FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the period ended March 31, 1996
Commission File Number: 0-5893
American Bancorporation
(Exact name of registrant as specified in its charter)
Ohio 31-0724349
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1025 Main Street, Suite 800, Wheeling, WV 26003
(Address of principal executive offices) (Zip Code)
(304) 233-5006
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
April 5, 1996: 1,564,837 shares of Common stock without par value
Number of pages comprising
this report. . . . . . . . . 11
TABLE OF CONTENTS
Part I FINANCIAL INFORMATION
Item 1 Financial Statements
Condensed Consolidated Balance Sheet 3
Condensed Consolidated Statement of Operations 4
Condensed Consolidated Statement of
Cash Flows 5
Condensed Consolidated Statement of
Changes in Stockholders' Equity 6
Notes to the Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II OTHER INFORMATION
Item 1 Legal Proceedings None
Item 2 Changes in Securities None
Item 3 Defaults Upon Senior Securities None
Item 4 Submission of Matters to a
Vote of Security Holders None
Item 5 Other Information 10
Item 6 Exhibits and Reports on Form 8-K 10
SIGNATURES 11
American Bancorporation and Subsidiaries
CONSOLIDATED BALANCE SHEET
March 31, December 31,
1996 1995 1995
ASSETS
Cash and due from banks $ 11,064,486 $ 11,129,137 $ 10,887,718
Federal funds sold 9,696,000 3,971,000 11,469,000
Investment securities
available for sale 86,787,536 4,693,430 68,014,533
Investment securities
held to maturity - 75,115,516 -
Loans, net of unearned income 246,112,983 239,144,153 250,372,023
Less allowance for loan losses 3,836,067 3,785,678 3,853,633
242,276,916 235,358,475 246,518,390
Premises and equipment - net 8,787,394 8,649,528 8,947,284
Accrued interest receivable 2,385,108 1,822,568 2,065,832
Excess of cost over net
assets purchased 2,556,023 2,006,649 1,830,170
Other assets 5,724,196 5,879,201 4,261,848
TOTAL ASSETS $369,277,659 $348,625,504 $353,994,775
LIABILITIES
Deposits
Non-interest bearing $ 32,196,705 $ 31,847,265 $ 31,792,609
Interest bearing 277,649,967 262,717,795 260,871,998
TOTAL DEPOSITS 309,846,672 294,565,060 292,664,607
Short-term borrowings 25,257,519 20,129,973 27,522,666
Accrued interest payable 1,140,798 1,227,563 1,033,315
Other liabilities 3,811,364 5,133,012 3,714,641
Long-term debt 1,044,614 1,000,000 1,047,124
TOTAL LIABILITIES 341,100,967 322,055,608 325,982,353
STOCKHOLDERS' EQUITY
Preferred stock - - -
Common stock without par value,
stated value $5, authorized
6,500,000 shares, issued
and outstanding 1,564,837 7,824,185 7,824,185 7,824,185
Additional paid-in capital 10,301,982 10,301,982 10,301,982
Retained earnings 10,321,337 8,242,229 9,763,633
Unrealized gain (loss) on
securities available
for sale, net (270,812) 201,500 122,622
TOTAL STOCKHOLDERS' EQUITY 28,176,692 26,569,896 28,012,422
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $369,277,659 $348,625,504 $353,994,775
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF OPERATIONS
Three Months ended March 31,
1996 1995
INTEREST INCOME
Loans $ 5,579,457 $ 5,245,583
Investment securities
Taxable interest income 1,089,267 1,059,916
Non-taxable interest income 34,424 37,277
1,123,691 1,097,193
Other short-term investments 172,141 82,480
Total interest income 6,875,289 6,425,256
INTEREST EXPENSE
Deposits 2,618,465 2,278,894
Borrowed funds 399,586 341,525
Total interest expense 3,018,051 2,620,419
NET INTEREST INCOME 3,857,238 3,804,837
PROVISION FOR LOAN LOSSES - 45,000
Net interest income after
provision for loan losses 3,857,238 3,759,837
OTHER INCOME
Service charges on
deposit accounts 210,890 150,611
Securities gains - -
Insurance commissions 25,744 30,780
Other income 262,788 199,531
Total other income 499,422 380,922
OTHER EXPENSE
Salaries and employee benefits 1,343,149 1,396,765
Occupancy and equipment expense 552,897 533,279
Other expenses 1,086,550 1,152,254
Total other expense 2,982,596 3,082,298
INCOME BEFORE INCOME TAXES 1,374,064 1,058,461
PROVISION FOR INCOME TAXES 503,393 388,358
NET INCOME $ 870,671 $ 670,103
Average Shares Outstanding 1,564,837 1,564,837
NET INCOME PER SHARE $ 0.56 $ 0.43
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
Three months ended March 31,
1996 1995
Operating Activities:
Net Income $ 870,671 $ 670,103
Charges to operations not using
cash in the current period (899,748) 624,546
Net cash provided by
(applied to) operating
activities (29,077) 1,294,649
Investing Activities:
Purchase of branch assets,
net of cash acquired 14,171,001 -
Investment securities held to maturity:
Proceeds from maturities
and repayments - 3,079,108
Proceeds from sales - -
Purchases - -
Investment securities available for sale:
Proceeds from maturities
and repayments 5,585,553 55,200
Proceeds from sales - -
Purchases (25,032,094) (1,322,700)
Net (increase) decrease
in loans 4,491,256 (10,274,725)
Purchase of premises
and equipment (234,480) (120,381)
Net cash used by
investing activities (1,018,764) (8,583,498)
Financing Activities:
Net increase (decrease) in
non-interest bearing
demand deposits (572,867) 638,352
Net decrease in interest
bearing demand and
savings deposits (1,965,591) (6,822,693)
Net increase in time deposits 4,570,693 8,408,744
Net increase (decrease) in
short-term borrowings (2,265,147) 6,731,792
Principal repayment of
long-term debt (2,510) (1,000,000)
Cash dividends paid (312,969) (195,605)
Net cash provided by
(applied to) financing
activities (548,391) 7,760,590
Net Increase (Decrease)
in Cash and Cash Equivalents (1,596,232) 471,741
Cash and Cash Equivalents
Beginning Balance 22,356,718 14,628,396
Cash and Cash Equivalents
Ending Balance $20,760,486 $15,100,137
American Bancorporation and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Three months ended March 31, 1996 and 1995
1996 1995
Balance at January 1, $28,012,422 $26,193,019
Net Income 870,671 670,103
Dividends declared ($0.20 per share
1996, $0.15 per share 1995) (312,967) (234,726)
Unrealized (loss) on securities
available for sale (393,434) (58,500)
Balance at March 31, $28,176,692 $26,569,896
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The unaudited interim condensed consolidated financial statements reflect all
adjustments which, in the opinion of management, are necessary to a fair
presentation of the financial position and results of operations. All
adjustments are of a normal recurring nature. The notes to the financial
statements contained in the 1995 Annual Report to Stockholders should be read
in conjunction with these statements.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL POSITION AND RESULTS OF OPERATIONS
SUMMARY
American Bancorporation (the "Company") recognized net income of $871,000
($0.56 per share) for the three months ended March 31, 1996, compared to net
income of $670,000 ($0.43 per share) for the three months ended March 31,
1995. The Company's assets totalled $369,278,000 at March 31, 1996, compared
to $348,626,000 at March 31, 1995.
The following is a discussion of significant factors influencing operating
performance and change in financial position during the interim periods
presented. The discussion should be read in connection with the 1995 Annual
Report and the financial statements appearing elsewhere herein.
RESULTS OF OPERATIONS
QUARTER COMPARISON
Net Income. Net income for the three months ended March 31, 1996 amounted to
$871,000, compared to net income of $670,000 for the three months ended March
31, 1995. The increase was the result of increases in net interest income
and other income and a decrease in other expenses.
Net Interest Income. Net interest income before provision for loan losses for
the three months ended March 31, 1996 amounted to $3,857,000, an increase of
$52,000 or 1.4% as compared to the three months ended March 31, 1995. The
increase resulted primarily from a $17,758,000 or 5.5% increase in average
interest earning assets which was partially offset by an 18 basis point
decrease in the Company's margin.
Interest Income. Total interest income for the three months ended March 31,
1996 amounted to $6,875,000, an increase of $450,000 or 7.0% as compared to
the same period in 1995. The increase resulted primarily from a $17,758,000
or 5.5% increase in the average volume of earning assets and an 11 basis point
increase in the average yield on earning assets. Average loans outstanding
increased $10,227,000 or 4.3%. Average real estate loans increased $1,240,000
or 0.1%, average commercial loans increased $9,262,000 or 16.1% while average
installment loans decreased $275,000 or 0.5%. The average yield on loans
increased from 8.84% in 1995 to 9.01% in 1996. Average investment securities
and other short-term investments outstanding increased $7,531,000 or 8.9% and
the average yield increased from 5.57% in 1995 to 5.62% in 1996.
Interest Expense. Total interest expense for the three months ended March 31,
1996 amounted to $3,018,000, an increase of $398,000 or 15.2%, as compared to
the three months ended March 31, 1995. The increase resulted primarily from a
$15,689,000 or 5.5% increase in the average volume of interest bearing
liabilities and a 34 basis point increase in interest rates paid on such
liabilities. Average NOW, money market and savings accounts decreased
$8,424,000. Average time deposits increased $18,697,000. Average noninterest
bearing accounts increased $374,000 and represented 10.3% of average total
deposits in 1996. Average borrowings increased $5,416,000.
Provision for Loan Losses. There was no loan loss provision for the three
months ended March 31, 1996, compared to $45,000 for the same period in 1995.
Other Income. Other income amounted to $499,000 for the three months ended
March 31, 1996, compared to $381,000 for the same period in 1995.
Other Expense. Total other expense for the three months ended March 31, 1996
amounted to $2,983,000, a decrease of $100,000 or 3.2% as compared to the same
period in 1995. Salaries and employee benefits decreased $54,000 or 3.8%.
Occupancy and equipment expense increased $20,000 or 3.7%. Other
(miscellaneous) expenses decreased $66,000 or 5.7%.
Provision for Income Taxes. The provision for income taxes for the three
months ended March 31, 1996 was $503,000, compared to $388,000 for the same
period in 1995. The increase was due to the increase in the Company's pre-tax
income.
ASSET QUALITY
Nonperforming loans totalled $2,161,000 or 0.9% of total loans at March 31,
1996, compared to $2,065,000 or 0.8% at December 31, 1995. Nonperforming
loans at March 31, 1996 consisted of nonaccrual loans totalling $798,000,
90 day delinquent loans of $658,000, and restructured loans aggregating
$705,000. Other real estate held totalled $859,000 at March 31, 1996,
compared to $575,000 at December 31, 1995.
CAPITAL RESOURCES
Stockholders' equity totalled $28,177,000 at March 31, 1996. The Company's
risk-based capital ratio was 12.6%, of which 11.4% constituted common
stockholder equity, while risk-based capital ratio for the Company's bank
subsidiary, Wheeling National Bank, was 12.3%, with common stockholders'
equity of 11.1%. At March 31, 1996 the Company's leverage capital ratio was
7.1%, while the leverage ratio for Wheeling National Bank was 6.9%.
Three months ended March 31,
1996 1995
Average Yield/ Average Yield/
Balance Rate Balance Rate
INTEREST EARNING ASSETS (000's) (000's)
Loans
Commercial $ 66,683 9.29% $ 57,421 10.12%
Real estate 125,883 8.54 124,643 7.68
Installment-net 55,114 9.01 55,389 9.43
Total loans 247,680 9.01 237,453 8.84
Investment securities
Taxable 80,716 5.40 78,739 5.38
Tax-exempt 2,125 6.48 2,046 7.29
Total investment securities 82,841 5.43 80,785 5.43
Other short-term investments 9,463 7.28 3,988 5.91
Total interest earning assets $339,984 8.09 $322,226 7.98
INTEREST BEARING LIABILITIES
Deposits
NOW, Savings and MMDA $128,941 2.61% $137,365 2.71%
Time 142,470 4.99 123,773 4.36
Total deposits 271,411 3.86 261,138 3.49
Short-term borrowings 28,040 5.41 22,336 5.53
Long-term debt 1,045 7.77 1,333 9.86
Total interest
bearing liabilities $300,496 4.02 $284,807 3.68
MARGIN ANALYSIS
(as a % of earning assets)
Interest income 8.09% 7.98%
Interest expense 3.55 3.26
Net interest income 4.54% 4.72%
Averages stated are month end average balances. Installment loans are stated
net of unearned income.
Average loans include nonaccrual loans. Yields do not reflect tax equivalent
adjustments.
PART II - OTHER INFORMATION
Item 5. Other Events
On February 6, 1996, American Bancorporation, (the "Company"), completed
the terms of an Office Purchase and Assumption Agreement, entered into
with Bank One, Steubenville, Ohio, NA, by which the Company, through its
banking subsidiary Wheeling National Bank, formerly Columbus National
Bank, assumed the liabilities and purchased the bank premises and
equipment of the Bank One branches located in Flushing and St. Clairsville,
Ohio. See Exhibit #10.11, attached.
