As filed with the Securities and Exchange Commission on September 23, 1996
Registration No. 333-11773
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM SB-2
Registration Statement
Under the
Securities Act of 1933
EMCLAIRE FINANCIAL CORP.
- --------------------------------------------------------------------------------
(Name of Small Business Issuer in Its Charter)
Pennsylvania 6021 25-1606091
- --------------------------------------------------------------------------------
(State or Other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Classification Identification No.)
Code Number)
612 Main Street, Box D, Emlenton, Pennsylvania 16373
(412) 867-2311
- --------------------------------------------------------------------------------
(Address and telephone number of principal executive offices)
Ronald L. Ashbaugh, President
Emclaire Financial Corp.
612 Main Street, Box D, Emlenton, Pennsylvania 16373
(412) 867-2311
- --------------------------------------------------------------------------------
(Name, address and telephone number of agent for service)
Please send copies of all communications to:
Gregory A. Gehlmann, Esq.
Michael W. Zarlenga, Esq.
MALIZIA, SPIDI, SLOANE & FISCH, P.C.
1301 K Street, N.W., Suite 700 East, Washington, D.C. 20005
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement is declared effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 27. Exhibits.
The exhibits filed as part of this Registration Statement are as
follows:
(a) List of Exhibits:
1.1 Form of Agency Agreement with Hopper Soliday & Co., Inc.
1.2 Form of Selected Dealers Agreement
3(i) Articles of Incorporation of Emclaire Financial Corp.*
3(ii) Bylaws of Emclaire Financial Corp.*
4 Specimen Stock Certificate of Emclaire Financial Corp.
5.1 Opinion of Malizia, Spidi, Sloane & Fisch, P.C. regarding
legality of securities registered*
10 Purchase and Assumption Agreement Between Mellon Bank,
N.A. as Seller and Farmers National Bank of Emlenton as
Purchaser dated as of May 3, 1996
11 Statement re: Computation of Per Share Earnings (see
"Selected Financial Data - Summary of Operations" and the
Notes to Consolidated Financial Statements included in the
Prospectus in Part I of this Registration Statement.)*
21 Subsidiaries of the Registrant (See "Business -
Subsidiaries" included in the Prospectus in Part I of this
Registration Statement.)*
23.1 Consent of Malizia, Spidi, Sloane & Fisch, P.C. (contained
in its opinion filed as Exhibit 5.1)*
23.2 Consent of S.R. Snodgrass, A.C.*
24 Power of Attorney (reference is made to the signature
page)*
99.1 Stock Order Form**
99.2 Marketing Materials**
-------------
* Previously filed.
** To be filed supplementally.
<PAGE>
Item 28. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 ("Securities Act");
(ii) Reflect in the prospectus any facts or events which
individually or together, represent a fundamental change in the information in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement.
(iii) Include any additional or changed material information on
the plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(4) The undersigned registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreement, certificates
in such denominations and registered in such names as required by the
underwriter to permit prompt delivery to each purchaser.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act, and is therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the small business issuer of expenses incurred or paid by a director,
officer or controlling person of the small business issuer in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
small business issuer will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of
Emlenton, Commonwealth of Pennsylvania, on September 23, 1996.
EMCLAIRE FINANCIAL CORPORATION
By: /s/ Ronald L. Ashbaugh
--------------------------------
Ronald L. Ashbaugh
President
(Duly Authorized Representative)
We the undersigned directors and officers of Emclaire Financial Corp.
(the "Corporation") do hereby severally constitute and appoint John J. Boczar
our true and lawful attorneys and agents, to do any and all things and acts in
our names in the capacities indicated below and to execute all instruments for
us and in our names in the capacities indicated below which said John J. Boczar
may deem necessary or advisable to enable the Corporation to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission, in connection with the registration
statement on Form SB-2 relating to the offering of the Corporation's common
stock, including specifically but not limited to, power and authority to sign
for us or any of us in our names in the capacities indicated below the
registration statement and any and all amendments (including post-effective
amendments) thereto; and we hereby ratify and confirm all that John J. Boczar
shall do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on September 23, 1996.
