Exhibit 2.1
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STOCK PURCHASE AGREEMENT
AMONG
FARMERS CAPITAL BANK CORPORATION
CITIZENS BANK (KENTUCKY), INC.
and
PREMIER FINANCIAL BANCORP, INC.
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STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and
entered
into as of the 13th day of February, 2004,
by and among (i) CITIZENS BANK
(KENTUCKY), INC., a Kentucky state banking
corporation with its principal
executive offices located at 120 North
Hamilton Street, Georgetown, Kentucky
40324 ("Bank"), (ii) PREMIER FINANCIAL
BANCORP, INC., a Kentucky corporation
with its principal executive offices
located at 2883 5th Avenue, Huntington,
West Virginia 25702 ("Premier") and (iii)
FARMERS CAPITAL BANK CORPORATION, a
Kentucky corporation with its principal
executive offices located at 202 West
Main Street, Frankfort, Kentucky 40601
("Company").
PREAMBLE
The Boards of Directors of the Company,
Premier and the Bank are of the opinion
that the transactions described herein are
in the best interests of the Parties
and their respective shareholders. This
Stock Purchase Agreement provides for
the purchase by the Company from Premier of
the outstanding capital stock of the
Bank. At the Effective Time, the Company
shall acquire all outstanding shares of
capital stock of the Bank for the aggregate
purchase price of Fourteen Million
Five Hundred Thousand Dollars
($14,500,000). The transactions described in this
Agreement are subject to the approvals of
the FRB, the Department and other
applicable federal and state regulatory
authorities, and the satisfaction of
certain other conditions described in this
Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
and
dependent covenants and undertakings
contained in this Agreement, and for other
good and valuable consideration, the
mutuality, receipt and sufficiency of which
is hereby acknowledged, and intending to be
legally bound, the parties hereby
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Certain Defined Terms. The words listed in this Article 1 when
used
and capitalized in this Agreement shall
have the meanings set forth for each by
this Article 1. Certain other capitalized
terms when used in this Agreement
shall have the meanings ascribed to them
when first encountered elsewhere in
this Agreement:
(a) "Acquisition
Proposal" shall mean any tender offer or
exchange offer or any proposal for a
merger, acquisition of all or a material
portion of the stock or assets of, or other
business combination involving, the
Bank or the acquisition of a substantial
equity interest in, or a material
portion of the assets of, the Bank.
(b) "Adequacy
Analysis" shall mean an Allowance for Loan
Losses Adequacy Analysis prepared as of the
Closing Date in the form attached
hereto and incorporated herein by reference
as Exhibit A.
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(c) "Adverse
Consequences" shall mean all Proceedings,
charges, claims, demands, injunctions,
Orders, damages, dues, assessments,
expenditures, outlays, awards, penalties,
fines, costs, interest, amounts paid
in settlement, liabilities, obligations,
payments, premiums, taxes, liens,
losses, reduction in value, loss of use,
injuries, expenses and fees of whatever
nature, including without limitation
response, restoration, investigative,
removal, remedial, monitoring or inspection
costs and court costs and reasonable
attorneys' fees and expenses.
(d) "Affiliate"
means, as applied to any Person, (i) any
director, executive officer, or general
partner of such Person, (ii) any other
Person directly or indirectly controlling,
controlled by or under common control
with or by such Person or (iii) any other
Person that directly or indirectly
owns or controls, whether beneficially or
as a trustee, guardian or other
fiduciary, five percent (5%) or more of the
equity capital of such Person;
provided, however, that it is the intent of
the parties that the Company shall
not be, and in no event shall either be
deemed or construed to be, an Affiliate
of the Bank or Premier prior to the
Effective Time, with the Bank becoming an
Affiliate of the Company following the
Effective Time. For purposes of this
definition, "control" (including the terms
"controlling," "controlled by" and
"under common control with") shall mean the
possession, directly or indirectly,
of the power to direct or cause the
direction of the management and policies of
a Person, whether through the ownership of
voting securities or by Contract or
otherwise.
(e) "Agreement"
shall mean this Stock Purchase Agreement and
the Schedules, Exhibits and other
certificates or documents delivered pursuant
hereto.
(f) "Bank" shall
mean Citizens Bank (Kentucky), Inc., a
Kentucky state banking corporation.
(g) "Bank
Benefit Plans" shall have the meaning assigned such
term in Section 3.17(a) hereof.
(h) "Bank ERISA
Plan" shall mean any Bank Benefit Plan which
is an "employee pension benefit plan" as
defined in Section 3(2) of ERISA.
(i) "Bank
Indemnified Persons" shall have the meaning assigned
such term in Section 9.3 hereof.
(j) "Bank
Shares" shall mean the Seven Thousand Five Hundred
Five (7,505) issued and outstanding shares
of common stock, $100.00 par value
per share, of the Bank.
(k) "Bankruptcy
Event" shall mean, with respect to a Person,
if such Person shall (i) discontinue
business, or cease doing business for more
than ten (10) days; (ii) make a general
assignment for the benefit of creditors;
(iii) apply for or consent to the
appointment of a custodian, receiver, trustee
or liquidator of all or a substantial part
of its assets; (iv) be adjudicated
bankrupt or insolvent; (v) file a voluntary
petition in bankruptcy or file a
petition or an answer seeking a
composition, reorganization or an arrangement
with creditors or seek to take advantage of
any other Law (whether federal or
state) relating to relief for debtors, or
admit (by answer, default or
otherwise) the material allegations of any
petition filed against it in any
bankruptcy, reorganization, composition,
insolvency or other Proceeding (whether
federal or state) relating to relief for
debtors; (vi) suffer the filing of any
involuntary petition in any bankruptcy,
reorganization, insolvency or other
Proceeding (whether federal or state), if
the same is not dismissed within
thirty (30) days after the date of such
filing; (vii) suffer or permit to
continue any judgment, decree or order
entered by a court which assumes control
of its business or financial affairs or
approves a petition seeking a
reorganization, composition or arrangement
of its business or financial affairs
or any other judicial modification of the
rights of any of its creditors, or
appoints a receiver, trustee or liquidator
for it, or for all or a substantial
part of any of its businesses or assets or
financial affairs; (viii) be enjoined
or restrained from conducting all or a
material part of any of its businesses as
then conducted or as hereafter conducted
and the same is not dismissed and
dissolved within thirty (30) days after the
entry thereof; (ix) not be paying
its debts generally as they become due; or
(x) admits in writing its inability,
or is unable, to pay its debts generally as
they become due.
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(l) "Change in
Control" shall mean (i) any merger,
consolidation, share exchange or other
reorganization or recapitalization to
which the Bank is a party or subject, (ii)
the sale, lease or exchange following
the date of this Agreement (either in one
(1) transaction or a series of
transactions) of five percent (5%) or more
of the assets of the Bank within a
one (1) year period, (iii) the issuance of
equity interests in the Bank
following the date of this Agreement
(either in one (1) transaction or a series
of transactions) which increases by five
percent (5%) or more the equity of the
Bank or (iv) the issuance of voting
interests in the Bank following the date of
this Agreement (either in one (1)
transaction or a series of transactions) equal
to five percent (5%) or more of the voting
interests of the Bank prior to such
issuance.
