Exhibit 2(b)
SUPPLEMENTAL AGREEMENT
THIS SUPPLEMENTAL AGREEMENT (this "Agreement") is made as of July 20,
2004, among OAK HILL FINANCIAL, INC., an Ohio corporation ("Oak Hill
Financial"), OAK HILL BANKS, a banking corporation chartered under the law of
Ohio ("Oak Hill Banks"), and THE XXXXXX NATIONAL BANK, a national bank
association chartered under the law of the United States ("Xxxxxx National").
RECITALS
A. Oak Hill Financial, Inc. is a registered bank holding company under the
Bank Holding Company Act of 1956, as amended. Oak Hill Banks is a wholly owned
subsidiary of Oak Hill Financial.
X. Xxxxxx National is a national bank association chartered under the law
of the United States.
C. Concurrently with the execution and delivery of this Agreement, Xxxxxx
National and Oak Hill Banks are entering into an Agreement and Plan of Merger
(the "Merger Agreement"), which provides for the merger of Oak Hill Banks into
Xxxxxx National in accordance with the terms and conditions contained in the
Merger Agreement and in this Agreement (the "Merger").
D. The parties hereto desire to enter into this Agreement for the purpose
of setting forth certain representations, warranties, and covenants made by each
party as an inducement to the other parties to execute and deliver the Merger
Agreement and to consummate the Merger and to set forth certain additional terms
and conditions applicable to the Merger.
AGREEMENT
In consideration of the foregoing and of the mutual promises contained
herein, the parties agree as follows:
SECTION 1. DEFINITIONS
1.01 Definitions Contained Elsewhere in this Agreement. For the purposes
of this Agreement, the following terms shall have the meanings assigned to them
in the preamble and Recitals of this Agreement:
(a) this "Agreement";
(b) "Xxxxxx National";
(c) "Oak Hill Banks";
(d) "Oak Hill Financial";
(e) the "Merger"; and
(f) the "Merger Agreement".
1.02 Definitions Contained in the Merger Agreement. For the purposes of
this Agreement, the following terms shall have the meanings assigned to them in
the Merger Agreement:
(a) the "Effective Date";
(b) the "Effective Time";
(c) the "Dissenters' Rights Law";
(d) "Xxxxxx National Common";
(e) "Xxxxxx Preferred"; and
(f) "Dissenting Share."
1.03 Other Definitions. For the purposes of this Agreement, certain other
terms shall be defined as follows:
(a) an "Acquisition Proposal" means an inquiry received from, or an
offer or proposal made by or on behalf of, any other corporation, firm,
association, person, or other entity relating to (i) the possible acquisition of
more than 25 percent of the shares of the capital stock of Xxxxxx National,
including, but not limited to, an exchange or tender offer therefor, (ii) the
possible acquisition of a majority of the assets of Xxxxxx National, (iii) a
merger or consolidation involving Xxxxxx National, other than a transaction in
which Xxxxxx National will be the owner of all of the stock of the surviving
corporation following the transaction, or (iv) a merger or consolidation
involving Xxxxxx National, other than a transaction in which Xxxxxx National
will be the surviving corporation and the current shareholders of Xxxxxx
National will be the owners of a majority of the stock of the surviving
corporation following the transaction;
(b) an "Affiliate" of a party means a director, officer, employee,
agent, or adviser of such party;
(c) "BIF" means the Bank Insurance Fund of the FDIC;
(d) "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended;
(e) the "Code" means the Internal Revenue Code of 1986;
(f) the "Financial Statements" mean the consolidated financial
statements of Xxxxxx National, consisting of a balance sheet as of June 30,
2004, and statements of income, cash flows, and changes in stockholders' equity
for the six-month period beginning January 1, 2004, and ending June 30, 2004,
prepared in accordance with generally accepted accounting standards consistently
applied in the United States by a certified public accountant holding a valid
permit to practice accounting in Ohio;
(g) "Confidential Information" of or relating to a party means any
and all information received from or on behalf of such party or their Affiliates
concerning the Merger, the terms of this Agreement or the Merger Agreement, or
the assets, business, operations, or financial condition of such party or their
Affiliates, unless and to the extent that any such information is in the public
domain;
(h) "CRA" means the Community Reinvestment Act of 1977, as amended;
(i) the "Division of Financial Institutions " means the Division of
Financial Institutions, Ohio Department of Commerce;
(j) "Employee Benefit Plans" means any and all "employee benefit
plans" or "welfare benefit plans" as defined in ERISA;
(k) "Environmental Law" means CERCLA, the Resource Conservation and
Recovery Act, the Hazardous Materials Transportation Act, the Toxic Substances
Control Act, the Federal Water Pollution Control Act, the Clean Water Act, the
Clean Air Act, regulations promulgated thereunder, and any other federal, state,
county, municipal, local, foreign, provincial, or other statute, law, ordinance,
or regulation which may relate to or deal with human health or the environment,
all as may be amended from time to time;
(l) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended;
(m) "FDIC" means the Federal Deposit Insurance Corporation;
(n) the "Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or its delegate;
(o) "Hazardous Substances" means (i) any "hazardous substance" as
defined in Section 101(14) of CERCLA or regulations promulgated thereunder; (ii)
any "solid waste," "hazardous waste," or "infectious waste," as such terms are
defined in any other Environmental Law; (iii) asbestos, urea-formaldehyde,
polychlorinated biphenyls (PCBs), nuclear fuel or material, chemical waste,
radioactive material, explosives, known carcinogens, petroleum products and
by-products, and other dangerous, toxic, or hazardous pollutants, contaminants,
chemicals, materials, or substances listed or identified in, or regulated by,
any Environmental Law; and (iv) any other substances or materials which are
classified or considered to be hazardous or toxic under any Environmental Law;
(p) "Knowledge" as used herein shall mean those facts that are known
or should reasonably have been known after due inquiry by the President, or any
Senior or Executive Vice President of any party hereto;
(q) "Litigation Reserve" means the fund established pursuant to
Section 8.10 hereof.
(r) "Oak Hill Financial's Reimbursed Expenses" means certain
expenses to be reimbursed to Oak Hill Financial by reducing the Merger proceeds
as provided in this Agreement and in the Merger Agreement.
(s) "OCC" means the Office of the Comptroller of the Currency;
(t) a "Principal Shareholder" of a party means a person who owns
five percent or more of the outstanding shares of any class of the capital stock
of such party;
(u) the "Real Property" means any and all real property owned or
leased by Xxxxxx National, as appropriate, as of the date of this Agreement or
acquired at any time after the date of this Agreement and prior to the Effective
Time, together with any and all improvements thereon;
(v) the "Xxxxxx Disclosure Memoranda" means those memoranda
delivered to representatives of Oak Hill Financial as of the date of this
Agreement as the same has been amended and supplemented in writings delivered to
Oak Hill Financial through the date of this Agreement, and as the same may
subsequently be amended prior to the Effective Date;
(w) the "SEC" means the Securities and Exchange Commission;
(x) "Starting Date" shall mean the date of this Agreement; and
(y) an "Unsolicited Acquisition Proposal" means a written
Acquisition Proposal that is received by Xxxxxx National or made public by or on
behalf of the proponent of such Acquisition Proposal without any solicitation of
such proposal by any director, officer, Principal Shareholder, employee, agent,
or other person acting on behalf of Xxxxxx National.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF XXXXXX NATIONAL
Xxxxxx National represents and warrants to Oak Hill Financial and Oak Hill
Banks that, except as set forth in the Xxxxxx Disclosure Memoranda:
2.01 Organization and Authority. Xxxxxx National is a national bank
association duly organized, validly existing, and in good standing under the
laws of the United States, is duly qualified to do business and is in good
standing in all jurisdictions where its ownership or leasing of property or the
conduct of its business requires it to be so qualified, and has the power and
authority to own its properties and assets, to carry on its business as it is
presently being conducted, and, subject to the approval of its shareholders, and
to the filing of all requisite regulatory applications and notices and the
receipt of all requisite regulatory approvals, to enter into and carry out its
obligations under this Agreement and under the Merger Agreement.
