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Exhibit 10.6
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
HUNTINGTON BANCSHARES INCORPORATED,
THE HUNTINGTON NATIONAL BANK
AND
FIRST BANK
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PURCHASE AND ASSUMPTION AGREEMENT
ARTICLE I - THE ASSETS .................................................... 1
Section 1.1 Banking Center ........................................ 1
ARTICLE II - TRANSFER OF ASSETS AND LIABILITIES ........................... 1
Section 2.1 Transferred Assets .................................... 1
Section 2.2 Purchase Price ........................................ 3
Section 2.3 Deposit Liabilities ................................... 5
Section 2.4 Loans Transferred ..................................... 8
Section 2.5 Safe Deposit Business ................................. 9
Section 2.6 Employee Matters ...................................... 10
Section 2.7 Records and Data Processing, etc. ..................... 11
Section 2.8 Security .............................................. 11
Section 2.9 Taxes and Fees; Proration of Certain Expenses ......... 12
Section 2.10 Title to Real Property ................................ 12
Section 2.11 Environmental Matters ................................. 14
ARTICLE III - CLOSING AND EFFECTIVE TIME .................................. 15
Section 3.1 Effective Time ........................................ 15
Section 3.2 Closing ............................................... 16
Section 3.3 Post Closing Adjustments .............................. 18
ARTICLE IV - INDEMNIFICATION .............................................. 19
Section 4.1 Huntington's Indemnification of Purchaser.............. 19
Section 4.2 Purchaser's Indemnification of Sellers................. 20
Section 4.3 Claims for Indemnity .................................. 20
Section 4.4 Limitations on Indemnification ........................ 21
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF SELLERS ..................... 21
Section 5.1 Corporate Organization ................................ 21
Section 5.2 No Violation .......................................... 21
Section 5.3 Corporate Authority ................................... 22
Section 5.4 Enforceable Agreement ................................. 22
Section 5.5 No Brokers ............................................ 22
Section 5.6 Personal Property ..................................... 22
Section 5.7 Real Property ......................................... 21
Section 5.8 Condition of Property ................................. 23
Section 5.9 Employees ............................................. 23
Section 5.10 Assumed Contracts ..................................... 24
Section 5.11 Loans ................................................. 24
Section 5.12 Environmental Matters ................................. 25
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Section 5.13 Deposit Liabilities ................................... 26
Section 5.14 Books, Records, Documentation, etc. ................... 26
Section 5.15 Litigation ............................................ 27
Section 5.16 Contracts and Agreements............................... 27
Section 5.17 Tax Matters............................................ 27
Section 5.18 Limitation and Survival of Representations and
Warranties ........................................ 27
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF PURCHASER .................. 28
Section 6.1 Corporate Organization ................................ 28
Section 6.2 No Violation .......................................... 28
Section 6.3 Corporate Authority ................................... 28
Section 6.4 Enforceable Agreement ................................. 28
Section 6.5 No Brokers ............................................ 28
Section 6.6 Survival of Representations and Warranties ............ 29
ARTICLE VII - OBLIGATIONS OF PARTIES PRIOR TO AND AFTER
EFFECTIVE TIME ................................................... 29
Section 7.1 Full Access ........................................... 29
Section 7.2 Delivery of Magnetic Media Records .................... 29
Section 7.3 Application for Approval .............................. 30
Section 7.4 Conduct of Business; Maintenance of Properties ........ 30
Section 7.5 No Solicitation by Sellers ............................ 30
Section 7.6 Further Actions ....................................... 31
Section 7.7 Fees and Expenses ..................................... 31
Section 7.8 Breaches with Third Parties ........................... 32
Section 7.9 Operations ............................................ 32
Section 7.10 Destruction and Condemnation .......................... 33
Section 7.11 Insurance ............................................. 34
Section 7.12 Public Announcements .................................. 34
Section 7.13 Tax Reporting ......................................... 34
Section 7.14 Transitional Matters .................................. 34
ARTICLE VIII - CONDITIONS TO PURCHASER'S OBLIGATIONS ...................... 34
Section 8.1 Representations and Warranties True ................... 35
Section 8.2 Obligations Performed ................................. 35
Section 8.3 No Adverse Litigation ................................. 35
Section 8.4 Regulatory Approval ................................... 35
ARTICLE IX - CONDITIONS TO SELLERS' OBLIGATIONS ........................... 35
Section 9.1 Representations and Warranties True ................... 36
Section 9.2 Obligations Performed ................................. 36
Section 9.3 No Adverse Litigation ................................. 36
Section 9.4 Regulatory Approval ................................... 36
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ARTICLE X - TERMINATION ................................................... 36
Section 10.1 Methods of Termination ................................ 36
Section 10.2 Procedure Upon Termination ............................ 37
Section 10.3 Payment of Expenses ................................... 38
ARTICLE XI - MISCELLANEOUS PROVISIONS ..................................... 38
Section 11.1 Assignment to Subsidiaries ............................ 38
Section 11.2 Amendment and Modification ............................ 38
Section 11.3 Waiver or Extension ................................... 38
Section 11.4 Assignment ............................................ 38
Section 11.5 Confidentiality ....................................... 39
Section 11.6 Addresses for Notices, Etc. ........................... 39
Section 11.7 Counterparts .......................................... 40
Section 11.8 Headings .............................................. 40
Section 11.9 Governing Law ......................................... 40
Section 11.10 Sole Agreement ........................................ 40
Section 11.11 Parties In Interest ................................... 41
Section 11.12 Calculation of Dates and Deadlines .................... 41
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PURCHASE AND ASSUMPTION AGREEMENT
THIS PURCHASE AND ASSUMPTION AGREEMENT (this "Agreement") is entered
into as of February 25, 1999, by and between HUNTINGTON BANCSHARES INCORPORATED,
a Maryland corporation having its principal offices in Columbus, Ohio
("Huntington"), THE HUNTINGTON NATIONAL BANK, a national banking association
having its principal offices in Columbus, Ohio ("HNB"), and FIRST BANK, an
Indiana state-chartered commercial bank having its principal offices in
Morgantown, Indiana ("Purchaser"):
W I T N E S S E T H:
WHEREAS, Huntington, by its own actions and through the actions of HNB
(Huntington and HNB being hereinafter referred to as "Sellers"), wishes to
divest itself of certain assets, deposits, and other liabilities; and
WHEREAS, Purchaser wishes to purchase such assets and assume such
liabilities upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, Sellers and Purchaser agree as follows:
ARTICLE I
THE ASSETS
Section 1.1. Banking Center.
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Purchaser shall purchase from Sellers the "Transferred Assets" (as defined in
Section 2.1 below), and assume certain liabilities assigned to the branch
banking offices of Sellers located at 00 Xxxxx Xxxxxxxxx Xxxxxx in Nashville,
Indiana (the "Banking Center").
ARTICLE II
TRANSFER OF ASSETS AND LIABILITIES
Section 2.1. Transferred Assets.
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(a) As of the "Effective Time" (as defined in Section 3.1 below) and upon
the terms and conditions set forth herein, Sellers will sell, assign,
transfer, convey, and deliver to Purchaser, and Purchaser will purchase
from Sellers, the following assets located at or
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attributed to the Banking Center, except as otherwise excluded from
sale pursuant to the provisions of paragraph 2.1(b) below
(collectively, the "Transferred Assets"):
(1) subject to Section 2.10 hereof, all of Sellers' transferable
right, title, and interest in and to all real estate and
improvements thereon at the Banking Center, but not including
any leasehold estates covered by item (3) below, together with
all rights and appurtenances pertaining thereto (the "Real
Property");
(2) the furniture, fixtures, leasehold improvements, equipment, and
other tangible personal property located on or affixed to the
Real Property, any of such items on order at the Closing or
subject to the terms of any Equipment Leases but only to the
extent such items, if material, were reflected in the Offering
Memorandum (collectively, the "Personal Property");
(3) all assignable leases affecting the Banking Center, including
all leases for equipment (the "Equipment Leases"), and those
assignable, stand-alone software licenses and leases acceptable
to Purchaser (the "Software Licenses");
(4) all safe deposit contracts and leases for the safe deposit boxes
located at the Banking Center as of the Effective Time (the
"Safe Deposit Contracts");
(5) all "Loans" (as defined in Section 2.4 below); and
(6) all coins and currency located at the Banking Center as of the
Effective Time (the "Coins and Currency").
(b) The following items shall be excluded from the Transferred Assets:
(1) the proprietary merchandising equipment and other assets listed
on Exhibit 2.1(b) hereto;
(2) Sellers' rights in and to the names "Huntington" and any of
their predecessor banks' names and any of Sellers' or Sellers'
predecessors' corporate logos, trademarks, trade names, signs,
paper stock forms, and other supplies containing any such logos,
trademarks, or trade names;
(3) residential mortgage servicing rights for 1-4 family residential
mortgages loans at the Banking Center;
(4) any regulatory licenses or any other nonassignable licenses and
permits;
(5) trust, brokerage, mutual fund, and similar relationships; and
(6) proprietary Huntington software (collectively, the "Excluded
Assets").
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Sellers shall coordinate with Purchaser to remove the Excluded Assets from the
Banking Center on or prior to the Effective Time. Sellers shall remove the
Excluded Assets at their own cost and using their reasonable efforts to attempt
to minimize any damage as a result of such removal. Apart from making any
repairs necessitated by Sellers' negligence in removing the Excluded Assets,
Sellers shall be under no obligation to restore the premises to their original
condition, which shall be the responsibility of Purchaser.
Section 2.2. Purchase Price.
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(a) As consideration for the purchase of the Banking Center, Purchaser
shall pay Sellers a purchase price equal to the sum of the following:
(1) the "Net Book Value" (as defined in paragraph 2.2(d) hereof) of
the Personal Property and the Real Property at the Banking
Center on the Closing Date;
(2) a premium for the "Deposit Liabilities" (as defined in paragraph
2.3(a) hereof) and franchise value assigned to the Banking
Center equal to 10% of such Deposit Liabilities; provided,
however, that for purposes of calculating the premium pursuant
to this Section 2.2(a)(2) only (and not for determining which
liabilities are assumed by Purchaser), the term "Deposit
Liabilities" shall not include any amounts represented by the
aggregate of Jumbo CDs (certificates of deposit in amounts equal
to or greater than $100,000) and public funds in excess of the
lesser of (i) $971,581 or (ii) an amount that represents 6.654
percent of all Deposit Liabilities excluding all Jumbo CDs and
public funds. Notwithstanding the above, Purchaser shall pay a
Deposit Premium of not less than $1,425,133;
(3) the "Net Book Value" (as defined in paragraph 2.2(d) hereof) of
the Loans as set forth in Section 2.4 hereof as of the Effective
Time; and
(4) the face amount of the Coins and Currency.
(b) In addition, Purchaser shall assume, as of the Effective Time, all of
the duties, obligations, and liabilities of Sellers relating to the
Deposit Liabilities and all duties, obligations, and liabilities
related to any of the following accruing or arising on or after the
Effective Time: (i) the Real Property, (ii) the Equipment Leases, (iii)
the Software Licenses, (iv) the Safe Deposit Contracts, and (v) all
other assignable operating contracts of the Banking Center.
Specifically excluded from the above are:
(1) liabilities or obligations with respect to any litigation,
suits, claims, demands or governmental proceedings arising from
any fact, circumstance, or event occurring prior to the
Effective Time and related to the Banking Center; and
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(2) any and all obligations arising under any service agreements
entered into between Huntington and its subsidiaries or other
affiliates.