(m) "Claim
Notice" shall have the meaning assigned such term
in Section 9.4(a) hereof.
(n) "Closing"
shall mean the consummation of the purchase by
the Company of the Bank Shares hereunder
and the other transactions contemplated
hereunder and the satisfaction of all other
conditions precedent thereto as set
forth hereinafter.
(o) "Closing
Date" shall mean the date on which the Closing
occurs.
(p) "Code" shall
mean the Internal Revenue Code of 1986, as
amended, or any successor thereto and all
rulings and regulations issued
pursuant thereto or any successor
thereto.
(q) "Company"
shall mean Farmers Capital Bank Corporation, a
Kentucky corporation.
(r) "Company
Indemnified Persons" shall have the meaning
assigned such term in Section 9.2
hereof.
(s) "Consent"
shall mean any consent, approval, authorization,
clearance, exemption, waiver or similar
affirmation by any Person pursuant to
any Contract, Law, Order or Governmental
Authorization.
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(t) "Contract"
shall mean any legally binding written or oral
agreement, arrangement, authorization,
commitment, contract, indenture,
instrument, lease, obligation, plan,
practice, restriction, order, permit,
understanding or undertaking of any kind or
character, or other document to
which any Person is a party or that is
binding on any Person or its equity
capital, assets or business.
(u) "Covered
Claim" shall have the meaning assigned such term
in Section 9.4(a) hereof.
(v) "Current
Excess Amount" shall mean the amount set forth on
the Adequacy Analysis under the heading
"Reserve Requirement" for the category
"Current excess (deficiency)".
(w) "Default" shall mean (i) any
breach or violation of or
default under any Contract, (ii) any
occurrence or event that with the passage
of time or the giving of notice or both
would constitute a breach or violation
of or default under any Contract or (iii)
any occurrence or event that with or
without the passage of time or the giving
of notice would give rise to a right
to terminate, revoke, modify, cancel,
amend, change the current terms of,
renegotiate, or to accelerate, increase or
impose any liability under, any
Contract.
(x) "Department"
shall mean the Kentucky Department of
Financial Institutions.
(y) "Effective
Time" shall mean 5:00 p.m., EST, on the Closing
Date.
(z)
"Encumbrance" shall mean any claim, lien, security
interest (or other security arrangement),
charge, equity, mortgage, pledge,
community property interest, condition,
equitable interest, option, right of
first refusal, conditional sale agreement,
default of title, hypothecation,
reservation, title retention or encumbrance
of any nature whatsoever.
(aa) "Environment"
means soil, land surface or subsurface
strata, surface waters (including navigable
waters, ocean waters, streams,
ponds, drainage basins and wetlands),
groundwaters, drinking water supply,
stream sediments, ambient air (including
indoor air), plant and animal life and
any other environmental medium or natural
resource.
(bb) "Environmental
Laws" means any Laws that require or
relate to: (a) advising appropriate
authorities, employees and the public of
intended or actual releases of pollutants
or Hazardous Materials, violations of
discharge limits or other prohibitions and
of the commencements of activities,
such as resource extraction or
construction, that could have significant impact
on the Environment; (b) preventing or
reducing to acceptable levels the release
of pollutants or Hazardous Materials into
the Environment; (c) reducing the
quantities, preventing the release or
minimizing the hazardous characteristics
of wastes that are generated; (d) assuring
that products are designed,
formulated, packaged and used so that they
do not present unreasonable risks to
human health or the Environment when used
or disposed of; (e) protecting
resources, species or ecological amenities;
(f) reducing to acceptable levels
the risks inherent in the transportation of
Hazardous Materials or other
potentially harmful substances; (g)
cleaning up pollutants that have been
released preventing the threat of release
or paying the costs of such clean up
or prevention; or (h) making responsible
parties pay private parties, or groups
of them, for damages done to their health
or the Environment, or permitting
self-appointed representatives of the
public interest to recover for injuries
done to public assets. "Environmental Laws"
shall include, without limitation,
the Comprehensive Environmental Response
Compensation and Liability Act, as
amended, ss.ss.42 U.S.C. 9601 et seq.
("CERCLA") or any successor law, and
regulations and rules issued pursuant
thereto or any successor, and the Resource
Conservation and Recovery Act, as amended
ss.ss. 42 U.S.C. 6901 et seq. ("RCRA")
or any successor law, and regulations and
rules issued pursuant thereto or any
successor.
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(cc) "ERISA" shall
mean the Employee Retirement Income
Security Act of 1974, as amended, or any
successor thereto, and regulations and
rules issued pursuant thereto or any
successor thereto.
(dd) "ERISA Affiliate"
shall have the meaning assigned such
term in Section 3.17(c) hereof.
(ee) "Exhibits" shall
mean the exhibits so marked and attached
to this Agreement, which Exhibits are
hereby incorporated herein by reference
and made a part hereof.
(ff) "FDIC" shall mean
the Federal Deposit Insurance
Corporation.
(gg) "FRB" shall mean
the Board of Governors of the Federal
Reserve System.
(hh) "Fifth Third
Encumbrances" shall mean any and all
Encumbrances upon the Bank Shares arising
under or related to the Pledge
Agreement.
(ii) "Financial
Statements" shall have the meaning assigned
such term in Section 3.5 hereof.
(jj) "Funded Debt"
shall mean, at any date, with respect to
the Bank, all indebtedness for borrowed
money issued, incurred, assumed or
guaranteed by the Bank which would, in
accordance with GAAP, be classified as
funded indebtedness, but in any event
"Funded Debt" shall include all
indebtedness for borrowed money, whether
secured or unsecured. However,
notwithstanding the foregoing, "Funded
Debt" shall not include, with respect to
the Bank, any liability or obligation of
the Bank incurred in the Ordinary
Course of its banking or trust business
with respect to (i) any deposits held by
the Bank or funds collected by the Bank;
(ii) any banker's acceptance or letter
of credit issued by the Bank; (iii) any
check, note, certificate of deposit,
money order, traveler's check, draft or
bill of exchange accepted or endorsed by
the Bank; (iv) any lease of real or
personal property, purchase money security
agreement or similar instrument not
involving an obligation of the Bank for
borrowed money other than purchase money
indebtedness; (v) any guarantee or
similar obligation incurred by the Bank in
such circumstances as are incidental
or usual in carrying on the banking or
trust business; (vi) any transaction in
the nature of an extension of credit,
whether in the form of a commitment or
otherwise, undertaken by the Bank for the
account of a third party after the
application by the Bank of the same banking
considerations and legal lending
limits that would otherwise be applicable
if the transaction were a loan to such
party; and (vii) any transaction in which
the Bank acts solely in a fiduciary or
agency capacity.
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(kk) "GAAP" shall mean
generally accepted accounting
principles applicable to banks and bank
holding companies as set forth in the
opinions and pronouncements of the
Accounting Principles Board and the American
Institute of Certified Public Accountants,
in statements and pronouncements of
the Financial Accounting Standards Board,
or in such other statements by such
other Person as may be approved by a
significant segment of the accounting
profession, in each case which are
applicable to the circumstances as of the
date of determination.