The acquisition of the offices was for cash equivalent to a combined
premium of approximately 4.5% of the "non-jumbo" deposits (approximately
$14.7 million) plus approximately $187,000 for the fixed assets.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits:
#10.11 Office Purchase and Assumption Agreement by and between
Columbus National Bank and Bank One, Steubenville, NA
B. Reports on Form 8-K:
Date Item Description
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN BANCORPORATION
(Registrant)
Date May 15, 1996 /s/ Jeremy C. McCamic
Jeremy C. McCamic
Chairman and
Chief Executive Officer
Date May 15, 1996 /s/ Brent E. Richmond
Brent E. Richmond
Chief Financial and
Accounting Officer
EXHIBIT #10.11
OFFICE PURCHASE AND ASSUMPTION AGREEMENT
by and between
COLUMBUS NATIONAL BANK
and
BANK ONE, STEUBENVILLE, NATIONAL ASSOCIATION
8/29/95
TABLE OF CONTENTS
1. PURCHASE AND ASSUMPTION 1
1.01 Purchase and Sale of Assets 1
1.02 Transfer of Assets 2
1.03 Acceptance and Assumption 4
1.04 Payment of Funds 7
2. CONDUCT OF THE PARTIES PRIOR TO CLOSING
2.01 Covenants of BANK ONE 11
2.02 Covenants of CNB 18
2.03 Covenants of All Parties 20
3. REPRESENTATIONS AND WARRANTIES 21
3.01 Representations and Warranties of BANK ONE 21
3.02 Representations and Warranties of CNB 28
4. ACTIONS RESPECTING EMPLOYEES AND PENSION AND
EMPLOYEE BENEFIT PLANS 30
4.01 Employment of Employees 30
4.02 Terms and Conditions of Employment 30
4.03 Compliance with Law 31
4.04 Actions to be Taken by BANK ONE 31
5. CONDITIONS PRECEDENT TO CLOSING 32
5.01 Conditions to BANK ONE'S Obligations 32
5.02 Conditions to CNB's Obligations 34
5.03 Non-Satisfaction of Conditions Precedent 37
5.04 Waiver of Conditions Precedent 38
6. CLOSING 38
6.01 Closing and Closing Date 38
6.02 BANK ONE's Actions at Closing 38
6.03 CNB's Actions at the Closing 41
6.04 Methods of Payment 43
6.05 Availability of Closing Documents 44
6.06 Effectiveness of Closing 44
7. CERTAIN TRANSITIONAL MATTERS 44
7.01 Transitional Action by CNB 44
7.02 Transitional Actions by BANK ONE 44
7.03 Overdrafts and Transitional Action 54
7.04 ATMs 55
7.05 Effect of Transitional Action 56
8. GENERAL COVENANTS AND INDEMNIFICATION 56
8.01 Confidentiality Obligations of CNB 56
8.02 Confidentiality Obligations of BANK ONE 58
8.03 Indemnification by BANK ONE 59
8.04 Indemnification by CNB 61
8.05 Solicitation of Customers by
CNB Prior to Closing 61
8.06 Further Assurances 61
8.07 Operation of the Offices 62
8.08 Information After Closing 63
8.09 Survival of Covenants 63
8.10 Individual Retirement Accounts 63
9. TERMINATION 64
9.01 Termination by Mutual Agreement 64
9.02 Termination by BANK ONE 64
9.03 Termination by CNB 65
9.04 Effect of Termination 65
10. MISCELLANEOUS PROVISIONS 66
10.01 Expenses 66
10.02 Certificates 66
10.03 Termination of Representations and Warranties 66
10.04 Waivers 67
10.05 Notices 68
10.06 Parties in Interest: Assignment; Amendment 69
10.07 Headings 70
10.08 Terminology 70
10.09 Flexible Structure 72
10.10 Press Releases 72
10.11 Entire Agreement 72
10.12 Governing Law 73
10.13 Counterparts 73
10.14 Tax Matters 73
OFFICE PURCHASE AND ASSUMPTION AGREEMENT
This Agreement ("Agreement"), made this 1st day of September 1995, by and
between Columbus National Bank, a national banking association with its
principal office at 1025 Main Street, Suite 800 Wheeling, West Virginia, 26003
(hereinafter called "CNB") and Bank One, Steubenville, National Association,
or its successors and assigns, a national banking association with its
principal office at 401 Market Street, Steubenville, Ohio 43952 (hereinafter
called "BANK ONE").
WHEREAS, CNB desires to purchase and assume from BANK ONE, and BANK ONE
desires to sell and assign to CNB certain assets and liabilities associated
with offices of BANK ONE in Steubenville, Ohio, as hereinafter described;
NOW, THEREFORE, in consideration of the premises hereinafter set forth and
other good and valuable consideration, the sufficiency of which is hereby
acknowledged, CNB and BANK ONE hereby agree as follows:
1.PURCHASE AND ASSUMPTION.
1.01 Purchase and Sale of Assets. At the Closing, as defined in Section
6.01 hereof (the "Closing"), CNB shall purchase and acquire and BANK ONE shall
assign the leased real estate and other assets described in Section 1.02
hereof (collectively, the "Assets") all of which are used in and/or relate to
business conducted by BANK ONE at its branch offices known as and located at:
(a) High Street, Flushing, Ohio 43977 (the "Flushing Office");
(b) Unit No. 490, Ohio Valley Mall Shopping Center, Richland
Township, Ohio 43950 (the "St. Clairsville Office");
pursuant to the terms and conditions set forth herein and subject to
exceptions, if any, set forth herein. The foregoing offices are hereinafter
sometimes collectively referred to as the "Offices" and each, individually,
sometimes as an "Office." The transactions contemplated by this Agreement and
the purchase of assets and assumption of liabilities provided for herein is
sometimes referred to herein as the "Acquisition."
1.02 Transfer of Assets. Subject to the terms and conditions of this
Agreement, BANK ONE shall assign, transfer, convey and deliver to CNB, on and
as of the Closing on the Closing Date, as defined in Section 6.01 hereof, the
Assets, which shall include the following:
(a) Leased Real Estate. A good and valid leasehold estate in the real
estate described in attached Schedule A and created by that certain lease
agreement between BANK ONE and lessor (the "Third Party Lease") for the real
estate upon which the Flushing Office and St. Clairsville Office are situated
(the "Leased Real Estate"), which Third Party Lease is specifically identified
on Schedule A annexed hereto;
(b) Furniture and Equipment. All of BANK ONE's right, title and interest
in and to the furniture, fixtures and equipment, excluding the teller
calculators, CRTs, controller and printer and signs, printed supplies and
documents bearing the BANK ONE name and/or logo, owned by BANK ONE and located
at the Offices, but specifically including that listed on Schedule B attached
hereto (the "Fixed Assets");
(c) Safe Deposit Business. All right, title and interest of BANK ONE in
and to the safe deposit business (subject to the allocation of safe deposit
rental payments as provided in Section 1.03(c)(ii) hereof) located at the
Offices as of the close of business on the Closing Date;
(d) Cash on Hand. All cash on hand at the Offices as of the close of
business on the Closing Date including vault cash, petty cash, ATM cash,
if any, and tellers' cash;
(e) Prepaid Expenses. All prepaid expenses recorded or otherwise
reflected on the books of BANK ONE as at June 3 0, 1995, or incurred in the
ordinary course of business thereafter, as being attributable to the Offices
as of the close of business on the day immediately preceding the Closing Date,
but only to the extent attributable to the Assets sold, assigned or
transferred to CNB by BANK ONE pursuant to this Agreement and only to the
extent arising by reason of CNB's use or ownership of such Assets after the
close of business on the Closing Date. Any and all prepaid expenses incurred
by BANK ONE with respect to the Offices subsequent to June 30, 1995, shall be
subject to the prior written consent of CNB;
(f) Office Loans. All right, title and interest in and to all those loans
which, as of the close of business on the Closing Date, are (i) secured, in
whole or in part, by Deposit Accounts (as hereinafter defined) attributable to
an Office and being assumed by CNB pursuant to this Agreement (the "Deposit
Account Loans") or (ii) automatically created as the result of an overdraft
of a Deposit Account pursuant to a pre-approved overdraft protection program
offered by BANK ONE (the "Overdraft Loans"). The Deposit Account Loans and
Overdraft Loans are hereinafter referred to collectively as the "Office
Loans." BANK ONE shall not make any material change to its customary policies
for making Office Loans at the Offices or extend Office Loans which are
materially different than loans offered by BANK ONE's other offices in
Steubenville, Ohio. The transfer of the Office Loans will be made without any
reserve for loan losses;
(g) Records of the Offices. All original records and documents related to
the Assets transferred or liabilities assumed by CNB including, but not
limited to the deposit accounts; and
(h) Contracts or Agreements. All of BANK ONE's right, title and interest
in and to the maintenance and service agreements related to the Offices, as
listed on Schedule C annexed hereto and made a part hereof (the "Assumed
Contracts"), provided the same are assignable.
1.03 Acceptance and Assumption. Subject to the terms and conditions of this
Agreement, on and as of the Closing on the Closing Date, CNB shall:
(a) Assets. Receive and accept all of the Assets assigned, transferred,
conveyed and delivered to CNB by BANK ONE pursuant to this Agreement,
including those identified in Section 1.02 above.
(b) Deposit Liabilities. Assume and thereafter discharge, pay in full and
perform all of BANK ONE's obligations and duties relating to the "Deposit
Liabilities" (as hereinafter defined). The term "Deposit Liabilities" is
defined herein as all of BANK ONE's obligations, duties and liabilities of
every type and character relating to all deposit accounts, other than (i)
KEOGH accounts and (ii) deposit accounts securing any loan of BANK ONE
which is not an Office Loan, for which CNB assumes no liability, which, as
reflected on the books of BANK ONE as of the close of business on the Closing
Date, are attributable to the Offices. The deposit accounts referred to in the
immediately preceding sentence (hereinafter the "Deposit Accounts") include,
without limitation, passbook accounts, checking, Money Market and NOW accounts,
Individual Retirement Accounts for which BANK ONE has not received, on or
before the Closing Date, the written advice from the account holder of such
account holder's objection to or failure to accept CNB as successor custodian
("IRA's") and certificates of deposit. The "obligations, duties and
liabilities" referred to in the immediately preceding sentence include, without
limitation, the obligation to pay and otherwise process all Deposit Accounts
in accordance with applicable law and their respective contractual terms and
the duty to supply all applicable reporting forms for post-closing periods
including, without limitation, Form 1099's, relating to the Deposit Accounts.
With regard to each IRA included within the Deposit Accounts, CNB shall also
assume the plan pertaining thereto and the trustee or custodial arrangement
in connection therewith.
(c) Liabilities Under Leases/Safe Deposit Business. Assume and thereafter
fully and timely perform and discharge, in accordance with their respective
terms, all of the liabilities and obligations of BANK ONE arising after the
Closing Date with respect to:
(i) all leases listed on Schedule D to this Agreement
(including safe deposit leases if any) and sold, assigned
or transferred to CNB by BANK ONE pursuant to this
Agreement;
(ii) the safe deposit business of the Offices including, but not
limited to, the maintenance of all necessary facilities for the use of
safe deposit boxes by the renters thereof during the periods for which
such persons have paid rent therefor in advance to BANK ONE, subject
to the agreed allocation of such rents, which allocation shall be
satisfied in full by BANK ONE paying to CNB, in the manner specified in
Section 6.04 hereof, the amount of rental payment received by BANK ONE
for each such safe deposit box attributable to and prorated to reflect
the period from and after the Closing Date, subject to the provisions of
the applicable leases or other agreements relating to such boxes; and
(iii) all safekeeping items and agreements listed on Schedule D to this
Agreement and delivered to CNB by BANK ONE pursuant to this Agreement,
including, but not limited to, all applicable safekeeping agreements,
memoranda, or receipts so delivered to CNB by BANK ONE hereunder.
(d) Other Liabilities. Fully and timely perform and discharge, as the
same may be or become due, the Assumed Contracts, the Third Party Lease for
the Leased Real Estate and all additional liabilities, obligations and
deferred expenses of BANK ONE as of the date of this Agreement, which are (i)
reflected on the books of BANK ONE as being attributable to an Office as of
the close of business on the Closing Date, and (ii) disclosed, by description
and an estimate of the amount, to CNB in writing prior to the date of this
Agreement), but only to the extent attributable to the Assets sold, assigned
or transferred to CNB by BANK ONE pursuant to this Agreement and only to the
extent arising by reason of CNB's use or ownership of such Assets after the
close of business on the Closing Date. No additional liabilities and
obligations of BANK ONE incurred subsequent to the date of this Agreement
shall be assumed by CNB unless the prior written consent of CNB has been
obtained prior to the incursion of the liability or obligation by BANK ONE.
(e) Other Obligations. Fully and timely perform its obligations relative to
employees of the Offices, if any, as set forth hereinafter.
1.04 Payment of Funds. Subject to the terms and conditions hereof, at the
Closing:
(a) Consideration. In consideration of CNB's assumption of the Deposit
Liabilities and its other agreements herein, BANK ONE shall make available and
transfer to CNB, in the manner specified in Section 6.04 hereof, funds equal
to the aggregate balance of all Deposit Accounts (including interest posted or
accrued to such accounts as of the close of business on the day immediately
preceding the Closing Date) plus the deferred expenses identified in Section
1.03(d) hereof prorated as of the close of business on the day preceding the
Closing Date less an amount equal to the sum of:
(i) the amount of cash on hand at the Offices transferred to CNB as of
the close of business on the Closing Date; and
(ii) the sum of $174,524 representing the leasehold improvements made
to the Leased Real Estate, which sum is attributable to said properties
as follows:
Flushing Office $30,211
St. Clairsville Office $144,313
(iii) the sum of $14,700 representing the purchase price (and the
present book value) of the furniture, fixtures and equipment being
transferred to CNB on the Closing Date; and
(iv) five percent (5%) of the aggregate "Core Deposits" (as hereinafter
defined) of the Flushing Office, plus three percent (3%) of the
aggregate Core Deposits of the St. Clairsville Office, as of the close
of business on the Closing Date. The term "Core Deposits" shall mean
the aggregate balance of all Deposit Liabilities of the Offices (which
aggregate balance shall include interest posted to such accounts as of
the close of business on the Closing Date but shall exclude interest
accrued but not posted to such accounts as of such dates) other than
those represented by "Jumbo Certificates of Deposit" (as hereinafter
defined) or constituting "Public Deposits"(as defined in 135.01(1)Ohio
Revised Code). The term "Jumbo Certificates of Deposit" shall mean a
Deposit Account represented by a certificate of deposit of $100,000 or
more. The amount calculated as the product of either 5% or 3%, as
applicable, times the Core Deposits of the respective Offices as of the
close of business on the Closing Date is hereinafter called the
"Acquisition Consideration;" and
(v) the amount of prepaid expenses described in Section 1.02(f) of this
Agreement, prorated as of the close of business on the day immediately
preceding the Closing Date; and
(vi) the book value of the Office Loans together with accrued and unpaid
interest thereon computed as of the close of business on the Closing
Date.
