Exhibit 2.1
-----------
STOCK PURCHASE AGREEMENT
AMONG
FARMERS CAPITAL BANK CORPORATION
CITIZENS BANK (KENTUCKY), INC.
and
PREMIER FINANCIAL BANCORP, INC.
STOCK PURCHASE AGREEMENT
------------------------
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of the 13th day of February, 2004, by and among (i) CITIZENS BANK
(KENTUCKY), INC., a Kentucky state banking corporation with its principal
executive offices located at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000 ("Bank"), (ii) PREMIER FINANCIAL BANCORP, INC., a Kentucky corporation
with its principal executive offices located at 0000 0xx Xxxxxx, Xxxxxxxxxx,
Xxxx Xxxxxxxx 00000 ("Premier") and (iii) FARMERS CAPITAL BANK CORPORATION, a
Kentucky corporation with its principal executive offices located at 000 Xxxx
Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 ("Company").
PREAMBLE
The Boards of Directors of the Company, Premier and the Bank are of the opinion
that the transactions described herein are in the best interests of the Parties
and their respective shareholders. This Stock Purchase Agreement provides for
the purchase by the Company from Premier of the outstanding capital stock of the
Bank. At the Effective Time, the Company shall acquire all outstanding shares of
capital stock of the Bank for the aggregate purchase price of Fourteen Million
Five Hundred Thousand Dollars ($14,500,000). The transactions described in this
Agreement are subject to the approvals of the FRB, the Department and other
applicable federal and state regulatory authorities, and the satisfaction of
certain other conditions described in this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual and
dependent covenants and undertakings contained in this Agreement, and for other
good and valuable consideration, the mutuality, receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound, the parties hereby
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Certain Defined Terms. The words listed in this Article 1 when used
and capitalized in this Agreement shall have the meanings set forth for each by
this Article 1. Certain other capitalized terms when used in this Agreement
shall have the meanings ascribed to them when first encountered elsewhere in
this Agreement:
(a) "Acquisition Proposal" shall mean any tender offer or
exchange offer or any proposal for a merger, acquisition of all or a material
portion of the stock or assets of, or other business combination involving, the
Bank or the acquisition of a substantial equity interest in, or a material
portion of the assets of, the Bank.
(b) "Adequacy Analysis" shall mean an Allowance for Loan
Losses Adequacy Analysis prepared as of the Closing Date in the form attached
hereto and incorporated herein by reference as Exhibit A.
(c) "Adverse Consequences" shall mean all Proceedings,
charges, claims, demands, injunctions, Orders, damages, dues, assessments,
expenditures, outlays, awards, penalties, fines, costs, interest, amounts paid
in settlement, liabilities, obligations, payments, premiums, taxes, liens,
losses, reduction in value, loss of use, injuries, expenses and fees of whatever
nature, including without limitation response, restoration, investigative,
removal, remedial, monitoring or inspection costs and court costs and reasonable
attorneys' fees and expenses.
(d) "Affiliate" means, as applied to any Person, (i) any
director, executive officer, or general partner of such Person, (ii) any other
Person directly or indirectly controlling, controlled by or under common control
with or by such Person or (iii) any other Person that directly or indirectly
owns or controls, whether beneficially or as a trustee, guardian or other
fiduciary, five percent (5%) or more of the equity capital of such Person;
provided, however, that it is the intent of the parties that the Company shall
not be, and in no event shall either be deemed or construed to be, an Affiliate
of the Bank or Premier prior to the Effective Time, with the Bank becoming an
Affiliate of the Company following the Effective Time. For purposes of this
definition, "control" (including the terms "controlling," "controlled by" and
"under common control with") shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities or by Contract or
otherwise.
(e) "Agreement" shall mean this Stock Purchase Agreement and
the Schedules, Exhibits and other certificates or documents delivered pursuant
hereto.
(f) "Bank" shall mean Citizens Bank (Kentucky), Inc., a
Kentucky state banking corporation.
(g) "Bank Benefit Plans" shall have the meaning assigned such
term in Section 3.17(a) hereof.
(h) "Bank ERISA Plan" shall mean any Bank Benefit Plan which
is an "employee pension benefit plan" as defined in Section 3(2) of ERISA.
(i) "Bank Indemnified Persons" shall have the meaning assigned
such term in Section 9.3 hereof.
(j) "Bank Shares" shall mean the Seven Thousand Five Hundred
Five (7,505) issued and outstanding shares of common stock, $100.00 par value
per share, of the Bank.
(k) "Bankruptcy Event" shall mean, with respect to a Person,
if such Person shall (i) discontinue business, or cease doing business for more
than ten (10) days; (ii) make a general assignment for the benefit of creditors;
(iii) apply for or consent to the appointment of a custodian, receiver, trustee
or liquidator of all or a substantial part of its assets; (iv) be adjudicated
bankrupt or insolvent; (v) file a voluntary petition in bankruptcy or file a
petition or an answer seeking a composition, reorganization or an arrangement
with creditors or seek to take advantage of any other Law (whether federal or
state) relating to relief for debtors, or admit (by answer, default or
otherwise) the material allegations of any petition filed against it in any
bankruptcy, reorganization, composition, insolvency or other Proceeding (whether
federal or state) relating to relief for debtors; (vi) suffer the filing of any
involuntary petition in any bankruptcy, reorganization, insolvency or other
Proceeding (whether federal or state), if the same is not dismissed within
thirty (30) days after the date of such filing; (vii) suffer or permit to
continue any judgment, decree or order entered by a court which assumes control
of its business or financial affairs or approves a petition seeking a
reorganization, composition or arrangement of its business or financial affairs
or any other judicial modification of the rights of any of its creditors, or
appoints a receiver, trustee or liquidator for it, or for all or a substantial
part of any of its businesses or assets or financial affairs; (viii) be enjoined
or restrained from conducting all or a material part of any of its businesses as
then conducted or as hereafter conducted and the same is not dismissed and
dissolved within thirty (30) days after the entry thereof; (ix) not be paying
its debts generally as they become due; or (x) admits in writing its inability,
or is unable, to pay its debts generally as they become due.
(l) "Change in Control" shall mean (i) any merger,
consolidation, share exchange or other reorganization or recapitalization to
which the Bank is a party or subject, (ii) the sale, lease or exchange following
the date of this Agreement (either in one (1) transaction or a series of
transactions) of five percent (5%) or more of the assets of the Bank within a
one (1) year period, (iii) the issuance of equity interests in the Bank
following the date of this Agreement (either in one (1) transaction or a series
of transactions) which increases by five percent (5%) or more the equity of the
Bank or (iv) the issuance of voting interests in the Bank following the date of
this Agreement (either in one (1) transaction or a series of transactions) equal
to five percent (5%) or more of the voting interests of the Bank prior to such
issuance.
(m) "Claim Notice" shall have the meaning assigned such term
in Section 9.4(a) hereof.
(n) "Closing" shall mean the consummation of the purchase by
the Company of the Bank Shares hereunder and the other transactions contemplated
hereunder and the satisfaction of all other conditions precedent thereto as set
forth hereinafter.
(o) "Closing Date" shall mean the date on which the Closing
occurs.
(p) "Code" shall mean the Internal Revenue Code of 1986, as
amended, or any successor thereto and all rulings and regulations issued
pursuant thereto or any successor thereto.
(q) "Company" shall mean Farmers Capital Bank Corporation, a
Kentucky corporation.
(r) "Company Indemnified Persons" shall have the meaning
assigned such term in Section 9.2 hereof.
(s) "Consent" shall mean any consent, approval, authorization,
clearance, exemption, waiver or similar affirmation by any Person pursuant to
any Contract, Law, Order or Governmental Authorization.
(t) "Contract" shall mean any legally binding written or oral
agreement, arrangement, authorization, commitment, contract, indenture,
instrument, lease, obligation, plan, practice, restriction, order, permit,
understanding or undertaking of any kind or character, or other document to
which any Person is a party or that is binding on any Person or its equity
capital, assets or business.
(u) "Covered Claim" shall have the meaning assigned such term
in Section 9.4(a) hereof.
(v) "Current Excess Amount" shall mean the amount set forth on
the Adequacy Analysis under the heading "Reserve Requirement" for the category
"Current excess (deficiency)".
(w) "Default" shall mean (i) any breach or violation of or
default under any Contract, (ii) any occurrence or event that with the passage
of time or the giving of notice or both would constitute a breach or violation
of or default under any Contract or (iii) any occurrence or event that with or
without the passage of time or the giving of notice would give rise to a right
to terminate, revoke, modify, cancel, amend, change the current terms of,
renegotiate, or to accelerate, increase or impose any liability under, any
Contract.
(x) "Department" shall mean the Kentucky Department of
Financial Institutions.
(y) "Effective Time" shall mean 5:00 p.m., EST, on the Closing
Date.
(z) "Encumbrance" shall mean any claim, lien, security
interest (or other security arrangement), charge, equity, mortgage, pledge,
community property interest, condition, equitable interest, option, right of
first refusal, conditional sale agreement, default of title, hypothecation,
reservation, title retention or encumbrance of any nature whatsoever.
(aa) "Environment" means soil, land surface or subsurface
strata, surface waters (including navigable waters, ocean waters, streams,
ponds, drainage basins and wetlands), groundwaters, drinking water supply,
stream sediments, ambient air (including indoor air), plant and animal life and
any other environmental medium or natural resource.
(bb) "Environmental Laws" means any Laws that require or
relate to: (a) advising appropriate authorities, employees and the public of
intended or actual releases of pollutants or Hazardous Materials, violations of
discharge limits or other prohibitions and of the commencements of activities,
such as resource extraction or construction, that could have significant impact
on the Environment; (b) preventing or reducing to acceptable levels the release
of pollutants or Hazardous Materials into the Environment; (c) reducing the
quantities, preventing the release or minimizing the hazardous characteristics
of wastes that are generated; (d) assuring that products are designed,
formulated, packaged and used so that they do not present unreasonable risks to
human health or the Environment when used or disposed of; (e) protecting
resources, species or ecological amenities; (f) reducing to acceptable levels
the risks inherent in the transportation of Hazardous Materials or other
potentially harmful substances; (g) cleaning up pollutants that have been
released preventing the threat of release or paying the costs of such clean up
or prevention; or (h) making responsible parties pay private parties, or groups
of them, for damages done to their health or the Environment, or permitting
self-appointed representatives of the public interest to recover for injuries
done to public assets. "Environmental Laws" shall include, without limitation,
the Comprehensive Environmental Response Compensation and Liability Act, as
amended, ss.ss.42 U.S.C. 9601 et seq. ("CERCLA") or any successor law, and
regulations and rules issued pursuant thereto or any successor, and the Resource
Conservation and Recovery Act, as amended xx.xx. 42 U.S.C. 6901 et seq. ("RCRA")
or any successor law, and regulations and rules issued pursuant thereto or any
successor.
(cc) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, or any successor thereto, and regulations and
rules issued pursuant thereto or any successor thereto.
(dd) "ERISA Affiliate" shall have the meaning assigned such
term in Section 3.17(c) hereof.
(ee) "Exhibits" shall mean the exhibits so marked and attached
to this Agreement, which Exhibits are hereby incorporated herein by reference
and made a part hereof.
(ff) "FDIC" shall mean the Federal Deposit Insurance
Corporation.
(gg) "FRB" shall mean the Board of Governors of the Federal
Reserve System.
(hh) "Fifth Third Encumbrances" shall mean any and all
Encumbrances upon the Bank Shares arising under or related to the Pledge
Agreement.
(ii) "Financial Statements" shall have the meaning assigned
such term in Section 3.5 hereof.
(jj) "Funded Debt" shall mean, at any date, with respect to
the Bank, all indebtedness for borrowed money issued, incurred, assumed or
guaranteed by the Bank which would, in accordance with GAAP, be classified as
funded indebtedness, but in any event "Funded Debt" shall include all
indebtedness for borrowed money, whether secured or unsecured. However,
notwithstanding the foregoing, "Funded Debt" shall not include, with respect to
the Bank, any liability or obligation of the Bank incurred in the Ordinary
Course of its banking or trust business with respect to (i) any deposits held by
the Bank or funds collected by the Bank; (ii) any banker's acceptance or letter
of credit issued by the Bank; (iii) any check, note, certificate of deposit,
money order, traveler's check, draft or xxxx of exchange accepted or endorsed by
the Bank; (iv) any lease of real or personal property, purchase money security
agreement or similar instrument not involving an obligation of the Bank for
borrowed money other than purchase money indebtedness; (v) any guarantee or
similar obligation incurred by the Bank in such circumstances as are incidental
or usual in carrying on the banking or trust business; (vi) any transaction in
the nature of an extension of credit, whether in the form of a commitment or
otherwise, undertaken by the Bank for the account of a third party after the
application by the Bank of the same banking considerations and legal lending
limits that would otherwise be applicable if the transaction were a loan to such
party; and (vii) any transaction in which the Bank acts solely in a fiduciary or
agency capacity.
(kk) "GAAP" shall mean generally accepted accounting
principles applicable to banks and bank holding companies as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants, in statements and pronouncements of
the Financial Accounting Standards Board, or in such other statements by such
other Person as may be approved by a significant segment of the accounting
profession, in each case which are applicable to the circumstances as of the
date of determination.
(ll) "Grade Category Reserve" shall mean the indicated reserve
for a grade category of Subject Bank Loans as set forth under the heading
"Reserve Requirement" in the Adequacy Analysis. By way of example, as reflected
on Exhibit A, the Grade Category Reserve as of January 31, 2004 for Residential
Mortgages - Grade 3 was $163,232.74.
(mm) "Governmental Authorization" shall mean any approval,
Consent, license, permit, waiver, or other authorization issued, granted, given
or otherwise made available by or under the authority of any Governmental Body
or pursuant to any Law.
(nn) "Governmental Body" shall mean any: (a) nation, state,
county, city, town, village, district or other jurisdiction of any nature; (b)
federal, state, local, municipal, foreign or other government; (c) governmental
or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official or entity and any court or other tribunal);
(d) multi-national organization or body; or (e) body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power of any nature.
(oo) "Hazardous Materials" shall mean any waste or other
substance that is listed, defined, designated or classified as, or otherwise
determined to be, hazardous, radioactive or toxic or a pollutant or a
contaminant or otherwise regulated under or pursuant to any Environmental Law,
including any admixture or solution thereof, and specifically including (without
limitation) petroleum and all derivatives thereof or synthetic substitutes
therefor, asbestos or asbestos-containing materials and polychlorinated
biphenyls, substances containing polychlorinated biphenyls, nitrate,
perchloroethylene, 1,1,1-trichloroethane, trichloroethylene,
tetrachloroethylene, 1,1-dichloroethane, 0, 0-xxxxxxxxxxxxxx, xxx-0,
0-xxxxxxxxxxxxxx, trans-1, 2-dichloroethene, copper, chromium, zinc, cadmium,
lead, mercury, nickel, iron, magnesium, nitrite and aluminum.
(pp) "Impaired Loan" shall mean any Subject Bank Loan included
under the heading "Impaired Loans" on the Adequacy Analysis.
(qq) "Indemnified Person" shall have the meaning assigned such
term in Section 9.4(a) hereof.
(rr) "Intellectual Property" shall mean any of the Bank's
copyrights (in both published and unpublished works), patents, trademarks
(registered and unregistered), service marks, service names, fictional business
names and trade names, technology rights and licenses, computer software
(including any source or object codes therefore or documentation relating
thereto), trade secrets, confidential information, customer lists, technical
information, research and development information and records, data processing
technology, plans, drawings, blueprints, franchises, know-how, inventions and
discoveries (whether or not patentable), any applications for any of the
foregoing and any other intellectual property rights of whatever nature.
(ss) "Knowledge:" a Person who is an individual will be deemed
to have "Knowledge" of a particular fact or other matter if: (a) such individual
is actually aware of such fact or other matter; or (b) a prudent individual
would be expected to discover or otherwise become aware of such fact or other
matter in the course of conducting reasonably comprehensive investigation
concerning the existence of such fact or other matter. A Person (other than an
individual) will be deemed to have "knowledge" of a particular fact or other
matter if any individual who is serving, or who has at any time served, as a
director, officer, partner, management employee, executor or trustee of such
Person (or in any similar capacity) has, or at any time had, Knowledge of such
fact or other matter.
