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EXHIBIT 2(b)(1)
Branch Purchase and Assumption Agreement, dated
as of May 23, 1997, between The Park National Bank
and KeyBank National Association
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Exhibit 2(b)(1)
BRANCH PURCHASE AND ASSUMPTION AGREEMENT
BY AND BETWEEN
KEYBANK NATIONAL ASSOCIATION
AND
THE PARK NATIONAL BANK
DATED AS OF
MAY 23, 1997
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INDEX OF DEFINITIONS
AGREED VALUE shall mean, with regard to the Owned Real Estate and the Leasehold
Estate, its value as reflected by the Appraisal. Agreed Value shall mean, with
regard to the furniture, fixture and equipment which constitute part of the
Assets, the net book value determined as of the most recent month end preceding
the Closing Date under generally accepted accounting principles (the "Net Book
Value") of such furniture, fixture and equipment. In no event shall the Agreed
Value of the furniture, fixtures and equipment at any Branch be less than
$5,000.00.
APPRAISAL shall mean, with regard to the Owned Real Estate and the Leasehold
Estate, a limited summary format appraisal of its Fair Market Value furnished by
an Appraiser reasonably acceptable to Seller and Purchaser. For purposes of this
Agreement, "Appraiser" shall mean a reputable appraiser certified as an MIA
appraiser with at least five (5) years' experience within the previous ten (10)
years as a real estate appraiser working in the geographic region in which the
Owned Real Estate or Leasehold Estate to be appraised is located, with knowledge
of market values and practices. The cost of the Appraisal shall be paid equally
by each party hereto.
BRANCH(ES) shall mean each of Seller's branches identified on Schedule A hereto.
CODE shall mean the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
ENCUMBRANCE shall mean all mortgages, claims, liens, encumbrances, easements,
limitations, restrictions, commitments and security interests, except for
statutory liens securing payments not yet due, liens incurred in the ordinary
course of business and such other liens or encumbrances which do not materially
adversely affect the use of the properties or assets subject thereto or affected
thereby or which otherwise do not materially impair business operations at such
properties.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended.
EXCLUDED DEPOSITS shall mean: (a) any individual retirement account or similar
account created by a trust for the exclusive benefit of an individual or his
beneficiaries in accordance with the provisions of Section 408 of the Code and
any simplified employee pension account established in accordance with Section
408(k) of the Code which hold investments in non-deposit instruments; (b)
deposits which have been pledged to secure, or as to which the owner is an
obligor with regard to, any extension of credit by Seller or an affiliate of
Seller other than a Loan, (c) in the event that the Loans are rejected by
Purchaser pursuant to Section 1.08(b) hereof, deposits which have been pledged
to secure any Loan and (d) any deposits obtained directly or indirectly through
a "deposit broker" (as that term is defined in Section 337.6(a)(5) of the Rules
and Regulations of the FDIC, 12 CFR Section 337.6(a)(5)).
FAIR MARKET VALUE shall mean, with regard to the Owned Real Estate and the
Leasehold Estate, the price in terms of money which it will bring, free and
clear of all indebtedness and, in the case of the Leasehold Estate, subject to
all of the terms of the Lease creating such Leasehold Estate, if exposed to the
open market, allowing a reasonable time to find a purchaser, who buys with the
intention of using the Owned Real Estate or the Leasehold Estate for conducting
the business of banking.
FEDERAL FUNDS RATE shall mean the "near closing bid" federal funds rate
published in the Wall Street Journal on the first business day following the
Closing.
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KNOWLEDGE shall mean, with regard to Article X hereof, the actual present
knowledge as of the date hereof, without further investigation, of any Vice
President in KeyCorp's Corporate Real Estate Group and, with regard to Sections
3.01(j) and 5.01 hereof, the actual present knowledge as of the date hereof,
without further investigation, of any officer that holds the title of Senior
Vice President or above of Seller and has responsibility with respect to the
operations conducted at the Branches.
MEDIATOR shall mean Deloitte and Touche LL P
PERMITTED EXCEPTIONS shall mean, with respect to the Owned Real Estate or the
Leasehold Estate, (a) those standard printed exceptions appearing as Schedule B
items in a standard American Land Title Association ("ALTA") owner's or
leasehold title insurance policy, as the case may be, (provided, however, that
if Purchaser elects to obtain a survey as to any of the Owned Real Estate or
Leasehold Estate, the Permitted Exceptions for such Owned Real Estate or
Leasehold Estate shall not include the standard exception for matters that would
be disclosed by a survey, but shall include specific exceptions, if any,
disclosed by such survey provided that such specific exceptions are otherwise
included in the definition of Permitted Exceptions), (b) statutory liens for
current real estate taxes or assessments, both general and special, not yet due,
or if due not yet delinquent, or the validity of which is being contested in
good faith by appropriate proceedings; (c) all zoning laws and rulings,
easements, rights of way, and restrictions of record; (d) such other liens,
imperfections in title, charges, easements, restrictions, and encumbrances (but
in all cases excluding those which secure borrowed money) which individually and
in the aggregate are not material in character, amount, or extent, or do not
materially detract from the value of, or materially interfere with, the present
use of, any Owned Real Estate or any Leasehold Estate subject thereto or
affected thereby; (e) any exceptions to title arising from the action, inaction,
or status of Purchaser; and (f) such other exceptions as are approved in writing
by Purchaser.
REGULATORY APPROVALS shall mean all approvals, permits, authorizations, waivers,
or consents of governmental agencies or authorities necessary or appropriate to
permit consummation of the transaction contemplated hereby.
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BRANCH PURCHASE AND ASSUMPTION AGREEMENT
This Branch Purchase and Assumption Agreement ("Agreement"), dated as of May
23, 1997, is made by and between KeyBank National Association, a national
banking association ("Seller"), and The Park National Bank, a national banking
association ("Purchaser"). Certain definitions used herein are set forth in the
Index of Definitions of this Agreement.
In consideration of the mutual promises hereinafter contained and other good and
valuable consideration, Seller and Purchaser hereby agree as follows:
ARTICLE I
THE TRANSACTION
1.01 THE TRANSACTION. Subject to the terms and conditions set forth in
this Agreement, at the Closing, (a) Purchaser shall purchase the Assets and
shall assume the Liabilities, and Seller shall assign, transfer, convey, and
deliver to Purchaser, free and clear of all Encumbrances, all of Seller's right,
title and interest in and to such Assets and such Liabilities and (b) Purchaser
shall assume and thereafter honor and fully and timely pay, perform and
discharge all of Seller's obligations and liabilities of every type and
character relating to the Assets and Liabilities. Purchaser understands and
agrees that it is purchasing only the Assets (and assuming only the Liabilities)
specified in this Agreement and, except as may be expressly provided for in this
Agreement, Purchaser has no interest in, right to, or obligations relating to
any other business relationship which Seller may have with any customer of any
of the Branches.
1.02 ASSETS AND LIABILITIES PURCHASED AND ASSUMED.
(a) ASSETS. For purposes of this Agreement, "Assets" shall mean:
(i) all real property owned by Seller on which Branches are
located, including all of Seller's rights in and to all
improvements thereon ("Owned Real Estate") and all leasehold
estates held by Seller ("Leasehold Estate") in and to any real
estate on which any of the Branches is situated, including all
of Seller's rights in and to all improvements thereon ("Leased
Real Estate");
(ii) all furniture, fixtures and equipment that are located in
or necessary for the conduct of business in the ordinary
course at any Branch (including Automated Teller Machines
("ATMs"), if any, and branch teller and platform automation
equipment, if any);
(iii) safe deposit agreements relating to safe deposit boxes
located at the Branches;
(iv) all loans (exclusive of any reserve for possible loan
losses) that are attributable to the Branches, including all
loans made in the ordinary course of business consistent with
Seller's credit standards between the date of this Agreement
and the Closing, including all documents executed or delivered
in connection with any loan and any and all collateral
relating to any such loan and all rights in relation thereto
attributable to the Branches at the Closing (the "Loans")
(unless the Loans are rejected by Purchaser pursuant to
Section 1.08(b) hereof);
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(v) all rights of Seller under any service or similar
contracts in effect as of the Closing Date with non-affiliated
third-party service providers which relate solely to the
operations of the Branches to the extent such contracts are
assignable;
(vi) all cash on hand (i.e., all petty cash, vault cash,
teller cash, ATM cash, and prepaid postage) at the Branches as
of the Closing; and
(vii) all prepaid expenses identified as an asset on the final
closing statement.
