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Exhibit 10
Material Contracts
Agreement and Plan of Reorganization with Commercial and Savings Bank Co.,
Danville, Ohio
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AGREEMENT AND PLAN OF REORGANIZATION
This is an AGREEMENT dated April 13, 1998, between Killbuck Bancshares,
Inc. (hereinafter called "Killbuck") and Commercial and Savings Bank Co.
(hereinafter called "Commercial").
WITNESSETH:
Killbuck is a corporation duly organized under the laws of the State of
Ohio. Its principal office is located at 165 N. Main St., Killbuck, Ohio. As of
the date hereof, Killbuck had authorized capital stock consisting of 200,000
shares of common stock, without par value ("Killbuck Common Shares") of which a
total of 132,380 shares are issued and outstanding and 2,620 shares of treasury
stock. Killbuck owns all of the outstanding capital stock of The Killbuck
Savings Bank Company. (hereinafter referred to as the "Subsidiary").
Commercial is an Ohio state banking corporation duly organized under
the laws of the State of Ohio. Its principal office is located at 701 S. Market
St., Danville, Knox County, Ohio. As of the date hereof, Commercial has
authorized capital stock consisting of 20,200 authorized shares of common stock,
$10.00 par value per share ("Commercial Common Stock"), all of which shares are
issued and outstanding and none were shares of treasury stock owned by
Commercial.
At least a majority of the entire Board of Directors of Killbuck and at
least a majority of the entire Board of Directors of Commercial, respectively,
have approved the entering into of this Agreement and have authorized the
execution and delivery of this Agreement. The Boards of Directors of Killbuck
and Commercial have determined that it is in the best interests of their
respective corporations and Shareholders that Commercial become a wholly owned
subsidiary corporation of Killbuck. After the execution of this Agreement,
Killbuck and Commercial will cause, subject to the terms and conditions set
forth in this Agreement, the merger of Commercial with and into Killbuck Bank,
in accordance with the terms set forth in the Merger Agreement attached hereto
and designated Appendix A (the "Merger Agreement"). From and after the time the
merger of Commercial and Killbuck Bank shall become effective, (the "Merger")
and as and
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when required by this Agreement and the Merger Agreement, Killbuck will issue
its Common Shares in exchange for all of the issued and outstanding shares of
Commercial Common Stock.
In consideration of mutual covenants and agreements herein contained,
Killbuck and Commercial hereby make this Agreement and prescribe the terms and
conditions of the Merger and the mode of carrying the Merger into effect as
follows:
1. Execution of Merger Agreement. As soon as practicable after the date
hereof, Killbuck Bank and Commercial will enter into the Merger
Agreement. Upon consummation of the Merger, each share of Commercial
Common Stock, (other than Dissenter Shares, as defined in Section 5)
shall be converted into the right to receive .4317 duly authorized,
validly issued, fully paid and non-assessable Killbuck Common Shares,
in accordance with the provisions regarding the exchange of shares set
forth in the Merger Agreement, subject to adjustment in the event of
any stock dividend, stock split or other general distribution of
Killbuck Common Stock prior to the Merger.
2. Articles of Incorporation and Code of Regulations. The Articles of
Incorporation and Code of Regulations of Killbuck Bank shall be the
Articles of Incorporation and Code of Regulations of the surviving
banking corporation upon the consummation of the Merger of Commercial
with and into Killbuck Bank.
3. Discussions with Others; Other Offers. On and after the date hereof,
except with the written consent of Killbuck, Commercial shall not
directly or indirectly solicit or encourage (nor shall Commercial
permit any of its officers, directors, employees or agents directly or
indirectly to solicit or encourage), including by way of furnishing
information, any inquiries or proposals for a merger, consolidation,
share exchange or similar transaction involving Commercial or for the
acquisition of the stock or all or substantially all of the assets or
business of Commercial, or discuss with or enter into conversations
with any person, other than Commercial shareholders or employees,
concerning any such merger, consolidation, share exchange, acquisition
or other transaction, other than the share exchange with Killbuck;
provided, however, that
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Commercial may communicate information about any such proposals or
inquiries to its shareholders if and to the extent that it is required
to do so in order to reasonably comply with its legal obligations.
Commercial will promptly notify Killbuck orally (to be confirmed in
writing as soon as practicable thereafter) of all of the relevant
details relating to any inquiries or proposals that it may receive
relating to any such matters, including actions it intends to take with
respect to such matters.
In order to induce Killbuck to enter into this Agreement and
incur the substantial expenses involved in effectuating the
transactions contemplated herein, Commercial agrees and does hereby
promise to pay to Killbuck the sum of $100,000, upon Killbuck's demand
therefor, in the event that the Commercial shareholders fail to approve
this Agreement or the Merger Agreement as a result of Commercial's
decision to entertain offers from and negotiate with a bona fide
offeree other than Killbuck.
4. Undertakings of the Parties. Killbuck and Commercial further covenant
and agree as follows:
(a) As soon as the Registration Statement referenced in (c) below
shall become effective or an exemption to registration relied
upon, this Agreement and the Merger Agreement shall be
submitted to the Shareholders of Commercial for approval and
adoption at a special meeting of Shareholders to be called and
held in accordance with law and the Articles of Incorporation
and Code of Regulations of Commercial.
(b) As promptly as possible after the date hereof, each of
Killbuck and Commercial shall use its best efforts, separately
and jointly with the other party, in good faith to take or
cause to be taken all such steps as shall be necessary or
advisable to obtain all consents and approvals of governmental
authorities as are required by law or otherwise to effect the
share exchange, including without limitation the approval of
the Federal Reserve Board (the "Board"), the approval of the
Ohio Department of Commerce (Division of Financial
Institutions Office of Banks and
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Savings & Loans) and the approval of the Federal Deposit
Insurance Corporation, and shall do any and all acts and
things reasonably necessary or advisable in order to cause the
share exchange to be consummated on the terms provided in this
Agreement and to complete the Merger as promptly as
practicable. Killbuck and Commercial will cooperate in
complying with and in the preparation of proxy and
registration statements under federal and state securities
laws so as to facilitate the exchange of shares as
contemplated by this Agreement and the Merger Agreement.
(c) Each party will assume and pay all of its fees and expenses
incurred by it incident to the negotiation, preparation and
execution of this Agreement, obtain the requisite regulatory
and shareholder consents and approvals and take all other acts
incidental to, contemplated by or in pursuance of this
Agreement. Killbuck shall be responsible for preparing and
filing at no expense to Commercial: (i) any and all required
regulatory applications necessary in connection with the
transactions contemplated by this Agreement; and (ii) an S-4
Registration Statement to be filed with the Securities and
Exchange Commission to register the Killbuck Common Shares to
be issued in connection with the transactions contemplated by
this Agreement or shall secure a suitable exemption from
registration; provided, however, that such registration
statement will not cover resales by any persons who may be
considered "underwriters" under Rule 145(c) of the Securities
Act of 1933, as amended (the "1933 Act") and (iii) any
documents to be filed or action required to be taken under any
applicable state securities or "Blue Sky" laws in connection
with the Merger.
(d) Between the date of this Agreement and the effective time of
the Merger, each party (reviewee) will afford to the
representatives of the other party (reviewer), including its
counsel and auditors, during normal business hours, full
access to any and all assets of, or information with respect
to, reviewee to the end that
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reviewer may have full opportunity to make an investigation,
in advance of the effective time as it shall reasonably desire
in order to effectuate the purposes of this Agreement. To the
extent reasonable under the circumstances, the officers of
reciewee will confer with the representatives of reviewer and
will furnish to reviewer either orally or by means of such
records, documents, and memoranda as are reasonably available
or capable of preparation (all of which reviewer will be
permitted to make copies of) and such other information as
reviewer may reasonably request. All information furnished by
one party to another party in connection with this Agreement
and the transactions contemplated hereby will be kept
confidential by such other party and will be used only in
connection with this Agreement and the transactions
contemplated hereby, except to the extent that such
information: (i) is already known to such other party when
received; (ii) thereafter becomes lawfully obtainable from
other sources; or (iii) is required to be disclosed in any
document filed with the Securities and Exchange Commission,
the Board, or any other governmental agency or authority. In
the event that this Agreement is terminated, each party will
return to the other party or destroy any documents received by
it from the other party that contain any such confidential
information.
(e) After (i) receipt of the Board's prior approval of Killbuck's
acquisition of Commercial; (ii) the approval of the
Shareholders of Commercial; and (iii) the regulatory waiting
period(s) have expired, Killbuck shall designate the date as
of which Killbuck desires the Merger to become effective and
the time the Merger shall become effective shall occur at the
time and on the date so designated, provided, that the date so
designated shall not be later than 30 days following the last
of the events described above (i-iii) shall occur.
(f) Subject to the terms and conditions of this Agreement,
Killbuck and Commercial each agree that, subject to applicable
laws and to the fiduciary duties of its
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respective directors, each will promptly take or cause to be
taken all action, and promptly do or cause to be done all
things necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the Merger
and other transactions contemplated by this Agreement.
(g) Killbuck shall offer the existing employees of Commercial the
opportunity to become employees of Killbuck Bank (i.e. the
surviving banking corporation under the Merger Agreement)
following consummation of the Merger; provided, however, that
nothing in this section or elsewhere in this Agreement shall
be deemed to be a contract of employment or be construed to
give said employees any rights other than as employees at will
under Ohio law and said employees shall not be deemed to be
third-party beneficiaries of this provision. Commercial's
employees who become employees of Killbuck Bank after the
Merger will have their years of service credited toward
eligibility and vesting in Killbuck's qualified retirement
plans, but shall be treated as new employees for purposes of
accrual of benefits under any such qualified plans. With
respect to all non-qualified benefits plans (such as vacation,
sick days, and policies of like import) Commercial's employees
who become employees of Killbuck after the Merger will have
their years of service credited toward the determination of
whether and to the extent that they participate in such
non-qualified plans, but shall be treated as new employees for
purposes of the determination of the accrual of any benefit
based on past service.
(h) Commercial shall, prior to the time the Merger shall become
effective, take such actions, in consultation with Killbuck,
as shall be necessary or desirable to cause termination of any
qualified retirement plans of Commercial at or after the
effective date of Merger.