(tt) "Law" shall mean any code, law, constitution, ordinance,
regulation, principle of common law, reporting or licensing requirement, rule,
treaty or statute applicable to a Person or its assets, liabilities or business,
including, without limitation, those promulgated, interpreted or enforced by any
Governmental Body wherever located.
(uu) "Loan Adverse Consequences" shall have the meaning
assigned such term in Section 9.5(b) hereof.
(vv) "Material Adverse Effect" shall mean that the Adverse
Consequences from an event, change, or occurrence, individually or together with
any other event, change or occurrence, have had or could have a material adverse
impact (financial or otherwise) on (i) the financial condition, business,
results of operations or properties of the subject Person or (ii) the ability of
the subject Person to perform his or her obligations under this Agreement or to
consummate other transactions contemplated by this Agreement in accordance with
applicable Law.
(ww) "Memorandum" shall mean that certain Memorandum of
Understanding between the Bank, the Department and the FDIC dated September 11,
2002.
(xx) "Noncompetition Agreement" shall mean an agreement
between the Company and Premier in the form attached hereto as Exhibit B.
(yy) "Non-Impaired Loans" shall mean any Subject Bank Loan
other than an Impaired Loan.
(zz) "Note" shall mean that certain Fifth Third Bank Term Note
made by Premier to the order of Fifth Third Bank in the original principal
amount of $6,000,000 and dated October 15, 2002.
(aaa) "Operating Property" shall mean any property owned (or
previously owned) by the Bank or in which the Bank holds (or previously held)
a security interest.
(bbb) "Order" shall mean any administrative decision or award,
directive, decree, judgment, order, quasi-judicial decision or award, ruling,
subpoena, injunction, decision, verdict or writ of any court, arbitrator,
mediator, tribunal or Governmental Body.
(ccc) "Ordinary Course" or "Ordinary Course of Business"-an
action taken by a Person will be deemed to have been taken in the "Ordinary
Course" or the "Ordinary Course of Business" only if: (a) such action is
consistent with the past practices of such Person and is taken in the ordinary
course of the normal day-to-day operations of such Person; (b) such action is
not required to be authorized by the board of directors or the shareholders of
such Person (or by any Person or group of Persons exercising similar authority);
and (c) such action is similar in nature and magnitude to actions customarily
taken, without any authorization by the board of directors or the shareholders
(or by any Person or group of Persons exercising similar authority or
shareholders), in the ordinary course of the normal day-to-day operations of
other Persons that are in the same line of business as such Person.
(ddd) "Participation Facility" shall mean any facility or
property in which the Bank participates (or previously participated) in the
management of such facility or property.
(eee) "Party" shall mean the Bank, Premier or the Company and
" Parties" shall mean, collectively, the Bank, Premier and the Company.
(fff) "Person" shall mean any individual, association,
corporation (including without limitation any non-profit corporation) estate,
general partnership, limited liability partnership, limited partnership, limited
liability company, joint stock association, joint venture, firm, trust, business
trust, cooperative, executor, administrator, nominee or entity in a
representative capacity, group acting in concert, Governmental Body,
unincorporated association or other legal entity or organization.
(ggg) "Permit" shall mean any federal, state, local or foreign
Governmental Authorization, certificate, easement, filing, franchise, license,
notice, permit or right to which any Person is a party or that is or may be
binding upon or inure to the benefit of any Person or its securities, assets or
business.
(hhh) "Pledge Agreement" shall mean that certain Fifth Third
Bancorp Bank Pledge Agreement between Premier and Fifth Third Bank dated
October 15, 2002.
(iii) "Premier" shall mean Premier Financial Bancorp, Inc. a
Kentucky corporation.
(jjj) "Proceeding" shall mean any action, arbitration,
adjudication, case, cause of action, audit claim, litigation, suit, complaint,
citation, criminal prosecution, demand letter, governmental or other examination
or investigation, hearing, inquiry, notice of violation, administrative or other
proceeding of whatever nature, or notice (written or oral) by any person
alleging potential liability or requesting information relating to or affecting
any Person, its business, assets or the transactions contemplated by this
Agreement.
(kkk) "Rights" shall mean all arrangements, calls,
commitments, Contracts, options, rights to subscribe to, scrip, options,
purchase rights, warrants or other binding obligations of any character
whatsoever by which the Bank is or may be bound to issue additional shares of
its capital stock or other equity interests of whatever nature or other rights,
or securities or rights convertible into or exchangeable for, shares of the
capital stock of the Bank or other equity interests of whatever nature, or by
which the Bank is or may be bound to repurchase, redeem or otherwise acquire any
of its outstanding shares of capital stock.
(lll) "Schedules" shall mean the schedules so marked and attached
to this Agreement, which Schedules are hereby incorporated herein by reference
and made a part hereof.
(mmm) "Subject Bank Loans" shall mean the Bank loans
outstanding, as reflected on the books and records of the Bank, at the Effective
Time.
(nnn) "Subsidiaries" shall mean all those Persons of which the
entity in question owns or controls 5% or more of the outstanding equity
securities either directly or through an unbroken chain of entities as to each
of which 5% or more of the outstanding equity securities is owned directly or
indirectly by its parent.
(ooo) "Taxes" shall mean all taxes, charges, fees, levies,
imposts or other assessments, including, without limitation, all net income,
gross income, gross receipts, sales, use, goods and services, ad valorem,
transfer, alternative, net worth, value added, franchise, profits, license,
withholding, payroll, employment, employer health, excise, estimated, severance,
stamp, occupation, real property and personal property taxes, and any other
taxes, customs duties, fees, assessments or charges of any kind whatsoever,
together with any interest, fines and penalties, additions to tax or additional
amounts imposed by any Governmental Body and whether disputed or not.
(ppp) "Tax Returns" shall mean all returns and reports of or
with respect to any Tax, which are required to be filed by or with respect
to the applicable Person.
(qqq) "Termination Date" shall mean that date three hundred
sixty-five (365) days following the Closing Date.
ARTICLE 2
THE TRANSACTION
2.1 Exchange of Cash For Bank Shares . Subject to the terms and
conditions hereof, at the Effective Time Premier shall sell, assign, transfer
and deliver (free and clear of all Encumbrances) the Bank Shares to the Company
in exchange for the aggregate cash sum of Fourteen Million Five Hundred Thousand
Dollars ($14,500,000).
2.2 Time and Place of Closing. The Closing will take place at 9:00
a.m., EST, at the offices of Xxxxx, Xxxxxx & Park, LLP, 000 Xxxx Xxxx Xxxxxx,
Xxxxx 0000, Xxxxxxxxx, Xxxxxxxx 00000, within thirty (30) days after receipt of
the Consents of Governmental Bodies described in Section 7.1(b) hereof, or at
such other time as the Parties, acting through their authorized officers, may
mutually agree (the "Closing Date").
2.3 Effective Time. The transfer of the Bank Shares to the Company
and the other transactions contemplated by this Agreement shall become
effective at the Effective Time.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE BANK AND PREMIER
The Bank and Premier hereby jointly and severally make to the Company
the following representations and warranties as of the date hereof and as of all
times throughout the term of this Agreement:
3.1 Organization, Standing and Power. The Bank is duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Kentucky and has the corporate power and authority to carry on its business as
now conducted and to own, lease and operate its assets. Premier is duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Kentucky and has the corporate power and authority to carry on
its business as now conducted and to own, lease and operate its assets. The Bank
owns no property nor carries on any activities that require it to qualify to do
business as a foreign corporation in any jurisdiction other than Kentucky. The
Bank is a member in good standing of the FDIC. The Bank is an "insured
depository institution" as defined in Section 3(c)(2) of the Federal Deposit
Insurance Act and applicable regulations thereunder, and the deposits of the
Bank are insured by the FDIC to the maximum extent permitted by the Federal
Deposit Insurance Act, as amended, and applicable regulations thereunder. The
Bank is a member of the Bank Insurance Fund.
3.2 Authority; No Conflict.
(a) Subject to the approval of the Bank and Premier
shareholders (if applicable), each of the Bank and Premier has the corporate
power and authority necessary to execute, deliver and perform its obligations
under this Agreement and all other agreements, documents or instruments
contemplated hereunder and to consummate the transactions contemplated hereby
and thereby. Subject to shareholder approval (if applicable), the execution,
delivery and performance of this Agreement, and the consummation of the
transactions contemplated herein, have been duly and validly authorized by all
necessary corporate action (including valid authorization and adoption of this
Agreement by the Bank's and Premier's duly constituted Board of Directors) in
respect thereof on the part of the Bank and Premier and this Agreement
constitutes the legal, valid and binding obligation of the Bank and Premier,
enforceable against the Bank and Premier in accordance with its terms. Each of
the Bank and Premier has the absolute and unrestricted right, power, authority
and capacity to execute and deliver this Agreement, and to perform its
obligations under this Agreement.
(b) Neither the execution and delivery of this Agreement by
the Bank and Premier nor the consummation of the transactions contemplated
hereby, nor compliance by the Bank and Premier with any of the provisions hereof
or thereof, will (i) conflict with or result in a breach of any provision of the
Articles of Incorporation or Bylaws of the Bank or Premier, (ii) constitute or
result in a Default under, or require any Consent (excluding Consents required
by (A) any Law or Order, (B) the Memorandum, (C) the Note or the Pledge
Agreement or (D) the Contracts identified in Schedule 3.2(b)(ii) hereto)
pursuant to, or result in the creation of any Encumbrance on any asset of the
Bank or Premier under, any Contract or Governmental Authorization of or
applicable to the Bank or Premier, except for such Defaults and Encumbrances
which will not have, and for such Consents which, if not obtained, will not
have, individually or in the aggregate, a Material Adverse Effect on the Bank or
Premier, or (iii) subject to receipt of the requisite Consents referred to in
Section 7.1(b) hereof, violate any Law or Order applicable to the Bank or
Premier or any of their respective material assets.
(c) Other than notice and filings with the FRB, the Department
and the FDIC, no notice to, filing with, or Consent of, any Governmental Body is
necessary for the consummation by the Bank or Premier of the transactions
contemplated in this Agreement.
3.3 Capital Stock. The authorized capital stock of the Bank consists
solely of 20,000 shares, $100.00 par value per share common stock, of which only
the Bank Shares are issued and outstanding as of the date of this Agreement and
are held in their entirety by Premier free and clear of all Encumbrances except
for the Fifth Third Encumbrances. All issued and outstanding Bank Shares are
duly and validly issued and outstanding, are fully paid and non-assessable under
applicable Law and the Articles of Incorporation and Bylaws of the Bank. None of
the Bank Shares have been issued in violation of any preemptive rights of any
current or past shareholder of the Bank. There are no outstanding Rights. Since
January 1, 1999, the Bank has not directly or indirectly redeemed, purchased or
otherwise acquired any of its capital stock.
3.4 Subsidiaries. The Bank has no (nor at any time has it had any)
Subsidiaries, or any equity investment or ownership interest, directly or
indirectly, in any Person.
3.5 Financial Statements. The Bank and Premier have delivered (or, as
applicable, will deliver) to the Company true and complete copies of: (a) the
General Ledgers and Consolidated Reports of Condition and Income of the Bank for
the years ended December 31, 2001, 2002 and 2003, and (b) for the monthly and
quarterly periods beginning on January 1, 2004 and ending on the last day of the
month immediately preceding the Closing Date, monthly General Ledgers and
quarterly Consolidated Reports of Condition and Income of the Bank
(collectively, the "Financial Statements"). The Financial Statements fairly
present or, as the context requires, shall fairly present, the financial
condition and the results of operation of the Bank as at the respective dates of
and for the periods referred to therein and reflect or, as the context requires,
shall reflect the consistent application of the accounting principles involved
therein throughout the periods involved. The Financial Statements do not (or
will not) contain any items of special or nonrecurring income or any other
income not earned in the Ordinary Course of Business. The Bank is subject to no
(nor are Bank assets subject to any) liabilities or obligations of any nature,
whether absolute, accrued, contingent or otherwise, and whether due or to become
due, that are not (or, as the context requires, will not be) reflected in the
Financial Statements. The Financial Statements contain and reflect adequate
provisions for all reasonably anticipated liabilities of the Bank for Post
Retirement Benefits Other than Pensions pursuant to SFAS Nos. 106 and 112.
3.6 Regulatory Reports; Corporate Records. The Bank has delivered to
the Company true and complete copies of (i) any and all material reports which
the Bank has filed with any Governmental Body since January 1, 1998, (ii) its
Articles of Incorporation and Bylaws and (iii) its stock transfer records and
corporate minutes for the past five (5) years. All of the foregoing are current,
complete and correct in all material requests.
3.7 Loans; Allowance for Loan and Lease Losses. Each of the allowances
for possible loan and lease losses and any allowance for real estate owned shown
on the Financial Statements is adequate (i) to provide for all known and
potential losses of the Bank as of the respective dates of the Financial
Statements, and (ii) under the requirements of GAAP and standard banking
practice to provide for possible losses, net of recoveries relating to loans and
leases previously charged off, on loans outstanding, lease receivables or real
estate owned by the Bank (including, without limitation, accrued interest
receivable). All outstanding Bank loans, discounts and lease financings (as well
as those reflected on the Financial Statements) have been (a) made for good,
valuable and adequate consideration in the Ordinary Course of Business and (b)
evidenced by notes or other evidences of indebtedness which are true, genuine,
what they purport to be and enforceable in accordance with their terms. No Bank
loan, discount or lease financing is subject to any defense with respect to the
enforceability of same. The signature of any party appearing on any note or
instrument evidencing any Bank loan, discount or lease financing, or on any
instrument evidencing any security therefor, is valid and the balances for Bank
loans, discounts or lease financings, as reflected on the books and records of
the Bank, are accurate. Any Bank loan made under, or in conjunction with, any
Governmental Body program (including, without limitation, the Farm Services
Administration) was made, and has been serviced and administered, in compliance
with any applicable requirements of Law. Any Bank loan which has been assigned
by the Bank (including, without limitation, Bank loans assigned to the secondary
market) was made in accordance with applicable Law and in accordance with the
requirements (including, without limitation, underwriting standards and
documentation requirements) of the subject assignee and no such assignment is
subject to any defense with respect to the enforceability of same or subject to
revocation by the assignee whereby the assignee could require the Bank to
repurchase any subject loan. Except for such secured loans the default of which
would not have, individually or in the aggregate, a Material Adverse Effect on
the Bank, (i) each of the Bank's secured loans is secured with the collateral
and priority indicated on the books and records of the Bank and (ii) each such
Encumbrance is evidenced by a security agreement or mortgage that is true,
genuine and enforceable in accordance with its terms (except in all cases as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar Law affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought). There are no material
uncured violations or violations with respect to which material refunds or
restitution may be required with respect to Bank loans that have been cited in
any compliance report to the Bank as a result of examination by any Governmental
Body and the loan documentation with respect to all Bank loans, discounts or
lease financings, complies in all material respects with applicable Law. No
borrower or obligor under any Bank loan has requested, and the Bank has not
allowed, any relief pursuant to the Soldiers and Sailors Civil Relief Act of
1940.
3.8 Repurchase Agreements. With respect to all repurchase agreements to
which Bank is a party, (i) where the Bank has the obligation to sell securities,
it has a valid, perfected first Encumbrance in the government securities or
other collateral securing the repurchase agreement, and the value of the
collateral securing each such repurchase agreement equals or exceeds the amount
of the debt secured by such collateral under such agreement, and (ii) where the
Bank has the obligation to buy securities, the value of the collateral securing
such obligation does not materially exceed the amount of the obligation.