2.02 Capitalization. The authorized capital stock of Xxxxxx National
consists of 10,000 shares of Xxxxxx National Common, of which 10,000 shares were
issued and outstanding as of the date of this Agreement and 20,500 shares of
Xxxxxx National Preferred, of which 20,500 shares were issued and outstanding as
of the date of this Agreement. All of the outstanding shares of Xxxxxx National
Common and Xxxxxx National Preferred are duly and validly authorized, issued,
and outstanding and are fully paid and nonassessable. There are no existing
options, warrants, or commitments of any kind which might require the issuance
by Xxxxxx National of any additional shares of Xxxxxx National Common, Xxxxxx
National Preferred or other equity securities of Xxxxxx National.
2.03 Subsidiaries. The Xxxxxx Disclosure Memoranda lists all corporations
in which Xxxxxx National owns, directly or indirectly, five percent or more of
any class of capital stock as of the date of this Agreement, and indicates, with
respect to the equity securities of each such corporation as of such date, the
number of shares of each class authorized, the number of shares outstanding, and
the number of shares owned or controlled directly or indirectly by Xxxxxx
National, Xxxxxx National does not own, directly or indirectly, more than fifty
percent (50%) of the capital stock of any other corporation. There are no
options, contracts, commitments, understandings, or arrangements by which Xxxxxx
National is bound to issue additional shares of its equity securities. Xxxxxx
National is a national banking association and its deposits are insured up to
the applicable limits by the BIF.
2.04 Directors, Officers, and Principal Shareholders. The Xxxxxx
Disclosure Memoranda contains a true and complete list of all directors,
executive officers, and Principal Shareholders of Xxxxxx National.
2.05 Authorization. The execution, delivery, and performance of this
Agreement and the Merger Agreement by Xxxxxx National, and the consummation of
the transactions contemplated hereby and thereby have been duly approved by the
Board of Directors of Xxxxxx National, subject to the adoption of the Merger
Agreement and this Agreement by the shareholders of Xxxxxx National; and subject
to applicable regulatory approvals and expiration of waiting periods, if any.
2.06 Absence of Defaults. Neither the execution and delivery of this
Agreement or the Merger Agreement, nor the consummation of the Merger, nor
compliance by Xxxxxx National with any provisions hereof or thereof will
conflict with or result in a breach of any provisions of the articles or
certificate of incorporation, regulations, bylaws, or other charter documents of
Xxxxxx National or result in a material breach or termination of, or accelerate
the performance required by, any note, bond, mortgage, lease, agreement, or
other instrument to which Xxxxxx National is a party or by which Xxxxxx National
may be bound.
2.07 Financial Statements. Xxxxxx National has delivered its Financial
Statements to Oak Hill Financial. The Financial Statements fairly present the
financial position, results of operations, and cash flows of Xxxxxx National at
the dates shown and for the periods indicated in conformity with generally
accepted accounting principles applied on a consistent basis. There are no
obligations or liabilities, whether absolute, accrued, or contingent (including,
without limiting the generality of the foregoing, liabilities for taxes), of
Xxxxxx National which are required in conformity with generally accepted
accounting principles to be reflected or disclosed in the Financial Statements
which have not been or will not be so reflected or disclosed.
2.08 Title to Properties.
(a) The Xxxxxx Disclosure Memoranda sets forth a complete and
correct list of all of the Real Property. Xxxxxx National has good and
marketable title to all of the Real Property listed as owned by it in the Xxxxxx
Disclosure Memoranda and valid leasehold interests in all of the Real Property
listed as leased by it in the Xxxxxx Disclosure Memoranda, free and clear of any
liens and encumbrances except taxes and assessments not delinquent and utility
and other easements that do not interfere with the use of the property for the
business being conducted thereon. The Real Property and the present use thereof
by Xxxxxx National do not violate any local zoning or similar land use laws, any
governmental regulations, or any restrictive covenants. To the knowledge of
Xxxxxx National, after reasonable investigation, (i) the Real Property and the
use thereof by Xxxxxx National do not encroach upon any property owned by any
other person, and (ii) no property owned by any other person encroaches upon any
of the Real Property.
(b) Complete and correct copies of all deeds and leases relating to
the Real Property are included in the Xxxxxx Disclosure Memoranda.
(c) Each item of the personal property owned by Xxxxxx National,
including without limitation all contractual rights and assets reflected in the
Financial Statements or acquired after June 30, 2004 (except for assets sold or
otherwise disposed of in the ordinary course of business since such date or
assets which, either individually or in the aggregate, are not material to the
operations or financial condition of Xxxxxx National), is owned by Xxxxxx
National, free and clear of any lien or encumbrance, except for portions of the
investment portfolio pledged for public deposits.
2.09 Absence of Undisclosed Liabilities. Except to the extent reflected or
reserved against on the Financial Statements, Xxxxxx National has no
liabilities, whether absolute, accrued, contingent, or otherwise, due or to
become due, including without limitation any liabilities as guarantor under any
guaranty or liabilities for taxes, except liabilities and taxes incurred in the
ordinary course of business, which have had or will have a material adverse
effect on the business, financial condition, or results of operations of Xxxxxx
National.
