<PAGE>
EXHIBIT 2.1
PURCHASE OF ASSETS AND LIABILITY ASSUMPTION AGREEMENT
BY AND BETWEEN
FIRST CITIZENS BANK
AN OHIO STATE CHARTERED COMMERCIAL BANK
AND
THE MARION BANK
AN OHIO STATE CHARTERED COMMERCIAL BANK
OCTOBER 27, 2004
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS................................................................
1
1.1
Definitions..................................................
1
ARTICLE II
TERMS OF PURCHASE AND
ASSUMPTION........................................... 6
2.1 Purchase and
Sale of Assets.................................. 6
2.2 Assumption
of Liabilities.................................... 7
2.3 Purchase
Price............................................... 7
2.4
Consideration for Assumption of Liabilities..................
8
2.5 Excluded
Assets.............................................. 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
SELLER................................... 8
3.1 Organization and Related
Matters............................. 8
3.2
Authorization................................................
8
3.3 No Breaches
of Statute or Contract Required Consents......... 8
3.4 Litigation
and Related Matters............................... 9
3.5
Consents.....................................................
9
3.6
Deposits.....................................................
9
3.7 Personal
Property............................................ 10
3.8
Contracts....................................................
10
3.9 Real
Property................................................
10
3.10 Compliance with
Laws and Regulations......................... 11
3.11 Governmental
Notices......................................... 11
3.12 The Acquired
Loans........................................... 11
3.13
FIRPTA.......................................................
12
3.14 No Broker's or
Finder's Fees................................. 12
3.15 Statements True
and Correct.................................. 13
3.16
Employees....................................................
13
3.17 Environmental
Matters........................................ 13
3.18
Records......................................................
13
3.19 Tax
Matters..................................................
14
3.20 Other
Assets.................................................
14
3.21 Exhibits and
Schedules....................................... 14
3.22 Community
Reinvestment Act; Regulatory Matters............... 14
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PURCHASER................................ 14
4.1 Organization
and Related Matters............................. 14
4.2
Authorization................................................
15
4.3 No Breaches
of Statute or Contract Required Consent.......... 15
4.4 Litigation
and Relate Matters................................ 15
4.5
Consents.....................................................
15
4.6 Compliance
with Laws and Regulations......................... 15
4.7 Governmental
Notices......................................... 15
4.8 No Broker's
or Finder's Fees................................. 16
4.9 Community
Reinvestment Act; Regulatory Matters............... 16
ARTICLE V
UPDATING OF
INFORMATION....................................................
16
5.1 Cash on
Hand................................................. 16
5.2
Deposits.....................................................
16
5.3 Personal
Property............................................ 16
5.4
Contracts....................................................
16
5.5 Acquired
Loans............................................... 17
5.6 Other
Assets.................................................
17
ARTICLE VI
COVENANTS OF
SELLER........................................................
17
6.1 Operations
in Ordinary Course................................ 17
6.2
Deposits.....................................................
17
6.3 Acquired
Loans............................................... 18
6.4 Conditions
to Closing........................................ 19
6.5
Contracts....................................................
19
6.6
Consents.....................................................
19
6.7 Conversion;
Records.......................................... 19
6.8 Insurance
Endorsements....................................... 20
6.9 Loan
Documents...............................................
20
6.10 Covenant Not to
Compete...................................... 20
6.11 Fees and
Expenses............................................ 21
6.12
Investigations...............................................
21
6.13 Acquired
Loans............................................... 21
6.14 Proposed
Action.............................................. 21
6.15 Limited Right of
Purchaser to Put Back Acquired Loans........ 21
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ARTICLE VII
COVENANTS OF
PURCHASER.....................................................
21
7.1 Performance
of Liabilities................................... 21
7.2 Safe Deposit
Business........................................ 22
7.3 Fiduciary
Relationships...................................... 22
7.4 Acquired
Loans............................................... 22
7.5 Conduct of
Business.......................................... 22
7.6 Conditions
to Closing........................................ 22
7.7
Records......................................................
23
ARTICLE VIII
ADDITIONAL
AGREEMENTS......................................................
23
8.1 Regulatory
Approvals......................................... 23
8.2
Insurance....................................................
23
8.3 Further
Assurances........................................... 23
8.4
Employees....................................................
23
8.5
Confidentiality..............................................
24
8.6
Publicity;
Notices........................................... 25
8.7 Tax
Reporting................................................
25
8.8 Interest
Reporting........................................... 25
8.9
Withholding..................................................
26
8.10
Signs........................................................
26
8.11 Transitional
Matters......................................... 26
8.12 Environmental
Matters........................................ 27
8.13 Damage or
Condemnation....................................... 27
8.14 Title to Real
Property....................................... 28
8.15 Escrow
Accounts.............................................. 29
ARTICLE IX
CONDITIONS TO OBLIGATION OF
PURCHASER...................................... 29
9.1 No
Injunctions or Restraints.................................
29
9.2 Conditions
Performed......................................... 30
9.3
Representations..............................................
30
9.4
Consents.....................................................
30
9.5
Documentation................................................
30
9.6 Collateral
Assignment........................................ 30
9.7 Minimum
Acquired Loans....................................... 30
9.8 Minimum
Acquired Core Deposits............................... 30
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ARTICLE X
CONDITIONS TO OBLIGATION OF
SELLER......................................... 31
10.1 No Injunctions or
Restraints................................. 31
10.2 Conditions
Performed......................................... 31
10.3
Representations..............................................
31
10.4
Documentation................................................
31
ARTICLE XI
CONDITIONS TO OBLIGATIONS OF BOTH
PARTIES.................................. 31
11.1 Governmental
Actions......................................... 31
11.2 Governmental
Approvals....................................... 32
ARTICLE XII
THE
CLOSING................................................................
32
12.1 Time and Place of
Closing.................................... 32
12.2 Payment Due at
Closing....................................... 32
12.3 Closing Documents
to be Delivered or Actions to be
Taken by Seller..............................................
32
12.4 Closing Documents
to be Delivered or Actions to be Taken
by Purchaser.................................................
34
12.5 Post-Closing
Adjustment...................................... 35
ARTICLE XIII
TRANSFER OF DEPOSIT
ACCOUNTS...............................................
35
13.1 Deposit
Post-Closing Reconciliation.......................... 35
13.2 Effect of
Transitional Action................................ 38
ARTICLE XIV
TERMINATION................................................................
38
14.1 Events of
Termination........................................ 38
14.2 Manner of
Termination........................................ 39
14.3 Effect of
Termination........................................ 39
ARTICLE XV
INDEMNIFICATION............................................................
39
15.1 Repurchase of
Loan........................................... 39
15.2 Indemnification
by Both Parties.............................. 40
15.3 Indemnification
by Seller.................................... 40
15.4 Indemnification
by Purchaser ................................ 40
15.5 Limitation on
Indemnification................................ 40
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ARTICLE XVI
MISCELLANEOUS..............................................................
41
16.1 Survival of
Representations and Warranties; Covenants........ 41
16.2 Taxes; Expenses
and Prorations............................... 41
16.3
Notices......................................................
42
16.4 Entire Agreement;
Modifications; Waivers Headings;
Ambiguities..................................................
42
16.5 Successors and
Assigns....................................... 43
16.6
Counterparts.................................................
43
16.7 Governing
Law................................................ 43
16.8 Time is of the
Essence....................................... 43
16.9
Remedies.....................................................
