<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported)
September 15, 1997
LNB Bancorp, Inc.
(Exact name of the registrant as specified in its charter)
Ohio 0-13203 34-1406303
(State or other jurisdiction of (SEC File No.) (I.R.S. Employer
incorporation or organization) Identification No.)
457 Broadway, Lorain, Ohio 44052 - 1769
(Address of principal executive offices) (Zip Code)
(440) 244 - 6000
Registrant's telephone number, including area code
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
<PAGE>2
Item 5. Other Events
Acquisition of three (3) KeyBank Branches
Effective September 15, 1997, LNB Bancorp, Inc., (the "Registrant"), acting
through its wholly-owned subsidiary Lorain National Bank, acquired
from KeyBank, National Association, (KeyBank), Cleveland, Ohio, certain
assets and assumed certain deposit and other liabilities of three KeyBank
branch offices in Lorain County, Ohio. The acquisition was effected
through the purchase and assumption of certain assets and liabilities of
KeyBank by the Registrant, pursuant to a Branch Purchase and Assumption
Agreement dated as of April 10, 1997, a copy of which is attached hereto
as Exhibit 99.1, and incorporated herein by reference, (the "Agreement").
Lorain National Bank assumed approximately $45 million in deposit
liabilities and purchased approximately $18 million in (i) commercial
loans, (ii) second mortgages, (iii) home equity loans and other loans to
businesses and customers located within or in areas proximate to the
communities served by the branches, (iv) certain fixed assets, (v) real
property related to the owned branches, (vi) certain lease obligations
with respect to the leased branches, and (vii) cash at the branches.
Pursuant to the Agreement, Lorain National Bank extended employment offers
to all seventeen employees associated with the three branches acquired.
The assets acquired from KeyBank by Lorain National Bank, Lorain, Ohio,
included the physical premises of (or the leases with respect to) the
three branches acquired. Lorain National Bank also acquired substantially
all of the personal property in these branches. The three (3) former
KeyBank branches opened for business as Lorain National Bank branches on
September 15, 1997.
KeyBank National Association, is a national banking association with its
headquarters located in Cleveland, Ohio. There is no relationship between
KeyBank National Association and LNB Bancorp, Inc. and its wholly-owned
subsidiary Lorain National Bank.
Lorain National Bank intends to continue to operate two (2) of the
acquired branches. The location of these branch offices are as follows:
1920 Cooper Foster Park Road
Lorain, Ohio 44052
6395 Midway Mall Boulevard
Elyria, Ohio 44035
Lorain Nationl Bank intends to operate the Lorain branch office at 383
Broadway, Lorain, Ohio, 44052, until November 14, 1997 at which time it
will be consolidated with the Main Office of Lorain National Bank at
457 Broadway, Lorain, Ohio, 44052. Lorain National Bank has not determined
the ultimate disposition of the building at 383 Broadway, Lorain, Ohio,
44052.
The transaction will be accounted for as a purchase, and accordingly, the
acquired assets and liabilities will be recorded based on the fair values
at the date of acquisition. For further information, reference is made to
the Registrant's press release dated September 16, 1997, which is attached
hereto as Exhibit 99.2 and incorporated herein by reference.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits:
99.1 Branch Purchase and Assumption Agreement by and between
KeyBank National Association and Lorain National Bank,
dated April 10, 1997.
99.2 The press release dated September 16, 1997 of Lorain
National Bank, the wholly-owned subsidiary of LNB Bancorp,
Inc.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LNB BANCORP, INC.
(registrant)
Date: October 2, 1997 /s/ Gregory D. Friedman
_________________________
Gregory D. Friedman,
Senior Vice President,
Chief Operating Officer and
Chief Financial Officer
Date: October 2, 1997 /s/ Mitchell J. Fallis
_________________________
Mitchell J. Fallis,
Vice President and
Chief Accounting Officer
<PAGE>5
LNB Bancorp, Inc.
Form 8-K
Exhibit Index
Exhibit Page
Number Number
99.1 Branch Purchase and Assumption Agreement 06
by and between KeyBank National
Association and Lorain National Bank
99.2 Lorain National Bank Press Release 42
<PAGE>6
LNB Bancorp, Inc.
Exhibit to Form 8-K
Exhibit 99.1
Branch Purchase and Assumption Agreement by and between
KeyBank National Association and Lorain National Bank,
dated April 10, 1997
<PAGE>7
Branch Purchase and Assumption Agreement
by and between
KeyBank National Association
and
Lorain National Bank
Dated as of
April 10, 1997
<PAGE>8
Index of Definitions
Agreed Value shall mean, with regard to the Owned Real Estate and the
Leasehold Estate, its value as reflected by the Appraisal. Agreed Value
shall mean, with regard to the furniture, fixture and equipment which
constitute part of the Assets, the net book value determined as of the
most recent month end preceding the Closing Date under generally accepted
accounting principles (the "Net Book Value") of such furniture, fixture
and equipment. In no event shall the Agreed Value of the furniture,
fixtures and equipment at any Branch be less than $5,000.00.
Appraisal shall mean, with regard to the Owned Real Estate and the
Leasehold Estate, a limited summary format appraisal of its Fair Market
Value furnished by an Appraiser reasonably acceptable to Seller and
Purchaser. For purposes of this Agreement, "Appraiser" shall mean a
reputable appraiser certified as an MIA appraiser with at least five (5)
years' experience within the previous ten (10) years as a real estate
appraiser working in the geographic region in which the Owned Real Estate
or Leasehold Estate to be appraised is located, with knowledge of market
values and practices. The cost of the Appraisal shall be paid equally by
each party hereto.
Branch(es) shall mean each of Seller's branches identified on Schedule A
hereto.
Code shall mean the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
Encumbrance shall mean all mortgages, claims, liens, encumbrances,
easements, limitations, restrictions, commitments and security interests,
except for statutory liens securing payments not yet due, liens incurred
in the ordinary course of business and such other liens or encumbrances
which do not materially adversely affect the use of the properties or
assets subject thereto or affected thereby or which otherwise do not
materially impair business operations at such properties.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended.
Excluded Deposits shall mean: (a) any individual retirement account or
similar account created by a trust for the exclusive benefit of an
individual or his beneficiaries in accordance with the provisions of
Section 408 of the Code and any simplified employee pension account
established in accordance with Section 408(k) of the Code which hold
investments in non-deposit instruments; (b) deposits which have been
pledged to secure, or as to which the owner is an obligor with regard to,
any extension of credit by Seller or an affiliate of Seller other than a
Loan, (c) in the event that the Loans are rejected by Purchaser pursuant
to Section 1.08(b) hereof, deposits which have been pledged to secure any
Loan, and (d) any deposits obtained directly or indirectly through a
"deposit broker" (as that term is defined in Section 337.6(a)(5) of the
Rules and Regulations of the FDIC, 12 CFR 337.6(a)(5)).
Fair Market Value shall mean, with regard to the Owned Real Estate and the
Leasehold Estate, the price in terms of money which it will bring, free
and clear of all indebtedness and, in the case of the Leasehold Estate,
subject to all of the terms of the Lease creating such Leasehold Estate,
if exposed to the open market, allowing a reasonable time to find a
purchaser, who buys with the intention of using the Owned Real Estate or
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the Leasehold Estate for conducting the business of banking.
Federal Funds Rate shall mean the "near closing bid" federal funds rate
published in the Wall Street Journal on the first business day following
the Closing.
Knowledge shall mean, with regard to Article X hereof, the actual present
knowledge as of the date hereof, without further investigation, of any
Vice President in KeyCorp's Corporate Real Estate Group and, with regard
to Sections 3.01(j) and 5.01 hereof, the actual present knowledge as of
the date hereof, without further investigation, of any officer that holds
the title of Senior Vice President or above of Seller and has
responsibility with respect to the operations conducted at the Branches.
Mediator shall mean the firm of Deloitte & Touche LLP.
Permitted Exceptions shall mean, with respect to the Owned Real Estate or
the Leasehold Estate, (a) those standard printed exceptions appearing as
Schedule B items in a standard American Land Title Association ("ALTA")
owner's or leasehold title insurance policy, as the case may be,
(provided, however, that if Purchaser elects to obtain a survey as to any
of the Owned Real Estate or Leasehold Estate, the Permitted Exceptions for
such Owned Real Estate or Leasehold Estate shall not include the standard
exception for matters that would be disclosed by a survey, but shall
include specific exceptions, if any, disclosed by such survey provided
that such specific exceptions are otherwise included in the definition of
Permitted Exceptions), (b) statutory liens for current real estate taxes
or assessments, both general and special, not yet due, or if due not yet
delinquent, or the validity of which is being contested in good faith by
appropriate proceedings; (c) all zoning laws and rulings, easements,
rights of way, and restrictions of record; (d) such other liens,
imperfections in title, charges, easements, restrictions, and encumbrances
(but in all cases excluding those which secure borrowed money) which
individually and in the aggregate are not material in character, amount,
or extent, or do not materially detract from the value of, or materially
interfere with, the present use of, any Owned Real Estate or any Leasehold
Estate subject thereto or affected thereby; (e) any exceptions to title
arising from the action, inaction, or status of Purchaser; and (f) such
other exceptions as are approved in writing by Purchaser.
Regulatory Approvals shall mean all approvals, permits, authorizations,
waivers, or consents of governmental agencies or authorities necessary or
appropriate to permit consummation of the transaction contemplated hereby.
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BRANCH PURCHASE AND ASSUMPTION AGREEMENT
This Branch Purchase and Assumption Agreement ("Agreement"), dated as of
April 10, 1997, is made by and between KeyBank National Association, a
national banking association ("Seller"), and Lorain National Bank, a
national banking association ("Purchaser"). Certain definitions used
herein are set forth in the Index of Definitions of this Agreement.
In consideration of the mutual promises hereinafter contained and other
good and valuable consideration, Seller and Purchaser hereby agree as
follows:
ARTICLE I
The Transaction
1.01 The Transaction. Subject to the terms and conditions set forth
in this Agreement, at the Closing, (a) Purchaser shall purchase the Assets
and shall assume the Liabilities, and Seller shall assign, transfer,
convey, and deliver to Purchaser, free and clear of all Encumbrances, all
of Seller's right, title and interest in and to such Assets and such
Liabilities and (b) Purchaser shall assume and thereafter honor and fully
and timely pay, perform and discharge all of Seller's obligations and
liabilities of every type and character relating to the Assets and
Liabilities. Purchaser understands and agrees that it is purchasing only
the Assets (and assuming only the Liabilities) specified in this Agreement
and, except as may be expressly provided for in this Agreement, Purchaser
has no interest in, right to, or obligations relating to any other
business relationship which Seller may have with any customer of any of
the Branches.