(ll) "Grade Category
Reserve" shall mean the indicated reserve
for a grade category of Subject Bank Loans
as set forth under the heading
"Reserve Requirement" in the Adequacy
Analysis. By way of example, as reflected
on Exhibit A, the Grade Category Reserve as
of January 31, 2004 for Residential
Mortgages - Grade 3 was $163,232.74.
(mm) "Governmental
Authorization" shall mean any approval,
Consent, license, permit, waiver, or other
authorization issued, granted, given
or otherwise made available by or under the
authority of any Governmental Body
or pursuant to any Law.
(nn) "Governmental
Body" shall mean any: (a) nation, state,
county, city, town, village, district or
other jurisdiction of any nature; (b)
federal, state, local, municipal, foreign
or other government; (c) governmental
or quasi-governmental authority of any
nature (including any governmental
agency, branch, department, official or
entity and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to
exercise, any administrative, executive,
judicial, legislative, police,
regulatory or taxing authority or power of
any nature.
(oo) "Hazardous
Materials" shall mean any waste or other
substance that is listed, defined,
designated or classified as, or otherwise
determined to be, hazardous, radioactive or
toxic or a pollutant or a
contaminant or otherwise regulated under or
pursuant to any Environmental Law,
including any admixture or solution
thereof, and specifically including (without
limitation) petroleum and all derivatives
thereof or synthetic substitutes
therefor, asbestos or asbestos-containing
materials and polychlorinated
biphenyls, substances containing
polychlorinated biphenyls, nitrate,
perchloroethylene, 1,1,1-trichloroethane,
trichloroethylene,
tetrachloroethylene, 1,1-dichloroethane, 1,
1-dichloroethene, cis-1,
2-dichloroethene, trans-1,
2-dichloroethene, copper, chromium, zinc, cadmium,
lead, mercury, nickel, iron, magnesium,
nitrite and aluminum.
(pp) "Impaired Loan"
shall mean any Subject Bank Loan included
under the heading "Impaired Loans" on the
Adequacy Analysis.
(qq) "Indemnified
Person" shall have the meaning assigned such
term in Section 9.4(a) hereof.
<PAGE>
(rr) "Intellectual
Property" shall mean any of the Bank's
copyrights (in both published and
unpublished works), patents, trademarks
(registered and unregistered), service
marks, service names, fictional business
names and trade names, technology rights
and licenses, computer software
(including any source or object codes
therefore or documentation relating
thereto), trade secrets, confidential
information, customer lists, technical
information, research and development
information and records, data processing
technology, plans, drawings, blueprints,
franchises, know-how, inventions and
discoveries (whether or not patentable),
any applications for any of the
foregoing and any other intellectual
property rights of whatever nature.
(ss) "Knowledge:" a
Person who is an individual will be deemed
to have "Knowledge" of a particular fact or
other matter if: (a) such individual
is actually aware of such fact or other
matter; or (b) a prudent individual
would be expected to discover or otherwise
become aware of such fact or other
matter in the course of conducting
reasonably comprehensive investigation
concerning the existence of such fact or
other matter. A Person (other than an
individual) will be deemed to have
"knowledge" of a particular fact or other
matter if any individual who is serving, or
who has at any time served, as a
director, officer, partner, management
employee, executor or trustee of such
Person (or in any similar capacity) has, or
at any time had, Knowledge of such
fact or other matter.
(tt) "Law" shall mean
any code, law, constitution, ordinance,
regulation, principle of common law,
reporting or licensing requirement, rule,
treaty or statute applicable to a Person or
its assets, liabilities or business,
including, without limitation, those
promulgated, interpreted or enforced by any
Governmental Body wherever located.
(uu) "Loan Adverse
Consequences" shall have the meaning
assigned such term in Section 9.5(b)
hereof.
(vv) "Material Adverse
Effect" shall mean that the Adverse
Consequences from an event, change, or
occurrence, individually or together with
any other event, change or occurrence, have
had or could have a material adverse
impact (financial or otherwise) on (i) the
financial condition, business,
results of operations or properties of the
subject Person or (ii) the ability of
the subject Person to perform his or her
obligations under this Agreement or to
consummate other transactions contemplated
by this Agreement in accordance with
applicable Law.
(ww) "Memorandum"
shall mean that certain Memorandum of
Understanding between the Bank, the
Department and the FDIC dated September 11,
2002.
(xx) "Noncompetition
Agreement" shall mean an agreement
between the Company and Premier in the form
attached hereto as Exhibit B.
(yy) "Non-Impaired
Loans" shall mean any Subject Bank Loan
other than an Impaired Loan.
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(zz) "Note" shall mean
that certain Fifth Third Bank Term Note
made by Premier to the order of Fifth Third
Bank in the original principal
amount of $6,000,000 and dated October 15,
2002.
(aaa) "Operating Property" shall mean any property owned (or
previously owned) by the Bank or in which
the Bank holds (or previously held)
a security interest.
(bbb) "Order" shall mean any administrative decision or award,
directive, decree, judgment, order,
quasi-judicial decision or award, ruling,
subpoena, injunction, decision, verdict or
writ of any court, arbitrator,
mediator, tribunal or Governmental
Body.
(ccc) "Ordinary Course" or "Ordinary Course of Business"-an
action taken by a Person will be deemed to
have been taken in the "Ordinary
Course" or the "Ordinary Course of
Business" only if: (a) such action is
consistent with the past practices of such
Person and is taken in the ordinary
course of the normal day-to-day operations
of such Person; (b) such action is
not required to be authorized by the board
of directors or the shareholders of
such Person (or by any Person or group of
Persons exercising similar authority);
and (c) such action is similar in nature
and magnitude to actions customarily
taken, without any authorization by the
board of directors or the shareholders
(or by any Person or group of Persons
exercising similar authority or
shareholders), in the ordinary course of
the normal day-to-day operations of
other Persons that are in the same line of
business as such Person.
(ddd) "Participation Facility" shall mean any facility or
property in which the Bank participates (or
previously participated) in the
management of such facility or
property.
(eee) "Party" shall mean the Bank, Premier or the Company and
" Parties" shall mean, collectively, the
Bank, Premier and the Company.
(fff) "Person" shall mean any individual, association,
corporation (including without limitation
any non-profit corporation) estate,
general partnership, limited liability
partnership, limited partnership, limited
liability company, joint stock association,
joint venture, firm, trust, business
trust, cooperative, executor,
administrator, nominee or entity in a
representative capacity, group acting in
concert, Governmental Body,
unincorporated association or other legal
entity or organization.
(ggg) "Permit" shall mean any federal, state, local or foreign
Governmental Authorization, certificate,
easement, filing, franchise, license,
notice, permit or right to which any Person
is a party or that is or may be
binding upon or inure to the benefit of any
Person or its securities, assets or
business.
(hhh) "Pledge Agreement" shall mean that certain Fifth Third
Bancorp Bank Pledge Agreement between
Premier and Fifth Third Bank dated
October 15, 2002.
(iii) "Premier" shall mean Premier Financial Bancorp, Inc. a
Kentucky corporation.
<PAGE>
(jjj) "Proceeding" shall mean any action, arbitration,
adjudication, case, cause of action, audit
claim, litigation, suit, complaint,
citation, criminal prosecution, demand
letter, governmental or other examination
or investigation, hearing, inquiry, notice
of violation, administrative or other
proceeding of whatever nature, or notice
(written or oral) by any person
alleging potential liability or requesting
information relating to or affecting
any Person, its business, assets or the
transactions contemplated by this
Agreement.