(i) Killbuck and Commercial acknowledge that the transactions
contemplated hereby are subject to the provisions of the
Securities Act of 1933, as amended (the "Act")
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and Rule 145 thereunder. Killbuck agrees to prepare and file,
as soon as practicable after the execution of this Agreement,
the Registration Statement under and pursuant to the
provisions of the Act for the purposes of registering the
Killbuck Common Shares to be issued in connection with the
transactions contemplated hereby or in lieu thereof to secure
a suitable exemption therefrom. Commercial agrees to provide
promptly to Killbuck information concerning the business and
financial condition and affairs of Commercial as may be
required or appropriate for inclusion in any such Registration
Statement and to cause its counsel and auditors to cooperate
with Killbuck counsel and auditors in the preparation of any
such Registration Statement. Killbuck agrees to use its best
efforts to have such Registration Statement declared effective
under the Act as soon as may be practicable, and Commercial
agrees to distribute the prospectus/proxy statement (to be
prepared by and furnished at Killbuck's expense) contained in
such Registration Statement (the Commercial "Prospectus/Proxy
Statement") to Commercial shareholders prior to the scheduled
meeting of Commercial shareholders that will be held to
consider approval of this Agreement and the Merger Agreement.
Except to the extent permitted by Rule 145(b), Killbuck and
Commercial agree not to publish any communication other than
the Prospectus/Proxy Statement, in respect of this Agreement,
the Merger Agreement, or the transactions contemplated
therein. Any communication by either party under Rule 145(b)
will be made only upon the written approval of the other.
Killbuck and Commercial agree that, between the date the
Registration Statement becomes effective and the effective
time of the Merger, they will keep each other advised on a
current basis of material developments concerning their
respective businesses, including any event which would cause
the Prospectus/proxy Statement to contain an untrue statement
of a material fact or omit to state any material fact
necessary to make the statements therein not
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misleading. Killbuck shall not be required to maintain the
effectiveness of the Registration Statement for the purpose of
resale of Killbuck Common Shares by Commercial shareholders
who may be deemed to be affiliates of Commercial, as such term
is defined in Rule 144 promulgated under the Act (the
"Affiliates").
(j) Each Affiliate of Commercial shall furnish to Killbuck a
certificate representing that such Affiliate will not sell,
assign, or transfer any of the Killbuck Common Shares received
by such Affiliate as a result of the transactions contemplated
by this Agreement, except pursuant to (a) registration under
the act or (b) a transaction permitted by Rule 145 under the
Act, or (c) a transaction in which, in the opinion of counsel
satisfactory to Killbuck, or in accordance with a "no action"
letter from the staff of the Securities and Exchange
Commission, the Killbuck Common Shares are not required to be
registered under the Act; and in the event of sale or other
disposition pursuant to Rule 145 such Affiliate will supply
satisfactory evidence of compliance with such Rule to
Killbuck. With respect to such representations, each Affiliate
shall agree to hold harmless and indemnify Killbuck and
Killbuck's officers and directors from and against any losses,
claims, damages, expenses (including reasonable attorneys'
fees), or liabilities to which Killbuck or any officer or
director of Killbuck may become subject under the Act or
otherwise as a result of the untruth, breach, or failure of
such representations. Each Affiliate shall further agree that
the certificate or certificates representing the Killbuck
Common Shares issued to such Affiliate upon the consummation
of the Share Exchange may bear the following restrictive
legend:
"The shares represented by this certificate have been
issued or transferred to the registered holder as a
result of a transaction to which Rule 145 under the
Securities Act of 1933, as amended (the "Act"),
applies. The shares represented by this certificate
may not
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be sold, transferred or assigned, and the
issuer shall not be required to give effect to any
attempted sale, transfer or assignment, except
pursuant to (i) current registration under the Act,
(ii) a transaction permitted by Rule 145 and as to
which the issuer has received reasonable and
satisfactory evidence of compliance with the
provisions of Rule 145, or (iii) a transaction in
which, in the opinion of counsel satisfactory to the
issuer or in accordance with a "no action" letter
from the staff of the Securities and Exchange
Commission, such shares are not required to be
registered under the Act."
Killbuck covenants and agrees to remove the foregoing restrictive
legend from the certificate or certificates representing the
Killbuck Common Shares issued to an Affiliate and to cancel
any stop order instructions with respect thereto upon (i)
receipt of advice from its counsel that such actions are
appropriate under the then existing circumstances, or (ii)
upon request of the holder thereof at anytime after that
period ending one year following the Merger, provided that the
holder thereof is not, and has not for at least the thirty day
period ending prior to the request been an affiliate of
Killbuck.
(k) Killbuck shall, to the extent required by applicable state
securities or "blue sky" laws, as promptly as practicable
after the furnishing by Commercial of all information
regarding Commercial required or desirable to be reflected
therein file with applicable state securities or blue sky
administrators, use its best efforts to cause to become
effective or be approved, all registration statements or
applications required to be so filed with respect to the
issuance of the Killbuck Common Shares in connection with the
Agreement of Merger.
(l) On the date the Registration Statement becomes effective and
at the effective time of the Merger, Commercial shall deliver
to Killbuck a certificate signed by the
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principal executive officer and by the principal financial
officer of Commercial to the effect that the information
contained in the Registration Statement relating to the
business and financial condition and affairs of Commercial
does not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading. On
the date the Registration Statement becomes effective and at
the effective time of the Merger, Killbuck shall deliver to
Commercial a certificate signed by the chief executive officer
and by the chief financial officer of Killbuck to the effect
that the Registration Statement (other than the information
contained therein relating to the business and financial
condition and affairs of Commercial) does not contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading.
(m) Killbuck undertakes to consider and interview, after the
effective time of the Merger, such directors of Commercial as
shall desire to be considered for a position as a director of
the resulting banking corporation after the merger of
Commercial with and into Subsidiary, and Killbuck may in its
sole discretion add one or two such persons to the Board of
Directors of the Subsidiary.
5. Dissenting Shareholders. Holders of Commercial Common Stock, who do not
vote their shares in favor of the Merger and otherwise comply in all
respects to perfect dissenters' rights, will be entitled to dissenters'
or appraisal rights, if any, pursuant to and solely upon strict
compliance with, the applicable provisions of Ohio law (collectively,
the "Dissenting Shares").
6. Tax Opinion. Killbuck, for the benefit of Killbuck, Commercial and
Commercial's Shareholders, shall obtain a written opinion of it's
counsel, to the effect that:
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(a) The statutory merger of Killbuck Bank with and into Commercial
will constitute a reorganization within the meaning of Section
368(a)(1)(A) and (a)(2)(E) of the Internal Revenue Code;
(b) No gain or loss will be recognized by Commercial as a
consequence of the transactions herein contemplated;
(c) No gain or loss will be recognized by the Shareholders of
Commercial on the exchange of their shares of Commercial
Common Stock for Killbuck Common Shares (disregarding for this
purpose any cash received for fractional share interests to
which they may be entitled);
(d) The federal income tax basis of the Killbuck Common Shares
received by the Shareholders of Commercial for their shares of
Commercial Common Stock will be the same as the federal income
tax basis of the Commercial Common Stock surrendered in
exchange therefor; and
(e) The holding period of the Killbuck Common Shares received by a
shareholder of Commercial in exchange for shares of Commercial
Common Stock will include the period for which the Commercial
Common Stock exchanged therefor was held, provided the
exchanged Commercial Common Stock was held as a capital asset
by such shareholder on the date of the exchange.
7. Representations and Warranties of Killbuck. Killbuck represents and
warrants to Commercial as follows:
(a) Killbuck is a corporation duly organized and validly existing
under the laws of the State of Ohio, is a registered bank
holding company under the Bank Holding Company Act of 1956, as
amended, and is qualified to do business in the State of Ohio,
together with all other jurisdictions where it is both
required to so qualify and the failure to so qualify would
have material and adverse consequences to Killbuck. Killbuck
has full power and authority (including all licenses,
franchises, permits and other governmental authorizations
which are legally
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required) to engage in the businesses and activities now
conducted by it, including the businesses of Subsidiary. As of
December 31, 1997, the authorized capital stock of Killbuck
consisted of 200,000 shares of common stock, without par
value, of which a total of 132,380 shares were issued and
outstanding and 2,620 shares were held by Killbuck as treasury
stock. All of said shares of capital stock are fully paid and
nonassessable and are not issued in violation of the
preemptive rights of any shareholder.
(b) Killbuck has furnished to Commercial copies of its audited
Consolidated Balance Sheets as of December 31, 1997, and 1996,
and the Consolidated Statements of Income, Shareholders'
Equity and Statements of Cash Flows for the three years ended
December 31, 1997, 1996 and 1995, together with the notes
thereto. Each of the aforementioned financial statements was
prepared in accordance with Generally Accepted Accounting
Principles, consistently applied and is true and correct in
all material respects and together present fairly the
consolidated financial position and results of operations of
Killbuck as of the dates and for the periods therein set
forth. Such financial statements do not, as of the dates
thereof, include any material asset or omit any material
liability, absolute or contingent, or other fact, the
inclusion or omission of which renders such financial
statements, in light of the circumstances under which they
were made, misleading in any material respect. Since December
31, 1997, there has not been any material adverse change in
the financial condition, results of operations, business or
prospects of Killbuck and the Subsidiary on a consolidated
basis.