1.02 Assets and Liabilities Purchased and Assumed.
(a) Assets. For purposes of this Agreement, "Assets" shall mean:
(i) all real property owned by Seller on which Branches are
located, including all of Seller's rights in and to all
improvements thereon ("Owned Real Estate") and all leasehold
estates held by Seller ("Leasehold Estate") in and to any real
estate on which any of the Branches is situated, including all
of Seller's rights in and to all improvements thereon ("Leased
Real Estate");
(ii) all furniture, fixtures and equipment that are located in
or necessary for the conduct of business in the ordinary course
at any Branch (including Automated Teller Machines ("ATMs"), if
any, and branch teller and platform automation equipment, if
any);
(iii) safe deposit agreements relating to safe deposit boxes
located at the Branches;
(iv) all loans (exclusive of any reserve for possible loan
losses) that are attributable to the Branches, including all
loans made in the ordinary course of business consistent with
Seller's credit standards between the date of this Agreement
and the Closing, including all documents executed or delivered
in connection with any loan and any and all collateral relating
to any such loan and all rights in relation thereto attributable
to the Branches at the Closing (the "Loans") (unless the Loans
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are rejected by Purchaser pursuant to Section 1.08(b) hereof);
(v) all rights of Seller under any service or similar contracts
in effect as of the Closing Date with non-affiliated third-party
service providers which relate solely to the operations of the
Branches to the extent such contracts are assignable;
(vi) all cash on hand (i.e., all petty cash, vault cash, teller
cash, ATM cash, and prepaid postage) at the Branches as of the
Closing; and
(vii) all prepaid expenses identified as an asset on the final
closing statement.
(b) Liabilities. For purposes of this Agreement, "Liabilities"
shall mean all of Seller's obligations and liabilities of every
type and character relating to all deposit accounts, including
accrued interest, which are reflected on the books of Seller as
of the Closing and are attributable to the Branches, including,
without limitation, all passbook accounts, statement savings
accounts, checking, Money Market and NOW accounts, certificates
of deposit, individual retirement accounts, simplified employee
pension accounts, saving incentive match plan for employees
accounts, Keogh accounts, and repurchase agreements except for
the Excluded Deposits (the "Assumed Deposits"). Liabilities
shall also include:
(i) all obligations due under any service or similar contracts,
in effect at the Closing, relating to the operations of the
Branches, to the extent such contracts are included in
1.02(a)(v);
(ii) all of Seller's obligations and liabilities, arising from
and after the Closing Date, to the extent attributable to the
Assets and the Assumed Deposits; and
(iii) all accrued and unpaid expenses identified as a liability
on the final closing statement.
1.03 Preliminary Closing Statement and Payment.
(a) Preliminary Closing Statement. Not less than five (5) days
prior to the Closing Date, Seller shall deliver to Purchaser a
proposed preliminary closing statement, in the form of Schedule
B to this Agreement, completed as at a date mutually agreed to
by the parties. The parties shall agree upon the preliminary
closing statement before the Closing Date, and it shall be the
basis of a preliminary payment to be made to Purchaser's
account, or to Seller's account, as the case may be, on the
Closing Date (the "Preliminary Payment").
(b) Preliminary Payment. Subject to the terms and conditions hereof,
at the Closing, Seller shall wire transfer to Purchaser
immediately available funds equal to: (i) the sum of (A) the
amount of the Assumed Deposits (including accrued and unpaid
interest thereon) reflected on the preliminary closing statement
and (B) the amount of all accrued and unpaid expenses reflected
as a liability on the preliminary closing statement; less (ii)
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an amount equal to the sum of: (A) X.X% of the Assumed Deposits
based on a 30-day average prior to Closing; (provided, however,
that for purposes of this Section 1.03(b)(ii)(A), "Assumed
Deposits" shall not be deemed to include (1) any public funds or
(2) any amounts relating to repurchase agreements); (B) the
amount of cash on hand at the Branches as of the Closing;
the Agreed Value of all furniture, fixtures, and equipment
constituting part of the Assets; (D) the Agreed Value of the
Owned Real Estate and the Leased Real Estate; (E) the amount of
all prepaid expenses of Seller as reflected as an asset on the
preliminary closing statement; (F) the Net Book Value of all
Loans, plus accrued and unpaid interest thereon as reflected
on the preliminary closing statement; and (G) the amount of
estimated sales taxes, if any, to be paid by Purchaser in
connection with the transaction contemplated hereby.
(c) Purchaser Payment. In the event that the amount equal to
subclause (b)(ii) above exceeds the amount equal to subclause
(b)(i) above, the amount of such excess shall constitute an
amount due from Purchaser to Seller and shall be paid to Seller
at the Closing.
1.04 Final Closing Statement and Adjustment Payment. Not more than
fifteen (15) days after the Closing Date, Seller shall provide Purchaser
with a proposed final closing statement, which shall be calculated as of
the Closing Date and the parties shall promptly agree upon the final closing
statement. The final closing statement shall be in a form consistent with
the preliminary closing statement. On the first business
day after Purchaser agrees to the final closing statement or Seller is
notified of any determination as to the final closing statement under
Section 1.05 below, Seller shall wire transfer to Purchaser (or Purchaser
shall wire transfer to Seller, as the case may be) in immediately
available funds an amount equal to the amount by which the final payment
reflected on the final closing statement indicates an amount in excess of
(or any amount less than) the Preliminary Payment paid at Closing (the
"Adjustment Payment"), plus interest, at a rate per annum equal to the
Federal Funds Rate.
1.05 Disputes and Mediation; Payment of Fees. If Purchaser disagrees
with the final closing statement, then Purchaser shall contact Seller and
Purchaser and Seller shall cooperate to resolve the matters in dispute. If
the parties are unable to agree on a final closing statement, then Purchaser
or Seller may submit the matter to the Mediator which shall
determine all disputed portions of the final closing statement; provided,
however, that if the fees of the Mediator as estimated by the Mediator
would exceed 50% of the net amount in dispute, the parties agree that
such firm will not be engaged by either party and that such net amount in
dispute will be equally apportioned between Seller and Purchaser. The
parties shall each pay one-half of the fees and expenses of the Mediator.
The final closing statement, as agreed upon by the parties and/or determined
under this subsection, shall be final and binding upon the parties.
1.06 Proration of Certain Expenses. All prepaid expenses and all
accrued and unpaid expenses shall be prorated between Purchaser and Seller
as of the Closing Date; provided, however, that (I) all property Taxes as
to the Owned Real Estate shall be prorated on the basis of the most recently
certified tax duplicate and rates; (ii) all real property taxes
and other expenses or charges required to be paid by Seller as tenant
<PAGE>13
under any lease pursuant to which Seller leases any of the Leased Real
Property ("Lease") shall be prorated based upon amounts paid by Seller
during the current lease year as to any period that includes but extends
after the Closing Date; (iii) all utility payments paid (excluding any
such payment paid by Seller to a landlord, which shall be covered by
clause (ii) hereof) shall be prorated on the basis of the best information
available at the Closing Date. All security deposits under any Lease,
together with any accrued but unpaid interest payable thereon, shall be
credited to Seller. All prepaid expenses that are allocable to Purchaser
hereunder shall appear as an asset on the preliminary or final closing
statement. To the extent that expenses allocable to Seller hereunder have
been accrued and not paid by Seller prior to the Closing Date, they shall
appear as a liability on the preliminary or final closing statement.
There shall be no post-closing adjustment for any of the foregoing.
1.07 Allocation and Reimbursement of Real Estate Expenses. All
expenses attributable to the Owned Real Estate and the Leasehold Estate
incurred in connection with the acquisition of the Branches by Purchaser
shall be allocated to and solely borne by Purchaser except for standard
title insurance commitment fees and title examination fees for the Owned
Real Estate which shall be paid by Seller.
1.08 Loans.
(a) Loan Information. Prior to the date hereof, Seller provided to
Purchaser certain information relating to the Loans to be
transferred to Purchaser, which included, among other data,
summary information relating to loan delinquencies.
(b) Opportunity to Review and Reject Loans. Following the date
hereof, Purchaser shall be provided with the opportunity to
conduct a limited due diligence review of the Loans for the
purpose of determining whether Purchaser desires to purchase the
Loans in their entirety. Purchaser shall complete such due
diligence review within a period of fourteen (14) days after the
date upon which Purchaser is first provided access to
documentation relating to the Loans. Within seven (7) days
following the end of the fourteen (14) day period referred to in
the immediately preceding sentence, Purchaser shall notify
Seller as to whether Purchaser shall accept or reject the Loans,
provided however, that Purchaser shall only be permitted to
accept or reject all of the Loans other than overdraft lines
directly attributable to the Assumed Deposits. In the event
that Purchaser notifies Seller that it intends to reject the
Loans, the payment under Section 1.03(b) shall be calculated
without giving effect to any amounts described in (F)
thereunder.
(c) Loan Documentation. Seller shall indemnify Purchaser for any
and all losses which arise as a direct result of the failure of
Seller to have delivered to Purchaser all necessary
documentation with respect to any Loan, provided, however, that
Seller shall not be obligated to indemnify Purchaser pursuant to
this Section 1.08(c) in the event that Purchaser shall not have
notified Seller of the missing documentation within sixty (60)
days following the Closing. For purposes of this provision, a
"loss" shall mean a loss of the principal balance of the
affected Loan outstanding as of the Closing Date and any
interest accrued thereon.
<PAGE>14
1.09 Successor Custodian. Effective at the Closing, Seller hereby
appoints Purchaser as the successor custodian to Seller under the
Liabilities consisting of individual retirement accounts, simplified
employee pension accounts, saving incentive match plan for employee
accounts, and Keogh accounts and Purchaser hereby accepts from Seller the
appointment to serve in such capacity from and after the Closing Date.
ARTICLE II
Obligations of the Parties Prior to the Closing Date
2.01 Covenants of Seller. Seller hereby covenants to Purchaser that,
from the date hereof until the Closing Date or by such earlier time as may
be specified in this Agreement, it will do or cause the following to
occur:
(a) Operation of Branches. Seller shall continue to operate and
maintain the Branches in a manner consistent with its customary
practices and in a condition substantially the same as exists on
the date hereof (ordinary wear and tear and casualty excepted).
(b) Information Concerning Branches. Seller shall use its reasonable
efforts to furnish Purchaser, its agents, or representatives
reasonable access to, and permit Purchaser to make or cause to
be made such reasonable investigation of, information and
materials relating to the financial and physical condition of
the Branches as Purchaser reasonably deems necessary or
advisable; provided, further, that nothing in this Section
2.01(b) shall be deemed to require Seller to breach any
obligation of confidentiality or to reveal any proprietary
information, trade secrets, or marketing or strategic plans.