2.10 Absence of Certain Changes. Since June 30, 2004, without the consent
of Oak Hill Financial or except as otherwise shown on the Xxxxxx Disclosure
Memoranda Xxxxxx National has not:
(a) made or permitted to be made any changes in its capital or
corporate structure, certificate or articles of incorporation, regulations,
bylaws, or other charter documents;
(b) merged with any other corporation or bank, or permitted any
other corporation or bank to merge into or consolidate with either of them;
acquired control over any other firm, bank, corporation, or organization; or
created any subsidiaries;
(c) issued, sold, delivered, or agreed to issue, sell, or deliver
any additional shares of its capital stock or any options, warrants, or rights
to acquire any such capital stock, or securities convertible into or
exchangeable for such capital stock, except for capital stock issued pursuant to
the exercise of stock options previously issued, in accordance with their
respective terms;
(d) purchased, sold, transferred, or otherwise acquired or disposed
of, or agreed to purchase, sell, transfer, acquire, or dispose of, any capital
stock or other securities of any kind, or options or other rights to acquire any
such securities, of any other entity (including, but not limited to, any such
transactions involving Xxxxxx National with respect to the capital stock or
other securities), other than in the ordinary course of business;
(e) incurred any indebtedness, obligations, or liabilities, whether
absolute, accrued, contingent, or otherwise, including, without limitation,
liabilities as guarantor under any guaranty, other than indebtedness,
obligations, and liabilities incurred in the ordinary course of its business or
incurred under the contracts and commitments referred to in Section 2.18 hereof;
(f) issued as borrower any promissory notes, guarantees, or other
evidences of indebtedness, other than in the ordinary course of business;
(g) forgiven or cancelled any indebtedness or contractual
obligation, other than in the ordinary course of business;
(h) mortgaged, pledged, or subjected to any lien or lease any of its
assets, tangible or intangible, or permitted or suffered any such asset to be
subjected to any lien or lease, other than in the ordinary course of business;
(i) purchased, sold, transferred, liquidated, or otherwise acquired
or disposed of any assets or properties, or entered into any contract for any
such purchase, sale, transfer, liquidation, acquisition, or disposition, other
than in the ordinary course of business;
(j) entered into any lease of real or personal property, other than
in the ordinary course of business;
(k) declared, paid, made, or set apart any sum or property for, any
dividend or other distribution, or otherwise paid or transferred any funds or
property to its shareholders, except as contemplated in this Agreement or in the
Merger Agreement;
(l) increased the wages, salaries, compensation, pension or other
fringe benefits, or perquisites payable to any executive officer in effect as of
June 30, 2004, or granted any severance or termination pay, or entered into any
contract to make or grant any severance or termination pay, or entered into any
employment or consulting contract which is not terminable by Xxxxxx National,
without cause and without penalty, upon notice of 30 days or less;
(m) made any loans or loan commitments, other than in the ordinary
course of business, to any director, officer, or Principal Shareholder (or any
person or business entity controlled by or affiliated with such director,
officer, or Principal Shareholder);
(n) modified, altered, amended, terminated, or withdrawn from
participation in any Employee Benefit Plan or any other plan or benefit provided
to one or more employees, or paid or distributed any sum from any such plan
except to participants in the ordinary course of the operation of the plan, or
made any payment or contribution to any such plan except as required by the
terms of such plan or consistent with past practices;
(o) entered into any transaction involving the expenditure of more
than $50,000, other than in the ordinary course of business, except pursuant to
and in accordance with the terms of the contracts and commitments referred to in
Section 2.18 hereof;
(p) adopted any change in any accounting policy or method;
(q) revalued any asset or adjusted any reserve other than in the
ordinary course of business;
(r) failed to keep in full force and effect insurance and bonds at
least equal in amount and scope of coverage to the insurance and bonds carried
on June 30, 2004;
(s) suffered any material adverse change in its business, financial
condition, income, assets, or liabilities;
(t) suffered any damage, destruction, or loss (whether or not
covered by insurance) which has had a material adverse effect, in any case or in
the aggregate, on its business, financial condition, operations, projects,
properties, or assets;
(u) suffered any strike, work stoppage, slow-down, or other labor
disturbance; or
(v) suffered any loss of employees or customers which has had a
material adverse effect on its business, operations, or prospects.
2.11 Taxes. Xxxxxx National has filed or caused to be filed all federal
and other tax returns which are required to be filed and have paid or made
provision for payment of all taxes shown as due on such returns. No deficiencies
for any tax, assessment, or governmental charge have been proposed, asserted, or
assessed against Xxxxxx National that have not been settled and paid. The
federal income tax returns of Xxxxxx National have not been examined by the
Internal Revenue Service for any of the ten years preceding the date of this
Agreement.
2.12 Labor Matters. Xxxxxx National is not a party to any collective
bargaining or other union agreement with any of its employees, or is involved in
any labor dispute.
2.13 Litigation. There is no action, suit, proceeding, or claim by any
governmental agency or other person or entity nor any investigation by any
governmental agency pending or, to the Knowledge of Xxxxxx National, threatened
against (i) Xxxxxx National, (ii) the assets, business, or goodwill of Xxxxxx
National, or (iii) any director, officer, or Principal Shareholder of Xxxxxx
National, in relation to the business of Xxxxxx National or any such person's
capacity as a director, officer, or Principal Shareholder of Xxxxxx National.
Xxxxxx National knows of no basis or grounds for any such action, suit,
proceeding, claim, or investigation. Xxxxxx National is not subject to any
supervisory agreement, consent order or decree, cease and desist order, or other
restriction on the business or assets of Xxxxxx National, except a consent order
issued by the OCC on April 20, 2004 (the "Consent Order").
2.14 Environmental Matters.
(a) To the Knowledge of Xxxxxx National, Xxxxxx National is and has
been at all times in substantial compliance with all applicable Environmental
Laws and Xxxxxx National has not engaged in any activity resulting in a material
violation of any applicable Environmental Law. No orders, hearings, actions, or
other proceedings by or before any court or governmental agency in which Xxxxxx
National is a party are pending or, to the Knowledge of Xxxxxx National,
threatened in connection with any alleged violation of any applicable
Environmental Law (i) by Xxxxxx National or (ii) in relation to any part of the
Real Property and Xxxxxx National has no Knowledge of any investigations or
inquiries with respect to any such alleged violation. No claims have been made
or, to the Knowledge of Xxxxxx National, threatened at any time by any third
party against Xxxxxx National relating to damage, contribution, cost recovery,
compensation, loss, or injury resulting from any Hazardous Substance. To the
Knowledge of Xxxxxx National, Xxxxxx National has not caused or permitted any
Hazardous Substance to be integrated into the Real Property or any component
thereof in such manner or quantity as may reasonably be expected to or in fact
would pose a threat to human health or the value of the Real Property. None of
the Real Property has been used by Xxxxxx National for the storage or disposal
of Hazardous Substances nor to the Knowledge of Xxxxxx National, is any of the
Real Property contaminated by any Hazardous Substance. To the Knowledge of
Xxxxxx National, none of the Real Property has in the past contained or
presently contains any underground storage tanks. To the Knowledge of Xxxxxx
National, Xxxxxx National has no interest, direct or indirect, in any property
owned by a third party which has been contaminated by Hazardous Substances
(excluding any property as to which the sole interest of Xxxxxx National is that
of a lien holder or mortgagee, but including any property as to which title has
been taken by Xxxxxx National pursuant to mortgage foreclosure or similar
proceeding and any property as to which Xxxxxx National has participated in the
financial management to a degree sufficient to influence the property's
treatment of Hazardous Substances).
(b) To the Knowledge of Xxxxxx National, the representations set
forth in paragraph (a) above are also true and correct in relation to any and
all real property owned or leased by it at any time prior to the date of this
Agreement, together with any improvements located thereon.
2.15 Community Reinvestment Act Compliance. Xxxxxx National is in
compliance with the applicable provisions of the CRA and the regulations
promulgated thereunder, and has received a CRA rating of satisfactory or better
from the OCC. Xxxxxx National knows of no fact or circumstance or set of facts
or circumstances which
would cause Xxxxxx National to fail to comply with such provisions or to cause
the CRA rating of Xxxxxx National to fall below satisfactory, except as
described in the Consent Order.
2.16 Compliance with Laws. Xxxxxx National holds all permits, licenses,
certificates of authority, orders, and approvals of, and have made all filings,
applications, and registrations with, all governmental or regulatory bodies that
are required in order to permit it to carry on its respective businesses as they
are presently conducted. To the Knowledge of Xxxxxx National, Xxxxxx National
has conducted its businesses so as to comply in all material respects with all
applicable statutes, regulations, rules, and orders, except as described in the
Consent Order.
2.17 Information Provided by Xxxxxx National. None of the information
supplied or to be supplied by Xxxxxx National for inclusion in the application
for approval, or any other document to be filed with the FDIC, the OCC, the
Federal Reserve Board, the Division of Financial Institutions, the SEC, or any
other federal or state regulatory authority in connection with the transactions
contemplated herein or in the Merger Agreement is or will be false or misleading
with respect to any material fact, or omits or will omit any material fact
necessary in order to make the statements therein not misleading.