(c) The Board of Directors of Killbuck has authorized execution of
this Agreement and the Merger Agreement and approved the
merger of Subsidiary and Commercial as contemplated herein and
therein. Killbuck and Subsidiary have all requisite power and
authority to enter into this Agreement and the Merger
Agreement and Killbuck and Subsidiary have the authority to
consummate the
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transactions contemplated hereby. This Agreement constitutes
the valid and legally binding obligation of Killbuck and this
Agreement and the consummation of the transactions
contemplated herein have been duly authorized and approved on
behalf of Killbuck by all requisite corporate action. Provided
the required approvals are obtained from the Board, neither
the execution and delivery of this Agreement or the Merger
Agreement nor the consummation of the Merger will conflict
with, result in the breach of, constitute a default under or
accelerate the performance provided by the terms of any law,
or any rule or regulation of any governmental agency or
authority or any judgment, order or decree of any court or
other governmental agency to which Killbuck or Subsidiary may
be subject, any contract, agreement or instrument to which
Killbuck or Subsidiary is a party or by which Killbuck or
Subsidiary is bound or committed, or the Articles of
Incorporation or Code of Regulations of Killbuck or
Subsidiary, or constitute an event which with the lapse of
time or action by a third party, could, to the best of
Killbuck's knowledge, result in the default under any of the
foregoing or result in the creation of any lien, charge or
encumbrance upon any of the assets or properties of Killbuck
or Subsidiary or upon any of the stock of Killbuck or
Subsidiary; except, however, in the case of contracts,
agreements or instruments, such defaults, conflicts or
breaches which either (i) will be cured or waived prior to the
time the Merger becomes effective, or (ii) if not so cured or
waived would not, in the aggregate, have any material adverse
effect on the financial condition, results of operations or
business of Killbuck on a consolidated basis.
(d) There is no litigation, action, suit, investigation or
proceeding pending or, to the best of the knowledge after due
inquiry of Killbuck and its executive officers, threatened,
against or affecting Killbuck and/or the Subsidiary or
involving any of their respective properties or assets, at law
or in equity, before any federal, state, municipal, local or
other governmental authority, involving a material amount
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which, if resolved adversely to the interest of Killbuck and
the Subsidiary, would materially affect the financial
conditions or operations of Killbuck and the Subsidiary and/or
its ability to perform under this Merger Agreement, and to the
best of the knowledge and belief after due inquiry of Killbuck
and its executive officers, no one has asserted and no one has
reasonable or valid grounds on which it reasonably can be
expected that anyone will assert any such claims against
Killbuck and the Subsidiary based upon the wrongful action or
inaction of Killbuck and the Subsidiary or any of their
respective officers, directors or employees.
(e) At the time the Merger shall become effective and on such
subsequent date when the former Shareholders of Commercial
surrender their Commercial share certificates for
cancellation, the Killbuck Common Shares to be received by
Shareholders of Commercial will have been duly authorized and
validly issued by Killbuck and will be fully paid and
nonassessable.
(f) Killbuck has not incurred and will not incur directly or
indirectly any liability for brokerage, finders', agents' or
investment bankers' fees or commissions in connection with
this Agreement or the transactions contemplated thereby.
(g) The Pension Plan for the Employees of Killbuck Bancshares,
Inc. and its affiliates and any other plan which purport to be
qualified plans under Section 401(a) of the Internal Revenue
Code is so qualified and is in compliance in all material
respects with the applicable requirements of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
All material notices, reports and other filings required under
applicable law to be given or made to or with any governmental
agency with respect to the plans have been timely filed or
delivered where failure to file will result in a penalty or
result in disqualification of the plan. Killbuck has no
knowledge either of any circumstances which would adversely
affect the qualifications of the plans or their compliance
with the applicable
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requirements of ERISA, or of any "reportable event" (as such
term is defined in Section 4043(b) of ERISA) or any
"prohibited transaction" (as such term is defined in Section
406 of ERISA and Section 4975(c) of the Internal Revenue Code)
which has occurred since the date on which said section became
applicable to the plans. With respect to those plans which are
defined benefit plans within the meaning of ERISA, such plans
meet the minimum funding standards set forth in the Internal
Revenue Code and ERISA.
(h) Since December 31, 1997, each of Killbuck and the Subsidiary
has conducted business only in the ordinary course, and has
preserved its corporate existence, business and goodwill
intact.
(i) Killbuck and the Subsidiary each have good and marketable
title to all assets and properties, whether real or personal,
tangible or intangible, including without limitation the
capital stock of the Subsidiary and all other assets and
properties reflected in Killbuck's Balance Sheet of December
31, 1997 or acquired subsequent thereto (except to the extent
that such assets and properties have been disposed of for fair
value in the ordinary course of business since December 31,
1997) subject to no liens, mortgages, security interests,
encumbrances, pledges or charges of any kind, except: (i)
those items that secure liabilities that are reflected in said
Balance Sheet; (ii) statutory liens for taxes not yet
delinquent; and (iii) minor defects and irregularities in
title and encumbrances which do not materially impair the use
thereof for the purposes for which they are held; and such
liens, mortgages, security interests, encumbrances and charges
are not in the aggregate, material to the assets and
properties of Killbuck. Killbuck or its Subsidiary as lessee
has the contractual right under valid leases to occupy, use,
possess and control all material property leased by Killbuck
or its Subsidiary.
(j) To the best of the knowledge after due inquiry of Killbuck and
its executive officers, Killbuck and the Subsidiary have
complied with all laws, regulations and
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orders applicable to them and to the conduct of their
respective businesses, including without limitation, all
statutes, rules and regulations pertaining to the conduct of
banking activities except for possible technical violations
which together with any penalty which results therefrom are or
will be of no material consequence to either Killbuck or the
Subsidiary. Neither Killbuck nor the Subsidiary is the subject
of, nor a party to, any regulatory action or agreement such as
letter agreements, memorandum of understanding, cease and
desist orders or like agreements. Neither Killbuck nor the
Subsidiary are in default under, and no event has occurred
which, with the lapse of time or action by a third party,
could, to the best of Killbuck's knowledge after due inquiry,
result in the default under the terms of any judgment, decree,
order, writ, rule or regulation of any governmental authority
or court, whether federal, state or local and whether at law
or in equity, where the default(s) could reasonably be
expected to have a material adverse effect on the financial
conditions, results of operations or business of Killbuck and
the Subsidiary on a consolidated basis.
(k) Killbuck and Subsidiary have duly filed all federal, state,
county and local income, excise, real and personal property
and other tax returns and reports (including, but not limited
to, social security, withholding, unemployment insurance, and
sales and use taxes) required to have been filed by Killbuck
up to the date hereof. To the best of the knowledge and belief
of Killbuck all such returns are true and correct in all
material respects, and Killbuck has paid or, prior to the time
the Merger shall become effective, will pay all taxes,
interest and penalties shown on such return or reports or
claimed (other than those claims being contested in good faith
and which have been disclosed to Commercial) to be due to any
federal, state, county, local or other taxing authority, and
there is, and at the time the Merger shall become effective
will be, no basis for any additional claim or assessment which
might materially and adversely affect
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Killbuck or the Subsidiary, and for which an adequate reserve
has not been established. To the best of its knowledge and
belief, Killbuck has paid or made adequate provision in its
financial statements or its books and records for all taxes
payable in respect of all periods ending as of the date
thereof. To the best of its knowledge and belief Killbuck has,
or at the time the Merger shall become effective will have, no
material liability for any taxes, interest or penalties of any
nature whatsoever, except for those taxes which may have
arisen up to the time the Merger shall become effective in the
ordinary course of business and are properly accrued on the
books of Killbuck as of the time the Merger shall become
effective.
(l) To the best of its knowledge and belief, but without having
undertaken an environmental audit, Killbuck has no knowledge
of any underground storage tanks, any hazardous substances,
hazardous waste, pollutant or contaminant, including, but not
limited to, asbestos (except as previously disclosed to
Commercial in a letter of even date herewith), PCB's or urea
formaldehyde, having been generated, released into, stored or
deposited over, upon or below (in storage tanks or otherwise)
Killbuck's or Subsidiary's premises or any other real property
owned or leased by Killbuck or Subsidiary other than other
real estate owned, for which no investigation was conducted by
Killbuck, but for which Killbuck has no knowledge of such, or
into any water systems on or below the surface of the Killbuck
or Subsidiary premises or any other real property owned or
leased by Killbuck or Subsidiary other than other real estate
owned, for which no investigation was conducted by Killbuck,
but for which Killbuck has no knowledge of such from any
source whatsoever. As used in this Agreement, the terms
"hazardous substance," "hazardous waste," "pollutant" and
"contaminant" mean any substance, waste, pollutant or
contaminant included within such terms under any applicable
Federal, state or local statute or regulation.
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8. Representations and Warranties of Commercial. Commercial represents and
warrants to Killbuck that, except as set forth in the disclosure letter
dated of even date herewith (the "Disclosure Letter") and attached
hereto and made a part hereof, as follows:
(a) Commercial is a banking corporation duly organized and validly
existing in good standing under the laws of the State of Ohio.
Commercial has full power and authority (including all
licenses, franchises, permits and other governmental
authorizations which are legally required) to engage in the
businesses and activities now conducted by it. As of the date
of this Agreement, the authorized capital stock of Commercial
consists of 20,200 shares of common stock with $10 par value,
all of which shares are issued and outstanding and none are
shares of treasury stock owned by Commercial. All of said
shares of capital stock are fully paid and nonassessable and
are not issued in violation of the preemptive rights of any
shareholder. There are no outstanding options, warrants or
commitments of any kind relating to Commercial's capital
stock.
(b) Commercial has furnished to Killbuck copies of all financial
statements relating to Commercial, as filed with the
appropriate regulatory agencies, as of and for the years ended
December 31, 1997 and 1996. Each of the aforementioned
financial statements is and shall be prepared in accordance
with Generally Accepted Accounting Principles or applicable
regulatory accounting principles applicable to Commercial
consistently applied and is and shall be true and correct in
all material respects and together present fairly the
consolidated financial position and results of operations of
Commercial as of the dates and for the periods therein set
forth. Commercial financial statements do not and will not, as
of the dates thereof, include any asset in excess of $5,000 or
omit any liability in excess of $5,000, absolute or
contingent, or other fact, the inclusion or omission of which
renders such financial statements, in light of the
circumstances under which they were made, misleading in any
material respect. Since December 31, 1997, there
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has not been any change in the financial condition, results of
operations, business or prospects of Commercial (including,
without limitation, any adverse trend in the loan loss
experience of Commercial) which in the aggregate, has had a
material adverse effect on Commercial's condition.
(c) The Board of Directors of Commercial has authorized execution
of this Agreement. Subject to the approval by the Shareholders
of Commercial, Commercial has all requisite power and
authority to enter in this Agreement and the Merger Agreement.
