
and warranties set forth in Section 6.10 of Schedule 6.0, as to which
Purchaser's only remedies shall be as set forth in this Section 5.1), in each
case only to the extent such breach, such Huntington Representations and
Warranties and Huntington Covenants apply to the Huntington Branches, (d) any
Excluded Liabilities, and (e) unless Seller makes the election provided for in
the proviso to Section 2.1(a)(1), any Environmental Costs arising from the
Indemnified Environmental Matters to the extent such Indemnified Environmental
Matters are in, on or under the Real Property or facilities thereon prior to the
Effective Time. In the event of any breach of the representations and warranties
contained in Section 6.10 of Schedule 6.0, Purchaser's sole remedy shall be to
request in writing that Seller (or if Seller elects and Huntington agrees in
writing to Purchaser to do so, Huntington) (i) purchase the Loan which breaches
such representation and warranty at the principal amount thereof, plus accrued
and unpaid interest, in each case as of the time of the applicable purchase (a
"Purchase Right"), or (ii) indemnify Purchaser in accordance with the other
provisions of this Article V, with Seller having the right to choose between
such measures.
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Section 5.2 Purchaser's Indemnification of Seller.
--------------------------------------
Purchaser shall indemnify, hold harmless, and defend Seller from and
against any Losses that Seller incurs as a result of (i) any breach by Purchaser
of any of its covenants or agreements contained herein occurring prior to the
Effective Time, (ii) any breach by Purchaser of any of its representations and
warranties contained herein, and (iii) any Loss that Seller may incur in
connection with Banking Operations as conducted by Purchaser occurring from and
after the Effective Time or otherwise relating to the Transferred Assets or the
Transferred Liabilities (other than Excluded Liabilities).
Section 5.3 Claims for Indemnity.
---------------------
(a) A claim for indemnity shall be made by the claiming party at any
time prior to the applicable Claim Limitation Anniversary by the giving of
written notice thereof to the other party. Such written notice shall set forth
in reasonable detail the basis upon which such claim for indemnity is made. In
the event that any bona fide claim is made within such period, the indemnity
relating to such claim shall survive until such claim is resolved. No claim for
indemnity may be made at any time at or after the 18-month anniversary of the
Effective Time (excluding claims for indemnity with respect to (i) the
representations and warranties contained in Section 6.3 of Schedule 6.0, which
may be made for a period of five (5) years after the Effective Time, (ii) the
representations and warranties contained in Section 6.14 of Schedule 6.0, which
may be made at any time up to the date ending thirty (30) days after the
applicable statutes of limitations with respect thereto and (iii) Excluded
Liabilities, which may be made at any time after the Effective Time, and (iv)
clause (e) of Section 5.1, which may be made at any time prior to the expiration
of the applicable statutes of limitations) and no indemnity shall be available
therefor in accordance with the provisions of this Article V. The applicable
claim limitation period, as provided in the preceding sentence, is hereby
referred to as the "Claim Limitation Anniversary."
(b) If any Person or entity not a party to this Agreement, including
any Governmental Authority, shall make any demand or claim or file or make or
threaten to file or make any lawsuit or other action or investigation, which
demand, claim, lawsuit, action or investigation may result in any Loss to a
party hereto of the kind for which such party is entitled to indemnification
pursuant to Section 5.1 or Section 5.2 hereof (other than an indemnification
claim under clause (e) of Section 5.1), such indemnified party shall notify the
indemnifying party of such demand, claim or lawsuit within thirty (30) Business
Days of such demand, claim, filing, making or threat; provided, however, that
any failure by the indemnified party to so notify the indemnifying party shall
not relieve the indemnifying party from its obligations hereunder, except to the
extent that the indemnified party is actually prejudiced by such failure to give
such notice. Following receipt of notice of a demand, claim, lawsuit, action or
investigation, the indemnifying party (or its designee) shall have the option,
at its cost and expense, to assume the defense of such matter and to retain
counsel (not reasonably objected to by the indemnified party) to defend any such
demand, claim or lawsuit, and the indemnifying party shall not be liable to the
indemnified party for any fees of other counsel or any other expenses (except as
expressly provided to the contrary herein) with respect to the defense of such
matter, other than reasonable fees and expenses of counsel employed by the
indemnified party for any period during which the indemnifying party (or its
designee) has not assumed the defense thereof. In
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effecting the settlement of any such matter, the indemnifying party (or its
designee), or the indemnified party, as the case may be, shall act in good
faith, shall consult with the other party and shall enter into only such
settlement as the other party shall consent, such consent not to be unreasonably
withheld or delayed. An indemnifying party (or its designee) shall not be liable
for any settlement not made in accordance with the preceding sentence. Purchaser
shall cooperate fully with Seller in connection with the defense by Seller of
any such matter, and Purchaser shall provide Seller with access to the
properties, books and records and personnel of the Banking Operations as Seller
may deem appropriate in connection with the defense of such matter.
(c) If any Person or entity not a party to this Agreement, including
any Governmental Authority, shall make any demand or claim or file or make or
threaten to file or make any lawsuit, action or investigation, which demand,
claim, lawsuit, action or investigation may result in any Loss to Purchaser of
the kind for which Purchaser is entitled to indemnification pursuant to clause
(e) of Section 5.1 hereof, Purchaser shall immediately notify Seller of such
demand, claim, lawsuit, action or investigation. Following receipt of notice of
any such demand, claim, lawsuit, action or investigation, Seller (or its
designee) shall have the option, at its cost and expense, to assume the defense
of such matter and to retain counsel (not reasonably objected to by Purchaser)
to defend any such matter, and Seller shall not be liable to Purchaser for any
fees of other counsel or any other expenses with respect to the defense of such
matter, other than reasonable fees and expenses of counsel employed by Purchaser
for any period during which Seller (or its designee) has not assumed the defense
thereof and reasonable fees and expenses of counsel employed by Purchaser in the
defense of indemnifiable matters where the Seller unsuccessfully asserts that
Purchaser and not Seller is the responsible party in Seller's defense of such
matter. Seller shall have complete control over all matters relating to the
defense of such matter, including the right to develop such environmental
remediation plan, if any, as Seller may determine is appropriate to address such
matter. Purchaser shall cooperate fully with Seller in connection with the
defense by Seller of any such matter, and Purchaser shall provide Seller with
access to the properties, books and records and personnel of the Banking
Operations as Seller may deem appropriate in connection with the defense of such
matter. Purchaser shall provide to Seller prompt written notice and copies of
any communications received by or to be sent to any consultants, agents or
Governmental Authorities in connection with any matters that could result in a
claim by Purchaser against Seller under Section 5.1(e). In addition, on and
after the date of this Agreement and for such period of time as Seller may
determine is reasonably necessary after the Closing Date, Seller shall have the
right to conduct, at Seller's cost, any environmental assessments (including
Phase II assessments) as Seller may determine to conduct with respect to the
Banking Operations or the Real Property. Purchaser shall provide Seller and
Seller's representatives with full access to the Banking Operations and the Real
Property in order to permit the conduct of such environmental assessments, and
Purchaser shall otherwise cooperate in good faith with Seller regarding such
environmental assessments and shall use its reasonable best efforts to
facilitate such environmental assessments.