(b) LIABILITIES. For purposes of this Agreement, "Liabilities"
shall mean all of Seller's obligations and liabilities of
every type and character relating to all deposit accounts,
including accrued interest, which are reflected on the books
of Seller as of the Closing and are attributable to the
Branches, including, without limitation, all passbook
accounts, statement savings accounts, checking, Money Market
and NOW accounts, certificates of deposit, individual
retirement accounts, simplified employee pension accounts,
saving incentive match plan for employees accounts, Keogh
accounts, and repurchase agreements except for the Excluded
Deposits (the "Assumed Deposits"). Liabilities shall also
include:
(i) all obligations due under any service or similar
contracts, in effect at the Closing, relating to the
operations of the Branches, to the extent such contracts are
included in 1.02(a)(v);
(ii) all of Seller's obligations and liabilities, arising from
and after the Closing Date, to the extent attributable to the
Assets and the Assumed Deposits; and
(iii) all accrued and unpaid expenses identified as a
liability on the final closing statement.
1.03 PRELIMINARY CLOSING STATEMENT AND PAYMENT.
(a) PRELIMINARY CLOSING STATEMENT. Not less than five (5) days
prior to the Closing Date, Seller shall deliver to Purchaser a
proposed preliminary closing statement, in the form of
Schedule B to this Agreement, completed as at a date mutually
agreed to by the parties. The parties shall agree upon the
preliminary closing statement before the Closing Date, and it
shall be the basis of a preliminary payment to be made to
Purchaser's account, or to Seller's account, as the case may
be, on the Closing Date (the "Preliminary Payment").
(b) PRELIMINARY PAYMENT. Subject to the terms and conditions
hereof, at the Closing, Seller shall wire transfer to
Purchaser immediately available funds equal to: (i) the sum of
(A) the amount of the Assumed Deposits (including accrued and
unpaid interest thereon) reflected on the preliminary closing
statement and (B) the amount of all accrued and unpaid
expenses reflected as a liability on the preliminary closing
statement; less (ii) an amount equal to the sum of: (A) twelve
point zero seven percent (12.07%) of the Assumed Deposits
based on a 30-day average prior to September 12, 1997; (B) the
amount of cash on hand at the Branches as of the Closing; (C)
the sum of ($125,000), representing the Agreed Value of all
furniture, fixtures, and equipment constituting part of the
Assets; (D) the Agreed Value of the Owned Real Estate and the
Leased Real Estate; (E) the amount of all prepaid expenses of
Seller as reflected as an asset on the preliminary closing
statement; (F) the Net Book Value of all Loans, plus accrued
and unpaid interest thereon as reflected on the preliminary
closing statement; and (G) the amount of estimated sales
taxes, if any, to be paid by Purchaser in connection with the
transaction contemplated hereby.
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(c) PURCHASER PAYMENT. In the event that the amount equal to
subclause (b)(ii) above exceeds the amount equal to subclause
(b)(i) above, the amount of such excess shall constitute an
amount due from Purchaser to Seller and shall be paid to
Seller at the Closing.
1.04 FINAL CLOSING STATEMENT AND ADJUSTMENT PAYMENT. Not more than
fifteen (15) days after the Closing Date, Seller shall provide Purchaser with a
proposed final closing statement, which shall be calculated as of the Closing
Date and the parties shall promptly agree upon the final closing statement. The
final closing statement shall be in a form consistent with the preliminary
closing statement. On the first business day after Purchaser agrees to the final
closing statement or Seller is notified of any determination as to the final
closing statement under Section 1.05 below, Seller shall wire transfer to
Purchaser (or Purchaser shall wire transfer to Seller, as the case may be) in
immediately available funds an amount equal to the amount by which the final
payment reflected on the final closing statement indicates an amount in excess
of (or any amount less than) the Preliminary Payment paid at Closing (the
"Adjustment Payment"), plus interest, at a rate per annum equal to the Federal
Funds Rate.
1.05 DISPUTES AND MEDIATION; PAYMENT OF FEES. If Purchaser disagrees
with the final closing statement, then Purchaser shall contact Seller and
Purchaser and Seller shall cooperate to resolve the matters in dispute. If the
parties are unable to agree on a final closing statement, then Purchaser or
Seller may submit the matter to the Mediator which shall determine all disputed
portions of the final closing statement; provided, however, that if the fees of
the Mediator as estimated by the Mediator would exceed 50% of the net amount in
dispute, the parties agree that such firm will not be engaged by either party
and that such net amount in dispute will be equally apportioned between Seller
and Purchaser. The parties shall each pay one-half of the fees and expenses of
the Mediator. The final closing statement, as agreed upon by the parties and/or
determined under this subsection, shall be final and binding upon the parties.
1.06 PRORATION OF CERTAIN EXPENSES. All prepaid expenses and all
accrued and unpaid expenses shall be prorated between Purchaser and Seller as of
the Closing Date; provided, however, that (i) all property Taxes as to the Owned
Real Estate shall be prorated on the basis of the most recently certified tax
duplicate and rates; (ii) all real property taxes and other expenses or charges
required to be paid by Seller as tenant under any lease pursuant to which Seller
leases any of the Leased Real Property ("Lease") shall be prorated based upon
amounts paid by Seller during the current lease year as to any period that
includes but extends after the Closing Date; (iii) all utility payments paid
(excluding any such payment paid by Seller to a landlord, which shall be covered
by clause (ii) hereof) shall be prorated on the basis of the best information
available at the Closing Date. All security deposits under any Lease, together
with any accrued but unpaid interest payable thereon, shall be credited to
Seller. All prepaid expenses that are allocable to Purchaser hereunder shall
appear as an asset on the preliminary or final closing statement. To the extent
that expenses allocable to Seller hereunder have been accrued and not paid by
Seller prior to the Closing Date, they shall appear as a liability on the
preliminary or final closing statement. There shall be no post-closing
adjustment for any of the foregoing.
1.07 ALLOCATION AND REIMBURSEMENT OF REAL ESTATE EXPENSES. All expenses
attributable to the Owned Real Estate and the Leasehold Estate incurred in
connection with the acquisition of the Branches by Purchaser shall be allocated
to and solely borne by Purchaser except for standard title insurance commitment
fees and title examination fees for the Owned Real Estate which shall be paid by
Seller.
1.08 LOANS.
(a) LOAN INFORMATION. Prior to the date hereof, Seller provided to
Purchaser certain information relating to the Loans to be
transferred to Purchaser, which included, among other data,
summary information relating to loan delinquencies.
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(b) OPPORTUNITY TO REVIEW AND REJECT LOANS. Following the date
hereof, Purchaser shall be provided with the opportunity to
conduct a limited due diligence review of the Loans for the
purpose of determining whether Purchaser desires to purchase
the Loans in their entirety. Within fourteen (14) days after
the date upon which Purchaser is first provided access to
documentation relating to the Loans, Purchaser shall notify
Seller as to whether Purchaser shall accept or reject the
Loans, provided however, that Purchaser shall only be
permitted to accept or reject all of the Loans other than
overdraft lines directly attributable to the Assumed Deposits.
In the event that Purchaser notifies Seller that it intends to
reject the Loans, the payment under Section 1.03(b) shall be
calculated without giving effect to any amounts described in
(F) thereunder.