Commercial has the authority to consummate the transactions
contemplated hereby so that, provided all required corporate
and regulatory approvals are obtained, neither the execution
and delivery of this Agreement, the Merger Agreement nor the
consummation of the Merger will conflict with, result in the
breach of, constitute a default under or accelerate the
performance provided by the terms of any law, or any rule or
regulation of any governmental agency or authority or any
judgment, order or decree of any court or other governmental
agency to which Commercial may be subject, any contract,
agreement or instrument to which Commercial is a party or by
which Commercial is bound or committed, or the Articles of
Incorporation or Code of Regulations of Commercial, or
constitute an event which with the lapse of time or action by
a third party, could, to the best of Commercial's knowledge,
result in the default under any of the foregoing or result in
the creation of any lien, charge, encumbrance upon any of the
assets, property or capital stock of Commercial, except,
however, in the case of contracts, agreements or instruments,
such defaults, conflicts or breaches which either (i) will be
cured or waived prior to the time the Merger becomes
effective, or (ii) if not so cured or waived would not, in the
aggregate, have any material adverse effect on the financial
condition, results of operations or business of Commercial.
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(d) Except as disclosed in Subsection (d) of the Disclosure
Letter, there is no litigation, action, suit, investigation or
proceeding pending or, to the best of their knowledge after
due inquiry of Commercial and its executive officers, overtly
threatened, against or affecting Commercial or involving any
of their respective properties or assets, at law or in equity,
before any federal, state, municipal, local or other
governmental authority, involving in excess of $5,000, and to
the best of the knowledge and belief after due inquiry of
Commercial and its executive officers, no one has asserted and
no one has reasonable or valid ground on which it reasonably
can be expected that anyone will assert any such claims
against Commercial based upon the wrongful action or inaction
of Commercial or its respective officers, directors or
employees.
(e) Commercial has good and marketable title to all assets and
properties, whether real or personal, tangible or intangible
reflected in Commercial's Balance Sheet of December 31, 1997
or acquired subsequent thereto (except to the extent that such
assets and properties have been disposed of for fair value in
the ordinary course of business since December 31, 1997)
subject to no liens, mortgages, security interests,
encumbrances, pledges or charges of any kind, except: (i)
those items that secure liabilities that are reflected in said
Balance Sheet; (ii) statutory liens for taxes not yet
delinquent; and (iii) minor defects and irregularities in
title and encumbrances which do not impair the use thereof for
the purposes for which they are held; and such liens,
mortgages, security interests, encumbrances and charges are
not in the aggregate, material to the assets and properties of
Commercial. Commercial as lessee has the contractual right
under valid leases to occupy, use, possess and control all
material property leased by Commercial.
(f) To the best of the knowledge after due inquiry of Commercial
and its executive officers, Commercial has complied with all
laws, regulations and orders applicable to it and to the
conduct of its business, including without limitation, all
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statutes, rules and regulations pertaining to the conduct of
its banking activities except for possible technical
violations which together with any penalty which results
therefrom are or will be of no material consequence to
Commercial. Except as disclosed in Subsection (f) of the
Disclosure Letter, Commercial is not the subject of, nor is a
party to, any regulatory actions or agreement such as letter
agreements, memorandum of understanding, cease and desist
order or like agreements. Commercial is not in default under,
and no event has occurred which, with the lapse of time or
action by a third party, could, to the best of Commercial's
knowledge after due inquiry, result in the default under the
terms of any judgment, decree, order, writ, rule or regulation
of any governmental authority or court, whether federal, state
or local and whether at law or in equity.
(g) Except as disclosed in Subsection (g) of the Disclosure
Letter, Commercial has not, since December 31, 1997 to the
date hereof: (i) issued or sold any of its capital stock or
any corporate debt securities; (ii) granted any option for the
purchase of capital stock; (iii) declared or set aside or paid
any dividend or other distribution in respect of its capital
stock except as permitted pursuant to Section 9(a) hereof or,
directly or indirectly, purchased, redeemed or otherwise
acquired any shares of such stock; (iv) incurred any
obligation or liability (absolute or contingent), except for
obligations reflected in this Agreement or the Merger
Agreement, and except for obligations or liabilities incurred
in the ordinary course of business, or mortgaged, pledged or
subjected to lien or encumbrance (other than statutory liens
for taxes not yet delinquent) any of its assets or properties;
(v) discharged or satisfied any lien or encumbrance or paid
any obligation or liability (absolute or contingent), other
than the current portion of any long term liabilities which
become due after December 31, 1997, current liabilities
included in its financial statements as of December 31, 1997,
current liabilities incurred since the date thereof in the
ordinary course of business and liabilities incurred in
carrying
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out the transactions contemplated by this Agreement
or the Merger Agreement; (vi) sold, exchanged or otherwise
disposed of any of its capital assets worth in excess of
$5,000 outside the ordinary course of business; (vii) made any
officers' salary increase or wage increase other than in the
ordinary course of business, entered into any employment
contract with any officer or salaried employee or, instituted
any employee welfare, bonus, stock option, profit-sharing,
retirement or similar plan or arrangement; (viii) suffered any
damage, destruction or loss, whether or not covered by
insurance, involving in excess of $5,000, affecting its
business, property or assets or waived (except for fair
consideration) any rights of value which are material in the
aggregate, considering its business taken as a whole; or (ix)
entered or agreed to enter into any agreement or arrangement
granting any preferential right to purchase any of its assets,
properties or rights or requiring the consent of any party to
the transfer and assignment of any such assets, properties or
rights.
(h) Except as disclosed in Subsection (h) of the Disclosure
Letter, Commercial is not a party to or bound by any written
or oral: (i) employment or consulting contract which is not
terminable by it on 60 days or less notice, (ii) employee
bonus, deferred compensation, pension, stock bonus or
purchase, profit-sharing, retirement or stock option plan,
(iii) other employee benefit or welfare plan, or (iv) other
executory material agreements which in any case obligate
Commercial to make any payment(s) which in the aggregate
exceed $5,000 per year except for contracts terminable on 60
days notice. All such pension, stock bonus or purchase,
profit-sharing, defined benefit and retirement plans set forth
under the caption "Qualified Plans" in the Commercial Document
List (hereinafter referred to collectively as the "plans") are
qualified plans under Section 401(a) of the Internal Revenue
Code and in compliance in all material respects with ERISA.
All material notices, reports and other filings required under
applicable law to be
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given or made to or with any governmental agency with respect
to the plans have been timely filed or delivered where failure
to file would result in a penalty and/or result in
disqualification of the plan. Commercial has no knowledge
either of any circumstances which would adversely affect the
qualification of the plans or their compliance with ERISA, or
of any unreported "reportable event" (as such term is defined
in ERISA) or, any "prohibited transaction" (as such term is
defined in Section 406 of ERISA and Section 4975(c) of the
Internal Revenue Code) which has occurred since the date on
which said sections became applicable to the plans. The plans
meet the minimum funding standards set forth in the Internal
Revenue Code and ERISA.
(i) Commercial has duly filed all federal, state, county and local
income, excise, real and personal property and other tax
returns and reports (including, but not limited to, social
security, withholding, unemployment insurance, and sales and
use taxes) required to have been filed by Commercial up to the
date hereof. Except as set forth in Subsection (i) of the
Disclosure Letter, to the best of the knowledge and belief of
Commercial all such returns are true, are correct in all
material respects, and Commercial has paid or, prior to the
time the Merger shall become effective, will pay all taxes,
interest and penalties shown on such return or reports or
claimed together than those claims being contested in good
faith and which have been disclosed to Killbuck to be due to
any federal, state, county, local or other taxing authority,
and there is, and at the time the Merger shall become
effective will be, no basis for any additional claim or
assessment in excess of $5,000 and for which an adequate
reserve has not been established. To the best of its knowledge
and belief, Commercial has paid, made or will make adequate
provision in its financial statements or its books and records
for all taxes payable in respect of all periods ending as of
the date thereof. To the best of its knowledge and belief,
Commercial has, or at the time the Merger shall become
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effective will have, no liability for any taxes, interest or
penalties of any nature whatsoever, in excess of $5,000 except
for those taxes which may have arisen up to the time the
Merger shall become effective in the ordinary course of
business and are properly accrued on the books of Commercial
as of the time the Merger shall become effective.
(j) To the best of its knowledge and belief, but without having
undertaken an environmental audit, Commercial has no knowledge
of any underground storage tanks, any hazardous substances,
hazardous waste, pollutant or contaminant, including, but not
limited to, asbestos (except as disclosed in Subsection (j) of
the Disclosure Letter), PCB's or urea formaldehyde, having
been generated, released into, stored or deposited over, upon
or below (in storage tanks or otherwise) Commercial's premises
or any other real property owned or leased by Commercial other
than other real estate owned, for which no investigation was
conducted by Commercial, but for which Commercial has no
knowledge of such, or into any water systems on or below the
surface of the Commercial premises or any other real property
owned or leased by Commercial other than other real estate
owned, for which no investigation was conducted by Commercial,
but for which Commercial has no knowledge of such from any
source whatsoever. As used in this Agreement, the terms
"hazardous substance," "hazardous waste," "pollutant" and
"contaminant" mean any substance, waste, pollutant or
contaminant included within such terms under any applicable
Federal, state or local statute or regulation.
(k) Commercial has not incurred and will not incur any liability
for brokerage, finders', agents', or investment bankers' fees
or commissions in connection with this Agreement or the Merger
Agreement or the transactions contemplated hereby and thereby.
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(l) Subject to their fiduciary duties, the directors of Commercial
executing this Agreement shall vote the shares of Commercial
held directly by them in favor of adoption of the Agreement.
(m) All contracts and commitments (whether written or oral) that
may have a material effect on the business of Commercial are
disclosed in subsection (m) of the Disclosure Letter and
copies of any such written contracts or commitments have been
provided to Killbuck. All contracts and commitments for the
lease or purchase of equipment or services have been entered
into on an arm's length basis.
(n) The deposits of Commercial are insured by the Federal Deposit
Insurance Corporation in accordance with the Federal Deposit
Insurance Act ("FDIA"). Commercial has paid all assessments
and filed all reports required under the FDIA and is in
compliance, in all material respects, with all regulatory
requirements imposed in connection with the insurance of its
deposits.