Section 5.4 Limitations on Indemnification.
-------------------------------
(a) Seller shall not be required to indemnify Purchaser, and Purchaser
shall not be required to indemnify Seller, unless the aggregate amount of all
Losses incurred by Purchaser or Seller pursuant to Sections 5.1 or 5.2 (as the
case may be), exceeds $100,000. Once such aggregate amount of Losses incurred by
Purchaser, on the one hand, or Seller, on the other
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hand, exceeds $100,000, Purchaser or Seller, as the case may be, shall thereupon
be entitled to indemnification only for amounts in excess of such $100,000;
provided, however that the limitations contained in this sentence and the
immediately preceding sentence shall not apply to any claim of common law fraud,
any claims for indemnification for Excluded Liabilities, any claims under clause
(e) of Section 5.1, any claims under clause (c) of Section 5.1 relating to
Huntington Covenants or any claims under clause (c) of Section 5.1 relating to
Section 6.10 of the Huntington Representations and Warranties. In addition, no
party hereto shall assert any claim for indemnification hereunder, including
claims relating to Excluded Liabilities, to which such party is otherwise
entitled unless and until the aggregate of all such Losses (including any
related claims for Losses or any claims for Losses arising out of the same
operative set of facts) submitted for indemnification at such time exceeds
$10,000, at which time all such Losses may be asserted. No party hereto shall
have any obligation hereunder for any consequential liability, damage or loss or
any lost profits.
(b) Neither Seller, on the one hand, nor Purchaser, on the other hand,
shall be obligated to indemnify the other for Losses that exceed $5,000,000 in
the aggregate with all Losses asserted by such party; provided, however that the
limitations contained in this sentence shall not apply to any claim of common
law fraud, claims for indemnification for Excluded Liabilities or claims under
clause (e) of Section 5.1.
(c) Following the Closing, the sole and exclusive remedy of the parties
hereto with respect to any and all claims relating to the matters addressed in
Sections 5.1 and 5.2 (other than claims of common law fraud) shall be pursuant
to the indemnification provisions set forth in this Article V; provided however
that the parties may seek to enforce specifically this Agreement and the terms
and conditions hereof.
(d) Nothing in this Article V shall affect the rights and remedies of
Purchaser or Seller with respect to any breach by the other of any of their
covenants or agreements to be performed at or after the Effective Time.
Section 5.5 Treatment of Indemnification Payments.
--------------------------------------
Seller and Purchaser agree to treat any indemnification payment under
this Article V as an adjustment of the consideration paid for the Transferred
Assets for income tax purposes.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Attached hereto as Schedule 6.0 is a true and correct copy of the
representations and warranties made by Huntington to Seller pursuant to the
Huntington Agreement that relate to the Huntington Branches (the "Huntington
Representations and Warranties").
Except as otherwise disclosed to Purchaser in writing prior to the date
hereof, Seller represents and warrants to Purchaser as follows:
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Section 6.1 Corporate Organization; Corporate Authority.
--------------------------------------------
Seller is a state banking corporation duly organized, validly existing
and in good standing under the laws of the State of Georgia. Seller has the
corporate power and authority to carry on its businesses as currently conducted,
to execute and deliver this Agreement and related documents and to effect the
transactions contemplated herein. No further corporate authorization is
necessary for Seller to consummate the transactions contemplated hereunder.
Section 6.2 No Violation.
-------------
Assuming receipt of the required approvals referenced under Section
6.6, neither the execution and delivery of this Agreement, nor the consummation
of the transactions contemplated herein, will violate or conflict with: (i)
Seller's charters or bylaws; (ii) any material provision of any material
agreement or any other material restriction of any kind to which Seller is a
party or by which Seller is bound; (iii) any material statute, law, decree,
regulation, or order of any Governmental Authority; or (iv) any material
provision which will result in a default under, or cause the acceleration of the
maturity of, any material obligations or loans to which Seller is a party.
Section 6.3 Enforceable Agreement.
----------------------
This Agreement has been duly executed and delivered by Seller and, upon
execution and delivery by Purchaser, will be the legal, valid, and binding
agreement of Seller, enforceable against Seller in accordance with its terms,
except as the availability of equitable remedies may be limited by equitable
principles of general applicability.
Section 6.4 No Brokers.
-----------
All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Seller and Purchaser, and there has
been no participation or intervention by any other Person, firm or corporation
employed or engaged by or on behalf of Seller in such a manner as to give rise
to any valid claim against Seller or Purchaser for a brokerage commission,
finder's fee or like commission, except that Seller has engaged SunTrust Capital
Markets, Inc. and will be solely responsible for its fees and expenses.
Section 6.5 Litigation and Regulatory Proceedings.
--------------------------------------
There are no material actions, causes of action, complaints, claims,
suits or proceedings, pending or, to Seller's Knowledge, threatened, against
Seller and affecting the Transferred Assets or Transferred Liabilities, whether
at law or in equity or before or by a Governmental Authority. No Governmental
Authority has notified Seller that it would oppose or not approve or consent to
the transactions contemplated by this Agreement and Seller knows of no reason
for any such opposition, disapproval or nonconsent. Neither of Seller, nor any
of its Affiliates, is a party to any written order, decree, agreement or
memorandum or understanding with, or commitment letter or similar submission to,
any Governmental Authority charged with the supervision or regulation of
depository institutions, nor has Seller been advised by any such agency or
authority that it is contemplating issuing or requesting any such order, decree,
agreement, memorandum or understanding, commitment letter or submission, in each
case
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which, individually or in the aggregate, would materially and adversely affect
the ability of Purchaser to own the Transferred Assets or conduct the Banking
Operations after the Closing Date.