(c) LOAN DOCUMENTATION. As soon as practicable after the Closing,
Seller shall deliver to Purchaser all loan files that Seller
retains in original paper form. From and after the Closing,
Seller shall promptly deliver upon Purchaser's reasonable
request on a loan by loan basis any additional loan
information that Seller has retained in its possession in
electronic form (e.g., microfiche or magnetic tape). Seller
shall indemnify Purchaser for any and all losses which arise
as a direct result of the failure of Seller to have delivered
to Purchaser all necessary documentation with respect to any
Loan, provided, however, that Seller shall not be obligated to
indemnify Purchaser pursuant to this Section 1.08(c) in the
event that Purchaser shall not have notified Seller of the
missing documentation within sixty (60) days following the
Closing. For purposes of this provision, a "loss" shall mean a
loss of the principal balance of the affected Loan outstanding
as of the Closing Date and any interest accrued thereon.
1.09 SUCCESSOR CUSTODIAN. Effective at the Closing, Seller hereby
appoints Purchaser as the successor custodian to Seller under the Liabilities
consisting of individual retirement accounts, simplified employee pension
accounts, saving incentive match plan for employee accounts, and Keogh accounts
and Purchaser hereby accepts from Seller the appointment to serve in such
capacity from and after the Closing Date.
ARTICLE II
OBLIGATIONS OF THE PARTIES PRIOR TO THE CLOSING DATE
2.01 COVENANTS OF SELLER. Seller hereby covenants to Purchaser that,
from the date hereof until the Closing Date or by such earlier time as may be
specified in this Agreement, it will do or cause the following to occur:
(a) OPERATION OF BRANCHES. Seller shall continue to operate and
maintain the Branches in a manner consistent with its
customary practices and in a condition substantially the same
as exists on the date hereof (ordinary wear and tear and
casualty excepted).
(b) INFORMATION CONCERNING BRANCHES. Seller shall use its
reasonable efforts to furnish Purchaser, its agents, or
representatives reasonable access to, and permit Purchaser to
make or cause to be made such reasonable investigation of,
information and materials relating to the financial and
physical condition of the Branches as Purchaser reasonably
deems necessary or advisable; provided, further, that nothing
in this Section 2.01(b) shall be deemed to require Seller to
breach any obligation of confidentiality or to reveal any
proprietary information, trade secrets, or marketing or
strategic plans.
(c) CREATION OF ENCUMBRANCES. Seller shall not voluntarily create
any Encumbrances affecting the Owned Real Estate.
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(d) INSURANCE. Seller will maintain in effect until and including
the Closing Date all casualty and public liability policies
relating to the Branches and maintained by Seller on the date
hereof or procure comparable replacement policies and maintain
such replacement policies in effect until and including the
Closing Date.
(e) RIGHT TO INTERVENE. In the event that any claim, protest, suit
or other proceeding is instituted against Purchaser under this
Agreement, Seller shall have the right, at its discretion and
expense, to intervene in such litigation, and Purchaser hereby
consents to such intervention.
2.02 COVENANTS OF PURCHASER. Purchaser hereby covenants to Seller that,
from the date hereof until the Closing Date or by such earlier time as may be
specified in this Agreement, it will do or cause the following to occur:
(a) CERTAIN APPLICATIONS. Not later than twenty-one (21) days
after the date hereof, Purchaser shall prepare and submit for
filing, at no expense to Seller, applications to all
regulatory agencies required by Purchaser to obtain the
Regulatory Approvals. Purchaser shall promptly deliver to
Seller a copy of such applications and any supplement,
amendment, or item of additional information in connection
therewith. Purchaser shall also promptly deliver to Seller a
copy of each material notice, order, opinion, approval or
denial and other item of correspondence received by Purchaser
from the regulatory agencies and shall keep Seller promptly
informed of developments and progress with respect to such
matters. Purchaser hereby represents that it knows of no
reason why it should not obtain all Regulatory Approvals in a
timely manner.
(b) REAL ESTATE LEASE CONSENTS. In connection with the consent and
release noted in Section 2.03 hereof, Purchaser shall provide
to Seller within five (5) days after the date hereof current
financial information concerning Purchaser for Seller's
transmittal to the landlord under each Lease and shall provide
promptly to Seller any other information requested by such
landlord.
2.03 COVENANTS OF BOTH PARTIES. Seller hereby covenants to Purchaser,
and Purchaser hereby covenants to Seller, that, from the date hereof until the
Closing, such party shall cooperate fully in obtaining, and make all reasonable
efforts to obtain, any third party consents which are required to consummate the
transaction contemplated by this Agreement, including, without limitation, (a)
an estoppel certificate of each landlord in the form attached hereto as Schedule
G, if the landlord agrees to execute such estoppel certificate, (b) the written
consent of each landlord under a Lease to the assignment and assumption by
Purchaser of such Lease or, if the landlord does not so consent, and if such
consent is necessary to validly effect such assignment or assumption or
sublease, to a sublease of the premises demised by such Lease, and (c) in either
case, the release of Seller from all obligations and liabilities under any such
Lease from and after the Closing Date (provided, however, that this Section 2.03
shall not obligate Seller to make any payment or to execute any indemnification
or guaranty or other similar instrument which would render Seller liable for any
obligations, liabilities or duties of Purchaser arising out of such Lease from
and after the Closing Date). Each of Seller and Purchaser also hereby covenant
to the other that it shall cooperate fully in promptly selecting an Appraiser
and shall make all reasonable efforts to obtain an Appraisal of the Owned Real
Property and the Leasehold Estate within thirty (30) days of the date hereof.
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2.04 SELLER'S AND PURCHASER'S RIGHTS AND OBLIGATIONS REGARDING
TITLE MATTERS.
(a) TITLE COMMITMENTS. Seller, at its sole expense, shall deliver
to Purchaser not later than thirty (30) days after the date
hereof, with respect to the Owned Real Estate, title
commitments for issuance of ALTA Owner's Policies of Title
Insurance (collectively, the "Title Commitments" and
individually, a "Title Commitment") issued not earlier than
thirty (30) days prior to the execution of this Agreement and
issued by a title insurance company authorized to do business
in the state in which the Owned Real Estate is located
designated by Seller (the "Title Company").
(b) SURVEYS. For thirty (30) days from the date hereof, Purchaser
shall have the right, but not the obligation, to obtain, at
Purchaser's sole cost and expense, (i) surveys as to any or
all of the Owned Real Estate or the Leasehold Estate and (ii)
title commitments for issuance of ALTA Leasehold Policies of
Title Insurance as to the Leasehold Estate from the Title
Company ("Leasehold Title Commitment"). Purchaser shall cause
a true and complete copy of each survey to be promptly
delivered to Seller and to the Title Company. Purchaser shall
cause a true and complete copy of each Leasehold Title
Commitment to be promptly delivered to Seller.
(c) TITLE DEFECTS. (i) Ten (10) days after receipt by Purchaser of
an original Title Commitment or any survey or Leasehold Title
Commitment obtained pursuant to Section 2.04(b) hereof,
Purchaser shall give Seller and the Title Company written
notice of any defect(s) disclosed in such Title Commitment,
survey or Leasehold Title Commitment that: (w) is (are) not
included in the exceptions specifically identified on the
Title Commitment or Leasehold Title Commitment; (x) is(are)
not included in clauses (a)-(d) of the definition of Permitted
Exceptions related to the applicable Owned Real Estate or
Leased Real Estate; (y) that materially adversely affect(s)
the business of the Branch situated upon such Owned Real
Estate or Leased Real Estate; and (z) which Purchaser does not
approve. Failure of Purchaser to provide such notice on a
timely basis shall constitute a waiver by Purchaser of any
matter(s) disclosed in such Title Commitment, survey or
Leasehold Title Commitment and thereupon such matter(s) shall
be deemed included in clause (b) of the definition of
Permitted Exceptions set forth in this Agreement.
(ii) If the notice referred to in (i) above is timely given by
Purchaser, Seller shall, within ten (10) days of such notice,
notify Purchaser and the Title Company as to whether Seller
shall cure or remove any defect(s). Following Seller's notice
to Purchaser and the Title Company that Seller elects not to
cure any defect(s), Purchaser must elect, within five (5)
days, as its sole remedy hereunder with respect to such
defect(s), to terminate this Agreement as to the Assets and
Liabilities attributable to the Branch situated upon the
affected Owned Real Estate and/or Leased Real Estate.