(o) To the best of Commercial's knowledge and belief, the reserves
for possible loan losses on the outstanding loans of
Commercial (if any, as reflected in the balance sheet of
Commercial as of December 31, 1997 (the "1997 Balance Sheet")
are adequate to absorb all known and anticipated loan losses
in the loan portfolio of Commercial, net of recoveries
relating to loans previously charged off. Except as set forth
in subsection (o) of the Disclosure Letter, there are no loans
of Commercial the present principal balance of which is in
excess of $5,000 that have been classified orally or in
writing by bank examiners (regulatory or internal) as "Other
Loans Specifically Mentioned," "Substandard," "Doubtful," or
"Loss," as of the last examination date (which shall include
the date on which any examination prior to the effective time
is concluded). To the best of Commercial's knowledge and
belief, each loan in the principal amount of $5,000 or greater
reflected as an asset of Commercial in the 1997 Balance Sheet
or acquired by
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Commercial since December 31, 1997, is the legal, valid and
binding obligation of the obligor and any guarantor named
therein, and no such loan is subject to any defense, offset or
counterclaim. Except for pledges to secure public and trust
deposits, to the best of Commercial's knowledge and belief,
none of the investments reflected in the 1997 Balance Sheet
under the heading "Investment Securities," and none of the
investments made by Commercial since December 31, 1997, is
subject to any restriction, whether contractual or statutory,
which impairs the ability of Commercial freely to dispose of
such investment at any time. Commercial is not a party to any
repurchase agreements. Except as set forth in subsection (o)
of the Disclosure Letter, and except for transactions
aggregating less than $ 5,000, Commercial has not sold or
otherwise disposed of any assets in a transaction in which the
acquirer of such assets or any other person has the right,
either conditionally or absolutely, to require Commercial to
repurchase or otherwise re acquire any such assets.
(p) Subsection (q) of the Disclosure Letter contains a list and a
brief description of all insurance policies currently in force
with respect to Commercial. All premiums due on such policies
have been paid, and such policies will continue to remain in
force through the Effective Time. Subsection (q) of the
disclosure letter also contains a description of all claims in
excess of $1,000 currently pending under such insurance
policies, together with a list of all other claims in excess
of $1,000 which have been filed during the last three (3)
years and a description of the disposition thereof.
(q) Except to the extent reflected or reserved against in the 1997
Balance Sheet or in the notes thereto, as of the date of such
Balance Sheet, Commercial has no liabilities or obligations,
secured or unsecured, whether accrued, absolute, contingent or
otherwise, which would materially and adversely affect the
financial condition, results of operations, assets, or
business of Commercial.
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(r) Except for loans made in the ordinary course of business,
Commercial has no business relationships, business
transactions or indebtedness with or to any of its officers
and directors.
9. Action by Commercial Pending Effective Time. Commercial agrees that
from the date of this Agreement until the time the Merger shall become
effective, except with prior written permission of Killbuck:
(a) Beginning with the date hereof and until such time as the
Merger shall become effective, Commercial will not declare or
pay any dividends or make any distributions other than regular
cash dividends, payable at such times and in amounts
consistent with past practice and not to exceed the per share
rate paid in the prior calendar year. If, prior to the
consummation of the Merger, Commercial shall declare a stock
dividend or make distributions upon or subdivide, split up,
reclassify or combine its shares of common stock in any
security convertible into its common stock, appropriate
adjustment or adjustments will be made in the foregoing per
share dividend rate.
(b) Commercial will not issue, sell, grant any option for, or
acquire for value any shares of its capital stock or otherwise
effect any change in connection with its capitalization.
(c) Except as otherwise set forth in or contemplated by this
Agreement or the Merger Agreement, Commercial will carry on
its businesses in substantially the same manner as heretofore,
keep in full force and effect insurance comparable in amount
and scope of coverage to that now maintained by it and use its
best efforts to maintain and preserve its business
organization intact.
(d) Commercial will not: (i) enter into any transaction other than
in the ordinary course of business or incur or agree to incur
any obligation or liability except liabilities incurred and
obligations entered into in the ordinary course of business;
(ii) change its lending, investment, liability management and
other policies in any
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respect; (iii) except as committed for adjustment as of the
date hereof and consistent with prior practice, grant any
general or uniform increase in the rates of pay of employees;
(iv) incur or commit to any capital expenditures other than in
the ordinary course of business, or (v) merge into,
consolidate with or sell its assets to any other corporation
or person, or permit any other corporation to be merged or
consolidated with it or acquire all of the assets of any other
corporation or person.
(e) Commercial will not change its method of accounting in effect
at December 31, 1997 except as required by changes in
generally accepted accounting principles and concurred in by
Commercial's independent auditors, or change any of its
methods of reporting income and deductions for Federal income
tax purposes from those employed in the preparation of
Commercial's Federal income tax returns for the taxable year
ending December 31, 1997, except for changes required by law.
(f) Commercial will promptly advise Killbuck in writing of all
material actions taken by the directors and Shareholders of
Commercial, furnish Killbuck with copies of all minutes of
such action and monthly interim financial statements of
Commercial as they become available, and keep Killbuck fully
informed concerning all developments which in the opinion of
Commercial may have a material effect upon the business,
properties or condition (either financial or otherwise) of
Commercial.
10. Action by Killbuck Pending Effective Time. Killbuck agrees that from
the date of this Agreement until the time the Merger shall become
effective:
(a) Killbuck will carry on its business in substantially the same
manner as heretofore except as otherwise set forth in or
contemplated by this Agreement, and Killbuck will keep in full
force and effect insurance comparable in amount and scope of
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coverage to that now maintained by it and use its best efforts
to maintain and preserve its business organization intact.
(b) Killbuck will not change its methods of accounting in effect
at December 31, 1997, except as required by changes in
generally accepted accounting principles as concurred in by
Killbuck's independent auditors, or change any of its methods
of reporting income and deductions for Federal income tax
purposes from those employed in the preparation of the Federal
income tax returns of Killbuck's Subsidiary for the taxable
year ended December 31, 1997, except for changes required by
law or take any action which could jeopardize the tax free
nature of the Merger.(c) Killbuck will furnish Commercial with
copies of monthly interim financial statements of Killbuck and
keep Commercial fully informed concerning all developments
which in the opinion of Killbuck may have a material effect
upon the business, properties or condition (either financial
or otherwise) of Killbuck.
11. Conditions to Obligations of Killbuck. The obligations of Killbuck
under this Agreement and the Merger Agreement are subject, unless
waived by Killbuck, to the satisfaction of the following conditions on
or prior to the time the Merger shall become effective:
(a) There shall not have been any material adverse change or
discovery of a condition or the occurrence of an event which
has or is likely to result in such a change, in the financial
condition, aggregate net assets, Shareholders' equity,
business or operating results of Commercial from December 31,
1997 to the time the Merger shall become effective.
(b) Commercial shall not have paid cash dividends from the date
hereof to the time the Merger shall become effective except as
permitted under this Agreement.
(c) All representations by Commercial contained in this Agreement
and the Merger Agreement shall be true in all material
respects at, or as of, the time the Merger shall become
effective as though such representations were made at and as
of said
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date, except for changes contemplated by this Agreement or the
Merger Agreement and except also for representations as of a
specified time other than the time the Merger shall become
effective, which shall be true in all material respects at
such specified time. In addition, all amendments to the
Disclosure Letter shall have been approved by Killbuck in
accordance with Section 19.
(d) Killbuck shall have received the opinion of legal counsel for
Commercial, dated the time the Merger shall become effective,
substantially to the effect set forth in Exhibit A hereto.
(e) Commercial shall have performed or satisfied in all material
respects all undertakings, agreements and conditions required
by this Agreement or the Merger Agreement to be performed or
satisfied by it at or prior to the time the Merger shall
become effective.
(f) At the time the Merger shall become effective, no suit, action
or proceeding shall be pending or overtly threatened before
any court or other governmental agency by the federal or state
government in which it is sought to restrain or prohibit the
consummation of the Merger, and no other suit, action or
proceeding shall be pending or overtly threatened and no
liability or claim shall have been asserted against Commercial
which Killbuck shall in good faith determine, with advice of
counsel: (i) has a reasonable likelihood of being successfully
prosecuted and (ii) if successfully prosecuted, would
materially and adversely affect the benefits hereunder
intended for Killbuck.
(g) Prior to the time the Merger shall become effective, Killbuck
shall not have been deprived of adequate opportunity to
conduct such review and examination of the business,
properties, and condition (financial or otherwise) of
Commercial as Killbuck shall have deemed prudent. In the event
Commercial receives a written examination report or written
agreement with a state or federal banking regulatory agency,
Killbuck shall have an opportunity to review such examination
report or
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written agreement for a period of thirty days and may, at its
option, elect to terminate its obligations under this
Agreement during such review period.
(h) Holders of Commercial Common Stock who are entitled to
exercise in the aggregate not more than 10% of the voting
power of the issued and outstanding Commercial Common Stock as
of the time the Merger shall become effective shall have taken
steps to perfect their rights as dissenting Shareholders
pursuant to the provisions the Sections 1115.19 and 1701.85 of
the Ohio Revised Code so that if, at the time the Merger shall
become effective, holders of more than 10% of such shares
shall have taken such steps, Killbuck may, at its option,
refuse to consummate the Merger.
(i) Commercial shall have furnished Killbuck certificates, signed
on its behalf by the Chairman or President and the Secretary
or an Assistant Secretary of Commercial and dated the time the
Merger shall become effective, to the effect that to the best
of their knowledge, after due inquiry, the conditions
described in Paragraphs (a), (b), (c), and (f) of this Section
11 have been fully satisfied.
(j) Killbuck shall have received from each Affiliate a certificate
in the form specified by Killbuck.
(k) Killbuck shall have received from Commercial the officers'
certificates required pursuant to Section 4 (m) hereof.
(l) Each of (i) the Board of Directors of Commercial, (ii)
Commercial' shareholders and (iii) Killbuck's shareholders
shall have approved this Agreement and the Agreement of
Merger.