3.9 Absence of Changes. Since December 31, 2002, the business of the
Bank has been conducted in the Ordinary Course and the Bank has not otherwise:
(a) experienced or suffered any change constituting a Material
Adverse Effect;
(b) incurred any Funded Debt or incurred, or become subject
to, any other absolute or contingent obligation or liability, or guaranteed any
liabilities or obligations of any other Person;
(c) created or suffered any Encumbrance with respect to its
properties, business or assets;
(d) sold, pledged, transferred or otherwise disposed of, or
agreed to sell, transfer or otherwise dispose of any portion of its assets,
properties or rights, except in the Ordinary Course of Business and not
exceeding in the aggregate $50,000;
(e) conveyed or agreed to convey any property to any Affiliate
or entered into any non-arm's length transaction with any Affiliate;
(f) experienced any general work stoppage, labor dispute or
other employee disturbance;
(g) incurred or become subject to any claim or liability for
any damages which could have a Material Adverse Effect on it, for negligence or
any other tort, or for breach of Contract;
(h) entered into any Contract other than in the Ordinary
Course of Business;
(i) committed any act or omitted to do any act which would
cause a Default under any Contract to which it is a party or by which it is
bound on the date hereof, which Default is reasonably likely to result in a
Material Adverse Effect on the Bank;
(j) issued, sold, purchased or redeemed any stock, bonds,
debentures, notes, or other securities of the Bank, or issued, sold or granted
any Right in respect thereof;
(k) waived, released or canceled any debts owed to it, claims,
rights of value or suffered any extraordinary loss, or paid any of its
non-current obligations or liabilities, or written down the value of any assets
or written down or off any receivable except for loan charge-offs and writedowns
in other real estate owned in the Ordinary Course of Business;
(l) declared, set aside or paid any dividend or distributions
on any Bank Shares;
(m) made any capital expenditures or capital additions or
betterments (or commitment therefor) in excess of $10,000 for any single item or
in excess of $20,000 in the aggregate;
(n) suffered any casualty, damage, destruction or loss to any
of its assets not covered by insurance in excess of $5,000 for any one event or
in excess of $10,000 in the aggregate;
(o) terminated, placed on probation, disciplined, warned, or
experienced any resignation of (other than resignations for retirement) any
employee;
(p) paid or obligated itself to pay any bonuses, extra
compensation or extraordinary compensation to, pensions or severance pay, or
made any increase (except increases in the Ordinary Course of Business) in the
compensation payable (or to become payable by it) to, any present or former
officer, director or employee of the Bank, or entered into any contract of
employment;
(q) terminated or amended or suffered the termination or
amendment of (i) any lease, bids, Contracts, commitments or other agreements, or
(ii) any Permits, licenses, concessions, Governmental Authorizations, franchises
and similar rights granted to or held by it, which are necessary or related to
its operations;
(r) received notice or had Knowledge that any of its credit or
deposit customers has terminated or intends to terminate its relationship with
the Bank, which termination (or terminations collectively) would constitute a
Material Adverse Effect on the Bank; or
(s) entered into any Contract to do any of the foregoing.
3.10 Intellectual Property.
(a) There are no outstanding or threatened Proceedings,
disputes or disagreements with respect to the Intellectual Property or with
respect to any Contract relating to the Intellectual Property, an adverse result
in which could have a Material Adverse Effect upon the Bank.
(b) The Bank is the owner of all right, title, and interest in
and to the Intellectual Property, free and clear of all Encumbrances, and has
the right under Law to use all of the Intellectual Property without any
obligation to pay royalties with respect thereto.
3.11 Properties. The Bank is the sole owner of, and has good and
marketable title to, all of its assets (excluding leased properties), whether
real or personal, tangible or intangible, free and clear of all Encumbrances.
Except for regular, scheduled repairs which are done in the Ordinary Course of
Business, all of such assets are free of material defect, well maintained and in
good working order, condition and repair. Neither the whole nor any portion of
such assets has been condemned or otherwise taken by public authority, nor is
any such condemnation or taking threatened. With respect to property held by
lease or Contract, each leasehold interest (or Contract right) is created
pursuant to a valid and subsisting lease (or Contract) enforceable in accordance
with its terms against the lessor (or other party to the Contract) (true and
complete copies of any such lease or Contract being attached hereto as Exhibit
C). All real property owned or leased by the Bank complies in all material
respects with all Laws, including, without limitation, all applicable zoning,
building, fire, health, safety, handicapped persons, and use Laws.
3.12 Insurance. The Bank currently maintains insurance pursuant to the
policies disclosed on Schedule 3.12 hereto in amounts, scope, and coverage which
are adequate for the operations of the Bank and consistent with the insurance
carried by prudent Persons similarly situated. The Bank is not liable for any
material, retroactive premium adjustments respecting any of its insurance
policies. None of such insurance policies is subject to any special or unusual
terms or restrictions or provides for a premium in excess of the stipulated
normal rate. Except for that certain notification from the Chubb Group of
Insurance Companies dated December 30, 2003, the Bank has received no notice
from any insurance carrier that (i) any of such insurance will be canceled or
that coverage thereunder will be reduced or eliminated, or (ii) premium costs
with respect to such policies of insurance will be substantially increased.
There are presently no claims pending under any such policies of insurance and
no notices have been given by the Bank under such policies. The Bank has not
failed to make a timely claim or file a timely notice with respect to any matter
giving rise to a material (or potentially material) claim under its insurance
policies and bonds. The Bank has not, during the past five (5) years, been
denied or had revoked or rescinded any policy of insurance.
3.13 Tax Matters. All Tax Returns required to be filed by or on behalf
of the Bank have been timely filed for periods ended on or before the date
hereof and all such Tax Returns are true, complete and accurate in all respects.
All Taxes shown on each filed Tax Return of the Bank (or, as applicable,
Premier) have been paid. There is no audit examination or refund Proceeding
respecting the Bank or Premier pending (or, to the knowledge of the Bank or
Premier, threatened) with respect to any Taxes. No presently pending assessments
of deficiencies in respect of Taxes have been made against the Bank or Premier
or with respect to the income, receipts or net worth of the Bank or Premier, and
no extensions of time are in effect for the assessment of deficiencies against
the Bank or Premier. Neither the Bank nor Premier has executed any extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due (excluding such statutes that relate to years currently under examination by
the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect. Material deferred Taxes of the Bank have been provided for
in accordance with GAAP. The Bank is in material compliance with, and the
records of the Bank contain all information and documents (including properly
completed Internal Revenue Service Forms W-9) necessary to comply in all
respects with, all applicable information reporting and Tax withholding
requirements under federal, state, and local Tax Laws, and such records identify
with specificity all accounts subject to backup withholding under Section 3406
of the Code. The Bank has made no payments, is obligated to make no payments,
nor is it a party to any Contract that could obligate it to make any payments
that would be disallowed as a deduction under Section 280G or 162(m) of the
Code. There has not been an ownership change, as defined in Code Section 382(g),
of the Bank that occurred during or after any taxable period in which the Bank
incurred a net operating loss that carries over to any taxable period ending
after December 31,1998, except in connection with the transactions contemplated
pursuant to this Agreement. Except for that Tax Sharing Agreement executed by
all Subsidiaries of Premier and as disclosed in Schedule 3.13 hereto, the Bank
is not a party to any tax allocation or sharing agreement nor does the Bank have
any material liability for taxes of any Person under Treasury Regulation Section
1.1502-6 (or any similar provision of state, local or foreign Law) as a
transferee or successor or by Contract or otherwise. The Bank has received no
notice of any claim by any Governmental Body that the Bank or the income,
receipts or net worth of the Bank may be subject to Taxes. All Taxes and other
liabilities due with respect to completed and settled examinations or concluded
Proceedings related to Tax Return and/or Taxes of the Bank have been paid. There
are no Encumbrances with respect to Taxes upon any of the assets of the Bank.
3.14 Environmental Matters.
(a) The Bank and its Participation Facilities and its
Operating Properties are, and have been (or, in the case of Operating Properties
in which the Bank holds or has held a security interest, to the Bank's Knowledge
are and have been), in compliance with all Environmental Laws, except for
violations which could not have, individually or in the aggregate, a Material
Adverse Effect on the Bank.
(b) There is no Proceeding pending or threatened before any
Governmental Body or other forum in which the Bank or any of its Operating
Properties or Participation Facilities has been or, with respect to threatened
Proceedings, may be named as a defendant (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release into the environment of any Hazardous Material, whether or not
occurring at, on, under, adjacent to, or affecting (or potentially affecting) a
site owned, leased, or operated by the Bank or any of its Operating Properties
or Participation Facilities, except for such Proceedings pending or threatened
that are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on the Bank.
(c) During the period of (i) the Bank's ownership or operation
of any of its current properties, (ii) the Bank's participation in the
management of any Participation Facility, or (iii) the Bank's holding of a
security interest in an Operating Property, there have been (or, in the case of
an Operating Property in which the Bank holds or has held a security interest,
there have to the Bank's Knowledge been) no releases of Hazardous Material in,
on, under, adjacent to, or affecting (or potentially affecting) such properties,
except such as are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on the Bank. Prior to the period of (i) the
Bank 's ownership or operation of any of its current properties, (ii) the Bank's
participation in the management of any Participation Facility or (iii) the
Bank's holding of a security interest in an Operating Property, there were to
the Bank's Knowledge, no releases of Hazardous Material in, on, under, or
affecting any such property, Participation Facility or Operating Property,
except such as are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Bank.
3.15 Compliance With Laws. The Bank has in effect all Permits necessary
for it to own, lease or operate its assets and to carry on its business as now
conducted. Except as set forth in Schedule 3.15 hereto, the Bank is not now nor
has it been in violation of any Laws, Orders or Permits applicable to its
business or employees conducting its business, except for such violations, which
could not have, individually, or in the aggregate, a Material Adverse Effect on
the Bank. The Bank has received no notification or communication from any
Governmental Body or the staff thereof (i) asserting that the Bank is in
violation of any of the Laws or Orders which such Governmental Body enforces
(excluding violations which would not be reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on the Bank), (ii) threatening to
revoke any Permits or (iii) requiring the Bank to enter into or consent to the
issuance of a cease and desist order, formal agreement, directive, commitment or
memorandum of understanding, or to adopt any Board of Directors resolution or
similar undertaking, which restricts the conduct of its business, or in any
manner relates to its capital adequacy, its credit or reserve policies, its
management or the payment of dividends. No event has occurred or circumstance
exists that (with or without notice or lapse of time) may constitute or result
in violation by the Bank of, or a failure on the part of the Bank to comply
with, any Laws, Orders or Governmental Authorizations, the failure with which to
comply could give rise to any obligation on the part of the Bank to undertake,
or to bear all or any portion of the cost of, any remedial action of any nature.
The Bank has filed all currency transaction reports with respect to all
transactions required to be reported under the Bank Secrecy Act and regulations
adopted pursuant thereto.
3.16 Labor Relations. The Bank is not the subject of any Proceeding
asserting that the Bank has committed an unfair labor practice (within the
meaning of the National Labor Relations Act or comparable state Law) or seeking
to compel the Bank to bargain with any labor organization as to wages or
conditions of employment, nor is there any strike or other labor dispute
involving the Bank pending or, to the Knowledge of Bank, threatened, nor to the
Knowledge of the Bank, is there any activity involving the Bank's employees
seeking to certify a collective bargaining unit or engaging in any other
collective bargaining organizational activity.
3.17 Employee Benefit Plans.
(a) The Bank has disclosed on Schedule 3.17 hereto and has
delivered or made available to the Company prior to the execution of this
Agreement true and complete copies of all pension, retirement, profit sharing,
deferred compensation, stock option, employee stock ownership, severance pay,
vacation, bonus or other material incentive plans, all other written employee
programs, arrangements or agreements, all medical, vision, dental or other
health plans, all life insurance plans, and all other material employee benefit
or fringe benefit plans, including "employee benefit plans" as that term is
defined in Section 3(3) of ERISA, currently adopted, maintained by, sponsored in
whole or in part by, or contributed to by the Bank or any ERISA Affiliate
thereof for the benefit of employees, retirees, dependents, spouses, directors,
independent contractors or other beneficiaries of the Bank and under which
employees, retirees, dependents, spouses, directors, independent contractors or
other beneficiaries of the Bank are eligible to participate (collectively, the
"Bank Benefit Plans"). No Bank ERISA Plan is or has been a multiemployer plan
within the meaning of Section 3(37) of ERISA.
(b) All Bank Benefit Plans are in compliance with (and have
been managed and administrated in accordance with) the applicable terms of
ERISA, the Code and any other applicable Laws except for such non-compliances
which would not be reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on the Bank. Each Bank ERISA Plan that is intended to
be qualified under Section 401(a) of the Code has either received a favorable
determination letter from the Internal Revenue Service (and the Bank is not
aware of any circumstances likely to result in revocation of any such favorable
determination letter) or timely application has been made therefor. The Bank is
not subject to a Tax imposed by Section 4975 of the Code or a civil penalty
imposed by Section 502(i) of ERISA. Neither the Bank nor Premier has knowledge
of any fact which would adversely affect the qualification of any of the Bank
Benefit Plans, or of any threatened or pending claim against any of the Bank
Benefit Plans or their fiduciaries by any participant, beneficiary or
Governmental Body.
(c) No "defined benefit plan" (as defined in Section 414(j) of
the Code) or any "single-employer plan," within the meaning of Section
4001(a)(15) of ERISA, maintained at any time by the Bank, or the single-employer
plan of any entity which is considered one employer with the Bank under Section
4001 of ERISA or Section 414 of the Code or Section 302 of ERISA (whether or not
waived) (an "ERISA Affiliate"), has an "accumulated funding deficiency" within
the meaning of Section 412 of the Code or Section 302 of ERISA. The Bank has not
provided, or, to it's Knowledge, is required to provide, security to any single-
employer plan of an ERISA Affiliate pursuant to Section 401 (a)(29) of the Code.
(d) Within the six year period preceding the Effective Time,
no liability under Subtitle C or D of Title IV of ERISA has been incurred by the
Bank with respect to any current, frozen, or terminated single-employer plan or
the single-employer plan of any ERISA Affiliate. The Bank has not incurred any
withdrawal liability with respect to a multiemployer plan under Subtitle E of
Title IV of ERISA (regardless of whether based on contributions of an ERISA
Affiliate). No notice of a "reportable event," within the meaning of Section
4043 of ERISA for which the 30 day reporting requirement has not been waived,
has been required to be filed for any Bank Benefit Plan or by any ERISA
Affiliate within the 12 month period ending on the date hereof.
(e) The Bank has fully complied with the notice and
continuation requirements of Parts 6 and 7 of Subtitle B of Title I of ERISA and
Section 4980B of the Code, and the proposed regulations thereunder, whether
proposed or final. All reports, statements, returns and other information
required to be furnished or filed with respect to the Bank Benefit Plans have
been timely furnished, filed or both in accordance with Sections 101 through 105
of ERISA and Sections 6057 through 6059 of the Code, and they are true, correct
and complete in all material respects. Records with respect to the Bank Benefit
Plans have been maintained in material compliance with Section 107 of ERISA.
Neither the Bank nor any other fiduciary (as that term is defined in Section
3(21) of ERISA) with respect to any of the Bank Benefit Plans has any material
liability for any breach of any fiduciary duties under Sections 404, 405 or 409
of ERISA.
(f) The Bank has not, with respect to any of the Bank Benefit
Plans, nor has any administrator of any of the Bank Benefit Plans, the related
trusts or any trustee thereof, engaged in any prohibited transaction which would
subject the Bank, any of the Bank Benefit Plans, any administrator or trustee or
any party dealing with any of the Bank Benefit Plans or any such trusts, to a
Tax or penalty on prohibited transactions imposed by ERISA, Section 4975 of the
Code, or to any other liability under ERISA.
(g) The Bank has no material liability for retiree health and
life benefits under any of the Bank Benefit Plans.
(h) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation or golden parachute)
becoming due to any director or any employee of Bank from the Bank under any
Bank Benefit Plan, (ii) materially increase any benefits otherwise payable under
any Bank Benefit Plan or (iii) result in any acceleration of the time of payment
or vesting of any such benefit.
(i) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of Bank and their respective beneficiaries, other than
entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Code or Section 302 of ERISA, have been fully
reflected on the Financial Statements to the extent required by and in
accordance with GAAP.
3.18 Material Contracts. Except as set forth in Schedule 3.18 hereto,
the Bank is not a party to, nor is it bound or affected by, nor does it receive
benefits under, (i) any employment, severance, termination, consulting or
retirement Contract, (ii) any Contract relating to the borrowing of money by
Bank or the guarantee by Bank of any such obligation (other than Contracts
evidencing deposit liabilities, purchases of federal funds, fully-secured
repurchase agreements, trade payables and Contracts relating to borrowings or
guarantees made in the Ordinary Course of Business), (iii) any Contracts which
prohibit or restrict Bank from engaging in any business activities in any
geographic area, line of business or otherwise in competition with any other
Person, (iv) any exchange-traded or over-the-counter swap, forward, future,
option, cap, floor, or collar financial Contract, or any other interest rate or
foreign currency protection Contract which is a financial derivative Contract
(including various combinations thereof), (v) any Contract not made in the
Ordinary Course of Business, (vi) any Contract relating to capital expenditures
and involving future payments which (either alone or when combined with other
like Contracts) exceed $20,000, (vii) any Contract involving an Acquisition
Proposal or (viii) any Contract which (A) will not be performed within sixty
(60) days of the date of this Agreement, (B) involves future payments by the
Bank (whether during the term of any such Contract or in connection with its
termination or expiration) in excess of $5,000 or (C) is not cancelable by the
Bank without penalty on no more than 30 days' notice. With respect to each Bank
Contract: (i) the Contract is valid and in full force and effect in accordance
with its terms; (ii) the Bank is not in Default thereunder; (iii) the Bank has
not repudiated or waived any material provision of any such Contract; (iv) no
other party to any such Contract is, to the Knowledge of the Bank or Premier, in
Default in any respect or has repudiated or waived any material provision
thereunder; (v) no event or condition has occurred or exists (or is alleged to
have occurred or existed) which constitutes (or with the lapse of time might
constitute) a Default; and (vi) the Contract may be assigned by the Bank (or a
Change in Control may occur) without the consent of the other party or parties
thereto.