Purchaser's failure to make such an election shall be deemed
to be a waiver of such defect(s) and such defect(s) shall be
included in the Permitted Exceptions and shown as Permitted
Exceptions in the deed and the title policy relating to such
Owned Real Estate or Leasehold Estate.
(iii) Seller shall cause the Title Company to update the Title
Commitments and Purchaser may, at its sole cost and expense,
cause the Title Company to update Leasehold Title Commitments,
as of the business day prior to the Closing Date. In the event
that the updated Title Commitment or Leasehold Title
Commitment as to any Owned Real Estate or Leasehold Estate
discloses any defect(s) not included in the original Title
Commitment, survey or Leasehold Title Commitment, the
procedure set forth in (ii) above shall apply.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Purchaser as follows:
(a) CORPORATE ORGANIZATION AND AUTHORITY. Seller is a national
banking association duly organized, validly existing, and in
good standing under the laws of the United States of America
with corporate power to carry on its business as presently
conducted at the Branches. Seller is an insured bank, as
defined in the Federal Deposit Insurance Act and applicable
regulations thereunder ("FDIA"). Seller is a member of the
Bank Insurance Fund of the FDIC ("BIF") and pays deposit
insurance assessments to BIF and the Savings Association
Insurance Fund. Seller is in compliance in all material
respects with all applicable fair lending laws, rules and
regulations, including without limitation the Community
Reinvestment Act of 1977, as amended. Seller has all requisite
corporate power and authority and has taken all corporate
action necessary to execute and deliver this Agreement and to
consummate the transaction contemplated hereby, and this
Agreement is a valid and binding obligation of Seller in
accordance with its terms subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditor's rights generally, whether applied
at law or equity, and to general equity principals.
(b) EFFECTIVE AGREEMENT. Subject to the receipt of any and all
Regulatory Approvals and required third party consents, the
execution, delivery, and performance of this Agreement by
Seller and the consummation of the transaction contemplated
hereby, will not conflict with, result in the breach of,
constitute a violation or default, result in the acceleration
of payment or other obligations, or create an Encumbrance,
under any of the provisions of the Charter or By-Laws of
Seller, under any judgment, decree, or order, under any law,
rule, or regulation of any government or agency thereof, or
under any material contract or instrument to which Seller is
subject, where such conflict, breach, violation, default,
acceleration, or Encumbrance would have a material adverse
effect on the business of any Branch or Seller's ability to
perform its obligations hereunder.
(c) INDIVIDUAL RETIREMENT ACCOUNTS. The Individual Retirement
Custodial Account Agreement (i.e. Internal Revenue Service
Model Form 5305-A with certain supplementary provisions) used
at the Branches materially meets the criteria for the
establishment of an "individual retirement account" as
specified in Section 408(a) of the Code in all material
respects.
(d) SIMPLIFIED EMPLOYEE PENSION ACCOUNTS. The Simplified Employee
Pension - Individual Retirement Account Agreement (i.e.
Internal Revenue Service Model Form 5305-SEP with certain
supplementary provisions) and the Salary Reduction and Other
Elective Simplified Employee Pension - Individual Retirement
Account Agreement (i.e. Internal Revenue Service Model Form
5305A-SEP with certain supplementary provisions) used at the
Branches materially meets the criteria for the establishment
of a "simplified employee pension" as specified in Section
408(k) of the Code in all material respects.
(e) SAVING INCENTIVE MATCH PLAN FOR EMPLOYEES ACCOUNTS. The Saving
Incentive Match Plan for Employees of Small Employers
Agreement (i.e. Internal Revenue Service Model Form
5305-SIMPLE with certain supplementary provisions) used at the
Branches materially meets the criteria for the establishment
of a "saving incentive match plan for employees" as specified
in Section 408(p) of the Code in all material respects.
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(f) KEOGH ACCOUNTS. The custodial agreement for the retirement
plan for self-employed individuals used at the Branches
materially meets the criteria for the establishment of a
"Keogh plan" as specified in Section 401(a) and Section 401(c)
of the Code in all material respects.
(g) NO BROKER. No broker or finder, or other party or agent
performing similar functions, has been retained by Seller or
is entitled to be paid based upon any agreements,
arrangements, or understandings made by Seller in connection
with the transaction contemplated hereby, and no brokerage fee
or other commission has been agreed to be paid by Seller on
account of such transaction.
(h) ENVIRONMENTAL. Seller makes the representations and warranties
to Purchaser set forth in Section 10.01 hereof.
(i) ASSETS. The fixed Assets material to the operations of each of
the Branches are in adequate working condition for the conduct
of the business at each of the Branches currently conducted by
Seller except for ordinary wear and tear.
(j) DEPOSITS. All of the Assumed Deposits have been administered
and, to Seller's knowledge, originated, in material compliance
with the documents governing the relevant type of deposit
account and all applicable laws. The Assumed Deposits are
insured by the Bank Insurance Fund or the Savings Association
Insurance Fund of the FDIC up to the current applicable
maximum limits, and no action is pending or, to Seller's
knowledge, threatened by the FDIC with respect to the
termination of such insurance.
(k) LIMITATION OF WARRANTIES. Except as otherwise specifically
provided for in this Agreement, Seller makes no
representations or warranties whatsoever with respect to the
Assets or the Liabilities, express or implied, including,
without limitation, any warranties with respect to
merchantability, fitness, title, enforceability,
collectibility, documentation or freedom from liens or
encumbrances (in whole or in part).
3.02 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to Seller as follows:
(a) CORPORATE ORGANIZATION, AUTHORITY AND COMPLIANCE. Purchaser is
a national banking association duly organized, validly
existing, and in good standing under the laws of the United
States of America with corporate power to own its properties
and to carry on its business as presently conducted, except
where the failure of Purchaser to have such corporate power
would not have a material adverse effect on the ability of
Purchaser to perform its obligations hereunder. Purchaser is
an insured bank, as defined in the FDIA. Purchaser has all
requisite corporate power and authority and has taken all
corporate action necessary to execute and deliver this
Agreement and to consummate the transaction contemplated
hereby, and this Agreement is a valid and binding obligation
of Purchaser in accordance with its terms subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditor's rights
generally, whether applied at law or equity, and to general
equity principals. Purchaser is in compliance with all
applicable fair lending laws, rules and regulations including
but not limited to the Community Reinvestment Act of 1977, as
amended.
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(b) EFFECTIVE AGREEMENT. Subject to the receipt of any and all
Regulatory Approvals and required third party consents, the
execution, delivery, and performance of this Agreement by
Purchaser and the consummation of the transaction contemplated
hereby, will not conflict with, result in the breach of,
constitute a violation or default, result in the acceleration
of payment or other obligations, or create an Encumbrance,
under any of the provisions of the Articles of Association or
By-Laws of Purchaser, under any judgment, decree, or order,
under any law, rule, or regulation of any government or agency
thereof, or under any material contract or instrument to which
Purchaser is subject, where such conflict, breach, violation,
default, acceleration, or lien would have a material adverse
effect on Purchaser's ability to perform its obligations
hereunder.
(c) NO BROKER. No broker or finder, or other party or agent
performing similar functions, has been retained by Purchaser
or is entitled to be paid based upon any agreements,
arrangements, or understandings made by Purchaser in
connection with the transaction contemplated hereby, and no
brokerage fee or other commission has been agreed to be paid
by Purchaser on account of such transaction.
(d) REGULATORY MATTERS. (i) There are no pending, or, to
Purchaser's knowledge, threatened or contemplated, disputes or
controversies (including any written order, decree, agreement
or memorandum of understanding, or Commitment Letter or
similar submission) with, to or between Purchaser and any
federal, state or local governmental agency or authority that,
individually or in the aggregate, would have a material
adverse effect on Purchaser's ability to perform any of its
obligations hereunder.