2.18 Material Contracts.
(a) The Xxxxxx Disclosure Memoranda contains a complete and correct
list of all written or oral agreements, leases, and other obligations and
commitments of the following types, to which either Xxxxxx National is a party,
by which Xxxxxx National or any of its property is bound, or which has been
authorized by Xxxxxx National:
(i) promissory notes, guaranties, mortgages, security
agreements, or other evidences of indebtedness of Xxxxxx National;
(ii) partnership or joint venture agreements;
(iii) employment, bonus, compensation, severance, or
consulting agreements;
(iv) collective bargaining agreements;
(v) Employee Benefit Plans and any other plans, benefits,
programs of benefits, or deferred compensation arrangements for the
benefit of directors, employees, or former or retired employees;
(vi) agreements or commitments for sale (other than in the
ordinary course of business) of assets exceeding $50,000 in the aggregate;
(vii) agreements or commitments for capital expenditures in
excess of $50,000 in the aggregate;
(viii) agreements or other documents creating liens or
security interests relating to any real or personal property owned,
rented, or leased by Xxxxxx National and used in connection with the
business of such entity;
(ix) leases of, commitments to lease, and other agreements
relating to the lease or rental of, real or personal property by Xxxxxx
National and used in connection with the business of such entity;
(x) all policies of insurance and fidelity bonds of Xxxxxx
National;
(xi) all direct or indirect loans or guaranties of loans to
any director, officer, or Principal Shareholder of Xxxxxx National or
their spouses or children or any partnership, corporation, or other entity
in which any such director, officer, or Principal Shareholder or their
spouses or children, have a significant (ten percent or more) interest;
and
(xii) all other contracts and commitments not made in the
ordinary course of business.
(b) To the Knowledge of Xxxxxx, the Xxxxxx Disclosure Memoranda
includes complete and correct copies of all written agreements, leases and
commitments, except loan commitments less than $100,000, together with all
amendments thereto and a complete and correct written description of all oral
agreements.
(c) As of and through the date of this Agreement: (i) each
agreement, lease, and commitment of Xxxxxx National is valid and subsisting and
in full force and effect in all material respects; (ii) Xxxxxx National has in
all material respects performed all obligations required to be performed by it
to date under such agreements, leases, and commitments; and (iii) no event or
condition exists which constitutes or, after notice or lapse of time, would
constitute, a material default on the part of Xxxxxx National under any
agreement, lease, or commitment.
2.19 Employee Benefit Plans.
(a) All Employee Benefit Plans maintained by Xxxxxx National comply
in all material respects with the requirements of ERISA and the Code and all
such plans have been administered to date in compliance with the requirements of
ERISA, the Code, and subsequent legislation regulating ERISA plans. Each of such
plans that is an employee pension benefit plan within the meaning of Section
3(2) of ERISA that is intended to be a qualified plan under Section 401(a) of
the Code has been amended to comply in all material respects with current law as
required or the remedial amendment period for such amendment under Section
401(b) of the Code has not expired and Xxxxxx National has obtained favorable
determination letters with respect to all such plans. As of the date hereof,
Xxxxxx National has no liability on account of any accumulated funding
deficiency (as defined in Section 412 of the Code) or on account of any failure
to make contributions to or pay benefits under any such plan nor is Xxxxxx
National aware of any claim pending or threatened to be brought by any party
regarding such matters. No prohibited transaction has occurred with respect to
any such plan that would result, directly or indirectly, in the imposition of
any excise tax under Section 4975 of the Code; nor has any reportable event
under Section 4043 of ERISA occurred with respect to any such plan. Xxxxxx
National is not a defendant in any lawsuit or criminal action concerning such
entity's conduct as a fiduciary, party-in-interest, or disqualified person with
respect to any plan, nor is either of them engaged in litigation or a continuing
controversy with, or, to the knowledge of Xxxxxx National, under investigation
or examination by, the Department of Labor, Internal Revenue Service, Justice
Department, or Pension Benefit Guaranty Corporation involving compliance with
ERISA or the provisions of the Code relating to employee benefit plans. All
reporting and disclosure requirements of ERISA and the Code have been met in all
respects by all such plans. Xxxxxx National is not required to contribute to an
Employee Benefit Plan that is a "multiemployer plan" within the meaning of
Section 3(37) of ERISA.
(b) The Xxxxxx Disclosure Memoranda lists all Employee Benefit Plans
and any and all other benefit plans or programs currently in effect for
employees, former employees, and retired employees of Xxxxxx National including,
without limitation, those providing any form of medical, health, and dental
insurance, severance pay and benefits continuation, relocation assistance,
vacation pay, tuition aid, and matching gifts for charitable contributions to
educational or cultural institutions, whether or not subject to ERISA. The
Xxxxxx Disclosure Memoranda includes complete and correct copies of all such
plans or programs, including each trust or other agreement under which any
trustee or custodian holds funds or property of the plan and all current
financial and actuarial reports, all current reporting and disclosure documents
and filings, and currently effective Internal Revenue Service rulings or
determination letters in respect thereof. If any of the Employee Benefit Plans
listed in the Xxxxxx Disclosure Memoranda has not been amended to comply with
the Tax Reform Act of 1986 and subsequent legislation, Xxxxxx National will also
deliver to Oak Hill Financial and Oak Hill Banks information and documentation
regarding such plan's operation during the remedial amendment period which is
sufficient to enable Oak Hill Financial and Oak Hill Banks to amend such plans
to comply with the Tax Reform Act of 1986 and subsequent legislation.
2.20 Insurance Policies. The Xxxxxx Disclosure Memoranda contains a
complete and correct list of the insurance policies and fidelity bonds currently
maintained by Xxxxxx National. The Xxxxxx Disclosure Memoranda includes complete
and correct copies of all such policies and bonds currently in effect together
with all riders and amendments thereto. All premiums due thereon have been paid
and Xxxxxx National has complied in all respects with the provisions of such
policies and bonds. Xxxxxx National has not failed to give any notice or present
any claim under any insurance policy or fidelity bond in due and timely fashion.
2.21 Capital Requirements. Xxxxxx National is in compliance with all
currently applicable capital requirements and guidelines prescribed by all
appropriate federal regulatory agencies, except as described in the Consent
Order.
2.22 Loan Loss Reserves. Since June 30, 2004, Xxxxxx National has not
incurred any unusual or extraordinary loan losses. The allowance for loan losses
reflected on the financial statements of Xxxxxx National has been determined in
accordance with generally accepted accounting principles and in accordance with
all applicable
regulations of all appropriate regulatory agencies and is adequate in all
material respects under requirements of GAAP to provide for reasonably
anticipated losses on outstanding loans. Xxxxxx National has no Knowledge of any
potential losses that have not been considered in establishing the current
allowance for loan losses.
2.23 Brokers; Certain Fees. Xxxxxx National, nor any of its respective
officers, directors, or employees, has employed any broker or finder or incurred
any liability for any financial advisory fees, brokerage fees, commissions, or
finder's fees in connection with this Agreement or the Merger Agreement, or the
transactions contemplated herein or therein.