(c) Creation of Encumbrances. Seller shall not voluntarily create
any Encumbrances affecting the Owned Real Estate.
(d) Insurance. Seller will maintain in effect until and including
the Closing Date all casualty and public liability policies
relating to the Branches and maintained by Seller on the date
hereof or procure comparable replacement policies and maintain
such replacement policies in effect until and including the
Closing Date.
(e) Right to Intervene. In the event that any claim, protest, suit
or other proceeding is instituted against Purchaser under this
Agreement, Seller shall have the right, at its discretion and
expense, to intervene in such litigation, and Purchaser hereby
consents to such intervention.
(f) Retention of Certain Assets. Seller shall retain all Assets as
to which it has received notification pursuant to Section
2.02(c) hereof and the Book Value of such Assets shall not be
included in the calculation of the Preliminary Payment or the
Adjustment Payment.
2.02 Covenants of Purchaser. Purchaser hereby covenants to Seller
that, from the date hereof until the Closing Date or by such earlier time
as may be specified in this Agreement, it will do or cause the following
to occur:
(a) Certain Applications. Not later than twenty-one (21) days after
<PAGE>15
the date hereof, Purchaser shall prepare and submit for filing,
at no expense to Seller, applications to all regulatory agencies
required by Purchaser to obtain the Regulatory Approvals.
Purchaser shall promptly deliver to Seller a copy of such
applications and any supplement, amendment, or item of
additional information in connection therewith. Purchaser shall
also promptly deliver to Seller a copy of each material notice,
order, opinion, approval or denial and other item of
correspondence received by Purchaser from the regulatory
agencies and shall keep Seller promptly informed of developments
and progress with respect to such matters. Purchaser hereby
represents that it knows of no reason why it should not obtain
all Regulatory Approvals in a timely manner.
(b) Real Estate Lease Consents. In connection with the consent and
release noted in Section 2.03 hereof, Purchaser shall provide to
Seller within five (5) days after the date hereof current
financial information concerning Purchaser for Seller's
transmittal to the landlord under each Lease and shall provide
promptly to Seller any other information requested by such
landlord.
(c) Notice Regarding Certain Assets. In connection with the branch
teller and platform automation equipment described in Section
1.02(a)(ii) hereof, Purchaser shall notify Seller, in writing,
within forty-five (45) days of the date hereof, of any such
Assets that Purchaser shall not purchase.
2.03 Covenants of Both Parties. Seller hereby covenants to
Purchaser, and Purchaser hereby covenants to Seller, that, from the date
hereof until the Closing, such party shall cooperate fully in obtaining,
and make all reasonable efforts to obtain, any third party consents which
are required to consummate the transaction contemplated by this Agreement,
including, without limitation, (a) an estoppel certificate of each
landlord in the form attached hereto as Schedule G, if the landlord agrees
to execute such estoppel certificate, (b) the written consent of each
landlord under a Lease to the assignment and assumption by Purchaser of
such Lease or, if the landlord does not so consent, and if such consent is
necessary to validly effect such assignment or assumption or sublease, to
a sublease of the premises demised by such Lease, and (c) in either case,
the release of Seller from all obligations and liabilities under any such
Lease from and after the Closing Date (provided, however, that this
Section 2.03 shall not obligate Seller to make any payment or to execute
any indemnification or guaranty or other similar instrument which would
render Seller liable for any obligations, liabilities or duties of
Purchaser arising out of such Lease from and after the Closing Date). Each
of Seller and Purchaser also hereby covenant to the other that it shall
cooperate fully in promptly selecting an Appraiser and shall make all
reasonable efforts to obtain an Appraisal of the Owned Real Property and
the Leasehold Estate within thirty (30) days of the date hereof.
2.04 Seller's and Purchaser's Rights and Obligations Regarding Title
Matters.
(a) Title Commitments. Seller, at its sole expense, shall deliver
to Purchaser not later than thirty (30) days after the date
hereof, with respect to the Owned Real Estate, title commitments
for issuance of ALTA Owner's Policies of Title Insurance
(collectively, the "Title Commitments" and individually, a
<PAGE>16
Title Commitment") issued not earlier than thirty (30) days
prior to the execution of this Agreement and issued by a title
insurance company authorized to do business in the state in
which the Owned Real Estate is located designated by Seller (the
"Title Company").
(b) Surveys. For thirty (30) days from the date hereof, Purchaser
shall have the right, but not the obligation, to obtain, at
Purchaser's sole cost and expense, (i) surveys as to any or all
of the Owned Real Estate or the Leasehold Estate and (ii) title
commitments for issuance of ALTA Leasehold Policies of Title
Insurance as to the Leasehold Estate from the Title Company
("Leasehold Title Commitment"). Purchaser shall cause a true and
complete copy of each survey to be promptly delivered to Seller
and to the Title Company. Purchaser shall cause a true and
complete copy of each Leasehold Title Commitment to be promptly
delivered to Seller.
(c) Title Defects. (i) Ten (10) days after receipt by Purchaser of
an original Title Commitment or any survey or Leasehold Title
Commitment obtained pursuant to Section 2.04(b) hereof,
Purchaser shall give Seller and the Title Company written notice
of any defect(s) disclosed in such Title Commitment, survey or
Leasehold Title Commitment that: (w) is (are) not included in
the exceptions specifically identified on the Title Commitment
or Leasehold Title Commitment; (x) is(are) not included in
clauses (a)-(d) of the definition of Permitted Exceptions
related to the applicable Owned Real Estate or Leased Real
Estate; (y) that materially adversely affect(s) the business of
the Branch situated upon such Owned Real Estate or Leased Real
Estate; and (z) which Purchaser does not approve. Failure of
Purchaser to provide such notice on a timely basis shall
constitute a waiver by Purchaser of any matter(s) disclosed in
such Title Commitment, survey or Leasehold Title Commitment and
thereupon such matter(s) shall be deemed included in clause (b)
of the definition of Permitted Exceptions set forth in this
Agreement.
(ii) If the notice referred to in (i) above is timely given by
Purchaser, Seller shall, within ten (10) days of such notice,
notify Purchaser and the Title Company as to whether Seller
shall cure or remove any defect(s). Following Seller's notice to
Purchaser and the Title Company that Seller elects not to cure
any defect(s), Purchaser must elect, within five (5) days, as
its sole remedy hereunder with respect to such defect(s), to
terminate this Agreement as to the Assets and Liabilities
attributable to the Branch situated upon the affected Owned Real
Estate and/or Leased Real Estate. Purchaser's failure to make
such an election shall be deemed to be a waiver of such
defect(s) and such defect(s) shall be included in the Permitted
Exceptions and shown as Permitted Exceptions in the deed and the
title policy relating to such Owned Real Estate or Leasehold
Estate.
(iii) Seller shall cause the Title Company to update the Title
Commitments and Purchaser may, at its sole cost and expense,
cause the Title Company to update Leasehold Title Commitments,
as of the business day prior to the Closing Date. In the event
that the updated Title Commitment or Leasehold Title Commitment
<PAGE>17
as to any Owned Real Estate or Leasehold Estate discloses any
defect(s) not included in the original Title Commitment, survey
or Leasehold Title Commitment, the procedure set forth in (ii)
above shall apply.
ARTICLE III
Representations and Warranties
3.01 Representations and Warranties of Seller. Seller represents and
warrants to Purchaser as follows:
(a) Corporate Organization and Authority. Seller is a national
banking association duly organized, validly existing, and in
good standing under the laws of the United States of America
with corporate power to carry on its business as presently
conducted at the Branches. Seller is an insured bank, as
defined in the Federal Deposit Insurance Act and applicable
regulations thereunder ("FDIA"). Seller is a member of the Bank
Insurance Fund of the FDIC ("BIF") and pays deposit insurance
assessments to BIF and the Savings Association Insurance Fund.
Seller is in compliance in all material respects with all
applicable fair lending laws, rules and regulations, including
without limitation the Community Reinvestment Act of 1977, as
amended. Seller has all requisite corporate power and authority
and has taken all corporate action necessary to execute and
deliver this Agreement and to consummate the transaction
contemplated hereby, and this Agreement is a valid and binding
obligation of Seller in accordance with its terms subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditor's rights
generally, whether applied at law or equity, and to general
equity principals.
(b) Effective Agreement. Subject to the receipt of any and all
Regulatory Approvals and required third party consents, the
execution, delivery, and performance of this Agreement by Seller
and the consummation of the transaction 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 an Encumbrance, under any of the
provisions of the Charter or By-Laws of Seller, under any
judgment, decree, or order, under any law, rule, or regulation
of any government or agency thereof, or under any material
contract or instrument to which Seller is subject, where such
conflict, breach, violation, default, acceleration, or
Encumbrance would have a material adverse effect on the business
of any Branch or Seller's ability to perform its obligations
hereunder.
(c) Individual Retirement Accounts. The Individual Retirement
Custodial Account Agreement (i.e. Internal Revenue Service Model
Form 5305-A with certain supplementary provisions) used at the
Branches materially meets the criteria for the establishment of
an "individual retirement account" as specified in Section
408(a) of the Code in all material respects.
(d) Simplified Employee Pension Accounts. The Simplified Employee
<PAGE>18
Pension - Individual Retirement Account Agreement (i.e.
Internal Revenue Service Model Form 5305-SEp with certain
supplementary provisions) and the Salary Reduction and Other
Elective Simplified Employee Pension - Individual Retirement
Account Agreement (i.e. Internal Revenue Service Model Form
5305A-SEP with certain supplementary provisions) used at the
Branches materially meets the criteria for the establishment of
a "simplified employee pension" as specified in Section 408(k)
of the Code in all material respects.
(e) Saving Incentive Match Plan for Employees Accounts. The Saving
Incentive Match Plan for Employees of Small Employers Agreement
(i.e. Internal Revenue Service Model Form 5305-SIMPLE with
certain supplementary provisions) used at the Branches
materially meets the criteria for the establishment of a "saving
incentive match plan for employees" as specified in Section
408(p) of the Code in all material respects.
(f) Keogh Accounts. The custodial agreement for the retirement plan
for self-employed individuals used at the Branches materially
meets the criteria for the establishment of a "Keogh plan" as
specified in Section 401(a) and Section 401(c) of the Code in
all material respects.