(ii) Purchaser is, and on a pro forma basis giving effect to
the transaction contemplated hereby will be, (A) at least
"well capitalized", as defined for purposes of the FDIA, and
(B) in compliance with all capital requirements, standards and
ratios required by each state or federal bank regulator with
jurisdiction over Purchaser, including, without limitation,
any such higher requirements, standard or ratio as shall apply
to institutions engaging in the acquisition of insured
institution deposits, assets or branches, and no such
regulator is likely to, or has indicated that it will,
condition any of the Regulatory Approvals upon an increase in
Purchaser's capital or compliance with any capital
requirements, standard or ratio.
(iii) Purchaser has no knowledge that it will be required to
divest deposit liabilities, branches, loans or any business or
line of business as a condition to the receipt of any of the
Regulatory Approvals.
(iv) Except for First-Knox National Bank and Farmers and
Savings Bank which were both rated "Satisfactory", each of the
subsidiaries, if any, or affiliates of Purchaser that is an
insured depository institution was rated "Outstanding"
following its most recent Community Reinvestment Act
examination by the regulatory agency responsible for its
supervision. Purchaser has received no notice of and has no
knowledge of any planned or threatened objection by any
community group to the transactions contemplated hereby.
(e) FINANCING AVAILABLE. Purchaser's ability to consummate the
transactions contemplated by this Agreement is not contingent
on raising any equity capital, obtaining specific financing
thereof, obtaining the consent of any lender or any other
matter.
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3.03 SURVIVABILITY; NO INDEMNIFICATION. The representations and
warranties of Seller and Purchaser contained or referred to in this Agreement or
in any certificate, schedule, or other instrument delivered or to be delivered
pursuant to this Agreement shall not survive beyond the Closing and neither
Seller nor Purchaser shall have any obligation whatsoever after the Closing to
indemnify, defend, or hold the other harmless for any loss, cost, charge,
liability or expense arising as a result of the inaccuracy or breach of any such
representation or warranty. Nothing in this provision shall affect the rights
and obligations of the parties provided for in Sections 1.08(c), 4.02(a), 6.03
and 10.02 hereof.
ARTICLE IV
EMPLOYEE BENEFITS
4.01 LIST OF BRANCH EMPLOYEES; HANDBOOK. Names of all employees
(including full and part-time employees, employees on short term disability and
employees on leave of absence and excluding employees on long-term disability)
employed by the Seller and assigned to the Branches as of the date hereof (the
"Branch Employees"), and, as to each Branch Employee, such employee's date of
hire and current compensation are listed on attached Schedule C. At least ten
days prior to the Closing Date, Seller shall update Schedule C to a date within
15 days prior to the Closing Date.
4.02 ACTIONS TO BE TAKEN BY PURCHASER WITH RESPECT TO BRANCH EMPLOYEES.
Purchaser covenants to Seller that it will do or cause the following to occur:
(a) OFFER OF EMPLOYMENT. Seller shall make available and Purchaser
shall hire, as of the Closing Date, all Branch Employees, at
salaries, or at base wages, not less than the current salaries
or base wages paid to such Branch Employees as of the Closing
Date. Purchaser shall be responsible for all obligations
(including any obligation to provide notices) or liabilities,
if any, which may arise in connection with any Branch Employee
under the Workers Adjustment and Retraining Notification Act
(the "WARN Act") and Purchaser shall indemnify Seller for any
and all losses which Seller may incur under the WARN Act in
connection with any Branch Employee due to actions taken by
Purchaser.
(b) EMPLOYEE BENEFITS. All Branch Employees shall be eligible to
participate in Purchaser's employee benefit plans and fringe
benefit plans (including, without limitation, pension and
profit sharing plans, retirement income and post retirement
welfare benefits, health insurance benefits (medical and
dental), disability, life and accident insurance, sickness
benefit, vacation, employees' loans, and banking privileges)
on the same basis as such plans and benefits exist and are
offered to employees of Purchaser with comparable positions
with Purchaser. Purchaser shall credit such Branch Employees
for their length of service with Seller, its predecessors, or
its affiliates, for all purposes under each employee benefit
and fringe benefit plan to be provided by Purchaser to such
Branch Employees and for purposes of vesting and eligibility
(but not for purposes of benefit accrual) under any pension
benefit plan as defined in Section 3(2) of ERISA.
(c) CREDITED SICKNESS DAYS. If Purchaser offers a salary
continuation or similar program for employees unable to work
for medical reasons, the Branch Employees shall be credited
under any program of Purchaser with at least the number of
sickness and/or personal benefit days accrued under Seller's
program at the Closing Date. After the Closing Date, the
Branch Employees shall accrue additional sickness and/or
personal benefit days in accordance with the terms of
Purchaser's program.
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(d) PRE-EXISTING CONDITION. Purchaser agrees that any pre-existing
condition clause in any of Purchaser's health or disability
insurance coverage shall not be applicable to the Branch
Employees or their dependents.
(e) SEVERANCE PAY. Seller's severance policy and Purchaser's
severance policy, if any, are attached hereto as Schedule D.
Effective as of the Closing Date, Purchaser shall assume
liability for all severance benefits payable to any Branch
Employee who is terminated by Purchaser after the Closing
Date. For a period of one (1) year following the Closing Date,
Purchaser shall provide such benefit pursuant to either
Purchaser's severance policy or Seller's severance policy,
whichever is greater, and Purchaser shall compute severance
benefits by giving all Branch Employees full credit for all
years of service with Seller, its affiliates, and
predecessors, in accordance with Section 4.02(b). In the event
that Purchaser does not maintain a severance policy, Purchaser
will adopt a severance policy for a period of one (1) year
from the Closing Date on a basis consistent with the terms of
Seller's severance policy in existence on the Closing Date as
disclosed in writing to Purchaser by Seller on or prior to the
date hereof. After the initial one-year period, Purchaser
shall provide Branch Employees with severance benefits in
accordance with Purchaser's severance policy, if any, in
accordance with their years of service as credited under this
Agreement.
(f) SUCCESSOR EMPLOYER. Purchaser agrees it will qualify as a
successor employer of Branch Employees for withholding tax
purposes.
(g) PAYMENT OF CLAIMS. Purchaser assumes responsibility for (i)
payment of any medical, dental, health and disability claims
incurred by Branch Employees on or after the Closing Date and
(ii) Continuation Coverage (as defined in Section 4.03(d)
below) to any Branch Employee (and each Branch Employee's
qualified beneficiaries) whose qualifying event occurs on or
after the Closing Date.
4.03 ACTIONS TO BE TAKEN BY SELLER WITH RESPECT TO BRANCH EMPLOYEES.
Seller covenants to Purchaser that it will do or cause the following to occur:
(a) ACCRUED BENEFITS. Seller agrees to remain responsible for the
payment of all accrued benefits to such Branch Employees who
are participants or retirees in accordance with the terms of
Seller's retirement income plans. Purchaser shall not at any
time assume any liability for the benefits of any active or
any terminated, vested, or retired participants whose benefit
accrued prior to the Closing Date under Seller's retirement
income plans.
(b) PAYMENT OF CLAIMS. Seller shall retain the responsibility for
payment of all medical, dental, health and disability claims
incurred by a Branch Employee prior to the Closing Date, and
Purchaser shall not assume any liability with respect to such
claims.
(c) CONTINUATION COVERAGE. Seller shall be responsible for
providing any Branch Employee whose "qualifying event," within
the meaning of Section 4980B(f) of the Code, occurs prior to
the Closing Date (and such Branch Employee's "qualified
beneficiaries" within the meaning of Section 4980B(g) of the
Code) with the continuation of group health coverage required
by Section 4980B(f) of the Code ("Continuation Coverage")
under the terms of the health plan maintained by Seller.
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(d) RETIRED OR TERMINATED BRANCH EMPLOYEES. Seller agrees that it
shall retain, consistent with its normal employment practices,
all liability and obligation, if any (including, without
limitation, the liability and obligation for all wages,
salary, vacation pay and unemployment, medical, dental, health
and disability benefits), for those former employees of the
Branches who retired or terminated employment prior to the
Closing Date, but shall in all other instances cease to have
any liability for Branch Employees with regard to the
foregoing provisions on or after the Closing Date, except as
otherwise required by law.