43
16.10 Attorneys' Fees..............................................
44
16.11 Severability.................................................
44
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EXHIBIT A
BRANCH OFFICES OF SELLER
EXHIBIT B FORM
OF PRELIMINARY SETTLEMENT STATEMENT
EXHIBIT C
IRREVOCABLE LIMITED POWER OF ATTORNEY (UNLIMITED DURATION)
EXHIBIT D FORM
OF CERTIFICATE OF NON-FOREIGN STATUS
EXHIBIT E FORM
OF BILL OF SALE AND ASSIGNMENT
EXHIBIT F FORM
OF GENERAL ASSIGNMENT
EXHIBIT G FORM
OF ASSUMPTION AGREEMENT
EXHIBIT H FORM
OF RETIREMENT ACCOUNT TRANSFER AGREEMENT
EXHIBIT I FORM
OF OPINION OF COUNSEL TO SELLER
EXHIBIT J FORM
OF SELLER'S DESIGNATED OFFICER'S CERTIFICATE
EXHIBIT K FORM
OF COVERDELL EDUCATION SAVINGS ACCOUNT TRANSFER AGREEMENT
EXHIBIT L FORM
OF OPINION OF COUNSEL TO PURCHASER
EXHIBIT M FORM
OF PURCHASER'S OFFICER'S CERTIFICATE
EXHIBIT N FORM
OF FINAL SETTLEMENT STATEMENT
Schedule 2.1(a)(xi) - Other Assets Schedule
Schedule 3.5
- Seller Consents
Schedule 3.6
- Deposits; Excluded Deposits
Schedule 3.7
- Personal Property
Schedule 3.8
- Contracts
Schedule 3.9
- Real Property Descriptions
Schedule 3.10
- Seller Regulatory Matters
v
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Schedule 3.12(b) - Acquired
Loan Schedule
Schedule 3.12(c) - Acquired
Loan Restrictions
Schedule 3.12(f) - Acquired
Loan Notices
Schedule 3.12(g) - Acquired
Loan Breaches and/or Defaults as of 6/30/04
Schedule 3.12(i)(1) - Acquired Loan Amounts 30
Days Past Due, as of 6/30/04
Schedule 3.14
- Seller Brokers and Finders
Schedule 3.17
- Environmental Matters
Schedule 3.22
- Community Reinvestment Act
Schedule 4.5
- Purchaser Consents
Schedule 4.8
- Purchaser Brokers and Finders
Schedule 5.1
- Cash on Hand
Schedule 8.4
- Employees
vi
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PURCHASE OF ASSETS AND LIABILITY ASSUMPTION AGREEMENT
This Purchase of Assets and Liability Assumption Agreement is
made
and entered into as of October 27, 2004, by
and between First Citizens Bank, an
Ohio state chartered commercial bank
("Seller"), and The Marion Bank, an Ohio
state chartered commercial bank
("Purchaser"), with reference to the following
facts:
WHEREAS, Seller desires (i) to transfer to Purchaser
approximately
$20 million of deposit liabilities, subject
to the adjustments described herein,
and (ii) to sell to Purchaser approximately
$___ million of assets, subject to
the adjustments described herein (and
transfer liabilities related thereto).
WHEREAS, Purchaser desires to assume such liabilities and
purchase
such assets for a Purchase Premium to be
calculated pursuant to the terms of
this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt
and
sufficiency of which are hereby
acknowledged, Seller and Purchaser hereby agree
as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
"ACH" shall have the meaning set forth in Section 13.1(b)(ii).
"Acquired Loan Purchase Price" shall mean, with respect to any
date,
with respect to each Acquired Loan, an
amount equal to the Loan Balance payable
to Seller of such Acquired Loan, plus the
aggregate of (i) accrued and unpaid
interest thereon and (ii) accrued and
unpaid fees thereon (or Seller's prorata
portion of accrued and unpaid interest and
fees in the event any participation
has been sold in the Acquired Loan) in each
case as of such date.
"Acquired Loan Schedule" shall mean, with respect to any date,
the
schedule substantially in the form of
Schedule 3.12(b) listing each Acquired
Loan to be purchased at the Closing and
listing the following information: (i)
the total Commitment or credit line with
respect to each such Acquired Loan;
(ii) the total amount of Loan Balance, and
any related accrued and unpaid
interest, fees and other payments
outstanding, of each such Acquired Loan; (iii)
the amount of Seller's ownership interest
as a percentage in each such Acquired
Loan; (iv) the amount of any unfunded
Commitment or credit line of Seller of
each such Acquired Loan; (v) the amount of
any over advance on each such
Acquired Loan; and (vi) the Loan Balance,
and any related accrued and unpaid
interest, fees and other payments
outstanding, of any participations in each
such Acquired Loan and the identity of such
participants, in each case, as of
such date.
"Acquired Loans" shall mean all right, title and interest of
Seller
as of the Closing Date in the loans (other
than Excluded Loans) and Commitments
identified on the Acquired
<PAGE>
Loan Schedule, and all Loan Documents
related thereto, including, without
limitation, all right, title and interest
to all unpaid or future commitment,
facility and other fees associated
therewith.
"Acquired Loan Restrictions" shall have the meaning set forth
in
Section 3.12(c).
"Action" shall mean any action, suit, arbitration, inquiry,
proceeding or investigation by or before
any court, governmental or other
regulatory or administrative agency or
commission.
"Agreement" shall mean this Purchase of Assets and Liability
Assumption Agreement, dated as of October
27, 2004, by and between Seller and
Purchaser.
"Allocation Statement" shall have the meaning set forth in
Section
8.7.
"Assets" shall have the meaning set forth in Section 2.1(a).
"Assumed Contracts" shall have the meaning set forth in Section
5.4.
"Bank Employees" shall mean the employees of Seller employed at
the
Branches.
"Branch" shall mean one of the Seller's branch offices located
at
201 Marion Street, Green Camp, Ohio and 24
West Ottawa Street, Richwood, Ohio,
more particularly described and defined in
Exhibit A hereto, and "Branches"
shall mean both such branch offices.
"Business Day" shall mean any day other than a Saturday, Sunday,
or
a day on which state chartered savings
banks, state chartered commercial banks
or national banking associations operating
in the State of Ohio are authorized
or obligated by law or executive order to
close.
"Carrying
Value" shall mean the carrying value as reflected on
Seller's books and records, as determined
in accordance with generally accepted
accounting principles consistently
applied.
"Cash on Hand" shall mean, with respect to any date, all cash
on
hand at the Branches as of the Close of
Business on such date, including vault
cash, ATM cash, petty cash, tellers' cash
and other cash items, as set forth on
Schedule 5.1.
"Cash Payment" shall have the meaning set forth in Section
12.2.
"Close of Business" shall mean, with respect to any Business
Day,
5:00 p.m. local time.
"Closing" shall have the meaning set forth in Section 12.1.
"Closing Date" shall have the meaning set forth in Section
12.1.
"Closing Purchase Premium" shall mean the calculation of the
Purchase Premium with reference to Closing
Schedule 3.6.
2
<PAGE>
"Closing Schedule 3.6" shall have the meaning set forth in
Section
5.2.
"COBRA" shall mean the Consolidated Omnibus Budget
Reconciliation
Act of 1985, as amended.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commitment" shall mean the obligation of Seller under a loan
agreement, credit agreement or other
arrangement or agreement to advance funds.
"Consultant" shall have the meaning set forth in Section
8.12(b).
"Conversion" shall have the meaning set forth in Section
6.7(a).
"Conversion Date" shall mean the Closing Date.
"Core Deposits" shall mean all Deposits domiciled at the
Branches
that may be drawn on by the account holder
without prior notice to Seller,
including all passbook, statement savings,
checking and money market checking
accounts, but not including certificates of
deposit of $100,000 or more, public
funds deposits, or any Excluded
Deposits.
"Covenant Not to Compete" shall mean the covenants of Seller
set
forth in Section 6.10.
"Credit Card" shall mean any card, plate, coupon book or other
credit device existing for the purpose of
obtaining money, property, labor or
services on credit and issued by Seller to
a consumer or business customer for
personal, family, household or business
credit purposes.
"Damages" shall mean any debt, loss, liability, damage,
obligation,
penalties, fines, payment (including,
without limitation, those arising out of
any claim, demand, assessment, settlement,
judgment or compromise relating to
any Action), costs and expenses (including,
without limitation, reasonable
attorneys' fees and expenses incurred in
investigating, preparing or defending
any Action).