2.24 Material Facts. Neither this Agreement, the Merger Agreement, the
Xxxxxx Disclosure Memoranda, nor any list, schedule, or certificate furnished to
Oak Hill Financial by or on behalf of Xxxxxx National contains any untrue
statement of a material fact or omits a material fact necessary in order to make
the statements contained therein not misleading in light of the circumstances in
which made; provided, however, that the scope of this representation does not
extend to any information relating to or furnished by Oak Hill Financial or Oak
Hill Banks.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF OAK HILL FINANCIAL AND OAK HILL
BANKS
Oak Hill Financial and Oak Hill Banks represent and warrant, as the case
may be, to Xxxxxx National that, except as set forth in the Oak Hill Disclosure
Memorandum:
3.01 Organization and Authority of Oak Hill Financial. Oak Hill Financial
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Ohio, is duly qualified to do business and is in good
standing in all jurisdictions where its ownership or leasing of property or the
conduct of its business requires it to be so qualified, and has the corporate
power and authority to own its properties and assets, to carry on its business
as it is presently being conducted, and to enter into and carry out its
obligations under this Agreement.
3.02 Organization and Authority of Oak Hill Banks. Oak Hill Banks is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Ohio, is duly qualified to do business and is in good
standing in all jurisdictions where its ownership or leasing of property or the
conduct of its business requires it to be so qualified, and has the corporate
power and authority to own its properties and assets, to carry on its business
as it is presently being conducted, and to enter into and carry out its
obligations under this Agreement and the Merger Agreement.
3.03 Authorization of Oak Hill Financial. The execution, delivery, and
performance of this Agreement by Oak Hill Financial, and the consummation of the
transactions contemplated hereby, have been duly approved by the Board of
Directors of Oak Hill Financial.
3.04 Authorization of Oak Hill Banks. The execution, delivery, and
performance of this Agreement and the Merger Agreement by Oak Hill Banks, and
the consummation of the transactions contemplated hereby and thereby, have been
duly approved by the Board of Directors of Oak Hill Banks, and by Oak Hill
Financial in its capacity as the sole shareholder of Oak Hill Banks.
3.05 Material Facts. Neither this Agreement nor the Merger Agreement
contains any untrue statement of a material fact or omits a material fact
necessary in order to make the statements contained therein not misleading in
light of the circumstances in which made; provided, however, that the scope of
this representation does not extend to any information relating to or furnished
by Xxxxxx National.
SECTION 4. COVENANTS OF XXXXXX NATIONAL
Xxxxxx National covenants and agrees as follows:
4.01 Applications for Charter Conversion. As soon as reasonably
practicable after the execution of this Agreement, Xxxxxx National shall prepare
and file such applications with the Division of Financial Institutions, and any
other regulatory authorities having jurisdiction as may be required to secure
all necessary regulatory approvals for conversion to a bank chartered in the
State of Ohio and to immediately thereafter consummate a merger of Oak Hill
Banks with and into Xxxxxx National as an Ohio state chartered bank, and shall
use its best efforts to secure such approvals.
4.02 Applications for Regulatory Approvals. Xxxxxx National will
cooperate, and will cause its respective directors, officers, employees, agents,
and advisers to cooperate, to the extent reasonably necessary, with
Oak Hill Financial and its advisers in connection with the preparation and
filing of the applications for regulatory approvals described in Section 5.01
hereof.
4.03 Shareholders' Meeting. As soon as practicable and Xxxxxx National
will call and mail notice of a meeting of its shareholders for the purpose of
adopting the Merger Agreement and this Agreement, which meeting shall be held
not more than 45 days from the date the notice is mailed, and the Board of
Directors of Xxxxxx National will to the extent consistent with their fiduciary
duty recommend to the shareholders that they vote their shares in favor of the
Merger.
4.04 Conduct of Business. From the date of this Agreement until the
Effective Time, except as provided herein or as consented to by Oak Hill
Financial in writing, Xxxxxx National will conduct its respective operations
only, and shall not take any action except, in the ordinary and usual course of
business, and Xxxxxx National will use its best efforts to preserve intact its
business organization, assets, prospects, and business relationships, to keep
available the services of their officers and employees, and to maintain existing
relationships with other entities. Without limiting the generality of the
foregoing, subject to the exceptions stated above, during such period, Xxxxxx
National will not except as provided herein:
(a) enter into any agreement or commitment of the character referred
to in subsections 2.18(a)(i) through (xii) hereof; or
(b) take or permit to be taken any action of a character which is
listed in subsections (a) through (q) of Section 2.10 hereof; provided, however,
that, after prior consultation with Oak Hill Financial, Xxxxxx National may take
or permit such of those actions as may be required pursuant to any change in
applicable accounting rules or standards, or by law or any applicable rules or
regulations of any governmental authority; or
(c) immediately prior to the Effective Date Xxxxxx National agrees
to conform its accounting measures to the accounting measures of Oak Hill Banks
and Oak Hill Financial.
4.05 Access to Information. Xxxxxx National shall give representatives of
Oak Hill Financial full access, during normal business hours and upon reasonable
notice, to all assets, properties, books, records, agreements, and commitments
of Xxxxxx National, provided that such access shall not unreasonably interfere
with the operations of Xxxxxx National, and shall furnish to representatives of
Oak Hill Financial all such information concerning its and their affairs as Oak
Hill Financial may reasonably request. It is expressly understood that no
investigation by Oak Hill Financial or Oak Hill Banks pursuant to this Section
4.05 or otherwise shall affect any representation or warranty made herein.
4.06 Press Releases. Xxxxxx National shall consult in advance with Oak
Hill Financial as to the form and substance of any press release, written
communication with its shareholders, or other public disclosure of matters
related to the Merger Agreement, this Agreement, or the Merger, and shall not
issue any such press release, written communication, or public disclosure
without the prior written consent of Oak Hill Financial; provided, however, that
nothing contained herein shall prohibit Xxxxxx National from making any
disclosure (after consultation with Oak Hill Financial and its legal counsel
with respect thereto) which Xxxxxx National's legal counsel deems necessary
under applicable law.
4.07 Best Efforts. Xxxxxx National shall use its best efforts to take or
cause to be taken all actions necessary, proper, or advisable to consummate the
Merger, including such actions as Oak Hill Financial may reasonably request in
writing.
4.08 Acquisition Proposals. Unless and until this Agreement shall have
been terminated by either party pursuant to Section 11 hereof, Xxxxxx National
shall not (i) directly or indirectly, through any of its officers, directors,
agents, or affiliates, solicit, encourage, initiate, entertain, consider, or
participate in any negotiations or discussions with respect to any Acquisition
Proposal, or (ii) disclose any information not customarily disclosed to any
person or entity or provide access to its properties, books, or records or
otherwise assist or encourage any person or entity in connection with any
Acquisition Proposal; provided, however, that Xxxxxx National shall be entitled
to entertain, consider, and participate in negotiations and discussions
regarding an Unsolicited Acquisition Proposal, and to disclose such information
and provide such access in connection with such an Unsolicited Acquisition
Proposal, to the extent that the Board of Directors of Xxxxxx National
determines in good faith, after consultation with legal counsel to Xxxxxx
National, that failure to so consider or participate in such negotiations or
discussions would be inconsistent with the fiduciary obligations of the
directors of Xxxxxx National to the shareholders of Xxxxxx National. Xxxxxx
National shall give Oak Hill Financial prompt notice of any such Acquisition
Proposals.