(c) Sellers shall prepare a balance sheet (the "Pre-Closing Balance Sheet")
in accordance with generally accepted accounting principles
consistently applied as of a date not earlier than 30 calendar days
prior to the Effective Time anticipated by the parties (the
"Pre-Closing Balance Sheet Date") reflecting the assets to be sold and
assigned hereunder and the liabilities to be transferred and assumed
hereunder; Sellers agree to pay to Purchaser at the Closing (as defined
in Section 3.1 hereof), in immediately available funds, the excess
amount, if any, of the amount of Deposit Liabilities assumed by
Purchaser pursuant to paragraph (b) above, as reflected by the
Pre-Closing Balance Sheet, over the aggregate purchase price computed
in accordance with paragraph (a) above, as reflected by the Pre-Closing
Balance Sheet. Purchaser agrees to pay Sellers at the Closing, in
immediately available funds, the excess, if any, of the aggregate
purchase price computed in accordance with paragraph (a) above, as
reflected by the Pre-Closing Balance Sheet, over the amount of Deposit
Liabilities assumed by Purchaser pursuant to paragraph (b) above, as
reflected by the Pre-Closing Balance Sheet. The purchase price, as well
as each of the items described in paragraphs (a)(1) through (4) above
and all amounts paid at the Closing shall be subject to subsequent
adjustment based on the Post-Closing Balance Sheet (as defined in
Section 3.3 hereof).
(d) The "Net Book Values" of the Personal Property and the Real Property
are the values that the relevant assets are carried on Sellers' general
ledger. The "Net Book Value" of the Loans is the aggregate principal
amount of the Loans, plus accrued and unpaid interest and late charges
thereon, but such value shall not include any loan loss reserves or
general reserve.
(e) Sellers and Purchaser agree to allocate the purchase price in
accordance with Section 1060 of the Internal Revenue Code (the "Code").
Within 120 days after the Closing Date, Purchaser shall provide to
Sellers Purchaser's proposed allocation of the purchase price as
finally determined and paid by Purchaser hereunder. Within 30 days
after the receipt of such allocation, Sellers shall propose to
Purchaser any changes to such allocation or otherwise shall be deemed
to have agreed with such allocation. Sellers and Purchaser shall reduce
such allocation to writing, including jointly and properly executing
completed Internal Revenue Service Form 8594, and any other forms or
statements required by the Code, Treasury Regulations or the Internal
Revenue Service, together with any and all attachments required to be
filed therewith. Sellers and Purchaser shall file timely any such forms
and statements with the Internal Revenue Service. To the extent
consistent with applicable law, Sellers and Purchaser shall not file
any tax return or other documents or otherwise take any position with
respect to taxes which is inconsistent with such allocation of the
final purchase price, provided, however, that neither Sellers nor
Purchaser shall be obligated to litigate any challenge to such
allocation of the final purchase price by a governmental authority.
Sellers and Purchaser shall promptly inform one another of any
challenge by any governmental authority to any
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allocation made pursuant to this paragraph and agree to consult with
and keep one another informed with respect to the state of, and any
discussion, proposal or submission with respect to, such challenge.
Section 2.3. Deposit Liabilities.
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(a) "Deposit Liabilities" shall mean all of Sellers' duties, obligations
and liabilities relating to the deposit accounts assigned to the
Banking Center as of the Effective Time (including accrued but unpaid
or uncredited interest thereon).
(b) Except for those liabilities and obligations specifically assumed by
Purchaser under 2.2(b) above, Purchaser is not assuming any other
liabilities or obligations. Liabilities not assumed include, but are
not limited to, the following:
(1) Sellers' cashier checks, letters of credit, money orders,
traveler's checks, interest checks and expense checks issued
prior to the Effective Time, consignments of U.S. Government "E"
and "EE" bonds and any cash items paid by Sellers and not
cleared prior to the Effective Time;
(2) deposit accounts associated with or securing lines of credit
where the line of credit is excluded in accordance with
paragraph 2.4(b); and
(3) individual retirement accounts which, by their terms, are not
subject to assignment, it being understood that all other types
of XXX Deposit Liabilities are intended to be transferred.
(c) Sellers do not represent or warrant that any deposit customers whose
accounts are assumed by Purchaser will become or continue to be
customers of Purchaser after the Effective Time.
(d) Purchaser agrees to pay in accordance with law and customary banking
practices all properly drawn and presented checks, drafts and
withdrawal orders presented to Purchaser by mail, over the counter or
through the check clearing system of the banking industry, by
depositors of the accounts assumed, whether drawn on the checks,
withdrawal or draft forms provided by Sellers or by Purchaser, and in
all other respects to discharge, in the usual course of the banking
business, the duties and obligations of Sellers with respect to the
balances due and owing to the depositors whose accounts are assumed by
Purchaser; provided that Purchaser shall not be obligated to honor or
pay any item if there are insufficient funds in the customer's account
when presented.
(e) If, after the Effective Time, any depositor, instead of accepting the
obligation of Purchaser to pay the Deposit Liabilities assumed, shall
demand payment from Sellers for all or any part of any such assumed
Deposit Liabilities, Sellers shall not be liable or responsible for
making any such payment; provided, that if Sellers shall pay the same,
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Purchaser agrees to reimburse Sellers for any such payments, and
Sellers shall not be deemed to have made any representations or
warranties to Purchaser with respect to any such checks, drafts or
withdrawal orders and any such representations or warranties implied by
law are hereby expressly disclaimed. Sellers and Purchaser shall make
arrangements to provide for the daily settlement with immediately
available funds by Purchaser of checks, drafts, withdrawal orders,
returns and other items presented to and paid by Sellers within 90
calendar days after the Effective Time and drawn on or chargeable to
accounts that have been assumed by Purchaser; provided, however, that
Sellers shall be held harmless and indemnified by Purchaser for acting
in accordance with such arrangements.
(f) Purchaser agrees, at its cost and expense, (i) to notify such
depositors, on or before the Effective Time, in a form and on a date
mutually acceptable to Sellers and Purchaser, of Purchaser's assumption
of Deposit Liabilities, (ii) to furnish such depositors with checks on
the forms of Purchaser and with instructions to utilize Purchaser's
checks and to destroy unused check, draft and withdrawal order forms of
Sellers (if Purchaser so elects, Purchaser may offer to buy from such
depositors their unused Sellers' check, draft and withdrawal order
forms), (iii) to reissue all ATM and debit cards associated with the
depositors of assumed Deposit Liabilities, (iv) to replace all line of
credit checks with checks on the forms of Purchaser with instructions
to utilize Purchaser's checks and to destroy the unused checks and (v)
to disable and to notify customers of its disabling of all credit card
overdraft protection or notify the customers of alternative over-draft
protection through a different credit card or line of credit. At its
expense, Sellers will prepare and deliver to Purchaser two sets of its
normal customer mailing labels relating to the Deposit Liabilities. In
addition, subsequent to regulatory approval, Sellers will notify its
affected customers by letter of the pending assignment of Sellers'
Deposit Liabilities to Purchaser, which notice shall be at Sellers'
cost and expense and shall be in a form mutually agreeable to Sellers
and Purchaser.
(g) Purchaser agrees to pay promptly to Sellers an amount equivalent to the
amount of any checks, drafts or withdrawal orders credited to any
assumed Deposit Liabilities as of the Effective Time that are returned
to Sellers after the Effective Time.
(h) As of the Effective Time, Purchaser will assume and discharge Sellers'
duties and obligations in accordance with the terms and conditions and
laws, rules and regulations that apply to the certificates of deposit,
accounts and other Deposit Liabilities assumed under this Agreement.
(i) As of the Effective Time, Purchaser will maintain and safeguard in
accordance with applicable law and sound banking practices all account
documents, deposit contracts, signature cards, deposit slips, canceled
items and other records related to the Deposit Liabilities assumed
under this Agreement, subject to Sellers' right of access to such
records as provided in this Agreement.
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(j) Sellers will render a final statement to each depositor of an account
assumed under this Agreement as to transactions occurring through the
Effective Time and will comply with all laws, rules and regulations
regarding tax reporting of transactions of such accounts through the
Effective Time. Sellers will be entitled to impose normal fees and
service charges on a per-item basis, but Sellers will not impose
periodic fees or blanket charges in connection with such final
statements. Purchaser will comply with all laws, rules and regulations
regarding tax reporting of transactions of such accounts after the
Effective Time.
(k) Prior to the Closing Date, Purchaser, at its expense, will notify all
Automated Clearing House ("ACH") originators of the transfers and
assumptions made pursuant to the Agreement; provided, however, that
Sellers shall have provided Purchaser with all information necessary to
make such notifications and provided, further, that Sellers may, at
their option, notify all such originators (on behalf of Purchaser) also
at the expense of Purchaser. For a period of 90 calendar days beginning
on the Effective Time, Sellers will honor all ACH items related to
accounts assumed under this Agreement which are mistakenly routed or
presented to Sellers. Sellers will make no charge to Purchaser for
honoring such items, and will electronically transmit such ACH data to
Purchaser. If Purchaser cannot receive an electronic transmission,
Sellers will make available to Purchaser at Sellers' operations center
receiving items from the Automated Clearing House tapes containing such
ACH data. Items mistakenly routed or presented after the 90-day period
will be returned to the presenting party. Sellers and Purchaser shall
make arrangements to provide for the daily settlement with immediately
available funds by Purchaser of any ACH items honored by Sellers, and
Sellers shall be held harmless and indemnified by Purchaser for acting
in accordance with this arrangement to accept ACH items.
(l) Following the Effective Time, Purchaser agrees to use reasonable
efforts consistent with its normal business practices to collect from
Purchaser's customers amounts equal to any Visa or MasterCard charge
backs under the MasterCard and Visa Merchant Agreements between Sellers
and their customers or amounts equal to any deposit items returned to
Sellers after the Effective Time which were honored by Sellers prior to
the Effective Time and remit such amounts so collected to Sellers. To
the extent permitted under applicable law, Purchaser agrees promptly to
freeze and remit to Sellers any funds, up to the amount of the charged
back or returned item that had been previously credited by Sellers, if
such funds are available at the time of notification by Sellers to
Purchaser of the charged back or returned item. Notwithstanding the
foregoing, Purchaser shall have no duty to remit funds for any item or
charge that has been improperly returned or charged to Sellers. Solely
for the purposes of this paragraph (l), all references to Sellers shall
be deemed to include Sellers and its assignees.
(m) As of the Effective Time, Sellers shall transfer and assign all files,
documents and records related to the Deposit Liabilities to Purchaser,
including such information held in
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electronic form, and Purchaser will be responsible for maintaining and
safeguarding all such materials in accordance with applicable law and
sound banking practices.
Section 2.4. Loans Transferred.
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(a) Sellers will transfer to Purchaser as of the Effective Time, subject to
the terms and conditions of this Agreement, all of Sellers' right,
title and interest in (including accrued but unpaid interest and late
charges and collateral relating thereto) loans maintained, serviced and
listed as loans assigned to the Banking Center (collectively, the
"Loans"); provided, however, the Loans shall not include any loans
described in paragraph (b) below. Such Loans (as well as any lien or
security interest related thereto) shall be transferred by means of a
blanket (collective) assignment and not individually (except as may be
otherwise required by law).
(b) Notwithstanding the provisions of paragraph (a) above, the Loans shall
not include:
(1) nonaccruals (which term shall include loans in which the
collateral securing same has been repossessed or in which
collection efforts have been instituted or claim and delivery or
foreclosure proceedings have been filed);
(2) loans 90 calendar days or more past due or otherwise in default
and consumer loans which have been 30 days or more past due
three or more times during the preceding 12-month period;
(3) loans upon which insurance has been force-placed;
(4) loans in connection with which the borrower has filed a petition
for relief under the United States Bankruptcy Code prior to the
Effective Time;
(5) servicing rights in connection with residential real estate
related loans; and
(6) loans lacking original loan documentation and any intervening
assignments required by law and required to enforce the loans.
(c) Sellers and Purchaser agree that Purchaser will become the beneficiary
of credit life insurance written on direct consumer installment loans
and coverage will continue to be the obligation of the current insurer
after the Effective Time and for the duration of such insurance as
provided under the terms of the policy or certificate. If Purchaser
becomes the beneficiary of credit life insurance written on direct
consumer installment loans, Sellers and Purchaser agree to cooperate in
good faith to develop a mutually satisfactory method by which the
current insurer will make rebate payments to and satisfy claims of the
holders of such certificates of insurance after the Effective Time.