In the event that the sum of items (i) through (vi) above should be
in excess of the aggregate amount to be transferred by BANK ONE
pursuant to the first paragraph of this Section 1.04(a), the full
amount of such excess shall constitute an amount due from CNB to BANK
ONE, and shall be paid to BANK ONE at the Closing in the manner
specified in Section 6.04 hereof. The parties shall execute a
Preliminary Settlement Statement at the Closing and Final Settlement
Statement post-closing, in substantially the same forms as the forms
attached as Schedules Q and R, respectively.
(b) Reimbursement and Proration of Certain Expenses. All other expenses
(i) due and payable at times after the Closing Date for periods prior to the
close of business on the Closing Date or (ii) paid prior to the close of
business on the Closing Date for periods following the Closing Date, including
the prepaid expenses described in Section 1.02(f) hereof and deferred expenses
described in Section 1.03(d) hereof, including without limitation, real estate
taxes and assessments which are a lien but not yet due and payable, utility
payments, payments due on leases assigned, payments due on assigned service
and maintenance contracts and similar expenses relating to the Offices shall
be prorated between BANK ONE and CNB as of the close of business on the day
immediately preceding the Closing Date, provided, however, that all real estate
taxes and assessments, if any, and to the extent payable by Seller and/or
Buyer, shall be prorated at the Closing on the basis of the most recently
certified real estate taxes and assessments, and all utility payments and
lease payments shall be prorated on the basis of the best information available
at Closing. With respect to premiums paid to the FDIC deposit insurance for
the Deposit Liabilities it shall be assumed that all the Deposit Liabilities
are insured under the Bank Insurance Fund; the proration of FDIC insurance
premiums will be based on the amount of the Deposit Liabilities as of the
close of business on the Closing Date and the number of days during any period
for which BANK ONE has prepaid premiums to the FDIC but during which CNB has
held or will hold the Deposit Liabilities. For prorations, if any, which
cannot be reasonably calculated as of the Closing, a post-closing adjustment
shall be made in the manner specified in Section 6.04 hereof
(c) Expenses Relating to Real Property. The costs, fees and expenses of
all title commitments, title guaranties and title examinations relating to the
procurement of the Title Commitments related to the Leased Real Estate referred
to in Sections 2.01(c) and 5.02(g) herein, shall be allocated to, and shall be
borne, solely and exclusively by CNB. The costs, fees and expenses relating
to the premiums for all title insurance policies (net of the costs of all
title commitments, guaranties and examinations), and other similar costs,
fees and expenses, if any, relating to the sale and transfer of the interest
in the Leased Real Estate, shall be allocated to, and shall be borne, solely
and exclusively, by CNB.
CONDUCT OF THE PARTIES PRIOR TO CLOSING.
2.01 Covenants of BANK ONE. BANK ONE hereby covenants to CNB that, from
the date hereof until the Closing, it will do or cause the following to occur:
(a) Operation of the Offices. BANK ONE shall continue to operate the
Offices in a manner equivalent to that manner and system of operation employed
immediately prior to the date of this Agreement; provided, however, that it is
contemplated by the parties that, prior to Closing, BANK ONE will be
terminating certain programs which are currently in effect which allow
depositors to access Deposit Accounts through electronic means and, provided
further, that BANK ONE contemplates that the name of the Offices may be changed
to BANK ONE, WHEELING-STEUBENVILLE, N.A., as a result of a proposed
consolidation and corporate combination of BANK ONE, WHEELING, N.A., BANK ONE,
NEW MARTINSVILLE, N.A. and BANK ONE, STEUBENVILLE, N.A. (the "Intra-Corporate
Consolidation"), which such event may occur prior to the Closing Date hereof
BANK ONE will use its best efforts to ensure that no harm or damage to the
reputation of the Offices or material reduction in the existing deposit
liabilities of the Offices occurs.
Notwithstanding the foregoing and except as may be required to obtain the
required authorizations referred to in Section 2.03 of this Agreement, between
the date of this Agreement and the Closing Date, and except as may be otherwise
required by a regulatory authority or to effectuate the Intra-Corporate
Consolidation, BANK ONE shall not without the prior consent of CNB, which
consent shall not be unreasonably withheld:
(i) cause any Office to engage or participate in any material
transaction or incur or sustain any obligation which, in the
aggregate, is material to its business, condition or operations except
in the ordinary course of business;
(ii) cause any Office to transfer to BANK ONEs other operations any
material amount of Assets, except for (a) supplies, if any, which have
unique function in BANK ONE's business and ordinarily would not be
useful to CNB, (b) cash and other normal intrabank transfers which may
be transferred in the ordinary course of business in accordance with
normal banking practices and (c) signs, or those parts thereof, bearing
the BANK ONE name and/or logo.
(iii) cause the Offices to transfer to BANK ONE's other operations any
deposits other than deposits securing loans made by BANK ONE which are
not Office Loans, except in the ordinary course of business at the
unsolicited request of depositors or cause any of BANK ONE's other
operations to transfer to the Offices any deposits, except in the ordinary
course of business at the unsolicited request of depositors; provided,
however, that BANK ONE shall be permitted to make such transfers of any
deposits to or from the Offices provided that neither (A) the net amount
of transfers to the Offices minus the amount of transfers from the
Offices nor (B) the net amount of transfers from the Offices minus
transfers to the Offices exceeds $100,000;
(iv) invest in any Fixed Assets on behalf of any Office, except
for commitments made on or before the date of this Agreement which
are disclosed to CNB on Schedule B of this Agreement and for
replacements of furniture, furnishings and equipment and normal
maintenance and refurbishing purchased or made in the ordinary
course of Office business;
(v) enter into or amend any continuing contract (other than
Deposit Liabilities and Office Loans) relating to the Offices, which
cannot be terminated without cause and without payment of any amounts
as a penalty, bonus, premium or other compensation for termination, or
which is not made in the ordinary course of Office business;
(vi) undertake any actions which are inconsistent with a program to
use all reasonable efforts to maintain good relations with customers
and with employees employed at the Offices, unless such actions are
required or permitted by this Agreement;
(vii) hire (other than to replace a departing employee and/or to
bring the number of employees at the Offices to normal staffing
levels), transfer, reassign or terminate any employee of the Offices,
increase the compensation of any employee of the Offices, or promote any
of the employees except pursuant to and consistent with customary
BANK ONE procedures and policies; or
(viii) make any material change to its customary policies for
setting rates on deposits offered at the Offices.
(b)Information Concerning the Offices. Upon reasonable notice, BANK ONE shall
permit officers and authorized representatives of CNB access to inspect the
Offices during normal business hours or at such other time mutually agreed
upon by both parties and permit CNB to make or cause to be made such
reasonable investigation of information and materials relating to the
financial condition of the Offices, including general and subsidiary ledgers,
deposit records, audit reports and any other information concerning the
business, property, personnel and legal questions concerning the Offices (and
related to the physical condition of the Offices), as CNB reasonably deems
necessary or advisable; provided, however, that such access and investigation
shall be reasonably related to the transactions contemplated hereby and shall
not interfere unnecessarily with the normal operations of the Offices or BANK
ONE; and provided, further, that nothing in this Section 2.0 1 (b) shall be
deemed to require BANK ONE to breach any obligation of confidentiality or to
reveal an proprietary information, trade secrets, marketing, strategic plans
or information not related to the transaction contemplated by this Agreement.
The information and materials related to the financial condition of the
Offices which will be made available to CNB from BANK ONE pursuant to this
subsection will be accurate in all material respects and will accurately and
completely reflect the Deposit Liabilities attributable to the Offices as of
the date the information is provided.
(c) Title Commitments for Real Estate. CNB, may at its election and
expense, no later than thirty (30) days after the date of this Agreement,
obtain a commitment or commitments (the "Title Commitments") having an
effective date as near as feasible to the date of delivery of such Title
Commitments from a title insurance company authorized to do business in Ohio
designated by CNB and reasonably satisfactory to BANK ONE, to issue to CNB as
soon as practicable after the Closing Date, as applicable, an American Land
Title Association (ALTA) leasehold title insurance (1975 Form) policies having
an effective date as of the Closing Date in an amount satisfactory to CNB
(but not in excess of the amount of the leasehold interest to be transferred
to CNB pursuant to the Third Party Lease) covering the Leased Real Estate,
subject to the exceptions specified in the Title Commitments. Such
commitments shall show title vested in BANK ONE. If title to all or part of
the Leased Real Estate is unmarketable or is subject to any defect, lien,
encumbrance, easement, condition, restriction or encroachment other than the
Permitted Exceptions as defined in Section 10.08(c) herein, then CNB shall
provide written notice thereof to BANK ONE. BANK ONE shall have thirty days
after written notice thereof from CNB, to elect to remedy or remove any such
defect, lien, encumbrance, easement, condition, restriction or encroachment
but, if BANK ONE does not, CNB may elect to attempt to cure or remove such
defect or encumbrance or other matter, for a period of thirty days thereafter.
BANK ONE also shall execute and deliver to CNB at the time of Closing such
affidavits and other instruments, if any, as the title insurance issuing the
Title Commitments may require to delete the standard exceptions appearing as
Schedule B items in a standard ALTA leasehold title insurance policy, other
than those which may only be deleted by a survey. CNB shall have the right
to obtain at its sole cost and expense duly certified surveys, and BANK ONE
hereby grants to CNB and its surveyors, agents and contractors right of
access to the Leased Real Estate, with the prior consent of the landlord
obtained by CNB, for the purpose of performing the surveys.
(d) Required Authorizations. BANK ONE shall obtain and procure all necessary
corporate approvals and authorizations, if any, required on its part to enable
it to fully perform all obligations imposed on it hereunder which must be
performed by it at or prior to the Closing.
(e) Creation of Liens and Encumbrances. With respect to the Leased Real
Estate, BANK ONE shall not create or allow any liens, imperfections in title,
charges, easements, restrictions or encumbrances other than the Permitted
Exceptions.
(f) Condemnation. If prior to Closing all or any portion of the Leased Real
Estate is taken or is made subject to eminent domain or other governmental
acquisition proceedings, then BANK ONE shall promptly notify CNB thereof, and
CNB may either complete the Closing and receive the proceeds paid or payable
on account of such acquisition proceedings, or terminate this Agreement. If
CNB terminates this Agreement, both parties shall thereupon be relieved from
all further obligations hereunder.
(g) Insurance Proceeds, Casualty and Condemnation Payments. BANK ONE shall
maintain adequate insurance on all the Assets consisting of Leased Real Estate
and Fixed Assets through the Closing Date. In the event of any damage,
destruction or condemnation affecting such Assets between the date hereof and
the time of the Closing, BANK ONE shall deliver to CNB any insurance proceeds
and other payments, to the extent of the applicable amount set forth in
Section 1.04(a)(ii) or (iii) hereof with respect to the replacement cost with
respect to the Fixed Assets, as the case may be, received (or with respect to
insurance proceeds, which would be received assuming BANK ONE's insurance
policy had no deductible) by BANK ONE as a result thereof unless, in the case
of damage or destruction, BANK ONE has repaired or replaced the damaged or
destroyed property.
(h) IRA Accounts. Not later than thirty days prior to the expected Closing
Date, BANK ONE shall, at BANK ONE's expense, mail notice of BANK ONE's
resignation as Custodian and the appointment of CNB as the Successor
Custodian, effective upon Closing, of each Individual Retirement Account
maintained at the Offices. The notice shall include such other information
that is mutually agreed upon by BANK ONE and CNB.
(i) Assignment of the Lease. BANK ONE shall use its reasonable
good faith efforts to obtain any written consent of the landlord as
shall be necessary for the effective assignment of the Third Party
Lease as of the Closing Date. The assignment of the Third Party Lease
shall be substantially the form of Schedule E attached hereto and
incorporated herein. CNB acknowledges that the Third Party Lease for
the St. Clairsville Office is currently a month-to- month Lease and may
not be assignable, and therefore, CNB acknowledges that it may be
required to negotiate directly with the Landlord of said Third Party
Lease for any future leasehold rights to the St. Clairsville Office if
said Third Party Lease is not extended by BANK ONE prior to the
Closing Date.
2.02 Covenants of CNB. CNB hereby covenants to BANK ONE that, from the
date hereof until the Closing, it will do or cause the following to occur:
(a) Regulatory Applications. CNB shall prepare and submit for filing, at no
expense to BANK ONE, any and all applications, filings, and registrations
with, and notifications to, all federal and state authorities required on the
part of CNB or any shareholder or affiliate of CNB for the Acquisition to
be consummated at the Closing as contemplated in Section 6.01 herein and for
CNB to operate the Offices following the Closing. CNB shall provide BANK ONE
with a draft copy of each application for BANK ONE's approval prior to filing,
which approval by BANK ONE will not be unreasonably withheld or delayed. Such
applications will be submitted to BANK ONE in draft form within thirty (30)
days from the date of this Agreement and filed by CNB without delay following
BANK ONE's approval of such applications; provided, however, that in no event
will such applications be filed later than sixty (60) days from the date of
this Agreement. Thereafter, CNB shall pursue all such applications, filings,
registrations, and notifications diligently and in good faith, and shall file
such supplements, amendments, and additional information in connection
therewith as may be reasonably necessary for the Acquisition to be consummated
at such Closing and for CNB to operate the Offices following the Closing.