(m) Prior to the Closing, Commercial will have provided Killbuck
with a list of all certificates of deposit or checking,
savings or other deposits and a list of all certificates of
deposit or checking, savings or other deposits owned by
directors and officers of Commercial and their affiliates as
of the last day of the calendar month immediately prior to the
Closing. In addition, Commercial shall provide
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Killbuck with a list of (i) all certificates of deposit,
checking, savings or other deposits in excess of $100,000 and
(ii) all customers with aggregate deposits in excess of
$100,000.
(n) Killbuck shall have received evidence, satisfactory to it,
that Commercial shall have taken such actions as are necessary
to secure supplemental Medicare medical insurance (to be
implemented at or prior to the effective time of the Merger)
for any former director of Commercial presently insured on
Commercial's group medical insurance policy, and caused the
corresponding removal from the group term medical insurance
policy of Commercial such director and such director's family.
12. Conditions to Obligations of Commercial. The obligations of Commercial
under this Agreement or the Merger Agreement are subject, unless waived
by Commercial, to the satisfaction on or prior to the time the Merger
shall become effective of the following conditions:
(a) There shall not have been any material adverse change or
discovery of a condition or the occurrence of an
event which has or is likely to result in such a change, in
the financial condition, aggregate net assets, Shareholders'
equity, business, or operating results of Killbuck from
December 31, 1997, to the time the Merger shall become
effective.
(b) All representations by Killbuck contained in this Agreement
and the Merger Agreement shall be true in all material
respects at, or as of, the time the Merger shall become
effective as though such representations were made at and as
of said date, except for changes contemplated by this
Agreement and the Merger Agreement, and except also for
representations as of a specified time other than the time the
Merger shall become effective, which shall be true in all
material respects at such specified time.
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(c) Commercial shall have received the opinion of counsel for
Killbuck dated the time the Merger shall become effective
substantially to the effect set forth in Exhibit B hereto.
(d) Killbuck shall have performed or satisfied in all material
respects all undertakings, agreements and conditions required
by this Agreement and the Merger Agreement to be performed or
satisfied by it at or prior to the time the Merger shall
become effective.
(e) At the time the Merger shall become effective, no suit, action
or proceeding shall be pending or overtly threatened before
any court or other governmental agency of the federal or state
government in which it is sought to restrain, prohibit or set
aside consummation of the Merger and no other suit, action or
proceeding shall be pending or overtly threatened and no
liability or claim shall have been asserted against Killbuck
which Commercial shall in good faith determine, with advice of
counsel: (i) has a reasonable likelihood of being successfully
prosecuted and (ii) if successfully prosecuted, would
materially and adversely affect the benefits hereunder
intended for Commercial and its Shareholders.
(f) Killbuck shall have furnished Commercial a certificate, signed
by the Chairman or President and by the Secretary or Assistant
Secretary of Killbuck and dated the time the Merger shall
become effective to the effect that to the best of their
knowledge after due inquiry the conditions described in
Paragraphs (a), (b), and (e) of this Section 12 have been
fully satisfied.
(g) Killbuck and Commercial shall have received the tax opinion
called for pursuant to Section 6 of this Agreement and there
shall exist as of, at or immediately prior to the time the
Merger shall become effective no facts or circumstances which
would render such opinion inapplicable in any respect to the
transactions to be consummated hereunder.
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(h) Prior to the time the Merger shall become effective,
Commercial shall not have been deprived of adequate
opportunity to conduct such review and examination of the
business, properties, and condition (financial or otherwise)
of Killbuck as Commercial shall have deemed prudent. In the
event Killbuck receives a written examination report or
written agreement with a state or federal banking regulatory
agency, Commercial shall have an opportunity to review such
examination report or written agreement for a period of thirty
days and may, at its option, elect to terminate its
obligations under this Agreement during such review period.
13. Conditions to Obligations of All Parties. In addition to the provisions
of Sections 11 and 12 hereof, the obligations of Killbuck and
Commercial to cause the transactions contemplated herein to be
consummated shall be subject to the satisfaction of the following
conditions on or prior to the time the Merger shall become effective:
(a) The parties hereto shall have received all necessary approvals
of governmental agencies and authorities of the transactions
contemplated by this Agreement and each of such approvals
shall remain in full force and effect at the time the Merger
shall become effective and such approvals and the transactions
contemplated thereby shall not have been contested by any
federal or state governmental authority by formal proceeding,
or contested by any other third party by formal proceeding
which the Board of Directors or the party asserting a failure
of a condition under this Section 13(a) shall in good faith
determine, with the advice of counsel: (i) has a reasonable
likelihood of being successfully prosecuted and (ii) if
successfully prosecuted, would materially and adversely affect
the benefits hereunder intended for such party. It is
understood that, if any contest as aforesaid is brought by
formal proceedings, Killbuck may, but shall not be obligated
to, answer and defend such contest. Killbuck shall notify
Commercial promptly upon receipt of all necessary governmental
approvals.
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(b) The registration statement required to be filed by Killbuck
pursuant to Section 4(c) of this Agreement shall have become
effective by an order of the Securities and Exchange
Commission or a suitable exemption shall be available
therefrom, the shares of Killbuck Common Shares to be
exchanged in the Merger shall have been qualified or exempted
under all applicable state securities laws, and if filed there
shall have been no stop order issued or threatened by the
Securities and Exchange Commission that suspends or would
suspend the effectiveness of the registration statement, and
no proceeding shall have been commenced, pending or overtly
threatened for such purpose.
(c) This Agreement and the Merger Agreement shall have been duly
adopted, ratified and confirmed by the requisite affirmative
votes of the Shareholders of Commercial.
14. Non-survival of Representations and Warranties. The respective
representations and warranties of Killbuck and Commercial set forth
shall expire at the effective time of the Merger.
15. Governing Law. This Agreement shall be construed and interpreted
according to the applicable laws of the State of Ohio.
16. Assignment. This Agreement and the Merger Agreement and all of the
provisions hereof and thereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns, but neither this Agreement nor the Merger Agreement
nor any of the rights, interest, or obligations hereunder or thereunder
shall be assigned by either of the parties hereto without the prior
written consent of the other party.
17. Satisfaction of Conditions; Termination.
(a) Killbuck agrees to use its best effort to obtain satisfaction
of the conditions insofar as they relate to Killbuck, and
Commercial agrees to use its best efforts to obtain the
satisfaction of the conditions insofar as they relate to
Commercial. If
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any material condition to the obligations of Killbuck set
forth in Section 11 or 13 is not substantially satisfied at
the time or times contemplated thereby and such condition is
not waived by Killbuck, or if any material condition to the
obligations of Commercial set forth in Section 12 or 13 is not
substantially satisfied at the time or times contemplated
thereby and such condition is not waived by Commercial, or if
at any time prior to the time the Merger shall become
effective, it shall become reasonably certain that such
condition will not be substantially satisfied and such
condition is not waived by Killbuck or Commercial, as the case
may be, either Killbuck or Commercial may terminate this
Agreement by written notice to the other party after the
expiration of fifteen (15) days written notice to the other
party during which time such other party shall have an
opportunity to cure such defect in said condition. This
Agreement may be terminated and abandoned (either before or
after the meetings of Shareholders contemplated hereby) by
mutual written consent of Killbuck and Commercial authorized
by their respective Boards of Directors. In the event of such
termination caused otherwise than by breach of this Agreement
by any of the parties hereto, this Agreement shall cease and
terminate, the acquisition of Commercial as provided herein
shall not be consummated, and neither Killbuck nor Commercial
shall have any further liability under this Agreement of any
nature whatever, including any liability for damages. In the
event this Agreement is terminated, the duties of both parties
with respect to confidential information set forth in Sections
4(d) shall survive any such termination. In addition to the
other grounds for termination of this Agreement set forth
herein, this Agreement can be terminated by written notice by
either party to the other, in each case authorized by its
Board of Directors, if the Merger shall not have been
consummated by February 1, 1999, or the date of such notice,
whichever is later.
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(b) If termination of this Agreement shall be judicially
determined to have been caused by breach of this Agreement,
then, in addition to other remedies at law or equity for
breach of this Agreement, the party so found to have breached
this Agreement shall indemnify the other parties for their
respective costs, fees and expenses of its counsel,
accountants and other experts and advisors as well as fees and
expenses incident to negotiation, preparation and execution of
this Agreement and related actions and its Shareholders'
meetings and actions.
18. Waivers, Amendments. Any of the provisions of this Agreement may be
waived at any time by the party which is, or the Shareholders of which
are, entitled to the benefit thereof, by resolution of the Board of
Directors of such party. This Agreement may be amended or modified in
whole or in part by an agreement in writing executed in the same manner
(but not necessarily by the same person) as this Agreement and which
makes reference to this Agreement, pursuant to a resolution, adopted by
the Boards of Directors of the respective parties, provided, however,
such amendment or modification may be made in this manner by the
respective Boards of Directors of Killbuck and Commercial at anytime
prior to a favorable vote of such party's Shareholders, (if such
shareholder approval is otherwise required) but may be made after a
favorable vote by the Shareholders (if such shareholders approval is
otherwise required) of such party, only if, in the opinion of its Board
of Directors, such amendment or modification will not have any material
adverse effect on the benefits intended under this Agreement for the
Shareholders of such party and will not require resolicitation of any
proxies from such Shareholders.
19. Entire Agreement. This Agreement supersedes any other agreement,
whether written or oral, that may have been made or entered into by
Killbuck and Commercial or by any officer or officers of such parties
relating to the acquisition of the business or the capital stock of
Commercial by Killbuck. This Agreement, including the exhibits and
schedules hereto (which shall include the Disclosure Letter and the
Merger Agreement) together
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constitute the entire agreement of the parties, and there are no
agreements or commitments except as set forth herein and therein. This
Agreement and the Merger Agreement may only be amended in a writing
signed by the parties hereto and thereto. The Disclosure Letter may be
amended by Commercial from time to time after the date hereof upon the
prior written consent of Killbuck.
20. Captions; Counterparts. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement. This
Agreement may be executed in several counterparts, each of which shall
constitute one and the same instrument.
21. Notices. All notices and other communications hereunder shall be deemed
to have been duly given if forwarded by regular First Class United
States Mail, postage prepaid, or a nationally recognized overnight
courier service. All notices and other communications hereunder given
to any party shall be communicated to the remaining party to this
Agreement by mail in the same manner as herein provided.
a) If to Killbuck, to:
Luther E. Proper
President
Killbuck Bancshares, Inc.