After the Effective Time, Sellers will promptly deliver to Purchaser
the proceeds of any credit life insurance relating to Loans
inadvertently received by it. The parties' obligations in this
paragraph
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(c) are subject to any restrictions contained in existing insurance
contracts as well as applicable laws and regulations.
(d) In connection with the transfer of any loans requiring notice to the
borrower and the servicer, Purchaser and Sellers will comply with all
notice and reporting requirements of the loan documents or of any law
or regulation.
(e) All Loans will be transferred without recourse and without any
warranties or representations as to their collectibility or the
creditworthiness of any of the obligors of such Loans.
(f) Purchaser will at its expense issue new coupon books or other forms of
payment identification for payment of Loans for which Sellers provide
coupon books with instructions to utilize Purchaser's coupons or forms
and to destroy coupons furnished by Sellers.
(g) For a period of 90 calendar days after the Effective Time, Sellers will
forward to Purchaser loan payments received by Sellers. Purchaser shall
reimburse Sellers for checks returned on payments forwarded to
Purchaser.
(h) As of the Effective Time, Sellers shall transfer and assign all files,
documents and records related to the Loans to Purchaser, including such
information held in electronic form, and Purchaser will be responsible
for maintaining and safeguarding all such materials in accordance with
applicable law and sound banking practices.
(i) If the balance due on any Loan purchased pursuant to this Section 2.4
has been reduced by Sellers as a result of a payment by check received
prior to the Effective Time, which item is returned after the Effective
Time, the asset value represented by the Loan transferred shall be
correspondingly increased and an amount in cash equal to such increase
shall be paid by Purchaser to Sellers promptly upon demand.
(j) Sellers shall grant to Purchaser as of the Effective Time a limited
power of attorney, in substantially the form attached hereto as Exhibit
2.4(j) (the "Power of Attorney").
Section 2.5. Safe Deposit Business.
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(a) As of the Effective Time, Purchaser will assume and discharge Sellers'
obligations with respect to the safe deposit box business at the
Banking Center in accordance with the terms and conditions of contracts
or rental agreements related to such business, and Purchaser will
maintain all facilities necessary for the use of such safe deposit
boxes by persons entitled to use them.
(b) As of the Effective Time, Sellers shall transfer and assign the records
related to such safe deposit box business to Purchaser, and Purchaser
shall maintain and safeguard all such
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records and be responsible for granting access to and protecting the
contents of safe deposit boxes at the Banking Center.
(c) Safe deposit box rental payments collected by Sellers before the
Effective Time shall be prorated to the Closing Date.
Section 2.6. Employee Matters.
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(a) Purchaser will offer employment to certain employees actively employed
by Sellers at the Banking Center as of the Effective Time (the
"Employees"), as provided on Exhibit 2.6(a), subject to Purchaser's
standard screening procedures, including, but not limited to, drug
testing. The responsibilities of Sellers and Purchaser with respect to
the Employees and the certain employees who will not be offered
employment by Purchaser are governed by Exhibit 2.6(a). The base salary
for each Employee hired by Purchaser shall not be less than the base
salary provided by Sellers immediately prior to the Effective Time,
subject to changes due to employment classification. With respect to
Purchaser's qualified plans, the Employees will be treated as new
hires; however, Employees who immediately become employees of Purchaser
will immediately participate in welfare benefit plans maintained by
Purchaser without regard to pre-existing conditions or waiting periods,
if and to the extent that such Employees are participating in Sellers'
welfare benefit plans immediately prior to the Closing Date. Employees
will be required to satisfy the deductible and employee payments (if
any) and all other terms and conditions required by Purchaser's plans.
Employees shall receive full credit for prior service with Sellers for
purposes of determining their participation and benefit accrual under
Purchaser's vacation and sick leave policies. Employees who immediately
become employees of Purchaser will be eligible for severance benefits
consistent with the Purchaser's severance policies or plans, provided
that all service with the Sellers shall be taken into account in
determining benefits under Purchaser's severance policies or plans.
Purchaser shall not be responsible or liable for any benefits accrued
under the pension or welfare plans of Sellers. Sellers will be
responsible for all accrued but not paid vacation pay for the Employees
through the Closing Date. Notwithstanding anything to the contrary set
forth above or implied therein, Purchaser does not intend and is not
entering into employment contracts with any of the Employees, and each
of the Employees, if any, who becomes employed by Purchaser, will
continue to be an "employee at will" of Purchaser as that term is
normally construed under the laws of the State of Indiana.
(b) After the execution of this Agreement, Sellers will continue their
normal employment practices in staffing the Banking Center; however,
Sellers make no representations or warranties about whether any of the
Employees who become employees of Purchaser will remain employed at the
Banking Center after the Effective Time. Sellers will use their best
efforts to: (i) maintain the Employees as employees of Sellers at the
Banking Center until the Effective Time, (ii) refrain from dissuading
any Employee from accepting an offer of employment with Purchaser or
(iii) refrain from recruiting employees for alternate positions with
Sellers. Sellers shall affirmatively advise Banking Center
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Employees that their current positions will terminate as of the
Effective Time. Any Employee whose employment shall be terminated for
any reason prior to the Effective Time shall be dealt with by Sellers
in their sole and absolute discretion. Any Employee who, for any
reason, elects not to accept Purchaser's offer of employment shall be
deemed to be part of Sellers' pool of unassigned employees and may,
after the Effective Time, be assigned to any openings in Sellers'
banking system or terminated. Sellers agree that, for a period of 24
months after the Closing Date, they will not solicit for employment any
Employee who remains employed by Purchaser.
(c) After the execution of this Agreement and subject to any legal
restrictions, Sellers shall permit Purchaser, at reasonable times and
upon reasonable notice, to examine and inspect Sellers, records
relating to Employees.
Section 2.7. Records and Data Processing, etc.
----------- --------------------------------
(a) As of the Effective Time, Purchaser shall become responsible for
maintaining the files, documents and records referred to in this
Agreement. Purchaser will preserve and hold them in safekeeping as
required by applicable law and sound banking practice for the joint
benefit of Sellers and Purchaser. After the Effective Time, Purchaser
will permit Sellers and their representatives, for reasonable cause, at
reasonable times and upon reasonable notice, to examine, inspect, copy
and reproduce any such files, documents or records as Sellers deem
reasonably necessary and to have similar access to such records and
Sellers' former employees for purposes of preparation of records and
reports (including regulatory and tax reports and returns) and as
Sellers require in connection with third party litigation.
(b) As of the Effective Time, Sellers will permit Purchaser and its
representatives, for reasonable cause, at reasonable times and upon
reasonable notice, to examine, inspect, copy and reproduce files,
documents or records retained by Sellers regarding the assets and
liabilities transferred under this Agreement as Purchaser deems
reasonably necessary.
(c) For a period of 180 days after the Effective Time, the party providing
copies of records shall do so without charge; thereafter it may charge
its customary rate for such copies.
(d) It is understood that certain of Sellers' records, including
certificates of deposit, may be available only in electronic form or in
the form of photocopies, film copies or other non-original and
non-paper media.
(e) After the execution of this Agreement, Sellers will work with Purchaser
to prepare mutually satisfactory schedules of Assets and contracts to
be sold hereunder.
Section 2.8. Security.
----------- --------
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As of the Effective Time, Purchaser shall be solely responsible for the security
of and insurance on all persons and property located in or about the Banking
Center.
Section 2.9. Taxes and Fees; Proration of Certain Expenses.
----------- ---------------------------------------------
(a) Purchaser shall not be responsible for, or have any liability with
respect to, taxes on any income to Sellers arising out of this
transaction. Purchaser shall not be responsible for any income tax
liability of Sellers arising from the business or operations of the
Banking Center before the Effective Time, and Sellers shall not be
responsible for any tax liabilities of Purchaser arising from the
business or operations of the Banking Center after the Effective Time.
Utility payments, telephone charges, real property taxes, personal
property taxes, rent, salaries, deposit insurance premiums or
assessments, maintenance items, other ordinary operating expenses of
the Banking Center and other expenses related to the liabilities
assumed or assets purchased hereunder shall be prorated between the
parties as of the Effective Time. To the extent any such item has been
prepaid by Sellers for a period extending beyond the Effective Time,
there shall be a proportionate monetary adjustment in favor of Sellers.
Purchaser shall be responsible for the payment of any non-delinquent
assessments. Real estate taxes shall be prorated on a calendar year
basis, based upon the maximum allowable discount and other applicable
exemptions. Sellers will remain responsible for all real property taxes
for any period prior to 1999.
(b) Sellers and Purchaser shall each be responsible for their own costs
with respect to the preparation and filing of any tax returns, as well
as the preparation, review and analysis of the allocation statements
and any forms or statements prepared in connection with the allocation
of the final purchase price.
Section 2.10. Title to Real Property.
------------ ----------------------
(a) Sellers agree to deliver to Purchaser as soon as reasonably possible
upon Purchaser's request copies of all title information in possession
of Sellers, including, but not limited to, title insurance policies,
attorneys' opinions on title, surveys, covenants, deeds and easements
relating to the Real Property. Such delivery shall constitute no
warranty by Sellers as to the accuracy or completeness thereof or that
Purchaser is entitled to rely thereon.
(b) Sellers will provide as soon as practicable, but not later than 60 days
after the date of this Agreement:
(1) a title insurance commitment, from a national title insurance
company selected by Sellers and reasonably satisfactory to
Purchaser, irrevocably undertaking to issue an owner's policy of
title insurance insuring Purchaser's title to the real estate
and related easements and rights appurtenant thereto for the Net
Book Value of the land and buildings (Purchaser may elect to
increase coverage, at Purchaser's expense), which commitment
shall provide that the owners title
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insurance policy to be issued pursuant thereto will be endorsed
to remove any binding arbitration provisions, and which
commitment will be accompanied by legible copies of all title
exception instruments identified in the commitment (Purchaser's
payment of its share of the title insurance premium will be
included in the settlement wire transfer). Seller agrees to
execute such affidavit regarding off-record title matters as may
be required by the title insurer to remove the so-called
"standard exceptions" to title, except for survey matters.
Sellers shall pay one-half the cost of said title insurance
commitment (including the title examination) and policy and
Purchaser shall pay the other one-half of such cost, except that
the Purchaser shall pay the entire cost of any increased amount
of coverage, as provided above, and the entire cost of any
endorsements or affirmative coverages desired by Purchaser.
(2) a survey as is required by the title insurer to remove the
survey exception in the title insurance policy, to be conducted
by a surveyor selected by Sellers and reasonably satisfactory to
Purchaser. Sellers shall pay one-half the cost of such survey
and Purchaser shall pay the other one-half of such cost. If
Purchaser desires information to be included on the survey which
is in addition to information that is required on the survey to
remove the survey exception in the title insurance policy,
Purchaser shall be responsible for obtaining such additional
survey work, at Purchaser's sole cost and expense.
(c) Purchaser agrees to notify Sellers, in writing within 30 calendar days
after the date of Purchaser's receipt of both the title insurance
commitment and survey obtained by Sellers described in paragraph (b)
above, of any mortgages, pledges, material liens, encumbrances,
reservations, tenancies, encroachments, overlaps or other title
exceptions, survey objections, or zoning or similar land use violations
(excluding legal but nonconforming uses) or material engineering or
structural problems related to the Real Property to which Purchaser
reasonably objects (the "Title Defects"). If Purchaser does not notify
Sellers of Title Defects within such time period, Purchaser shall be
deemed to have waived its rights under this Section 2.10. Purchaser
agrees that Title Defects shall not include real property taxes not yet
due and payable or easements, restrictions, tenancies, survey matters,
rights of way or other title matters which Purchaser deems acceptable
in Purchaser's reasonable discretion. During the 30-day period after
Sellers' receipt from Purchaser of said notice of any Title Defects,
Sellers shall have the right, but not the obligation, to attempt to
correct any such Title Defect to Purchaser's reasonable satisfaction.