(kkk) "Rights" shall mean all arrangements, calls,
commitments, Contracts, options, rights to
subscribe to, scrip, options,
purchase rights, warrants or other binding
obligations of any character
whatsoever by which the Bank is or may be
bound to issue additional shares of
its capital stock or other equity interests
of whatever nature or other rights,
or securities or rights convertible into or
exchangeable for, shares of the
capital stock of the Bank or other equity
interests of whatever nature, or by
which the Bank is or may be bound to
repurchase, redeem or otherwise acquire any
of its outstanding shares of capital
stock.
(lll) "Schedules" shall mean the schedules so marked and
attached
to this Agreement, which Schedules are
hereby incorporated herein by reference
and made a part hereof.
(mmm) "Subject Bank Loans" shall mean the Bank loans
outstanding, as reflected on the books and
records of the Bank, at the Effective
Time.
(nnn) "Subsidiaries" shall mean all those Persons of which the
entity in question owns or controls 5% or
more of the outstanding equity
securities either directly or through an
unbroken chain of entities as to each
of which 5% or more of the outstanding
equity securities is owned directly or
indirectly by its parent.
(ooo) "Taxes" shall mean all taxes, charges, fees, levies,
imposts or other assessments, including,
without limitation, all net income,
gross income, gross receipts, sales, use,
goods and services, ad valorem,
transfer, alternative, net worth, value
added, franchise, profits, license,
withholding, payroll, employment, employer
health, excise, estimated, severance,
stamp, occupation, real property and
personal property taxes, and any other
taxes, customs duties, fees, assessments or
charges of any kind whatsoever,
together with any interest, fines and
penalties, additions to tax or additional
amounts imposed by any Governmental Body
and whether disputed or not.
(ppp) "Tax Returns" shall mean all returns and reports of or
with respect to any Tax, which are required
to be filed by or with respect
to the applicable Person.
(qqq) "Termination Date" shall mean that date three hundred
sixty-five (365) days following the Closing
Date.
<PAGE>
ARTICLE 2
THE TRANSACTION
2.1 Exchange of Cash For Bank Shares . Subject to the terms and
conditions hereof, at the Effective Time
Premier shall sell, assign, transfer
and deliver (free and clear of all
Encumbrances) the Bank Shares to the Company
in exchange for the aggregate cash sum of
Fourteen Million Five Hundred Thousand
Dollars ($14,500,000).
2.2 Time and Place of Closing. The Closing will take place at
9:00
a.m., EST, at the offices of Stoll, Keenon
& Park, LLP, 300 West Vine Street,
Suite 2100, Lexington, Kentucky 40507,
within thirty (30) days after receipt of
the Consents of Governmental Bodies
described in Section 7.1(b) hereof, or at
such other time as the Parties, acting
through their authorized officers, may
mutually agree (the "Closing Date").
2.3 Effective Time. The transfer of the Bank Shares to the
Company
and the other transactions contemplated by this Agreement
shall become
effective at the Effective Time.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE BANK AND PREMIER
The Bank and Premier hereby jointly and severally make to the
Company
the following representations and
warranties as of the date hereof and as of all
times throughout the term of this
Agreement:
3.1 Organization, Standing and Power. The Bank is duly
organized,
validly existing and in good standing under
the laws of the Commonwealth of
Kentucky and has the corporate power and
authority to carry on its business as
now conducted and to own, lease and operate
its assets. Premier is duly
organized, validly existing and in good
standing under the laws of the
Commonwealth of Kentucky and has the
corporate power and authority to carry on
its business as now conducted and to own,
lease and operate its assets. The Bank
owns no property nor carries on any
activities that require it to qualify to do
business as a foreign corporation in any
jurisdiction other than Kentucky. The
Bank is a member in good standing of the
FDIC. The Bank is an "insured
depository institution" as defined in
Section 3(c)(2) of the Federal Deposit
Insurance Act and applicable regulations
thereunder, and the deposits of the
Bank are insured by the FDIC to the maximum
extent permitted by the Federal
Deposit Insurance Act, as amended, and
applicable regulations thereunder. The
Bank is a member of the Bank Insurance
Fund.
3.2 Authority; No Conflict.
(a) Subject to
the approval of the Bank and Premier
shareholders (if applicable), each of the
Bank and Premier has the corporate
power and authority necessary to execute,
deliver and perform its obligations
under this Agreement and all other
agreements, documents or instruments
contemplated hereunder and to consummate
the transactions contemplated hereby
and thereby. Subject to shareholder
approval (if applicable), the execution,
delivery and performance of this Agreement,
and the consummation of the
transactions contemplated herein, have been
duly and validly authorized by all
necessary corporate action (including valid
authorization and adoption of this
Agreement by the Bank's and Premier's duly
constituted Board of Directors) in
respect thereof on the part of the Bank and
Premier and this Agreement
constitutes the legal, valid and binding
obligation of the Bank and Premier,
enforceable against the Bank and Premier in
accordance with its terms. Each of
the Bank and Premier has the absolute and
unrestricted right, power, authority
and capacity to execute and deliver this
Agreement, and to perform its
obligations under this Agreement.
<PAGE>
(b) Neither the
execution and delivery of this Agreement by
the Bank and Premier nor the consummation
of the transactions contemplated
hereby, nor compliance by the Bank and
Premier with any of the provisions hereof
or thereof, will (i) conflict with or
result in a breach of any provision of the
Articles of Incorporation or Bylaws of the
Bank or Premier, (ii) constitute or
result in a Default under, or require any
Consent (excluding Consents required
by (A) any Law or Order, (B) the
Memorandum, (C) the Note or the Pledge
Agreement or (D) the Contracts identified
in Schedule 3.2(b)(ii) hereto)
pursuant to, or result in the creation of
any Encumbrance on any asset of the
Bank or Premier under, any Contract or
Governmental Authorization of or
applicable to the Bank or Premier, except
for such Defaults and Encumbrances
which will not have, and for such Consents
which, if not obtained, will not
have, individually or in the aggregate, a
Material Adverse Effect on the Bank or
Premier, or (iii) subject to receipt of the
requisite Consents referred to in
Section 7.1(b) hereof, violate any Law or
Order applicable to the Bank or
Premier or any of their respective material
assets.
(c) Other than
notice and filings with the FRB, the Department
and the FDIC, no notice to, filing with, or
Consent of, any Governmental Body is
necessary for the consummation by the Bank
or Premier of the transactions
contemplated in this Agreement.
3.3 Capital Stock. The authorized capital stock of the Bank
consists
solely of 20,000 shares, $100.00 par value
per share common stock, of which only
the Bank Shares are issued and outstanding
as of the date of this Agreement and
are held in their entirety by Premier free
and clear of all Encumbrances except
for the Fifth Third Encumbrances. All
issued and outstanding Bank Shares are
duly and validly issued and outstanding,
are fully paid and non-assessable under
applicable Law and the Articles of
Incorporation and Bylaws of the Bank. None of
the Bank Shares have been issued in
violation of any preemptive rights of any
current or past shareholder of the Bank.