CNB shall deliver to BANK ONE evidence of the filing of each and all of such
applications, filings, registrations and notifications (except for any
confidential portions thereof, and any supplement, amendment or item of
additional information in connection therewith (except for any confidential
portions thereof). CNB shall also deliver to BANK ONE a copy of each material
notice, order, opinion and other item of correspondence received by CNB from
such federal and state authorities (except for any confidential portions
thereof) and shall advise BANK ONE, at BANK ONE's request, of developments and
progress with respect to such matters.
(b) Required Authorizations. CNB shall obtain and procure all necessary
corporate approvals and authorizations, if any, required on its part to enable
it to fully perform all obligations imposed on it hereunder which must be
performed by it at or prior to the Closing.
(c) Satisfaction of Conditions. CNB shall not voluntarily undertake any
course of action inconsistent with the satisfaction of the requirements or
the conditions applicable to it, or its agreements, undertakings, obligations,
or covenants set forth in this Agreement, and it shall promptly do all such
reasonable acts and take all such reasonable measures as may be appropriate to
enable it to perform as early as possible the agreements, undertakings,
obligations, and covenants herein provided to be performed by it, and to
enable the conditions precedent to BANK ONE's obligations to consummate the
Closing of the Acquisition to be fully satisfied. Additionally, CNB shall not
knowingly, directly or through any existing or future subsidiary or affiliate,
take any action that would be in conflict with, or result in the denial,
delay, termination, or withdrawal of, any of the regulatory approvals referred
to in this Agreement.
(d) Cooperation Regarding Leased Real Estate. CNB shall, at BANK ONE's
request in connection with BANK ONE's obtaining the consents specified in
Section 2.01 (I), advise, in writing, the lessor of Leased Real Estate,
of CNB's intent to assume and comply with the terms of the Third Party
Lease (as to matters arising from and after the Closing Date) for the Offices.
2.03 Covenants of All Parties. BANK ONE hereby covenants to CNB, and CNB
hereby covenants to BANK ONE that, from the date hereof until the Closing,
such party shall cooperate fully with the other party in attempting to obtain
all consents, approvals, permits, or authorizations which are required to be
obtained pursuant to any federal or state law, or any federal or state
regulation thereunder, for or in connection with the transactions described
and contemplated in this Agreement.
3. REPRESENTATIONS AND WARRANTIES.
3.01 Representations and Warranties of BANK ONE. BANK ONE represents and
warrants to CNB to the best of its knowledge, as follows:
(a) Good Standing and Power of BANK ONE. BANK ONE is a national banking
association duly organized, validly existing, and in good standing under the
laws of the United States with corporate power to own its properties and to
carry on its business as presently conducted. BANK ONE is an insured bank as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder.
(b) Authorization of Agreement. The execution and delivery of this
Agreement, and the transactions contemplated hereby, have been duly authorized
by all necessary corporate action on the part of BANK ONE, and this Agreement
is a valid and binding obligation of BANK ONE.
(c) Effective Agreement. Subject to the receipt of any and all necessary
regulatory approvals and required consents, the execution, delivery, and
performance of this Agreement by BANK ONE and the consummation of the
transactions contemplated hereby, will not conflict with, result in the breach
of, constitute a violation or default, result in the acceleration of payment
or other obligations, or create a lien, charge or encumbrance, under any of
the provisions of Articles of Association or By-Laws of BANK ONE, under any
judgment, decree or order, under any law, rule, or regulation of any
government or agency thereof, or under any material contract, material
agreement or material instrument to which BANK ONE is subject, where such
conflict, breach, violation, default, acceleration or lien would have a
material adverse effect on the Assets or BANK ONE's ability to perform its
obligations hereunder.
(d) Title to Real Estate And Other Assets. Except for the Leased Real
Estate, BANK ONE is the sole owner of each of the Assets free and clear of any
mortgage, lien, encumbrance or restrictions of any kind or nature. BANK ONE
has valid leasehold title to the Leased Real Estate pursuant to the Third Party
Lease and has the use of the Real Estate pursuant to the Third Party Lease,
a binding lease agreement which will be assigned to CNB by delivery of an
assignment conveying such leasehold interest to CNB at the Closing for the
Flushing Office and, to the extent possible, for the St. Clairsville Office.
(e) Zoning Variations. As of the date of this Agreement, BANK ONE has
neither received written notice of nor has it any notice of any contemplation
to provide BANK ONE with any written notice from any governmental authority of
any uncorrected violations of zoning and/or building codes relating to the
Leased Real Estate. The Leased Real Estate is zoned to permit CNB to use said
properties as offices of a financial institution.
(f) IRA Account Documentation. The form of Individual Retirement
Custodial Account Agreement for individual retirement accounts, and the
related Amended and Restated Individual Retirement Account Disclosure Statement
annexed hereto as Schedule G, constitute the form of the document establishing
the trustee or custodial arrangement in connection with all IRAs's maintained
at the Office.
(g) Condemnation Proceedings. BANK ONE has received no written notice of
any pending or threatened, nor is it aware of any contemplated, condemnation
proceeding affecting or relating to the Offices.
(h) No Broker. No broker or finder or other party or agent performing
similar functions, has been retained by BANK ONE or is entitled to be paid
based upon any agreements, arrangements, or understandings made by BANK ONE
in connection with the transactions contemplated hereby, and no brokerage fee
or other commission has been agreed to be paid by BANK ONE on account of the
transactions contemplated hereby.
(i) Taxes. All federal, state and local payroll, withholding, property,
sales, use and transfer taxes, if any, which are due and payable by BANK ONE
relating to the Offices prior to the date of Closing shall be paid in full as
of the Closing Date or BANK ONE shall have made appropriate provision for such
payment in accordance with ordinary business practices. Any claims for
refunds of taxes which have been paid by BANK ONE shall remain the property
of BANK ONE.
(j) Operations Lawful. The conduct of banking business at the Offices is
in compliance in all material respects with all federal, state, county and
municipal laws, ordinances and regulations applicable to conduct of such
business.
(k) Third-Party Claims. There are no actions, suits or proceedings,
pending or, to the best of BANK ONE's knowledge, threatened against or
affecting BANK ONE which could have a material adverse effect on the aggregate
value of the banking business and Assets of the Offices.
(l) Insurance. BANK ONE maintains such insurance on the Offices and the
Fixed Assets to be purchased by or assigned to CNB as may be required or as is
customary in the business of banking.
(m) Labor Relations. No employee located at any of the Offices is
represented, for purposes of collective bargaining, by a labor organization
of any type. BANK ONE is unaware of any efforts during the past three years
to unionize or organize any employees at any Office, and no material claim
related to employees at the Offices under the Fair Labor Standards Act,
National Labor Relations Act, Civil Rights of 1964, Walsh-Healy Act, Davis
Bacon Act, -Civil Rights of Act of 1866, Age Discrimination in Employment Act,
Equal Pay Act of 1963, Executive Order No. 11246, Federal Unemployment Tax
Act, Vietnam Era Veterans Readjustment Act, Occupational Safety and Health
Act, Americans with Disabilities Act or any state or local employment related
law, order, ordinance or regulation, no unfair labor practice, discrimination
or wage-and-hour claim is pending or, to the best of BANK ONE's knowledge,
threatened against or with respect to BANK ONE.
(n) Governmental Notices. BANK ONE has not received notice from any
federal or state governmental agency indicating that it would oppose or not
grant or issue its consent or approval, if required, with respect to the
transactions contemplated by this Agreement.
(o) Environmental. To the actual knowledge of the executive officers of
BANK ONE, there are no actions, proceedings or investigations pending before
any environmental regulatory body, federal or state court with respect to or
threatened against or affecting BANK ONE in respect of any Office under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended ("CERCLA"), or under the any federal, state, local or municipal
environmental statute, ordinance or regulation in respect thereof and in
connection with any release of any toxic or "hazardous substance," pollutant
or contaminant into the "environment," nor, to the best knowledge of the
executive officers of BANK ONE, is there any reasonable basis for the
institution of any such actions or proceedings or investigations which is
probable of assertion, nor are there any such actions or proceedings or
investigations in which BANK ONE is a plaintiff or complainant. To the actual
knowledge of the executive officers of BANK ONE, BANK ONE is not responsible
in any material respect under any applicable environmental law for any release
by BANK ONE or for any release by an other "Person" at or in the vicinity of
any Office of a hazardous or toxic substance, contaminant or pollutant caused
by the spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing of hazardous wastes or
other chemical substances, pollutants or contaminants into the environment,
nor is BANK ONE responsible for any material costs (as a result of the acts
or omissions of BANK ONE, or, to the actual knowledge of the executive officers
of BANK ONE, as a result of the acts or omissions of any other "person") of
any remedial action including, without limitation, costs arising out of
security fencing, alternative water supplies, temporary evacuation and housing
and other emergency assistance undertaken by any environmental regulatory
body having jurisdiction over BANK ONE to prevent or minimize any actual or
threatened release by BANK ONE on premises any hazardous wastes or other
chemical substances, pollutants and contaminants into the environment which
would endanger the public health or the environment. All terms contained in
quotation marks in this paragraph and the paragraph immediately following
shall have the meaning ascribed to such terms as defined in all federal,
state and local statutes, regulations or ordinances.
Except as previously disclosed to CNB in writing, to the actual knowledge of
the executive officers of BANK ONE, each Office is, in all material respects,
in compliance with all applicable Federal, state, local or municipal statutes,
ordinances, laws and regulations and all orders, rulings or other decisions
of any court, administrative agency or other governmental authority relating
to the protection of the environment.
For purposes of this section, the term "executive officer" shall refer to all
executive officers of BANK ONE as defined in 12 CFR 215.2 as of the date
of this Agreement.
(p) Access to Real Estate. No fact or condition exists which would result
in the termination or impairment of access to the Leased Real Estate from
adjoining public or private streets or ways or which could result in
discontinuation of necessary sewer, water, electric, gas, telephone, or other
utilities or services. All sewage, sanitation, plumbing, refuse disposal, and
similar facilities servicing the Leased Real Estate are in full compliance
with applicable governmental regulations.
(q) Mechanic's Liens. BANK ONE has paid or will pay in full all bills and
invoices for labor and material of any kind arising from the ownership,
operation, management, repair, maintenance, or leasing of the Leased Real
Estate, and no actual or potential mechanic's lien or other claims are
outstanding or available to any party in connection with the ownership,
operation, management, repair, maintenance, or leasing said properties.
(r) Deposit. Attached as Schedule H hereto is a true and accurate
schedule of all Deposit Accounts (including individual retirement accounts)
domiciled at the Offices, prepared as of a date within thirty (30) days prior
to the date of this Agreement, listing by Office and by category the amount of
all deposits and the interest rates and maturity dates associated with such
deposits, and indicating the deposits that constitute Core Deposits.
(s) Office Loans. Attached hereto as Schedule I is a true and accurate
schedule of all Office Loans, including accrued and unpaid interest thereon,
computed as of a date within thirty (30) days prior to the date of this
Agreement, excluding, however, such Office Loans which are more than 30 days
past due for payment.
(t) Personal Property. Schedule B is a true and accurate schedule of
Fixed Assets owned by BANK ONE at any of the Offices, which Schedule specifies
the original cost and net book value of each such item, as shown on the
financial records of BANK ONE, computed as of the month-end immediately prior
to the date of execution of this Agreement and describing any security
interest therein or lien thereon.
(u) Assumed Contracts and Third Party Lease. Schedule C is a true and
accurate schedule of all Assumed Contracts related to the Offices. Each
Assumed Contract is valid and subsisting in full force and effect.
(v) FIRPTA. BANK ONE is not a "foreign person" within the meaning of the
Internal Revenue Code 1445.
3.02 Representations and Warranties of CNB. CNB represents and warrants
to BANK ONE, to the best of its knowledge, as follows:
(a) Good Standing, and Power of CNB. CNB is a national banking
association duly organized, validly existing, and in good standing under the
laws of the United States with corporate power to own its properties and to
carry on its business as presently conducted. CNB is an insured bank, as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder.
(b) Authorization of Agreement. The execution and delivery of this
Agreement, and the transactions contemplated hereby, have been duly authorized
by all necessary corporate action on the part of CNB, and this Agreement is a
valid and binding obligation of CNB.
(c) Effective Agreement. Subject to the receipt of any and all necessary
regulatory approvals, the execution, delivery, and performance of this
Agreement by CNB, and the consummation of the transactions contemplated
hereby, will not conflict with, result in the breach of, constitute a
violation or default, result in the acceleration of payment or other
obligations, or create a lien, charge or encumbrance, under any of the
provisions of the Articles of Association or By-Laws of CNB, under any
judgment, decree or order, under any law, rule or regulation of any government
or agency thereof, or under any material agreement, material contract or
material instrument to which CNB is subject, where such conflict, breach,
violation, default, acceleration or lien would have a material adverse effect
on CNB's ability to perform its obligations hereunder.
(d) No Broker. No broker or finder, or other party or agent performing
similar functions, has been retained by CNB or is entitled to be paid based
upon any agreements, arrangements, or understandings made by CNB in connection
with the transactions contemplated hereby, and no brokerage fee or other
commission has been agreed to be paid by CNB on account of the transactions
contemplated hereby.
4. ACTIONS RESPECTING EMPLOYEES AND PENSION AND EMPLOYEE BENEFIT
PLANS.
4.01 Employment of Employees
(a) CNB shall extend offers of employment, as of the Closing Date to all
employees of the Offices.