If Sellers are unable or unwilling to cure any such Title Defects to
Purchaser's reasonable satisfaction, Purchaser shall have the option
either to terminate this Agreement (upon written notice to Sellers and
subject to Sellers' option to lease the Banking Center to Purchaser
pursuant to paragraph 2.10(e)) with respect to the Banking Center, at
which the Real Property having such Title Defects is located or to
receive title in its then existing condition. Upon termination of this
Agreement with respect to a particular tract of property pursuant to
this Section 2.10, no party shall have any further liability to the
other party under this Agreement except as set forth in Section 10.2.
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(d) Purchaser shall have the right to request that the title insurance
company update title matters up to 10 business days prior to the
Closing Date for any changes which may have arisen between the date of
the original title search and the Closing Date. If such update
indicates that any Title Defects have been placed of record since the
date of Purchaser's original title search, and Purchaser reasonably
objects thereto in writing, then Sellers shall make a good faith effort
to cure any such Title Defect to Purchaser's reasonable satisfaction.
If Sellers are unable or unwilling to cure any such Title Defect,
Purchaser shall have the option to receive title in the then existing
condition, to terminate this Agreement (upon written notice to Sellers
and subject to Sellers' option to lease the Banking Center to Purchaser
pursuant to paragraph 2.10(e)) with respect to the Banking Center, or
to enter into the lease of that Banking Center as described in
paragraph 2.10(e).
(e) In the event Purchaser notifies Sellers of its intent under this
Section 2.10 to terminate this Agreement with respect to the Banking
Center due to an unacceptable Title Defect, Sellers may elect to lease
the Banking Center to Purchaser at a reasonable rent, based on a
valuation of the Banking Center at its Net Book Value, for a term of 10
years, in which event Purchaser will have no right to terminate the
Agreement with respect to the Banking Center. The parties agree that if
they cannot agree upon the rent to be payable for the Banking Center to
be leased to Purchaser under this provision, the rent shall be
determined by an appraisal to be conducted by an appraiser acceptable
to both parties, with the cost of such appraisal to be shared equally
by both parties, based on a valuation of the Banking Center at its Net
Book Value. If Purchaser leases the Banking Center under this paragraph
2.10(e) and if, following the Closing and at any time during the term
of such lease, Sellers cure the unacceptable Title Defect, Sellers
shall promptly sell and convey the Banking Center to Purchaser, upon
the terms specified in this Agreement, whereupon such lease shall be
terminated. In the event of such sale, the purchase price of the
Banking Center shall be reduced (but not to less than zero) by the
amount of the rent paid by Purchaser to Sellers pursuant to such lease.
Section 2.11. Environmental Matters.
------------ ---------------------
(a) Sellers agree to deliver to Purchaser as soon as reasonably possible,
upon Purchaser's request copies of all environmental studies, reports
and audits in Sellers' possession related to the Banking Center.
(b) Purchaser shall have the right, but not the obligation, at their sole
cost and expense, to cause such investigations and tests to be made as
they deem necessary to determine whether there has been any soil,
surface water, groundwater, or building space contamination on or under
the Real Property. Sellers shall provide reasonable assistance to
Purchaser and/or their agents or contractors in their evaluation and
testing of the Real Property and Sellers shall provide Purchaser and/or
their agents or contractors access to pertinent records and documents.
Sellers authorize Purchaser and/or their agents or contractors to
contact governmental agencies regarding the environmental status of the
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Real Property. Purchaser shall report the results of any such
investigations or tests to Sellers no later than 30 days after the date
of this Agreement; provided, however, that without the prior written
consent of Sellers, which consent will not unreasonably be withheld,
and execution of a satisfactory property access agreement, Purchaser
shall not conduct subsurface testing, any ground water monitoring or
install any test well or undertake any other investigation which
requires a permit or license from, or the reporting of the
investigation or the results thereof to, a local or state environmental
regulatory authority or the United States Environmental Protection
Agency. If Purchaser object to any material adverse environmental
condition which impacts the Banking Center, Sellers shall have the
right, but not the obligation, to cure any such material adverse
environmental condition which is discovered by Purchaser's
investigation. If at the end of the applicable 30-day period, Sellers
are unable or unwilling to cure such problem, Purchaser shall have the
option to accept the premises in the then existing condition or to
terminate this Agreement with respect to that particular Banking Center
affected by the environmental problem (subject to Sellers' option to
lease the Banking Center to Purchaser pursuant to paragraph 2.11(c)),
in which event neither party shall have any liability to the other
party with respect to such Banking Center.
(c) In the event Purchaser notify Sellers of their intent under this
Section 2.11 to terminate this Agreement with respect to any Banking
Center due to an environmental problem, Sellers may elect to lease the
Banking Center to Purchaser at a reasonable rent, based on a valuation
of the Banking Center at its Net Book Value, for a term of 10 years, in
which event Purchaser will have no right to terminate the Agreement
with respect to that particular Banking Center. The parties agree that
if they cannot agree upon the rent to be payable for any such Banking
Center to be leased to Purchaser under this provision, the rent shall
be determined by an appraisal to be conducted by an appraiser
acceptable to both parties, with the cost of such appraisal to be
shared equally by both parties, based on a valuation of the Banking
Center at its Net Book Value. If Purchaser lease the Banking Center
under this paragraph 2.11(c) and if, following the Closing and at any
time during the term of such lease, Sellers cure the environmental
problem, Sellers shall promptly sell and convey the Banking Center to
Purchaser, upon the terms specified in this Agreement, whereupon such
lease shall be terminated.
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ARTICLE III
CLOSING AND EFFECTIVE TIME
Section 3.1. Effective Time.
----------- --------------
(a) The purchase of assets and assumption of liabilities provided for in
this Agreement shall occur at a closing (the "Closing") to be held at
the offices of Sellers in Columbus, Ohio, at 10:00 a.m., local time, or
at such other time, place, and manner as the parties shall mutually
agree, on a date to be mutually agreed upon between the parties, which
date shall be after the receipt of all necessary approvals by
regulatory agencies and after all statutory waiting periods have
expired and no later than September 30, 2000. The effective time (the
"Effective Time") shall be 5:00 p.m., local time, on the day on which
the Closing occurs (the "Closing Date").
(b) Sellers and Purchaser may agree to conduct the Closing by exchanging
executed and original documents by overnight courier service for
delivery on the Closing Date. In this case, all Closing documents shall
be held in escrow by the parties' counsel pending their receipt of
confirmation that all Closing documents have been received and are
satisfactory, respectively, and that the parties' wire transfer(s) of
funds required under this Agreement have been received and credited to
their designated account(s). Upon the parties' receipt of such
confirmation(s), respectively, such Closing documents shall be released
from escrow by such counsel and the Closing shall be deemed to have
been consummated.
Section 3.2. Closing.
----------- -------
(a) All actions taken and documents delivered at the Closing shall be
deemed to have been taken and executed simultaneously, and no action
shall be deemed taken nor any document delivered until all have been
taken and delivered.
(b) At the Closing, subject to all the terms and conditions of this
Agreement, Sellers shall execute and deliver to Purchaser or, in the
case of items (6), (7), (8), (10) and (11), make reasonably available
to Purchaser:
(1) warranty deeds in recordable form executed by the appropriate
Seller transferring good and marketable title to the Real
Property, free and clear of any and all liens, restrictions, or
encumbrances, except for Permitted Exceptions and any other such
matters that are shown on the title commitment to be provided to
Purchaser hereunder, in and to each parcel of Real Property to
Purchaser in substantially the form attached hereto as Exhibit
3.2(b)(1);
(2) a Xxxx of Sale, in substantially the form attached hereto as
Exhibit 3.2(b)(2) (the "Xxxx of Sale"), transferring to
Purchaser all of Sellers interest in the Personal Property and
in the Loans;
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(3) an Assignment and Assumption Agreement in substantially the form
attached hereto as Exhibit 3.2(b)(3) (the "Assignment and
Assumption Agreement"), assigning Sellers' interest in the
Equipment Leases, the Safe Deposit Contracts, and the Deposit
Liabilities;
(4) [reserved];
(5) consents from third persons that are required to effect the
assignments set forth in the Assignment and Assumption
Agreement;
(6) Sellers' keys to the safe deposit boxes and Sellers' records
related to the safe deposit box business at the Banking Center;
(7) Sellers' files and records related to the Loans;
(8) Sellers' records related to the Deposit Liabilities assumed by
Purchaser;
(9) immediately available funds in the net amount shown as owing to
Purchaser by Sellers on the Closing Statement, if any;
(10) the Coins and Currency;
(11) such of the other assets to be purchased as shall be capable of
physical delivery;
(12) a certificate of a proper officer of each Seller, dated as of
the Closing Date, certifying to the fulfillment of all
conditions which are the obligation of that Seller and that all
of the representations and warranties of such Seller set forth
in this Agreement remain true and correct in all material
respects as of Effective Time;
(13) copies of (A) the charters and bylaws of Sellers and (B) a
resolution of the Boards of Directors of Sellers, or the
Executive Committees of Sellers, approving the sales
contemplated herein;
(14) such certificates and other documents as Purchaser and its
counsel may reasonably require to evidence the receipt by
Sellers of all necessary regulatory authorizations and approvals
for the consummation of the transactions provided for in this
Agreement;
(15) a Closing Statement using amounts shown on the Pre-Closing
Balance Sheet, substantially in the form attached hereto as
Exhibit 3.2(b)(15) (the "Closing Statement");
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(16) an affidavit of Sellers certifying that Sellers are not "foreign
persons" as defined in the federal Foreign Investment in Real
Property Tax Act of 1980;
(17) the Power of Attorney;
(18) lease agreements for any Banking Center to be leased to the
Purchaser under the provisions of Section 2.10;
(19) such title insurance affidavits as may be required by the title
insurance company; and
(20) such certificates and other documents as the parties and their
respective counsel may reasonably require to evidence receipt of
all necessary regulatory authorizations and approvals for the
consummation of the transactions provided for in this Agreement.
It is understood that the items listed in items (6), (7), (8), (10) and
(11) shall be transferred at the Banking Center immediately after the
Banking Center have closed for business on the Closing Date.
(c) At the Closing, subject to all the terms and conditions of this
Agreement, Purchaser shall execute and deliver to Sellers:
(1) the Assignment and Assumption Agreement;
(2) [reserved];
(3) a certificate and receipt acknowledging the delivery and receipt
of possession of the Assets and records referred to in this
Agreement;
(4) immediately available funds in the net amount shown as owing to
Sellers by Purchaser on the Closing Statement, if any;
(5) a certificate of a proper officer of Purchaser, dated as of the
Closing Date, certifying to the fulfillment of all conditions
which are the obligation of Purchaser and that all of the
representations and warranties of Purchaser set forth in this
Agreement remain true and correct in all material respects as of
the Effective Time;
(6) copies of (A) the charters and bylaws of Purchaser and (B) a
resolution of the Boards of Directors, or the Executive
Committees, of Purchaser approving the purchases contemplated
herein; and
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(7) such certificates and other documents as Sellers and its counsel
may reasonably require to evidence the receipt by Purchaser of
all necessary regulatory authorizations and approvals for the
consummation of the transactions provided for in this Agreement.
(d) All instruments, agreements, and certificates described in this Section
3.2 shall be in form and substance reasonably satisfactory to the
parties' respective legal counsel.
Section 3.3. Post Closing Adjustments.
----------- ------------------------
(a) Not later than 30 days after the Effective Time (the "Post-Closing
Balance Sheet Delivery Date"), Huntington shall deliver to Purchaser a
balance sheet dated as of the Effective Time and prepared in accordance
with generally accepted accounting principles consistently applied
reflecting the assets sold and assigned and the liabilities transferred
and assumed hereunder (the "Post-Closing Balance Sheet"), including,
but not limited to, the specific items described in paragraph 2.2(a)(1)
through (4) above, as adjusted, together with a copy of Huntington's
calculation of the adjusted purchase price and amounts payable
thereunder. Additionally, Huntington shall deliver to Purchaser a final
list of Loans purchased, individually identified by account number.