/s/ Ronald L. Ashbaugh /s/ John J. Boczar
- -------------------------------- --------------------------------------------
Ronald L. Ashbaugh John J. Boczar
President Treasurer
(Principal Executive Officer) (Principal Financial and Accounting Officer)
/s/ Dr. Clinton R. Coulter /s/ David L. Cox
- -------------------------------- --------------------------------------------
Dr. Clinton R. Coulter David L. Cox
Director Vice President and Director
/s/ Bernadette H. Crooks /s/ George W. Feeman
- -------------------------------- --------------------------------------------
Bernadette H. Crooks George W. Freeman
Director Director
/s/ Rodney C. Heeter /s/ Robert L. Hunter
- -------------------------------- --------------------------------------------
Rodney C. Heeter Robert L. Hunter
Director Director
<PAGE>
SIGNATURES (cont.)
/s/ J. Michael King /s/ John B. Mason
- -------------------------------- --------------------------------------------
J. Michael King John B. Mason
Director Director
/s/ Elizabeth C. Smith
- --------------------------------
Elizabeth C. Smith
Director
<PAGE>
As filed with the Securities and Exchange Commission on September 23, 1996
Registration No. 333-11773
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
EXHIBITS TO
FORM SB-2
Registration Statement
Under the
Securities Act of 1933
EMCLAIRE FINANCIAL CORP.
- --------------------------------------------------------------------------------
(Name of Small Business Issuer in Its Charter)
Pennsylvania 6021 25-160691
- --------------------------------------------------------------------------------
(State or Other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Classification Identification No.)
Code Number)
612 Main Street, Box D, Emlenton, Pennsylvania 16373
- --------------------------------------------------------------------------------
(412) 867-2311
(Address and telephone number of principal executive offices)
Ronald L. Ashbaugh, President
Emclaire Financial Corp.
612 Main Street, Box D, Emlenton, Pennsylvania 16373
(412) 867-2311
- --------------------------------------------------------------------------------
(Name, address and telephone number of agent for service)
Please send copies of all communications to:
Gregory A. Gehlmann, Esq.
Michael W. Zarlenga, Esq.
MALIZIA, SPIDI, SLOANE & FISCH, P.C.
1301 K Street, N.W., Suite 700 East, Washington, D.C. 20005
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement is declared effective.
<PAGE>
INDEX TO EXHIBITS TO FORM SB-2
EXHIBIT DOCUMENT
- ------- --------
1.1 Form of Agency Agreement with Hopper Soliday & Co., Inc.
1.2 Form of Selected Dealers Agreement
3(i) Articles of Incorporation of Emclaire Financial Corp.*
3(ii) Bylaws of Emclaire Financial Corp.*
4 Specimen Stock Certificate of Emclaire Financial Corp.
5 Opinion of Malizia, Spidi, Sloane & Fisch, P.C. regarding legality of
securities registered*
10 Purchase and Assumption Agreement Between Mellon Bank, N.A. as Seller
and Farmers National Bank of Emlenton as Purchaser dated as of May 3,
1996
11 Statement re: Computation of Per Share Earnings (see "Selected
Financial Data - Summary of Operations" and the Notes to Consolidated
Financial Statements included in the Prospectus in Part I of this
Registration Statement.)*
21 Subsidiaries of the Registrant (See "Business - Subsidiaries" included
in the Prospectus in Part I of this Registration Statement.)*
23.1 Consent of Malizia, Spidi, Sloane & Fisch, P.C. (contained in its
opinion filed as Exhibit 5)*
23.2 Consent of S.R. Snodgrass, A.C.*
24 Power of Attorney (reference is made to the signature page)*
99.1 Stock Order Form**
99.2 Marketing Materials**
- -------------
* Previously filed.
** To be filed supplementally.
Exhibit 1.1
<PAGE>
EMCLAIRE FINANCIAL CORPORATION
200,800 Shares
(subject to increase to 30,000 shares)
at $13.50 per Share
COMMON STOCK
(Par Value $1.25 Per Share)
AGENCY AGREEMENT
----------------
Hopper Soliday & Co., Inc.