There are no outstanding Rights. Since
January 1, 1999, the Bank has not directly
or indirectly redeemed, purchased or
otherwise acquired any of its capital
stock.
3.4 Subsidiaries. The
Bank has no (nor at any time has it had any)
Subsidiaries, or any equity investment or
ownership interest, directly or
indirectly, in any Person.
3.5 Financial Statements. The Bank and Premier have delivered (or,
as
applicable, will deliver) to the Company
true and complete copies of: (a) the
General Ledgers and Consolidated Reports of
Condition and Income of the Bank for
the years ended December 31, 2001, 2002 and
2003, and (b) for the monthly and
quarterly periods beginning on January 1,
2004 and ending on the last day of the
month immediately preceding the Closing
Date, monthly General Ledgers and
quarterly Consolidated Reports of Condition
and Income of the Bank
(collectively, the "Financial Statements").
The Financial Statements fairly
present or, as the context requires, shall
fairly present, the financial
condition and the results of operation of
the Bank as at the respective dates of
and for the periods referred to therein and
reflect or, as the context requires,
shall reflect the consistent application of
the accounting principles involved
therein throughout the periods involved.
The Financial Statements do not (or
will not) contain any items of special or
nonrecurring income or any other
income not earned in the Ordinary Course of
Business. The Bank is subject to no
(nor are Bank assets subject to any)
liabilities or obligations of any nature,
whether absolute, accrued, contingent or
otherwise, and whether due or to become
due, that are not (or, as the context
requires, will not be) reflected in the
Financial Statements. The Financial
Statements contain and reflect adequate
provisions for all reasonably anticipated
liabilities of the Bank for Post
Retirement Benefits Other than Pensions
pursuant to SFAS Nos. 106 and 112.
<PAGE>
3.6 Regulatory Reports; Corporate Records. The Bank has delivered
to
the Company true and complete copies of (i)
any and all material reports which
the Bank has filed with any Governmental
Body since January 1, 1998, (ii) its
Articles of Incorporation and Bylaws and
(iii) its stock transfer records and
corporate minutes for the past five (5)
years. All of the foregoing are current,
complete and correct in all material
requests.
3.7 Loans; Allowance for Loan and Lease Losses. Each of the
allowances
for possible loan and lease losses and any
allowance for real estate owned shown
on the Financial Statements is adequate (i)
to provide for all known and
potential losses of the Bank as of the
respective dates of the Financial
Statements, and (ii) under the requirements
of GAAP and standard banking
practice to provide for possible losses,
net of recoveries relating to loans and
leases previously charged off, on loans
outstanding, lease receivables or real
estate owned by the Bank (including,
without limitation, accrued interest
receivable). All outstanding Bank loans,
discounts and lease financings (as well
as those reflected on the Financial
Statements) have been (a) made for good,
valuable and adequate consideration in the
Ordinary Course of Business and (b)
evidenced by notes or other evidences of
indebtedness which are true, genuine,
what they purport to be and enforceable in
accordance with their terms. No Bank
loan, discount or lease financing is
subject to any defense with respect to the
enforceability of same. The signature of
any party appearing on any note or
instrument evidencing any Bank loan,
discount or lease financing, or on any
instrument evidencing any security
therefor, is valid and the balances for Bank
loans, discounts or lease financings, as
reflected on the books and records of
the Bank, are accurate. Any Bank loan made
under, or in conjunction with, any
Governmental Body program (including,
without limitation, the Farm Services
Administration) was made, and has been
serviced and administered, in compliance
with any applicable requirements of Law.
Any Bank loan which has been assigned
by the Bank (including, without limitation,
Bank loans assigned to the secondary
market) was made in accordance with
applicable Law and in accordance with the
requirements (including, without
limitation, underwriting standards and
documentation requirements) of the subject
assignee and no such assignment is
subject to any defense with respect to the
enforceability of same or subject to
revocation by the assignee whereby the
assignee could require the Bank to
repurchase any subject loan. Except for
such secured loans the default of which
would not have, individually or in the
aggregate, a Material Adverse Effect on
the Bank, (i) each of the Bank's secured
loans is secured with the collateral
and priority indicated on the books and
records of the Bank and (ii) each such
Encumbrance is evidenced by a security
agreement or mortgage that is true,
genuine and enforceable in accordance with
its terms (except in all cases as
such enforceability may be limited by
applicable bankruptcy, insolvency,
reorganization, moratorium or similar Law
affecting the enforcement of
creditors' rights generally and except that
the availability of the equitable
remedy of specific performance or
injunctive relief is subject to the discretion
of the court before which any proceeding
may be brought). There are no material
uncured violations or violations with
respect to which material refunds or
restitution may be required with respect to
Bank loans that have been cited in
any compliance report to the Bank as a
result of examination by any Governmental
Body and the loan documentation with
respect to all Bank loans, discounts or
lease financings, complies in all material
respects with applicable Law. No
borrower or obligor under any Bank loan has
requested, and the Bank has not
allowed, any relief pursuant to the
Soldiers and Sailors Civil Relief Act of
1940.
<PAGE>
3.8 Repurchase Agreements. With respect to all repurchase
agreements to
which Bank is a party, (i) where the Bank
has the obligation to sell securities,
it has a valid, perfected first Encumbrance
in the government securities or
other collateral securing the repurchase
agreement, and the value of the
collateral securing each such repurchase
agreement equals or exceeds the amount
of the debt secured by such collateral
under such agreement, and (ii) where the
Bank has the obligation to buy securities,
the value of the collateral securing
such obligation does not materially exceed
the amount of the obligation.
3.9 Absence of Changes. Since December 31, 2002, the
business of the
Bank has been conducted in the Ordinary
Course and the Bank has not otherwise:
(a) experienced
or suffered any change constituting a Material
Adverse Effect;
(b)
incurred any
Funded Debt or incurred, or become subject
to, any other absolute or contingent
obligation or liability, or guaranteed any
liabilities or obligations of any other
Person;
(c) created or
suffered any Encumbrance with respect to its
properties, business or assets;
(d) sold,
pledged, transferred or otherwise disposed of, or
agreed to sell, transfer or otherwise
dispose of any portion of its assets,
properties or rights, except in the
Ordinary Course of Business and not
exceeding in the aggregate $50,000;
(e) conveyed or
agreed to convey any property to any Affiliate
or entered into any non-arm's length
transaction with any Affiliate;
(f) experienced
any general work stoppage, labor dispute or
other employee disturbance;
(g) incurred or
become subject to any claim or liability for
any damages which could have a Material
Adverse Effect on it, for negligence or
any other tort, or for breach of
Contract;
<PAGE>
(h) entered into
any Contract other than in the Ordinary
Course of Business;
(i) committed
any act or omitted to do any act which would
cause a Default under any Contract to which
it is a party or by which it is
bound on the date hereof, which Default is
reasonably likely to result in a
Material Adverse Effect on the Bank;
(j) issued,
sold, purchased or redeemed any stock, bonds,
debentures, notes, or other securities of
the Bank, or issued, sold or granted
any Right in respect thereof;
(k) waived,
released or canceled any debts owed to it, claims,
rights of value or suffered any
extraordinary loss, or paid any of its
non-current obligations or liabilities, or
written down the value of any assets
or written down or off any receivable
except for loan charge-offs and writedowns
in other real estate owned in the Ordinary
Course of Business;
(l) declared,
set aside or paid any dividend or distributions
on any Bank Shares;
(m) made any
capital expenditures or capital additions or
betterments (or commitment therefor) in
excess of $10,000 for any single item or
in excess of $20,000 in the aggregate;
(n) suffered any
casualty, damage, destruction or loss to any
of its assets not covered by insurance in
excess of $5,000 for any one event or
in excess of $10,000 in the aggregate;
(o) terminated,
placed on probation, disciplined, warned, or
experienced any resignation of (other than
resignations for retirement) any
employee;
(p) paid or
obligated itself to pay any bonuses, extra
compensation or extraordinary compensation
to, pensions or severance pay, or
made any increase (except increases in the
Ordinary Course of Business) in the
compensation payable (or to become payable
by it) to, any present or former
officer, director or employee of the Bank,
or entered into any contract of
employment;
(q) terminated
or amended or suffered the termination or
amendment of (i) any lease, bids,
Contracts, commitments or other agreements, or
(ii) any Permits, licenses, concessions,
Governmental Authorizations, franchises
and similar rights granted to or held by
it, which are necessary or related to
its operations;
(r) received
notice or had Knowledge that any of its credit or
deposit customers has terminated or intends
to terminate its relationship with
the Bank, which termination (or
terminations collectively) would constitute a
Material Adverse Effect on the Bank; or
(s) entered into
any Contract to do any of the foregoing.