Huntington shall afford Purchaser and its accountants and attorneys the
opportunity to review all work papers and documentation used by
Huntington in preparing the Post-Closing Balance Sheet. Within 15 days
following the Post-Closing Balance Sheet Delivery Date (the "Adjustment
Payment Date"), Huntington and Purchaser shall meet at the offices of
Huntington in Columbus, Ohio, or such other location as may be mutually
agreed, to effect the transfer of any funds as may be necessary to
reflect changes in such assets and liabilities between the Pre-Closing
Balance Sheet and the Post-Closing Balance Sheet and resulting changes
in the purchase price, together with interest thereon computed from the
Effective Time to the Adjustment Payment Date at the applicable Federal
Funds Rate (as hereinafter defined).
(b) In the event that a dispute arises as to the appropriate amounts to be
paid to either party on the Adjustment Payment Date, each party shall
pay to the other on such Adjustment Payment Date all amounts other than
those as to which a dispute exists. Any disputed amounts retained by a
party which are later found to be due to the other party shall be paid
to such other party promptly upon resolution with interest thereon from
the Effective Time to the date paid at the applicable Federal Funds
Rate.
(c) The Federal Funds Rate shall be the mean of the high and low rates
quoted for Federal Funds in the Money Rates column of The Wall Street
Journal adjusted as such mean may increase or decrease during the
period between the Effective Time and the date paid.
ARTICLE IV
INDEMNIFICATION
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Section 4.1. Huntington's Indemnification of Purchaser.
----------- -----------------------------------------
(a) Subject to any limitations in paragraphs 4.1(b) or otherwise contained
in this Agreement, Huntington shall indemnify, hold harmless, and
defend Purchaser from and against (i) any breach by Sellers of any
representation or warranty contained herein, (ii) claims or liabilities
relating to any Title Defect or environmental contamination existing
prior to the Effective Time in any Banking Center leased to the
Purchaser under the provisions of paragraph 2.10(e) or paragraph
2.11(c), and (iii) all claims, losses, liabilities, demands, and
obligations, including reasonable attorneys' fees and expenses, arising
out of any actions, suits, or proceedings commenced prior to the
Effective Time (other than proceedings to prevent or limit the
consummation of this transaction) relating to Sellers' operations at
the Banking Center; and, except as otherwise provided in this
Agreement, Huntington shall further indemnify, hold harmless, and
defend Purchaser from and against all claims, losses, liabilities,
demands, and obligations, including reasonable attorneys' fees and
expenses, real estate taxes, intangibles and franchise taxes, sales and
use taxes, social security and unemployment taxes, all accounts
payable, and operating expenses (including salaries, rents, and utility
charges) incurred by Sellers, prior to the Effective Time and which are
claimed or demanded on or after the Effective Time, or which arise out
of any actions, suits, or proceedings commenced on or after the
Effective Time and which relate to Sellers' operations or transactions
at the Banking Center prior to the Effective Time.
(b) The Purchaser's sole remedy for a breach of the representations and
warranties contained in Section 5.11 shall be to require the Sellers to
purchase any Loans which Purchaser in good xxxxx xxxx to breach such
representation and warranty (a "Purchase Right"). The Purchase Right
can be exercised only for a period ending on the earlier of 60 days
after discovery of such breach or 12 months after the Closing Date.
Alternatively, the parties may agree to extend that exercise period
with respect to a particular Loan or group of Loans and permit
Purchaser to continue their customary processing and collection efforts
with respect to such Loans.
Section 4.2. Purchaser's Indemnification of Sellers.
----------- --------------------------------------
Purchaser shall indemnify, hold harmless, and defend Sellers from and against
any breach by Purchaser of any representation or warranty contained herein and
all claims, losses, liabilities, demands and obligations, including reasonable
attorneys' fees and expenses, real estate taxes, intangibles and franchise
taxes, sales and use taxes, social security and unemployment taxes, all accounts
payable, and operating expenses (including salaries, rents and utility charges),
which any of Sellers may receive, suffer, or incur in connection with operations
and transactions occurring after the Effective Time and which involve the
Banking Center, the Transferred Assets, or the liabilities assumed by Purchaser
pursuant to this Agreement.
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Section 4.3. Claims for Indemnity.
----------- --------------------
(a) A claim for indemnity under Sections 4.1 or 4.2 of this Agreement may
be made by the claiming party at any time prior to (i) 120 months after
the Effective Time in case of a claim under Section 4.1(a)(ii), and
(ii) 24 months after the Effective Time for all other items, by the
giving of written notice thereof to the other party. Such written
notice shall set forth in reasonable detail the basis upon which such
claim for indemnity is made. In the event that any such claim is made
within, the prescribed period, the indemnity relating to such claim
shall survive until such claim is resolved. Claims not made within such
period shall cease and no indemnity shall be made therefor.
(b) In the event that any person or entity not a party to this Agreement
shall make any demand or claim or file or threaten to file any lawsuit,
which demand, claim or lawsuit may result in any liability, damage or
loss to one party hereto of the kind for which such party is entitled
to indemnification pursuant to Section 4.1 or 4.2 hereof, then, after
written notice is provided by the indemnified party to the indemnifying
party of such demand, claim or lawsuit, the indemnifying party shall
have the option, at its cost and expense, to retain counsel for the
indemnified party to defend any such demand, claim or lawsuit. In the
event that the indemnifying party shall fail to respond within five
calendar days after receipt of such notice of any such demand, claim or
lawsuit, then the indemnified party shall retain counsel and conduct
the defense of such demand, claim or lawsuit as it may in its
discretion deem proper, at the cost and expense of the indemnifying
party. In effecting the settlement of any such demand, claim or
lawsuit, an indemnified party shall act in good faith, shall consult
with the indemnifying party and shall enter into only such settlement
as the indemnifying party shall approve (the indemnifying party's
approval will be implied if it does not respond within ten calendar
days of its receipt of the notice of such settlement offer).
Section 4.4. Limitations on Indemnification.
----------- ------------------------------
Notwithstanding anything to the contrary contained in this Article IV, no
indemnification shall be required to be made by either party until the aggregate
amount of all such claims by a party exceeds $50,000. Once such aggregate amount
exceeds $50,000, such party shall thereupon be entitled to indemnification for
all amounts in excess of such $50,000. IN ADDITION, THE PARTIES SHALL HAVE NO
OBLIGATIONS UNDER THIS ARTICLE IV FOR ANY CONSEQUENTIAL LIABILITY, DAMAGE OR
LOSS THE INDEMNIFIED PARTY MAY SUFFER AS THE RESULT OF ANY DEMAND, CLAIM OR
LAWSUIT.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS
Except as otherwise specifically herein provided, and except as specifically
disclosed to Purchaser in writing prior to the date hereof, or as otherwise
disclosed as described in the
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particular Sections of this Article V, Huntington, on behalf of itself and its
subsidiaries, hereby represents and warrants to Purchaser as follows:
Section 5.1. Corporate Organization.
----------- ----------------------
Huntington is a bank holding company duly organized, validly existing, and in
good standing under the laws of the State of Maryland. HNB is a national banking
association duly organized, validly existing and in good standing under the laws
of the United States. Sellers have the corporate power and authority to carry on
their respective businesses as currently conducted and to effect the
transactions contemplated herein.
Section 5.2. No Violation.
----------- ------------
The Banking Center has been operated in all material respects in accordance with
applicable laws, rules and regulations. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated herein,
will violate or conflict with (i) Sellers' charters or bylaws; (ii) any material
provision of any material agreement or any other material restriction of any
kind to which Sellers are parties or by which Sellers are bound; (iii) any
material statute, law, decree, regulation, or order of any governmental
authority; or (iv) any material provision which will result in a default under,
or cause the acceleration of the maturity of, any material obligations or loans
to which Sellers are parties.
Section 5.3. Corporate Authority.
----------- -------------------
Prior to the Closing Date, the consummation of the transactions contemplated
herein will have been duly authorized by the Board of Directors or the Executive
Committee of each corporate entity conveying assets or liabilities to Purchaser
under this Agreement. No further corporate authorization is necessary for
Sellers to consummate the transactions contemplated hereunder.
Section 5.4. Enforceable Agreement.
----------- ---------------------
This Agreement has been duly executed and delivered by Huntington and HNB and is
the legal, valid, and binding agreement of Huntington and HNB, enforceable
against each of Huntington and HNB in accordance with its terms.
Section 5.5. No Brokers.
----------- ----------
All negotiations relative to this Agreement and the transactions contemplated
hereby have been carried on by Huntington, Purchaser, and Xxxxx X. Xxxxx &
Company, and there has been no participation or intervention by any other
person, firm or corporation employed or engaged by or on behalf of Sellers in
such a manner as to give rise to any valid claim against Sellers or Purchaser
for a brokerage commission, finder's fee or like commission.
Section 5.6. Personal Property.
----------- -----------------
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Sellers own, and will convey to Purchaser at the Closing, all of Sellers' right,
title, and interest to all of the Personal Property free and clear of any
mortgages, liens, security interests or pledges. Such items are in generally
good working order other than items that are not material or items that do not,
in the aggregate, exceed $10,000 in value.
Section 5.7. Real Property.
----------- -------------
Sellers make the following additional representations regarding the Real
Property:
(a) Except as specifically set forth herein, there are no condemnation
proceedings pending against the Real Property locations.
(b) Except as specifically set forth herein, Sellers have not entered into
any agreement regarding the Real Property, and to Seller's knowledge
the Real Property is not subject to any claim, demand, suit, lien,
proceeding or litigation of any kind, pending or outstanding, or
threatened which would materially affect or limit Purchaser's use and
enjoyment of the Real Property or which would materially limit or
restrict Sellers' right or ability to enter into this Agreement and
consummate the sale and purchase contemplated hereby.
(c) To Sellers' knowledge, (i) no fact or condition exists which would
result in the permanent termination or material impairment of access to
the Real Property from adjoining public streets or highways or in the
permanent discontinuance of necessary utilities services to the Real
Property, and (ii) all sanitation, plumbing, refuse disposal, and
similar facilities servicing the Banking Center are in material
compliance with applicable governmental regulations.
(d) No complaints or other notice have been received by Sellers that
Sellers are in violation of applicable building, zoning, platting,
subdivision, use, safety, building or similar laws, ordinances,
regulations and restrictions with respect to the Banking Center. To
Sellers' knowledge, there are no special or general assessments pending
against or affecting the Real Property and, to Sellers' knowledge, no
public improvements have been recently made which would cause special
or general assessments to be assessed against the Real Property. Except
for any encroachment which does nonmaterially affect the use or value
of the premises: (i) to Sellers' knowledge, there is no encroachment
upon the Real Property from any buildings or improvements, if any,
located on the adjacent property; and (ii) to Sellers' knowledge, there
is no encroachment by the Real Property upon any adjacent property or
upon any easements with respect to the adjacent property. There are no
leases or other agreements by which any person possesses or has a right
to possess all or any portion of the Real Property other than those
described in this Agreement or exhibits to this Agreement. To Sellers'
knowledge, and except as disclosed by title insurance binder or by
survey, there is no violation of any applicable building restriction or
restrictive covenant. To Sellers' knowledge, the Real Property is
adequately serviced
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by all utilities necessary for effective operation as presently used
for a financial institution office.
Until the Closing Date, Purchaser's sole remedy for a breach of the
representations and warranties in this Section 5.7 shall be as provided in
Sections 2.10(e).
Section 5.8. Condition of Property.
----------- ---------------------
Except as may be otherwise specifically set forth in this Agreement, the Real
Property and Personal Property to be purchased by Purchaser hereunder are sold
"AS IS, WHERE IS," with no warranties or representations whatsoever, except as
may be expressly represented or warranted in this Agreement.
Section 5.9. Employees.