Section 6.6 Consents and Approvals.
-----------------------
Except for required Regulatory Approvals and third party consents set
forth on Schedule 6.6, no consents, approvals, filings or registrations with any
third party or any public body, agency or authority are required in connection
with Seller's consummation of the transactions contemplated by this Agreement,
other than as may be required as a result of any facts or circumstances relating
solely to Purchaser.
Section 6.7 Community Reinvestment Compliance.
----------------------------------
Seller is in compliance in all material respects with the applicable
provisions of the CRA and has received a CRA rating of "satisfactory" in its
most recent exam under the CRA, and Seller has no knowledge of the existence of
any fact or circumstance or set of facts or circumstances which could be
reasonably expected to result in Seller failing to be in compliance in all
material respects with such provisions or having its current rating lowered.
Section 6.8 FDIC Insurance.
---------------
The Deposit Liabilities are insured by the FDIC to the fullest extent
permitted by federal law, and all premiums and assessments required to be paid
in connection therewith have been paid when due.
Section 6.9 Employment Contracts.
---------------------
No Employee is a party to any individual contract with Seller for the
employment of the Employee or the provision of severance or change of control
benefits.
Section 6.10 Limitation of Representations and Warranties.
---------------------------------------------
Except as may be expressly represented or warranted in this Agreement,
Seller makes no representation or warranty whatsoever with regard to any asset
being transferred to Purchaser or any liability or obligation being assumed by
Purchaser or as to any other matter or thing.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Except as otherwise specifically herein provided, Purchaser hereby
represents and warrants to Seller as follows:
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Section 7.1 Corporate Organization; Corporate Authority.
--------------------------------------------
Purchaser is a federally chartered savings bank duly organized, validly
existing and in good standing under the laws of United States. Purchaser has the
corporate power and authority to carry on the business being acquired, to assume
the liabilities being transferred, to execute and deliver this Agreement and
related documents and to effect the transactions contemplated herein. No further
corporate authorization is necessary for Purchaser to consummate the
transactions contemplated hereunder.
Section 7.2 No Violation.
-------------
Assuming receipt of the required approvals referenced under Section
7.6, neither the execution and delivery of this Agreement nor the consummation
of the transactions contemplated herein will violate or conflict with (i) the
charter or bylaws of Purchaser, (ii) any material provision of any material
agreement or any other material restriction of any kind to which Purchaser is a
party or by which Purchaser is bound, (iii) any material statute, law, decree,
regulation or order of any Governmental Authority, or (iv) any material
provision which will result in a default under, or cause the acceleration of the
maturity of, any material obligation or loan to which Purchaser is a party.
Section 7.3 Enforceable Agreement.
----------------------
This Agreement has been duly executed and delivered by Purchaser and,
upon execution and delivery by Seller, will be the legal, valid, and binding
agreement of Purchaser, enforceable in accordance with its terms, except as the
availability of equitable remedies may be limited by equitable principles of
general applicability.
Section 7.4 No Brokers.
-----------
All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Purchaser and Seller and there has
been no participation or intervention by any other Person, firm, or corporation
employed or engaged by or on behalf of Purchaser in such a manner as to give
rise to any valid claim against Seller or Purchaser for a brokerage commission,
finder's fee, or like commission, except that Purchaser has engaged Sandler
O'Neill & Partners, L.P. and will be solely responsible for its fees and
expenses.
Section 7.5 Litigation and Regulatory Proceedings.
--------------------------------------
There are no actions, causes of action, complaints, claims, suits or
proceedings, pending or, to Purchaser's Knowledge, threatened, against
Purchaser, whether at law or in equity or before or by a Governmental Authority,
that, individually or in the aggregate, would reasonably be expected to have a
Purchaser Material Adverse Effect. No Governmental Authority has notified
Purchaser that it would oppose or not approve or consent to the transactions
contemplated by this Agreement, and Purchaser knows of no reason for any such
opposition, disapproval or nonconsent. Neither Purchaser nor any of its
Affiliates is a party to any written order, decree, agreement or memorandum or
understanding with, or commitment letter or similar submission to, any
Governmental Authority charged with the supervision or regulation of depository
institutions, nor has Purchaser been advised by any such agency or authority
that it is
-37-
contemplating issuing or requesting any such order, decree, agreement,
memorandum or understanding, commitment letter or submission, in each case
which, individually or in the aggregate, would materially and adversely affect
the ability of Purchaser to consummate the transactions contemplated by this
Agreement.
Section 7.6 Consents and Approvals.
-----------------------
Except for required Regulatory Approvals set forth on Schedule 7.6, no
consents, approvals, filings or registrations with any third party or any public
body, agency or authority are required of Purchaser in connection with
Purchaser's consummation of the transactions contemplated by this Agreement,
other than what may be required as a result of any facts or circumstances
relating solely to Seller. Purchaser has no reason to believe that it will not
be able to obtain all required regulatory approvals in a prompt and timely
manner.
Section 7.7 Regulatory Capital and Condition.
---------------------------------
Purchaser is in compliance with all capital standards as of the date
hereof, and has no reason to believe that it will be unable to obtain the
required regulatory approvals for the transactions contemplated by this
Agreement solely as a result of its current level of regulatory capital. As of
the date of this Agreement, there is no pending or threatened legal or
governmental proceedings against Purchaser or any Affiliate that would affect
Purchaser's ability to obtain the required regulatory approvals or satisfy any
of the other conditions required to be satisfied in order to consummate any of
the transactions contemplated by this Agreement.
Section 7.8 Financing.
----------
Purchaser will have not later than the close of business on the day
prior to the Effective Time sufficient funds available to consummate the
transactions contemplated hereby, including to make any payment pursuant to
Section 2.2.
Section 7.9 Community Reinvestment Act Compliance.
--------------------------------------
Purchaser is in compliance in all material respects with the applicable
provisions of the CRA and has received a CRA rating of "satisfactory" or better
in its most recent exam under the CRA, and Purchaser has no knowledge of the
existence of any fact or circumstance or set of facts or circumstances which
could be reasonably expected to result in Purchaser failing to be in compliance
in all material respects with such provisions or having its current rating
lowered.
ARTICLE VIII
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME
--------------------------------------------------------
Section 8.1 Full Access.