(g) No Broker. No broker or finder, or other party or agent
performing similar functions, has been retained by Seller or is
entitled to be paid based upon any agreements, arrangements, or
understandings made by Seller in connection with the transaction
contemplated hereby, and no brokerage fee or other commission
has been agreed to be paid by Seller on account of such
transaction.
(h) Environmental. Seller makes the representations and warranties
to Purchaser set forth in Section 10.01 hereof.
(i) Assets. The fixed Assets material to the operations of each of
the Branches are in adequate working condition for the conduct
of the business at each of the Branches currently conducted by
Seller except for ordinary wear and tear.
(j) Deposits. All of the Assumed Deposits have been administered
and, to Seller's knowledge, originated, in material compliance
with the documents governing the relevant type of deposit
account and all applicable laws. The Assumed Deposits are
insured by the Bank Insurance Fund or the Savings Association
Insurance Fund of the FDIC up to the current applicable maximum
limits, and no action is pending or, to Seller's knowledge,
threatened by the FDIC with respect to the termination of such
insurance.
(k) Limitation of Warranties. Except as otherwise specifically
provided for in this Agreement, Seller makes no representations
or warranties whatsoever with respect to the Assets or the
Liabilities, express or implied, including, without limitation,
any warranties with respect to merchantability, fitness, title,
enforceability, collectibility, documentation or freedom from
liens or encumbrances (in whole or in part).
<PAGE>19
3.02 Representations and Warranties of Purchaser. Purchaser
represents and warrants to Seller as follows:
(a) Corporate Organization, Authority and Compliance. Purchaser is
a national bank duly organized, validly existing, and in good
standing under the laws of the United States of America with
corporate power to own its properties and to carry on its
business as presently conducted, except where the failure of
Purchaser to have such corporate power would not have a material
adverse effect on the ability of Purchaser to perform its
obligations hereunder. Purchaser is an insured bank, as defined
in the FDIA. Purchaser has all requisite corporate power and
authority and has taken all corporate action necessary to
execute and deliver this Agreement and to consummate the
transaction contemplated hereby, and this Agreement is a valid
and binding obligation of Purchaser in accordance with its terms
subject, as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditor's
rights generally, whether applied at law or equity, and to
general equity principals. Purchaser is in compliance with all
applicable fair lending laws, rules and regulations including
but not limited to the Community Reinvestment Act of 1977, as
amended.
(b) Effective Agreement. Subject to the receipt of any and all
Regulatory Approvals and required third party consents, the
execution, delivery, and performance of this Agreement by
Purchaser and the consummation of the transaction 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 an Encumbrance, under
any of the provisions of the Articles of Association or By-Laws
of Purchaser, under any judgment, decree, or order, under any
law, rule, or regulation of any government or agency thereof, or
under any material contract or instrument to which Purchaser is
subject, where such conflict, breach, violation, default,
acceleration, or lien would have a material adverse effect on
Purchaser's ability to perform its obligations hereunder.
(c) No Broker. No broker or finder, or other party or agent
performing similar functions, except Austin Associates, Inc.,
has been retained by Purchaser or is entitled to be paid based
upon any agreements, arrangements, or understandings made by
Purchaser in connection with the transaction contemplated
hereby, and no brokerage fee or other commission has been agreed
to be paid by Purchaser on account of such transaction.
(d) Regulatory Matters. (i) Except as previously disclosed in
writing to Seller, there are no pending, or, to Purchaser's
knowledge, threatened or contemplated, disputes or controversies
(including any written order, decree, agreement or memorandum of
understanding, or Commitment Letter or similar submission) with,
to or between Purchaser and any federal, state or local
governmental agency or authority that, individually or in the
aggregate, would have a material adverse effect on Purchaser's
ability to perform any of its obligations hereunder.
(ii) Purchaser is, and on a pro forma basis giving effect
<PAGE>20
to the transaction contemplated hereby will be, (A) at least
"well capitalized", as defined for purposes of the FDIA, and
(B) in compliance with all capital requirements, standards and
ratios required by each state or federal bank regulator with
jurisdiction over Purchaser, including, without limitation, any
such higher requirements, standard or ratio as shall apply to
institutions engaging in the acquisition of insured institution
deposits, assets or branches, and no such regulator is likely
to, or has indicated that it will, condition any of the
Regulatory Approvals upon an increase in Purchaser's capital or
compliance with any capital requirements, standard or ratio.
(iii) Purchaser has no knowledge that it will be required to
divest deposit liabilities, branches, loans or any business or
line of business as a condition to the receipt of any of the
Regulatory Approvals.
(iv) Each of the subsidiaries or affiliates of Purchaser that
is an insured depository institution was rated "Outstanding"
following its most recent Community Reinvestment Act examination
by the regulatory agency responsible for its supervision.
Purchaser has received no notice of and has no knowledge of any
planned or threatened objection by any community group to the
transactions contemplated hereby.
(e) Financing Available. Purchaser's ability to consummate the
transactions contemplated by this Agreement is not contingent on
raising any equity capital, obtaining specific financing
thereof, obtaining the consent of any lender or any other
matter.
3.03 Survivability; No Indemnification. The representations and
warranties of Seller and Purchaser 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 not survive beyond the
Closing and neither Seller nor Purchaser shall have any obligation
whatsoever after the Closing to indemnify, defend, or hold the other
harmless for any loss, cost, charge, liability or expense arising as a
result of the inaccuracy or breach of any such representation or warranty.
Nothing in this provision shall affect the rights and obligations of the
parties provided for in Sections 1.08(c), 4.02(a), 6.03 and 10.02 hereof.
ARTICLE IV
Employee Benefits
4.01 List of Branch Employees; Handbook. Names of all employees
(including full and part-time employees, employees on short term
disability and employees on leave of absence and excluding employees on
long-term disability) employed by the Seller and assigned to the Branches
as of the date hereof (the "Branch Employees"), and, as to each Branch
Employee, such employee's date of hire and current compensation are listed
on attached Schedule C. At least ten days prior to the Closing Date,
Seller shall update Schedule C to a date within 15 days prior to the
Closing Date.
4.02 Actions to be Taken by Purchaser with Respect to Branch
Employees. Purchaser covenants to Seller that it will do or cause the
following to occur:
<PAGE>21
(a) Offer of Employment. Seller shall make available and
Purchaser shall hire, as of the Closing Date, all Branch
Employees, at salaries, or at base wages, not less than the
current salaries or base wages paid to such Branch Employees as
of the Closing Date. Purchaser shall be responsible for all
obligations (including any obligation to provide notices) or
liabilities, if any, which may arise in connection with any
Branch Employee under the Workers Adjustment and Retraining
Notification Act (the "WARN Act") and Purchaser shall indemnify
Seller for any and all losses which Seller may incur under the
WARN Act in connection with any Branch Employee due to actions
taken by Purchaser.
(b) Employee Benefits. All Branch Employees shall be eligible to
participate in Purchaser's employee benefit plans and fringe
benefit plans (including, without limitation, pension and profit
sharing plans, retirement income and post retirement welfare
benefits, health insurance benefits (medical and dental),
disability, life and accident insurance, sickness benefit,
vacation, employees' loans, and banking privileges) on the same
basis as such plans and benefits exist and are offered to
employees of Purchaser with comparable positions with Purchaser.
Purchaser shall credit such Branch Employees for their length of
service with Seller, its predecessors, or its affiliates, for
all purposes under each employee benefit and fringe benefit plan
to be provided by Purchaser to such Branch Employees and for
purposes of vesting and eligibility (but not for purposes
of benefit accrual) under any pension benefit plan as defined in
Section 3(2) of ERISA.
(c) Credited Sickness Days. If Purchaser offers a salary
continuation or similar program for employees unable to work for
medical reasons, the Branch Employees shall be credited under
any program of Purchaser with at least the number of sickness
and/or personal benefit days accrued under Seller's program at
the Closing Date. After the Closing Date, the Branch Employees
shall accrue additional sickness and/or personal benefit days in
accordance with the terms of Purchaser's program.
(d) Pre-existing Condition. Purchaser agrees that any pre-existing
condition clause in any of Purchaser's health or disability
insurance coverage shall not be applicable to the Branch
Employees or their dependents.
(e) Severance Pay. Seller's severance policy is attached hereto as
Schedule D. Effective as of the Closing Date, Purchaser shall
assume liability for all severance benefits payable to any
Branch Employee who is terminated by Purchaser after the Closing
Date. For a period of one (1) year following the Closing Date,
Purchaser shall provide such benefit pursuant to individual
separation pay agreements entered into with each Branch Employee
on terms and conditions consistent in all respects with Seller's
severance policy (provided, however, that for purposes of
determining whether the terms of Purchaser's separation pay
agreements are consistent with Seller's severance policy (i) the
second sentence of Section 2.11 of Seller's severance policy
shall be read exactly as such sentence is currently contained
therein, except that for purposes of determining whether a
position is comparable, the reference to a reduction in a Branch
<PAGE>22
Employee's Base Weekly Salary (as defined under Seller's
severance policy) shall be revised to require a 12% or
greater reduction, as compared to 10% or greater reduction and
(ii) references to certain types of benefits to be paid in
addition to the separation pay benefit to be provided in
accordance with the Separation Pay Schedule included in Section
3.3(c) shall refer to those benefits offered to current
employees of the Purchaser), and Purchaser shall compute
severance benefits by giving all Branch Employees full credit
for all years of service with Seller, its affiliates, and
predecessors, in accordance with Section 4.02(b). After
the initial one-year period, Purchaser shall provide Branch
Employees with severance benefits in accordance with Purchaser's
severance policy, if any, in accordance with their years of
service as credited under this Agreement.
(f) Successor Employer. Purchaser agrees it will qualify as a
successor employer of Branch Employees for withholding tax
purposes.
(g) Payment of Claims. Purchaser assumes responsibility for (I)
payment of any medical, dental, health and disability claims
incurred by Branch Employees on or after the Closing Date and
(ii) Continuation Coverage (as defined in Section 4.03(d) below)
to any Branch Employee (and each Branch Employee's qualified
beneficiaries) whose qualifying event occurs on or after the
Closing Date.
4.03 Actions to be Taken by Seller with Respect to Branch Employees.
Seller covenants to Purchaser that it will do or cause the following to
occur:
(a) Accrued Benefits. Seller agrees to remain responsible for the
payment of all accrued benefits to such Branch Employees who are
participants or retirees in accordance with the terms of
Seller's retirement income plans. Purchaser shall not at any
time assume any liability for the benefits of any active or any
terminated, vested, or retired participants whose benefit
accrued prior to the Closing Date under Seller's retirement
income plans.
(b) Payment of Claims. Seller shall retain the responsibility for
payment of all medical, dental, health and disability claims
incurred by a Branch Employee prior to the Closing Date, and
Purchaser shall not assume any liability with respect to such
claims.