----------- ---------
No Employee located in the Banking Center is a party to any collective
bargaining, employment, severance, termination, or change of control agreement
or represented by a labor organization of any type other than Sellers'
established terms of employment and severance policies. Sellers are unaware of
any efforts during the past three years to unionize or organize the employees of
any of the Banking Center. Exhibit 5.9 sets forth a true and correct list of all
employees of the Banking Center as of the date hereof, and a list of any and all
bonus or incentive or other compensation arrangements or commitments, other than
benefits plans applicable to all Huntington employees, for each such employee or
for the employees as a group. Purchaser agree to keep such information in
strictest confidence and to confine knowledge of such information to those of
its officers and personnel who have a need to know such information in
connection with the performance of their duties. None of the employees of the
Banking Center is a party to any employment contract, formal or informal, oral
or written, or represented under any collective bargaining agreement relating to
employment with Sellers.
Section 5.10. Assumed Contracts.
------------ -----------------
Each of the Equipment Leases, and the Software Licenses is valid and subsisting,
in full force and effect, and Sellers have performed in all material respects
all obligations required to be performed by Sellers thereunder; and no condition
exists which constitutes or, with notice, or lapse of time, would constitute a
material default thereunder.
Section 5.11. Loans.
------------ -----
(a) Each Loan was made in the ordinary course of business, has been
properly executed by the parties thereto, represents the valid and
binding obligation of the obligor, enforceable by the holder thereof in
accordance with its terms, is free from any material defenses, contains
customary enforcement provisions such that the rights and remedies of
the holder thereof are adequate for enforcement of the Loans, and,
unless approved by Sellers and documented in their files, no material
provision of a Loan has been waived.
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(b) Each Loan (such term to include, for purposes of this paragraph, the
principal documents relating in any way to such Loans, including notes,
mortgages, security instruments, and guarantees) complies and has been
administered in all material respects with all requirements of
applicable Federal, state, and local laws and regulations.
(c) Each Loan that is secured by collateral is secured by a perfected
mortgage or security interest in the collateral in favor of Sellers as
mortgagee or secured party. No collateral has been released from the
lien granted to Sellers, unless approved by Sellers and documented in
their files.
(d) No selection procedures believed to be adverse to Purchaser have been
utilized by Sellers in selecting the Loans.
(e) Purchaser's sole remedy for a breach of the representations and
warranties in this Section 5.11 shall be as provided in paragraph
4.1(b).
Section 5.12. Environmental Matters.
------------ ---------------------
Except as previously disclosed to Purchaser in writing, to the actual knowledge
of the Executive Officers of Sellers or the senior property management officer
for the geographic region in which the Banking Center are located, and without
any investigation by such officers:
(a) Each Banking Center is, in all material respects, in compliance with
all applicable Federal, state, local, or municipal statutes, ordinance,
laws, and regulations and all orders, rulings, or other decisions of
any court, administrative agency, or any other governmental authority
relating to the protection of the environment.
(b) No Banking Center is constructed of, nor does it contain as a component
part, any material (either in its present form or as it may reasonably
be expected to change through aging or normal use) which reasonably can
be expected to release any substance, whether gaseous, liquid, or solid
or that is known to be (either by single exposure or by repeated or
prolonged exposure) injurious or hazardous to the health of persons
occupying the premises or is a Hazardous Substance (defined below).
Without limiting the generality of this Section, the Banking Center is,
and during all applicable limitation periods has been, to Sellers'
knowledge, free of asbestos except to the extent properly sealed or
encapsulated in compliance with all applicable Environmental Laws
(defined below) and all work-place safety, disability and health laws,
regulations, and guidelines so as to completely prevent the escape of
asbestos particles or fibers.
(c) During Sellers' ownership and operation, no part of any Banking Center
has been used for the manufacture, handling, storage, or disposal of
Hazardous Substances, except for conventional cleaning and maintenance
materials in quantities customary for commercial operations of the
nature conducted by Sellers at such Banking Center.
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(d) Except as disclosed in writing to Purchaser, no Banking Center
contains, nor has ever contained, an "underground storage tank" as that
term is defined in the Federal Hazardous and Solid Waste Amendments of
1984 to the Resource Conservation and Recovery Act. To Sellers'
knowledge, the Banking Center and any contiguous properties are not
contaminated by any Hazardous Substance in excess of applicable cleanup
criteria developed by the Indiana Department of Environmental
Management ("IDEM") pursuant to Title 13 of the Indiana Code and the
implementing rules and regulations thereunder.
(e) There is no action, suit, investigation, inquiry, or other proceeding,
ruling, order, or citation involving Sellers, pending, threatened, or
previously asserted as a result of any actual or alleged failure to
comply with any requirement of any Environmental Laws with respect to
any Banking Center, and there is no factual basis for any of the
foregoing.
(f) Sellers is not and may not be deemed to be an "owner or operator" of a
"facility" or "vessel," as those terms are defined in Section 9601 of
the Comprehensive Environmental Response Compensation and Liability Act
of 1980, 42 U.S.C.A. ss. 9601 ("CERCLA"), thereby owning, possessing,
transporting, generating, or disposing of any Hazardous Substances in
relation to any Banking Center.
For purposes of this Section 5.12, "Hazardous Substances" has the meaning
defined in Section 9601 of CERCLA, and includes any substance that is now or
hereafter regulated by or subject to any Environmental Laws and any other
pollutant, contaminant, or waste, including, without limitation, asbestos,
radon, and polychlorinated biphenyls; and "Environmental Laws" mean all laws
(civil or common), ordinances, rules, regulations, and orders that: (i) regulate
solid waste management, including the containment, storage, handling,
transportation, disposal, or management of Hazardous Substances; (ii) regulate
or prescribe requirements for air, water, or soil quality; (iii) are intended to
protect public health or the environment; or (iv) establish liability for the
investigation, removal, or cleanup of, or damage caused by, any Hazardous
Substances. Until the Closing Date, Purchaser's sole remedy for a breach of the
representations and warranties in this Section 5.12 shall be as provided in
Section 2.11(c). Notwithstanding anything to the contrary above, Seller is not
required to file a "Disclosure Document" pursuant to the Indiana Responsible
Property Transfer Act.
Section 5.13. Deposit Liabilities.
------------ -------------------
No selection procedures believed to be adverse to Purchaser have been utilized
by Sellers in selecting the Deposit Liabilities. The Deposit Liabilities are
insured by the FDIC to the fullest extent permitted by federal law and no action
is pending or has been threatened by the FDIC against Sellers with respect to
the termination of such insurance. Sellers are classified 1-A for purposes of
calculating FDIC Insurance premiums. To Sellers' knowledge, the Deposit
Liabilities (i) are in all respects genuine and enforceable obligations of
Sellers and have been acquired and maintained in full compliance with all
applicable Laws, including (but not limited to) the Truth in Savings Act and
regulations promulgated thereunder; (ii) were acquired in the ordinary course of
Sellers' business; and (iii) are not subject to any claims with respect to such
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Deposit Liabilities that are superior to the rights of persons shown on the
records delivered to Purchaser indicating the owners of the Deposit Liabilities
other than claims against such Deposit Liabilities owners, such as state and
federal tax liens, garnishments, and other judgment claims, which have matured
or may mature into claims against the respective Deposit Liabilities.
Section 5.14. Books, Records, Documentation, etc.
------------ -----------------------------------
The books and records of the Banking Center are correct, accurate, and complete,
in all material respects, have been maintained in a consistent and a customary
manner, and are in material compliance with all applicable federal and state
laws and regulations and customary banking practices. The deposit- and
lending-related forms, notices, statements, and related documentation, as well
as Sellers' policies, procedures, and practices with respect thereto, used at
the Banking Center comply in all material respects with applicable federal and
state laws and regulations and customary banking practices.
Section 5.15. Litigation.
------------ ----------
There are no actions, causes of action, claims, suits or proceedings, pending
or, to Sellers' knowledge, threatened, against Sellers relating to the Banking
Center or materially affecting the Banking Center, whether at law, in equity or
before or by a governmental department, commission, board, bureau, agency or
instrumentality. For purposes of this section, claims will be considered to
materially affect the Banking Center if the aggregate amount of such claims
exceeds $5,000.
Section 5.16. Contracts and Agreements.
------------ ------------------------
Sellers have delivered a true and complete copy of each contract or other
written agreement described in items 2.2(b)(ii), (iii), (iv) and (v) that is to
be assumed by Purchaser, all of which are listed on Exhibit 5.16 hereto. Each
such contract or other written agreement is valid and enforceable according to
its terms and Sellers are not in default thereunder and there has been no event
which, with notice or the lapse of time, or both, would constitute a default
under any such contract or other written agreement by Sellers.
Section 5.17. Tax Matters.
------------ -----------
Sellers have complied with the requirements of the Internal Revenue Service
regarding taxpayer identification number certification, interest information
reporting and backup withholding of interest payable in connection with Deposit
Liabilities. Sellers have filed all federal, state, county, local and foreign
tax returns, including information returns, required to be filed by them in
connection with Sellers' operation of the Banking Center, and paid all taxes
owed by them, including those with respect to withholding, social security,
unemployment, workers compensation, franchise, ad valorem, premium, excise and
sales taxes, and no taxes shown on such returns or assessments received by them
are delinquent. Sellers have paid all taxes which
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they are required to withhold from amounts owing to employees, creditors,
holders of Deposit Liabilities, or other third parties. For all completed years,
Sellers have duly and timely sent to each holder of Deposit Liabilities a Form
1099 (or a substitute form permitted by law) relating to interest, earning or
dividends paid on such accounts for those periods.
Section 5.18. Limitation and Survival of Representations and Warranties.
------------ ---------------------------------------------------------
Except as may be expressly represented or warranted in this Agreement, neither
Huntington nor any other Seller makes any representation or warranty whatsoever
with regard to any asset being transferred to Purchaser or any liability or
obligation being assumed by Purchaser or as to any other matter or thing. The
foregoing representations and warranties shall survive the Effective Time for a
period of 24 months, except Section 5.13, which shall survive the Effective Time
for a period of six months, and except as otherwise specifically herein
provided.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as otherwise specifically herein provided, Purchaser hereby represents
and warrants to Sellers as follows:
Section 6.1. Corporate Organization.
----------- ----------------------
Purchaser is a start chartered banking corporation, duly organized and validly
existing under the laws of the State of Indiana. Purchaser has the corporate
power and authority to carry on the business being acquired, to assume the
liabilities being transferred, and to effect the transactions contemplated
herein.
Section 6.2. No Violation.
----------- ------------
Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated herein will violate or conflict with (i) the charter
or bylaws of Purchaser, (ii) any material provision of any material agreement or
any other material restriction of any kind to which Purchaser is a party or by
which Purchaser is bound, (iii) any material statute, law, decree, regulation or
order of any governmental authority, or (iv) any material provision which will
result in a default under, or cause the acceleration of the maturity of, any
material obligation or loan to which Purchaser is a party.
Section 6.3. Corporate Authority.
----------- -------------------
Prior to the Closing Date, the consummation of the transactions contemplated
herein will have been duly authorized by the Board of Directors (or Executive
Committee) of Purchaser. No further corporate authorization on the part of
Purchaser is necessary to consummate the transactions contemplated hereunder.
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Section 6.4. Enforceable Agreement.
----------- ---------------------
This Agreement has been duly executed and delivered by Purchaser and is the
legal, valid, and binding agreement of Purchaser, enforceable in accordance with
its terms.
Section 6.5. No Brokers.
----------- ----------
All negotiations relative to this Agreement and the transactions contemplated
hereby have been carried on by Purchaser, Xxxxx X. Xxxxx & Company, and
Huntington and there has been no participation or intervention by any other
person, firm, or corporation employed or engaged by or on behalf of Purchaser in
such a manner as to give rise to any valid claim against Sellers or Purchaser
for a brokerage commission, finder's fee, or like commission, other than
compensation due Xxxxx X. Xxxxx & Company by Purchaser.
Section 6.6. Survival of Representations and Warranties.
----------- ------------------------------------------
The foregoing representations and warranties shall survive the Effective Time
for a period of 24 months.
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ARTICLE VII
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME
Section 7.1. Full Access.