------------
(a) Until the Closing Date, Seller shall, or shall use its commercially
reasonable efforts to cause Huntington pursuant to the Huntington Agreement to,
afford to the officers and authorized representatives of Purchaser, upon prior
notice and subject to Seller's or
-38-
Huntington's, as applicable, normal security requirements, reasonable access to
the properties, books, and records pertaining to the Huntington Branches,
specifically including but not limited to all books and records relating to the
Deposit Liabilities, the Loans, the Real Property and the Personal Property, and
copies of the Software Licenses in order that Purchaser may make reasonable
investigations, and engage in operational planning, at reasonable times, without
interfering with the normal conduct of the Banking Operations or the affairs of
Seller or Huntington. Seller will cooperate with Purchaser to the extent
reasonably requested and legally permissible to provide Purchaser with
information about Employees and a reasonable opportunity to meet with Employees,
subject to Huntington's approval. Nothing in this Section 8.1 shall require
Seller to provide access to or disclose information where such access or
disclosure would violate the rights of customers, result in the loss of any
attorney-client privilege or contravene any law, rule, regulation, order,
judgment, decree, fiduciary duty or binding agreement entered into prior to the
date of this Agreement. The parties hereto shall make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply.
(b) Any information discovered, disclosed or revealed pursuant to
Sections 2.8, 2.9, or 2.14, Article IV or this Section 8.1, or otherwise
disclosed in connection with entering into or performing the covenants and
agreements contemplated under this Agreement, shall be subject to the provisions
of the Confidentiality Agreement.
Section 8.2 Application for Approval.
-------------------------
(a) On or prior to December 10, 2001, Purchaser shall have prepared and
have filed applications and notices relating to the Regulatory Approvals.
Purchaser agrees to process such applications as promptly as reasonably
practicable and to provide Seller promptly with a copy of such applications as
filed (except for any confidential portions thereof) and all material notices,
orders, opinions, correspondence, and other documents with respect thereto, and
to use its reasonable best efforts to obtain all Regulatory Approvals. Purchaser
shall promptly notify Seller upon receipt by Purchaser of notification that any
application provided for hereunder has been accepted or denied. Seller shall,
and Seller shall use its commercially reasonable efforts to cause Huntington
pursuant to the Huntington Agreement to, provide such cooperation and
information reasonably requested by Purchaser in connection with Purchaser's
compliance with the requirements of the applicable regulatory authorities.
(b) The parties shall use their reasonable best efforts to, and Seller
shall use its commercially reasonable efforts to cause Huntington pursuant to
the Huntington Agreement to, (i) cooperate in all respects with each other in
connection with any filing or submission and in connection with any
investigation or other inquiry relating to the Regulatory Approvals, (ii)
subject to applicable law, permit the other party to review and discuss in
advance, and consider in good faith the views of the other in connection with,
any proposed written or material oral communication (or other correspondence or
memoranda) between it and any Governmental Authority, (iii) promptly inform each
other of and supply to such other party any communication (or other
correspondence or memoranda) received by such party from, or given by such party
to, the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board") or any other Governmental Authority, in each case regarding any of the
transactions contemplated hereby, and (iv) consult with each other in advance of
any meeting or conference with the
-39-
Federal Reserve Board or any other Governmental Authority, and to the extent
permitted by the Federal Reserve Board or such other applicable Governmental
Authority, give the other party the opportunity to attend and participate in
such meetings and conferences.
(c) In furtherance and not in limitation of the parties' obligations
hereunder, if any objections are asserted with respect to the transactions
contemplated hereby under any antitrust or competition law, Purchaser agrees to
use its best efforts to resolve any antitrust concerns, federal, state, foreign
or private, obtain all Regulatory Approvals and obtain termination of any
applicable waiting periods and the termination of any outstanding federal or
state judicial or administrative orders prohibiting the Closing so as to permit
the prompt completion of the transactions contemplated hereby.
Section 8.3 Conduct of Business.
--------------------
Attached hereto as Schedule 8.3 is a copy of certain covenants made by
Huntington to Seller with respect to conduct of business of the Huntington
Branches prior to the Florida Franchise Closing Date (collectively, the
"Huntington Covenants").
Section 8.4 Solicitation of Customers and Employees.
----------------------------------------
At any time prior to the Closing Date, Purchaser will not, and will not
permit any of its Affiliates, if any, to conduct any mass marketing which is
specifically targeted to induce customers whose Deposit Liabilities are to be
assumed or whose Loans are to be acquired by Purchaser pursuant to this
Agreement to discontinue or limit their account relationships with Huntington or
Seller or to conduct any media or customer solicitation activities outside of
the ordinary course of business of Purchaser, consistent with past practice,
which are specifically targeted to induce any such customers to discontinue or
limit any such relationships, it being understood and agreed that the foregoing
is not intended to prohibit general advertising or solicitations directed to the
public generally or other similar activities conducted in the ordinary course of
business of Purchaser, consistent with past practice. For a period of 18 months
following the Closing Date, Seller will not, and will not permit any of its
Affiliates to conduct any mass marketing in the locations served by the
Huntington Branches which is specifically targeted to induce customers whose
Deposit Liabilities are to be assumed or whose Loans are to be acquired by
Purchaser pursuant to this Agreement to discontinue or limit their account
relationships with Purchaser or Seller or to conduct in the locations served by
the Huntington Branches any media or customer solicitation activities outside of
the ordinary course of business of Seller, consistent with past practice, which
are specifically targeted to induce any such customers to discontinue or limit
any such relationships, it being understood and agreed that the foregoing is not
intended to prohibit general advertising or solicitations directed to the public
generally or other similar activities conducted in the ordinary course of
business of Seller, consistent with past practice. In addition, for a period of
18 months following the Closing, neither Seller nor its Affiliates will, without
written permission from Purchaser, solicit for employment any Transferred
Employee who becomes an employee of Purchaser, provided that nothing contained
in this paragraph shall restrict any general advertisement or solicitation by
Seller or any of its Affiliates which is not directed at any particular
Transferred Employee.
-40-
Section 8.5 Efforts to Consummate; Further Assurances.
------------------------------------------
The parties hereto agree to use all reasonable efforts to satisfy or
cause to be satisfied as soon as practicable their respective obligations
hereunder and the conditions precedent to Closing. After the Effective Time,
Seller will, or will use its commercially reasonable efforts to cause Huntington
pursuant to the Huntington Agreement to, duly execute and deliver such
assignments, bills of sale, deeds, acknowledgments and other instruments of
conveyance and transfer as shall at any time be necessary or appropriate to vest
in Purchaser the full legal and equitable title to the Transferred Assets.