(c) Continuation Coverage. Seller shall be responsible for
providing any Branch Employee whose "qualifying event," within
the meaning of Section 4980B(f) of the Code, occurs prior to the
Closing Date (and such Branch Employee's "qualified
beneficiaries" within the meaning of Section 4980B(g) of the
Code) with the continuation of group health coverage required by
Section 4980B(f) of the Code ("Continuation Coverage") under the
terms of the health plan maintained by Seller.
(d) Retired or Terminated Branch Employees. Seller agrees that it
shall retain, consistent with its normal employment practices,
all liability and obligation, if any (including, without
<PAGE>23
limitation, the liability and obligation for all wages, salary,
vacation pay and unemployment, medical, dental, health and
disability benefits), for those former employees of the Branches
who retired or terminated employment prior to the Closing Date,
but shall in all other instances cease to have any liability for
Branch Employees with regard to the foregoing provisions on or
after the Closing Date, except as otherwise required by law.
4.04 Seller's Pension and Savings Plan. On and after the Closing
Date, Seller shall vest all of the Branch Employees in the KeyCorp Cash
Balance Pension Plan ("Seller's Pension Plan") and the KeyCorp 401(K)
Savings Plan ("Seller's Savings Plan").
ARTICLE V
Tax Matters
5.01 Deposit Accounts Documentation. To Seller's Knowledge, with
respect to the Assumed Deposits, Seller is in compliance with the law and
IRS regulations relative to obtaining from depositors executed IRS Forms
W-8 and W-9 or is back-up withholding on the applicable account.
5.02 Assistance and Cooperation; Tax Matters. After the Closing
Date, each of Seller and Purchaser shall, with respect to the Assets or
income therefrom, the Assumed Deposits or payments in respect thereof, or
the operation of the Branches:
(a) Tax Information. Make available to the other and, subject
to attorney-client privilege, to any taxing authority as
reasonably requested all relevant information, records, and
documents relating to taxes.
(b) Audits and Assessments. Provide timely notice to the other
party in writing of any pending or proposed tax audits (with
copies of all relevant correspondence received from any taxing
authority in connection with any tax audit or information
request) or assessments for taxable periods for which the other
party may have a liability.
The party requesting assistance or cooperation shall bear the
other party's reasonable out-of-pocket expenses in complying with such
request to the extent that those expenses are attributable to fees and
other costs of unaffiliated third-party service providers.
ARTICLE VI
Conditions Precedent to Closing
6.01 Conditions to Both Parties' Obligations. The obligations of
each party to consummate the transaction contemplated hereby are subject
to the satisfaction, or the waiver by such party to the extent permitted,
of each of the following conditions at or prior to the Closing:
(a) Prior Regulatory Approval of the Transaction Contemplated
Hereby. All filings and registrations with, and notifications
to, all federal and state authorities required for consummation
of the transaction contemplated hereby and Purchaser's operation
of the Branches shall have been made, all Regulatory Approvals
shall have been received and shall be in full force and effect,
<PAGE>24
and all applicable waiting periods shall have passed. A
Regulatory Approval will be deemed to have been received, and
the condition to closing set forth in this Section 6.01 shall be
deemed to have been met notwithstanding the fact that such
Regulatory Approval requires Purchaser to effect any divestiture
of any of the Branches.
(b) Representations and Warranties. The representations and
warranties of the other party set forth in this Agreement shall
be true and correct in all material respects as of the Closing
Date with the same effect as though all such representations and
warranties had been made on and as of such time (unless a
different date is specifically indicated in such representations
and warranties), and each party shall have delivered to the
other a certificate, dated as of the Closing Date, to the effect
that this condition has been satisfied with respect to such
party, provided, however, that the representation of Seller set
forth in Section 3.01(i) hereof shall be deemed to be true and
correct in accordance with this Section 6.01 unless Purchaser
shall have notified Seller at least 10 days prior to the Closing
Date of any potential breach of Section 3.01(i), or within
twenty-four (24) hours of knowledge of any potential breach of
Section 3.01(i) which occurs within the 10 days prior to the
Closing Date, and Seller shall have had sufficient opportunity
to correct such potential breach.
(c) Covenants. Each and all of the covenants and agreements of the
other party to be performed or complied with at or prior to the
Closing Date pursuant to this Agreement shall have been duly
performed or complied with in all material respects by such
party, or shall have been waived in accordance with the terms
hereof, and such party shall have delivered a certificate, dated
as of the Closing Date, to the effect that this condition has
been satisfied with respect to such party; provided, however,
that the covenant of Seller set forth in Section 2.01(a) hereof
shall be deemed to have been duly performed and complied with in
accordance with this Section 6.01(c) unless Purchaser shall have
notified Seller at least 10 days prior to the Closing Date of
any potential breach of Section 2.01(a), or within twenty-four
(24) hours of knowledge of any potential breach of Section
2.01(a) which occurs within the 10 days prior to the Closing
Date, and Seller shall have had sufficient opportunity to
correct such potential breach.
(d) No Proceeding or Prohibition. At the time of the Closing, no
court or governmental or regulatory authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced,
or entered any statute, rule, regulation, judgment, decree,
injunction or other order (whether temporary, preliminary or
permanent) which is in effect to restrain, enjoin, or prohibit
consummation of the transaction contemplated hereby or which
might result in rescission in connection with such transaction,
and Purchaser shall have delivered to Seller a certificate,
dated as of the Closing Date, to that effect.
6.02 Additional Condition to Purchaser's Obligations. The Updated
Title Commitments shall have been delivered to Purchaser in accordance
with Section 2.04. Subject to the provisions of Section 2.04, the Title
Company shall be ready and willing, upon the recording of the applicable
<PAGE>25
deeds, to issue to Purchaser, at Purchaser's sole cost and expense, an
ALTA Owner's Policy of Title Insurance as to each parcel of Owned Real
Estate, showing as exceptions to title only the Permitted Exceptions.
6.03 Overriding Provisions Relating to the Leases. Notwithstanding
anything to the contrary herein, if, by no later than five (5) days prior
to the Closing Date, a landlord under a Lease shall not have consented to
the assignment to and assumption by Purchaser of that Lease or to a
sublease by Seller to Purchaser of the Leased Real Estate demised by the
Lease and such consent is required under the terms of the Lease, the
Seller shall have the right, exercisable by written notice no later than
the Closing Date, to terminate the Agreement: (a) as to the Leasehold
Estate demised by such Lease and all furniture, fixtures and equipment
located thereon; or (b) as to the Assets and Liabilities relating to the
Branch situated upon such Leased Real Estate. Furthermore, and also
notwithstanding anything to the contrary herein, if, by not later than
five (5) days prior to the Closing Date, a landlord under a Lease shall
not have agreed to the release of Seller from all obligations and
liabilities under the Lease from and after the Closing Date, but either
the landlord shall have consented to a sublease by Seller to Purchaser of
the Leased Real Estate demised by the Lease (if the Lease requires such
consent) or such a sublease does not require the landlord's consent, then
Seller and Purchaser agree to proceed with the transactions contemplated
by this Agreement as to the Branch located at the Leased Real Estate
demised by such Lease, except that Seller and Purchaser shall enter into a
sublease agreement by which Seller shall sublease the Leased Real Estate
and Purchaser shall agree to indemnify Seller for any loss, cost, charge
or liability incurred by Seller as a result of the failure to obtain the
landlord's release. If the parties are to enter into a sublease, then
Seller shall provide to Purchaser promptly after the lapse of such
deadline a form of sublease which shall contain substantially the same
terms and conditions as the corresponding Lease, with appropriate
modifications to reflect the sublease nature.
<PAGE>26
ARTICLE VII
Closing
7.01 Closing and Closing Date. The transaction contemplated hereby
shall be effective at a closing (the "Closing") to be held in the offices
of Seller, located at 127 Public Square, Cleveland, Ohio 44114, or via
courier or facsimile transmission as Seller may designate. The Closing
shall be effective at 11:59 p.m. on Friday, September 12, 1997, or such
other date as Seller in its discretion may designate, which date shall be
reasonably acceptable to Purchaser. The date on which the Closing occurs
is referred to in this Agreement as the "Closing Date".
7.02 Parties' Actions at the Closing. At the Closing, Seller and
Purchaser shall, except as otherwise provided in this Agreement, take such
actions, including the execution and delivery of certain documentation,
all as set forth on Schedule E, and including the filing or recording of
any and all documents (including, without limitation, deeds) necessary in
order to transfer legal and equitable title to the Owned Real Estate to
Purchaser as of the Closing Date.
ARTICLE VIII
Certain Transitional Matters
Transitional Action by Purchaser and Seller. Purchaser and Seller
shall cooperate in good faith and will use all reasonable efforts to
comply with the various transitional matters set forth in Schedule F
hereto.
<PAGE>27
ARTICLE IX
General Covenants
9.01 Information. Except as otherwise set forth in this Agreement,
for a period of three (3) years following the Closing, Seller and
Purchaser mutually agree, subject to any limitations imposed by law, to
provide each other, upon written request, with reasonable access to, or
copies of, information and records relating to the Branches, including,
without limitation, Branch Employee and customer files which are in the
possession or control of Purchaser or Seller reasonably necessary to
permit Seller or Purchaser or any of their affiliates to comply with or
contest any applicable legal, tax, banking, accounting, or regulatory
policies or requirements, any legal or regulatory proceedings, or
inquiries by customers or Branch Employees. The provisions of this
Section 9.01 shall survive the Closing for a period of three (3) years and
any claim for the breach of this Section 9.01 must be brought within such
three (3) year period.
9.02 Confidentiality Obligations. From and after the date hereof,
each party shall, and shall cause its affiliates to, treat all information
received from the other party concerning the business, assets, operations,
and financial condition of the other party as well as any other material
which is included in the definition of "Evaluation Material" as such term
is defined under the confidentiality agreement between Purchaser and
Seller dated as of March 11, 1997, as Evaluation Material in accordance
with the terms of such confidentiality agreement. From and after the
Closing Date, Seller shall assign to Purchaser all of Seller's rights
under any confidentiality agreements executed by or on behalf of parties
other than Purchaser.
9.03 Allocation of Consideration. Purchaser and Seller agree that
the consideration payable hereunder at the Closing shall be allocated
among the Assets on the basis of an allocation to be mutually agreed upon
by Purchaser and Seller within thirty (30) days after the Closing, and
that is consistent with Section 1060 of the Code.
9.04 Confidential Information.
9.05 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 or as may
be reasonably necessary, including obtaining all required consents of
third parties, in order to carry out and implement this Agreement.