3.19 Legal Proceedings. There is no Proceeding instituted or pending,
or, to the Knowledge of the Bank, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a reasonable
probability of an unfavorable outcome) against the Bank, or against any asset,
employee benefit plan, interest or right of the Bank, that could have,
individually or in the aggregate, a Material Adverse Effect on the Bank, nor are
there any Orders of any Governmental Body outstanding against the Bank except
for the Memorandum. There is no Proceeding instituted or pending, or to the
knowledge of the Bank, threatened (or unasserted but considered probable of
assertion) against any officer, director or employee of the Bank arising in
connection with actions taken (or omitted to be taken) by such officer, director
or employee in his capacity as an officer, director or employee. Schedule 3.19
hereto includes a summary report of all Proceedings as of the date of this
Agreement to which the Bank is a party and which names the Bank as a defendant
or cross-defendant.
3.20 Reports. Since January 1, 1999, the Bank has timely filed all
reports and statements, together with any amendments required to be made with
respect thereto, that it was required to file with any Governmental Body. As of
its respective date (or, if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing), each of such reports and
documents, including the financial statements, exhibits and schedules thereto,
complied with all applicable Laws. As of its respective date (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing), none of such documents so filed contained any untrue statement of
a material fact, omitted to state a material fact required to be stated therein,
or intentionally omitted to state a material fact necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
3.21 Deposits. The deposit records of the Bank accurately reflect the
Bank's deposit accounts and are and shall be sufficient to enable the Company to
conduct a banking business with respect to the Bank. There are no material
uncured violations or violations with respect to which material refunds or
restitution may be required with respect to the Bank deposit liabilities and the
terms and conditions and other documentation with respect to the Bank deposit
liabilities comply in all material respects with all applicable Laws and have
been provided to the Company. The Bank deposit liabilities are insured by the
FDIC to the full extent provided by Law. The Bank is in material compliance with
all terms and conditions and other documentation applicable to the Bank deposit
liabilities. To the best of the Bank's Knowledge, there are not (and have not
been within the past three years) any "kiting" schemes associated with any of
the Bank deposit liabilities.
3.22 Books and Records. The books of account, general ledger and
records of the Bank fairly and accurately in all material respects reflect the
assets and liabilities of the Bank in accordance with GAAP consistently applied.
The books of account, general ledger and records of the Bank (i) are maintained
by the Bank substantially in accordance with applicable legal and accounting
requirements and (ii) reflect only actual transactions. The Bank's records and
other information provided in accordance with this Agreement will accurately
reflect in all material respects the book value of the assets and liabilities
referred to therein as of their respective dates, recorded at their historical
cost and depreciated or otherwise adjusted in accordance with the Bank's
historical accounting policies, all in accordance with GAAP consistently
applied.
3.23 Safe Deposit Boxes. The Bank is in compliance with the terms and
conditions of the applicable leases or other agreements relating to the safe
deposit boxes currently offered or maintained in connection with the safe
deposit business conducted by the Bank.
3.24 Statements True and Correct.
(a) Neither this Agreement, nor any Exhibit, Schedule or
document delivered by the Bank to the Company in connection with this Agreement
or any of the transactions contemplated hereby contains or shall contain an
untrue statement of a material fact or omits or shall omit to state a material
fact necessary to make the statements contained herein or therein, in light of
the circumstances in which they are made, not misleading.
(b) All of the information supplied or to be supplied by the
Bank expressly for inclusion in any filing with any Governmental Body in
connection with the transactions contemplated hereby will be true, correct and
complete and will comply as to form in all material respects with the provisions
of applicable Law.
3.25 Regulatory Matters. The Bank has no Knowledge of any fact or
circumstance that is reasonably likely to materially impede or delay receipt
of any Consents of Governmental Bodies referred to in Section 7.1(b) of this
Agreement.
3.26 Brokers' or Finders' Fees. Apart from Xxxxxx Xxxxxxxx and Company,
no agent, broker or other Person acting on behalf of the Bank or Premier or
under the authority of either is or shall be entitled to any commission,
broker's or finder's fee in connection with any of the transactions contemplated
by this Agreement. Any fees owed Xxxxxx Xxxxxxxx and Company in connection with
this Agreement and the transactions contemplated hereunder shall be the sole
obligation of Premier.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company hereby makes to the Bank and Premier the following
representations and warranties as of the date hereof, and as of all times
throughout the term of this Agreement:
4.1 Organization, Standing and Power. The Company is a corporation duly
organized, validly existing, and in good standing under the Laws of the
Commonwealth of Kentucky, and has the corporate power and authority to carry on
its business as now conducted and to own, lease and operate its assets. The
Company is duly qualified or licensed to transact business as a foreign
corporation in good standing in each of the States of the United States and in
each foreign jurisdiction where the character of its assets or the nature or
conduct of its business requires it to be so qualified or licensed, except for
such jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on the Company.
4.2 Authority; No Breach by Agreement.
(a) The Company has the corporate power and authority
necessary to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated herein and therein, have been duly
and validly authorized by all necessary corporate action in respect thereof on
the part of the Company. Subject to the receipt of all Consents required from
Governmental Bodies and the expiration of all mandatory waiting periods,
assuming the due authorization, execution and delivery of this Agreement by the
Bank and Premier, this Agreement each represents a legal, valid and binding
obligation of the Company, enforceable against it in accordance with its terms.
(b) Neither the execution and delivery of this Agreement by
the Company, nor the consummation by Company of the transactions contemplated
hereby or thereby, nor compliance by the Company with any of the provisions
hereof or thereof will (i) conflict with or result in a breach of any provision
of the Company's Articles of Incorporation or Bylaws, (ii) constitute or result
in a Default under, or require any Consent (excluding Consents required by Law
or Order) pursuant to, or result in the creation of any Encumbrance on any
material asset of the Company under, any Contract or Governmental Authorization
of or applicable to the Company except for such Defaults and Encumbrances which
will not, and for such Consents which, if not obtained, will not have,
individually or in the aggregate, a Material Adverse Effect on the Company, or
(iii) subject to receipt of the requisite Consents referred to in Section 7.1(b)
hereof, violate any Law or Order applicable to the Company or any of its
material assets.
(c) Other than (i) Consents required from Governmental Bodies,
and (ii) Consents, filings or notifications which, if not obtained or made, are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on the Company, no notice to, filing with, or Consent of, any
Governmental Body is necessary for the consummation by the Company of the
transactions contemplated in this Agreement.
4.3 Financial Resources. The Company has the available financial
resources to satisfy its obligations hereunder.
4.4 Regulatory Matters. The Company has no Knowledge of any fact or
circumstance respecting the Company that is reasonably likely to materially
impede or delay receipt of any Consents of Governmental Bodies referred to in
Section 7.1(b) of this Agreement.
4.5 Brokers' or Finders' Fees. No agent, broker or other Person acting
on behalf of the Company or under its authority is or shall be entitled to any
commission, broker's or finder's fee in connection with any of the transactions
contemplated by this Agreement.
4.6 Statements True and Correct.
(a) Neither this Agreement, nor any Exhibit, Schedule or
document delivered by the Company to the Bank or Premier in connection with this
Agreement or any of the transactions contemplated hereby contains or shall
contain an untrue statement of a material fact or omits or shall omit to state a
material fact necessary to make the statements contained herein or therein, in
light of the circumstances in which they are made, not misleading.
(b) None of the information supplied or to be supplied by the
Company in connection with documents to be filed by the Company with any
Governmental Body in connection with the transactions contemplated hereby, will,
at the respective time such documents are filed be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. All documents that the Company is responsible for filing
with any Governmental Body in connection with the transactions contemplated
hereby will comply as to form in all material respects with the provisions of
applicable Law.
ARTICLE 5
CONDUCT OF BUSINESS PENDING CONSUMMATION
5.1 Affirmative Covenants of the Bank and Premier. From the date of
this Agreement until the earlier of the Effective Time or the termination of
this Agreement, the Bank shall use its best efforts to (and Premier shall use
its best efforts to insure that the Bank will) (i) operate its business only in
the Ordinary Course, (ii) use reasonable efforts to preserve intact its business
organization and assets and maintain its rights and franchises, and (iii) take
no action which would (a) materially adversely affect the ability of any Party
to obtain any Consents required for the transactions contemplated hereby, or (b)
materially adversely affect the ability of any Party to perform its covenants
and agreements under this Agreement.
5.2 Negative Covenants of the Bank and Premier. Except as specifically
permitted by this Agreement, from the date of this Agreement until the earlier
of the Effective Time or the termination of this Agreement, the Bank covenants
and agrees that it will not permit, do or agree or commit to do (and Premier
covenants and agrees that it will not permit the Bank to do) any of the
following without the prior written consent of the chief executive officer,
president or chief financial officer of the Company, which consent may be
withheld for any reason or no reason:
(a) amend the Articles of Incorporation, Bylaws or other
governing instruments of the Bank;
(b) (i) incur any Funded Debt, (ii) impose, or suffer the
imposition of, on any material asset (or assets) of the Bank, any Encumbrance or
permit any such Encumbrance to exist (other than in connection with deposits,
repurchase agreements, bankers acceptances, "treasury tax and loan" accounts
established in the Ordinary Course of Business and the satisfaction of legal
requirements in the exercise of trust powers), or (iii) guarantee or become a
surety or otherwise contingently liable for any obligations of others;
(c) repurchase, redeem or otherwise acquire or exchange (other
than exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any Bank Shares or declare, set aside or pay any dividend or make
any other distribution in respect of Bank Shares;
(d) issue, sell, pledge, encumber, authorize the issuance of,
enter into any Contract to issue capital stock, sell, pledge, encumber, or
authorize the issuance of, or otherwise permit to become outstanding, any
additional shares of capital stock of the Bank, or any other Right to acquire
any such stock, or any security convertible into any such stock;
(e) adjust, split, combine or reclassify any capital stock of
the Bank or issue or authorize the issuance of any other securities in respect
of or in substitution for shares of Bank capital stock, or sell, lease or
transfer in any fashion assets having in the aggregate a book value in excess of
$5,000 other than in the Ordinary Course of Business for reasonable and adequate
consideration;
(f) except for purchases of investment securities acquired in
the Ordinary Course of Business consistent with past practices, purchase any
securities or make any investment, either by purchase of stock or securities,
contributions to capital, asset transfers, or purchase of any assets, in any
Person or otherwise acquire direct or indirect control over any Person, other
than in connection with (i) foreclosures in the Ordinary Course of Business, or
(ii) acquisitions of control in its fiduciary capacity;
(g) grant any increase in compensation or benefits to the
employees, directors or officers of the Bank or pay any severance or termination
pay or any bonus other than pursuant to written policies or written Contracts in
effect on the date of this Agreement; enter into or amend any severance
agreements with officers of Bank; grant any increase in fees or other increases
in compensation or other benefits to directors of Bank; or voluntarily
accelerate the vesting of any employee benefits;
(h) enter into any employment Contract between the Bank and
any Person;
(i) adopt any new employee benefit plan of or terminate or
withdraw from, or make any material change in or to, any existing employee
benefit plans, other than any such change that is required by Law or that, in
the opinion of counsel, is necessary or advisable to maintain the tax qualified
status of any such plan, nor shall the Bank make any distributions from such
employee benefit plans, except as required by Law, by the terms of such plans,
or in a manner consistent with past practices with respect to the applicable
plan;
(j) make any change in any Tax or accounting methods or
systems of internal accounting controls, except as may be appropriate to conform
to changes in Tax Laws, regulatory accounting requirements or GAAP;
(k) commence any Proceeding or settle any Proceeding involving
any liability of the Bank for material money damages or restrictions upon the
operations of the Bank;
(l) a Change in Control;
(m) except in the Ordinary Course consistent with past
practices, enter into, modify, amend or terminate any Contract or waive,
release, compromise, or assign any material rights or claims thereunder; or
(n) encourage or solicit any Bank customer or depositor to
replace or diminish his relationship with the Bank by virtue of entering into
(or enhancing) a relationship with an Affiliate of the Bank or Premier.
5.3 Adverse Changes in Condition. The Bank agrees to give written
notice promptly to the Company upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it which (i) could
have, individually or in the aggregate, a Material Adverse Effect on it or (ii)
would cause or constitute a breach of any of its representations, warranties, or
covenants contained herein or which would prevent the satisfaction of the
conditions precedent set forth in Article 7 of this Agreement, and to use its
reasonable efforts to prevent or promptly to remedy the same.
5.4 Reports. The Bank shall file all reports required to be filed by it
with Governmental Bodies between the date of this Agreement and the Effective
Time and shall deliver to the Company copies of all such reports promptly after
the same are filed. If financial statements are contained in any such reports,
such financial statements will fairly present the consolidated financial
position of the Bank as of the dates indicated and the consolidated results of
operations, changes in shareholders' equity, and cash flows of the Bank for the
periods then ended in accordance with GAAP (subject in the case of interim
financial statements to normal recurring year end adjustments that are not
material). The Bank shall deliver to the Company not less than every two weeks a
list of all of its paid-off loans, loan reductions, new loans or increases in
existing loans to customers setting forth the amounts of such loans, the
collateral securing such loans, and any other matters or information concerning
such loans as the Company shall reasonably request. The Bank shall deliver to
the Company not less than monthly an Allowance For Loan Losses Adequacy Analysis
in the form attached hereto as Exhibit A.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 Applications. The Company shall prepare and file, and the Bank and
Premier shall cooperate in the preparation and, where appropriate, filing of,
applications with all Governmental Bodies having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement. At
least five days prior to each filing, the Company shall provide the Bank,
Premier and their counsel with copies of such applications. Each of the Parties
shall deliver to each of the other Parties copies of all filings, correspondence
and orders sent by such Party to and copies of all filings, correspondence and
orders received by such Party from all Governmental Bodies in connection with
the transactions contemplated hereby as soon as practicable upon their becoming
available.
6.2 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use its reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper, or advisable under applicable Laws to consummate and
make effective, as soon as practicable after the date of this Agreement, the
transactions contemplated by this Agreement, including, without limitation,
using its reasonable efforts to lift or rescind any Order adversely affecting
its ability to consummate the transactions contemplated herein and to cause to
be satisfied the conditions referred to in Article 7 of this Agreement. Each
Party shall use, and shall cause each of its Subsidiaries to use, its reasonable
efforts to obtain all Consents necessary or desirable for the consummation of
the transactions contemplated by this Agreement.
6.3 Investigation and Confidentiality.
(a) Prior to the Effective Time, each Party shall keep the
other Parties advised of all material developments relevant to its business and
to consummation of the transactions contemplated hereunder and shall permit the
other Parties to make or cause to be made such investigation of its business and
properties and of its respective financial and legal conditions as any other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere
unnecessarily with normal operations. No investigation by a Party or its
respective representatives shall affect the representations and warranties of
any other Party.
(b) Each Party will hold, and will cause its respective
Affiliates and their respective officers, directors, employees, agents,
consultants and other representatives to hold, in strict confidence, unless
compelled to disclose by judicial or administrative process (including without
limitation in connection with obtaining the necessary Consents of Governmental
Bodies) or by other requirements of Law, all confidential documents and
confidential or proprietary information concerning the other Parties gathered
from the other Parties, or their respective officers, directors, employees,
agents, consultants or representatives, pursuant to this Agreement, except to
the extent that such documents or information can be shown to have been (a)
previously lawfully known by the Party receiving such documents or information,
(b) in the public domain through no fault of such receiving Party or (c) later
acquired by the receiving party from other sources not themselves bound by, and
in breach of, a confidentiality agreement. Except as provided in Sections 6.1
and 6.2 hereof, no Party will disclose or otherwise provide any such
confidential or proprietary documents or information to any other Person, except
to the Party's representatives who need such documents or information in
connection with this Agreement and the transactions contemplated hereby and the
Parties agree to cause each of the foregoing to agree to be subject to and bound
by the confidentiality provisions hereof; provided, however, that nothing in
this Agreement shall be construed to prohibit the Company from informing other
Persons of this Agreement and the Company's intention of negotiating following
the Closing Date of the sale and assignment of certain of the assets and
liabilities associated with the Bank's offices in Bath County, Kentucky.