1703 Oregon Pike
Lancaster, PA 17601
Gentlemen:
Emclaire Financial Corp. proposes to issue and sell to the public 200,800
shares of the Company's $1.25 par value per share Common Stock (the "Common
Stock"), subject to an Oversubscription Reserve (as defined herein) of 30,000
shares, in a Community Offering and a Public Offering (collectively, the
"Offering") as described below. This is to confirm the arrangements with respect
to the sale of the shares through the Agent on a best effort basis.
During the period between the date of this Agreement and COX Date* (the
"Community Offering Expiration Date") the Company will offer shares of Common
Stock for sale to persons residing in the Counties of Venango, Clarion, Butler
and Armstrong, Pennsylvania (the "Community Offering"). For a period of 15 days
following the Community Offering Expiration Date, the Company will offer shares
of Common Stock for sale to the general public (the "Public Offering"). The
Community Offering and the Public Offering are referred to herein collectively
as the "Offering". The Company, with the consent of the Agent, may extend the
period of the Public Offering for up to an additional 15 days. The last day of
the Public Offering period, as it may be extended, is referred to herein as the
Public Offering Termination Date. In the Offering, the minimum subscription per
investor will be 100 shares and the maximum subscription per investor will be
1,000 shares, subject to the waiver of such requirements by the Company.
The Company, in its sole discretion, to the extent that the
<PAGE>
200,800 shares of Common Stock to be offered and sold pursuant to the Offering
are over subscribed, may increase the total number of shares of Common Stock
available in the Offering by 30,000 shares (the "Oversubscription Reserve"). The
200,800 shares to be offered and sold pursuant to the Offering, together with
the 30,000 shares constituting the Oversubscription Reserve, shall be
collectively referred to herein as the "Shares".)
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File No. Registration #)
(the "Registration Statement") containing a prospectus relating to the Offering,
for the registration of the Shares under the Securities Act of 1933, as amended
(the "1933 Act"), and has filed such amendments thereto, if any, as may have
been required to the date hereof. The Registration Statement has been declared
effective by the Commission. The prospectus included in the Registration
Statement when the Registration Statement became effective is hereinafter called
the "Prospectus," except that if the prospectus filed by the Company pursuant to
Rule 424(b) of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") differs from the prospectus included in the
Registration Statement when the Registration Statement became effective, the
term "Prospectus" shall refer to the prospectus filed pursuant to Rule 424(b)
from and after the time said prospectus is filed with or mailed for filing to
the Commission. The date on which the Registration Statement was declared
effective by the Commission is hereinafter referred to as the "Effective Date."
SECTION 1. Appointment of Agent; Compensation to the Agent.
Subject to the terms and conditions herein set forth, the Company hereby
appoints Hopper Soliday & Co., Inc. as its exclusive agent (the "Agent") to
consult with and advise the Company, and to solicit subscriptions to purchase
Shares on behalf of the Company, in connection with the Company's offering of
the Shares in the Offering. On the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions herein set
forth, the Agent accepts such appointment and agrees to consult with and advise
the Company as to the matters set forth in the letter agreement ("Letter
Agreement") accepted by the Company on June 28, 1996, between the Company and
the Agent (a copy of which is annexed hereto as Exhibit A) and to use its best
efforts to solicit subscriptions to purchase Shares in accordance with this
Agreement. The Agent shall not be responsible for obtaining subscriptions or
purchase orders for any specific number of Shares, shall not be required to
purchase any Shares, and shall not be obligated to take any action which is
inconsistent with any applicable laws, regulations, decisions or orders. The
appointment of the Agent hereunder shall terminate upon termination of the
Public Offering and satisfaction of the
2
<PAGE>
obligations of the Company pursuant to such Letter Agreement and
this Agreement.
In addition to the reimbursement of the expenses specified in Sections 5,
6 and 7 hereof, the Agent will receive as compensation for its services
hereunder, (i) a fee equal to 3% of the gross proceeds of the Community
Offering, plus (ii) a fee equal to 7% of the gross proceeds of the Community
Offering. No fees will be paid to Agent, however, in connection with sales of
Shares to officers, directors or employees (or members of their immediate
families) of the Company or the Bank.