Purchaser shall use its best efforts to pursue all applications filed in
connection with obtaining the Regulatory Approvals diligently and in good
faith.
9.06 Operation of Branches. Not later than the Closing Date,
Purchaser: (a) shall change the legal name of the Branches to a name that
does not include the word Key, and (b) except for any documents or
materials in possession of the customers of the Branches (including, but
not limited to, deposit tickets and checks), shall not use and shall cause
the Branches to cease using (i) any signage, stationery, advertising,
documents, or printed or written materials that refer to such Branches by
any name that includes the word Key and (ii) any logo, trademark or
service mark or trade name registered in the name of, or otherwise owned
by Seller or any of its affiliates, except as otherwise provided in this
Agreement or permitted pursuant to any written agreement(s) between
<PAGE>28
Purchaser and Seller or its affiliates.
9.07 Notices of Default. Each of Seller and Purchaser shall promptly
give written notice to the other upon becoming aware of the impending or
threatened occurrence of any event which could reasonably be expected to
cause or constitute a breach of any of their respective representations,
warranties, covenants or agreements contained in this Agreement.
9.08 Fire, Casualty and Takings. If any Owned Real Estate, Leasehold
Estate or Leased Real Estate or any fixtures or leasehold improvements
composing part thereof shall be damaged by fire or other casualty and such
damage materially affects the operations of the Branch related thereto,
whether insured or uninsured, and shall not be substantially repaired or
restored by the Closing Date, or if the land where any of the Branches is
located or any building thereon or any part thereof shall be taken by
condemnation or exercise of the power of eminent domain, or if proceedings
therefor have commenced or been threatened, on or prior to the Closing
Date and such taking materially affects or would materially affect the
operations of the Branch related thereto, Purchaser shall have the right
and option exercisable within 10 days of notification of such damage or
taking to elect (i) to terminate this Agreement with respect to the
affected Branch, and the purchase price shall be adjusted to reflect the
decrease in the value of the assets and liabilities of the affected Branch
assigned thereto pursuant to the terms hereof, or (ii) to cause Seller to
assign to Purchaser as of the Closing Date all of Seller's rights and
claims against any third party by reason of such fire or other casualty,
including without limitation, any insurance claims.
ARTICLE X
Environmental Matters
10.01 Environmental Representations and Warranties.
(a) Prior to the date hereof, Seller shall have provided to
Purchaser Phase I audit reports, as of a date no earlier than
January 1, 1994, undertaken by Seller with respect to the Owned
Real Estate (the "Phase I Reports"). Except as set forth in the
Phase I Reports, to the Knowledge of Seller, the Branches are in
compliance with all environmental laws, rules and regulations of
the United States of America and of states and localities in
which the Branches are located, except for any such
noncompliance which, individually or in the aggregate, has not
had, and is not expected to have, to the Knowledge of Seller, a
material adverse effect on the business of any Branch.
(b) Except as may be set forth in the Phase I Reports, to the
Knowledge of Seller, Seller has no liability with respect to
the Branches which, taken singularly or as a whole, if adversely
determined, would have a material adverse effect on the business
of any Branch (i) relating to the handling, storage, treatment,
use, disposal, discharge or release into the environment of any
hazardous material or waste at, on or from the Owned Real Estate
or the Leased Real Estate, (ii) for the release or emission of
any hazardous material from, on, under, or within the Owned Real
Estate or Leased Real Estate into the air, water, surface water,
ground water, land surface, or subsurface strata, (iii) for the
disposal of any hazardous material on the Owned Real Estate or
<PAGE>29
Leased Real Estate or (iv) for the contamination of the Owned
Real Estate or Leased Real Estate with any hazardous material.
10.02 Environmental Investigation.
(a) If any Phase I Report indicates the presence of any hazardous
substance with respect to any Owned Real Estate, and such
presence is a condition that requires remediation pursuant to
appropriate governmental standards, then, at Purchaser's request
made in writing to Seller within ten (10) days after the date of
this Agreement, and at Purchaser's sole cost and expense, Seller
shall arrange to cause a consultant approved by both Seller and
Purchaser to conduct a Phase II environmental audit as to such
hazardous substance and deliver to Seller and Purchaser the
results of such audit within forty-five days after the request
by Purchaser. If the Phase II audit report confirms that such
presence requires remediation pursuant to appropriate
governmental standards and if such presence, if not remediated,
would materially adversely affect the business of the Branch
situated upon the Owned Real Estate and Purchaser requests that
Seller take remedial action with respect thereto, then
Purchaser shall so notify Seller in writing promptly after
receipt of the Phase II environmental audit report, whereupon
Seller shall have the right to (i) terminate this Agreement as
it relates to the Assets and Liabilities of the affected Branch,
(ii) undertake remedial action as to such presence at its sole
cost and expense so that no material continuing violation of any
environmental law exists (provided, however, that the timing of
any such remediation shall be coordinated with Purchaser to
minimize any resulting business interruption), or (iii) agree to
indemnify Purchaser for all actual costs and expenses incurred
by Purchaser to remediate the Owned Real Estate as to such
presence so that no material continuing violation of any
environmental law exists.
(b) If Purchaser fails to request a Phase II environmental audit or
to exercise its right to make a request that Seller remediate
any Owned Real Estate in each case as and when required above,
then Purchaser shall be bound to the terms of this Agreement
without a right of termination except as provided in Article XI
and without a further right to request or to require any Seller
remediation or indemnification. Any termination by Seller under
this Article X shall neither create nor result in any liability
of the Seller to the Purchaser.
ARTICLE XI
Termination
11.01 Methods of Termination. This Agreement may be terminated in any
of the following ways:
(a) By either Purchaser or Seller, in writing, if the Closing has
not occurred on or before the earlier of the nine (9) month
anniversary of this Agreement;
(b) At any time prior to the Closing Date by the mutual consent in
writing of Purchaser and Seller;
<PAGE>30
(c) By Purchaser or Seller as to the Owned Real Estate and/or
Leasehold Estate and all furniture, fixture and equipment
located thereon, all of the Assets and Liabilities relating to
the affected Branch, or as to the Agreement in its entirety, as
provided, in each case, in Section 2.04(c), 6.03 or 10.02;
(d) By Purchaser in writing if and when, at any time prior to the
Closing, any condition of its obligations hereunder set forth in
Section 6.01 of this Agreement becomes incapable of being
fulfilled and such condition has not been waived by Purchaser;
(e) By Seller in writing if and when, at any time prior to the
Closing, any condition of its obligations hereunder set forth in
Section 6.01 of this Agreement becomes incapable of being
fulfilled and such condition has not been waived by Seller;
(f) At any time prior to the Closing Date by Purchaser or Seller in
writing if the other continues to be in breach of any
representation and warranty (as if such representation and
warranty had been made on and as of the date of the notice of
breach referred to below unless a different time is specified in
any such representation and warranty), covenant, or agreement
in any material respect and such breach has not been cured
within twenty-five (25) days after the giving of notice to the
breaching party of such breach; or
(g) By Purchaser or Seller in writing at any time after any
applicable regulatory authority has denied approval of any
application of Purchaser for approval of the transaction
contemplated hereby.
11.02 Effect of Termination. Except as otherwise specifically
provided in this Agreement, in the event of termination of this Agreement
pursuant to this Article XI, neither Purchaser nor Seller nor their
respective officers, directors, or agents shall have any liability or
obligation to the other of any nature whatsoever except liabilities and
obligations arising from Section 9.02 of this Agreement and liabilities
and obligations arising from any material breach of any provision of this
Agreement occurring prior to the termination hereof.
ARTICLE XII
Miscellaneous Provisions
12.01 Expenses. Except as otherwise specifically allocated herein,
each of the parties hereto shall bear its own expenses, whether or not the
transaction contemplated hereby is consummated.
12.02 Transfer of Loans Without Recourse; Limitation on Warranties.
Except as may be provided in Section 1.08, all Loans transferred to
Purchaser pursuant to this Agreement shall be transferred without recourse
and without any representations or warranties whatsoever (including,
without limitation, any representations or warranties as to the
enforceability or collectibility of any such Loans, the creditworthiness
of any obligors or guarantors thereunder, or the value or adequacy of such
collateral). EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED FOR IN THIS
AGREEMENT, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER WITH
RESPECT TO THE ASSETS OR THE LIABILITIES, EXPRESS OR IMPLIED, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTIES WITH RESPECT TO MERCHANTABILITY,
<PAGE>31
FITNESS, TITLE, ENFORCEABILITY, COLLECTIBILITY, DOCUMENTATION OR FREEDOM
FROM LIENS OR ENCUMBRANCES (IN WHOLE OR IN PART).
12.03 Amendment, Modifications and Waivers. The parties hereto, by
mutual consent of their duly authorized officers, may amend, modify, and
supplement this Agreement in such manner as may be agreed upon by them in
writing. Each party hereto, by written instrument signed by an officer 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; (b) compliance with
any of the covenants or agreements of the other party; (c) the performance
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.
12.04 Notices. Any notice or other communication required or
permitted pursuant to this Agreement shall be effective only if it is in
writing and delivered personally, by facsimile transmission, or by
registered or certified return receipt mail, postage prepaid, addressed as
follows:
If to Purchaser:
Lorain National Bank
457 Broadway
Lorain, OH 44050
Facsimile: 216-282-3242
Attention: James F. Kidd, President & CEO
with a copy to:
Thomas Blank, Esq.
Werner & Blank Co.
7205 W. Central Avenue
Toledo, OH 43617
Facsimile: 419-841-8380
If to Seller:
KeyCorp
127 Public Square
Cleveland, Ohio 44114
Facsimile: 216-689-3610
Attention: Matthew M. Nickels
with a copy to the following:
KeyCorp
127 Public Square
Cleveland, Ohio 44114
Facsimile: 216-689-4121
Attention: Daniel R. Stolzer, Esq.
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
<PAGE>32
date received.
12.05 Parties in Interest; Assignment. 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, including a
Branch Employee, 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 except by a written agreement executed by the parties hereto or
their respective successors and assigns. Notwithstanding the foregoing,
Seller acknowledges that Purchaser may intend to arrange for resales of
certain of the Branches simultaneously with the Closing; provided,
however, that no third party beneficiary relationship or any contractual
relationship between Seller and any other third party shall be deemed to
exist or to be created hereunder by virtue of the resale of any of the
Branches by Purchaser hereunder.
12.06 Press Releases. Seller and Purchaser shall mutually agree as to
the form, timing and substance of any press release of any matters
relating to this Agreement; provided, however, that nothing in this
Section 12.06 shall be deemed to prohibit any party hereto from making any
press release which its legal counsel deems necessary in order to fulfill
such party's disclosure obligations imposed by law.