4.09 Advice of Changes. Between the date hereof and the Effective Date,
Xxxxxx National shall advise Oak Hill Financial promptly, in writing, of any
fact which, if existing or known on the date hereof, would have been required to
be set forth or disclosed in or pursuant to this Agreement and any fact which,
if existing or known on the date hereof, would have made any of the
representations contained herein untrue. Prior to the Effective Date, Xxxxxx
National shall deliver to Oak Hill Financial a supplement to the Xxxxxx
Disclosure Memoranda, which shall contain a description of any and all such
matters.
4.10 Confidentiality. From and after the date of this Agreement, Xxxxxx
National shall, and shall cause its respective Affiliates to, treat all
Confidential Information of Oak Hill Financial and Oak Hill Banks, as
confidential, and Xxxxxx National shall, and shall cause its respective
Affiliates to, not use any such Confidential Information for any purpose except
in furtherance of the transactions contemplated hereby. In the event this
Agreement is terminated pursuant to Section 11 hereof, Xxxxxx National shall,
and shall cause its respective Affiliates to, promptly return to Oak Hill
Financial all documents and workpapers, and all copies thereof, containing any
such Confidential Information of Oak Hill Financial or Oak Hill Banks. The
covenants of Xxxxxx National contained in this Section 4.10 are of the essence
and shall survive any termination of this Agreement and the closing of the
transactions contemplated hereby.
SECTION 5. COVENANTS OF OAK HILL FINANCIAL AND OAK HILL BANKS
Oak Hill Financial and Oak Hill Banks covenant and agree as follows:
5.01 Applications for Regulatory Approvals. As soon as reasonably
practicable after the execution of this Agreement, the parties shall prepare and
file such applications with the OCC, the FDIC, the Federal Reserve Board, the
Division of Financial Institutions, and any other regulatory authorities having
jurisdiction as may be required to secure all necessary regulatory approvals of
the conversion of Xxxxxx National and immediately thereafter the Merger, and
shall use its best efforts to secure such approvals.
5.02 Press Releases. Oak Hill Financial shall consult in advance with
Xxxxxx National as to the form and substance of any press release, written
communication with its shareholders, or other public disclosure of matters
related to this Agreement, the Merger Agreement, or the Merger.
5.03 Best Efforts. Oak Hill Financial will use its best efforts to take or
cause to be taken all actions necessary, proper, or advisable to consummate the
Merger.
5.04 Confidentiality. From and after the date of this Agreement, Oak Hill
Financial and Oak Hill Banks shall, and shall cause their respective Affiliates
to, treat all Confidential Information of Xxxxxx National as confidential, and
Oak Hill Financial and Oak Hill Banks shall, and shall cause their respective
Affiliates to, not use any such Confidential Information for any purpose except
in furtherance of the transactions contemplated hereby. In the event this
Agreement is terminated pursuant to Section 11 hereof, Oak Hill Financial and
Oak Hill Banks shall, and shall cause their respective Affiliates to, promptly
return to Xxxxxx National all documents and workpapers, and all copies thereof,
containing any such Confidential Information of Xxxxxx National. The covenants
of Oak Hill Financial and Oak Hill Banks contained in this Section 5.04 are of
the essence and shall survive any termination of this Agreement, but shall
terminate as of the closing of the transactions contemplated hereby.
5.05 Indemnification of Directors and Officers. Oak Hill Banks
acknowledges that, by operation of law, at the Effective Time, Oak Hill Banks
will assume any and all legally enforceable obligations of Xxxxxx National to
indemnify and defend the directors and officers of Xxxxxx National pursuant to,
to the extent of, and in accordance with the terms and conditions of any such
obligations that Xxxxxx National had to indemnify and defend such persons in
effect immediately prior to the Effective Time, in connection with such persons'
status or services as directors and officers of Xxxxxx National, whether by
contractual right or by any provision of the articles of incorporation or code
of regulations of Xxxxxx National, with respect to any claim asserted or made
prior to or at any time after the Effective Time. All such rights to
indemnification with respect to any such claim shall continue until the final
disposition of such claim regardless of when such claim was made or asserted;
provided, however, that nothing contained herein shall increase or lengthen the
duration of Oak Hill Banks' obligations with respect to such indemnification
over that to which Xxxxxx National would have been subject had the Merger not
been consummated. Oak Hill Banks agrees to use its reasonable best efforts to
cover the former directors and officers of Xxxxxx National with insurance
policies for a period of three (3) years.
5.06 Employee Benefit and Welfare Benefit Plans.
(a) Oak Hill Financial and Oak Hill Banks agree to use their
reasonable best efforts to coordinate the conversion of any pension Employee
Benefit Plans, practices, or policies of Xxxxxx National into similar plans of
Oak Hill Financial, to the extent that such plans may exist, and to give credit
to any and all employees of Xxxxxx National who become employees of Oak Hill
Banks following the consummation of the Merger for all service with Xxxxxx
National prior to the Effective Time for purposes of eligibility, vesting, and
all other purposes for which such service is taken into account or recognized,
to the extent feasible and permissible under all applicable laws and regulations
and the applicable terms of Oak Hill Financial's pension Employee Benefit Plans.
(b) Oak Hill Financial and Oak Hill Banks agree to use their
reasonable best efforts, including when permitted by law the amendment of
existing plans, to coordinate the maintenance of or conversion into similar
plans of Oak Hill Financial and Oak Hill Banks of any welfare Employee Benefit
Plan, practice, or policy of Xxxxxx National, to the extent feasible and
permissible under all applicable laws and regulations and the applicable terms
of Oak Hill Financial's or Oak Hill Banks' plans. Furthermore, the former
officers and employees of Xxxxxx National (and their spouses and dependents, if
applicable) who are under a Xxxxxx National plan on the Effective Date, may,
upon the cessation of their participation in a Xxxxxx National plan being
maintained by Oak Hill Banks after the Effective Date, immediately participate
in the corresponding benefit plan maintain by Oak Hill Banks without regard to
pre-existing conditions or waiting periods to the extent then-permitted by law
and the existing plans of Oak Hill Financial.
5.07 Employees of Xxxxxx National. After the Effective Date, Oak Hill
Banks will review the current Xxxxxx National employees for continued employment
by Oak Hill Banks, subject to the existing employment practices and procedures
of Oak Hill Banks.
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF ALL PARTIES
The obligations of each of the parties hereto to consummate the Merger are
subject to the fulfillment, on or before the Closing Date, of the following
conditions precedent:
6.01 Shareholder Approval. The Merger shall have been approved by the
affirmative vote of the holders of at least two-thirds of the issued and
outstanding shares of Xxxxxx National Common.
6.02 Charter Conversion. Xxxxxx National shall have completed the charter
conversion process and shall be a banking corporation chartered under the laws
of Ohio.
6.03 Regulatory Approvals. The Merger shall have been approved by the
FDIC, the Federal Reserve Board, the Division of Financial Institutions, and any
other governmental authority having jurisdiction, and any applicable waiting
periods shall have expired, with no such approval or authorization containing
any provision which would be materially adverse to the business of Xxxxxx
National, Oak Hill Financial or Oak Hill Banks, either prior to or subsequent
to, the proposed merger of Xxxxxx National and Oak Hill Banks.
6.04 Litigation. No suit, action, investigation by any governmental body,
or legal or administrative proceeding shall have been brought or threatened
which materially questions the validity or legality of the transactions
contemplated hereunder or under the Merger Agreement. For purposes hereof,
advisory opinions or written requests for information which could be used in
connection with such suit, investigation, or proceeding given by governmental
agencies may be deemed to constitute such a threat, except for those requests
for information issued in connection with the Consent Order.