The Agent may enter into agreements with other broker-dealers ("Selected
Dealers") to assist in the sale of shares in the Community Offering. The Agent
and each of the Selected Dealers shall be registered as a broker-dealer under
the state securities or blue sky laws of the jurisdictions designated in Section
4(e) of this Agreement and all other jurisdictions in which the Agent and each
Selected Dealer shall offer or sell Shares in the Community Offering.
The Company shall pay the Agent a fee equal to 7% of the gross proceeds
from sales through Selected Dealers, of which the Agent will pay over to the
appropriate Selected Dealers an amount equal to 5% of such sales and the Agent
may retain an amount equal to 2% of such sales as compensation for managing the
sales efforts of the Selected Dealers. During the Community Offering, the Agent
and the Selected Dealers may submit orders to purchase Shares for which they
have received indications of interest from their customers.
If the Offering are not completed, the Agent shall not be entitled to the
compensation set forth in the preceding two paragraphs but, in addition to
reimbursement of its expenses pursuant to Sections 5, 6 and 7 hereof,
nevertheless shall retain the financial advisory fee of $20,000 in consideration
of its advisory and administrative services as set forth in the Letter
Agreement.
The compensation specified above shall be payable (to the extent not
already paid) to the Agent in next day clearing house funds on the Public
Offering Termination Date or upon a determination by the Company to terminate or
abandon the Offering. The Company also agrees to reimburse the Agent for the
costs and expenses specified in Sections 5, 6 and 7 hereof as they are incurred,
to the extent such costs and expenses are incurred by the Agent, promptly upon
receiving a reasonable accounting of such costs and expenses.
SECTION 2. Release of Funds and Delivery of Certificates.
If all conditions precedent to the completion of the Offering are
satisfied, the Company shall issue the Shares sold in the Offering and release
for delivery certificates for such Shares as
3
<PAGE>
soon as practicable following the Public Offering Termination Date against
payment therefor by release of funds from the special escrow account maintained
by the Company at the Bank for purposes of the Offering. Such release,
withdrawal and payment shall be made at 10:00 A.M., Pittsburgh, Pennsylvania
time, on a business day and at a place selected by the Company, which date and
place shall be acceptable to the Agent, on at least two business days' prior
notice to the Agent (it being understood that such business day shall not be
more than 1O business days after the Public Offering Termination Date or such
other time or place as shall be agreed upon by the Company and the Agent.
Certificates for Shares shall be delivered directly to the purchasers thereof or
in accordance with their directions. Any certificates returned as undeliverable
will be held by the Company until claimed by persons legally entitled thereto or
otherwise disposed of in accordance with applicable law.
SECTION 3. Representations and Warranties. The Company represents and
warrants to the Agent as follows:
(a) As of the Effective Date, the Registration Statement complied in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations, and the Registration Statement did not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and as of the
Effective Date (unless the term "Prospectus" refers to the Rule 424(b)
prospectus, in which case at the time it is filed with or mailed for filing to
the Commission) and at the Community Offering Expiration Date and Public
Offering Termination Date, as the case may be, referred to in the Registration
Statement, any preliminary or final Prospectus, and any Blue Sky Application or
any Sales Document (as such terms are defined in Section 6 hereof) authorized by
the Company for use in connection with the Community and Public Offering did not
and will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this Section 3 (a) shall not apply to
statements in or omissions from such Registration Statement, Prospectus or Sales
Documents made in reliance upon and in conformity with information furnished in
writing to the Company by the Agent regarding the Agent expressly for use under
the caption "Plan of Distribution" in the Prospectus;
(b) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the 1933 Act with respect to any securities
of the Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
4
<PAGE>
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the 1933 Act;
(c) The Company has been duly incorporated and is an existing corporation
in good standing under the laws of the Commonwealth of Pennsylvania, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus; and the Company is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended;
(d) The Bank has been duly organized and is validly existing as a national
banking association under the laws of the United States of America and the rules
and regulations of the Office of the Comptroller of the Currency ("OCC"); all of
the issued shares of capital stock of the Bank have been duly and validly