165 N. Main
Killbuck, OH 44637
With copies to:
Martin D. Werner, Esq.
Werner & Blank Co., LPA
7205 W. Central Ave.
Toledo, OH 43617
(419) 841-8051/PH
(419) 841-8380/FX
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(b) If to Commercial, to:
Mr. Robert K. Wagner
President
Commercial and Savings Bank Co.
701 South Market Street
Danville, OH 43014
With copies to:
Clifford A. Roe, Jr., Esq.
Dinsmore & Shohl, P.L.L.
1900 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202-3172
(513) 977-8200/PH
(513) 977-8141/FX
22. Publicity. Killbuck and Commercial agree to consult with and obtain the
consent of the other, prior to any media release or other public
disclosures as to the matters covered by this Agreement, except as may
be required by law.
24. Knowledge. Whenever a representation or warranty is made herein as
being "to the knowledge of" a party hereto or the officers or directors
thereof, it is understood that an officer has made or caused to be made
by personnel or representatives competent to determine the accuracy
thereof (and the results thereof reported to him) an investigation
which is appropriate to determine the accuracy of such representation
or warranty.
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IN WITNESS WHEREOF, this Agreement has been executed the day and year
first above written.
ATTEST: Killbuck Bancshares, Inc.
____________________
By:___________________________
By:_________________ Luther E. Proper, President
Its:________________
ATTEST: Commercial and Savings Bank Co.
____________________
By:___________________________
By:_________________ Robert K. Wagner, President
Its:________________
As individuals and with respect solely to the understanding made in Section 8(l)
of this Agreement.
_____________________ ____________________________
_____________________ ____________________________
_____________________ ____________________________
_____________________ ____________________________
_____________________ ____________________________
_____________________ ____________________________
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APPENDIX A
MERGER AGREEMENT
THIS MERGER AGREEMENT (this "Agreement") dated as of __________, 1998,
is by and between The Killbuck Savings Bank Company, Ohio ("Killbuck Bank"), an
Ohio state banking corporation and wholly owned subsidiary of Killbuck
Bancshares, Inc., ("Killbuck") and Commercial and Savings Bank Co., Danville,
Ohio ("Commercial"), an Ohio state banking corporation and is joined in by
Killbuck, the sole shareholder of Killbuck Bank.
WITNESSETH:
WHEREAS, the Board of Directors of the Killbuck Bank and the Board of
Directors of Commercial have determined that it is in the best interests of the
Killbuck Bank and Commercial to merge Commercial with and into Killbuck Bank in
accordance with the provisions of the laws of the State of Ohio (the "Merger");
and
WHEREAS, the Board of Directors of Commercial and the Board of
Directors of Killbuck Bank have each adopted a resolution approving this
Agreement and have directed that the Merger Agreement be submitted to the
shareholders of Commercial and Killbuck Bank entitled to vote in respect thereof
for adoption and approval;
NOW, THEREFORE, the parties hereto, subject to the terms and conditions
contained herein, agrees as follows:
ARTICLE I
Constituent Corporations
Commercial and Killbuck Bank shall be the constituent banking
corporations with respect to the Merger.
ARTICLE II
Merger
Effective as of the date set forth in the Certificate of Merger filed
in accordance with Section 1115.11 (F) of the Ohio Revised Code with the
Superintendent of Banks for the State of Ohio (the "Effective Time"), Commercial
shall be merged into Killbuck Bank and Killbuck Bank shall be the surviving
banking corporation (the "Surviving Corporation"), which after the effective
time of the Merger shall be known as "The Killbuck Savings Bank Company."
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ARTICLE III
Articles of Incorporation, Etc.
1. At the Effective Time, the Articles of Incorporation and Code of
Regulations of Killbuck shall constitute the Articles of Incorporation
Code of Regulations of the Surviving Corporation.
2. The Surviving Corporation's main office shall be located 165 N. Main
St., Killbuck, Ohio, until otherwise changed in accordance with law.
3. The officers of Killbuck Bank immediately prior to the Effective Time
shall be the officers of the Surviving Corporation, each to hold office
until his respective successor is duly elected or appointed and
qualified in accordance with the provisions of the Articles of
Incorporation and Code of Regulations of the Surviving Corporation and
of applicable law, or until his earlier death, resignation or removal.
The officers of Commercial immediately prior to the Effective Time
shall be appointed as officers of the Surviving Corporation by the
Board of Directors immediately after the Effective Time, to hold such
officer and titles as shall be determined by the Board of Directors of
the Surviving Corporation.
4. The directors of the Surviving Corporation shall be all of the
directors of Killbuck immediately prior to the Effective Time.
ARTICLE IV
Manner of Converting and Exchanging Stock and Capital Structure
1. Subject to the provisions of this Article IV, the manner of
converting and exchanging the shares of the constituent corporation's stock at
the Effective Time shall be as follows.
Conversion and Exchange of Shares.
(a) At the time the Merger shall become effective;
(i) All of the outstanding certificates for shares of
Commercial Common Stock shall, subject to statutory
dissenters rights as provided Ohio Revised Code
Section 1115.19 and 1701.85, be converted into the
right to receive .4317 duly authorized, validly
issued, fully paid and non-assessable Killbuck Common
Shares, subject to pro rata adjustment in the event
of any stock dividend, stock split or other general
distribution of Killbuck Common Stock prior to the
Merger.
(ii) The shares of Killbuck Common Stock issued and
outstanding immediately prior to the time the Merger
shall become effective shall
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continue to be issued and outstanding shares of
the Surviving Corporation and shall be held by
Killbuck.
(b) No fractional shares or scrip representing fractional Killbuck
Common Shares will be issued by Killbuck in connection with
the Merger, but in lieu thereof, any holder of Commercial
Common Stock entitled to such a fractional share shall, upon
surrender of the certificate or certificates formerly
representing such Commercial Common Stock, be paid cash,
without interest, by Killbuck for such fractional share(s).
The cash paid for fractional shares shall be based upon $350
per share of Killbuck Common Shares.
(c) As soon as practicable after the time the Merger shall become
effective, and subject to the provisions set forth above
relating to the fractional shares, Killbuck will distribute to
the former holders of Commercial Common Stock in exchange for
and upon surrender for cancellation by such holders of a
certificate or certificates formerly representing shares of
Commercial Common Stock the certificate(s) for Killbuck Common
Shares in accordance with the provisions regarding the
exchange of shares of Commercial Common Stock set forth in
paragraph 1(a)(i) of this Merger Agreement. Each certificate
formerly representing Commercial Common Stock (other than
certificates representing shares of Commercial Common Stock
subject to the rights of dissenting shareholders) shall be
deemed for all purposes to evidence the ownership of the
number of whole Killbuck Common Shares and cash for fractional
share interests in Killbuck Common Shares into which such
shares have been converted. Certificates representing shares
of Commercial Common Stock held by a stockholder of
Commercial, shall be aggregated together in determining the
number of fractional shares for which such shareholder shall
receive cash as provided for herein. Until surrender of the
certificate or certificates formerly representing shares of
Commercial Common Stock, the holder thereof shall not be
entitled to receive any dividend or other payment or
distribution payable to holders of Killbuck Common Shares.
Upon such surrender (or in lieu of surrender other provisions
reasonably satisfactory to Killbuck as are made as set forth
in the next following paragraph), there shall be paid to the
person entitled thereto the aggregate amount of dividends or
other payments or distributions (in each case without
interest) which became payable after the time the Merger shall
become effective on the whole Killbuck Common Shares
represented by the certificates issued upon such surrender and
exchange or in accordance with such other provisions, as the
case may be. After the time the Merger shall become effective,
the holders of certificates formerly representing shares of
Commercial Common Stock shall cease to have rights with
respect to such shares except such rights, if any, as a holder
of certificates formerly representing shares of Commercial
Common Stock may have as dissenting shareholders pursuant to
Ohio law and except as aforesaid, their sole rights shall be
to exchange said certificates for certificates for Killbuck
Common Shares in accordance with this Merger Agreement.
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Certificates formerly representing shares of Commercial Common
Stock surrendered for cancellation by each shareholder
entitled to exchange shares of Commercial Common Stock for
Killbuck Common Shares by reason of the Merger shall be
accompanied by such appropriate instruments of transfer as
Killbuck may reasonably require, provided, however, that if
there be delivered to Killbuck by any person who is unable to
produce any such certificate formerly representing shares of
Commercial Common Stock for transfer (i) evidence to the
reasonable satisfaction of Killbuck that any such certificate
has been lost, wrongfully taken or destroyed, and (ii) such
indemnity agreement as reasonably may be requested by Killbuck
to save it harmless, and (iii) evidence to the reasonable
satisfaction of Killbuck that such person is the owner of the
shares theretofore represented by each certificate claimed by
him to be lost, wrongfully taken or destroyed and that he is
the person who would be entitled to present each such
certificate and to receive Killbuck Common Shares pursuant to
this Merger Agreement, then Killbuck (or an Exchange Agent, as
the case may be), in the absence of actual notice to it that
any shares theretofore represented by any such certificate
have been acquired by a bona fide purchaser, shall deliver to
such person the certificate(s) representing Killbuck Common
Shares which such person would have been entitled to receive
upon surrender of each such lost, wrongfully taken or
destroyed certificate representing shares of Commercial Common
Stock.
2. After the Effective Time, there shall be no transfers of the stock
transfer books of Killbuck Bank of any certificates representing shares
of Killbuck Bank Common Stock. After the Effective Time, upon
presentation to the Surviving Corporation of certificates formerly
representing capital stock of Killbuck Bank, such certificates shall be
canceled.
3. The Resulting Corporation shall have a capital structure equal to the
following:
(a) Common stock of $__________, consisting of _________shares of
$____ par value all of which will be issued and outstanding
immediately following the Effective Time of the Merger; and
(b) Surplus of $_______________; and
(c) Undivided profits, including capital reserves, of
$____________, adjusted for all earnings and losses between
January 1, 1998, and the Effective Time of the Merger.