SECTION 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF XXXXXX NATIONAL
The obligations of Xxxxxx National to consummate the Merger are subject to
the fulfillment on or before the Closing Date of the following additional
conditions precedent:
7.01 Representations and Warranties. The representations and warranties
made by Oak Hill Financial herein shall be true and correct in all material
respects on the Effective Date with the same force and effect as though such
representations and warranties had been made on and as of such date; Oak Hill
Financial and Oak Hill Banks shall have performed in all material respects their
obligations hereunder and under the Merger Agreement to be performed on or
before the Closing Date; and an executive officer of Oak Hill Financial shall
have executed and delivered to Xxxxxx National a certificate or certificates,
dated as of the Closing Date, in respect of the foregoing matters and in respect
of such other matters as Xxxxxx National shall reasonably request.
SECTION 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF OAK HILL FINANCIAL AND OAK
HILL BANKS
The obligations of Oak Hill Financial and Oak Hill Banks to consummate the
Merger are subject to the fulfillment on or before the Closing Date of the
following additional conditions precedent:
8.01 Regulatory Approval of the Subsidiary Merger. The Merger shall have
been approved by the FDIC, the Federal Reserve Board, the Division of Financial
Institutions, and any other governmental authority having jurisdiction, and any
applicable waiting periods shall have expired, with no such approval or
authorization containing any provision which would be materially adverse to the
business of Oak Hill Financial or Oak Hill Banks.
8.02 Representations and Warranties. The representations and warranties
made by Xxxxxx National herein shall be true and correct in all material
respects on the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of such date; Xxxxxx
National shall have performed in all material respects its obligations hereunder
and under the Merger Agreement to be performed on or before the Closing Date;
and the chief executive officer and principal financial officer of Xxxxxx
National shall have executed and delivered to Oak Hill Financial certificates,
dated as of the Closing Date, in respect of the foregoing matters and in respect
of such other matters as Oak Hill Financial shall reasonably request.
8.03 Material Adverse Change. Since June 30, 2004, there shall not have
occurred any material adverse change in the consolidated results of operations,
financial condition, properties, or business of Xxxxxx National, other than any
such change attributable to or resulting from (i) changes in law, regulation, or
generally accepted accounting principles of general application to the banking
or thrift industries, (ii) changes in economic conditions that affect the
banking and thrift industries generally, including changes in the general level
of interest rates, or (iii) any matter or matters relating to Xxxxxx National
which have been disclosed in the Xxxxxx Disclosure Memoranda as of the date of
this Agreement.
8.04 Title Insurance. For each parcel of the Real Property described in
the Xxxxxx Disclosure Memoranda as being owned by Xxxxxx National or subject to
a contract for purchase by Xxxxxx National, and for each lease for any parcel of
the Real Property described in the Xxxxxx Disclosure Memoranda as being leased
by Xxxxxx National, Oak Hill Financial shall have obtained a title insurance
commitment (ALTA 1966 form or its equivalent) for a fee owner's title insurance
policy or leasehold owner's title insurance policy, as appropriate, each in an
amount equal to the carrying cost of the premises or leasehold interest to be
insured (including all improvements thereon), on the books of Xxxxxx National as
of June 30, 2004. Each title insurance commitment shall show that marketable fee
simple title to the owned premises or that valid leasehold title to the leased
premises, as appropriate, is in the name of Xxxxxx National, and that it is free
and clear of any liens and encumbrances except taxes and assessments not
delinquent and utility and other easements that do not interfere with the use of
the property for the business being conducted thereon. Each such commitment
shall provide that such fee owner's policy committed for therein shall be an
ALTA 1970 form, revised in 1984, and each leasehold owner's policy shall be an
ALTA 1975 form, or other form acceptable to Oak Hill Financial and Oak Hill
Banks.
8.05 Survey. Oak Hill Financial or Oak Hill Banks shall have obtained
current land surveys of those parcels of the Real Property described in the
Xxxxxx Disclosure Memoranda as being owned by Xxxxxx National or subject to a
contract for purchase by Xxxxxx National. Each survey to be conducted and
prepared by a duly licensed land surveyor, with such survey to be a duly
certified ALTA/ACSM field survey, which confirm that the Real Property is not
subject to any easements, restrictions, set backs, encroachments, or other
limitations except utility and other easements that do not interfere with the
use of the Real Property for the business then being conducted thereon, and that
the Real Property is not located in any flood hazard area.
8.06 Phase I. For each parcel of the Real Property described in the Xxxxxx
Disclosure Memoranda as being leased or owned by Xxxxxx National, Oak Hill
Financial or Oak Hill Banks shall have completed a "Phase I" environmental site
assessment prepared by a licensed environmental engineering firm indicating that
there is no evidence of contamination with Hazardous Substances or other
violations of environmental Laws and concluding that no testing or additional
investigations appears to be warranted.
8.07 Consents and Approvals. Xxxxxx National shall have obtained any and
all consents or approvals that may be required under the terms of (i) any
contract, agreement, lease, or other obligation or commitment, including, but
not limited to, the types described in Section 2.18 hereof, to which either
Xxxxxx National is a party or by which either Xxxxxx National or any of their
property or assets is bound, or (ii) any license or permit of Xxxxxx National,
in order to avoid the occurrence of any breach or default which may result from
the consummation of the Merger and which, if not obtained, is reasonably likely
to have, individually or in the aggregate, a material adverse
effect on Oak Hill Financial, Oak Hill Banks or Xxxxxx National. Oak Hill
Financial shall have obtained permission to terminate all data processing
contracts (including all ATM servicing agreements) of Xxxxxx National for the
payment of fees and expenses not greater than $50,000, or Oak Hill Financial
shall be reimbursed as part of Oak Hill Financial's Reimbursed Expenses for the
portion of the fees and expenses in excess of $50,000.
8.08 Shareholders' Equity. The total shareholders' equity of Xxxxxx
National as of the end of the most recent calendar quarter preceding the Closing
Date and as of the Closing Date shall not be less than the total shareholders'
equity of Xxxxxx National as of June 30, 2004, except for Xxxxxx National'
expenses relating to the Merger and accounting adjustments relating to the
Merger and requested by Oak Hill Financial.
8.09 Litigation. No claim, suit, action, investigation, legal or
administrative proceeding shall have been brought or threatened which competes
with, seeks to prevent or challenge, or which questions the validity or legality
of, the transactions contemplated in this Agreement or in the Merger Agreement.
8.10 Litigation Reserve. The parties shall have agreed upon the terms of
an escrow to be established by the parties to hold $885,000 from the Merger
Proceeds as a reserve against claims made in certain litigation and threatened
litigation. The funds shall be escrowed in an account at Oak Hill Banks with an
interest rate of 5 per cent per annum. The litigation and threatened litigation
to be reserved against shall include only those claims by, and damage and
expense awards in favor of, New Richmond National Bank, New Richmond, Ohio,
arising from participation agreements executed prior to the Effective Date.
Claims to be paid from the reserve shall include damage awards of every kind,
such as, for example, actual and punitive damage awards, awards for the costs
and legal expenses of a plaintiff and the costs and expenses of Xxxxxx National
or its successor in defending such litigation, including all other related
expenses of defending such litigation, such as, for example, expert witness
fees. The escrow shall end on the date of the final adjudication of any such
litigation, including the running of any periods for discretionary appeals.