authorized and issued, are fully paid and nonassessable (except as set forth
under 12 U.S.C. ss.55), provided that the Company knows of no facts which
currently or with the passage of time would permit an assessment thereunder) and
are owned directly by the Company, free and clear of all liens, encumbrances,
equities or other claims; and there are no outstanding rights, warrants or
options to acquire or instruments convertible into, or exchangeable for, any
shares of capital stock or other equity interests in the Bank;
(e) The Shares will have been, and all other outstanding shares of the
Common Stock have been, duly authorized and validly issued, and the Shares will
be, and all other outstanding shares of Common Stock are, fully paid and
nonassessable and conform to the description thereof contained in the
Prospectus; and, the shareholders of the Company have no preemptive rights with
respect to the Shares;
(f) No consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court is required for the consummation of the
transactions contemplated by this Agreement in connection with the issuance or
sale of the Shares by the Company, except such as have been obtained and made
under the 1933 Act and such as may be required under state securities laws;
(g) The execution, delivery and performance of this Agreement and the
issuance and sale of the Shares will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any statute, any
rule, regulation or order of any governmental agency or body or any court having
jurisdiction over the Company or the Bank or any of their properties, or any
agreement or instrument to which the Company or the Bank is a party or by which
the Company or the Bank is bound or to which any of the properties of the
Company or the Bank is subject, or the charter or by-laws of the Company or the
5
<PAGE>
Bank, and the Company has full power and authority to authorize, issue and sell
the Shares as contemplated by this Agreement;
(h) This Agreement has been duly authorized, executed and
delivered by the Company;
(i) S.R. Snodgrass, A.C. with respect to the Company and the Bank, are
independent certified public accountants within the meaning of Rule 1O1 of the
Rules of Conduct of the Code of Professional Ethics of the American Institute of
Certified Public Accountants and Rule 2-01 of Regulation S-X under the 1933 Act;
(j) The consolidated financial statements of the Company included in the
Registration Statement and the Prospectus present fairly the consolidated
financial condition, results of operations and cash flows of the Company and the
Bank as at and for the dates indicated and the periods specified and comply as
to form in all material respects with the applicable accounting requirements of
the Commission and generally accepted accounting principles ("GAAP"). Said
financial statements have been prepared in conformity with GAAP applied on a
consistent basis during the periods involved, present fairly in all material
respects the information required to be stated therein and are consistent with
financial statements and other reports filed by the Company with the Commission.
The other financial and statistical information and related notes included in
the Prospectus present fairly the information shown therein on a basis
consistent with the audited and unaudited consolidated financial statements of
the Company included in the Prospectus;
(k) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as may otherwise be stated
therein:
(i) there has not been any material adverse change, financial or
otherwise, in the condition of the Company or the Bank or in the earnings,
business affairs or business prospects of the Company or the Bank, whether
or not arising in the ordinary course of business,
(ii) there has not been any material increase in the long term debt
of the Company and the Bank, or in loans past due 90 days or more, or real
estate acquired by foreclosure, or any material decrease in surplus and
reserves or total assets of the Company and the Bank, nor has the Company
or the Bank issued any securities or incurred any liability or obligation
for borrowing other than in the ordinary course of business,
(iii) there have not been any material transactions entered into by
the Company or the Bank other than those in the ordinary course of
business, and
6
<PAGE>
(iv) the capitalization, liabilities, assets, properties and
business of the Company and the Bank conform in all material respects to
the descriptions thereof contained in the Prospectus. The Company and the
Bank have no material liability of any kind, contingent or otherwise,
except as disclosed or referred to in the Prospectus;
(l) The Company and the Bank have obtained all material licenses, permits
and other governmental authorizations currently required for the conduct of
their businesses; all such licenses, permits and governmental authorizations are
in full force and effect, and the Company and the Bank are in all material
respects complying with all laws, rules, regulations and orders applicable to
the operation of their businesses. The Company and the Bank do not own equity
securities or any equity interest in any business enterprise, except as
described in the Prospectus;