<PAGE>
3.10 Intellectual Property.
(a) There are no
outstanding or threatened Proceedings,
disputes or disagreements with respect to
the Intellectual Property or with
respect to any Contract relating to the
Intellectual Property, an adverse result
in which could have a Material Adverse
Effect upon the Bank.
(b) The Bank is
the owner of all right, title, and interest in
and to the Intellectual Property, free and
clear of all Encumbrances, and has
the right under Law to use all of the
Intellectual Property without any
obligation to pay royalties with respect
thereto.
3.11 Properties. The Bank is the sole owner of, and has good
and
marketable title to, all of its assets
(excluding leased properties), whether
real or personal, tangible or intangible,
free and clear of all Encumbrances.
Except for regular, scheduled repairs which
are done in the Ordinary Course of
Business, all of such assets are free of
material defect, well maintained and in
good working order, condition and repair.
Neither the whole nor any portion of
such assets has been condemned or otherwise
taken by public authority, nor is
any such condemnation or taking threatened.
With respect to property held by
lease or Contract, each leasehold interest
(or Contract right) is created
pursuant to a valid and subsisting lease
(or Contract) enforceable in accordance
with its terms against the lessor (or other
party to the Contract) (true and
complete copies of any such lease or
Contract being attached hereto as Exhibit
C). All real property owned or leased by
the Bank complies in all material
respects with all Laws, including, without
limitation, all applicable zoning,
building, fire, health, safety, handicapped
persons, and use Laws.
3.12 Insurance. The Bank currently maintains insurance pursuant to
the
policies disclosed on Schedule 3.12 hereto
in amounts, scope, and coverage which
are adequate for the operations of the Bank
and consistent with the insurance
carried by prudent Persons similarly
situated. The Bank is not liable for any
material, retroactive premium adjustments
respecting any of its insurance
policies. None of such insurance policies
is subject to any special or unusual
terms or restrictions or provides for a
premium in excess of the stipulated
normal rate. Except for that certain
notification from the Chubb Group of
Insurance Companies dated December 30,
2003, the Bank has received no notice
from any insurance carrier that (i) any of
such insurance will be canceled or
that coverage thereunder will be reduced or
eliminated, or (ii) premium costs
with respect to such policies of insurance
will be substantially increased.
There are presently no claims pending under
any such policies of insurance and
no notices have been given by the Bank
under such policies. The Bank has not
failed to make a timely claim or file a
timely notice with respect to any matter
giving rise to a material (or potentially
material) claim under its insurance
policies and bonds. The Bank has not,
during the past five (5) years, been
denied or had revoked or rescinded any
policy of insurance.
<PAGE>
3.13 Tax Matters. All Tax Returns required to be filed by or on
behalf
of the Bank have been timely filed for
periods ended on or before the date
hereof and all such Tax Returns are true,
complete and accurate in all respects.
All Taxes shown on each filed Tax Return of
the Bank (or, as applicable,
Premier) have been paid. There is no audit
examination or refund Proceeding
respecting the Bank or Premier pending (or,
to the knowledge of the Bank or
Premier, threatened) with respect to any
Taxes. No presently pending assessments
of deficiencies in respect of Taxes have
been made against the Bank or Premier
or with respect to the income, receipts or
net worth of the Bank or Premier, and
no extensions of time are in effect for the
assessment of deficiencies against
the Bank or Premier. Neither the Bank nor
Premier has executed any extension or
waiver of any statute of limitations on the
assessment or collection of any Tax
due (excluding such statutes that relate to
years currently under examination by
the Internal Revenue Service or other
applicable taxing authorities) that is
currently in effect. Material deferred
Taxes of the Bank have been provided for
in accordance with GAAP. The Bank is in
material compliance with, and the
records of the Bank contain all information
and documents (including properly
completed Internal Revenue Service Forms
W-9) necessary to comply in all
respects with, all applicable information
reporting and Tax withholding
requirements under federal, state, and
local Tax Laws, and such records identify
with specificity all accounts subject to
backup withholding under Section 3406
of the Code. The Bank has made no payments,
is obligated to make no payments,
nor is it a party to any Contract that
could obligate it to make any payments
that would be disallowed as a deduction
under Section 280G or 162(m) of the
Code. There has not been an ownership
change, as defined in Code Section 382(g),
of the Bank that occurred during or after
any taxable period in which the Bank
incurred a net operating loss that carries
over to any taxable period ending
after December 31,1998, except in
connection with the transactions contemplated
pursuant to this Agreement. Except for that
Tax Sharing Agreement executed by
all Subsidiaries of Premier and as
disclosed in Schedule 3.13 hereto, the Bank
is not a party to any tax allocation or
sharing agreement nor does the Bank have
any material liability for taxes of any
Person under Treasury Regulation Section
1.1502-6 (or any similar provision of
state, local or foreign Law) as a
transferee or successor or by Contract or
otherwise. The Bank has received no
notice of any claim by any Governmental
Body that the Bank or the income,
receipts or net worth of the Bank may be
subject to Taxes. All Taxes and other
liabilities due with respect to completed
and settled examinations or concluded
Proceedings related to Tax Return and/or
Taxes of the Bank have been paid. There
are no Encumbrances with respect to Taxes
upon any of the assets of the Bank.
3.14 Environmental Matters.
(a) The Bank and
its Participation Facilities and its
Operating Properties are, and have been
(or, in the case of Operating Properties
in which the Bank holds or has held a
security interest, to the Bank's Knowledge
are and have been), in compliance with all
Environmental Laws, except for
violations which could not have,
individually or in the aggregate, a Material
Adverse Effect on the Bank.