"Deposits" shall mean, with respect to any date, the aggregate
deposit liabilities domiciled at the
Branches as of the Close of Business on
such date, including the amount of any
accrued but unpaid interest thereon.
"Designated Officers" shall mean Seller's President and
principal
accounting officer.
"Endorsements" shall have the meaning set forth in Section 6.8.
"Environmental Exceptions" shall have the meaning set forth in
Section 8.12(d).
"Environmental Matters Notice of Termination" shall have the
meaning
set forth in Section 8.12(d).
3
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"Environmental Requirements" shall have the meaning set forth
in
Section 3.17.
"Environmental Survey" shall have the meaning set forth in
Section
8.12(b).
"Excluded Assets" shall have the meaning set forth in Section
2.5.
"Excluded Deposits" shall mean deposit liabilities (i) which in
Purchaser's reasonable judgment cannot be
transferred or assigned by Seller to
Purchaser, (ii) which are subject to legal
restraint preventing assignment of
such deposit liabilities to Purchaser or
(iii) any escrow account maintained by
Seller for the payment of taxes and
insurance on property securing an Acquired
Loan.
"Excluded Loans" shall have the meaning set forth in Section
5.5.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"Federal Reserve" shall mean the Board of Governors of the
Federal
Reserve System.
"Final Payment Amount" shall have the meaning set forth in
Section
12.5(b).
"Final Purchase Premium" shall mean the calculation of the
Purchase
Premium with reference to the final
Schedule 3.6.
"Hazardous Material" shall have the meaning set forth in
Section
3.17.
"Inclearing Period" shall have the meaning set forth in Section
13.1(a).
"IRS" shall mean the Internal Revenue Service.
"Knowledge" shall mean, with respect to any date, the actual
knowledge of each of the Designated
Officers, as of such date, without
additional inquiry.
"Liabilities" shall have the meaning set forth in Section 2.2.
"Loan Balance" shall mean, with respect to any Acquired Loan as of
a
given date, the legally outstanding
principal balance of such Acquired Loan as
of the Close of Business on such date, as
reflected in and based on the related
Loan Documents.
"Loan Documents" shall mean with respect to each Acquired Loan,
all
credit agreements, guaranties, opinions of
counsel, mortgages, security
agreements, deeds, title searches, UCC
filings, trust instruments, financing
statements, side letter agreements,
participation agreements, records,
correspondence, insurance binders and
policies and other documents and Notes,
and all amendments to any of the foregoing,
relating to such Acquired Loan which
are in Seller's legal or credit files.
"Minimum Acquired Loans" shall have the meaning set forth in
Section
9.7.
4
<PAGE>
"Noncompete Area" shall mean the area within 15 miles of the
Branches.
"Note" shall mean the promissory note evidencing indebtedness
under
an Acquired Loan.
"ODFI" shall mean the Ohio Department of Financial
Institutions.
"Paper Items" shall have the meaning set forth in Section
13.1(a).
"Permitted Encumbrances" shall have the meaning set forth in
Section
8.14(c).
"Personal Property" shall have the meaning set forth in Section
5.3.
"Preliminary Purchase Price" shall mean the Purchase Price
calculated pursuant to Section 2.3 of this
Agreement in reliance upon updated
Schedules 2.1(a)(xi), 3.6, 3.7, and
3.12(b), and upon Schedule 5.1, each as
required to be delivered to Purchaser at
the Closing.
"Preliminary Settlement Statement" shall mean a settlement
statement
substantially in the form of Exhibit B
attached hereto.
"Prepaid FDIC Insurance Premium" shall mean the aggregate amount
of
all insurance premiums paid by Seller to
the FDIC prior to the Closing Date with
respect to the Deposits for any period
following the Closing Date based on (i)
the aggregate amount of the deposits
domiciled at the Branches at the dates used
for computation of the FDIC insurance
assessment, and (ii) Seller's insurance
assessment rate effective at the date of
computation of such assessment, based
on a "well capitalized" rating.
"Purchase Premium" shall mean an amount equal to the lesser of
(i)
5.5 percent of Core Deposits that are
acquired by Purchaser or (ii) $850,000.
The Purchase Premium shall be calculated
based on the daily average balance of
Core Deposits for the 20 Business Days
immediately preceding the Closing Date,
and shall be subject to reduction in an
amount equal to 4% of the amount by
which the Minimum Acquired Loans are less
than $8,000,000.
"Purchase Price" shall have the meaning set forth in Section
2.3.
"Purchaser" shall mean The Marion Bank, an Ohio state chartered
commercial bank.
"Purchaser Transaction Documents" shall mean (i) a bill of sale
and
assignment, substantially in the form of
Exhibit E, (ii) an assumption
agreement, substantially in the form of
Exhibit G, (iii) a retirement account
transfer agreement, substantially in the
form of Exhibit H, (iv) a Coverdell
Education Savings Account Transfer
agreement, substantially in the form of
Exhibit K, and (v) an officer's
certificate, substantially in the same form as
Exhibit M.
"Real
Property" means all of Seller's right, title and interest in
and to all real estate and improvements
thereon and fixtures thereto at the
Branches, together with all rights and
appurtenances thereto and appurtenances
pertaining thereto.
5
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"Records" shall have the meaning set forth in Section 6.7(b).
"Safe Deposit Business" shall mean the safe deposit boxes located
at
the Branches and the safe deposit business
associated therewith.
"Schedule 3.6" shall have the meaning set forth in Section 3.6.
"Seller" shall mean First Citizens Bank, an Ohio state
chartered
banking corporation.
"Seller Transaction Documents" shall mean (i) a limited power
of
attorney, substantially in the form of
Exhibit C, (ii) a certificate of
non-foreign status, substantially in the
form of Exhibit D, (iii) a bill of sale
and assignment substantially in the form of
Exhibit E, (iv) a general
assignment, substantially in the form of
Exhibit F, (v) an assumption agreement,
substantially in the form of Exhibit G,
(vi) a retirement account transfer
agreement, substantially in the form of
Exhibit H, (vii) a Coverdell Education
Savings Account Transfer agreement,
substantially in the form of Exhibit K; and
(viii) a designated officer certificate,
substantially in the form of Exhibit J.
"Sign Support System" shall mean the support structure to which
Signage is affixed or attached.
"Signage" shall mean the display, including either Seller's or
Purchaser's name and logo, used to identify
either Seller's or Purchaser's place
of business.
"Student Loan" shall mean any loan designated as a student loan
on
the records of Seller as of the Closing
Date.
"Title Defects" shall have the meaning set forth in Section
8.14(c).
"Transferred Employee" shall mean each Bank Employee who is
offered
employment by Purchaser and who accepts
such employment.
"Withholding Obligations" shall have the meaning set forth in
Section 8.9.
ARTICLE II
TERMS OF PURCHASE AND ASSUMPTION
2.1 Purchase and Sale of Assets. (a) Pursuant to the terms of
this
Agreement, Seller shall sell, transfer,
convey and assign to Purchaser, and
Purchaser shall purchase and acquire from
Seller, as of the Close of Business on
the Closing Date, all of Seller's right,
title and interest in and to each of
the following, except as specifically
provided herein, which are collectively
referred to herein as the "Assets":
(i) the Personal
Property;
(ii) the Assumed
Contracts;
6
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(iii) the Real Property;
(iv) the Safe Deposit
Business;
(v) the
Records;
(vi) the Cash on
Hand;
(vii) the Acquired Loans;
(viii) the customer lists delivered to Purchaser pursuant to
the
terms of the Agreement;
(ix) all Sign Support
Systems located at the Branches;
(x) rights of
action related to any Liabilities; and
(xi) such other assets
(as set forth on Schedule 2.1(a)(xi)) as may
be mutually agreed to by the parties; provided that no
Excluded Assets shall be included in such other assets.