(b) Not later than thirty (30) days following the date of this Agreement,
CNB shall advise BANK ONE, in writing, of the names of all of the employees of
the Offices, who thereafter accept such offer of employment with CNB (the
"Transferred Employees"). Following the expiration of said 30 days, BANK ONE
shall be permitted to offer other employment opportunities to any employees of
the Offices who are not Transferred Employees, but this provision shall not be
construed to obligate BANK ONE to make any such offers.
4.02 Terms and Conditions of Employment. Except as otherwise provided
explicitly in this Agreement, the terms of employment for each Transferred
Employee shall be determined solely by CNB's policies, procedures, and
programs; provided, however, that for purposes of CNB's various employee
benefit plans at and following the Closing Date, (i) time of service with
BANK ONE will be credited to Transferred Employees for purposes of determining
and calculating their eligibility for and vesting with respect to such plans
and (ii) all pre-existing conditions of Transferred Employees will be waived
by CNB with respect to all CNB's plans.
4.03 Compliance with Law. BANK ONE agrees that it shall comply with any
applicable requirements, if any, for the Worker Adjustment and Retraining
Notification Act in connection with the transaction contemplated by this
Agreement.
4.04 Actions to be Taken by BANK ONE. BANK ONE covenants to CNB that it
will do or cause the following to occur:
(a) Solicitation of Transferred Employees. Except with the written
consent of CNB, for six months following the Closing Date, BANK ONE will not
solicit Transferred Employees as prospective officers or employees of BANK
ONE.
(b) Employee Benefit Programs. BANK ONE's obligations to employees of the
Offices, including Transfer-red Employees, will be as set forth in established
policies of BANC ONE CORPORATION and/or BANK ONE and BANK ONE shall continue
its employee benefit programs in full force and effect as benefit programs for
Transferred Employees through the Closing Date. After the Closing, BANK ONE
shall retain the responsibility and liability for the funding and payment of
all claims incurred under such employee benefit programs through the Closing
Date. CNB shall have no obligation or liability to compensate Transferred
Employees for benefits of any kind earned, accrued, promised and/or provided
to Transferred Employees as employees of BANK ONE, except with respect to
eligibility and vesting as set forth in Section 4.02, above.
(c) Employees of the Offices. BANK ONE shall not, without CNB's prior
written consent, (i) increase the aggregate full-time equivalent size of the
work force at the Offices above the aggregate normal staffing levels
designated by BANK ONE for the Offices at the date hereof, (ii) terminate any
Transferred Employee prior to the Closing Date, unless such person is
dismissed for cause and written notice of such dismissal is provided to CNB,
(iii) transfer or assign any Transferred Employee prior to the Closing Date
to a position of permanent employment with BANK ONE; or (iv) increase the
compensation of any Transferred Employee except pursuant to existing BANK ONE
policies and procedures.
The obligations of BANK ONE pursuant to this Section 4.04 shall survive the
Closing.
5. CONDITIONS PRECEDENT TO CLOSING.
5.01 Conditions to BANK ONE's Obligations. The obligations of BANK ONE to
consummate the Acquisition are subject to the satisfaction, or the waiver in .
writing by BANK ONE to the extent permitted by applicable law, of the
following conditions at or prior to the Closing:
(a) Prior Regulatory Approval. All filings and registrations with, and
notifications to, all federal and state authorities required for consummation
of the Acquisition shall have been made, all approvals and authorizations of
all federal and state authorities required for consummation of the Acquisition
shall have been received and shall be in full force and effect, and all
applicable waiting periods shall have passed.
(b) Corporate Action. The Board of Directors of CNB shall have taken all
corporate action necessary by it to effectuate this Agreement and the
Acquisition and CNB shall have furnished BANK ONE with a certified copy of
each such resolution adopted by the Board of Directors of CNB evidencing the
same.
(c) Representations and Warranties. The representations and warranties of
CNB set forth in this Agreement shall be true and correct in all material
respects on the Closing Date with the same effect as though all such
representations and warranties had been made on and as of such date, and CNB
shall have delivered to BANK ONE a Certificate to that effect, dated as of the
Closing Date to the effect specified in Schedule J to this Agreement.
(d) Covenants. Each and all of the covenants and agreements of CNB to be
performed or complied with at or prior to Closing pursuant to this Agreement
shall have been duly performed or complied with in all material respects by
CNB, or waived by BANK ONE, and CNB shall have delivered to BANK ONE a
Certificate to that effect, dated as of the Closing Date to the effect
specified in Schedule J to this Agreement.
(e) No Proceeding or Prohibition. At the time of the Closing, there shall
not be any litigation, investigation, inquiry, or proceeding pending or
threatened in or by any court or agency of any government or by any third
party which in the judgment of the executive officers of BANK ONE, with the
advice of counsel, presents a bona fide claim to restrain, enjoin, or
prohibit consummation~nation of the transaction contemplated by this Agreement
or which might result in rescission in connection with such transactions; and
BANK ONE shall have beenfurnishedd with a Certificate, substantially in the
form as specified in Schedule J to this Agreement, dated as of the Closing
Date and signed by the Chairman, President or an Executive Vice President
and Secretary or Assistant Secretary of CNB, to the effect that no such
litigation, investigation, inquiry, or proceeding is pending or, to the best
of their knowledge, threatened.
(f) Opinion of Counsel. CNB shall have delivered to BANK ONE an opinion,
dated as of the Closing Date, of legal counsel reasonably satisfactory to
BANK ONE and its counsel, in form and substance reasonably satisfactory to
BANK ONE and its counsel, to the effect specified in Schedule K to this
Agreement.
5.02 Conditions to CNB's Obligations. The obligations of CNB to
consummate the Acquisition are subject to the satisfaction, or the waiver in
writing by CNB to the extent permitted by applicable law, of the following
conditions at or prior to the Closing:
(a) Prior Regulatory Approval. All filings and registrations with, and
notifications to, all federal and state authorities required for consummation
of the Acquisition and operation of the Offices by CNB shall have been made,
all approvals and authorizations of all federal and state authorities required
for consummation of the Acquisition and operation of the Offices by CNB shall
have been received and shall be in full force and effect, and all applicable
waiting periods shall have passed.
(b) Corporate Action. The Board of Directors of BANK ONE shall have taken
all corporate action necessary to effectuate this Agreement and the
Acquisition; and BANK ONE shall have furnished CNB with a certified copy of
each such resolution adopted by the Board of Directors of BANK ONE evidencing
the same.
(c) Representations and Warranties. The representations and warranties
of BANK ONE set forth in this Agreement shall be true and correct in all
material respects on the Closing Date with the same effect as though all such
representations and warranties had been made on and as of such date (unless a
different date is specifically indicated in such representations and
warranties), and BANK ONE shall have delivered to CNB a Certificate to that
effect, dated as of the Closing Date to the effect specified in Schedule L to
this Agreement.
(d) Covenants. Each and all of the covenants and agreements of BANK ONE
to be performed or complied with pursuant to this Agreement shall have been
duly performed or complied with in all material respects by BANK ONE, or
waived by CNB, and BANK ONE shall have delivered to CNB a Certificate to that
effect, dated as of the Closing Date to the effect specified in Schedule L to
this Agreement.
(e) No Proceedings or Prohibitions. At the time of the Closing, there
shall not be any litigation, investigation, inquiry, or proceeding pending or
threatened in or by any court or agency of any government or by any third
party which in the judgment of the executive officers of CNB, with the advice
of counsel, presents a bona fide claim to restrain, enjoin, or prohibit
consummation of the transactions contemplated by this Agreement or which
might result in rescission in connection with such transactions; and CNB shall
have been furnished with a Certificate, in substantially the form specified
in Schedule L to this Agreement, dated as of the Closing Date and signed by
the Chairman, President, or Vice President, and the Secretary or Assistant
Secretary of BANK ONE, to the effect that no such litigation, investigation,
inquiry, or proceeding is pending or threatened to the best of their knowledge.
(f) Opinion of Counsel. BANK ONE shall have delivered to CNB an opinion,
dated as of the Closing Date, of legal counsel reasonably satisfactory to CNB
and its counsel, in form and substance reasonably satisfactory to CNB and its
counsel, to the effect specified in Schedule M to this Agreement.
(g) Real Property. The Title Commitment (as defined in Section 2.01(c)
herein), at CNB's election, shall have been delivered to CNB, and updated to
or as close as practicable to (but in no event more than five (5) business
days prior to) the Closing Date, and such updated Title Commitment shall not
include any special exceptions other than those set forth in the original
Title Commitment and any other Permitted Exceptions.
(h) Fixed Assets. There shall have been no material alteration in or
adjustment to the Fixed Assets. For purposes of this subsection h), it will
not be considered to be a material alteration or adjustment to the Fixed Assets
if (i) there is damage or destruction to the Fixed Assets as contemplated by
Section 2.01 (g) herein and BANK ONE complies with said Section 2.0 1 (g),
(ii) BANK ONE makes additions to the Fixed Assets with the prior written
consent of CNB or (iii) BANK ONE makes additions to the Fixed Assets without
CNB's consent in order to correct emergency situations which are threatening
to impair BANK ONE's operations at an Office.
5.03 Non-Satisfaction of Conditions Precedent. The non-occurrence or delay
of the Closing of the Acquisition by reason of the failure of timely
satisfaction of all conditions precedent to the obligations of any party
hereto to consummate the Acquisition shall in no way relieve such party of any
liability to the other party hereto, nor be deemed a release or waiver of any
claims the other party hereto may have against such party, if and to the
extent the failure of timely satisfaction of such conditions precedent is
attributable to the actions or inactions of such party.
5.04 Waiver of Conditions Precedent. The conditions specified in Sections
5.01 and 5.02 herein shall be deemed satisfied or, to the extent not satisfied,
waived if the Closing occurs unless such failure of satisfaction is reserved
in a writing executed by CNB and BANK ONE at or prior to the Closing.
6. CLOSING
6.01 Closing and Closing Date. The Acquisition contemplated by this
Agreement shall be consummated and closed (the "Closing") at such location as
shall be mutually agreed upon by CNB and BANK ONE, on a date to be mutually
agreed upon by CNB and BANK ONE which date is after all required regulatory
approvals have been obtained and all applicable regulatory waiting periods
associated therewith have expired. The precise date on which the Closing.
shall occur (the "Closing Date")shall be confirmed by the parties in writing
not less than five (5) days after receiving all required regulatory approvals.
6.6.02 BANK ONE's Actions at Closing. At the Closing (unless another time
is specifically stated in Section 6.04 hereof), BANK ONE shall, with respect
to the Offices:
(a) deliver to CNB at the Offices such of the Assets purchased hereunder
as shall be capable of physical delivery, including, without limitation, all
assets comprising the safe deposit box business, if any, of the Offices; and
(b) execute, acknowledge and deliver to CNB all such endorsements,
assignments, bills of sale, and other instruments of conveyance, assignment,
and transfer as shall reasonably be necessary or advisable to consummate the
sale, assignment, and transfer of the Assets sold or assigned to CNB hereunder
and such other documents as the title company may reasonably require; the
originals of all blueprints, construction plans, specifications and plat
relating to the Leased Real Estate, which are now in BANK ONE's possession or
which BANK ONE has reasonable access to; and such other documents or
instruments as may be reasonably required by CNB, required by other provisions
of this Agreement, or reasonably necessary to effectuate the Closing. All of
the documents and instruments to be delivered by BANK ONE hereunder shall be
in form and substance reasonably satisfactory to counsel for CNB; and
(c) execute, acknowledge and deliver to CNB a duly executed and recordable
assignment to CNB of the Third Party Lease and a consent to assignment from
the landlord of the Third Party Lease all in substantially as set forth in
Schedule E attached hereto and incorporated herein by reference;
(d) assign, transfer, and deliver to CNB such of the following records
(in whatever form or medium then maintained by BANK ONE) pertaining to the
Deposit Liabilities and accrued interest thereon of the Offices assumed by
CNB hereunder as exist and are available:
(i) signature cards, orders and contracts between BANK ONE and
depositors of the Offices, and records of similar character; and
(ii) canceled checks and/or negotiable orders of withdrawal
representing charges to depositors; and
(iii) a trial balance listing of records of account; and
(iv) all other miscellaneous records, statements and other data
and materials maintained by BANK ONE relative to any Deposit
Liabilities being assumed by CNB; and
(e) assign, transfer, and deliver to CNB such safe deposit and safekeeping
files and records (in whatever form or medium then maintained by BANK ONE)
pertaining to the safe deposit business of the Offices transferred to CNB
hereunder as exist and are available, together with the contents of the safe
deposit boxes maintained at the Offices, as the same exist as of the close of
business on the day immediately preceding the Closing Date (subject to the
terms and conditions of the leases or other agreements relating to the same)
and all securities and other records, if any, held by the Offices for their
customers as of the close of business on the day immediately preceding the
Closing Date (subject to the terms and conditions of the agreements or receipts
relating to the same); and
(f) make available and transfer to CNB on the Closing Date and prior to
the conclusion of the Closing any funds required to be paid to CNB pursuant
to the terms of this Agreement; and
(g) execute, acknowledge and deliver to CNB all Certificates and other
documents required to be delivered to CNB by BANK ONE at the Closing pursuant
to the terms hereof, and
(h) assign by endorsement substantially in a form as provided in Schedule
O attached hereto, transfer and deliver to CNB the contract, promissory note
or other evidence of indebtedness related to the Office Loans together with
the loan file and records in whatever form or medium then maintained by BANK
ONE) pertaining to such Office Loans; and
(i) assign to CNB all BANK ONE's rights in and to the Assumed Contracts
which are assignable and which constitute part of the Assets.