(b) There is no
Proceeding pending or threatened before any
Governmental Body or other forum in which
the Bank or any of its Operating
Properties or Participation Facilities has
been or, with respect to threatened
Proceedings, may be named as a defendant
(i) for alleged noncompliance
(including by any predecessor) with any
Environmental Law or (ii) relating to
the release into the environment of any
Hazardous Material, whether or not
occurring at, on, under, adjacent to, or
affecting (or potentially affecting) a
site owned, leased, or operated by the Bank
or any of its Operating Properties
or Participation Facilities, except for
such Proceedings pending or threatened
that are not reasonably likely to have,
individually or in the aggregate, a
Material Adverse Effect on the Bank.
<PAGE>
(c) During the
period of (i) the Bank's ownership or operation
of any of its current properties, (ii) the
Bank's participation in the
management of any Participation Facility,
or (iii) the Bank's holding of a
security interest in an Operating Property,
there have been (or, in the case of
an Operating Property in which the Bank
holds or has held a security interest,
there have to the Bank's Knowledge been) no
releases of Hazardous Material in,
on, under, adjacent to, or affecting (or
potentially affecting) such properties,
except such as are not reasonably likely to
have, individually or in the
aggregate, a Material Adverse Effect on the
Bank. Prior to the period of (i) the
Bank 's ownership or operation of any of
its current properties, (ii) the Bank's
participation in the management of any
Participation Facility or (iii) the
Bank's holding of a security interest in an
Operating Property, there were to
the Bank's Knowledge, no releases of
Hazardous Material in, on, under, or
affecting any such property, Participation
Facility or Operating Property,
except such as are not reasonably likely to
have, individually or in the
aggregate, a Material Adverse Effect on
Bank.
3.15 Compliance With Laws. The Bank has in effect all Permits
necessary
for it to own, lease or operate its assets
and to carry on its business as now
conducted. Except as set forth in Schedule
3.15 hereto, the Bank is not now nor
has it been in violation of any Laws,
Orders or Permits applicable to its
business or employees conducting its
business, except for such violations, which
could not have, individually, or in the
aggregate, a Material Adverse Effect on
the Bank. The Bank has received no
notification or communication from any
Governmental Body or the staff thereof (i)
asserting that the Bank is in
violation of any of the Laws or Orders
which such Governmental Body enforces
(excluding violations which would not be
reasonably likely to have, individually
or in the aggregate, a Material Adverse
Effect on the Bank), (ii) threatening to
revoke any Permits or (iii) requiring the
Bank to enter into or consent to the
issuance of a cease and desist order,
formal agreement, directive, commitment or
memorandum of understanding, or to adopt
any Board of Directors resolution or
similar undertaking, which restricts the
conduct of its business, or in any
manner relates to its capital adequacy, its
credit or reserve policies, its
management or the payment of dividends. No
event has occurred or circumstance
exists that (with or without notice or
lapse of time) may constitute or result
in violation by the Bank of, or a failure
on the part of the Bank to comply
with, any Laws, Orders or Governmental
Authorizations, the failure with which to
comply could give rise to any obligation on
the part of the Bank to undertake,
or to bear all or any portion of the cost
of, any remedial action of any nature.
The Bank has filed all currency transaction
reports with respect to all
transactions required to be reported under
the Bank Secrecy Act and regulations
adopted pursuant thereto.
3.16 Labor Relations. The Bank is not the subject of any
Proceeding
asserting that the Bank has committed an
unfair labor practice (within the
meaning of the National Labor Relations Act
or comparable state Law) or seeking
to compel the Bank to bargain with any
labor organization as to wages or
conditions of employment, nor is there any
strike or other labor dispute
involving the Bank pending or, to the
Knowledge of Bank, threatened, nor to the
Knowledge of the Bank, is there any
activity involving the Bank's employees
seeking to certify a collective bargaining
unit or engaging in any other
collective bargaining organizational
activity.
<PAGE>
3.17 Employee Benefit Plans.
(a) The Bank has
disclosed on Schedule 3.17 hereto and has
delivered or made available to the Company
prior to the execution of this
Agreement true and complete copies of all
pension, retirement, profit sharing,
deferred compensation, stock option,
employee stock ownership, severance pay,
vacation, bonus or other material incentive
plans, all other written employee
programs, arrangements or agreements, all
medical, vision, dental or other
health plans, all life insurance plans, and
all other material employee benefit
or fringe benefit plans, including
"employee benefit plans" as that term is
defined in Section 3(3) of ERISA, currently
adopted, maintained by, sponsored in
whole or in part by, or contributed to by
the Bank or any ERISA Affiliate
thereof for the benefit of employees,
retirees, dependents, spouses, directors,
independent contractors or other
beneficiaries of the Bank and under which
employees, retirees, dependents, spouses,
directors, independent contractors or
other beneficiaries of the Bank are
eligible to participate (collectively, the
"Bank Benefit Plans"). No Bank ERISA Plan
is or has been a multiemployer plan
within the meaning of Section 3(37) of
ERISA.
(b) All Bank
Benefit Plans are in compliance with (and have
been managed and administrated in
accordance with) the applicable terms of
ERISA, the Code and any other applicable
Laws except for such non-compliances
which would not be reasonably likely to
have, individually or in the aggregate,
a Material Adverse Effect on the Bank. Each
Bank ERISA Plan that is intended to
be qualified under Section 401(a) of the
Code has either received a favorable
determination letter from the Internal
Revenue Service (and the Bank is not
aware of any circumstances likely to result
in revocation of any such favorable
determination letter) or timely application
has been made therefor. The Bank is
not subject to a Tax imposed by Section
4975 of the Code or a civil penalty
imposed by Section 502(i) of ERISA. Neither
the Bank nor Premier has knowledge
of any fact which would adversely affect
the qualification of any of the Bank
Benefit Plans, or of any threatened or
pending claim against any of the Bank
Benefit Plans or their fiduciaries by any
participant, beneficiary or
Governmental Body.
(c) No "defined
benefit plan" (as defined in Section 414(j) of
the Code) or any "single-employer plan,"
within the meaning of Section
4001(a)(15) of ERISA, maintained at any
time by the Bank, or the single-employer
plan of any entity which is considered one
employer with the Bank under Section
4001 of ERISA or Section 414 of the Code or
Section 302 of ERISA (whether or not
waived) (an "ERISA Affiliate"), has an
"accumulated funding deficiency" within
the meaning of Section 412 of the Code or
Section 302 of ERISA. The Bank has not
provided, or, to it's Knowledge, is
required to provide, security to any single-
employer plan of an ERISA Affiliate
pursuant to Section 401 (a)(29) of the Code.
(d) Within the
six year period preceding the Effective Time,
no liability under Subtitle C or D of Title
IV of ERISA has been incurred by the
Bank with respect to any current, frozen,
or terminated single-employer plan or
the single-employer plan of any ERISA
Affiliate. The Bank has not incurred any
withdrawal liability with respect to a
multiemployer plan under Subtitle E of
Title IV of ERISA (regardless of whether
based on contributions of an ERISA
Affiliate). No notice of a "reportable
event," within the meaning of Section
4043 of ERISA for which the 30 day
reporting requirement has not been waived,
has been required to be filed for any Bank
Benefit Plan or by any ERISA
Affiliate within the 12 month period ending
on the date hereof.