(b) In addition,
Seller agrees to be bound, effective upon
consummation of the Closing, by the terms
of the Covenant Not to Compete.
2.2 Assumption of Liabilities. Pursuant to the terms of this
Agreement, Purchaser shall assume, at the
Close of Business on the Closing Date,
the Deposits (other than Excluded
Deposits), and the liabilities and obligations
of Seller arising from and after the
Closing with respect to the Deposits (other
than Excluded Deposits), the Assumed
Contracts, the Safe Deposit Business, the
Acquired Loans, the ownership and operation
of the Real Property and Personal
Property, and such other liabilities as may
be mutually agreed to by the
parties, which are collectively referred to
herein as the "Liabilities". All
liabilities of Seller other than the
Liabilities shall remain the sole
obligation of Seller and shall be performed
in full by Seller.
2.3 Purchase Price. The purchase price (the "Purchase Price") of
the
Assets, which will be offset at the Closing
against the amount owed to Purchaser
by Seller pursuant to the terms of Section
2.4 as consideration for the
assumption by Purchaser of the Liabilities,
will be an amount equal to the sum
of the following:
(i) the
aggregate Carrying Value of the Personal Property,
determined as of the Close of Business on the Closing Date up
to a maximum of $16,000;
(ii) the aggregate
value of $200,000 for the Real Property,
allocated as set forth on Schedule 3.9.
(iii) the Acquired Loan Purchase Price;
(iv) the amount of the
Cash on Hand;
7
<PAGE>
(v) the agreed
upon purchase price of the other assets to be
acquired by Purchaser upon mutual agreement of the parties;
and
(vi) the Purchase
Premium, as adjusted in accordance with the terms
of this Agreement.
2.4 Consideration for Assumption of Liabilities. As
consideration
for the assumption of the Liabilities,
Seller shall pay to Purchaser one hundred
percent (100%) of the amount of the
Deposits (other than Excluded Deposits) as
of the Close of Business on the Closing
Date.
2.5 Excluded Assets. Notwithstanding anything else contained in
the
Agreement, the Assets shall not include (a)
appreciated fine art; (b) Signage;
(c) any item bearing the name of First
Citizens Bank (or any variation thereof)
or the logo or trademark of First Citizens
Bank or any predecessor thereto; (d)
Excluded Loans; (e) Excluded Deposits; (f)
any Credit Cards and related
business; (h) any insurance or securities
related business; (i) any of Seller's
contracts excluded pursuant to Section 5.4;
or (j) any rights, liabilities and
obligations of Seller arising from any of
the foregoing items (collectively, the
"Excluded Assets")."
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents, warrants and agrees as
follows:
3.1 Organization and Related Matters. Seller is an Ohio state
chartered commercial bank, duly organized,
validly existing, and in good
standing under the laws of the State of
Ohio, and it has the requisite corporate
power and authority to own the Assets and
carry on its business at the Branches
as currently conducted and execute, deliver
and perform this Agreement. Seller
is duly qualified to carry on its business
as it is now being conducted in each
jurisdiction in which it does business,
except any jurisdiction in which the
failure to be so qualified would not have a
material adverse effect on any
Acquired Loan or materially adversely
affect the operations of any of the Assets
or Liabilities taken as a whole or
materially adversely affect the operations of
any of the Branches after the Closing. The
deposits of Seller are, subject to
applicable monetary limits established by
law, insured by the Bank Insurance
Fund of the FDIC. Seller is a not a member
of the Federal Reserve, is regulated
by the FDIC, and is duly authorized to
operate each of the Branches.
3.2 Authorization. The execution, delivery and performance of
this
Agreement and the transactions contemplated
hereby have been duly and validly
authorized and approved by all requisite
corporate action on the part of Seller,
including approval by its Board of
Directors. This Agreement has been duly
executed and delivered by Seller. This
Agreement is a valid and binding
obligation of Seller, enforceable in
accordance with its terms.
3.3 No Breaches of Statute or Contract; Required Consents. The
execution and delivery of this Agreement
and the Seller Transaction Documents
and the consummation of the transactions
contemplated hereby and in the Seller
Transaction Documents, do not and will
not
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(i) conflict with any of the provisions of
the charter or bylaws of Seller; (ii)
violate any applicable laws, orders or
regulations; (iii) conflict with or
result in a breach (with notice or lapse of
time or both) of any judgment,
order, decree or ruling to which Seller is
a party, or by which Seller or any of
its property may be bound or affected, or
any injunction of any court or
governmental authority to which Seller or
any of its property is subject; (iv)
except as expressly contemplated by this
Agreement, require the affirmative
consent or approval of any governmental or
nongovernmental third party; (v)
result in a breach of the terms, conditions
or provisions of, or constitute a
default (or an event which with notice or
lapse of time, or both, would become a
default) under, or terminate or give rise
to a right to terminate or bring into
operation any penalty provision of, any
lease, license, contract, agreement or
other instrument to which any of the
Acquired Loans, the other Assets may be
bound or affected or to which Seller is a
party (including any such
documentation relating to the Acquired
Loans) or by which Seller or any of its
property may be bound or affected; or (vi)
result in the creation of any lien,
security interest, restriction, encumbrance
or claim on the Acquired Loans, on
any other Asset.
3.4 Litigation and Related Matters. To Seller's Knowledge, there
is
no action, suit, claim, proceeding or
investigation pending or threatened
against Seller that is reasonably likely to
impair the consummation of the
transactions contemplated hereby, or
materially adversely affect the operations
of any of the Branches after the Closing
Date or materially adversely affect
Seller's title to any Acquired Loan or the
validity or enforceability of any
Acquired Loan or Loan Document. Seller is
not aware of any facts that would
reasonably afford a basis for any such
action, suit, proceeding, claim or
investigation.
3.5 Consents. Except as set forth on Schedule 3.5, other than
the
approval of the ODFI and the FDIC, and
subject to the expiration of any
applicable waiting period, no consent,
approval or authorization of any federal
or state governmental authority or agency,
or any third party, is required for
the execution, delivery and performance by
Seller of this Agreement and the
consummation by it of the transactions
contemplated hereby.
3.6 Deposits. Provided herewith as Schedule 3.6 is a schedule of
the
aggregate Deposits domiciled at the
Branches (which schedule shall set forth the
Excluded Deposits), prepared as of the
Close of Business on October 22, 2004,
listing by category and by Branch the
amount of such Deposits, including the
amount of accrued but unpaid interest
thereon, and also indicating the aggregate
amount of Core Deposits as of such date
(the "______________, 2004 Schedule
3.6"), which constitutes all of the
Deposits of Seller as of such date. The
Deposits 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 Seller with
respect to the termination of such
insurance. To Seller's Knowledge, the
Deposits (excluding the Excluded Deposits)
(i) are in all respects genuine and
enforceable obligations of Seller and have
been acquired and maintained in
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 Seller's business; and
(iii) are not subject to any claims
with respect to such Deposits that are
superior to the rights of persons shown
on the records delivered to Purchaser
indicating the owners of the Deposits
other than claims against such owners of
the Deposits, such as state and federal
tax liens, garnishments, and other judgment
claims, which have matured or may
mature into claims against the respective
Deposits.
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3.7 Personal Property. Provided herewith as Schedule 3.7 is a
schedule of all material items of personal
property owned by Seller and located
at the Branches, which are not Excluded
Assets. The Personal Property is free
and clear of any mortgages, liens, security
interests or pledges. The Personal
Property is in "as is" condition. Schedule
3.7 specifies the Carrying Value of
each such item as shown on the financial
records of Seller, computed as of the
date indicated thereon.
3.8 Contracts. Provided herewith as Schedule 3.8 is a schedule
of
contracts relating to the maintenance and
physical operation of the Branches.
3.9 Real Property.
(a) Attached
hereto as Schedule 3.9 are the legal descriptions of
the Real Property.