6.03 CNB's Actions at the Closing At the Closing (unless another time is
specifically stated in Section 6.04 hereto~o, CNB shall, with respect to the
Offices:
(a) execute, acknowledge, and deliver to BANK ONE, to evidence the
assumption of the liabilities and obligations of BANK ONE by CNB hereunder,
an instrument of assumption in the form set forth in Schedule P to this
Agreement, and BANK ONE shall then accept, execute, and acknowledge such
instrument. Copies of such instrument may be recorded in the public records
at the option of either party hereto. The execution and acknowledgment of
such instrument shall not be deemed to be a waiver of any rights or obligations
of any party to this Agreement;
(b) receive, accept and acknowledge delivery of all Assets, and all records
and documentation relating thereto, sold, assigned, transferred, conveyed or
delivered to CNB by BANK ONE hereunder; and
(c) execute and deliver to BANK ONE such written receipts for the Assets,
properties, records, and other materials assigned, transferred, conveyed, or
delivered to CNB hereunder as BANK ONE may reasonably have requested at or
before the Closing;
(d) pay to BANK ONE on the Closing Date and prior to the conclusion of the
Closing any funds required to be paid to BANK ONE at the Closing pursuant to
the terms of this Agreement;
(e) execute, acknowledge and deliver to BANK ONE all Certificates and
other documents required to be delivered to BANK ONE by CNB at the Closing
pursuant to the terms hereof; and
(f) execute, acknowledge and deliver to BANK ONE an agreement wherein CNB
assumes obligations with respect to the Third Party Lease and Assumed Contracts
for all periods following the Closing Date with respect thereto.
6.04 Methods of Payment. Subject to the adjustment procedures set forth
in this Section 6.04, the transfer of the funds, if any, due to CNB or to BANK
ONE, as the case may be, as set forth pursuant to the terms of Section 1.04(a)
hereof, shall be made on the Closing Date in immediately available United
States Federal Funds. At least two business days prior to the Closing, BANK
ONE and CNB shall provide written notice to one another indicating the
account and bank to which such funds shall be wire transferred. In order to
facilitate the Closing, the parties agree: (i) that the amount of funds
transferred on the Closing Date, pursuant to Section 1.04(a) hereof, shall be
computed based upon (a) the aggregate book value plus accrued interest of the
Office Loans as of the close of business on the day immediately preceding the
Closing Date, (b) cash on hand at the Offices as of the close of business on
the day immediately preceding the Closing Date, and (c) the aggregate balance
of all Deposit Accounts (including interest posted or accrued to such accounts
and Individual Retirement Accounts which have become IRAs as a result of the
written appointment of CNB as the successor custodian and the failure of the
account holders to object to such appointment as of the close of business on
the day immediately preceding the Closing Date, all as reflected on the
Preliminary Settlement Statement in a form substantially similar to the one
attached as Schedule Q; and (ii) that within ten (10) business days after the
Closing, the parties shall make appropriate post-closing adjustments,
consistent with the provisions of Section 1.04 hereof, based upon actual
Deposit Accounts, Office Loans and cash transactions which took place on the
Closing Date or which took place prior to the Closing Date but which were not
reflected as of the close of business on the day immediately preceding the
Closing Date and execute the Final Settlement in a form substantially similar
to Schedule R attached. In addition, prorations of prepaid and deferred
income and expenses that cannot be reasonably calculated at the Closing shall
be settled and paid based on actual figures as soon as possible after the
Closing.
6.05 Availability of Closing Documents. The documents proposed to be used
and delivered at the Closing shall be made available for examination by the
respective parties not later than 12:00 noon, Ohio time, on the tenth Business
Day prior to the Closing Date.
6.06 Effectiveness of Closing. Upon the satisfactory completion of the
Closing, which does not include and shall not require completion of the
adjustment and proration arrangements set forth in Section 6.04, the
Acquisition shall be deemed to be effective and the Closing shall be deemed
to have occurred.
7. CERTAIN TRANSITIONAL MATTERS.
7.01 Transitional Action by CNB. After the Closing, unless another time is
otherwise indicated:
(a) CNB shall: (i) pay in accordance with the law and customary banking
practices and applicable Deposit Account contract terms, all properly drawn
and presented checks, negotiable orders of withdrawal, drafts, debits, and
withdrawal orders presented to CNB by mail, over the counter, through
electronic media, or through the check clearing system of the banking industry,
by depositors of the Deposit Accounts assumed by CNB hereunder, whether drawn
on checks, negotiable orders or withdrawal, drafts, or withdrawal order forms
provided by CNB or BANK ONE; and (ii) in all other respects discharge, in the
usual course of the banking business, the duties and obligations of BANK ONE
with respect to the balances due and owing to the depositors whose Deposit
Accounts are assumed by CNB hereunder; provided, however, that any obligations
of CNB pursuant to this Section 7.01 to honor checks, negotiable orders of
withdrawal, drafts, and withdrawal orders on forms provided by BANK ONE and
carrying its imprint (including its name and transit routing number) shall not
apply to any checks, draft, or withdrawal order (i) presented to CNB more than
one hundred twenty (120) days following the Closing Date, (ii) with a date
more than one hundred twenty (120) days prior to (a) the Closing Date or
(b) the date of CNB's receipt thereof, or (iii) on which a stop payment has
been requested by the deposit customer. The provisions of this subsection
7.01 (a) shall in no way limit CNB's duties or obligations arising under
Section 1.03(b) hereof.
(b) CNB shall, not earlier than the time of procurement of all regulatory
approvals required for consummation of the transaction contemplated by this
Agreement nor later than ten days prior to the Closing Date, notify all
depositors of the Offices by letter, acceptable to BANK ONE, produced in, if
appropriate, several similar, but different forms calculated to provide
necessary and specific information to the owners of particular types of
accounts, of CNB's pending assumption of the Deposit Liabilities hereunder,
and, in appropriate instances, notify depositors that on and after the Closing
Date certain BANK ONE deposit-related services and/or BANK ONE's debit card
and automatic teller machine services, will be terminated. As an enclosure
to such notices, CNB may furnish appropriate depositors with brochures, forms
and other written materials related or necessary to the assumption of the
Deposit Accounts by CNB and the conversion of said accounts to CNB accounts,
including the provision of checks to appropriate depositors using the forms of
CNB with instructions to such depositors to utilize such CNB checks on and
after the Closing Date and thereafter to destroy any unused checks on BANK
ONE's forms. The expenses of the printing, processing and mailing of such
letter notices and providing new CNB checks and other forms and written
materials to appropriate customers shall be borne by CNB. Before Closing,
except as provided in this paragraph, CNB will not contact BANK ONE's
customers except as may occur in connection with advertising or solicitations
directed to the public generally or in the course of obtaining the requisite
regulatory approvals of the transaction.
(c) CNB shall promptly pay to BANK ONE an amount equivalent to the amount
of any checks, negotiable orders of withdrawal, drafts, or withdrawal orders
(net of the applicable Acquisition Consideration paid by CNB with respect to
the Deposit Liabilities represented by any such instrument) credited as of the
close of business on the Closing Date to a Deposit Account assumed by CNB
hereunder which are returned uncollected to BANK ONE after the Closing Date
and which shall include an amount equivalent to holds placed upon such
deposit account for items cashed by BANK ONE as of the close of business on
the Closing Date which items are subsequently dishonored.
(d) All tasks and obligations concerning the provision of data processing
services to or for the Offices after the Closing, other than those specifically
set forth in, and to the extent assumed by BANK ONE pursuant to, Section
7.02(b) herein, are the sole and exclusive responsibility of, and shall be
performed solely and exclusively by, CNB.
(e) CNB shall, not later than the close of business on the business day i
mmediately following the Closing Date, supply suitable government-backed
securities as security for any deposits of governmental units included among
the Deposit Liabilities for which BANK ONE had provided similar security.
(f) CNB shall, as soon as practicable after the Closing Date, prepare and
transmit at CNB's expense to each of the obligors on Office Loans transferred
to CNB pursuant to this Agreement a notice to the effect that the loan has
been transferred and directing that payment be made to CNB at the address
specified by CNB, with CNB's name as payee on any checks or other instruments
used to make payments, and, with respect to such loan on which a payment
notice or coupon book has been issued, to issue a new notice or coupon book
reflecting the name and an address of CNB as the person to whom and place at
which payments are to be made.
(g) If the balance due on any Office Loan transferred to CNB pursuant to
this Agreement has been reduced by BANK ONE as a result of a payment by check
or draft received prior to the close of business on the Closing Date, which
item is returned unpaid to BANK ONE after the day immediately preceding the
Closing Date, the asset value represented by the loan transferred shall be
correspondingly increased and an amount in cash equal to such increase shall
be promptly paid by CNB to BANK ONE.
(h) CNB shall use its best efforts to cooperate with BANK ONE in
assuring an orderly transition of ownership of the Assets and responsibility
for the liabilities, including the Deposit Liabilities, assumed by CNB
hereunder.
7.02 Transitional Actions by BANK ONE. After the Closing, unless another
time is otherwise indicated:
(a) BANK ONE shall use its best efforts to cooperate with CNB in assuring
an orderly transition of ownership of the Assets and responsibility for the
liabilities, including the Deposit Liabilities, assumed by CNB hereunder.
(b) BANK ONE's sole and exclusive responsibilities concerning the
provision of data processing services to or for the Deposit Accounts of the
Offices after the Closing Date shall be as set forth in this Section 7.02(b).
As soon as practicable following the date of this Agreement, BANK ONE shall
provide CNB with applicable product functions and specifications relating to
the data processing support required for the Deposit Accounts, Office Loans,
and safe deposit business (if such data processing support currently is
provided with respect to such business) maintained at the Offices (such
Deposit Accounts, Office Loans and safe deposit business, if applicable,
hereinafter called the "Accounts"). As soon as practicable following the date
of this Agreement, BANK ONE shall provide to CNB file formats relating to the
Accounts and test tapes related to the Accounts in generic form which are
machine readable on IBM (or IBM compatible) equipment or which shall be on
eighteen track 3480 cartridges (non-compressed data) or on nine channel 6250
B.P.I. EBC1DIC formatted tape. By not later than 2:00 P.M. local Steubenville,
Ohio time of the day immediately following the Closing Date, BANK ONE shall
make available for CNB's pick-up at Wheeling, West Virginia, tapes containing
all pertinent data and descriptive information relating to the Accounts which
is then available to BANK ONE, which tapes shall constitute BANK ONE's records
maintained as of and current to the close of business on the Closing Date
with respect to the Accounts. BANK ONE shall bear all costs and expenses
relating to the performance of its obligations pursuant to this Section
7.02(b).
(c) Prior to the Closing Date, BANK ONE shall cooperate with CNB, at CNB's
expense and at no expense to BANK ONE, in making Transferred Employees
available at reasonable times for whatever program of training CNB deems
advisable; provided, however, that CNB shall conduct such training program in
a manner that does not materially interfere with or prevent the performance of
the normal duties and activities of such Transferred Employees. CNB shall
make request of BANK ONE for training opportunities prior to the Closing Date.
Such requests, which shall specify the time, duration and place of such
training, must be approved by BANK ONE. Such approvals will not be
unreasonably withheld by BANK ONE.
(d) BANK ONE shall cooperate with and permit CNB, at CNB's option and
expense and at no expense to BANK ONE, to make provision for the installation
of teller equipment in the Offices; provided, however, that CNB shall arrange
for the installation and placement of such equipment at such times and in a
manner that does not significantly interfere with the normal business
activities and operation of BANK ONE or the Offices.
(e) BANK ONE shall resign as custodian of each IRA account maintained at
the Offices and assign the custodianship of such accounts to CNB upon Closing.
(f) Not sooner than one (1) business day prior to the Closing nor later
than the close of business on the Closing Date, BANK ONE shall terminate its
debit card service and convert and change over its direct deposit or payroll
and retirement payments service for the Deposit Accounts from BANK ONE to CNB.
Such terminations will be preceded by the notice described in Section
7.01 (b) herein.
(g) As of the opening of business on the first business day after the
Closing Date, BANK ONE and CNB shall provide the Federal Reserve Bank of
Cleveland with all information necessary in order to expedite the clearing and
sorting of all checks, drafts, instruments and other commercial paper
relative to the Deposit Liabilities and/or the Office Loans (hereinafter
collectively referred to as "Paper Items"). CNB shall bear all charges and
costs imposed by the Federal Reserve in connection with the reassignment of
account number ranges for sorting the Paper Items.
In the event the Federal Reserve and/or any other regional or local
clearinghouse for negotiable instruments fails, refuses or is unable to direct
sort such Paper Items for delivery to CNB with the result that such Paper
Items are presented to BANK ONE, by not later than 2:00 p.m. local time of
each business day following the Closing and continuing for one hundred twenty
(120) days after the Closing, BANK ONE will make available to CNB for pick up
from BANK ONE's offices or the offices of BANK ONE's agent and/or processor
at Columbus, Ohio, all of the Paper Items which are received by BANK ONE from
the Federal Reserve Bank of Cleveland and/or any regional or local
clearinghouse during the morning of each such business day on an "as-received
basis." At the same time BANK ONE shall also make available to CNB information
and records, including but not limited to systems printouts, concerning
such Paper Items and concerning incoming Automated Clearing House items ("ACH
items") as well as outstanding Automatic Teller Machine ("ATM") transactions.
Such information and records, including but not limited to systems printouts,
will utilize the most recent account number designated by BANK ONE for each
of the Deposit Accounts and/or the Office Loans. Each business day BANK ONE
will endeavor to see that the sum of (a) the actual Paper Items provided to
CNB plus (b) all ACH items and ATM transactions captured by BANK ONE in its
information and records balance with the sum of (c) the information and
records, including but not limited to systems printouts, provided by BANK ONE
relative to the Paper Items plus (d) the information and records, including
but not limited to systems printouts, provided relative to the ACH items and
ATM transactions affecting the Deposit Accounts and/or the Office Loans.