4.04 SELLER'S PENSION AND SAVINGS PLAN. On and after the Closing Date,
Seller shall vest all of the Branch Employees in the KeyCorp Cash Balance
Pension Plan ("Seller's Pension Plan") and the KeyCorp 401(K) Savings Plan
("Seller's Savings Plan").
ARTICLE V
TAX MATTERS
5.01 DEPOSIT ACCOUNTS DOCUMENTATION. To Seller's Knowledge, with
respect to the Assumed Deposits, Seller is in compliance with the law and IRS
regulations relative to obtaining from depositors executed IRS Forms W-8 and W-9
or is back-up withholding on the applicable account.
5.02 ASSISTANCE AND COOPERATION; TAX MATTERS. After the Closing Date,
each of Seller and Purchaser shall, with respect to the Assets or income
therefrom, the Assumed Deposits or payments in respect thereof, or the operation
of the Branches:
(a) TAX INFORMATION. Make available to the other and, subject to
attorney-client privilege, to any taxing authority as
reasonably requested all relevant information, records, and
documents relating to taxes.
(b) AUDITS AND ASSESSMENTS. Provide timely notice to the other
party in writing of any pending or proposed tax audits (with
copies of all relevant correspondence received from any taxing
authority in connection with any tax audit or information
request) or assessments for taxable periods for which the
other party may have a liability.
The party requesting assistance or cooperation shall bear the
other party's reasonable out-of-pocket expenses in complying with such request
to the extent that those expenses are attributable to fees and other costs of
unaffiliated third-party service providers.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
6.01 CONDITIONS TO BOTH PARTIES OBLIGATIONS. The obligations of each
party to consummate the transaction contemplated hereby are subject to the
satisfaction, or the waiver by such party to the extent permitted, of each of
the following conditions at or prior to the Closing:
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(a) PRIOR REGULATORY APPROVAL OF THE TRANSACTION CONTEMPLATED
HEREBY. All filings and registrations with, and notifications
to, all federal and state authorities required for
consummation of the transaction contemplated hereby and
Purchaser's operation of the Branches shall have been made,
all Regulatory Approvals shall have been received and shall be
in full force and effect, and all applicable waiting periods
shall have passed. A Regulatory Approval will be deemed to
have been received, and the condition to closing set forth in
this Section 6.01 shall be deemed to have been met
notwithstanding the fact that such Regulatory Approval
requires Purchaser to effect any divestiture of any of the
Branches.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the other party set forth in this Agreement
shall be true and correct in all material respects as of the
Closing Date with the same effect as though all such
representations and warranties had been made on and as of such
time (unless a different date is specifically indicated in
such representations and warranties), and each party shall
have delivered to the other a certificate, dated as of the
Closing Date, to the effect that this condition has been
satisfied with respect to such party, provided, however, that
the representation of Seller set forth in Section 3.01(i)
hereof shall be deemed to be true and correct in accordance
with this Section 6.01 unless Buyer shall have notified Seller
at least 10 days prior to the Closing Date of any potential
breach of Section 3.01(i) by Seller and Seller shall have had
sufficient opportunity to correct such potential breach.
(c) COVENANTS. Each and all of the covenants and agreements of the
other party to be performed or complied with at or prior to
the Closing Date pursuant to this Agreement shall have been
duly performed or complied with in all material respects by
such party, or shall have been waived in accordance with the
terms hereof, and such party shall have delivered a
certificate, dated as of the Closing Date, to the effect that
this condition has been satisfied with respect to such party;
provided, however, that the covenant of Seller set forth in
Section 2.01(a) hereof shall be deemed to have been duly
performed and complied with in accordance with this Section
6.01(c) unless Buyer shall have notified Seller at least 10
days prior to the Closing Date of any potential breach of
Section 2.01(a) and Seller shall have had sufficient
opportunity to correct such potential breach.
(d) NO PROCEEDING OR PROHIBITION. At the time of the Closing, no
court or governmental or regulatory authority of competent
jurisdiction shall have enacted, issued, promulgated,
enforced, or entered any statute, rule, regulation, judgment,
decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect to restrain,
enjoin, or prohibit consummation of the transaction
contemplated hereby or which might result in rescission in
connection with such transaction, and Purchaser shall have
delivered to Seller a certificate, dated as of the Closing
Date, to that effect.
6.02 ADDITIONAL CONDITION TO PURCHASER'S OBLIGATIONS. The Updated Title
Commitments shall have been delivered to Purchaser in accordance with Section
2.04. Subject to the provisions of Section 2.04, the Title Company shall be
ready and willing, upon the recording of the applicable deeds, to issue to
Purchaser, at Purchaser's sole cost and expense, an ALTA Owner's Policy of Title
Insurance as to each parcel of Owned Real Estate, showing as exceptions to title
only the Permitted Exceptions.
6.03 OVERRIDING PROVISIONS RELATING TO THE LEASES. Notwithstanding
anything to the contrary herein, if, by no later than five (5) days prior to the
Closing Date, a landlord under a Lease shall not have consented to the
assignment to and assumption by Purchaser of that Lease or to a sublease by
Seller to Purchaser of the Leased Real Estate demised by the Lease and such
consent is required under the terms of the Lease, the Seller shall have the
right, exercisable by written notice no later than the Closing Date, to
terminate the Agreement: (a) as to the Leasehold Estate demised by such Lease
and all furniture, fixtures and equipment located thereon; or (b) as to the
Assets and Liabilities relating to the Branch situated upon such Leased Real
Estate. Furthermore, and also notwithstanding anything to the
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contrary herein, if, by not later than five (5) days prior to the Closing Date,
a landlord under a Lease shall not have agreed to the release of Seller from all
obligations and liabilities under the Lease from and after the Closing Date, but
either the landlord shall have consented to a sublease by Seller to Purchaser of
the Leased Real Estate demised by the Lease (if the Lease requires such consent)
or such a sublease does not require the landlord's consent, then Seller and
Purchaser agree to proceed with the transactions contemplated by this Agreement
as to the Branch located at the Leased Real Estate demised by such Lease, except
that Seller and Purchaser shall enter into a sublease agreement by which Seller
shall sublease the Leased Real Estate and Purchaser shall agree to indemnify
Seller for any loss, cost, charge or liability incurred by Seller as a result of
the failure to obtain the landlord's release. If the parties are to enter into a
sublease, then Seller shall provide to Purchaser promptly after the lapse of
such deadline a form of sublease which shall contain substantially the same
terms and conditions as the corresponding Lease, with appropriate modifications
to reflect the sublease nature.
ARTICLE VII
CLOSING
7.01 CLOSING AND CLOSING DATE. The transaction contemplated hereby
shall be effective at a closing (the "Closing") to be held in the offices of
Seller, located at 127 Public Square, Cleveland, Ohio 44107, or via courier or
facsimile transmission as Seller may designate. The Closing shall be effective
at 11:59 p.m. on Friday, September 12, 1997 or Friday, December 5, 1997, or such
other date as Seller in its discretion may designate, which date shall be
reasonably acceptable to Purchaser. The date on which the Closing occurs is
referred to in this Agreement as the "Closing Date".
7.02. PARTIES' ACTIONS AT THE CLOSING. At the Closing, Seller and
Purchaser shall, except as otherwise provided in this Agreement, take such
actions, including the execution and delivery of certain documentation, all as
set forth on Schedule E, and including the filing or recording of any and all
documents (including, without limitation, deeds) necessary in order to transfer
legal and equitable title to the Owned Real Estate to Purchaser as of the
Closing Date.
ARTICLE VIII
CERTAIN TRANSITIONAL MATTERS
TRANSITIONAL ACTION BY PURCHASER AND SELLER. Purchaser and Seller shall
cooperate in good faith and will use all reasonable efforts to comply with the
various transitional matters set forth in Schedule F hereto.