(c) If applicable, the Bank shall use its reasonable efforts
to exercise its rights under confidentiality agreements entered into with
Persons which were considering an Acquisition Proposal with the Bank to preserve
the confidentiality of the information relative to the Bank provided to such
Persons and their Affiliates and representatives.
(d) Any communication (whether oral or written) received by
the Bank or Premier from the FRB, the Department, the FDIC or other Governmental
Body which relates in any way to the Bank shall be promptly communicated and
made available to Company.
6.4 Press Releases. Prior to the Effective Time, the Bank, Premier and
the Company shall consult with each other as to the form and substance of any
press release or other public disclosure materially related to this Agreement or
any other transaction contemplated hereby; provided, that nothing in this
Section 6.4 shall be deemed to prohibit any Party from making any disclosure
which its counsel deems necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law.
6.5 No Shop. Except with respect to this Agreement and the transactions
contemplated hereby, after the date of this Agreement and until the Effective
Time or the termination of this Agreement, neither the Bank nor Premier nor any
of their representatives shall directly or indirectly solicit, initiate or
encourage any Acquisition Proposal by any Person or discuss any Acquisition
Proposal with any other Person. Neither the Bank nor Premier nor their
representatives shall furnish any non-public information that it is (or they
are) not legally obligated to furnish, negotiate with respect to, or enter into
any Contract with respect to, any Acquisition Proposal. The Bank and Premier
shall promptly notify the Company orally and in writing in the event that either
receives any Acquisition Proposal or inquiry related thereto. The Bank and
Premier shall (i) immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any Persons conducted heretofore
with respect to any of the foregoing, and (ii) direct and use reasonable efforts
to cause all of their representatives not to engage in any of the foregoing.
6.6 Insurance. The Bank shall procure, maintain and carry in full force
and effect, with financially sound and reputable insurers, general liability,
public liability, workers' compensation liability and property damage insurance
with respect to its actions and operations to such extent, in such amounts, and
with such deductibles as is commonly carried by prudent persons similarly
situated. The Bank shall provide the Company with copies of certificates of
insurance evidencing its due compliance with the requirements of this Section.
Without limiting the generality of the foregoing, the Bank shall obtain and
maintain standard "banker's blanket bond insurance" protecting it from a loss
caused, in whole or in part, by the act or failure to act, or omission of any
officer, employee, agent or independent contractor of the Bank. The Bank shall
maintain at all times insurance on its deposits from the FDIC to the maximum
extent the FDIC is authorized to insure deposits.
6.7 Obligations. The Bank shall pay in full:
(a) Prior in each case to the respective dates when penalties
would attach, all Taxes (excepting only those as shall be contested in good
faith by appropriate and timely legal proceedings and as to which adequate
reserves or other provision shall be established on its books in accordance with
GAAP) assessed or asserted against it or any of its property;
(b) Except with respect to obligations for Funded Debt, on or
prior to their respective due dates or performance dates, obligations and
liabilities for which it may be or become liable or to which any or all of its
properties may be or become subject; and
(c) On or prior to their respective due dates, all obligations
due on account of any Funded Debt.
6.8 Performance of Contracts. Unless disputed in good faith (and so
long as such dispute does not give rise to any default thereunder or materially
affect the obligation of any party thereto), the Bank shall timely comply with
and fully perform all of its Contracts and valid obligations to and with all
Persons and shall not commit or permit to be committed any Default which could
(i) have a Material Adverse Effect upon it, (ii) impair the ability of the Bank
to perform hereunder or (iii) result in an Encumbrance upon any of its assets.
6.9 Resignations. The Bank and Premier shall use all reasonable efforts
to deliver at the Closing written resignations of all members of the Board of
Directors of the Bank requested by the Company prior to the Closing Date.
Neither the Company nor the Bank shall be responsible for any Adverse
Consequences associated with any such resignations, including, without
limitation, any rights any such directors may have pursuant to any Bank Benefit
Plan.
6.10 Tax Election. Each Party hereby consents and agrees to the making
of a Section 338(h)(10) election under the Code and agrees to file timely all
returns and timely take all other actions required to enable the making of such
election.
6.11 Sale of Participations.
(a) Prior to the Closing, the Bank and Premier shall arrange
for and effect the sale by the Bank, for the face amount thereof, of the
following Bank loan participation interests:
(i) a 24.11% participation in an advance of up to $725,000
to X.X. Xxxxxx Construction Company, Inc. pursuant to Loan Participation
Agreement dated February 18, 2003 ($697,406.61 principal balance at January 26,
2004); and
(ii) a 19.04% participation in an advance of up to $500,000
to 4th Leaf, LLC pursuant to Loan Participation Agreement dated March 29, 2000
($460,964.08 principal balance at January 26, 2004).
(b) Immediately after the Closing, Premier shall purchase from
the Bank the Bank's participation in the maximum amount of $500,000 in a loan
to Xxxxxx Family Limited Partnership, LLC pursuant to that certain Loan
Participation Agreement dated April 28, 2000 ($371,942.32 principal balance at
January 31, 2004), for a purchase price equal to the sum of (i) $273,420 plus
(ii) 26.04% of any gain realized upon any sale of collateral securing said loan.
6.12 Loan Balance Verification. The Bank shall deliver to each of its
borrowers a loan verification form provided by the Company requesting an
affirmative response from each borrower verifying the then-current balance of
such borrower's Bank loan. The results of such verification requests shall be
promptly provided to the Company.
6.13 Dormant Account Balance Verification. The Bank shall deliver to
each of its depositors who maintain a depository account of whatever nature with
the Bank which has had no transaction activity during the six (6) months prior
to the date of this Agreement, a balance verification form provided by the
Company requesting an affirmative response from such depositors verifying the
then-current balances of such depositors' accounts. The results of such
verification requests shall be promptly provided the Company.
6.14 Adequacy Analysis. The Bank shall deliver the Adequacy Analysis
to the Company at the Closing.
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
7.1 Conditions to Obligations of Each Party. The respective obligations
of each Party to perform this Agreement and the transactions contemplated hereby
are subject to the satisfaction of the following conditions, unless waived by
both Parties pursuant to Section 10.5 hereof:
(a) Shareholder Approval. The shareholders of any Person
legally required to approve this Agreement shall have approved this Agreement
and the consummation of the transactions contemplated hereby and thereby, as and
to the extent required by Law, or by the provisions of any governing
instruments;
(b) Regulatory Approvals. All Consents of, filings and
registrations with, and notifications to, all Governmental Bodies required for
consummation of the transactions contemplated hereunder shall have been obtained
or made and shall be in full force and effect and all waiting periods required
by Law shall have expired. No Consent obtained from any Governmental Body which
is necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in any manner deemed to be unacceptable by Company in
its sole discretion; and
(c) Legal Proceedings. No Person, court or Governmental Body
of competent jurisdiction shall have sought, enacted, issued, promulgated,
enforced or entered any Law or Order (whether temporary, preliminary or
permanent) or taken any other action which prohibits, restricts or makes illegal
(or seeks to prohibit, restrict or make illegal) consummation of the
transactions contemplated by this Agreement.
7.2 Conditions to Obligations of the Company. The obligations of the
Company to perform this Agreement and consummate the transactions contemplated
hereby are subject to the satisfaction of the following conditions, unless
waived by the Company pursuant to Section 10.5(a) hereof:
(a) Representations and Warranties. The representations and
warranties of the Bank and Premier set forth in this Agreement shall be true and
correct as of the date of this Agreement and as of the Effective Time with the
same effect as though all such representations and warranties had been made
immediately prior to the Effective Time (provided that representations and
warranties which are confined to a specific date shall speak only as of such
date). There shall not exist inaccuracies in the representations and warranties
of the Bank and Premier such that the aggregate effect of such inaccuracies has
had or could have a Material Adverse Effect on the Bank, provided that for
purposes of this sentence only, those representations and warranties which are
qualified by reference to "Material " or "Material Adverse Effect" or
"Knowledge" shall be deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of the Bank to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby prior to
the Effective Time shall have been duly performed and complied with in all
material respects.
(c) Certificates. Each of the Bank and Premier shall have
delivered to the Company (i) a certificate, dated as of the Effective Time and
signed on its behalf by its chief executive officer and its chief financial
officer or treasurer, to the effect that the conditions of its obligations set
forth in Sections 7.2(a) and 7.2(b) hereof have been satisfied, and (ii)
certified copies of resolutions duly adopted by the Board of Directors and (if
applicable) shareholders of the Bank and Premier evidencing the taking of all
corporate action necessary to authorize the execution, delivery and performance
of this Agreement, and the consummation of the transactions contemplated hereby,
all in such reasonable detail as the Company shall request.
(d) Consents and Approvals. The Bank and Premier shall have
obtained any and all Consents required for consummation of the transactions
contemplated hereunder (other than those set forth in Section 7.1(b) hereof) or
for the preventing of any Default under any Contract or Permit of such Party
which, if not obtained or made, is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on the Bank or the Company.
(e) Legal Opinion. The Bank and Premier shall have delivered
to the Company an opinion of counsel from Huddleston, Bolen, Xxxxxx, Xxxxxx &
Xxxxx, LLP, dated as of the Closing Date, addressed to and in form and substance
reasonably satisfactory to Company, to the effect that:
(i) The Bank is a Kentucky banking corporation duly
organized, validly existing and in good standing under
the laws of the Commonwealth of Kentucky;
(ii) This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Bank and
Premier, and constitutes a valid and binding
obligation of the Bank and Premier, enforceable in
accordance with its terms; and
(iii) The execution, delivery and performance of this
Agreement, and the consummation of the transactions
contemplated herein and therein, have been duly and
validly authorized by all necessary corporate and
shareholder action in respect thereof on the part of
the Bank and Premier.
(f) No Material Adverse Effect. Without intending to limit in
any manner the provisions of Section 7.2(a) hereof, there shall have been no
events, changes or occurrences after the date of this Agreement which have had
or could have, individually or in the aggregate, a Material Adverse Effect on
the Bank.
(g) No Governmental Body Restrictions. No Governmental Body
shall have imposed (or communicated to the Bank or Premier the intention of
imposing) restrictions or sanctions on the Bank, which are unacceptable to the
Company in its sole discretion.
(h) Noncompetition Agreement. The Noncompetition Agreement
shall have been executed and delivered by all parties thereto.
(i) Tax Matters. The Company shall have received a written
opinion of counsel from Xxxxx, Xxxxxx & Park, LLP, in form and substance
reasonably satisfactory to the Company, substantially to the effect that the
transactions contemplated hereunder will result in no adverse tax consequences
for Company.
(j) Fifth Third Encumbrances. The Fifth Third Encumbrances
shall have been released, discharged and satisfied in full.
(k) Loan Verification. At least thirty percent (30%) of the
loan verification requests required pursuant to Section 6.12 hereof shall have
been responded to by the respective Bank borrowers in a manner affirming the
balances reflected on the books of the Bank respecting such loans.
7.3 Conditions to Obligations of the Bank and Premier. The obligations
of the Bank and Premier to perform their obligations under this Agreement and
consummate the transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by the Bank and Premier pursuant to
Section 10.5(b) hereof:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
as of the date of this Agreement and as of the Effective Time with the same
effect as though all such representations and warranties had been made
immediately prior to the Effective Time (provided that representations and
warranties which are confined to a specified date shall speak only as of such
date).
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of the Company to be performed and complied with by
the Company pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and complied
with in all material respects.
(c) Certificates. The Company shall have delivered to the Bank
and Premier (i) a certificate, dated as of the Effective Time and signed on its
behalf by its chief executive officer and its chief financial officer or
treasurer, to the effect that the conditions of its obligations set forth in
Sections 7.3(a) and 7.3(b) hereof have been satisfied, and (ii) certified copies
of resolutions duly adopted by the Company's Board of Directors evidencing the
taking of all corporate action necessary to authorize the execution, delivery
and performance of this Agreement, and the consummation of the transactions
contemplated hereby.
(d) Legal Opinion. The Company shall have delivered to the
Bank and Premier an opinion of counsel from Xxxxx, Xxxxxx & Park, LLP, dated as
of the Closing Date, addressed to and in form and substance reasonably
satisfactory to the Bank and Premier, to the effect that:
(i) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of
the Commonwealth of Kentucky;
(ii) This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Company, and
(assuming this Agreement is a binding obligation of
the Bank and Premier) constitutes a valid and binding
obligation of the Company, enforceable in accordance
with its terms; and
(iii) The execution, delivery and performance of this
Agreement, and the consummation of the transactions
contemplated herein have been duly and validly
authorized by all necessary corporate and shareholder
action in respect thereof on the part of the Company.
ARTICLE 8
TERMINATION
8.1 Termination. Notwithstanding any other provision of this Agreement,
this Agreement may be terminated and the transactions contemplated hereunder
abandoned at any time prior to the Effective Time:
(a) By mutual consent of the Boards of Directors of the
Company, the Bank and Premier;
(b) By the Board of Directors of the Company (provided that
the Company is not then in breach of any representation, warranty, covenant or
other agreement contained in this Agreement) in the event of an inaccuracy of
any representation or warranty of the Bank or Premier contained in this
Agreement which cannot be or has not been cured within thirty (30) days after
the giving of written notice to the Bank and Premier of such inaccuracy and
which inaccuracy would provide the Company the ability to refuse to consummate
the transactions contemplated hereunder under the applicable standard set forth
in Section 7.2(a) of this Agreement;
(c) By the Board of Directors of Premier (provided that
neither the Bank nor Premier is then in breach of any representation, warranty,
covenant or other agreement contained in this Agreement) in the event of an
inaccuracy of any representation or warranty of the Company contained in this
Agreement which cannot be or has not been cured within thirty (30) days after
the giving of written notice to the Company of such inaccuracy and which
inaccuracy would provide Premier the ability to refuse to consummate the
transactions contemplated hereunder under the applicable standard set forth in
Section 7.3(a) of this Agreement;
(d) By the Board of Directors of the Company (provided that
the Company is not then in breach of any representation, warranty, covenant or
other agreement contained in this Agreement) in the event of a material breach
by the Bank or Premier of any covenant or agreement contained in this Agreement
which cannot be or has not been cured within thirty (30) days after the giving
of written notice to the Bank and Premier of such breach;
(e) By the Board of Directors of Premier (provided that
neither the Bank nor Premier is then in breach of any representation, warranty,
covenant or other agreement contained in this Agreement) in the event of a
material breach by the Company of any covenant or agreement contained in this
Agreement which cannot be or has not been cured within thirty (30) days after
the giving of written notice to the Company of such breach;
(f) By the Board of Directors of Company or the Board of
Directors of Premier in the event any Consent of any Governmental Body required
for consummation of the transactions contemplated hereby shall have been denied
by final non-appealable action of such authority or if any action taken by such
authority is not appealed within the time limit for appeal;
(g) By the Company in the event any Consent of any
Governmental Body required for consummation of the transactions contemplated
hereby shall have been denied or is granted upon satisfaction of conditions
unacceptable in the sole judgment of the Company, or in the event that at any
time prior to the Closing Date it shall become reasonably certain to the
Company, with the advice of counsel, that a required Consent of a Governmental
Body for consummation of the subject transactions will not be obtained; or
(h) By the Board of Directors of the Company or the Board of
Directors of Premier in the event that the Closing shall not have occurred by
July 31, 2004, if the failure to consummate the transactions contemplated hereby
on or before such date is not caused by any willful breach of this Agreement by
the Party electing to terminate pursuant to this Section 8.1(h) or should the
failure to consummate by that date be due to or arising out of Proceeding to
which the Parties, or any of them, are a Party, then such date shall be extended
until forty-five (45) days after the final termination or resolution of such
Proceeding.