BANK ONE shall provide the foregoing at no charge to CNB except that CNB shall
pay any charges assessed to BANK ONE by the Federal Reserve Bank of Cleveland
a national or local clearinghouse and/or BANK ONE's agent and/or processor to
the extent such assessments relate to the Deposit Accounts. CNB shall be
responsible for pick up of the data to be provided by BANK ONE.
BANK ONE and CNB shall arrange for appropriate daily settlement with one
another in order that the transmission of all monies associated with the
matters set forth in this Section 7.02(g) might be effected promptly.
BANK ONE shall not be liable to CNB for any failure to provide the data
required by this Section 7.02(g) to the extent any such failure results from
causes beyond BANK ONE's control including war, strike or other labor
disputes, acts of God, errors or failures of the Federal Reserve Bank of
Cleveland and/or a participating regional or local clearinghouse, or equipment
failure or other emergency wherein BANK ONE and/or its agent processor has
been unable to process inclearings from the Federal Reserve Bank of Cleveland
or such clearinghouse.
(h) BANK ONE shall, not earlier than the time of procurement of all
regulatory approvals required for consummation of the transaction contemplated
by this Agreement nor later than twenty days prior to the Closing Date, notify
all depositors of the Offices and all borrowers of any Office Loan by letter
acceptable to CNB, produced in, if appropriate, several similar, but different
forms calculated to provide necessary and specific information to the owners
of particular types of accounts and/or loans, of CNB's pending assumption of
the Deposit Liabilities and acquisition of the Office Loans hereunder, and,
in appropriate instances, notify depositors that on and after the Closing Date
certain BANK ONE deposit-related services and/or BANK ONE's debit card and
automatic teller machine services, will be terminated. The expenses of the
printing, processing and mailing of such letter notices shall bebornee by BANK
ONE. BANK ONE and CNB may by mutual agreement, coordinate their efforts in
fulfilling their respective obligations in 7.01(b) and 7.02(h) by jointly
preparing one letter to the customers to be cosigned by both parties and, in
such event, the costs therefore shall be shared equally by the parties.
(i) For a period of sixty (60) days after the Closing Date, BANK ONE will
forward to CNB, within two (2) business days of receipt, loan payments
received by BANK ONE with respect to the Office Loans. CNB will forward,
within two (2) business days of receipt payments received by CNB with respect
to any loans not assigned to CNB under this Agreement. CNB and BANK ONE
further agree to refer customers to the offices of the other when such
customers present payments over the counter to the party not holding their
respective loan.
7.03 Overdrafts and Transitional Action. Overdrafts paid on the Deposit
Accounts with respect to ledger dates after the Closing Date will be the
responsibility and risk of CNB. Overdrafts approved with respect to ledger
dates more than four (4) business days prior to the Closing Date will be the
responsibility and risk of BANK ONE. Overdrafts approved with respect to
ledger dates during the period beginning four (4) business days prior to the
Closing Date through the Closing Date, inclusive, will initially be the
responsibility and risk of CNB (other than overdrafts of customers who are
specifically identified in writing by CNB to BANK ONE not less than four (4)
business days prior to the Closing Date); provided, however, that CNB shall
have the right to retransfer any such overdrafts back to BANK ONE for BANK
ONE's responsibility and at its risk within six (6) days following the Closing
Date, and BANK ONE will repurchase all rights in respect of such overdrafts
from CNB for the amount of each such overdraft outstanding at the time it
is retransferred back to BANK ONE less the amount of the Acquisition
Consideration paid by CNB to BANK ONE attributable to such overdrafts;
provided, however, that CNB shall have closed all accounts on which each such
overdraft exists not later than the date of such retransfer.
7.04 ATMs Located in the Offices, if any.
(a) BANK ONE shall provide to CNB no later than sixty (60) days prior to
the Closing Date, a test tape, along with a file format or file layout and a
production tape thirty (30) days before the Closing Date, containing customer
name, address, card number, card status (open, closed or blocked), personal
identification number ("PIN"), withdrawal limits, the Deposit Accounts
activated by, accessible to or committed to such cards, issue dates and/or
open dates, last transaction dates, expiration dates and social security
numbers as to all ATM cards issued to customers of the BANK ONE Offices
processor to deactivate the operation of the BANK ONE ATM Cards completely or
to deactivate or disconnect the Deposit Accounts from such BANK ONE ATM Cards
no later than the business day cutoff on the date prior to the Closing Date
so that all activity generated by the BANK ONE ATM Cards shall have settled
prior to the Closing Date. All transactions and activity related to the BANK
ONE ATM Cards following the Closing Date which are received or forwarded to
BANK ONE will be returned by BANK ONE to its processor for forwarding to CNB
or will be accepted and forwarded by BANK ONE to CNB along with all
corresponding funds. BANK ONE thereafter agrees to immediately notify its
processor to deactivate such ATM Cards and to forward all transactions related
thereto directly to CNB.
(b BANK ONE agrees to deactivate the ATMs located at the Offices on or
before the business day cutoff on the day prior to the Closing Date.
Thereafter, CNB shall reconfigure the ATMs to its standards for activation
after the business day cutoff on the Closing Date.
(c) CNB and BANK ONE agree to cooperate with each other to assure that all
transactions originated through the ATM or originated with the ATM Cards prior
to or on the Closing Date shall be for the account of BANK ONE and all
transactions originated after the Closing Date shall be for the account of
CNB. A post closing adjustment shall be made in the manner set forth in
Section 6.04 hereof to reflect all such transactions which cannot be
reasonably calculated as of the Closing.
7.05 Effect of Transitional Action. Except as and to the extent expressly
set forth in this Article 7, nothing contained in this Article 7 shall be
construed to be an abridgment or nullification of the rights, customs and
established practices under applicable banking laws and regulations as they
affect any of the matters addressed in this Article 7.
8. GENERAL COVENANTS AND INDEMNIFICATION.
8.01 Confidentiality Obligations of CNB. From and after the date hereof,
CNB and its affiliates and parent company shall treat all information received
from BANK ONE concerning the business, assets, operations, and financial
condition of BANK ONE (including without limitation the Offices), as
confidential, unless and to the extent that CNB can demonstrate that such
information was already known to CNB and its affiliates, if any, or in the
public domain or received from a third person not known by CNB to be under
any obligation to BANK ONE; and CNB shall not use any such information (so
required to be treated as confidential) for any purpose except in furtherance
of the transactions contemplated hereby. Upon the termination of this
Agreement, CNB shall, and shall cause its affiliates, if any, to, promptly
return all documents and workpapers containing, and all copies of, any such
information (so required to be treated as confidential) received from or on
behalf of BANK ONE in connection with the transactions contemplated hereby.
The covenants of CNB contained in this Section 8.01 are of the essence and
shall survive any termination of this Agreement, but shall terminate at the
Closing, if it occurs, with respect to any information that is limited solely
to the activities and transactions of the Offices; provided, however, that
neither CNB nor any of its affiliates shall be deemed to have violated the
covenants set forth in this Section 8.01 if CNB shall in good faith disclose
any of such confidential information in compliance with any legal process,
order or decree issued by any court or agency of government of competent
jurisdiction. It is expressly acknowledged by BANK ONE that all information
provided to CNB related to this purchase and assumption transaction may be
provided to American Bancorporation and CNB's affiliates for the purpose of
consummating the transaction which is the subject of this Agreement.
8.02 Confidentiality Obligations of BANK ONE. From and after the date
hereof, BANK ONE, its affiliates and its parent corporation shall treat all
information received from CNB concerning CNB's business, assets, operations,
and financial condition as confidential, unless and to the extent BANK ONE
can demonstrate that such information was already known to BANK ONE or its
affiliates or in the public domain, and BANK ONE shall not use any such
information (so required to be treated as confidential) for any purpose except
in furtherance of the transactions contemplated hereby. Upon the termination
of this Agreement, BANK ONE shall promptly return all documents and workpapers
containing, and all copies of, any such information (so required to be treated
as confidential) received from or on behalf of CNB in connection with the
transactions contemplated hereby. The covenants of BANK ONE contained in this
Section 8.02 are of the essence and shall survive any termination of this
Agreement; provided, however that BANK ONE nor any of its affiliates shall be
deemed to have violated the covenants set forth in this Section 8.02 if BANK
ONE shall in good faith disclose any of such confidential information in
compliance with any legal process, order or decree issued by any court or
agency of government of competent jurisdiction. It is expressly acknowledged
by CNB that all information provided to BANK ONE related to this purchase and
assumption transaction may be provided to Banc One Corporation and BANK ONE's
affiliates for the purpose of consummating the transaction which is the
subject of this Agreement.
8.03 Indemnification by BANK ONE. From and after the Closing Date, BANK
ONE shall indemnify, hold harmless, and defend CNB from and against all losses
and liabilities, including reasonable attorneys' fees and expenses, arising
out of any actions, suits, or proceedings commenced prior to the Closing
(other than proceedings to prevent or limit the consummation of the
Acquisition) relating to operations at the Offices and/or the Deposit
Liabilities or Office Loans of the Offices; and BANK ONE shall further
indemnify, hold harmless, and defend CNB from and against all losses and
liabilities, including reasonable attorneys' fees and expenses, arising out
of any actions, suits, or proceedings commenced on or after the Closing to the
extent the same relate to operations at the Offices and/or the Deposit
Liabilities or Office Loans prior to the Closing. The obligations of BANK
ONE under this Section 8.03 shall be contingent upon CNB giving BANK ONE
written notice (i) of receipt by CNB of any process and/or pleadings in or
relating to any actions, suits, or proceedings of the kinds described in this
Section 8.03, including copies thereof, and (ii) of the assertion of any claim
or demand relating to the operation of the Offices and/or the Deposit
Liabilities or Office Loans prior to the Closing, including, to the extent
known to CNB, the identity of the person(s) or entity(ies) asserting such
claim or making such demand and the nature thereof, and including copies of
any correspondence or other writings relating thereto. All notices required
by the preceding sentence shall be given within fifteen days of the receipt
by CNB of any such process or pleadings or any oral or written notice of the
assertion of any such claims or demands. BANK ONE shall have the right to
take over CNB's defense in any such actions, suits, or proceedings through
counsel selected by BANK ONE, to compromise and/or settle the same and to
prosecute any available appeals or reviews of any adverse judgment or ruling
that may be entered therein. The obligations of BANK ONE pursuant to this
Section 8.03 shall survive the Closing.
8.04 Indemnification by CNB. From and after the Closing Date, CNB shall
indemnify, hold harmless and defend BANK ONE from and against all claims,
losses, liabilities, demands and obligations, including without limitation
reasonable attorneys' fees and operating expenses which BANK ONE may receive,
suffer, or incur in connection with (i) any losses incurred by BANK ONE related
to BANK ONE's compliance with instructions from CNB made pursuant to Section
7.04 of this Agreement and not related to any negligence or malfeasance on the
part of BANK ONE and (ii) operations and transactions occurring after the
Closing and which involve the Assets transferred, the Deposit Liabilities or
Office Loans and the other obligations and liabilities assumed pursuant to
this Agreement. The obligations of CNB under this Section 8.04 shall be
contingent upon BANK ONE giving CNB written notice (i) of the receipt by BANK
ONE of any process and/or pleadings in or relating to any actions, suits or
proceedings of the kinds described in this Section 8.04, including copies
thereof, and (ii) of the assertion of any claim or demand relating to the
Assets transferred to and/or the Deposit Liabilities or Office Loans and the
other obligations and liabilities assumed by CNB on or after the Closing,
including, to the extent known to BANK ONE, the identity of the person(s) or
entity(ies) asserting such claim or making such demand and the nature thereof,
and including copies of any correspondence or other writings relating thereto.
All notices required by the preceding sentence shall be given within fifteen
(15) days of the receipt by BANK ONE of any such process or pleadings or any
oral or written notice of the assertion of any such claims or demands. CNB
shall have the right to take over BANK ONE's defense in any such actions,
suits, or proceedings through counsel selected by CNB, to compromise and/or
settle the same and to prosecute any available appeals or review of any
adverse judgment or ruling that may be entered therein. The obligations of
CNB pursuant to this Section 8.04 shall survive the Closing.
8.05 Solicitation of Customers by CNB Prior to Closing. At any time prior
to the Closing Date, CNB will not, and will not permit any of its affiliates,
if any, to conduct any marketing, media or customer solicitation campaign
which is specifically targeted to induce customers whose Deposit Account
liabilities are to be assumed or Office Loans are to be acquired by CNB
pursuant to this Agreement to discontinue their account relationships with
BANK ONE, except as may occur in connection with advertising or solicitations
directed to the public generally. Additionally, at any time prior to the
Closing, CNB shall not, with respect to its offices in Belmont County, Ohio,
offer to pay on any transaction accounts or any new or renewal savings accounts
or certificates of deposits, rates of interest greater than those offered or
then being paid on similar accounts for like term and amount by the main
office and all Belmont County, Ohio offices of CNB. It is the intent of this
provision to prevent CNB from paying or offering to pay a rate of interest on
any deposit account at its Belmont County offices in excess of that rate paid
for like accounts at the Belmont County offices of CNB.
8.06 Further Assurances. From and after the date hereof, each party hereto
agrees to execute and deliver such instruments and to take such other actions
as the other party hereto may reasonably request in order to carry out and
implement this Agreement. Without limiting the foregoing, BANK ONE agrees to
execute and deliver such deeds, bills of sale, acknowledgments, and other
instruments of conveyance and transfer as, in the reasonable judgment of CNB,
shall be necessary and appropriate to vest in CNB the legal and equitable
title to the Assets of BANK ONE being conveyed to CNB hereunder. The covenants
of each of the parties hereto pursuant to this Section 8.07 shall survive the
Closing.