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ARTICLE IX
GENERAL COVENANTS
9.01 INFORMATION. Except as otherwise set forth in this Agreement, for
a period of three (3) years following the Closing, Seller and Purchaser mutually
agree, subject to any limitations imposed by law, to provide each other, upon
written request, with reasonable access to, or copies of, information and
records relating to the Branches, including, without limitation, Branch Employee
and customer files which are in the possession or control of Purchaser or Seller
reasonably necessary to permit Seller or Purchaser or any of their affiliates to
comply with or contest any applicable legal, tax, banking, accounting, or
regulatory policies or requirements, any legal or regulatory proceedings, or
inquiries by customers or Branch Employees. The provisions of this Section 9.01
shall survive the Closing for a period of three (3) years and any claim for the
breach of this Section 9.01 must be brought within such three (3) year period.
9.02 CONFIDENTIALITY OBLIGATIONS. From and after the date hereof, each
party shall, and shall cause its affiliates to, treat all information received
from the other party concerning the business, assets, operations, and financial
condition of the other party as well as any other material which is included in
the definition of "Evaluation Material" as such term is defined under the
confidentiality agreement between Purchaser and Seller dated as of April 30,
1997 as Evaluation Material in accordance with the terms of such confidentiality
agreement. From and after the Closing Date, Seller shall assign to Purchaser all
of Seller's rights under any confidentiality agreements executed by or on behalf
of parties other than Purchaser.
9.03 ALLOCATION OF CONSIDERATION. Purchaser and Seller agree that the
consideration payable hereunder at the Closing shall be allocated among the
Assets on the basis of an allocation to be mutually agreed upon by Purchaser and
Seller within thirty (30) days after the Closing, and that is consistent with
Section 1060 of the Code.
9.04 COVENANT REGARDING THE ESTABLISHMENT OF BRANCHES AND THE RETENTION
OF CUSTOMER LISTS.
(a) For two (2) years after the Closing, Seller shall not open,
and shall not permit any of its affiliates to open, any branch
office or install any ATM within Lancaster, Ohio; provided
that the foregoing restriction shall not apply from and after
any date that the Seller or one of its affiliates shall have
completed an acquisition transaction, including a merger of
Seller or one of Seller's affiliates, with any other financial
institution holding company or any insured depository
institution which at the time of such acquisition transaction
is providing retail branch services in Lancaster, Ohio.
(b) Following the Closing, neither Seller nor KeyCorp or any of
its affiliates will solicit any Branch customer except such as
may occur as a result of solicitations to (i) the public
generally, or (ii) customers of Seller or KeyCorp or any of
its affiliates, including without limitation, all customers
that Seller retains as a result of Purchaser rejecting the
Loans in accordance with Section 1.08(b).
9.05 FURTHER ASSURANCES. From and after the date hereof, each party
hereto agrees to execute and deliver such instruments and to take such other
actions as the other party hereto may reasonably request or as may be reasonably
necessary, including obtaining all required consents of third parties, in order
to carry out and implement this Agreement. Purchaser shall use its best efforts
to pursue all applications filed in connection with obtaining the Regulatory
Approvals diligently and in good faith.
9.06 OPERATION OF BRANCHES. Not later than the Closing Date, Purchaser:
(a) shall change the legal name of the Branches to a name that does not include
the word Key, and (b) except for any documents or materials in possession of the
customers of the Branches (including, but not limited to, deposit tickets and
checks), shall not use
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and shall cause the Branches to cease using (i) any signage, stationery,
advertising, documents, or printed or written materials that refer to such
Branches by any name that includes the word Key and (ii) any logo, trademark or
service mark or trade name registered in the name of, or otherwise owned by
Seller or any of its affiliates, except as otherwise provided in this Agreement
or permitted pursuant to any written agreement(s) between Purchaser and Seller
or its affiliates.
9.07 NOTICES OF DEFAULT. Each of Seller and Purchaser shall promptly
give written notice to the other upon becoming aware of the impending or
threatened occurrence of any event which could reasonably be expected to cause
or constitute a breach of any of their respective representations, warranties,
covenants or agreements contained in this Agreement.
9.08 FIRE, CASUALTY AND TAKINGS. If any Owned Real Estate, Leasehold
Estate or Leased Real Estate or any fixtures or leasehold improvements composing
part thereof shall be damaged by fire or other casualty and such damage
materially affects the operations of the Branch related thereto, whether insured
or uninsured, and shall not be substantially repaired or restored by the Closing
Date, or if the land where any of the Branches is located or any building
thereon or any part thereof shall be taken by condemnation or exercise of the
power of eminent domain, or if proceedings therefor have commenced or been
threatened, on or prior to the Closing Date and such taking materially affects
or would materially affect the operations of the Branch related thereto,
Purchaser shall have the right and option exercisable within 10 days of
notification of such damage or taking to elect (i) to terminate this Agreement
with respect to the affected Branch, and the purchase price shall be adjusted to
reflect the decrease in the value of the assets and liabilities of the affected
Branch assigned thereto pursuant to the terms hereof, or (ii) to cause Seller to
assign to Purchaser as of the Closing Date all of Seller's rights and claims
against any third party by reason of such fire or other casualty, including
without limitation, any insurance claims.
ARTICLE X
ENVIRONMENTAL MATTERS
. 10.01 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.
(a) Prior to the date hereof, Seller shall have provided to
Purchaser Phase I audit reports, as of a date no earlier than
January 1, 1994, undertaken by Seller with respect to the
Owned Real Estate (the "Phase I Reports"). Except as set forth
in the Phase I Reports, to the Knowledge of Seller, the
Branches are in compliance with all environmental laws, rules
and regulations of the United States of America and of states
and localities in which the Branches are located, except for
any such noncompliance which, individually or in the
aggregate, has not had, and is not expected to have, to the
Knowledge of Seller, a material adverse effect on the business
of any Branch.
(b) Except as may be set forth in the Phase I Reports, to the
Knowledge of Seller, Seller has no liability with respect to
the Branches which, taken singularly or as a whole, if
adversely determined, would have a material adverse effect on
the business of any Branch (i) relating to the handling,
storage, treatment, use, disposal, discharge or release into
the environment of any hazardous material or waste at, on or
from the Owned Real Estate or the Leased Real Estate, (ii) for
the release or emission of any hazardous material from, on,
under, or within the Owned Real Estate or Leased Real Estate
into the air, water, surface water, ground water, land
surface, or subsurface strata, (iii) for the disposal of any
hazardous material on the Owned Real Estate or Leased Real
Estate or (iv) for the contamination of the Owned Real Estate
or Leased Real Estate with any hazardous material.
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10.02 ENVIRONMENTAL INVESTIGATION.
(a) If any Phase I Report indicates the presence of any hazardous
substance with respect to any Owned Real Estate, and such
presence is a condition that requires remediation pursuant to
appropriate governmental standards, then, at Purchaser's
request made in writing to Seller within ten (10) days after
the date of this Agreement, and at Purchaser's sole cost and
expense, Seller shall arrange to cause a consultant approved
by both Seller and Purchaser to conduct a Phase II
environmental audit as to such hazardous substance and deliver
to Seller and Purchaser the results of such audit within
forty-five days after the request by Purchaser. If the Phase
II audit report confirms that such presence requires
remediation pursuant to appropriate governmental standards and
if such presence, if not remediated, would materially
adversely affect the business of the Branch situated upon the
Owned Real Estate and Purchaser requests that Seller take
remedial action with respect thereto, then Purchaser shall so
notify Seller in writing promptly after receipt of the Phase
II environmental audit report, whereupon Seller shall have the
right to (i) terminate this Agreement as it relates to the
Assets and Liabilities of the affected Branch, (ii) undertake
remedial action as to such presence at its sole cost and
expense so that no material continuing violation of any
environmental law exists (provided, however, that the timing
of any such remediation shall be coordinated with Purchaser to
minimize any resulting business interruption), or (iii) agree
to indemnify Purchaser for all actual costs and expenses
incurred by Purchaser to remediate the Owned Real Estate as to
such presence so that no material continuing violation of any
environmental law exists.