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ARTICLE V
Effect of Merger
From and after the Effective Time, the Surviving Corporation shall have
all of the rights, interests, privileges, powers, immunities and franchises
(public and private) of each of the constituent corporations, and all property
(real, personal and mixed), all debts due on whatever account, and all other
chooses in action, of each of the constituent corporations. All interests of or
belonging to or due to either of the constituent corporations shall thereupon be
deemed to be transferred to and vested in the Surviving Corporation without act
or deed and no title to any real estate or any interest therein vested in either
of the constituent corporations shall revert or be in any way impaired because
of the Merger.
ARTICLE VI
Surviving Corporation
From and after the Effective Time, the Surviving Corporation shall be
responsible for all obligations of each of the constituent corporations and each
claim existing and each action or proceeding pending by or against either of the
constituent corporations may be prosecuted as if the Merger had not taken place,
and the Surviving Corporation may be substituted in the place of such
constituent corporation. No right of any creditor of either constituent
corporation and no lien upon the property of either constituent corporation
shall be impaired by the Merger.
ARTICLE VII
Further Documents
If at any time the Surviving Corporation shall consider or be advised
that any further assignments, conveyances or assurances in law are necessary or
desirable to vest, perfect or confirm of record in the Surviving Corporation the
title to any property or rights of the constituent corporations, or otherwise to
carry out the provisions hereof, the persons who were the proper officers and
directors of the constituent corporations immediately prior to the Effective
Time (or their successors in office) shall execute and deliver any and all
proper deeds, assignments and assurances in law, and do all things necessary or
proper, to vest, perfect or confirm title to such property or rights in the
Surviving Corporation, including, but not limited to, filing with each court or
other public tribunal, agency or officer by which Commercial or Killbuck Bank
have been appointed in the capacity of fiduciary or agent, and in the court file
of each estate, suit or proceeding in which any of them has been acting, a
statement setting forth the information required by law or otherwise to carry
out the provisions hereof.
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ARTICLE VIII
Termination
Notwithstanding the adoption and approval of this Agreement and the
Merger by the shareholders of Commercial and Killbuck Bank, this Agreement and
the Merger may be terminated:
(a) At any time prior to the Effective Time, by the mutual
consent of the Boards of Directors of Commercial and
Killbuck Bank; or
(b) This Merger Agreement shall automatically terminate in the
event of the termination of the Agreement and Plan of
Reorganization dated __________, 1998 by and between
Commercial and Killbuck to which it relates.
(c) At any time prior to the Effective Time, by Commercial or
Killbuck Bank if there shall have been a final judicial
determination (as to which all periods for appeal shall have
expired and no appeal shall be pending) that any material
provision of this Agreement or of the Merger is illegal,
invalid or unenforceable;
In the event that this Agreement is terminated pursuant to this Article
VIII, the Merger provided for herein shall be abandoned automatically and
without any further act or deed by the parties hereto.
ARTICLE IX
Conditions to Consummation of the Merger
The consummation of the Merger pursuant to this Merger Agreement and
the obligations of the parties hereto is subject to the satisfaction of the
provisions and conditions of the Agreement and Plan of Reorganization by and
between Commercial and Killbuck dated ________, 1998.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and attested to on their behalf by the following directors and officers
thereunto duly authorized as of the day and year first written above.
Commercial and Savings Bank Co.: The Killbuck Savings Bank Company
By:_____________________________ By:_____________________________
Robert K. Wagner, President Luther E. Proper, President
Attest: Attest:
________________________________ ________________________________
by: ____________________________ by: Jon D. Boley
its:____________________________ its: Cashier
Killbuck Bancshares, Inc.:
By:_____________________________
Luther E. Proper, President
Attest:
________________________________
by: Jon D. Boley
its: Secretary
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EXHIBIT A
____________________, 1998
Board of Directors
Killbuck Bancshares, Inc.
165 N. Main
Killbuck, OH 44637
Re: Commercial and Savings Bank Co.
Members of the Board:
We have acted as special counsel to Commercial and Savings Bank Co., an Ohio
banking corporation ("Commercial"), in connection with the contemplated
Agreement and Plan of Reorganization dated_______, 1998, and related Merger
Agreement (the "Agreement") between Commercial and Killbuck Bancshares, Inc.
("Killbuck"). This Opinion Letter is rendered to you pursuant to Section -_(_)
of the Agreement. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Agreement.
We have examined such documents and matters and conducted such research as we
have deemed necessary or appropriate for the purpose of rendering this opinion.
As to questions of fact, we have relied upon statements and certificates from
certain officers of Commercial as well as certificates of certain public
officials.
This Opinion Letter is governed by, and shall be interpreted in accordance with,
the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations, all as
more particularly described in the Accord, and this Opinion Letter should be
read in conjunction therewith. The law addressed by this opinion is limited to
the law of the State of Ohio and the federal law of the United States.
Based upon the foregoing, and subject to the qualifications more particularly
herein set forth, we are of the opinion that:
1. Commercial is an banking corporation validly existing under the laws of the
State of Ohio and has the requisite corporate power and authority to own
its properties and to carry on the business in which it is now engaged.
2. All necessary corporate proceedings of Commercial have been duly taken to
authorize the execution, delivery and performance of the Agreement by
Commercial and the consummation of the transactions contemplated by the
Agreement. The Agreement constitutes the legal, valid and binding
obligation of Commercial, enforceable in accordance with its terms, except:
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a. as such enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or similar laws affecting
creditors' rights; and
b. that the remedy of specific performance and injunctive and other forms
of equitable relief are subject to certain equitable defenses and to
the discretion of the court before which any proceedings may be
brought.
3. The execution, delivery and performance of the Agreement by Commercial will
not violate or result in a breach of any term of Commercial's Articles of
Incorporation or Code of Regulations, or violate, result in a breach of, or
constitute a default under any term of any material agreement known to us
to which Commercial is a party.
4. The authorized capital stock of Commercial consists of 20,200 shares of
common stock, $_____ par value per share, all of which are issued and
outstanding as of _________, 1998. To our knowledge, there are no
outstanding options, warrants or other rights to acquire, or securities
convertible into any capital stock of Commercial.
5. All consents or approvals of any regulatory authority having jurisdiction
over Commercial or its subsidiary that are required to be obtained in
connection with the Merger and the transactions contemplated by the
Agreement have been obtained.
6. There is no suit, action, investigation or other proceeding pending or, to
our knowledge, threatened against Commercial or any of its subsidiaries
which would adversely affect the ability of Commercial to consummate the
Merger or perform its obligations under the Agreement.
This opinion is solely for the benefit of the addressee hereof and may not be
relied upon by any other person or party or in any other context without our
prior written consent. This opinion is delivered as of the date hereof, and we
expressly disclaim any undertaking to update it.
Very truly yours,
Dinsmore & Shohl, L.L.P.
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EXHIBIT B
____________________, 1998
Board of Directors
Commercial and Savings Bank Co.
701 S. Market Street
Danville, OH 44854
Re: Killbuck Bancshares, Inc.
Members of the Board:
We have acted as special counsel to Killbuck Bancshares, Inc., an Ohio
corporation ("Killbuck"), in connection with the contemplated Agreement and Plan
of Reorganization dated _______, 1998 and related Merger Agreement (the
"Agreement") between Killbuck and Commercial and Savings Bank Co..
("Commercial"). This Opinion Letter is rendered to you pursuant to Section -_(_)
of the Agreement. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Agreement.
We have examined such documents and matters and conducted such research as we
have deemed necessary or appropriate for the purpose of rendering this opinion.
As to questions of fact, we have relied upon statements and certificates from
certain officers of Killbuck as well as certificates of certain public
officials.
This Opinion Letter is governed by, and shall be interpreted in accordance with,
the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations, all as
more particularly described in the Accord, and this Opinion Letter should be
read in conjunction therewith. The law addressed by this opinion is limited to
the law of the State of Ohio and the federal law of the United States.
Based upon the foregoing, and subject to the qualifications more particularly
herein set forth, we are of the opinion that:
1. Killbuck is a corporation validly existing under the laws of the State of
Ohio and has the requisite corporate power and authority to own its
properties and to carry on the business in which it is now engaged.
2. All necessary corporate proceedings of Killbuck have been duly taken to
authorize the execution, delivery and performance of the Agreement by
Killbuck and the consummation of the transactions contemplated by the
Agreement. The Agreement constitutes the legal, valid and binding
obligation of Killbuck, enforceable in accordance with its terms, except:
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a. as such enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or similar laws affecting
creditors' rights; and
b. that the remedy of specific performance and injunctive and other forms
of equitable relief are subject to certain equitable defenses and to
the discretion of the court before which any proceedings may be
brought.
3. The execution, delivery and performance of the Agreement by Killbuck will
not violate or result in a breach of any term of Killbuck's Articles of
Incorporation or Code of Regulations, or violate, result in a breach of, or
constitute a default under any term of any material agreement known to us
to which Killbuck is a party.
4. Killbuck is registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended.
5. The authorized capital stock of Killbuck consists of 200,000 shares of
common stock, no par value per share, of which a total of 132,380 shares
are issued and outstanding as of _________, 1998. To our knowledge, there
are no outstanding options, warrants or other rights to acquire, or
securities convertible into any capital stock of Killbuck.
6. The shares of Killbuck Common Stock to be issued to the shareholders of
Commercial under the Agreement will be, at the effective time of the
Merger, duly and validly authorized and issued and fully paid and
nonassessable.
7. All consents or approvals of any regulatory authority having jurisdiction
over Killbuck or its subsidiary that are required to be obtained in
connection with the Merger and the transactions contemplated by the
Agreement have been obtained.
8. The Registration Statement on Form S-4 filed by Killbuck pursuant to the
Agreement has become effective and no stop order revoking such
effectiveness has been issued or has been threatened. [If an exemption
available - delete.]
9. There is no suit, action, investigation or other proceeding pending or, to
our knowledge, threatened against Killbuck or any of its subsidiary which
would adversely affect the ability of Killbuck to consummate the Merger or
perform its obligations under the Agreement.
This opinion is solely for the benefit of the addressee hereof and may not be
relied upon by any other person or party or in any other context without our
prior written consent. This opinion is delivered as of the date hereof, and we
expressly disclaim any undertaking to update it.
Very truly yours,
Werner & Blank Co., L.P.A.
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