Section 8.6 Fees and Expenses.
------------------
Unless expressly stated to the contrary in this Agreement, each party
will assume and pay for the expenses it incurs with respect to the purchase and
sale of the Transferred Assets and the assumption of the Transferred Liabilities
under this Agreement; provided, however, that (i) Purchaser shall pay all fees
and expenses associated with its regulatory application process, (ii) each party
shall be responsible for any fee payable to any agent, broker or finder acting
on its behalf in this transaction, (iii) in addition to the expenses provided in
Section 2.2(d) with respect to real property sales and transfer taxes that are
payable or that arise as a result of the consummation of the transactions
contemplated hereby, Purchaser and Seller shall each be responsible for one-half
of the costs, charges and expenses relating to all title examinations, title
search fees, surveys, title insurance (including but not limited to premiums and
the costs of any endorsements), documentary stamp taxes, intangible taxes,
recording fees, transfer fees, sales and use and other transfer taxes arising in
connection therewith, (iv) Purchaser shall be responsible for the costs of
removing Seller's or Huntington's signage from the Huntington Branches and (v)
each of Seller and Purchaser shall be responsible for its own attorneys' and
accountants' fees and expenses related to this transaction.
Section 8.7 Third Party Consents.
---------------------
Seller shall, or shall use its commercially reasonable efforts to cause
Huntington pursuant to the Huntington Agreement to, use its commercially
reasonable efforts to obtain from the parties to any material contract,
agreement, license (including any Software License) or Personal Property Lease
to be transferred hereunder, any consents to the assignment of any such material
contracts, agreements, licenses and leases required under the terms of such
contract, agreement, license or lease in connection with the consummation of the
transactions contemplated hereby. Any transfer hereunder of any such contracts,
agreements, licenses and leases shall be made subject to such consents or
approvals being obtained.
Section 8.8 Insurance.
----------
Seller will maintain, or use its commercially reasonable efforts to
cause Huntington pursuant to the Huntington Agreement to maintain, in effect
until the Closing Date all casualty and public liability policies relating to
the Real Property and the activities conducted thereon and maintained by Seller
on the date hereof or procure comparable replacement policies and maintain such
replacement policies in effect until the Effective Time. As of the Effective
Time, Seller's or Huntington's, as applicable, insurance coverage shall cease,
and from and after the Effective
-41-
Time Purchaser shall be responsible for all insurance protection for the Real
Property and the activities conducted thereon.
Section 8.9 Public Announcements.
---------------------
Other than the mutually agreed upon press releases and other materials
to be issued upon the announcement of this Agreement, Seller and Purchaser agree
that from and after the date hereof neither shall make any public announcement
or public comment regarding this Agreement or the transactions contemplated
herein (including any of the terms hereof) without the prior written consent of
the other party (which consent shall not be unreasonably withheld or delayed),
unless and only to the extent that (i) the furnishing or use of such information
is required in making any filing or obtaining any consent or approval required
for the consummation of the transactions contemplated hereunder or (ii) the
furnishing or use of such information is required by applicable law, legal
proceedings or the rules or regulations of the SEC, the Nasdaq National Market
or the New York Stock Exchange. Further, Seller and Purchaser acknowledge the
sensitivity of this transaction to the Employees and agree that, until the
Effective Time, no announcements or communications with the Employees (other
than communications by Huntington or Seller that do not relate to the
transactions contemplated hereby) shall be made without the prior consent of the
other party, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, nothing in this Agreement shall preclude Seller
from furnishing any information to Huntington relating to the transactions
contemplated hereby.
Section 8.10 Tax Reporting.
--------------
Seller shall comply, or use its commercially reasonable efforts to
cause Huntington pursuant to the Huntington Agreement to comply, with all tax
reporting obligations in connection with the Transferred Assets and the
Transferred Liabilities on or before the Effective Time, and Purchaser shall
comply with all tax reporting obligations with respect to the Transferred Assets
and the Transferred Liabilities after the Effective Time.
Section 8.11 Advise of Changes.
------------------
Seller and Purchaser shall promptly advise the other party of any
change or event (i) having a Seller Material Adverse Effect or Purchaser
Material Adverse Effect, respectively, (ii) which they believe would or would be
reasonably likely to cause or constitute a material breach of any of their
representations, warranties or covenants contained herein or (iii) which they
believe would or would be reasonably likely to cause any of the conditions set
forth in Article IX or X not being satisfied; provided that a breach of this
Section 8.11 shall not be considered for purposes of determining the
satisfaction of the closing conditions set forth in Sections 9.1, 9.2, 10.1 or
10.2, or give rise to a right of termination under Article XI, if the underlying
breach or breaches with respect to which the other party failed to give notice
would not result in the failure of the closing conditions set forth in Section
9.1 or Section 9.2, in the case of a termination by Purchaser, or in Section
10.1 or Section 10.2, in the case of a termination by Seller, to be satisfied.
-42-
Section 8.12 Non Solicitation of Transactions.
---------------------------------
Neither Seller nor any of its Affiliates will (and Seller will use its
commercially reasonable best efforts to exercise its rights under the Huntington
Agreement to cause Huntington not to), directly or indirectly, through any
officer, director or agent of any of them or otherwise, encourage, solicit,
participate in or initiate discussions or agreements with respect to the sale of
the Huntington Branches. Seller will notify Purchaser orally (within one
Business Day) and in writing (as promptly as practicable) of any inquiry or
proposal received with respect to any such transaction. As of the date hereof,
Seller shall, and shall cause its and its Affiliates' officers, directors and
agents, to cease any pending discussions or negotiations regarding any such
transaction.
Section 8.13 Supplements to Schedules.
-------------------------
On the tenth (10th) day prior to the Closing Date anticipated by the
parties, Seller shall supplement or amend the Schedules that it has delivered
pursuant to this Agreement with respect to any matter first existing or
occurring after the date hereof which, if existing or occurring at or prior to
the date hereof, would have been required to be set forth or described in such
Schedules or which is necessary to correct any information in such Schedules
that has been rendered inaccurate thereby.
Section 8.14 Physical Damage to Huntington Branches.