(b) Except as
specifically set forth herein, Seller has no
knowledge of any condemnation proceedings
pending against the Real Property.
(c) Except as
specifically set forth herein, Seller has not
entered into any agreement regarding the
Real Property, and the Real Property is
not subject to any claim, demand, suit,
lien, proceeding or litigation of any
kind, pending or outstanding, which would
materially affect or limit Purchaser's
use and enjoyment of the Real Property or
which would materially limit or
restrict Seller's right or ability to enter
into this Agreement and consummate
the sale and purchase contemplated
hereby.
(d) To Seller's
Knowledge no fact or condition exists which would
result in the termination or material
impairment of access to the Real Property
from adjoining public streets or highways
or in the discontinuance of necessary
utilities services to the Real Property,
and (ii) all sanitation, plumbing,
refuse disposal, and similar facilities
servicing the Branches are in material
compliance with applicable governmental
regulations.
(e) Seller is not in material
violation of applicable building,
zoning, platting, subdivision, use, safety,
building or similar laws,
ordinances, regulations and restrictions
with respect to the Branches. None of
the Branches constitute a non-conforming
use under applicable zoning and land
use ordinances other than by reason of
so-called "grandfather" provisions
contained in such ordinances. There are no
special or general assessments
pending against or affecting the Real
Property and, 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 not
affect the use or value of the premises to
the Knowledge of Seller: (i) there is
no encroachment upon the Real Property from
any buildings or improvements, if
any, located on the adjacent property; and
(ii) 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. There is no violation of any
applicable building restriction or
restrictive covenant with respect to the
Real Property. The Real Property is
adequately serviced by all utilities
necessary for effective operation as
presently used for a financial institution
office.
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3.10 Compliance with Laws and Regulations. Except as set forth
in
Schedule 3.10, Seller has conducted and is
conducting its business at the
Branches in all material respects in
compliance with all federal and state laws
and regulations, including, without
limitation, all applicable regulations,
orders and opinions of the ODFI, the
Federal Reserve, and the FDIC.
3.11 Governmental Notices. Seller has not received any notice
from
any federal, state, or other governmental
agency indicating that such agency
would oppose or not grant or issue its
consent or approval, if required, with
respect to the transactions contemplated
hereby. There are no facts known to
Seller that could reasonably be expected to
have an adverse effect on the
ability of Seller to obtain all requisite
regulatory consents or to perform its
obligations under this Agreement.
3.12 The Acquired Loans. (a) Seller has made or will make
available
to Purchaser prior to Closing a complete,
true and correct copy of all Loan
Documents relating to each Acquired Loan.
There are no material agreements,
waivers, opinions of counsel, security or
collateral documents, amendments,
releases, discharges, or modifications or
releases of collateral,
representations or promises, written or
oral, made by Seller or any of its
affiliates, agents or employees with
respect to the Acquired Loans which have
not been disclosed to Purchaser by Seller
and which would be binding upon
Purchaser.
(b) The amounts
listed as Loan Balances on the Acquired Loan
Schedule on Schedule 3.12(b) represent debt
for actual monies borrowed.
(c) Subject to
any applicable bankruptcy, insolvency and other
laws affecting the enforcement of
creditors' rights generally and general
principles of equity, the Loan Documents
are in full force and effect, are valid
and binding and enforceable against the
parties thereto in accordance with their
terms. The Loan Balance of each Acquired
Loan and the accrued and unpaid
interest and fees thereon represents the
genuine, legal, valid and binding
payment obligation of the borrower of such
Acquired Loan and no Acquired Loan is
subject to any right of rescission, setoff,
recoupment, abatement, diminution,
counterclaim or valid defense by any
borrower or guarantor thereunder. Except as
set forth on Schedule 3.12(c), Seller is
the sole lender under and owns the
Acquired Loans free and clear of any
encumbrance, lien, pledge, charge, claim,
right of third parties or secondary
interest (collectively, "Acquired Loan
Restrictions"). Each of the Acquired Loans
was made in compliance with
applicable banking laws, rules and
regulations.
(d) Seller has
performed all obligations required to have been
performed by it under the Loan Documents
except where the failure to have
performed such obligations would not
materially adversely affect any Acquired
Loan. Seller has not received written
notice and does not have any Knowledge
that any borrower is asserting any material
claim against Seller or any defense
to payment of such borrower's obligations
under any Loan Documents. There are no
claims, proceedings, action, arbitrations,
or investigations pending, or, to the
Knowledge of Seller, threatened, which if
adversely determined, would have a
material adverse effect on any individual
Acquired Loan or (ii) on the Acquired
Loans taken as a whole.
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(e) Except as
disclosed or otherwise set forth in the Loan
Documents, none of the Acquired Loans has
been satisfied, cancelled,
subordinated or rescinded and no collateral
securing or supporting the Acquired
Loans has been released from any existing
lien nor has any instrument been
executed that would effect any such
release, cancellation, subordination or
rescission.
(f) Other than
notices received or given which have been disclosed
by Seller to Purchaser, and which have been
approved in writing by Purchaser,
with respect to the Acquired Loans as set
forth on Schedule 3.12(f), Seller has
not received any notice of intention to
pre-pay any Acquired Loan and has not
given any notice of intention not to renew
any Acquired Loan which is a
customarily renewable credit facility by
the borrower.
(g) Except as
set forth on Schedule 3.12(g) Seller has not
received written notice and does not have
Knowledge of any material default or
breach of any material representation,
agreement or covenant by any borrower
under any of the Loan Documents which
remains uncured for any Acquired Loan.
Seller shall update Schedule 3.12(g) to the
Closing Date and shall deliver such
to Purchaser at Closing.
(h) With respect
to each Acquired Loan, Seller has (unless
otherwise provided in the relevant Loan
Documents) a valid first priority
perfected security interest (subject,
however to any prior liens arising by
operation of law) in all collateral
described in the Loan Documents as security
for such Acquired Loans. With respect to
each Acquired Loan secured by personal
property, Seller will deliver to Purchaser
at the Closing copies of Requests for
Information or copies (UCC Form 11) (or a
similar search report), dated at a
date reasonably near the Closing Date,
listing all effective financing
statements which name each borrower and
guarantor of such Acquired Loan (under
its present name and any previous name) as
debtor, together with copies of such
financing statements.
(i) (1) Except
as set forth in Schedule 3.12(i)(1), there are no
amounts more than 30 days past due in
respect of any Acquired Loan as of the
date of this Agreement. Seller shall update
Schedule 3.12(i)(1) to the Closing
Date and shall deliver such to Purchaser at
Closing.
(2) No waiver or indulgence has been granted by Seller with
respect to any Acquired Loan which is
presently in effect or will be in effect
in the future.
(j) Other than
as expressly provided for herein, Seller makes no
representations or warranties with respect
to the collectibility or credit
quality of the Acquired Loans, the value or
condition of any collateral securing
the Acquired Loans, the creditworthiness or
financial condition of the borrower
under the Acquired Loans.
3.13 FIRPTA. Seller is not a "foreign person" within the meaning
of
Section 1445 of the Code.
3.14 No Broker's or Finder's Fees. Except as set forth on
Schedule
3.14, no agent, broker, investment banker,
person or firm acting on behalf of or
under authority of Seller
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is or will be entitled to any broker's or
finder's fee or any other commission
or similar fee directly or indirectly in
connection with any of the transactions
contemplated by this Agreement.
3.15 Statements True and Correct. All documents that Seller is
responsible for filing with any regulatory
authority in connection with the
transactions contemplated hereby will
comply as to form in all material respects
with the provisions of applicable law,
including applicable provisions of the
securities laws.