8.07 Operation of the Offices. Except as otherwise provided in this
Agreement, neither BANK ONE, its subsidiaries, affiliates or parent corporation
shall be obligated to provide for any managerial, financial, business, or other
services to the Offices, including without limitation any personnel, employee
benefit, data processing, accounting, risk management, or other services or
assistance that may have been provided to the Offices prior to the close of
business on the Closing Date, and CNB shall take such action as may in its
judgment appear to be necessary or advisable to provide for the ongoing
operation and management of, and the provision of services and assistance to,
the Offices after the Closing Date. As soon as possible after the Closing
Date, CNB shall change the legal name of the Offices and, except for any
documents or materials in possession of the customers of the Offices
(including but not limited to deposit tickets and checks), shall not use and
shall cause the Offices to cease using any signs, stationery, advertising,
documents, or printed or written materials that refer to the Offices by any
name that includes the words "BANK ONE" or "BANC ONE." Preceding the Closing,
BANK ONE shall cooperate with any reasonable requests of CNB directed to
obtaining specifications for the procurement of new signs of CNB~'s choosing
so that CNB is in a position to install new signs immediately following the
close of business on the Closing Date; provided, however, that CNB's receipt
of all sign specifications shall be obtained by CNB in a manner that does not
significantly interfere with the normal business activities and operations of
the Offices, and further provided that the procurement of all new signs shall
be at the sole and exclusive expense of CNB. As indicated in Section 1.02(c),
BANK ONE will retain its signs located at the Offices. If removed by CNB in
conjunction with its installation of new signs, CNB shall obtain BANK ONE's
approval for such removal and shall insure that said signs are removed without
damaging them. It is understood by the parties hereto that, with the exception
of the signs themselves, all mounting facilities for the signs shall be
considered as fixtures or as part of the Fixed Assets.
8.08 Information After Closing. For a period of seven (7) years following
the Closing, upon written request of BANK ONE to CNB or CNB to BANK ONE, as
the case may be, such requested party shall provide the requesting party with
reasonable access to, or copies of, information and records relating to the
Offices which are then in the possession or control of the requested party
reasonably necessary to permit the requesting party or any of its subsidiaries
or affiliates to comply with or contest any applicable legal, tax, banking,
accounting, or regulatory policies or requirements, or any legal or regulatory
proceeding thereunder or requests related to customer relationships at the
Offices prior to Closing. In the event of any such requests, the requesting
party shall reimburse the requested party for the reasonable costs of the
requested party related to such request.
8.09 Survival of Covenants. The obligations and covenants of the parties
under this Section 8 shall survive the Closing.
8.10 Individual Retirement Accounts. All Individual Retirement Accounts
related to the Offices that shall not have become IRAs by the close of business
on the Closing Date shall not be assigned by BANK ONE to CNB or assumed by CNB.
BANK ONE may thereafter, at its option, elect to retain such Individual
Retirement Accounts, advise the account holders that it has withdrawn its
resignation as custodian or transfer the amount in such Individual Retirement
Accounts to the account holders.
9. TERMINATION
9.01 Termination by Mutual Agreement. This Agreement may be terminated and
the transactions contemplated hereby may be abandoned by mutual consent of the
parties authorized by a vote of a majority of the Board of Directors (or by the
vote of the Executive Committee of such Board, if so empowered) of each of
BANK ONE and CNB.
9.02 Termination by BANK ONE. This Agreement may be terminated and the
transactions contemplated hereby abandoned by a vote of a majority of the
Board of Directors (or by the vote of the Executive Committee of such Board,
if so empowered) of BANK ONE:
(a) in the event of a material breach by CNB of this Agreement; or
(b) in the event any of the conditions precedent specified in Section 5.01
of this Agreement has not been met as of the date required by this Agreement
and, if not so met, has not been waived by BANK ONE; or
(c) in the event any regulatory approval required for consummation of the
Acquisition is denied by the applicable regulatory authority or in the event
that at any time prior to the Closing Date it shall become reasonably certain
to BANK ONE, with the advice of counsel, that a regulatory approval required
for consummation of the Acquisition will not be obtained; or
(d) on or after December 31, 1995 if the Closing has not then occurred.
9.03 Termination by CNB. This Agreement may be terminated and transactions
contemplated hereby abandoned by a vote of a majority of the Board of
Directors (or by the vote of the Executive Committee of such Board, if so
empowered) of CNB:
(a) in the event of a material breach by BANK ONE of this Agreement; or
(b) in the event any of the conditions precedent specified in Section 5.02
of this Agreement has not been met as of the date required by this Agreement
and, if not so met, has not been waived by CNB; or
(c) in the event any regulatory approval required for consummation of the
Acquisition is denied by the applicable regulatory authority or in the event
that at any time prior to the Closing Date it shall become reasonably certain
to CNB, with the advice of counsel that a regulatory approval required for
consummation of the Acquisition will not be obtained; or
(e) on or after December 31, 1995 if the Closing has not then occurred.
9.04 Effect of Termination. The termination of this Agreement pursuant to
Sections 9.02 or 9.03 of this Article 9 shall not release any party hereto
from any liability or obligation to the other party hereto arising from (i) a
breach of any provision of this Agreement occurring prior to the termination
hereof or (ii) the failure of timely satisfaction of conditions precedent to
the obligations of a party to the extent that such failure of timely
satisfaction is attributable to the actions or inactions of such party.
10. MISCELLANEOUS PROVISIONS.
10.01 Expenses. Except as and to the extent specifically allocated otherwise
herein, each of the parties hereto shall bear its own expenses, whether or not
the transactions contemplated hereby are consummated.
10.02 Certificates. All statements contained in any certificate
("Certificate") delivered by or on behalf of BANK ONE or CNB pursuant to this
Agreement or in connection with the transactions contemplated hereby shall be
deemed to be representations and warranties of the party delivering the
Certificate hereunder. Each such Certificate shall be executed on behalf of
the party delivering the Certificate by duly authorized officers of such party.
10.03 Termination of Representations and Warranties. The respective
representations and warranties of BANK ONE and CNB contained or referred to
in this Agreement or in any Certificate, schedule, or other instrument
delivered or to be delivered pursuant to this Agreement shall terminate at the
Closing, except for:
(a) those representations and warranties contained in any warranty deeds
delivered by BANK ONE to CNB at the Closing;
(b) those representations and warranties contained in any bill of sale
relating to the Assets delivered by BANK ONE to CNB at Closing;
(c) those representations and warranties contained in any instrument of
assumption or in any Certificate in the forms of Schedule P and Schedule J, r
espectively, attached hereto and delivered by CNB to BANK ONE at the Closing;
(d) those representations and warranties contained in any Certificate in
the form of Schedule L attached hereto, delivered by BANK ONE to CNB at the
Closing; and
(e) those representations and warranties of BANK ONE contained in Section
3.01(o) of thisAgreement.
10.04 Waivers. Each party hereto, by written instrument signed by duly
authorized officers of such party, may extend the time for the performance of
any of the obligations or other acts of the other party hereto and may waive,
but only as affects the party signing such instrument:
(a) any inaccuracies in the representations or warranties of the other
party contained or referred to in this Agreement or in any document delivered
pursuant hereto;
(b) compliance with any of the covenants or agreements of the other party
contained in this Agreement;
(c) the performance (including performance to the satisfaction of a party
or its counsel) by the other party of such of its obligations set out herein;
and
(d) satisfaction of any condition to the obligations of the waiving party
pursuant to this Agreement.
10.05 Notices. All notices and other communications hereunder may be made
by mail, hand-delivery or by courier service and notice shall be deemed to
have been given when received; provided, however, if notices and other
communications are made by nationally recognized overnight courier service for
overnight delivery, such notice shall be deemed to have been given one business
day after being forwarded to such a nationally recognized overnight courier
service for overnight delivery.
If to BANK ONE:
Bank One, Steubenville, National Association
Attention: William D. Wolter, President & Chief Executive Officer
401 Market Street
Steubenville, Ohio 43952
With a copy to:
BANC ONE CORPORATION
Attention: Steven A. Bennett, Senior Vice President
100 East Broad Street
Columbus, Ohio 43271-0158
If to CNB:
Columbus National Bank
Attention: Jeremy C. McCamic, Chairman
c/o American Bancorporation
Hawley Building
1025 Main Street, Suite 800
Wheeling, West Virginia 26003
or such other person or address as any such party may designate by notice to
the other parties, and shall be deemed to have been given as of the date
received.
10.06 Parties in Interest: Assignment; Amendment. This Agreement is binding
upon and is for the benefit of the parties hereto and their respective
successors, legal representatives, and assigns, and no person who is not a
party hereto (or a successor or assignee of such party) shall have any rights
or benefits under this Agreement, either as a third party beneficiary or
otherwise. This Agreement cannot be assigned, and this Agreement cannot be
amended or modified, except by a written agreement executed by the parties
hereto or their respective successors and assigns.
10.07 Headings. The headings, table of contents, and index to defined terms
(if any) used in this Agreement are inserted for convenience of reference only
and are not intended to be a part of or to affect the meaning or interpretation
of this Agreement.
10.08 Terminology. The specific terms of art that are defined in various
provisions of this Agreement shall apply throughout this Agreement (including
without limitation each Schedule hereto), unless expressly indicated otherwise.
In addition, the following terms and phrases shall have the meanings set forth
for purposes of this Agreement (including such Schedule):
(a) The term "business day" shall mean any day other than a Saturday,
Sunday, or a day on which CNB is closed in accordance with the laws of the
State of Ohio or the United States of America. Any action, notice, or right
which is to be taken or given or which is to be exercised or lapse on or by a
given date which is not a business day may be taken, given, or exercised, and
shall not lapse, until the next business day following.
(b) The term "affiliate" shall mean, with respect to any person, any other
person directly or indirectly controlling, controlled by or under common
control with such person.
(c) The term "Permitted Exceptions" shall mean, with respect to the Leased
Real Estate, (i) those five standard exceptions appearing as Schedule B items
in a standard ALTA leasehold title insurance policy, and any other exceptions,
restrictions, easements, rights of way, and encumbrances referenced in the
Title Commitment delivered by BANK ONE to CNB as indicated in Section 2.01 (c)
of this Agreement; (ii) statutory liens for current taxes or assessments not
yet due, or if due not yet delinquent, or the validity of which is being
contested in good faith by appropriate proceedings; (iii) such other liens,
imperfections in title, charges, easements, restrictions, and encumbrances
which, individually and in the aggregate, do not materially detract from the
value of, or materially interfere with the present use of, any property s
ubject thereto or affected thereby; and (iv) such other exceptions as are
approved by CNB in writing.
(d) The term "person" shall mean any individual, corporation partnership,
limited liability company, association, trust, or other entity, whether
business, personal, or otherwise.
(e) Unless expressly indicated otherwise in a particular context, the
terms "herein," "hereunder," "hereto," "hereof," and similar references refer
to this Agreement in its entirety and not to specific articles, sections,
schedules, or subsections of this Agreement. Unless expressly indicated
otherwise in a particular context, references in this Agreement to enumerated
articles, sections, and subsections refer to designated portions of this
Agreement (but do not refer to portions of any Schedule unless such Schedule
is specifically referenced) and do not refer to any other document.
(f) The term "subsidiary" shall mean a corporation, partnership, limited
liability company, joint venture, or other business organization more than 50%
of the voting securities or interests in which are beneficially owned or
controlled by the indicated parent of such entity.
10.09 Flexible Structure. References in this Agreement to federal or state
laws or regulations, jurisdictions, or chartering or regulatory authorities
shall be interpreted broadly to allow maximum flexibility in consummating the
transactions contemplated hereby in light of changing business, economic, and
regulatory conditions. Without limiting the foregoing, in the event BANK ONE
and CNB agree in writing to alter the legal structure of the Acquisition
contemplated by this Agreement references in this Agreement to such laws,
regulations, jurisdictions, and authorities shall be deemed to be altered to
reflect the laws, regulations, jurisdictions, and authorities that are
applicable in light of such change.
10.10 Press Releases. BANK ONE and CNB shall approve the form and substance
of any press release of any matters relating to this Agreement issued by the
other.
10.11 Entire Agreement. This Agreement supersedes any and all oral or
written agreements and understandings heretofore made relating to the subject
matter hereof and contains the entire agreement of the parties relating to the
subject matter hereof All schedules, exhibits, and appendices to this Agreement
are incorporated into this Agreement by reference and made a part hereof.
10.12 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Ohio and the National Banking
Laws of the United States.
10.13 Counterparts. This Agreement may be executed in several counter parts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10.14 Tax Matters. CNB and BANK ONE agree that they will file applicable
tax returns and other related schedules and documents based on the allocations
in this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized, all as of the
date first above written.
Bank One, Steubenville,
National Association
ATTEST:
/s/ David A. Black By: /s/ William D. Wolter
President & CEO
Columbus National Bank
ATTEST:
/s/ Jeffrey A. Baran By: /s/ Jeremy C. McCamic
Chairman of American Bancorporation
and Authorized Signator
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 11,064,486
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 9,696,000
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<SHORT-TERM> 25,257,519
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<COMMON> 7,824,185
0
0
<OTHER-SE> 20,352,507
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<INTEREST-DEPOSIT> 2,618,465
<INTEREST-EXPENSE> 3,018,051
<INTEREST-INCOME-NET> 3,857,238
<LOAN-LOSSES> 0
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<INCOME-PRETAX> 1,374,064
<INCOME-PRE-EXTRAORDINARY> 870,671
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<NET-INCOME> 870,671
<EPS-PRIMARY> 0.56
<EPS-DILUTED> 0.56
<YIELD-ACTUAL> 0454
<LOANS-NON> 798,000
<LOANS-PAST> 659,000
<LOANS-TROUBLED> 705,000
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<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