<PAGE>
(e) The Bank has
fully complied with the notice and
continuation requirements of Parts 6 and 7
of Subtitle B of Title I of ERISA and
Section 4980B of the Code, and the proposed
regulations thereunder, whether
proposed or final. All reports, statements,
returns and other information
required to be furnished or filed with
respect to the Bank Benefit Plans have
been timely furnished, filed or both in
accordance with Sections 101 through 105
of ERISA and Sections 6057 through 6059 of
the Code, and they are true, correct
and complete in all material respects.
Records with respect to the Bank Benefit
Plans have been maintained in material
compliance with Section 107 of ERISA.
Neither the Bank nor any other fiduciary
(as that term is defined in Section
3(21) of ERISA) with respect to any of the
Bank Benefit Plans has any material
liability for any breach of any fiduciary
duties under Sections 404, 405 or 409
of ERISA.
(f) The Bank has
not, with respect to any of the Bank Benefit
Plans, nor has any administrator of any of
the Bank Benefit Plans, the related
trusts or any trustee thereof, engaged in
any prohibited transaction which would
subject the Bank, any of the Bank Benefit
Plans, any administrator or trustee or
any party dealing with any of the Bank
Benefit Plans or any such trusts, to a
Tax or penalty on prohibited transactions
imposed by ERISA, Section 4975 of the
Code, or to any other liability under
ERISA.
(g)
The Bank has no
material liability for retiree health and
life benefits under any of the Bank Benefit
Plans.
(h) Neither the
execution and delivery of this Agreement nor
the consummation of the transactions
contemplated hereby will (i) result in any
payment (including severance, unemployment
compensation or golden parachute)
becoming due to any director or any
employee of Bank from the Bank under any
Bank Benefit Plan, (ii) materially increase
any benefits otherwise payable under
any Bank Benefit Plan or (iii) result in
any acceleration of the time of payment
or vesting of any such benefit.
(i) The
actuarial present values of all accrued deferred
compensation entitlements (including
entitlements under any executive
compensation, supplemental retirement, or
employment agreement) of employees and
former employees of Bank and their
respective beneficiaries, other than
entitlements accrued pursuant to funded
retirement plans subject to the
provisions of Section 412 of the Code or
Section 302 of ERISA, have been fully
reflected on the Financial Statements to
the extent required by and in
accordance with GAAP.
<PAGE>
3.18 Material Contracts. Except as set forth in Schedule 3.18
hereto,
the Bank is not a party to, nor is it bound
or affected by, nor does it receive
benefits under, (i) any employment,
severance, termination, consulting or
retirement Contract, (ii) any Contract
relating to the borrowing of money by
Bank or the guarantee by Bank of any such
obligation (other than Contracts
evidencing deposit liabilities, purchases
of federal funds, fully-secured
repurchase agreements, trade payables and
Contracts relating to borrowings or
guarantees made in the Ordinary Course of
Business), (iii) any Contracts which
prohibit or restrict Bank from engaging in
any business activities in any
geographic area, line of business or
otherwise in competition with any other
Person, (iv) any exchange-traded or
over-the-counter swap, forward, future,
option, cap, floor, or collar financial
Contract, or any other interest rate or
foreign currency protection Contract which
is a financial derivative Contract
(including various combinations thereof),
(v) any Contract not made in the
Ordinary Course of Business, (vi) any
Contract relating to capital expenditures
and involving future payments which (either
alone or when combined with other
like Contracts) exceed $20,000, (vii) any
Contract involving an Acquisition
Proposal or (viii) any Contract which (A)
will not be performed within sixty
(60) days of the date of this Agreement,
(B) involves future payments by the
Bank (whether during the term of any such
Contract or in connection with its
termination or expiration) in excess of
$5,000 or (C) is not cancelable by the
Bank without penalty on no more than 30
days' notice. With respect to each Bank
Contract: (i) the Contract is valid and in
full force and effect in accordance
with its terms; (ii) the Bank is not in
Default thereunder; (iii) the Bank has
not repudiated or waived any material
provision of any such Contract; (iv) no
other party to any such Contract is, to the
Knowledge of the Bank or Premier, in
Default in any respect or has repudiated or
waived any material provision
thereunder; (v) no event or condition has
occurred or exists (or is alleged to
have occurred or existed) which constitutes
(or with the lapse of time might
constitute) a Default; and (vi) the
Contract may be assigned by the Bank (or a
Change in Control may occur) without the
consent of the other party or parties
thereto.
3.19 Legal Proceedings. There is no Proceeding instituted or
pending,
or, to the Knowledge of the Bank,
threatened (or unasserted but considered
probable of assertion and which if asserted
would have at least a reasonable
probability of an unfavorable outcome)
against the Bank, or against any asset,
employee benefit plan, interest or right of
the Bank, that could have,
individually or in the aggregate, a
Material Adverse Effect on the Bank, nor are
there any Orders of any Governmental Body
outstanding against the Bank except
for the Memorandum. There is no Proceeding
instituted or pending, or to the
knowledge of the Bank, threatened (or
unasserted but considered probable of
assertion) against any officer, director or
employee of the Bank arising in
connection with actions taken (or omitted
to be taken) by such officer, director
or employee in his capacity as an officer,
director or employee. Schedule 3.19
hereto includes a summary report of all
Proceedings as of the date of this
Agreement to which the Bank is a party and
which names the Bank as a defendant
or cross-defendant.
3.20 Reports. Since January 1, 1999, the Bank has timely filed
all
reports and statements, together with any
amendments required to be made with
respect thereto, that it was required to
file with any Governmental Body. As of
its respective date (or, if amended or
superseded by a filing prior to the date
of this Agreement, then on the date of such
filing), each of such reports and
documents, including the financial
statements, exhibits and schedules thereto,
complied with all applicable Laws. As of
its respective date (or, if amended or
superseded by a filing prior to the date of
this Agreement, then on the date of
such filing), none of such documents so
filed contained any untrue statement of
a material fact, omitted to state a
material fact required to be stated therein,
or intentionally omitted to state a
material fact necessary to make the
statements made therein, in light of the
circumstances under which they were
made, not misleading.
<PAGE>
3.21 Deposits. The deposit records of the Bank accurately reflect
the
Bank's deposit accounts and are and shall
be sufficient to enable the Company to
conduct a banking business with respect to
the Bank. There are no material
uncured violations or violations with
respect to which material refunds or
restitution may be required with respect to
the Bank deposit liabilities and the
terms and conditions and other
documentation with respect to the Bank deposit
liabilities comply in all material respects
with all applicable Laws and have
been provided to the Company. The Bank
deposit liabilities are insured by the
FDIC to the full extent provided by Law.
The Bank is in material compliance with
all terms and conditions and other
documentation applicable to the Bank deposit
liabilities. To the best of the Bank's
Knowledge, there are not (and have not
been within the past three years) any
"kiting" schemes associated with any of
the Bank deposit liabilities.
3.22 Books and Records. The books of account, general ledger
and
records of the Bank fairly and accurately
in all material respects reflect the
assets and liabilities of the Bank in
accordance with GAAP consistently applied.
The books of account, general ledger and
records of the Bank (i) are maintained
by the Bank substantially in accordance
with applicable legal and accounting
requirements and (ii) reflect only actual
transactions. The Bank's records and
oth