3.16 Employees. No Bank Employee is a party to any collective
bargaining, employment, severance,
termination, or change of control agreement,
oral or written, or represented under any
collective bargaining agreement
relating to employment with Seller. Seller
is unaware of any efforts during the
past three years to unionize or organize
the Bank Employees. Seller has provided
to Purchaser a true and correct list of any
and all bonus or incentive or other
compensation arrangements or commitments,
other than benefits plans applicable
to all Seller employees, for the Bank
Employees individually or as a group.
3.17 Environmental Matters. Except as set forth in Schedule 3.17,
to
the Knowledge of Seller:
(a) The Branches
are, in all material respects, in compliance with
all Environmental Requirements.
(b) During
Seller's occupancy of the Branches, no part of the
Branches have been used for the
manufacture, handling, storage or disposal of
Hazardous Material, except in compliance
with Environmental Requirements.
(c) There is no
action, suit, investigation, inquiry, or other
proceeding, ruling, order or citation
involving Seller, pending, threatened or
previously asserted as a result of any
actual or alleged failure to comply with
any of the Environmental Requirements with
respect to the Branches.
"Hazardous Material" means any substance
the presence of which requires
investigation or remediation under any
Environmental Requirements and includes,
without limitation, petroleum products,
PCB's, asbestos, mold, "hazardous
wastes" and "hazardous substances", as
defined in Federal Resource Conservation
and Recovery Act, as amended, and CERCLA,
respectively. "Environmental
Requirements" means all applicable statutes
and regulations of all governmental
agencies of the United States, states and
political subdivisions thereof and all
applicable judicial, administrative, and
regulatory decrees, judgments, and
orders relating to the protection of human
health or the environment.
3.18 Records. The Records 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 Seller's
policies, procedures and practices with
respect thereto, used at the Branches
comply in all material respects with
applicable federal and state laws and
regulations and customary banking
practices.
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3.19 Tax Matters. Seller has complied in all material respects,
with
the requirements of the IRS regarding
taxpayer identification number
certification, interest information
reporting and backup withholding of interest
payable in connection with Deposits. Seller
has filed all material federal,
state, county, local and foreign tax
returns, including information returns,
required to be filed by it in connection
with the operation of the Branches, and
paid all taxes shown as due from it on
those returns, 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 it
are delinquent. In all material
respects, Seller has paid or will pay all
taxes which it is required to withhold
from amounts owing to employees, creditors,
holders of Deposits, or other third
parties. For all calendar years ending
prior to or on the Closing Date, in all
material respects, Seller has duly and
timely sent to each holder of Deposits a
Form 1099 (or a substitute form permitted
by law) relating to interest, earnings
or dividends paid on such accounts for
those periods.
3.20 Other Assets. (a) Seller has good and marketable title to
each
of the other assets that the parties
mutually agree Seller will sell to
Purchaser and Purchaser will purchase from
Seller.
(b) None of such
other assets will be, as of the Closing Date,
subject to any restrictions with respect to
transfer or assignment thereof and
no third party consents, or notification to
any third parties, that will not
have been obtained by the Closing Date, are
required in order to effect any such
transfer or assignment.
3.21 Exhibits and Schedules. All information contained in the
Exhibits and Schedules hereto is true and
correct in all material respects and
all information contained in any amendments
or updates to such Exhibits and
Schedules will be true and correct as of
the date of delivery thereof.
3.22 Community Reinvestment Act; Regulatory Matters. Except as
set
forth in Schedule 3.22, Seller received a
rating of at least "satisfactory" in
its most recent examination with respect to
the Community Reinvestment Act.
Seller has no Knowledge of any supervisory
concerns regarding its compliance
with the Community Reinvestment Act or, to
the extent applicable, and similar
law of the State of Ohio. To Seller's
Knowledge, there are no threatened or
pending actions, proceedings or allegations
by any person or regulatory agency
which may cause the ODFI, FDIC or the
Federal Reserve to deny any application
required to be filed pursuant to Section
8.1.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents, warrants and agrees
as follows:
4.1 Organization and Related Matters. Purchaser is an Ohio
state
chartered commercial bank, duly organized,
validly existing, and in good
standing under the laws of the State of
Ohio and it has the requisite corporate
power and authority to own its assets and
carry on
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its business as currently conducted and
execute, deliver and perform this
Agreement. Upon receipt of the approval of
the FDIC and ODFI and the expiration
of any related waiting period, Purchaser
will be duly authorized to operate each
of the Branches. The deposits of Purchaser
are, subject to applicable monetary
limits established by law, insured by the
FDIC.
4.2 Authorization. The execution, delivery and performance of
this
Agreement and the consummation of the
transactions contemplated hereby by
Purchaser have been duly and validly
authorized and approved by all requisite
corporate action. This Agreement has been
approved by Purchaser's Board of
Directors, and such approval is reflected
in the minutes of the board of
directors. This Agreement has been duly
executed and delivered by Purchaser.
This Agreement is a valid and binding
obligation of Purchaser, enforceable in
accordance with its terms.
4.3 No Breaches of Statute or Contract; Required Consents. The
execution and delivery of this Agreement
and Purchaser Transaction Documents and
the consummation of the transactions
contemplated hereby and in the Purchaser
Transaction Documents, do not and will not
(i) conflict with any of the
provisions of the charter or bylaws of
Purchaser; (ii) violate any applicable
laws, orders or regulations; (iii) conflict
with or result in a breach (with
notice or lapse of time or both) of any
judgment, order, decree or ruling to
which Purchaser is a party, or by which it
or any of its property is bound or
affected, or any injunction of any court or
governmental authority to which it
or any of its property is subject, or any
material agreement to which it is a
party or by which it is bound or affected;
or (iv) require the affirmative
consent or approval of any governmental or
nongovernmental third party (other
than as expressly contemplated by this
Agreement).
4.4 Litigation and Related Matters. There is no action, suit,
claim,
proceeding or investigation pending or, to
the best of Purchaser's knowledge,
threatened against Purchaser that is
reasonably likely to impair the
consummation of the transactions
contemplated hereby. Purchaser is not aware of
any facts that would reasonably afford a
basis for any such action, suit,
proceeding, claim or investigation.
4.5 Consents. Except as set forth on Schedule 4.5, other than
the
approval of the FDIC and ODFI, and subject
to the expiration of any applicable
waiting period, no consent, approval or
authorization of any federal or state
governmental authority or agency, or any
third party, is required for the
execution, delivery and performance by
Purchaser of this Agreement and the
consummation by it of the transactions
contemplated hereby or to assume and
perform the obligations and duties of and
function as a lender with respect to
the Acquired Loans.
4.6 Compliance with Laws and Regulations. Purchaser has
conducted
and is conducting its business in all
material respects in compliance with all
federal and state laws and regulations,
including, without limitation, all
regulations, orders, and opinions of the
FDIC and ODFI. Purchaser is not subject
to any order or ruling directed to it by,
or memorandum of understanding with,
any governmental agency, including the FDIC
and ODFI.
4.7 Governmental Notices. Purchaser has not received any notice
from
any federal, state, or other governmental
agency indicating that such agency
would oppose or not grant or issue its
consent or approval, if required, with
respect to the transactions
contemplated
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hereby. There are no facts known to
Purchaser that could reasonably be expected
to have an adverse effect on the ability of
Purchaser to obtain all requisite
regulatory consents or to perform its
obligations under this Agreement.
4.8 No Broker's or Finder's Fees. Except as set forth on
Schedule
4.8, no agent, broker, investment banker,
person or firm acting on behalf of or
under authority of Purchaser is or will be
entitled to any broker's or finder's
fee or any other commission or similar fee,
directly or indirectly, in
connection with any of the transactions
contemplated by this Agreement.
4.9 Community Reinvestment Act; Regulatory Matters. Purchaser
received a rating of "satisfactory" in its
most recent examination with respect
to the Community Reinvestment Act.