SECTION 9. CLOSING DATE
Unless the parties otherwise agree, the closing of the transactions
contemplated by this Agreement and the Merger Agreement ("Closing Date") shall
be held at 11:00 a.m. at the offices of Porter, Wright, Xxxxxx & Xxxxxx in
Columbus, Ohio, on the last business day of the month in which the conditions
specified in Sections 6.01, 6.02 and 6.03 hereof have been satisfied.
SECTION 10. AMENDMENT
At any time prior to the Closing Date, the parties, subject to paragraph
14 of the Merger Agreement, may modify, amend, or supplement this Agreement by
mutual agreement authorized by their respective boards of directors and
evidenced by an instrument in writing executed and delivered by the parties
hereto, whether before or after the shareholders of Xxxxxx National has adopted
this Agreement.
SECTION 11. TERMINATION
11.01 Termination. This Agreement and the Merger Agreement shall terminate
on December 31, 2004, unless a later date is agreed upon in writing by the
parties, and may be terminated and the Merger may be abandoned at any time prior
to the Effective Time as follows:
(a) by the mutual consent, evidenced in writing, of the boards of
directors of Oak Hill Financial, Oak Hill Banks, and Xxxxxx National;
(b) by the board of directors of Oak Hill Financial, by giving
written notice thereof to Xxxxxx National, which notice shall specify in
reasonable detail the grounds therefor: (i) if any condition precedent to
performance by Oak Hill Financial and Oak Hill Banks has not been satisfied or
waived; (ii) if Xxxxxx National has not fully performed its obligations and
agreements hereunder and under the Merger Agreement; or (iii) if any of the
representations of Xxxxxx National set forth herein are untrue or incorrect in
any material respect; or
(c) by the board of directors of Xxxxxx National, by giving written
notice thereof to Oak Hill Financial, which notice shall specify in reasonable
detail the grounds therefor: (i) if any condition precedent to performance by
Xxxxxx National has not been satisfied or waived; (ii) if Oak Hill Financial and
Oak Hill Banks have not fully performed their obligations and agreements
hereunder and under the Merger Agreement; or (iii) if any of the representations
of Oak Hill Financial set forth herein are untrue or incorrect in any material
respect.
11.02 Survival of Certain Provisions upon Termination. Upon a termination
of this Agreement as provided herein, this Agreement and the Merger Agreement
shall become void and there shall be no further obligation or liability on the
part of any party hereto or their respective shareholders, directors, or
officers, except pursuant to Sections 4.10, 5.04, 11.03, and 12 hereof, which
shall survive a termination of this Agreement in accordance with the express
terms of such Sections.
11.03 Termination Fee. During the term of this Agreement, if (i) an
Unsolicited Acquisition Proposal is submitted to and approved by the
shareholders of Xxxxxx National at any time prior to the Effective Time, or (ii)
an Unsolicited Acquisition Proposal is received by Xxxxxx National or is made
directly to the shareholders of Xxxxxx National at any time prior to the holding
of the meeting of the shareholders of Xxxxxx National to be called pursuant to
Section 4.03 hereof, the board of directors of Xxxxxx National fails to
recommend to the shareholders of Xxxxxx National approval of the Merger
Agreement or this Agreement, withdraws such recommendation previously made to
the shareholders of Xxxxxx National, or fails to solicit proxies of shareholders
of Xxxxxx National to approve the Merger, and the Merger Agreement and this
Agreement are subsequently rejected by the shareholders of Xxxxxx National at
such meeting, then, in either such event, Xxxxxx National shall pay to Oak Hill
Financial, within five business days after a termination of the Merger Agreement
and this Agreement following such an event, a cancellation fee in the amount of
$500,000, as liquidated damages, and not as a penalty, and, upon the payment in
full thereof, Xxxxxx National shall have no further liability under this
Agreement or the Merger Agreement. The obligations of Xxxxxx National under this
Section 11.03 shall survive a termination of this Agreement, provided that, at
the time of such termination, (1) an event described in Section 7.04 hereof has
not occurred, and (2) Xxxxxx National does not have the right to terminate this
Agreement by virtue of a material breach of this Agreement or the Merger
Agreement by Oak Hill Financial or Oak Hill Banks.
SECTION 12. EXPENSES
Except as otherwise expressly provided herein, all expenses incurred by or
on behalf of the parties hereto in connection with the authorization,
preparation, execution, and consummation of this Agreement and the Merger
Agreement, including, without limitation, all fees and expenses of agents,
representatives, printers, and counsel employed by the parties hereto, and
taxes, if any, shall be borne solely by the party which has or shall have
incurred the same. The covenants of the parties contained in this Section 12
shall survive a termination of this Agreement for any reason.
SECTION 13. NOTICES
All notices, requests, demands, and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered
personally or sent by facsimile and confirmed by first-class, certified mail,
postage prepaid, addressed as indicated below, or at such other address as such
party may designate in writing to the other parties:
(a) If to Ripley National, to:
Xxxxxx National Bank
Attention: Board of Directors
000 Xxxx Xxxxxx
Xxxxxx, Xxxx 00000
with a copy to:
Xxxxx X. Xxxxxxxxxxx, Esq.
Xxxxxxxx & Shohl LLP
1900 Chemed Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
(b) If to Oak Hill Financial or Oak Hill Banks, to:
Xxxx X. Xxxx
Chairman
Oak Hill Financial, Inc.
00000 Xxxxx Xxxxx 00
Xxxxxxx, Xxxx 00000
with a copy to:
H. Xxxxx Xxxxxxxxxx, Esq.
Porter, Wright, Xxxxxx & Xxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
SECTION 14. GENERAL PROVISIONS
14.01 Entire Agreement. This Agreement, together with the Merger Agreement
and the documents referred to or incorporated herein or therein, reflect the
entire agreement among the parties with respect to the subject matter thereof
and supersede all prior agreements and understandings, oral or written, among
the parties with respect to such subject matter, and no party shall be liable or
bound to any other party in any manner by any representations, warranties, or
covenants except as specifically set forth herein or therein.
14.02 Waiver. At any time on or prior to the Effective Date, any party
hereto may (i) waive any inaccuracies in the representations and warranties of
the other parties contained in this Agreement and the Merger Agreement or in any
document delivered pursuant hereto or thereto, or (ii) waive compliance by the
other parties with any of the conditions, covenants, and agreements contained in
this Agreement or the Merger Agreement.
14.03 Assignment. Neither this Agreement nor any rights, interests, or
obligations hereunder shall be assigned or transferred by operation of law or
otherwise by any of the parties hereto without the prior written consent of the
other party.
14.04 Benefit. Except as specifically provided herein, nothing in this
Agreement, express or implied, is intended to confer upon any person or entity
other than the parties hereto and their successors in interest any rights or
remedies under or by reason of this Agreement.
14.05 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original for all purposes, but
such counterparts taken together shall constitute one and the same instrument.
14.06 Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Ohio without regard to its conflicts of
laws principles.
14.07 Incorporation by Reference. The Merger Agreement, the Disclosure
Memoranda, and all Exhibits attached hereto are hereby incorporated by reference
herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
OAK HILL FINANCIAL, INC.
By:
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Xxxx X. Xxxx, Chairman
OAK HILL BANKS
By:
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Xxxxx X. Xxxxxx, Xx. President
THE XXXXXX NATIONAL BANK
By:
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Xxxxxxx X. Xxxxxx, President