----------- -----------
Sellers shall afford to the officers and authorized representatives of
Purchaser, upon prior notice and subject to Huntington's normal security
requirements, access to the properties, books, and records pertaining to the
Banking Center, specifically including but not limited to all books and records
relating to the Deposit Liabilities, the Loans, the Real Property, and the
Personal Property, and copies of the Equipment Leases and the Software Leases in
order that Purchaser may have full opportunity to make reasonable investigations
and to engage in operational planning, at reasonable times, without interfering
with the normal business and operations of the Banking Center or the affairs of
Huntington relating to the Banking Center. Sellers will cooperate with Purchaser
to the extent reasonably requested and legally permissible to provide Purchaser
with information about Employees and a means to meet with Employees. The
officers of Sellers shall furnish Purchaser with two standard sets of such
additional financial and operating data and other information as to its business
and properties at the Banking Center, or where otherwise located, as Purchaser
may, from time to time, reasonably request and as shall be available, including,
without limitation, information required for inclusion in all governmental
applications necessary to effect this transaction. Any additional copies of such
information shall be produced and provided at Purchaser's expense. Nothing in
this Section 7.1 shall require Sellers to breach any obligation of
confidentiality or to reveal any proprietary information, trade secrets or
marketing or strategic plans. Records, including credit information relating to
the Loans, will be made available for review by Purchaser no later than 30
calendar days after the execution of this Agreement. It is understood that
certain of Sellers' records may be available only in the form of photocopies,
film copies, or other non-original and non-paper media.
Section 7.2. Delivery of Magnetic Media Records.
----------- ----------------------------------
Sellers shall prepare or cause to be prepared at its expense and make available
to Purchaser at Sellers' data processing center or other reasonably convenient
location magnetic media records in Sellers' field format as soon as possible and
in any event not later than 60 calendar days after the execution of this
Agreement and further shall make available to Purchaser such records updated
monthly and as of the Closing Date, which records shall contain the information
related to the items described in items 3.2(b)(6), (7), and (8) above. Such
updated records shall be made available at such time after the Closing Date as
agreed to by the parties. At its option, Sellers may provide such reports in
paper format instead of magnetic media format.
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Section 7.3. Application for Approval.
----------- ------------------------
Within 45 calendar days following the execution of this Agreement, Purchaser
shall prepare and file applications required by law with the appropriate
regulatory authorities for approval to purchase and assume the aforesaid assets
and liabilities, to establish a branch at the location of the Banking Center,
and to effect in all other respects the transactions contemplated herein.
Purchaser agrees to process such applications in a diligent manner and on a
priority basis and to provide Huntington promptly with a copy of such
applications as filed (except for any confidential portions thereof) and all
material notices, orders, opinions, correspondence, and other documents with
respect thereto, and to use its best efforts to obtain all necessary regulatory
approvals. On the date hereof, Purchaser knows of no reason why such
applications should not receive all such approvals. Purchaser shall promptly
notify Huntington upon receipt by Purchaser of notification that any application
provided for hereunder has been accepted or denied. Sellers shall provide such
assistance and information to Purchaser as shall be reasonably necessary for
Purchaser to comply with the requirements of the applicable regulatory
authorities.
Section 7.4. Conduct of Business; Maintenance of Properties.
----------- ----------------------------------------------
From the date hereof until the Effective Time, Huntington covenants that it will
cause Sellers to:
(1) carry on, or cause to be carried on, the business of the Banking
Center substantially in the same manner as on the date hereof,
use all reasonable efforts to preserve intact its current
business organization and preserve its business relationships
with depositors, customers and others having business
relationships with it and whose accounts will be retained at the
Banking Center; provided, however, that a Seller need not, in
its sole discretion, advertise or promote new or substantially
new customer services in the principal market area of the
Banking Center;
(2) cooperate with and assist Purchaser in assuring the orderly
transition of the business of the Banking Center to Purchaser
from Sellers; and
(3) Maintain the Real Property and the Personal Property in their
current condition, ordinary wear and tear excepted.
Section 7.5. No Solicitation by Sellers.
----------- --------------------------
(a) After the execution of this Agreement, Sellers will take reasonable
steps to avoid causing Banking Center customers to transfer all or part
of their Deposit or Loan business from the Banking Center. For a period
of 24 months after the Closing Date, Sellers will not establish any new
branch facility or install any automated teller machines at any
location within five miles of any Banking Center; provided, however,
that this restriction will not apply to any branch existing as of the
date of this Agreement nor prohibit Sellers from acquiring a branch
facility or automated teller machine as part of an acquisition of
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another bank or bank holding company that has at least 85% of its total
deposits attributed to branch offices located outside such five-mile
limit. In addition, for a period of 24 months after the Closing Date,
Sellers will not specifically target or solicit customers assigned to
the Banking Center; provided, however, that this restriction shall not
restrict general mass mailings, telemarketing calls, statement stuffers
and other similar communications directed to all the current customers
of Sellers or Sellers' affiliates, or to the public or newspaper, radio
or television advertisements of a general nature or otherwise prevent
Sellers from taking such actions as may be required to comply with any
applicable federal or state laws, rules or regulations. The foregoing
restriction shall not restrict the ability of Sellers to solicit
customers whose accounts are normally established or maintained in
offices other than the Banking Center or any customer which has an
agreement for merchant services with Sellers or Sellers' affiliates,
including their venture partners for merchant services. The obligations
of the parties hereunder shall specifically survive the Closing for a
period of 24 months.
(b) In order to facilitate Sellers' compliance with the restrictions in
this Section 7.5, Purchaser will give prompt notice to Sellers of any
mailing or other form of marketing that it determines is not consistent
with such restrictions; provided, however, that Purchaser's failure to
provide such notice shall not relieve Seller of any obligations it has
under this Section 7.5.
Section 7.6. Further Actions.
----------- ---------------
The parties hereto shall execute and deliver such instruments and take such
other actions as the other party may reasonably require in order to carry out
the intent of this Agreement. Included in such actions shall be the execution
and delivery of additional powers of attorney and such other documents and
instruments as shall be prepared and reasonably requested by Purchaser to
transfer the Loans and all collateral related thereto. Such assistance will be
provided to the Purchaser without costs for Sellers' personnel for a period of
at least 12 months after the Closing Date.
Section 7.7. Fees and Expenses.
----------- -----------------
Subject to the provisions of Section 10.3 and except as provided in this Section
7.7 and in Section 2.10, Purchaser shall be responsible for the costs of all
title examinations, surveys, environmental investigation costs, its own
attorneys' and accountants' fees and expenses, software license and transfer
fees, recording costs, transfer fees, sales and use and other transfer taxes,
regulatory applications and other expenses arising in connection therewith as
well as all costs and expenses associated with the transfer or perfection of any
security interests or liens securing Loans transferred hereunder. Except as
provided in Section 2.10, Purchaser shall pay the costs of title insurance
premiums, surveys, and documentary stamps and similar real estate transfer
charges. Sellers shall be responsible for their own attorneys' and accountants'
fees and expenses related to this transaction. Sellers shall make no charge to
the Purchaser for Sellers' personnel assigned to transition matters hereunder.
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Section 7.8. Breaches with Third Parties.
----------- ---------------------------
If the assignment of any material claim, contract, license, lease, commitment,
sales order or purchase order (or any material claim or right or any benefit
arising thereunder) without the consent of a third party would constitute a
breach thereof or materially affect the rights of Purchaser or Sellers
thereunder, then such assignment is hereby made subject to such consent or
approval being obtained.
Section 7.9. Operations.
----------- ----------
Notwithstanding the foregoing, between the date of this Agreement and the
Effective Time, and except as may be otherwise required by regulatory authority,
Sellers shall not without the prior consent of Purchaser, which consent shall
not be unreasonably withheld:
(1) cause the Banking Center to engage or participate in any
material transaction or incur or sustain any obligation which is
material to its business, condition or operation;
(2) cause the Banking Center to transfer to Sellers' other
operations any material amount of Transferred Assets, except for
(i) supplies, if any, which have unique function in Sellers'
business and ordinarily would not be useful to Purchaser, (ii)
cash and other normal intrabank transfers which may be
transferred in the ordinary course of business in accordance
with normal banking practices and (iii) signs, or those parts
thereof, bearing Sellers name and/or logo;
(3) except in the ordinary course of business at the unsolicited
request of depositors (i) cause the Banking Center to transfer
to Sellers' other operations any Deposit Liabilities or (ii)
cause any of Sellers' other operations to transfer to the
Banking Center any Deposit Liabilities;
(4) invest in any fixed assets on behalf of the Banking Center and
for replacements of furniture, furnishing and equipment except
for normal maintenance and refurbishing purchased or made in the
ordinary course of business;
(5) enter into or amend any continuing contract (other than Deposit
Liabilities and Loans) relating to the Banking Center, which
cannot be terminated without cause and without payment of any
amounts as a penalty, bonus, premium or other compensation for
termination, or which is not made in the ordinary course of
business;
(6) undertake any actions which are inconsistent with a program to
use all reasonable efforts to maintain good relations with
customers and with
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employees employed at the Banking Center, unless such actions
are required or permitted by this Agreement;
(7) hire any person into the Banking Center (other than to replace a
departing employee and/or to bring the number of employees at
the Banking Center to normal staffing levels), transfer or
reassign any employee of the Banking Center, increase the
compensation of any employee of the Banking Center, or promote
any of the employees, except where any such action is pursuant
to and consistent with customary Sellers' procedures and
policies;
(8) make any material change to its customary policies for setting
rates on deposits offered at the Banking Center;
(9) amend or modify any of its promotional, deposit account, or Loan
practices at the Banking Center other than amendments or
modifications in the ordinary course of business in accordance
with amendments or modifications undertaken at Sellers' branches
other than the Banking Center. Sellers shall underwrite and
administer the Loans at the Banking Center in accordance with
its past standards and practices and in accordance with
applicable laws and regulations;
(10) enter into any employment severance, termination, or change in
control contracts or understandings with any Banking Center
employees;
(11) reduce the service charges on any deposit product or fee-based
product (e.g. safe deposit boxes, money orders, cashier's
checks) unless such reduction is implemented generally in
Sellers' other branches;
(12) lease or sublease any space in the Banking Center,
(13) until the Effective Time fail to maintain and update its general
ledger on a basis consistent with its past accounting practices;
or
(14) undertake any actions which would result in a Title Defect or
fail to take any action to remove or cure a Title Defect caused
by the Sellers after the date hereof.
Section 7.10. Destruction and Condemnation.
------------ ----------------------------
If the Banking Center is damaged or destroyed or condemned between the date
hereof and the Closing Date, unless Sellers have repaired or replaced the damage
or destroyed property, Purchaser may elect, in its sole discretion, to either
(i) not acquire the Banking Center and the related assets and liabilities or,
(ii) acquire the Banking Center, in which event Sellers will deliver to
Purchaser any insurance proceeds, condemnation proceeds or other payment with
respect to the Banking Center.
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Section 7.11. Insurance.
------------ ---------
As of the Effective Time, Huntington will discontinue its insurance coverage
maintained in connection with the Banking Center and the activities conducted
thereon. Purchaser shall be responsible for all insurance protection for the
Banking Center's premises and the activities conducted thereon immediately
following the Effective Time. Huntington shall bear the risk of loss until the
Effective Time.
Section 7.12. Public Announcements.
------------ --------------------
Sellers and Purchaser agree that, from the date hereof, neither shall make any
public announcement or public comment, regarding this Agreement or the
transactions contemplated herein without first consulting with the other party
hereto and reaching an agreement upon the substance and timing of such
announcement or comment. Further, Sellers and Purchaser acknowledge the
sensitivity of this transaction to the Employees and no announcements or
communications with the public or the Employees shall be made without the prior
approval of Sellers until the Effective Time.
Section 7.13. Tax Reporting.
------------ -------------
Sellers shall comply with all tax reporting obligations in connection with
transferred assets and liabilities on or before the Effective Time, and
Purchaser shall comply with all tax reporting obligations with respect to the
transferred assets and liabilities after the Effective Time.