8.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1 of this Agreement, this
Agreement shall become void and have no effect, and none of the Company, the
Bank or Premier or any of the officers or directors of any of them shall have
any liability of any nature whatsoever under this Agreement, except that the
provisions of this Section 8.2, Section 9.1, Section 9.2, Section 9.3, Section
10.1 and Section 10.2 of this Agreement shall survive any such termination and
abandonment.
ARTICLE 9
INDEMNIFICATION
9.1 Survival. Except as expressly provided in this Agreement, all
representations, warranties, covenants, agreements and indemnification
obligations made and incurred hereunder or pursuant hereto or in connection with
the transactions contemplated hereby shall not terminate, but shall survive the
Closing and any investigation made at any time with respect thereto and continue
in effect until the Termination Date (except for intentional misrepresentations
or intentional failures to perform or comply with any covenant or agreement
herein, in which cases the subject representations, warranties, covenants,
agreements and indemnification obligations shall continue indefinitely) and be
enforceable and shall not be deemed to merge or terminate in connection with (or
by virtue of) the purchase by the Company of the Bank Shares hereunder.
9.2 Company Indemnification. Premier hereby agrees to indemnify and
defend and hold harmless the Company and its Affiliates, directors, officers,
employees, managers, members and agents and their successors and assigns
(collectively, the "Company Indemnified Persons") against and in respect of any
and all Adverse Consequences incurred, suffered, sustained or required to be
paid by a Company Indemnified Person resulting or arising from or incurred in
connection with: (i) any misrepresentation, breach of warranty, breach of
representation, or non-fulfillment or non-performance of any agreement, covenant
or condition on the part of the Bank or Premier made herein or to be performed,
complied with or fulfilled under this Agreement; or (ii) any Proceeding incident
to any of the foregoing. This indemnity obligation on the part of Premier shall
survive the termination, expiration or cancellation of this Agreement for any
reason whatsoever.
9.3 Bank Indemnification. The Company hereby agrees, to indemnify and
defend and hold harmless the Bank, Premier and their Affiliates, directors,
officers, employees, managers, members and agents and their successors and
assigns (collectively, the "Bank Indemnified Persons") against and in respect of
any and all Adverse Consequences incurred, suffered, sustained or required to be
paid by a Bank Indemnified Person resulting or arising from or incurred in
connection with: (i) any misrepresentation, breach of warranty, breach of
representation, or non-fulfillment or non-performance of any agreement, covenant
or condition on the part of the Company made herein or to be performed, complied
with or fulfilled under this Agreement; or (ii) any Proceeding incident to any
of the foregoing. This indemnity obligation on the part of Company shall survive
the termination, expiration or cancellation of this Agreement for any reason
whatsoever.
9.4 Indemnification Procedures.
(a) Whenever a Company Indemnified Person or Bank Indemnified
Person (an "Indemnified Person") becomes aware that it has a claim for indemnity
under Section 9.2 or 9.3 hereof or that any claim is threatened or asserted
against it that would occasion the indemnification described in Section 9.2 or
9.3 (a "Covered Claim"), such Indemnified Person shall promptly provide the
indemnifying Party with a notice (a "Claim Notice") of such Covered Claim
pursuant to the provisions of Section 10.7 hereof. Each Claim Notice shall
describe in reasonable detail the Indemnified Person's understanding of (and
basis for) the Covered Claim, the Person threatening or asserting it, the relief
sought and the basis for indemnification hereunder with respect thereto.
(b) In connection with any Covered Claim the indemnifying
Party, provided that it shall have acknowledged in writing its obligation to
provide indemnification in respect of such Covered Claim, shall have the right
(without prejudice to the right of any Indemnified Person to participate at its
expense through counsel of its own choosing) to defend or prosecute such Covered
Claim at its expense and through counsel of its own choosing if it gives written
notice of its intention to do so not later than twenty days following receipt by
it of a Claim Notice or such shorter time period as required so that the
interests of the Indemnified Person would not be materially prejudiced as a
result of its failure to have received such notice; provided, however, that if
the defendants in any action shall include both the indemnifying Party and an
Indemnified Person and the Indemnified Person shall have reasonably concluded
that counsel selected by the indemnifying Party has a conflict of interest
because of the availability of different or additional defenses to the
Indemnified Person, the Indemnified Person shall have the right to select
separate counsel to participate in the defense of such action on its behalf, at
the expense of the indemnifying Party. If the indemnifying Party does not choose
to defend or prosecute any such claim asserted by a Person for which any
Indemnified Person would be entitled to indemnification hereunder, then the
Indemnified Person shall be entitled to recover from the indemnifying Party, on
a monthly basis, all of its attorneys' fees and other costs and expenses of
litigation of any nature whatsoever incurred in the defense of such claim. If
the indemnifying Party assumes the defense of any such claim, the indemnifying
Party will hold the Indemnified Person harmless from and against any and all
Adverse Consequences arising out of any settlement approved by indemnifying
Party or any Order in connection with such Covered Claim or Proceeding.
Notwithstanding the assumption of the defense of any Covered Claim by the
Indemnified Person pursuant to this Section 9.4(b) the indemnifying Party shall
have the right to approve the terms of any settlement of a claim (which approval
shall not be unreasonably withheld). The indemnifying party shall be subrogated
to the rights that the Indemnified Person has against third parties with respect
to any subject Covered Claim.
(c) The indemnifying Party and the Indemnified Person shall
cooperate in furnishing evidence and testimony and in any other manner which the
other may reasonably request, and shall in all other respects have an obligation
of good faith dealing, one to the other, so as not to unreasonably expose the
other to an undue risk of loss. The Indemnified Person shall be entitled to
reimbursement for out-of-pocket expenses reasonably incurred by it in connection
with such cooperation. Except for Adverse Consequences for which indemnification
is provided pursuant to Section 9.3 hereof, as the case may be, and as provided
in the preceding sentence, each party shall bear its own fees and expenses
incurred pursuant to this Section 9.4(c).
(d) It is not a condition precedent to recovery under this
Article 9 for an Indemnified Person to first seek a contractual, statutory or
common law remedy against any indemnifying Party in order to provide a Claim
Notice. No Indemnified Person is under any obligation to pursue any claims
against an indemnifying Party.
9.5 Restrictions on Scope and Duration of Indemnification.
(a) The amount of indemnity payable hereunder shall be
calculated after giving effect to (i) the actual tax impact when realized on
the Indemnified Person with respect to the subject Covered Claims and (ii)
any proceeds received under insurance policies covering the subject Covered
Claims.
(b) With respect to any Covered Claim involving Adverse
Consequences arising from Subject Bank Loans (the "Loan Adverse Consequences"),
the amount of indemnity payable hereunder by Premier shall be offset as follows:
(i) With respect to any Impaired Loan, the Loan Adverse
Consequences in question shall be offset by the portion of the
applicable Grade Category Reserve specifically attributable to
such Impaired Loan;
(ii) With respect to any Non-Impaired Loan, the Loan
Adverse Consequences in question shall be offset by an equivalent
amount from the sums remaining (if any) from the difference
between (A) the applicable Grade Category Reserve, less (B)
any sums previously used from such Grade Category Reserve to
offset Loan Adverse Consequences pursuant to this Section
9.5(b)(ii); and
(iii) Following any offset against Loan Adverse Consequences
as specified in Section 9.5(b)(i) and (ii) above, any remaining
Loan Adverse Consequences shall be offset by an equivalent
amount from the sums remaining (if any) from the difference
between (A) the Current Excess Amount, less (B) any sums
previously used from the Current Excess Amount to offset Loan
Adverse Consequences pursuant to this Section 9.5(b)(iii).
Any remaining Loan Adverse Consequences after offset pursuant to
Sections 9.5(b)(i), (ii) and (iii) above shall then be indemnifiable pursuant to
Sections 9.5(c) and (d) below.
(c) No Company Indemnified Person or Bank Indemnified Person
shall be entitled to be indemnified hereunder for any Adverse Consequences
respecting a Covered Claim until the total of all Adverse Consequences
respecting Covered Claims for Company Indemnified Persons or Bank Indemnified
Persons, as applicable, exceeds $250,000.
(d) Subject to Section 9.5(e) below, the aggregate and total
liability of Premier pursuant to Section 9.2 hereof or the Company pursuant to
Section 9.3 hereof shall in no event exceed (i) $4,000,000 with respect to
Covered Claims for which Claim Notices are provided on or before the date one
hundred twenty (120) days following the Closing Date, (ii) $3,000,000 with
respect to Covered Claims for which Claim Notices are provided after the date
one hundred twenty (120) days following the Closing Date but on or before the
date two hundred forty (240) days following the Closing Date and (iii)
$2,000,000 with respect to Covered Claims for which Claim Notices are provided
after the date two hundred forty (240) days following the Closing Date but on or
before the Termination Date. Subject to Section 9.5(e) below, the Parties agree
that in no event shall the aggregate and total liability of Premier pursuant to
Section 9.2 hereof or the Company pursuant to Section 9.3 hereof exceed
$4,000,000.
(e) Notwithstanding anything contained in this Agreement to
the contrary, the rights of a Indemnified Person to be indemnified, defended and
held harmless in connection with any intentional misrepresentation hereunder or
any intentional failure to perform or comply with any covenant or agreement
hereunder shall not be subject to the restrictions or scope and duration set
forth in Sections 9.5(c) and 9.5(d) above, and shall survive the Closing
indefinitely.
(f) Subject to Section 9.5(e) above, all rights of Company
Indemnified Persons or Bank Indemnified Persons to be indemnified and held
harmless pursuant to Section 9.2 or 9.3 hereof shall survive and continue in
full force and effect until the Termination Date, at which time said rights
shall terminate; provided, however, that such rights shall remain in full force
and effect following the Termination Date with respect to any Covered Claim
which is the subject of a Claim Notice provided by a Indemnified Person on or
prior to the Termination Date.
ARTICLE 10
MISCELLANEOUS
10.1 Expenses.
(a) Each of the Parties shall bear and pay all direct costs
and expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including filing, registration and application fees,
printing fees and fees and expenses of its own financial or other consultants,
investment bankers, accountants and counsel.
(b) Nothing contained in this Section 10.1 shall constitute or
shall be deemed to constitute liquidated damages for the willful breach by a
Party of the terms of this Agreement or otherwise limit the rights of the
non-breaching Party.
10.2 Brokers and Finders. Apart from Premier's employment of Xxxxxx
Xxxxxxxx and Company, each of the Parties represents and warrants that neither
it nor any of its officers, directors, employees or Affiliates has employed any
broker or finder or incurred any liability for any financial advisory fees,
investment bankers' fees, brokerage fees, commissions or finders' fees in
connection with this Agreement or the transactions contemplated hereby.
10.3 Entire Agreement; Benefits of Agreement. This Agreement
constitutes the complete and exclusive agreement between the Parties with
respect to the transactions contemplated hereunder and concedes and supersedes
all prior arrangements or understandings with respect thereto, written or oral,
between the Parties (including, without limitation, that certain Confidentiality
Agreement among the Parties hereto dated as of October 1, 2003). Nothing in this
Agreement expressed or implied is intended or shall be construed to confer upon
any Person, other than the Parties or their respective successors, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
10.4 Amendments. To the extent permitted by Law, this Agreement may be
amended, only by a subsequent writing signed by each of the Parties, upon the
approval of the Board of Directors of each of the Parties, whether before or
after shareholder approval (if applicable) of this Agreement has been obtained.
10.5 Waivers.
(a) Prior to or at the Effective Time, the Company, acting
through its Board of Directors or chief executive officer, shall have the right
to waive any Default in the performance of any term of this Agreement by the
Bank or Premier, to waive or extend the time for the compliance or fulfillment
by the Bank or Premier of any and all of their obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of
Company under this Agreement, except any condition which, if not satisfied,
would result in the violation of any Law. No such waiver shall be effective
unless in writing signed by the chief executive officer of the Company.
(b) Prior to or at the Effective Time, the Bank and Premier,
acting through the Board of Directors or chief executive officer of Premier,
shall have the right to waive any Default in the performance of any term of this
Agreement by the Company, to waive or extend the time for the compliance or
fulfillment by the Company of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of the Company under this Agreement, except any condition which, if
not satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by the chief executive officer of Premier.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
10.6 Assignment. Neither this Agreement nor any of the rights,
interests, or obligations hereunder shall be assigned by any Party hereto
(whether by operation of Law or otherwise) without the prior written consent of
the other Parties. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the Parties and
their respective successors and assigns.
10.7 Notices. Any deliveries, notices or other communications required
or permitted hereunder shall be deemed to have been duly made or given (i) if
delivered in person, (ii) if sent by registered mail, return receipt requested,
postage prepaid, (iii) if sent by a nationally recognized overnight courier or
(iv) if sent by facsimile transmission, to the following addresses and numbers:
Company: Farmers Capital Bank Corporation
G. Xxxxxxx Xxxxxxx, President
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile Number: (000) 000-0000
Copy to Company
Counsel: Xxxxx, Xxxxxx & Park, LLP
J. Xxxxx Xxxxx, Jr.
000 Xxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile Number: (000) 000-0000
Bank: Citizens Bank (Kentucky), Inc.
Xxxxx X. Xxxxxxx, President
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile Number: (000) 000-0000
Premier: Premier Financial Bancorp, Inc.
Xxxxxx X. Xxxxxx, President
0000 0xx Xxxxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
Facsimile Number: (000) 000-0000
Copy to Bank and
Premier Counsel: Huddleston, Bolen, Xxxxxx, Xxxxxx & Xxxxx, LLP
Attn: Xxxxxx X. Xxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
Facsimile Number: (000) 000-0000
or, as to each party, at such other address or number as may hereafter be
designated by such party in a written notice to the other party complying as to
delivery with the terms of this Section 10.7. All such notices, requests,
demands and other communications shall be deemed to have been given (i) on the
date received if personally delivered, (ii) two days following the date
deposited in the mail if delivered by mail, (iii) on the date following the date
sent by overnight courier if delivered by overnight courier or (iv) the date
sent by facsimile if delivered by facsimile transmission on or before 2:30 p.m.
EST (if received by facsimile after 2:30 p.m. EST, then the following day).
10.8 Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the Laws of the Commonwealth of Kentucky, without
regard to its principles of conflicts of law or choice of law.
10.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument. Any such counterpart may
be delivered through facsimile transmission provided the original thereof is
promptly delivered to the Parties hereto.
10.10 Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
10.11 Interpretations. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any Party, whether under
any rule of construction or otherwise. No Party to this Agreement shall be
considered the draftsman. The Parties acknowledge and agree that this Agreement
has been reviewed, negotiated and accepted by all Parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of all Parties
hereto.
10.12 Enforcement of Agreement. The Parties agree that time is of the
essence in the performance of their respective obligations under this Agreement.
The Parties hereto agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
the Parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at Law or in
equity.
10.13 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
10.14 Rights and Remedies Cumulative. The rights and remedies provided
by this Agreement are cumulative and the use of any one right or remedy by any
Party shall not preclude or waive the right to use any or all other remedies.
Said rights and remedies are given in addition to any other rights the parties
may have by Law, Order, or otherwise.
10.15 Disclosure on Schedules. Any document referred to on any Schedule
attached to this Agreement shall be deemed to modify, qualify, limit or amend
only those representations and warranties of Premier and the Bank herein which
specifically refer to such Schedule, and no such document (or any information
contained therein) shall be deemed in any fashion to modify, qualify, limit or
amend any other representation or warranty of Premier or the Bank made in (or in
connection with) this Agreement.
FARMERS CAPITAL BANK CORPORATION
/s/ G. Xxxxxxx Xxxxxxx
-----------------------------------------
G. Xxxxxxx Xxxxxxx
President
CITIZENS BANK (KENTUCKY), INC.
/s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxx
President
PREMIER FINANCIAL BANCORP, INC.