---------------------------------------
In the event Seller receives written notice of any physical damage or
destruction which damage or destruction occurs following the date hereof, other
than ordinary wear and tear, to any Huntington Branch, Seller shall promptly
notify Purchaser in writing. The parties acknowledge that, in the event of any
such damage or destruction, Seller has the right, under the Huntington
Agreement, either (i) to repair or to cause Huntington to repair, prior to the
Closing Date, such damage or destruction to return such property to its
condition prior to such damage or destruction, (ii) to cause an adjustment to
the purchase price to be paid by Seller to Huntington under the Huntington
Agreement with respect to such item of property, or (iii) to receive an amount
equal to the sum of (x) the insurance proceeds received by Huntington with
respect to such damage or destruction, (y) any applicable deductible amount and
(z) such additional amount (up to, but not in excess of, an amount, when
aggregated with the amounts paid under the preceding clauses (x) and (y), equal
to the Property Price of the applicable Branch) as may be required to repair
such damage or destruction to return such property to its condition prior to
such damage or destruction, or, if the damage or destruction is not reasonably
capable of repair, to reflect the difference between the amounts paid under the
preceding clauses (x) and (y) and the Property Price of the applicable
Huntington Branch. If, within seven (7) days of Purchaser's receipt of such
notice of destruction or repair, Purchaser notifies Seller in writing of which
of the above elections it chooses to make (or to cause Seller to make), Seller
shall make such election on behalf of Purchaser in accordance with the terms of
the Huntington Agreement, and shall either (x) forward any proceeds actually
received by Seller in respect of such election to Purchaser promptly upon
Seller's receipt thereof, or (y) if Purchaser elects an adjustment to the
purchase price in accordance with clause (ii), reduce the Purchase Price by the
amount of any such reduction received by Seller. Notwithstanding the foregoing,
if Purchaser fails to notify Seller of its election in accordance with the
immediately preceding sentence, Seller shall be free
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to make whatever election it deems appropriate, Purchaser shall be deemed to
have made the election so made by Seller, and Seller shall either forward
proceeds actually received, or adjust the Purchase Price, in the same manner
described in clauses (x) and (y) above. Any such election made by Purchaser
(including a deemed election pursuant to the immediately preceding sentence)
shall be final and binding on Purchaser, and Seller shall have no further
obligation with respect to any such damage or destruction.
Section 8.15 Inspection of Branches and Operating Systems
--------------------------------------------
Purchaser may, at any time prior to December 31, 2001 and at its sole
cost and expense, arrange for an engineering inspection and report to be
completed by such date with respect to the Huntington Branches and the related
building operating systems (including, without limitation, plumbing, electrical,
HVAC, drive through air transport system, roof, structural, walls or
foundations, landscaping, drainage, sewage, utility systems, underground storage
tanks and parking facilities) to ensure that the Huntington Branches and the
related building operating systems are in reasonably good working condition,
ordinary wear and tear excepted, and in compliance in all material respects with
the ADA. If the inspection reveals the existence of defects in the buildings,
facilities or systems which interfere with the use of any of the Huntington
Branches for its intended purposes, the Purchaser shall so notify Seller in
writing, citing such deficiencies with specificity and providing Seller with a
copy of the engineer's report. At the Effective Time, Purchaser shall accept
possession of the Huntington Branch premises in their then "As Is" condition;
provided that if (x) the inspection reveals the existence of defects in the
buildings, facilities or systems which interfere with the use of any of the
Huntington Branches for its intended purposes and (y) the reasonable cost of
repairing such identified defects to restore the Huntington Branches and the
related building operating systems to an operating condition substantially the
same as the operating condition of the average branch facility and related
building operating systems currently operated by Purchaser exceeds $50,000 in
the aggregate, Purchaser shall be entitled to a reduction in the Purchase Price
equal to (a) 50%, times (b) the reasonable cost of repairing such identified
defects to restore the Huntington Branches and the related building operating
systems to an operating condition substantially the same as the operating
condition of the average branch facility and related building operating systems
currently operated by the Purchaser.
Section 8.16 Vendor Contracts
----------------
Seller shall be responsible for the payment of any obligation or
liability arising from any open vendor purchase orders of undelivered items
prior to the Effective Time; provided that Seller shall at its own expense
receive possession and ownership of such items and such items will be excluded
from the definition of Transferred Assets. Purchaser will pay for all necessary
supply and maintenance items in the ordinary course of business.
-44-
ARTICLE IX
CONDITIONS TO PURCHASER'S OBLIGATIONS
-------------------------------------
The obligation of Purchaser to complete the transactions contemplated
in this Agreement is conditioned upon fulfillment or, where legally permitted,
waiver, on or before the Closing Date, of each of the following conditions:
Section 9.1 Representations and Warranties True.
------------------------------------
The representations and warranties made by Seller in this Agreement
shall be true and correct as of the Effective Time as though such
representations and warranties were made at and as of such time (except that
representations and warranties that speak as of a specified date shall be true
and correct as of such date); provided, however, that for purposes of
determining the satisfaction of the condition contained in this Section 9.1,
such representations and warranties shall be deemed to be true and correct
unless the failure or failures of such representations and warranties to be so
true and correct (excluding the effect of any qualification set forth therein
relating to "materiality" or "Seller Material Adverse Effect") have,
individually or in the aggregate, a Seller Material Adverse Effect.
Section 9.2 Obligations Performed.
----------------------
Seller shall have performed and complied in all material respects, with
all obligations, covenants and agreements, taken as a whole, required by this
Agreement to be performed or complied with by it prior to or at the Effective
Time.
Section 9.3 Delivery of Documents.
----------------------
Seller shall have delivered to Purchaser those items required by
Section 3.2(b) hereof.
Section 9.4 Regulatory Approval.
--------------------
The parties shall have obtained the Regulatory Approvals. No
Governmental Authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any statute, judgment, decree, legal restraint
or other order (whether temporary, preliminary or permanent) (an "Order") that
is in effect and prohibits consummation of the transactions contemplated by this
Agreement.
Section 9.5 No Legal Prohibition.
---------------------
No court or other Governmental Authority of competent jurisdiction
shall have issued any Order which is in effect and which prohibits or makes
illegal the consummation of the transactions contemplated by this Agreement.
Section 9.6 No Litigation.
--------------
There shall not be pending before any court or Governmental Authority
of competent jurisdiction any action or proceeding by any third party that seeks
to prohibit the consummation
-45-
of the transactions contemplated by this Agreement and that has a substantial
probability of so prohibiting the transactions contemplated by this Agreement;
provided, however, that Purchaser shall not be entitled to assert the condition
to Closing contained in this Section 9.6 if it has breached in any material
respect its obligations under Section 8.2.