Section 7.14. Transitional Matters.
------------ --------------------
Sellers shall use their best efforts to cooperate with Purchaser to assure an
orderly transition of ownership of the Assets and Loans and responsibility for
the liabilities, including the Deposit Liabilities, assumed by Purchaser
hereunder. As soon as practicable following the date of this Agreement, but in
no event later than 30 days after the date of this Agreement, Purchaser shall
provide Sellers with a draft of a detailed transition plan covering operational
aspects of the transition, including methods for the transmission of data and
records. If Sellers do not accept any part or all of such plan, they must notify
Purchaser in writing within 15 days after receiving such draft transition plan
from Purchaser, whereupon the parties agree to use their best efforts to agree
upon a mutually acceptable transition plan as soon as possible, but in no event
later than 60 days after the date of this Agreement. Sellers shall use their
best efforts to cooperate fully with Purchaser in implementing such transition
plan.
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ARTICLE VIII
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of Purchaser to complete the transactions contemplated in this
Agreement is conditioned upon fulfillment, on or before the Closing Date, of
each of the following conditions:
Section 8.1. Representations and Warranties True.
----------- -----------------------------------
The representations and warranties made by Sellers in this Agreement shall be
true in all material respects on and as of the Effective Time as though such
representations and warranties were made at and as of such time, except for any
changes permitted by the terms hereof or consented to by Purchaser.
Section 8.2. Obligations Performed.
----------- ---------------------
Sellers shall have (i) delivered or made available to Purchaser those items
required by Section 3.2 hereof, and (ii) performed and complied in all material
respects with all obligations and agreements required by this Agreement to be
performed or complied with by it prior to or on the Effective Time.
Section 8.3. No Adverse Litigation.
----------- ---------------------
As of the Effective Time, no action, suit or proceeding shall be pending or
threatened against Sellers which is reasonably likely to (i) materially and
adversely affect the business, properties and assets of the Banking Center, or
(ii) materially and adversely affect the transactions contemplated herein.
Section 8.4. Regulatory Approval.
----------- -------------------
(a) Purchaser shall have received all necessary regulatory approvals of the
transactions provided in this Agreement, all notice and waiting periods
required by law to pass shall have passed, no proceeding to enjoin,
restrain, prohibit or invalidate such transactions shall have been
instituted or threatened, and any conditions of any regulatory approval
shall have been met.
(b) Such approvals shall not have imposed any condition which is materially
disadvantageous or burdensome to Purchaser.
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ARTICLE IX
CONDITIONS TO SELLERS' OBLIGATIONS
The obligation of Sellers to complete the transactions contemplated in this
Agreement is conditioned upon fulfillment, on or before the Closing Date, of
each of the following conditions:
Section 9.1. Representations and Warranties True.
----------- -----------------------------------
The representations and warranties made by Purchaser in this Agreement shall be
true in all material respects at and as of the Effective Time as though such
representations and warranties were made at and as of such time, except for any
changes permitted by the terms hereof or consented to by Sellers.
Section 9.2. Obligations Performed.
----------- ---------------------
Purchaser shall have (i) delivered to Sellers those items required by Section
3.2 hereof, and (ii) performed and complied in all material respects, with all
obligations and agreements required by this Agreement to be performed or
complied with by it prior to or on the Effective Time.
Section 9.3. No Adverse Litigation.
----------- ---------------------
As of the Effective Time, no action, suit, or proceeding shall be pending or
threatened against Purchaser or Sellers which might materially and adversely
affect the transactions contemplated hereunder.
Section 9.4. Regulatory Approval.
----------- -------------------
(a) Sellers shall have received from the appropriate regulatory authorities
approval of the transactions contemplated herein, waiting periods
required by law to pass shall have passed, no proceeding to enjoin,
restrain, prohibit or invalidate such transactions shall have been
instituted or threatened, and any conditions of any regulatory approval
shall have been met.
(b) Such approvals or Purchaser's corresponding regulatory approvals shall
not have imposed any condition which is materially disadvantageous or
burdensome to Sellers.
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ARTICLE X
TERMINATION
Section 10.1. Methods of Termination.
------------ ----------------------
This Agreement may be terminated in any of the following ways:
(1) by either Purchaser or Sellers, in writing five calendar days in
advance of such termination, if the Closing has not occurred by
September 30, 2000;
(2) at any time on or prior to the Effective Time by the mutual
consent in writing of Huntington and Purchaser;
(3) by Huntington in writing if the conditions set forth in Article
IX of this Agreement shall not have been met by Purchaser or
waived in writing by Huntington prior to the Closing Date;
(4) by Purchaser in writing if the conditions set forth in Article
VIII of this Agreement shall not have been met by Sellers or
waived in writing by Purchaser prior to the Closing Date;
(5) any time prior to the Effective Time, by Purchaser or Huntington
in writing if the other shall have been in breach of any
representation and warranty in any material respect (as if such
representation and warranty had been made on and as of the date
hereof and on the date of the notice of breach referred to
below), or in breach of any covenant, undertaking or obligation
contained herein, and such breach has not been cured by the
earlier of 30 calendar days after the giving of notice to the
breaching party of such breach or the Effective Time; provided,
however, that there shall be no cure period in connection with
any breach of Section 7.3 hereof, so long as such breach by
Purchaser was not caused by any action or inaction of Sellers,
and Huntington may terminate this Agreement immediately if
regulatory applications are not filed within 30 calendar days
after the date of this Agreement as provided in that section; or
(6) by Huntington in writing at any time after any applicable
regulatory authority has denied approval of any application of
Purchaser for approval of the transactions contemplated herein.
Section 10.2. Procedure Upon Termination.
------------ --------------------------
In the event of termination pursuant to Section 10.1 hereof, and except as
otherwise stated therein, written notice thereof shall be given to the other
party, and this Agreement shall terminate immediately upon receipt of such
notice unless an extension is consented to by the party having the right to
terminate. If this Agreement is terminated as provided herein:
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(1) each party will return all documents, work papers and other
materials of the other party, including photocopies or other
duplications thereof, relating to this transaction, whether
obtained before or after the execution hereof, to the party
furnishing the same;
(2) all information received by either party hereto with respect to
the business of the other party (other than information which is
a matter of public knowledge or which has heretofore been
published in any publication for public distribution or filed as
public information with any governmental authority) shall not at
any time be used for any business purpose by such party or
disclosed by such party to third persons; and
(3) each party will pay its own expenses.
Section 10.3. Payment of Expenses.
------------ -------------------
Should the transactions contemplated herein not be consummated because of a
party's breach of this Agreement, in addition to such damages as may be
recoverable in law or equity, the other party shall be entitled to recover from
the breaching party upon demand, itemization, and documentation, its reasonable
outside legal, accounting, consulting, and other out-of-pocket expenses.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1. Assignment to Subsidiaries.
------------ --------------------------
At their discretion, Huntington may cause the obligations of Sellers under this
Agreement to be fulfilled by their respective banking and corporate
subsidiaries. Upon identification by Huntington of the subsidiaries to be
considered a Seller, Huntington shall cause those subsidiaries to enter into
such agreements as may be necessary to bind those subsidiaries as additional
parties to this Agreement.
Section 11.2. Amendment and Modification.
------------ --------------------------
The parties hereto, by mutual consent, my amend, modify and supplement this
Agreement in such manner as may be agreed upon by them in writing.
Section 11.3. Waiver or Extension.
------------ -------------------
Except with respect to required approvals of the applicable governmental
authorities, either party, by written instrument signed by a duly authorized
officer, may extend the time for the performance of any of the obligations or
other acts of the other party and may waive (i) any
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inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto or (ii) compliance with any of the
undertakings, obligations, covenants or other acts contained herein.
Section 11.4. Assignment.
------------ ----------
This Agreement and all of the provisions hereof shall be binding upon, and shall
inure to the benefit of, the parties hereto and their permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by either of the parties hereto without the prior written
consent of the other.
Section 11.5. Confidentiality.
------------ ---------------
Purchaser and Sellers agree that any confidentiality agreements between
Purchaser and Sellers shall survive the execution hereof and the consummation of
the transactions contemplated herein.
Section 11.6. Addresses for Notices, Etc.
------------ ---------------------------
All notices, consents, waivers, and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (i) delivered
by hand (with written confirmation of receipt), (ii) deposited in the United
States Mail by registered or certified mail, return receipt requested, (iii)
sent by telecopier (with electronic confirmation of receipt), provided that a
copy is mailed by registered or certified mail, return receipt requested, or
(iv) when received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to the appropriate
addresses or telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):
If to Sellers, to: Huntington Bancshares Incorporated
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Senior Vice President
Facsimile Number: (000) 000-0000
with a copy to: Xxxxxxx X. Cheap, Esq.
General Counsel and Secretary
Huntington Bancshares Incorporated
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Facsimile Number: (000) 000-0000
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If to Purchaser, to: First Bank
000 Xxxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxx, President
Facsimile Number: (000) 000-0000
with a copies to: Xxxx X. Xxxxxx, Esq.
Leagre Xxxxxxxx & Xxxxxxx LLP
0000 Xxxxx Xxxxxxx Xxxxx
000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile Number: (000) 000-0000
Xxxxx X. Xxxxx & Company
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxx
Facsimile Number: (000) 000-0000
Section 11.7. Counterparts.
------------ ------------
This Agreement may be executed simultaneously in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
Section 11.8. Headings.
------------ --------
The headings of the Articles and Sections of this Agreement are inserted for
convenience only and shall not constitute a part thereof.
Section 11.9. Governing Law.
------------ -------------
This Agreement shall be governed by, and construed in accordance with, the laws
of the State of Ohio.
Section 11.10. Sole Agreement.
------------- --------------
Except for the Confidentiality Agreement, this Agreement and the exhibits and
attachments hereto represent the sole agreement between the parties hereto
respecting the transactions contemplated hereby and all prior or contemporaneous
written or oral proposals, agreements in principle, representations, warranties
and understandings between the parties with respect to such matters are
superseded hereby and merged herein.
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Section 11.11. Parties In Interest.
------------- -------------------
Nothing in this Agreement, express or implied, expressly including, without
limiting the generality of the foregoing in any way, the provisions of paragraph
2.6(a) hereof, is intended or shall be construed to confer upon or give to any
person (other than the parties hereto, their successors and permitted assigns)
any rights or remedies under or by reason of this Agreement, or any term,
provision, condition, undertaking, warranty, representation, indemnity, covenant
or agreement contained herein.
Section 11.12 Calculation of Dates and Deadlines.
------------- ----------------------------------
Unless otherwise specified, any period of time to be determined under this
Agreement shall be deemed to commence at 12:01 a.m. on the first full day after
the specified starting date, event, or occurrence. Any deadline, due date,
expiration date, or period-end to be calculated under this Agreement shall be
deemed to end at 5 p.m. on the last day of the specified period. The time of day
shall be determined with reference to the then current local time in Columbus,
Ohio.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers as of the date first written
above.
HUNTINGTON BANCSHARES INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxxx, Senior Vice President
THE HUNTINGTON NATIONAL BANK
By: /s/ Xxxx Xxxxxxxx
-----------------------------------------
Name: Xxxx Xxxxxxxx
-----------------------------------------
Title: _________________________________________
FIRST BANK
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxx
-----------------------------------------
Title: President and CEO
-----------------------------------------
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PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
HUNTINGTON BANCSHARES INCORPORATED
AND
FIRST BANK
LIST OF EXHIBITS
Exhibit No. Description
---------- -----------
2.1(b) List of Excluded Assets
2.4(j) Form of Power of Attorney
2.6(a) Agreement Regarding Employees of Banking Center
3.2(b)(1) Form of Warranty Deed
3.2(b)(2) Form of Xxxx of Sale
3.2(b)(3) Form of Assignment and Assumption Agreement
3.2(b)(4) Form of Assignment and Assumption of Leases
3.2(b)(15) Form of Closing Statement
5.9 List of Employees
5.16 List of Contracts to be Assumed
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