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx
President
EXHIBIT A
---------
Citizens Bank (Kentucky)
Allowance for Loan Losses
Adequacy Analysis
January 31, 2004
Loans Reserve
Outstanding Factor Requirement
Residental Mortgages (Call Report RC-C 1c)
Grade 1 $ 23,644.96 0.00% $ -
Grade 2 - 0.66% -
Grade 3 12,316,918.47 1.33% 163,232.74
Grade 4 2,530,179.70 3.00% 75,905.39
Grade 5 1,778,263.79 5.00% 88,913.19
Grade 6 710,474.95 15.00% 106,571.24
------------- ------------
17,359,481.87 434,622.56
Consumer Installment Loans (RC-C 6c)
Grade 1 $ 864,519.39 0.00% $ -
Grade 2 - 1.25% -
Grade 3 4,796,926.55 2.50% 119,740.08
Grade 4 310,014.63 3.00% 9,300.44
Grade 5 53,950.11 5.00% 2,697.51
Grade 6 174,967.94 15.00% 26,245.19
------------- ------------
6,200,378.62 157,983.22
All Other Loans
Grade 1 $ 108,745.87 0.00% $ -
Grade 2 - 1.03% -
Grade 3 24,448,690.43 2.06% 503,212.17
Grade 4 1,332,564.80 3.00% 39,976.94
Grade 5 389,908.22 5.00% 19,495.41
Grade 6 347,341.78 15.00% 52,101.27
Impaired Loans
Grade 6 over $100,000 $ 1,231,396.95 $ 251,758.00
Grade 7 761,403.35 395,369.00
Grade 8 43,919.94 43,920.00
SBA/USDA Guaranteed Loans 2,208,341.86 -
Credit Cards - 6.32% -
Overdrafts and Checking Plus 147,142.84 2.06% 3,028.55
Home Equity Lines of Credit 924,300.87 2.06% 19,024.31
Totals $55,503,617.40 $1,920,491.43
Current balance in Reserve 3.90% $2,165,768.27
-------------
Current excess (deficiency) $ 245,276.84
=============
GL Net Loan Total $53,341,426.63
Unearned Interest XXX 3.32
Loan Loss Reserve 2,165,768.27
Loan Balance Adjustments (3,580.82)
--------------
$55,503,617.40
==============
EXHIBIT B
---------
CONFIDENTIALITY AND
NONCOMPETITION AGREEMENT
THIS CONFIDENTIALITY AND NONCOMPETITION AGREEMENT is made as of
______________, 2004 between (i) FARMERS CAPITAL BANK CORPORATION, a Kentucky
corporation with its principal executive offices located at 000 Xxxx Xxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 ("Company") and (ii) PREMIER FINANCIAL
BANCORP, INC., a West Virginia corporation with its principal executive offices
located at 0000 0xx Xxxxxx, Xxxxxxxxxx, Xxxx Xxxxxxxx 00000 ("Premier").
RECITALS
A. Contemporaneously herewith pursuant to that certain Stock Purchase
Agreement dated February __, 2004 (the "Purchase Agreement") between Company,
Premier and Citizens Bank (Kentucky), Inc. ("Bank"), Company is acquiring Bank
through the purchase from Premier of all outstanding shares of capital stock of
the Bank (the "Acquisition").
B. Under the Acquisition, all of the Bank Shares are being acquired by
Company for the aggregate cash sum of $14,500,000.
C. Company's acquisition of Bank through the Acquisition was induced in
part by the expectation that, for a reasonable period of time, Premier would
refrain from competing with Company within the Territory.
D. Premier acknowledges and agrees that (i) an indispensable part of
the consideration for the purchase by Company under the Acquisition of the Bank
Shares is the execution of this Agreement, (ii) the execution of this Agreement
is a condition to the consummation of the Acquisition under the Purchase
Agreement, and (iii) it is appropriate for Company to protect its confidential
interests, and the confidential interests of the Bank, following the
Acquisition.
1. Confidentiality Agreement.
(a) Confidential Information. Except for disclosures required
by Law, Premier shall not disclose or use or otherwise exploit (for its own
benefit or the benefit of any other Person) at any time, any Confidential
Information of which Premier has heretofore become aware. For purposes of this
Agreement, "Confidential Information" shall mean all non-public, proprietary
technical, commercial and business information of the Bank, including, but not
limited to, manner of operations, financial information, employee lists and
records (including lists of employees of the Bank's customers and clients), the
identity of Bank customers and clients, loan or deposit information, contractual
agreements between the Bank and any Persons, contents of any and all
applications to Governmental Bodies, and comments of such Governmental Bodies
and the Bank's response thereto and any and all examination reports of
Governmental Bodies. "Confidential Information" shall not include information
that became generally known or available by publication, commercial use or
otherwise through no fault of Premier.
(b) Injunctive Relief; Invalidity of Any Provision. Premier
acknowledges that its breach of any covenant contained in this Section 1
will result in irreparable injury to Company, Bank and any of their Affiliates
and that the remedy of such Persons at Law for such a breach will be inadequate.
Accordingly, Premier agrees and consents that any of Company, Bank or any of
their Affiliates, in addition to all other remedies available to any of them at
Law and in equity, shall be entitled to seek both preliminary and permanent
injunctions to prevent and/or halt a breach or threatened breach by Premier of
any covenant contained in this Section 1. If any provision of this Section 1 is
invalid in part or in whole, it shall be deemed to have been amended, whether as
to time, area covered or otherwise, as and to the extent required for its
validity under applicable Law and, as so amended, shall be enforceable. The
parties further agree to execute all documents necessary to evidence such
amendment.
(c) Rights Cumulative. The rights and remedies of Company and
Bank under this Section 1 are in addition to, and cumulative of, any other
rights and remedies that either may have, whether by Law or by equity.
(d) Survival. The provisions of this Section 1 shall survive f
or a period of two (2) years.
2. Restrictive Covenants.
(a) Acknowledgments. Premier acknowledges that (i) its status
as the sole shareholder of Bank has placed it in a position of confidence
and trust with the customers and employees of the Bank and has allowed it access
to Confidential Information, (ii) it will benefit from the consummation of the
Acquisition, (iii) the nature and periods of restrictions imposed by the
covenants contained in this Section 2 are fair, and reasonable and necessary to
protect and preserve for Company the benefits of its acquisition of Bank, (iv)
Company and its Affiliates would sustain great and irreparable loss and damage
if Premier were to breach any of such covenants, (v) Company and its Affiliates
conduct (or, following the Company's acquisition of the Bank Shares, will
conduct) their business actively in and throughout the entire Territory, and
(vi) the Territory is reasonably sized because the business of Company and its
Affiliates are scattered over a wide geographical area, and require the entire
Territory for profitable operations.
(b) Covenants. Having acknowledged the foregoing, Premier
covenants and agrees with Company that it will not, directly or indirectly,
for a period of two (2) years following the date hereof, (i) solicit, divert or
appropriate to itself or any other Person, or attempt to solicit or divert or
appropriate to itself or any other Person, any business or services (similar in
nature to any portion of the Business) of any Person who (A) maintained a
deposit, demand, sweep or loan account with the Bank, (B) was a party to a
repurchase agreement with the Bank, (C) borrowed money from the Bank pursuant to
a loan which was subsequently sold by the Bank on the secondary market or (D)
was an employee or an agent of the Bank, at any time during the six (6) months
prior to the date of this Agreement or (ii) own, manage, operate, join, control,
assist, participate in or be connected in any way with, directly or indirectly,
as shareholder, partner, proprietor, joint venturer, member, agent, consultant,
independent contractor or otherwise, any Person which is, at the time, directly
or indirectly, engaged in any portion of the Business within the Territory or in
competition within the Territory with the Business of Company or any Affiliate
thereof. The parties hereto acknowledge that, as of the date of this Agreement,
Premier Subsidiaries have customers in the Territory who are not material
(defined for these purposes as having one or more depository, loan or other
relationships with the Bank which individually or in the aggregate exceed
$5,000) customers of the Bank and desire to exclude such Subsidiaries from the
operation of this Agreement as it relates to customers of such Subsidiaries in
the Territory who are not customers of the Bank. The parties further acknowledge
that this Section 2(b) shall not be deemed to prohibit any marketing, media or
customer solicitation campaign not targeted solely or principally at customers
of the Bank or citizens of Xxxxx County or Bath County and which campaign makes
use of broadcast media such as radio or television or mass mailings; provided,
however, that the use of a mass mailing directed to only citizens of Xxxxx
County or Bath County, Kentucky or to Bank customers, as well as the
distribution of handbills, use of a billboard or advertisement in a newspaper of
local circulation in Xxxxx County or Bath County, Kentucky shall be prohibited
hereunder.
(c) Definitions. For purposes of this Agreement,
(i) The "Territory" shall mean that area comprised of
Xxxxx County, Kentucky and Bath County, Kentucky; and
(ii) The "Business" shall mean the banking, mortgage
banking, or finance business, and all activities and enterprises reasonably
related thereto.
(d) Injunctive Relief; Invalidity of Any Provision. Premier
acknowledges that its breach of any covenant contained in this Section 2
will result in irreparable injury to Company and its Affiliates and that the
remedy of Company and its Affiliates at Law for such a breach will be
inadequate. Accordingly, Premier agrees and consents that the Company or any of
its Affiliates, in addition to all other remedies available to any of them at
Law and in equity, shall be entitled to seek both preliminary and permanent
injunctions to prevent and/or halt a breach or threatened breach of any covenant
contained in this Section 2. If any provision of this Section 2 is invalid in
part or in whole, it shall be deemed to have been amended, whether as to time,
area covered or otherwise, as and to the extent required for its validity under
applicable Law and, as so amended, shall be enforceable. The parties further
agree to execute all documents necessary to evidence such amendment.
(e) Rights Cumulative. The rights and remedies of Company under
this Section 2 are in addition to, and cumulative of, any other rights and
remedies that Company or its Affiliates may have, whether by Law or by equity,
with respect to this Agreement.
3. Entire Agreement; Modification; Waiver. This Agreement (along
with the Purchase Agreement) constitutes the entire agreement between the
parties pertaining to the subject matter contained in it and supersedes all
prior and contemporaneous agreements, representations, and understandings of the
parties, whether written or oral. No supplements, modification, or amendment of
this Agreement shall be binding unless executed in writing by all parties
hereto. No waiver of any of the provisions of this Agreement will be deemed, or
will constitute, a waiver of any other provision, whether or not similar, nor
will any waiver constitute a continuing waiver. No waiver will be binding unless
executed in writing by the party making the waiver.
4. Successors and Assigns; Assignment. This Agreement shall be
binding on, and inure to the benefit of, the parties hereto and their respective
heirs, executors, legal representatives, successors and assigns; provided,
however, that this Agreement is intended to be personal to Premier and the
rights and obligations of Premier hereunder may not be assigned or transferred
by it. The Parties agree that Company may assign its rights and obligations
hereunder as they relate to Bath County, Kentucky to any Person acquiring all
(or a substantial portion) of the assets and liabilities associated with the
Bank's offices in Bath County, Kentucky.
5. Notices. Any deliveries, notices or other communications
required or permitted hereunder shall be deemed to have been duly made or given
(i) if delivered in person, (ii) if sent by registered mail, return receipt
requested, postage prepaid, or (iii) if sent by a nationally recognized
overnight courier to the addresses of the parties set forth at the outset of
this Agreement or to each party, at such other address as may hereafter be
designated by such party in a written notice to the other party complying as to
delivery with the terms of this Section. All such notices, requests, demands and
other communications shall be deemed to have been given (i) on the date received
if personally delivered, (ii) two days following the date deposited in the mail
if delivered by mail, or (iii) one day following the date sent by overnight
courier if delivered by overnight courier.
6. Governing Law. This Agreement is executed and delivered in,
and shall be governed by, enforced and interpreted in accordance with the Laws
of the Commonwealth of Kentucky without taking into account provisions regarding
choice of law or conflicts of law.
7. Execution in Counterparts. This Agreement may be executed
in multiple counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same document.
8. Severability of Provisions. The invalidity or
unenforceability of any particular provision of this Agreement shall not affect
the other provisions hereof and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision were omitted.
9. Definitions. Capitalized terms herein not otherwise defined
herein shall have the meanings assigned such terms by the Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year set forth above.
FARMERS CAPITAL BANK CORPORATION
By: /s/ G. Xxxxxxx Xxxxxxx
-----------------------------------
G. Xxxxxxx Xxxxxxx
President
PREMIER FINANCIAL BANCORP, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
President
EXHIBIT C
--------------------------------------------------------------------------------
MEMORANDUM OF UNDERSTANDING
FOR
LEASE AGREEMENT
--------------------------------------------------------------------------------
This agreement made and entered into this 10th day of June, 2003, by
and between PREMIER FINANCIAL BANCORP, INC., a Kentucky corporation, 0000 0xx
Xxxxxx, Xxxxxxxxxx, XX 00000., (hereinafter referred to as the Lessor) and
CITIZENS BANK OF KENTUCKY, a Kentucky corporation, 000 X. Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, XX 00000 (hereinafter referred to as the Lessee).
WHEREAS, by deed dated September 25, 1996, and recorded in Deed Book
220, page 404, Xxxxx County Clerk's Records, Xxxxxx Xxxxxxx, et al, conveyed to
Premier Financial Bancorp, Inc., .known as 000 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx, (the "Facility") and
WHEREAS, Lessor desires to lease the Facility to Lessee for use in its
banking business,
NOW, THEREFORE, it is hereby and herewith mutually agreed by and
between the parties hereto as follows:
1. The Lessee agrees that:
a. The Lessee shall occupy the Facility for purposes of
conducting banking business in compliance with all applicable
federal, state and local laws, regulations and ordinances.
b. The Lessee shall be responsible for paying all utility costs
associated with the operation of the Facility (including, but
not limited to, gas, water, sewage and electric). All utilities
shall be billed by the proper utility companies in the name of
the Lessee.
c. The Lessee shall be solely responsible for paying all costs
relating to telephone service including the
connection/disconnection fee for such services, etc. The Lessee
shall be responsible for making necessary arrangements for such
services
d. The Lessee shall be solely responsible for routine maintenance
and repairs, including, but not limited to, light fixtures
repairs and/or replacements, painting and decorating, janitorial
functions, lawn maintenance and replacements caused by the
Lessee's negligence.
e. Preventative maintenance schedules shall be maintained on all
equipment by the Lessee and all records shall be kept on
premises for inspections.
f. The Lessee shall not permit or suffer any offensive, injurious
or abusive use of the leased premises, shall maintain the
premises in good order and in a clean and sanitary condition
throughout the entire term of this lease, whether operating or
not, and shall immediately respond to any failure of any of its
employees, servants or agents to so maintain, without regard to
the causation of such failure.
g. The Lessee, at its sole expense, shall be responsible to
ensure trash pick-up, etc. be maintained throughout the entire
term of this lease agreement. The Lessee shall also be
responsible to ensure that all walkways and parking lot areas
are clean of snow, ice and debris at all times during the
entire term of this lease agreement.
h. The Lessee may, with the prior written consent of the Lessor,
renovate said premises or erect structures and install
equipment in or upon the leased premises at the Lessee's sole
expense. Such improvements, structures and equipment solely
placed in or upon or attached to said premises which cannot be
removed without damage to the Lessor's property, shall at the
expiration, cancellation or termination of this lease, remain
in or on said premises and shall vest with the Lessor as a
further consideration for this lease,
i. Prior to the Lessee initiating any renovations or alterations
to the leased premises, such renovations or alterations must be
approved in writing by Lessor.
j. The Lessee shall comply with all standards set by the State
Fire Xxxxxxxx'x Office and that of the Kentucky Occupational
Safety and Health Standards Board.
k. The Lessee shall be responsible for adequate liability insurance
with a bona fide insurance company maintaining sufficient
protection against any personal injuries or property damages
sustained by individuals while upon the leased premises for
which the Lessee may become liable. Further, the Lessee shall
bear the risk of loss or damage by fire or other casualty to any
of its personal property located' within the leased premises
throughout the entire term of this lease agreement.