12.07 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 to this Agreement
are incorporated into this Agreement by reference and made a part hereof.
12.08 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Ohio. If any part
of this Agreement is declared illegal by a court of competent jurisdiction,
the remaining parts shall remain in full force and effect.
12.09 Counterparts. This Agreement and any Schedule hereto may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officer whose signature appears below as
of the date first above written.
PURCHASER: SELLER:
Lorain National Bank KeyBank National Association
By: /s/ James F. Kidd By: /s/ Matthew M. Nickels
ATTEST: /s/ Gregory D. Friedman ATTEST: /s/ Kathryn L. Hale
TITLE: President & CEO TITLE: Vice President
<PAGE>33
SCHEDULES
TO
BRANCH PURCHASE AND ASSUMPTION AGREEMENT
Schedule A Branches to be Purchased. . . . . . . . . . . . . . . . . . S-2
Schedule B Form of Preliminary Closing Statement . . . . . . . . . . . S-3
Schedule C Employee List . . . . . . . . . . . . . . . . . . . . . . . S-4
Schedule D Severance Plan. . . . . . . . . . . . . . . . . . . . . . . S-5
Schedule E Actions to be Taken At Closing. . . . . . . . . . . . . . . S-6
Attachment 1 - Instrument of Assumption . . . . . . . . . . . . . S-7
Attachment 2 - Bill of Sale and Receipt . . . . . . . . . . . . . S-8
Attachment 3 - Limited Warranty Deed for Ohio . . . . . . . . . . S-9
Attachment 4 - Assignment and Assumption of Lease . . . . . . . .S-12
Schedule F Transitional Matters. . . . . . . . . . . . . . . . . . . .S-14
Schedule G Landlord Estoppel Certificate . . . . . . . . . . . . . . .S-18
Schedule H ("Confidential Information"). . . . . . . . . . . . . . . .S-21
NOTE: Schedules to Branch Purchase and Assumption Agreement are not
included as part of this filing.
<PAGE>34
AMENDMENT NO. 1
BRANCH PURCHASE AND ASSUMPTION AGREEMENT
This Amendment No. 1 (this "Amendment") dated as of September 9,
1997, is entered into by and between KeyBank National Association, a
national banking association (the "Seller") and Lorain National Bank, a
national banking association (the "Purchaser").
SECTION 1. BRANCH PURCHASE AND ASSUMPTION AGREEMENT
Reference is made to the Branch Purchase and Assumption Agreement
dated as of April 10, 1997 (the "Agreement") regarding Purchaser's
purchase of certain assets and assumption of certain liabilities of three
(3) branches from Seller. Unless otherwise changed in this Amendment,
terms used herein, which are defined in the Agreement, are used herein
with the meanings therein described to them. The Agreement as amended by
this Amendment is and shall continue to be in full force and effect and
shall not be affected by this Amendment except and only to the extent
specified herein.
The Agreement provided that the Closing of the transaction would be
effective at 11:59 p.m. on Friday, September 12, 1997. The primary
purpose of this Amendment is to modify the Agreement to reflect that the
transaction will close on Friday, September 12, 1997, but will have an
Effective Time (as that term is defined herein) as of 12:01 a.m. Monday,
September 15, 1997. This Amendment also removes the requirement that
Purchaser obtain new telephone numbers for the Branches in Purchaser's
name.
SECTION 2. AMENDMENTS TO THE AGREEMENT
2.1. Amendments to Article I; The Transaction. Article I of the
Agreement shall be and hereby is amended as follows:
2.1.1. Section 1.01 is amended, such that the reference to the
term "Closing" is deleted and in place thereof is inserted the term
"Effective Time".
2.1.2. Section 1.02(a)(iv) is amended, such that each
reference to the term "Closing" is deleted and in place thereof, in
each instance, is inserted the term "Effective Time".
2.1.3. Section 1.02(a)(v) is amended, such that the reference
to the term "Closing Date" is deleted and in place thereof is
inserted the term "Effective Time".
2.1.4. Section 1.02(a)(vi) is amended, such that the reference
to the term "Closing" is deleted and in place thereof is inserted the
term "Effective Time".
2.1.5. Section 1.02(b) is amended, such that the reference to
the term "Closing" is deleted and in place thereof is inserted the
term "Effective Time".
2.1.6. Section 1.02(b)(i) is amended, such that the reference
to the term "Closing" is deleted and in place thereof is inserted the
term "Effective Time".
2.1.7. Section 1.02(b)(ii) is amended, such that the reference
<PAGE>35
to the term "Closing Date" is deleted and in place thereof is
inserted the term "Effective Time".
2.1.8. Section 1.03(b) is amended and restated as follows:
Preliminary Payment. Subject to the terms and conditions
hereof, by no later than 12:00 p.m. on the Closing Date, Seller
shall wire transfer to Purchaser immediately available funds
equal to: (i) the sum of (A) the amount of the Assumed Deposits
(including accrued and unpaid interest thereon) reflected on
the preliminary closing statement; (B) the amount of all
accrued and unpaid expenses reflected as a liability on the
preliminary closing statement; and (C) the aggregate of all
prepaid safe deposit rental payments prorated to the Effective
Time; less (ii) an amount equal to the sum of: (A) X.X% of the
Assumed Deposits based upon an estimated 30-day average prior
to the Effective Time; (provided, however, that for purposes of
this Section 1.03(b)(ii)(A), "Assumed Deposits" shall not be
deemed to include (1) any public funds or (2) any amounts
relating to repurchase agreements); (B) the amount of cash on
hand at the Branches as reflected on the preliminary closing
statement; (C) the Agreed Value of all furniture, fixtures, and
equipment constituting part of the Assets; (D) the Agreed Value
of the Owned Real Estate and the Leased Real Estate; (E) the
amount of all prepaid expenses of Seller as reflected as an
asset on the preliminary closing statement; (F) the Net Book
Value of all Loans, plus accrued and unpaid interest thereon as
reflected on the preliminary closing statement; and (G) the
amount of estimated sales taxes, if any, to be paid by
Purchaser in connection with the transaction contemplated
hereby.
2.1.9. Section 1.04 is amended, such that the reference to the
phrase "at Closing" in the last sentence of this Section 1.04 is deleted
and in place thereof is inserted the phrase "on the Closing Date or at the
Closing, as the case may be".
2.1.10. Section 1.08(c) is amended, such that the reference to
the term "Closing" is deleted and in place thereof is inserted the term
"Closing Date"; and Section 1.08(c) is further amended, such that the
reference to the term "Closing Date" is deleted and in place thereof is
inserted the term "Effective Time".
2.1.11. Section 1.09 is amended, such that the reference to
the term "Closing" is deleted and in place thereof is inserted the term
"Effective Time".
2.2. Amendments to Article II; Obligations of the Parties Prior to
the Closing Date. Article II of the Agreement shall be and hereby is
amended as follows:
2.2.1. Section 2.01(d) is amended and restated in its entirety
as follows:
(d) Insurance. Seller will maintain in effect until the
Effective Time all casualty and public liability policies
relating to the Branches and maintained by Seller on the date
hereof or procure comparable replacement policies and maintain
such replacement policies in effect until the Effective Time.
<PAGE>36
2.2.2. Section 2.02 is amended, such that the reference to the
term "Closing Date" is deleted and in place thereof is inserted the
term "Closing".
2.3. Amendments to Article III; Representations and Warranties.
Article III of the Agreement shall be and hereby is amended as follows:
2.3.1. Section 3.03 is amended, such that each reference to
the term "Closing" is deleted and in place thereof, in each instance,
is inserted the term "Closing Date".
2.4. Amendments to Article IV; Employee Benefits. Article IV of the
Agreement shall be and hereby is amended as follows:
2.4.1. Section 4.02(c) is amended, such that each reference to
the term "Closing Date" is deleted and in place thereof, in each
instance, is inserted the term "Effective Time".
2.4.2. The second sentence of Section 4.02(e) is amended and
restated in its entirety as follows:
Effective as of the Closing Date, Purchaser shall assume
liability for all severance benefits payable to any Branch
Employee who is terminated by Purchaser on or after the Closing
Date.
2.4.3. Section 4.04 is amended, such that the initial phrase
"On and after the Closing Date" is deleted and in place thereof is
inserted the phrase "Effective upon the Closing Date".
2.5 Amendments to Article VI; Conditions Precedent to Closing.
Article VI of the Agreement shall be and hereby is amended as follows:
2.5.1. Section 6.01(b) is amended, such that the first and
third references to the term "Closing Date" are deleted and in place
thereof, in each instance, is inserted the term "Closing".
2.5.2. Section 6.01(c) is amended, such that the first, third,
and fourth references to the term "Closing Date" are deleted and in
place thereof, in each instance, is inserted the term "Closing".
2.5.3. Section 6.03 is amended, such that each reference to
the term "Closing Date" in the first sentence of this Section 6.03 is
deleted and in place thereof, in each instance, is inserted the term
"Closing"; and Section 6.03 is further amended, such that the first
reference to the term "Closing Date" in the second sentence of this
Section 6.03 is deleted and in place thereof is inserted the term
"Closing".
2.6. Amendments to Article VII; Closing. Article VII of the
Agreement shall be and hereby is amended as follows:
2.6.1. Section 7.01 is amended and restated in its entirety to
read as follows:
7.01 Closing, Closing Date and Effective Time. The Transaction
contemplated hereby shall occur at a closing (the "Closing") to
be held in the offices of Seller, located at 127 Public Square,
Cleveland, Ohio 44114, or via courier or facsimile transmission
<PAGE>37
as Seller may designate, on Friday, September 12, 1997, or such
other date as Seller in its discretion may designate, which
date shall be reasonably acceptable to Purchaser. The "Closing
Date" shall be Monday, September 15, 1997. The "Effective
Time" of this Agreement for purposes of making calculations and
for other purposes specifically referred to in this Agreement
shall be as of 12:01 a.m. on Monday, September 15, 1997. In
addition, the Closing shall be deemed to have been consummated
and final as of the Effective Time. All actions taken and
documents delivered at the Closing will be deemed to have been
taken and executed simultaneously, and no action will be deemed
taken nor any document deemed delivered until all have been
taken and delivered. Both parties acknowledge that time is
of the essence with respect to consummating the transactions
contemplated hereby.