Purchaser has not been advised of any
supervisory concerns regarding its
compliance with the Community Reinvestment
Act or any similar law of the State of
Ohio. To Purchaser's knowledge, there are
no threatened or pending actions,
proceedings or allegations by any person or
regulatory agency which may cause the FDIC
and ODFI to deny any application
required to be filed pursuant to Section
8.1.
ARTICLE V
UPDATING OF INFORMATION
5.1 Cash on Hand. At the Closing, Seller shall deliver to
Purchaser
Schedule 5.1 indicating the amount and
location of the Cash on Hand as of the
Close of Business on the Business Day
preceding the Closing Date.
5.2 Deposits. At Closing Seller will provide Purchaser with an
updated Schedule 3.6 (the "Closing Schedule
3.6") reflecting as of the Close of
Business on a date no more than five (5)
Business Days prior to the Closing Date
the aggregate Deposits (other than Excluded
Deposits) domiciled at the Branches,
including accrued and unpaid interest
thereon, and indicating the aggregate
amount of Core Deposits as of such
date.
5.3 Personal Property. Purchaser shall have the right by prior
written notice to Seller to exclude from
Schedule 3.7 items that are subject to
any lien, claim or encumbrance as of the
Closing,. An updated Schedule 3.7
listing all of the items of personal
property remaining after any such
exclusions (collectively referred to herein
as the "Personal Property"), along
with the Carrying Value of all of such
items, as of the end of the month
preceding the Closing Date, shall be
delivered by Seller to Purchaser at the
Closing.
5.4 Contracts. Seller shall use its reasonable best efforts to
obtain the consent of any third party
required to assign any of the contracts
listed on Schedule 3.8 to Purchaser.
Purchaser may by written notice to Seller
prior to the Closing exclude from Schedule
3.8 any contract (i) that is not
assignable by its terms, or that requires
the consent of a third party in order
for such contract to be assigned to
Purchaser, if, in each case, consent has not
been obtained prior to the Closing, or (ii)
that contains materially burdensome
terms that are not ordinary or customary.
An updated Schedule 3.8 listing all of
the contracts remaining after any such
exclusions (collectively referred to
herein as the "Assumed Contracts") shall be
delivered by Seller to Purchaser at
the Closing.
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5.5 Acquired Loans. Purchaser may, by written notice to Seller
at
any time prior to the Closing Date, exclude
any loan that would otherwise be an
Acquired Loan (such loans, together with
any loans excluded pursuant to Section
6.3 being collectively referred to herein
as "Excluded Loans"). Updated Schedule
3.12(b) listing all Acquired Loans
remaining after any such exclusions shall be
delivered by Purchaser to Seller at
Closing. Seller shall provide to Purchaser
on the Closing Date a listing all Acquired
Loans as to which any of the
statements set forth in Section 3.12 hereof
are not true and correct in all
material respects at and as of the Closing
Date.
5.6 Other Assets. An updated Schedule 2.1(a)(xi) reflecting the
other assets to be purchased from Seller by
Purchaser, and their mutually agreed
upon purchase price, shall be provided by
Seller at Closing, subject to final
agreement by Purchaser.
ARTICLE VI
COVENANTS OF SELLER
During the period from the date hereof to the Closing Date,
Seller
hereby covenants and agrees as follows:
6.1 Operations in Ordinary Course. (a) Without the prior consent
of
Purchaser, Seller shall:
(i) not engage in any transaction related to any of the
Branches,
except in the ordinary course of business
or as contemplated by this Agreement;
(ii) maintain the Branches in a condition
substantially the same as on the date
of this Agreement, reasonable wear and use
excepted; (iii) duly maintain
compliance in all material respects with
all laws, regulatory requirements and
agreements to which it is subject or by
which it is bound with respect to the
Assets, the Liabilities and the Branches;
(iv) not close or sell any of the
Branches or open or acquire any permanent
offices or branches within the
Noncompete Area; (v) reasonably cooperate
with Purchaser to maintain and the
franchise value of the Branches prior to
Closing; (vi) not sell or transfer any
Deposits (other than Excluded Deposits);
(vii) not change the compensation
policies or practices applicable to the
Bank Employees; (viii) not acquire
personal property for, or make capital
expenditures at, the Branches in excess
of $10,000 in the aggregate, or $2,500
individually; and
(b) Seller shall maintain its books of accounts and records
with
respect to the Assets and Liabilities in
the usual, regular and ordinary manner.
In addition, Seller shall not conduct its business and operations
in
such a manner as to impair its ability to
consummate the transactions
contemplated hereunder, nor will it engage
in any transaction, take any action,
or omit to take any action, which could
reasonably be expected to impair its
ability to consummate the transactions
contemplated hereunder.
6.2 Deposits. Seller shall not materially alter its current
method
of establishing interest rates for deposit
products, or its current advertising,
or deposit account practices at the
Branches. Subject to the foregoing, Seller
agrees to take such actions as it shall
reasonably deem
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necessary to preserve the mix, type and
aggregate amount of the Deposits at
approximately current levels.
Notwithstanding the foregoing, Seller and
Purchaser understand and agree that as of
thirty (30) days prior to the Closing
Date Seller shall be under no obligation to
open any new retirement accounts or
Coverdell Education Savings Accounts at the
Branches.
6.3 Acquired Loans. Without the prior consent of Purchaser,
Seller
shall:
(a) not, except for any Acquired Loan with a Loan Balance as of
the
date of this Agreement of less than $25,000
for which the following actions may
be taken in the ordinary course without
Purchaser's consent, enter into, create
or assume any security agreement, lien,
encumbrance, mortgage, deed of trust,
pledge, conditional sale or other title
retention agreement, easement, covenant,
restriction or other burden upon any
Acquired Loan or renewals thereof;
(b) not sell, assign, transfer or otherwise dispose of all or
any
portion of any Acquired Loan or any
interest therein;
(c) not, except for any Acquired Loan with a Loan Balance before
and
after any such action of less than $25,000
for which the following actions may
be taken in the ordinary course without
Purchaser's consent: modify or increase
any Commitments or credit lines with
respect to Acquired Loans; modify or change
any terms of any Loan Documents; enter
into, or make or promise to make any over
advance with respect to any Acquired Loan;
repurchase any participations in any
Acquired Loans except for repurchases which
Seller is contractually obligated
(by an agreement entered into prior to the
date hereof and disclosed to
Purchaser) to consummate. If Seller takes
any prohibited actions referred to in
this subsection 6.3(c) without the written
consent of Purchaser, then
Purchaser's sole remedy with respect to
such loan shall be that such loan, at
Purchaser's option, may be deemed an
Excluded Loan and may no longer be deemed
an Acquired Loan;
(d) not fail to comply in all material respects with any Loan
Documents;
(e) use reasonable best efforts to preserve the good will of
the
borrowers pursuant to the Acquired
Loans;
(f) not compromise or settle claims of any kind with respect to
any
Acquired Loan;
(g) not release any borrower under or guarantor of or any portion
of
the collateral supporting any Acquired Loan
(except in connection with a
prepayment in full of such Acquired
Loan);
(h) not increase the principal amount outstanding under any of
the
Notes, except that Seller may make
additional advances under existing lines of
credit, provided such advances are
consistent with Seller's applicable credit
standards and procedures; and
(i) continue to service the Acquired Loans in accordance with
its
prior practices and as it would in the
ordinary course of its business subject
to the provisions of this Agreement.
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Notwithstanding anything herein to the contrary, Seller shall
be
permitted to accept prepayments of any of
the Acquired Loans between the date
hereof and the Closing Date. If an Acquired
Loan is prepaid in full prior to the
Closing Date, such Acquired Loan shall be
deemed an Excluded Loan.
6.4 Conditions to Closing. Seller shall use its reasonable best
efforts to (i) satisfy, as expeditiously as
reasonably possible, all of the
conditions to the obligations of Purchaser
hereunder within Seller's control,
and (ii) obtain all consents of third
parties required to assign the contracts
set forth on Schedule 3.8.