(b) If Purchaser fails to request a Phase II environmental audit
or to exercise its right to make a request that Seller
remediate any Owned Real Estate in each case as and when
required above, then Purchaser shall be bound to the terms of
this Agreement without a right of termination except as
provided in Article XI and without a further right to request
or to require any Seller remediation or indemnification. Any
termination by Seller under this Article X shall neither
create nor result in any liability of the Seller to the
Purchaser.
ARTICLE XI
TERMINATION
11.01 METHODS OF TERMINATION. This Agreement may be terminated in any
of the following ways:
(a) By either Purchaser or Seller, in writing, if the Closing has
not occurred on or before the earlier of the nine (9) month
anniversary of this Agreement;
(b) At any time prior to the Closing Date by the mutual consent in
writing of Purchaser and Seller;
(c) By Purchaser or Seller as to the Owned Real Estate and/or
Leasehold Estate and all furniture, fixture and equipment
located thereon, all of the Assets and Liabilities relating to
the affected Branch, or as to the Agreement in its entirety,
as provided, in each case, in Section 2.04(c), 6.03 or 10.02;
(d) By Purchaser in writing if and when, at any time prior to the
Closing, any condition of its obligations hereunder set forth
in Section 6.01 of this Agreement becomes incapable of being
fulfilled and such condition has not been waived by Purchaser;
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(e) By Seller in writing if and when, at any time prior to the
Closing, any condition of its obligations hereunder set forth
in Section 6.01 of this Agreement becomes incapable of being
fulfilled and such condition has not been waived by Seller;
(f) At any time prior to the Closing Date by Purchaser or Seller
in writing if the other continues to be in breach of any
representation and warranty (as if such representation and
warranty had been made on and as of the date of the notice of
breach referred to below unless a different time is specified
in any such representation and warranty), covenant, or
agreement in any material respect and such breach has not been
cured within twenty-five (25) days after the giving of notice
to the breaching party of such breach; or
(g) By Purchaser or Seller in writing at any time after any
applicable regulatory authority has denied approval of any
application of Purchaser for approval of the transaction
contemplated hereby.
11.02 EFFECT OF TERMINATION. Except as otherwise specifically provided
in this Agreement, in the event of termination of this Agreement pursuant to
this Article XI, neither Purchaser nor Seller nor their respective officers,
directors, or agents shall have any liability or obligation to the other of any
nature whatsoever except liabilities and obligations arising from Section 9.02
of this Agreement and liabilities and obligations arising from any material
breach of any provision of this Agreement occurring prior to the termination
hereof.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.01 EXPENSES. Except as otherwise specifically allocated herein, each
of the parties hereto shall bear its own expenses, whether or not the
transaction contemplated hereby is consummated.
12.02 TRANSFER OF LOANS WITHOUT RECOURSE; LIMITATION ON WARRANTIES.
Except as may be provided in Section 1.08, all Loans transferred to Purchaser
pursuant to this Agreement shall be transferred without recourse and without any
representations or warranties whatsoever (including, without limitation, any
representations or warranties as to the enforceability or collectibility of any
such Loans, the creditworthiness of any obligors or guarantors thereunder, or
the value or adequacy of such collateral). EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED FOR IN THIS AGREEMENT, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES
WHATSOEVER WITH RESPECT TO THE ASSETS OR THE LIABILITIES, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES WITH RESPECT TO MERCHANTABILITY,
FITNESS, TITLE, ENFORCEABILITY, COLLECTIBILITY, DOCUMENTATION OR FREEDOM FROM
LIENS OR ENCUMBRANCES (IN WHOLE OR IN PART).
12.03 AMENDMENT, MODIFICATIONS AND WAIVERS. The parties hereto, by
mutual consent of their duly authorized officers, may amend, modify, and
supplement this Agreement in such manner as may be agreed upon by them in
writing. Each party hereto, by written instrument signed by an officer of such
party, may extend the time for the performance of any of the obligations or
other acts of the other party hereto and may waive, but only as affects the
party signing such instrument: (a) any inaccuracies in the representations or
warranties of the other party; (b) compliance with any of the covenants or
agreements of the other party; (c) the performance by the other party of such of
its obligations set out herein; and (d) satisfaction of any condition to the
obligations of the waiving party pursuant to this Agreement.
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12.04 NOTICES. Any notice or other communication required or permitted
pursuant to this Agreement shall be effective only if it is in writing and
delivered personally, by facsimile transmission, or by registered or certified
return receipt mail, postage prepaid, addressed as follows:
If to Purchaser:
The Park National Bank
21 South First Street
Newark, Ohio 43055
Facsimile: (614) 349-3787
Attention: David C. Bowers, Senior Vice President
with a copy to the following:
Vorys Sater Seymour & Pease
P.O Box 1008
52 East Gay Street
Columbus, Ohio 43216-1008
Facsimile: (614) 464-6350
Attention: Betsy Farrar
If to Seller:
KeyCorp
127 Public Square
Cleveland, Ohio 44114
Facsimile: 216-689-3610
Attention: Matthew M. Nickels
with a copy to the following:
KeyCorp
127 Public Square
Cleveland, Ohio 44114
Facsimile: 216-689-4121
Attention: Daniel R. Stolzer, Esq.
or such other person or address as any such party may designate by notice to the
other parties, and shall be deemed to have been given as of the date received.
12.05 PARTIES IN INTEREST; ASSIGNMENT. This Agreement is binding upon
and is for the benefit of the parties hereto and their respective successors,
legal representatives, and assigns, and no person, including a Branch Employee,
who is not a party hereto (or a successor or assignee of such party) shall have
any rights or benefits under this Agreement, either as a third party beneficiary
or otherwise. This Agreement cannot be assigned except by a written agreement
executed by the parties hereto or their respective successors and assigns.
Notwithstanding the foregoing, Seller acknowledges that Purchaser may intend to
arrange for resales of certain of the Branches simultaneously with
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the Closing; provided, however, that no third party beneficiary relationship or
any contractual relationship between Seller and any other third party shall be
deemed to exist or to be created hereunder by virtue of the resale of any of the
Branches by Purchaser hereunder.
12.06 PRESS RELEASES. Seller and Purchaser shall mutually agree as to
the form, timing and substance of any press release of any matters relating to
this Agreement; provided, however, that nothing in this Section 12.06 shall be
deemed to prohibit any party hereto from making any press release which its
legal counsel deems necessary in order to fulfill such party's disclosure
obligations imposed by law.
12.07 ENTIRE AGREEMENT. This Agreement supersedes any and all oral or
written agreements and understandings heretofore made relating to the subject
matter hereof and contains the entire agreement of the parties relating to the
subject matter hereof. All Schedules to this Agreement are incorporated into
this Agreement by reference and made a part hereof.
12.08 GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Ohio. If any part of this Agreement
is declared illegal by a court of competent jurisdiction, the remaining parts
shall remain in full force and effect.
12.09 COUNTERPARTS. This Agreement and any Schedule hereto may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officer whose signature appears below as of
the date first above written.
PURCHASER: SELLER:
The Park National Bank KeyBank National Association
By: /s/ WILLIAM T. McCONNELL By: /s/ MATTHEW M. NICKELS
----------------------------- ---------------------------
Name: William T. McConnell Name: Matthew M. Nickels
--------------------------- -------------------------
Title: Chairman Title: Vice President
--------------------------- -------------------------
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List of Schedules and Exhibit to
Branch Purchase and Assumption Agreement,
dated as of May 23, 1997, between
The Park National Bank and KeyBank National Association
Schedule Description
-------- -----------
A Branches to be Purchased
B Form of Preliminary Closing Statement
C Employee List
D Severance Policies
E Actions to be Taken at Closing
Attachment 1 Instrument of Assumption
Attachment 2 Bill of Sale and Receipt
Attachment 3 Limited Warranty Deed for Ohio
Attachment 4 Assignment and Assumption of Lease
F Transitional Matters
G Landlord Estoppel Certificate
Exhibit
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1 Lease
The above-described Schedules and Exhibit are not being filed herewith. Park
National Corporation agrees to furnish supplementally a copy of any omitted
Schedule or Exhibit to the Securities and Exchange Commission upon request.