Section 9.7 No Seller Material Adverse Effect.
----------------------------------
There shall not have occurred and be continuing since the date of this
Agreement any change, condition, event or development (except to the extent
contemplated by the Schedules provided to Purchaser prior to the date hereof)
that, individually or in the aggregate, would constitute a Seller Material
Adverse Effect.
ARTICLE X
CONDITIONS TO SELLER'S OBLIGATIONS
----------------------------------
The obligation of Seller to complete the transactions contemplated in
this Agreement is conditioned upon fulfillment or, where legally permitted,
waiver, on or before the Closing Date, of each of the following conditions:
Section 10.1 Representations and Warranties True.
------------------------------------
The representations and warranties made by Purchaser in this Agreement
shall be true and correct as of the Effective Time as though such
representations and warranties were made at and as of such time (except that
representations and warranties that speak as of a specified date shall be true
and correct as of such date); provided, however, that for purposes of
determining the satisfaction of the condition contained in this Section 10.1,
such representations and warranties shall be deemed to be true and correct
unless the failure or failures of such representations and warranties to be so
true and correct (excluding the effect of any qualification set forth therein
relating to "materiality" or "Purchaser Material Adverse Effect") have,
individually or in the aggregate, a Purchaser Material Adverse Effect.
Section 10.2 Obligations Performed.
----------------------
Purchaser shall have performed and complied in all material respects,
with all obligations and agreements, taken as a whole, required by this
Agreement to be performed or complied with by it prior to or on the Effective
Time.
Section 10.3 Delivery of Documents.
----------------------
Purchaser shall have delivered to Seller those items required by
Section 3.2(c) hereof.
Section 10.4 Regulatory Approval.
--------------------
The parties shall have obtained all Regulatory Approvals. In addition,
to the extent there are other branches or deposits in the Florida Franchise for
which divestiture is required by any Governmental Authority that are not
included in the Huntington Branches, such other purchaser
-46-
or purchasers shall have received all required regulatory approvals to permit
such purchaser or purchasers to acquire such branches or deposits simultaneously
with the Closing Date. No Governmental Authority of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any Order that is in
effect and prohibits consummation of the transactions contemplated by this
Agreement.
Section 10.5 No Legal Prohibition.
---------------------
No court or other Governmental Authority of competent jurisdiction
shall have issued any Order which is in effect and which prohibits or makes
illegal the consummation of the transactions contemplated by this Agreement.
Section 10.6 Florida Franchise Closing.
--------------------------
The Florida Franchise Closing shall have occurred and the Huntington
Branches shall have been transferred to the Seller pursuant to the terms of the
Huntington Agreement.
ARTICLE XI
TERMINATION
-----------
Section 11.1 Methods of Termination.
-----------------------
This Agreement may be terminated in any of the following ways:
(1) by either Purchaser or Seller, in writing five (5) days in advance
of such termination, if the Closing has not occurred by August 31, 2002
(provided that no party shall be permitted to terminate this Agreement hereunder
if the failure of the Closing to occur prior to such date arises out of or
results from the actions or omissions of the terminating party);
(2) at any time on or prior to the Effective Time by the mutual consent
in writing of Seller and Purchaser;
(3) as a result of any breach of any representation, warranty or
covenant of the other party contained herein if (i) the terminating party has
given notice of such breach and such breach is not, or is not capable of being,
cured within thirty (30) days after such notice and (ii) such breach,
individually or in the aggregate with all other such breaches, would cause the
closing condition set forth in Section 9.1 or Section 9.2, in the case of a
termination by Purchaser, or in Section 10.1 or Section 10.2, in the case of a
termination by Seller, not to be satisfied;
(4) (i) any Regulatory Approval shall have been denied by final,
nonappealable action of such Governmental Authority, or such Governmental
Authority shall have requested permanent withdrawal of any application therefor
or (ii) any injunction, decree or other order issued by any Governmental
Authority or other legal
-47-
restraint or prohibition preventing consummation of the transactions
contemplated by this Agreement shall have been entered by any Governmental
Authority of competent jurisdiction or any applicable law shall have been
enacted or adopted that enjoins, prohibits or makes illegal consummation of any
of the transactions contemplated by this Agreement and such injunction, decree
or other order shall be final and nonappealable; provided that no such action or
request, and no such injunction, decree or other order, legal restraint or
prohibition shall permit Purchaser to terminate the Agreement pursuant to this
clause if such order, prohibition or restraint could be removed by complying
with the provisions of Section 8.2; or
(5) by Seller if the Huntington Agreement is terminated and the
Huntington Branches are not transferred to Seller pursuant to the terms of the
Huntington Agreement.
Section 11.2 Procedure Upon Termination.
---------------------------
(a) In the event of termination pursuant to Section 11.1 hereof, and
except as otherwise stated therein, written notice thereof shall be given to the
other party, and this Agreement shall terminate immediately upon receipt of such
notice unless an extension is consented to by the party having the right to
terminate. If this Agreement is terminated as provided herein:
(1) each party will return all documents, work papers and other
materials of the other party, including photocopies or other duplications
thereof, relating to this transaction, whether obtained before or after the
execution hereof, to the party furnishing the same;
(2) all information received by either party hereto with respect to the
business of the other party (other than information which is a matter of public
knowledge or which has heretofore been published in any publication for public
distribution or filed as public information with any Governmental Authority)
shall not at any time be used for any business purpose by such party or
disclosed by such party to third Persons; and
(3) except as provided in Section 11.3, each party will pay its own
expenses; provided that if this Agreement is terminated pursuant to clause (5)
of Section 11.1, then promptly following such termination Seller shall reimburse
to the Purchaser the reasonable, documented out-of-pocket expenses incurred by
Purchaser in connection with this Agreement up to a maximum reimbursement not
exceeding $150,000.
(b) In the event of termination of this Agreement pursuant to this
Article XI, this Agreement (other than as set forth in Sections 8.1 and 12.4)
shall become void and of no effect with no liability on the part of any party
hereto (or of any of its directors, officers, employees, agents, legal and
financial advisors or other representatives); provided, however, that, no such
termination shall absolve the breaching party from any liability to the other
party arising out of its knowing or willful breach of this Agreement.
-48-
Section 11.3 Payment of Expenses.
--------------------
Should the transactions contemplated herein not be consummated because
of a party's breach of this Agreement, in addition to such damages as may be
recoverable in law or equity, the other party shall be entitled to recover from
the breaching party upon demand, itemization, and documentation, its reasonable
outside legal, accounting, consulting, and other out-of-pocket expenses.