6.5 Contracts. Subject to the provisions of Section 6.1, Seller
shall not enter into any material contracts
related to the Branches without the
written consent of Purchaser, which consent
shall not be unreasonably withheld.
For purposes of this Section 6.5, a
material contract shall be any contract
(other than an Acquired Loan or Deposit)
requiring payments in excess of $5,000.
6.6 Consents. Seller shall use its reasonable best efforts to
obtain
all consents, approvals and agreements
which are required in connection with the
consummation of the transactions provided
for herein.
6.7 Conversion; Records. (a) From the date hereof through
conversion
from Seller's system to Purchaser's system
of Seller's files and records
relating to the Assets purchased and
Liabilities assumed, including those
relating to deposit taking activities and
Safe Deposit Business provided at the
Branches (the "Conversion"), Seller shall
cooperate and work with Purchaser to
complete the tasks required to facilitate
the Conversion. Such tasks include,
but are not limited to, providing Purchaser
with updated computer files and
reports, and other items as are necessary
to complete the Conversion. Within 60
calendar days from the date hereof, Seller
shall provide to Purchaser the
computer files and reports, and related
documentation of the Assets and
Liabilities in a format acceptable to
Purchaser. Seller agrees to reasonably
cooperate in resolving any
conversion-related issue arising from the Conversion
until the Conversion is completed.
(b) Upon
consummation of the Closing, Seller shall deliver to
Purchaser (i) its existing files and
records located at the Branches relating to
the Assets purchased or otherwise
transferred and Liabilities assumed by
Purchaser pursuant to this Agreement and
those relating to the deposit taking
activities and Safe Deposit Business
provided at the Branches (collectively
referred to herein as the "Records"), which
constitute all of the books and
records in Seller's or its agent's
possession necessary for the conduct of the
business of the Branches as currently
conducted, to the extent such business
relates to the Assets and Liabilities; (ii)
all records relating to the
retirement accounts and plans included in
the Acquired Deposits; (iii) all tapes
and supporting documentation related to the
Deposits (other than Excluded
Deposits), Acquired Loans and Safe Deposit
Business; and (iv) all records, tapes
and files related to the Assets purchased
and Liabilities assumed by Purchaser
hereunder. Without limiting the foregoing,
following the Closing Date, Seller
agrees to promptly provide such copies of
such files and records relating to the
Assets and Liabilities which remain in its
possession as Purchaser shall
reasonably request, provided that, from and
after 180 days following the Closing
Date, Purchaser shall reimburse Seller for
its actual out-of-pocket expenses
incurred in connection therewith.
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<PAGE>
Seller agrees not to transfer, except as
may be contemplated pursuant to the
terms of this Agreement or to a successor
in interest or to a subsequent
purchaser of any of the Branches, Assets or
Liabilities, or to destroy any such
files or records for a period equal to the
lesser of six (6) years or the
required retention period under applicable
law, including, without limitation,
the USA PATRIOT Act following the Closing
Date without first providing Purchaser
with an opportunity to take possession of
any such files or records.
6.8 Insurance Endorsements. After the Closing, Seller agrees to
reasonably cooperate with Purchaser to
obtain endorsements or similar
acknowledgments (the "Endorsements") naming
Purchaser or acknowledging Purchaser
as the loss payee or additional insured
under each insurance policy with respect
to which Seller is named loss payee or
additional insured and which are related
to or required in connection with any
Acquired Loan.
6.9 Loan Documents. Except in the ordinary course of business,
Seller shall not allow any document to be
placed with, or permanently removed
from, the Loan Documents after Purchaser
has completed its review of such Loan
Documents without the knowledge of
Purchaser.
6.10 Covenant Not to Compete. (a) For a period of three (3)
years
commencing as of the Closing Date, Seller
shall not open any temporary or
permanent offices or branches for deposit
gathering or loan production
activities within the Noncompete Area.
Nothing herein shall prevent Seller from
(i) maintaining its existing single loan
production office at 559 E. Center St.,
Marion, Ohio (the "LPO Office"), (ii)
accepting deposits from any customer that
has a loan from Seller either at the LPO
Office or at any facility of customeror
(iii) establishing a branch office of
Seller's finance company subsidiary known
as "Mr. Money". No other deposits shall be
accepted at either the existing LPO
Office or any Mr. Money office located
within the Noncompete Area during the
period provided for herein. Nothing herein
shall prevent Seller from operating
any office or branch acquired in connection
with the acquisition by Seller of
another financial institution.
(b) During the three (3) year period following the Closing
Date,
Seller shall not (i) use any proprietary
customer list of the Deposits or
Acquired Loans or other similar record of
the holders of accounts that
constitute Deposits or borrowers of
Acquired Loans on the Closing Date, to
solicit deposits or to solicit loans of the
type included in the Acquired Loans,
(ii) specifically target and solicit
Deposit and Acquired Loan customers for
deposits or loans of the type included in
the Acquired Loans, provided that this
restriction shall not prohibit newspaper,
radio, television, internet, or other
mass media or mailing advertisements,
provided that such advertisements are
directed at the general public or Seller's
then existing customers, and are not
specifically targeted or directed at the
Deposit or Acquired Loan customers or
(iii) solicit for hire any Bank Employee of
Seller who becomes an employee of
Purchaser as of the Closing Date.
(c) The restrictions set forth in this Section 6.10 shall apply
to
Seller provided that none of such
restrictions shall apply to any bona fide
third party that by any means acquires
Seller, or all, or substantially all, of
its business, assets, and liabilities, or
any of its branches, as long as such
entity does not solicit deposits under the
name First Citizens Bank, (or any
similar
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name to that of Seller) within the
Noncompete Area during the three (3) year
period following the Closing Date.
6.11 Fees and Expenses. Except as otherwise provided herein,
all
costs and expenses incurred in connection
with this Agreement and the
transactions contemplated hereby shall be
paid by the party incurring such
expense.
6.12 Investigations. Seller shall permit Purchaser and its agents
to
inspect the premises and facilities at the
Branches and the books and records of
Seller regarding the Assets purchased and
Liabilities assumed hereunder at
reasonable times and upon reasonable
notice; provided, however, that any such
inspection shall be conducted in such
manner at such times and upon such notice
as is reasonably acceptable to Seller. In
addition, Seller shall furnish
Purchaser and its agents with copies of
such documents and records with respect
to the Branches and the Assets purchased
and Liabilities assumed hereunder as
Purchaser shall from time to time
reasonably request, including, without
limitation, all documents and records
reasonably necessary or advisable in order
for Purchaser to allocate the Purchase
Price pursuant to Section 8.7 hereof.
6.13 Acquired Loans. Following the Closing Date, Seller will
forward
any payments with respect to any Acquired
Loans received by Seller to Purchaser
by wire transfer within one (1) Business
Day of receipt of such payment by
Seller.
6.14 Proposed Action. Seller shall not authorize, propose or
commit
to any of the actions prohibited by this
Article VI or enter into or modify any
contract, agreement, commitment or
arrangement to do any of the actions
prohibited by this Article VI.
6.15 Limited Right of Purchaser to Put Back Acquired Loans. For
a
period of ninety (90) days following the
Closing Date in the event that
Purchaser discovers, with respect to any
Acquired Loan, that the Loan Documents
are deficient, and such deficiency cannot
be cured to the reasonable
satisfaction of Purchaser, then without
regard to the materiality of such
deficiency, and notwithstanding any other
limitation on Purchaser's rights
contained in this Agreement, Purchaser may,
in its sole discretion, elect to put
such Acquired Loan back to Seller, and
Seller shall purchase such loan from
Purchaser at the amount of such loan's then
Loan Balance.
ARTICLE VII
COVENANTS OF PURCHASER
7.1 Performance of Liabilities. From and after the Closing
Date,
Purchaser shall perform and be bound by the
terms and provisions of the deposit
agreements governing the terms of all
accounts included within the Deposits
(other than E