1. The Lessee shall be responsible to the Lessor for all damages to
the leased premises caused by fire or other casualty which is
the result of the Lessee's negligent use of the leased premises
or willful conduct.
m. The Lessee shall not do, or permit to be done, in or about the
premises, any thing which is illegal or unlawful, or which is of
a hazardous or dangerous nature or which will increase the
Lessor's rate(s) of insurance.
n. The Lessee agrees that all goods and chattels placed in or about
the premises shall be at the sole risk of the Lessee. The Lessor
shall not be liable for injury or damage to property from any
cause.
o. The Lessee shall indemnify and save the Lessor harmless from any
or all claims, demands, damages, actions, costs, including
attorney fees, and charges to which the Lessor may have to pay
for reason of any injury to any person(s) or person's property,
or loss of life or property resulting from or in any way
connected with the Lessee's operations or the character,
condition or use of the structures, premises or any means of
ingress thereto or ingress there from described herein, unless
such injury or loss arise directly from the negligence of the
Lessor, any of its departments or agents or any of its officers,
agents or employees while acting within the scope of their
employment. The Lessee shall, at its sole expense, assure the
defense of any such claims and actions for damage arising out
of such injuries or loss which may be bought against the Lessor
by third persons and shall pay judgment which may be rendered in
any such actions.
p. The Lessee shall permit employees, servants and agents of the
Lessor to enter upon the leased premises at all reasonable
times during the term of this lease for the purposes 'of
inspecting the leased premises and monitoring the Lessee's
compliance with the terms and conditions of this lease
agreement,
q. The Lessee shall not voluntarily, involuntarily or by operation
of law assign, transfer, mortgage or otherwise encumber all or
any part of the premises.
r. The Lessee agrees to conform to all laws and applicable
regulations prohibiting discrimination against any employee or
applicant for employment because of race, color, religion, sex,
national origin, age (except as provided by law), marital
status, political affiliation or disability.
s. All ad valorem taxes which may be imposed by the State of
Kentucky and its political subdivisions upon the Facility and
equipment of the Lessee in or upon the premises shall be paid
promptly by the Lessee.
t. To pay Lessor, as rent for the above-described premises, the sum
of Three Thousand Four Hundred Dollars ($3,400.00) per month
2. The Lessor agrees that:
a. The Lessor will perform periodic on-site monitoring to assure
the Lessee's compliance with the terms and conditions of the
lease agreement.
b. The Lessor shall be responsible for informing the Lessee of any
changes to current codes or standards set by the State Fire
Xxxxxxxx'x Office and that of the Kentucky Occupational Safety
and Health Standards Board.
3. The period within which this agreement is in effect is from March 1,
2003, through February 29, 2008 The lease shall be automatically
renewable annually for up to four years, subject to termination and
renewal rights, however, the monthly rent during each renewal term \
shall be negotiated by the parties.
4. Either party shall have the right to terminate this agreement by
giving sixty (60) days written notice, served upon the other party
by certified or registered mail with return receipt requested. In
addition, either party may terminate this agreement immediately for
cause upon written notice served upon the other party by registered
or certified mail with return receipt requested.
5. Choice of Law and Forum Provision: All questions as to the
execution, validity, interpretation and performance of this
agreement shall be governed by the laws of the Commonwealth of
Kentucky. Furthermore, the parties hereto agree that any legal
action which is brought on the basis of this agreement shall be
filed in the Xxxxx County Circuit Court of the Commonwealth of
Kentucky.
PREMIER FINANCIAL BANCORP, INC. CITIZENS BANK OF KENTUCKY
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxx
---------------------------- ------------------------------
Xxxxxx X. Xxxxxx
President and C.E.O. President & C.E.O.
JKM PARTNERSHIP LEASE AGREEMENT
This Lease Agreement is made and entered into between JKM PARTNERSHIP, of
00 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000, hereinafter referred to as Lessor,
and Citizens Bank. Kentucky company of 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, hereinafter referred to as Lessee.
ARTICLE ONE
Leased Premises
The subject matter of this Lease Agreement consists of a designated area of
real property located at 000 -000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000 and described as Office Suite Number 105 .
The subject number if this Lease Agreement is hereinafter referred to as
the "Leased Premises."
ARTICLE TWO
Term, Rent and Late Charges
Unless earlier terminated as provided for herein, Lessor hereby leases the
Leased Premises to Lesses for a period of two (2) year period commencing on
September 1, 2002 and ending on August 31, 2004. Rent shall be in the amount of
$583.00. Lessee shall have the option to renew this lease agreement for an
additional two (2) year period, with the rent to increase to $624.00 per month
upon the same terms and conditions set forth herein.
All rental payments shall be made payable to Lessor at 00 Xxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxx 00000, or at such other address as Lessor may designate.
ARTICLE THREE
which the Lessor may incur by reason of any default by the Lessee; The Lessor
shall repay to the Lessee the security deposit or any balance thereof upon the
termination, or expiration of the term of this lease or renewal period thereof,
provided there is no failure in payment of rent or other sum, or of any default
by the Lessee, in which event, the Lessor shall have the right to apply the
security deposit against any loss, cost, fees and expense caused thereby. The
security deposit shall bear no interest.
ARTICLE FOUR
Utilities
Lessor shall be responsible for payment of all gas, water and electric
utilities on or about the Leased Premises- Lessee shall be responsible for and
telephone options and telephone utilities and shall apply for such in Lessee's
own name.
ARTICLE FIVE
Alterations and Improvements
Lessee may not make additional alterations or improvements to the Premises
without the prior written consent of Lessor. All such alterations or improvement
for which consent is obtained shall be at Lessee's sole cost and expense. All
such alterations and improvements shall become the property of the Lessor,
unless otherwise agreed to in writing. Lessee agrees that any and all
alterations or improvements shall be made in compliance with the building codes
and ordinances, laws, and regulations applicable to the Leased Premises. It is
understood the Lessee may maintain appropriated signs on or about the Leased
Premises, the location of which is subject to the consent of Lessor- If a
building or other permit is required by the Lessee to accomplish any of the
improvements referred to herein, Lessee agrees to execute all documents required
to obtain such permits with the cost of obtaining such to be paid by Lessee.
ARTICLE SIX
Assignment and Subletting
Lessee may not sublet the Premises or assign this Lease without Lessor's
written consent. In the event of any assignment or subletting by Lessee as
approved by Lessor, Lessee shall remain liable as a guarantor of any of the
obligations which may be assumed by any assignee of this Lease.
ARTICLE SEVEN
Parking Spaces
Lessee shall be entitled to the use of two (2) designated parking spaces on
the Leased Premises. No additional parking spaces shall be utilized by Lessee,
except with the written consent of Lessor.
ARTICLE EIGHT
Indemnification; Risk of Loss; Insurance
Lessee agrees to indemnify, compensate, save and hold Lessor harmless from
any and all claims, damages, and liability whatsoever resulting from or arising
out of, injury to, and death of any person and damage and destruction of any
property, in or about the Leased Premises, unless due to the fault of the
Lessor, its employees, agents, invitees, and licensees. The risk of loss for all
contents and property of any nature which belong to the Lessee, wherever located
on or about the Leased Premises, is on Lessee. The Lessee waives any and all
claims against Lessor for loss of damage due to fire, explosion, water damage
from flooding or bursting pipes, windstorm, or other casualty if the cause
thereof is not due to the negligence or willful conduct of omission of the
Lessor, its agents, employees, invitees, or licensees.
Lessee shall, at Lessee's sole cost and expense carry public liability and
property damage insurance sufficient to insure against accidents and injuries to
persons or property in or about the Leased Premises. Lessee shall provide proof
of such coverage to Lessor upon request.
ARTICLE NINE
Condition of Property
Unless otherwise specifically provided for herein. Lessee accepts the
present condition of the Leased Premises, improvements, common areas, and any
equipment on or in the Leased Premises as they exist upon commencement of the
Lease, No representation, statement or warranty, express or implied, other than
in writing has been made by or on behalf of the Lessor as to the condition of
the property or as to the use that may be made of such property.
ARTICLE TEN
Use
The Leased Premises are to be used for the purpose of storage of bank
records. Any other use is prohibited except with the express written consent of
Lessor. Lessee agrees the Lessor will not conduct or permit to be conducted on
the Premises any unlawful act or ant act that creates a disturbance or nuisance
to other tenants or their invitees. Lessee shall be responsible to obtain any
certificate of Occupancy or any other license, permit, or Certificate of
Registration as required by any local, state, or federal regulatory agency to do
business as may be required by law.
ARTICLE ELEVEN
Condition, Repairs, and maintenance of Premises
Lessee agrees that Lessee shall keep and maintain the Leased Premises in
good repair and return same to Lessor a the expiration of the lease term in the
same condition, ordinary wear and tear excepted. Lessee shall be responsible for
placing its trash in an appropriate trash container, placing it on the street
for weekly trash pick up, and returning the container to an appropriate place
designated for the tenants' trash containers. Lessor will supply paper products
and soap for the restroorn.
Lessor shall be responsible for maintaining and keeping the exterior of the
Leased Premises and common areas (parking lots, sidewalks and landscaped areas )
clean and free of trash and debris. At all times during Lessee's occupancy of
the Leased Premises, Lessor shall promptly, upon notice from Lessor, perform
reasonable repairs to the exterior of the Leased Premises and common areas.
Necessary repairs relating to the air conditioning, heating, ventilating, and
plumbing systems therein, as well as the replacement of such heating, air
conditioning, and plumbing systems shall be done by Lessor unless such is caused
by the negligence of Lessee, in which event Lessee shall bear full
responsibility for such repairs or replacements. Lessee shall keep the Leased
premised clean and shall not permit any waste upon the Leased Premises. In the
event the Leased Premises shall become, in the opinion of the Lessor, in such
condition as to prevent normal business operations in or on the Leased Premises,
Lessor, at its option may cause the Leased Premises to be cleaned and/or
repaired, and the cost of the same shall be born by the Lessee and shall become
immediately due and payable to the Lessor,
ARTICLE TWELVE
Surrender and Holding Over
Lessee shall surrender the Leased Premises to Lessor on expiration of this
Lease or termination of the Lease as provided for herein. At time surrender, the
Premises shall be returned in the same condition as when received, normal wear
and tear excepted. If Lessee Holds the Leased Premises after termination of this
Lease, a tenancy from month to month shall be created thereby at a monthly
rental to be agreed upon by the parties, but at no less than $625.00 per month,
and the acceptance of the rental payments by Lessor will not extend the term of
the Lease in any manner.
ARTICLE THIRTEEN
Destruction of the Premises
In the event of a partial destruction of the Leased premises during the
term for any cause. Lessor may at its option repair the same, provided the
repairs can be made within sixty (60) days under the laws and regulations of
applicable governmental authorities. Any partial destruction shall neither annul
nor void this Lease, except that Lessee shall be entitled to a proportionate
reduction being based on the extent to which the making of repairs shall
interfere with the practice carried on by the Lessee on the Premises. In the
event that Lessor does not elect to or cannot make repairs in the specified
time, or those repairs cannot be made under the laws and regulations of the
applicable governmental authorities, this Lease may be terminated at the option
of either party.
ARTICLE FOURTEEN
Default by Lessee
If Lessee fails refuses to perform or observe any other obligation imposed
upon it under this Lease and such failure or refusal continues for a period of
thirty (30) days after written notice by Lessor to Lessee specifying with
particularity the nature of such failure or refusal then. Lessee shall be
considered in the default and Lessor may, at its option and by giving Lessee a
notice of termination, avail itself of any or all of the following:
A. Declare this lease terminated;
B. Declare Lessee's right to possession of the Leased Premises terminated.
C. Xxx for damages and any other actions allowed by law, in which event
Lessor shall be entitled to cover its attorney's fees and consist in
bringing such action from Lessee (jointly and severally if more than
one Lessee).
ARTICLE FIFTEEN
Notices
Any written notice provided to given under this Lease to Lessor shall be
given to JKM PARTNERSHIP, 00 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000, and any
notice given to Lessee shall be given by transmitting the notice to Lessee at
the Leased Premises.
Lessee shall advise Lessor forty five (45) days prior to this Lease's
expiration date of the Lessee's intentions to cancel, renew or exercise the
options available in this agreement.
ARTICLE SIXTEEN
Right of Entry
Lessor may enter the Leased Premises during reasonable hours and upon
providing Lessee with reasonable notice for the purpose of making inspections,
repairs, alterations, or improvements connected with any portion of the Leased
Premises.
ARTICLE SEVENTEEN
Quiet Enjoyment
Subject to any limits of Lessor's leasehold interests, Lessor covenants and
agrees that Lessee, so long as Lessee is not be in default hereunder, shall
peacefully and quietly hold, occupy and enjoy the Leased Premises during the
term of this Lease.
LESSOR: JMK PARTNERSHIP
BY: /s/ Xxxxxx Xxxxxxx
----------------------------------
Xxxxxx Xxxxxxx, Partner
BY: /s/ Xxxxx X. Xxxx
----------------------------------
Xxxxx X. Xxxx, Partner
BY: /s/ E. Xxxxxx Xxxx
----------------------------------
E. Xxxxxx Xxxx, Partner
LESSEE: CITIZENS BANK
BY: /s/ Xxxxxx X. Xxxxxxxxxxxx
----------------------------------
XXXXXX X. XXXXXXXXXXXX
BY:
----------------------------------
Witness
STATE OF KENTUCKY
COUNTY OF XXXXX
The forgoing instrument was subscribed, sworn to, and acknowledged before
me on behalf of the Lessor, JMK PARTNERSHIP, by Xxxxxx Xxxxxxx, Xxxxx X. Xxxx,
and E. Xxxxxx Xxxx, its general partners, on this 20th day of Nov., 2002.
---- ----
My commission expires: 5/27/05 /s/ Xxxxx Xx Xxxxx
---------------- ---------------------------
NOTARY PUBLIC
STATE OF KENTUCKY
COUNTY OF XXXXX
--------------
The foregoing instrument was subscribed, sworn to, and acknowledged before
me by Xxxxxx X. Xxxxxxxxxxxx, Pres. of Citizens Bank, the Lessee, on this 20th
day of November , 2002. Witness ----
----------
My commission expires: 5/27/05 /s/ Xxxxx Xx Xxxxx
---------------- ---------------------------
NOTARY PUBLIC
SCHEDULE 3.2(b)(ii)
1) E Funds Agreement dated June 6, 2003 (Standard Terms and Conditions,
Section 16)
2) Check Products Purchase Agreement dated November 6, 2002 between
Xxxx X. Xxxxxxx Company and Premier (Section 12)
3) Copyrighted and Works Licensing Agreement
Electronic Form and Documents dated October 21, 2003 between Premier
and BISYS Retirement Services, Inc.
SCHEDULE 3.13
Tax Allocation Agreement dated June 26, 2003 between Premier and Bank.
SCHEDULE 3.15
1) Memorandum of Understanding between the board of directors of Bank, the
Commissioner of the Kentucky Department of Financial Institutions and
the Atlanta Regional Director of the Federal Deposit Insurance
Corporation dated September 11, 2002.
2) Reports of Joint Examinations conducted by the Federal Deposit
Insurance Corporation and the Kentucky Department of Financial
Institutions dated June 3, 2002 and June 23, 2003.
SCHEDULE 3.17
EMPLOYEE BENEFIT PLANS
a) Employee Benefit Summary
i) Medical Insurance ii) Flex Dollars iii) Life Insurance iv) Long term
disability v) 401(k)
b) Plan Document for Health Insurance Plan
c) Group Life and Accidental Death and Dismemberment Insurance Program
d) Policy Schedule - Anthem Life/Life Insurance
e) Jefferson Pilot Long Term Disability
f) Premier Financial Bancorp, Inc. 401(k) Profit Sharing Plan
g) Employee Benefits 1/1/02 - 12/31/03
i) Education Reimbursement Plan
ii) Hospital and Medical Insurance Coverage
iii) Disability Income Protection Plan
iv) Life Insurance
v) Retirement Plan
vi) Sick Leave
vii) Family and Medical Leave Absence
viii) Personal Leave
ix) Marriage Leave
x) Death in Family
xi) Military Leave
xii) Holidays
xiii) Vacation Policy
h) Your Employee Benefits Effective 1/1/2004
i) Vacation Time
ii) Sick Leave
iii) Paid Personal Time
iv) Holidays
v) Educational Assistance
vi) Long-Term Disability
vii) Life Insurance
viii) 401-K
ix) Family and Medical Leave
x) Bereavement Leave
xi) Military Leave
xii) Jury Duty
xiii) Benefit Continuation (COBRA)
SCHEDULE 3.18
(i) Deferred Compensation Agreement dated December 17, 1992 between the
Bank and Xxxxxxx X. Xxxxxx.
(ii) Contracts relating to the borrowing of money which "affect" Bank by
virtue of pledge of Bank Shares:
(i) Fifth Third Bank Term Note in original principal amount of
Six Million Dollars ($6,000,000) dated October 15, 2002 and
related Fifth Third Bancorp Bank Pledge Agreement (Securities)
dated October 15, 2002 between Premier and Fifth Third Bank.
(iii) Contracts which will not be performed within 60 days of date of
Agreement involving future payments by Bank in excess of $5,000:
(A) Memorandum of Understanding for Lease Agreement dated June 10,
2003 between Premier and Bank regarding 000 X. Xxxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx.
(B) Lease Agreement between JKM Partnership and Bank dated
November 20, 2002 regarding 000-000 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx.