ARTICLE XII
MISCELLANEOUS PROVISIONS
------------------------
Section 12.1 Amendment and Modification; Waiver.
-----------------------------------
This Agreement may not be amended or modified in any manner except by
mutual agreement of the parties and as set forth in a writing signed by the
parties hereto or their respective successors in interest.
Subject to applicable law, either party, by written instrument signed
by a duly authorized officer, may extend the time for the performance of any of
the obligations or other acts of the other party and may waive (i) any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto or (ii) compliance with any of the
undertakings, obligations, covenants or other acts contained herein. The waiver
of any breach of any provision under this Agreement by a party shall not be
deemed to be a waiver of any preceding or subsequent breach under this
Agreement.
Section 12.2 Survival.
---------
Except as otherwise provided herein, the parties' respective
representations and warranties contained in this Agreement shall survive (i) in
all cases other than with respect to the representations and warranties
contained in Section 6.3, until the 18-month anniversary of the Effective Time,
and (ii) in the case of the representations and warranties contained in Section
6.3, the five-year anniversary of the Effective Time; provided that any
representation or warranty shall be deemed to survive its relevant anniversary
solely for the purpose of resolving any claim with respect thereto submitted by
an indemnified party in accordance with Article V prior to such relevant
anniversary with respect to Losses incurred by the applicable indemnified party
prior to such anniversary and asserted under such claim and relating to the
relevant surviving representations and warranties. The covenants and agreements
contained in this Agreement which by their terms contemplates performance after
the Effective Time shall survive the Effective Time in accordance with such
terms.
Section 12.3 Assignment.
-----------
This Agreement and all of the provisions hereof shall be binding upon,
and shall inure to the benefit of, the parties hereto and their successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by either of
-49-
the parties hereto without the prior written consent of the other except by
operation of law in connection with a merger or consolidation of a party.
Section 12.4 Confidentiality.
----------------
Purchaser and Seller agree that the Confidentiality Agreement shall
survive the execution hereof, any termination hereof or any consummation of the
transactions contemplated herein.
Section 12.5 Addresses for Notices, Etc.
---------------------------
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (i)
delivered by hand (with written confirmation of receipt), (ii) deposited in the
United States Mail by registered or certified mail, return receipt requested,
(iii) sent by telecopier (with electronic confirmation of receipt), provided
that a copy is mailed by registered or certified mail, return receipt requested,
or (iv) when received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to the appropriate
addresses or telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):
If to Seller, to: John W. Spiegel
Vice Chairman and Chief Financial Officer
SunTrust Bank
303 Peachtree Street, NE, 30th Floor
Atlanta, Georgia 30308
Facsimile Number: (404) 827-6173
with a copy to: Raymond D. Fortin
General Counsel
SunTrust Bank
303 Peachtree Street, NE, 29th Floor
Atlanta, Georgia 30308
Facsimile Number: (404) 724-3550
-50-
If to Purchaser, to: Gregory Wilkes
Chief Executive Officer
FloridaFirst Bank
205 East Orange Street
P.O. Box 1527
Lakeland, FL 33801
Facsimile Number: (863) 686-6642
with a copy to: Richard Fisch, Esq.
Malizia, Spidi & Fisch, PC
1100 New York Avenue NW
Suite 340 West
Washington, D.C. 20005
Facsimile Number: (202) 434-4661
Section 12.6 Counterparts.
-------------
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 12.7 Headings.
---------
The headings of the Articles and Sections of this Agreement are
inserted for convenience only and shall not constitute a part thereof.
Section 12.8 Governing Law.
--------------
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Florida applicable to contracts made and to be
performed entirely within such state.
Section 12.9 Entire Agreement.
-----------------
Except for the Confidentiality Agreement, this Agreement and the
exhibits and attachments hereto represent the entire agreement between the
parties hereto respecting the transactions contemplated hereby and all prior or
contemporaneous written or oral proposals, agreements in principle,
representations, warranties and understandings between the parties with respect
to such matters are superseded hereby and merged herein.
Section 12.10 No Third Party Beneficiaries.
-----------------------------
Nothing in this Agreement is intended to or shall confer upon or give
to any Person (other than the parties hereto, their successors and permitted
assigns) any rights or remedies under or by reason of this Agreement, or any
term, provision, condition, undertaking, warranty, representation, indemnity,
covenant or agreement contained herein.
-51-
Section 12.11 Calculation of Dates and Deadlines.
-----------------------------------
Unless otherwise specified, any period of time to be determined under
this Agreement shall be deemed to commence at 12:01 a.m. on the first full day
after the specified starting date, event, or occurrence. Any deadline, due date,
expiration date, or period-end to be calculated under this Agreement shall be
deemed to end at 5 p.m. on the last day of the specified period. The time of day
shall be determined with reference to the then current local time in Florida.
Section 12.12 Consent to Jurisdiction; Waiver of Jury Trial.
----------------------------------------------
Each of the parties hereto hereby irrevocably and unconditionally
submits to the jurisdiction of any state court of the State of Florida and any
federal court sitting in Orlando, Florida, and irrevocably agrees that all
actions or proceedings arising out of or relating to this agreement or the
transactions contemplated hereby or in aid or arbitration or for enforcement of
an arbitral award shall be litigated exclusively in such courts. Each of the
parties hereto agrees not to commence any legal proceedings related hereto
except in such courts. Each of the parties hereto irrevocably waives any
objection which he or it may now or hereafter have to the laying of the venue of
any such proceeding in any such court and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 12.13 Severability.
-------------
Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be only
so broad as is enforceable.
Section 12.14 Specific Performance.
---------------------
Each of the parties acknowledges and agrees that the other party would
be damaged irreparably in the event any of the provisions of this Agreement are
not performed in accordance with their specific terms or otherwise are breached.
Accordingly, each of the parties agrees that the other party shall be entitled
to seek an injunction or injunctions to prevent breaches of the provisions of
this Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having jurisdiction over the parties and the matter, in
addition to any other remedy to which it may be entitled, at law or in equity.
-52-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers as of the date first written
above.
SUNTRUST BANK
By: /s/Ray Fortin
------------------------------------------
Name: Ray Fortin
Title: Senior Vice President
FLORIDAFIRST BANK
By: /s/Gregory C. Wilkes
------------------------------------------
Name: Gregory C. Wilkes
Title: President and Chief Executive Officer
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