2.6.2. Section 7.03 is added to Article VII as follows:
7.03 Recorded Instruments. If any instrument of transfer
contemplated herein shall be filed or recorded in any public
record before the Closing Date and thereafter the transaction
is not consummated, then at the request of Seller, Purchaser
will deliver (or execute and deliver) such instruments and take
such other action as Seller shall reasonably request to revoke
such purported transfer and to record any additional transfers
as are necessary to record property in the name of the Seller.
2.7. Amendments to Article IX; General Covenants. Article IX of the
Agreement shall be and hereby is amended as follows:
2.7.1. Section 9.03 is amended, such that the first reference
to the phrase "at the Closing" is deleted and in place thereof is
inserted the phrase "on the Closing Date or at the Closing, as the
case may be"; and Section 9.03 is further amended, such that the
second reference to the term "Closing" is deleted and in place
thereof is inserted the phrase "Closing Date or the Closing,
respectively,".
2.7.2. Section 9.06 is amended, such that the reference to the
term "Closing Date" is deleted and in place thereof is inserted the
term "Effective Time".
2.8. Amendments to Article XI; Termination. Article XI of the
Agreement shall be and hereby is amended as follows:
2.8.1. Section 11.01(a) is amended, such that the phrase "the
earlier of" is deleted.
2.8.2. Section 11.01(d) is amended, such that the reference to
the term "Closing" is deleted and in place thereof is inserted the
term "Closing Date".
2.8.3. Section 11.01(e) is amended, such that the reference to
the term "Closing" is deleted and in place thereof is inserted the
term "Closing Date".
2.9. Amendments to Schedule E. Schedule E to the Agreement shall be
and hereby is amended as follows:
<PAGE>38
2.9.1. The paragraph entitled "Delivery of Documentation" set
forth under the Section "Seller's Actions at the Closing" is amended
and restated as follows:
Delivery of Documentation. Execute, acknowledge, and/or
deliver to Purchaser, dated as of the Closing Date, the
certificates of Seller contemplated by Section 6.01, the Bill
of Sale and Receipt in the form of Attachment 2, Limited
Warranty Deed in the form of Attachment 3 for the Owned Real
Estate upon which each Branch is situated dated as of the
Closing, the Assignment and Assumption of Lease in the form of
Attachment 4 for the Leased Real Estate upon which each Branch
is situated, all other documents required to be delivered to
Purchaser by Seller at the Closing pursuant to the terms of
this Agreement, and any other documents which Purchaser has
identified to Seller at a reasonable time prior to the Closing
that are necessary or reasonably advisable to consummate the
transaction contemplated by the Agreement.
2.9.2. The paragraph entitled "Delivery of Funds" set forth
under the Section "Seller's Actions at the Closing" is amended and
restated as follows:
Delivery of Funds. Deliver to Purchaser any funds required to
be paid by Seller to Purchaser no later than 12:00 p.m. on the
Closing Date pursuant to the terms of this Agreement.
2.9.3. Attachment 1: Instrument of Assumption, paragraph (b)
is amended, such that the reference to the term "Closing Date" is
deleted and in place thereof is inserted the term "Effective Time".
2.10. Amendments to Schedule F; Transitional Matters. Schedule F to
the Agreement shall be and hereby is amended as follows:
2.10.1. Schedule F, paragraph (a) under the heading
"Transitional Actions by Purchaser" is amended, such that the first
sentence is restated as follows: "From and after the Effective Time,
Purchaser shall:(i). . ."
2.10.2. Schedule F, paragraph (b) under the heading
"Transitional Actions by Purchaser" is amended such that the
reference to the term "Closing Date" in the first sentence is
deleted and in place thereof is inserted the term "Effective Time".
2.10.3. Schedule F, paragraph (c) under the heading
"Transitional Actions by Purchaser" is amended, such that the second
reference to the term "Closing Date" is deleted and in place thereof
is inserted the term "Effective Time".
2.10.4. Schedule F, paragraph (d) under the heading
"Transitional Actions by Purchaser" is amended, such that each
reference to the term "Closing Date" is deleted and in place thereof,
in each instance, is inserted the term "Effective Time".
2.10.5. Schedule F, paragraph (e) under the heading
"Transitional Actions by Purchaser" is amended, such that each
reference to the term "Closing Date" is deleted and in place thereof,
in each instance, is inserted the term "Effective Time".
<PAGE>39
2.10.6. Schedule F, paragraph (g) under the heading
"Transitional Actions by Purchaser" is amended, such that the
reference to the term "Closing Date" is deleted and in place thereof
is inserted the term "Effective Time".
2.10.7. Schedule F, paragraph (h) under the heading
"Transitional Actions by Purchaser" is deleted.
2.10.8. Schedule F, paragraph (i) under the heading
"Transitional Actions by Purchaser" is amended, such that the second
sentence is restated as follows: "Purchaser shall notify affected
customers to destroy the old ATM/Debit cards and shall notify
customers of standard withdrawal limits beginning on the date of the
Closing.
2.10.9. Schedule F, the second paragraph of paragraph (a)
under the heading "Transitional Actions by Seller" is amended, such
that the phrase "As early as practicable after the Closing Date" is
deleted and in place thereof is inserted the phrase "No later than
the Closing Date".
2.10.10. Schedule F, paragraph (f) under the heading
"Transitional Actions by Seller" is amended, such that the reference
to the term "Closing Date" is deleted and in place thereof is
inserted the term "Effective Time".
2.10.11. Schedule F, paragraph (g) under the heading
"Transitional Actions by Seller" is amended such that the phrase "on
the Closing Date" is deleted and in place thereof is inserted the
phrase "on the date of the Closing".
2.10.12. Schedule F, under the heading "Transitional Actions
by Seller" is amended, such that a new paragraph (h) is inserted to
read as follows:
(h) Operation of the Branches. During the weekend immediately
preceding the Closing Date, Seller shall not open the Branches
for the conduct of business.
2.10.13. Schedule F, paragraph (b) under the heading
"Transitional Action by Both Parties" is amended, such that the
reference to the term "Closing Date" in the first sentence is
deleted and in place thereof is inserted the term "Effective Time".
2.10.14. Schedule F, paragraph (e) under the heading
"Transitional Action by Both Parties" is amended, such that each
reference to the term "Closing Date" in the last sentence is deleted
and in place thereof, in each instance, is inserted the term
"Effective Time".
2.10.15. Schedule F, paragraph (f) under the heading
"Transitional Action by Both Parties" is amended, such that each
reference to the term "Closing Date" is deleted and in place thereof,
in each instance, is inserted the term "Effective Time".
SECTION 3. MISCELLANEOUS
3.1 Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be an original, by all of which shall
<PAGE>40
constitute one and the same agreement.
3.2 Headings. The section headings set forth in this Amendment are
for convenience only and shall not affect the construction hereof.
3.3 Entire Agreement. The Agreement as amended by this Amendment is
and shall continue to be in full force and effect and shall not be
affected by this Amendment except and only to the extent specified herein.
The Agreement as amended by this Amendment contains the entire agreement
and understanding of the parties and supersedes all prior agreements and
understandings between the parties, both written and oral, with respect to
its subject matter.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as a relevant instrument by their duly authorized officer as of
the day and year first written above.
LORAIN NATIONAL BANK
By: /s/ James F. Kidd
Title: President & CEO
KEYBANK NATIONAL ASSOCIATION
By: /s/ Matthen M. Nickels
Title: Senior Vice President
<PAGE>41
LNB Bancorp, Inc.
Exhibit to Form 8-K
Exhibit 99.2
The press release dated September 16, 1997 of Lorain
National Bank, the wholly-owned subsidiary of
LNB Bancorp, Inc.
<PAGE>42
FOR IMMEDIATE RELEASE
(216) 244-6000 FAX 244-4815 Steven F. Cooper
Assistant Vice President
September 16, 1997
LORAIN NATIONAL COMPLETES ACQUISITION OF THREE KEYCORP BRANCHES
James F. Kidd, President and Chief Executive Officer of Lorain
National Bank, has announced the completion of the acquisition of three
KeyBank branches in Lorain County from KeyBank, National Association. All
three offices opened for business Monday, September 15th as Lorain
National Bank. Regulatory approval of the purchase and assumption was
granted earlier this summer.
The branches are located at 383 Broadway and 1920 Cooper-Foster Park
Road in Lorain and 6395 Midway Boulevard at the Midway Mall in Elyria.
All 17 employees associated with the branches have accepted employment
offers from Lorain National Bank.
"We have taken another step in expanding our presence in our primary
market, Lorain County," Kidd said. "Our new customers, from these
acquired branches, now have 18 more offices and 25 more automated teller
locations to meet their banking needs."
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Lorain National Bank
Page 2
"For our existing customers, we've expanded their reach, giving them
more convenient places to bank," Kidd added.
As a result of the acquisition, Lorain National will receive
approximately $45 million in deposits, $18 million in loans and possession
of the three former KeyBank branch facilities. Conversion of all deposit
and loan accounts from KeyBank to Lorain National Bank occurred at 12:01
A.M., Monday.
The acquisition gives Lorain National Bank a third location in the
Midway Mall area and its first full-service branch office in the shopping
complex. Lorain National currently operates ATMs in the Midway Mall food
court and adjacent to the Lowe's Home Improvement Warehouse.
The acquisition of the three banking offices will give Lorain
National a deposit market share of approximately 15% of all bank, savings
& loan and credit union deposits in Lorain County, according to published
sources.
"This will give us additional liquidity and allow us to retain these
deposits to lend locally in our market area," Kidd stated.
Lorain National Bank will now operate 21 banking facilities and 27
ATMs in Lorain, Cuyahoga and Erie counties. The bank's offices are
located in the communities of Lorain, Elyria, Amherst, Avon Lake, Oberlin,
Olmsted Township, Vermilion and Westlake.
"The completion of this branch acquisition is an important element of
- - more -
Lorain National Bank
Page 3
our corporate vision, which is to become recognized as the most
progressive and dynamic independent provider of financial services in our
<PAGE>43
market," Kidd said.
Since January 1st of this year, Lorain National has expanded its
distribution network with two new retirement center offices in Westlake
and Olmsted Township and a new ATM location at the intersection of
Colorado and Root roads in Lorain. In addition, regulatory approval to
establish a new branch office in the village of LaGrange next summer is
expected during the fourth quarter.
Lorain National Bank, a bank with local roots dating back to 1905, is
a wholly-owned subsidiary of LNB Bancorp, Inc., with assets totaling
approximately $484 million as of Monday. Lorain National Bank's deposits
are insured by the Federal Deposit Insurance Corporation.
Lorain National Bank now employs approximately 290 employees at its
community bank branches, administrative offices and computer operations
center. The full-service bank offers a complete line of consumer,
mortgage, commercial and trust & investment products and services.
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