(m) The Bank is a member in good standing of the Federal Home Loan Bank of
Pittsburgh. The Company is in good standing with the Federal Reserve Bank of
Philadelphia. The Bank is in good standing with the OCC. The deposit accounts of
the Bank are insured by the Bank Insurance Fund up to the maximum amount allowed
under the law and no proceedings for the termination or revocation of such
insurance are pending or threatened;
(n) The Company and the Bank have good and marketable title to all
properties and assets which are material to their businesses and to those
properties and assets described in the Registration Statement and the Prospectus
as owned by them, free and clear of all liens, except such liens as are
described or referred to in the Registration Statement or the Prospectus or are
not materially significant or important in relation to the businesses of the
Company and the Bank; and all of the leases and subleases material to the
businesses of the Company and the Bank under which the Company and the Bank hold
properties, including those described in the Registration Statement and the
Prospectus, are in full force and effect;
(o) Except as set forth in the Registration Statement or the Prospectus,
there is no suit, proceeding, charge, investigation or action before or by any
court, regulatory authority or governmental agency or body pending or, to the
best knowledge of the Company or the Bank, threatened, which might materially
and adversely affect the performance of this Agreement or which might result in
any material adverse change in the condition (financial or otherwise), business
affairs or business prospects of the Company or the Bank, or which would
materially affect their properties and assets;
(p) The Company and the Bank are in compliance in all material respects
with the applicable financial record-keeping and reporting requirements of the
Currency and Foreign Transaction Reporting Act of 1970, as amended, and the
7
<PAGE>
regulations and rules thereunder;
(q) No default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default on the part of the Company or
the Bank in the due performance and observance of any material term, covenant or
condition of any indenture, mortgage, deed of trust, note, bank loan or credit
agreement or any other instrument or agreement to which the Company or the Bank
or by which either of them or any of their property is bound or affected in any
respect which, in any such case, is material to the Company or the Bank; such
agreements are in full force and effect; and no other party to any such
agreements has instituted or, to the best knowledge of the Company and the Bank,
threatened any action or proceeding wherein the Company or the Bank would or
might be alleged to be in default thereunder;
(r) The Company and the Bank have filed all federal, state and local tax
returns required to be filed and have made timely payments of all taxes due and
payable in respect of such returns and no deficiency has been asserted with
respect thereto by any taxing authority except such as are being contested in
good faith and by appropriate proceedings and for which adequate reserves have
been established on the books of the Company and/or the Bank, as the case may
be;
(s) Neither the Company nor the Bank nor, to the knowledge of the Company,
any of their respective employees have made any payment of funds of the Company
or the Bank prohibited by law, and no funds have been set aside to be used for
any payment prohibited by law;
(t) The Company will apply the net proceeds from the sale of the Shares in
the manner set forth in the Prospectus under the caption "Use of Proceeds"; and
(u) Neither the Company nor the Bank has sold or issued any securities
within the three (3) years immediately preceding the Effective Date which were
not, registered under the 1933 Act and the applicable securities or Blue Sky
laws of the jurisdictions in which such securities were sold or issued; or, if
not registered, were sold or issued pursuant to and in full compliance with
applicable exemptions from registration available under the 1933 Act and the
applicable securities or Blue Sky laws of the jurisdiction in which sold or
issued; and no stop order, denial, order to show cause, suspension or revocation
order, injunction or restraining order, or similar order entered or issued by
the Commission, any state or other regulatory authority or by any court,
concerning any of such securities, is in effect and no proceeding with respect
thereto is now pending.
8
<PAGE>
SECTION 4. Covenants of the Company. The Company hereby covenants with the
Agent as follows:
(a) The Company will advise the Agent promptly of any proposal to amend or
supplement the Registration Statement or the Prospectus (including a prospectus
filed pursuant to Rule 424 under the 1933 Act which differs from the prospectus
on file at the time the Registration Statement was declared effective) and will
not effect such amendment or supplementation without the Agent's consent, which
shall not be unreasonably withheld; and the Company will also advise the Agent
promptly of the effectiveness of any amendment or supplementation of the
Registration Statement or the Prospectus (including a prospectus filed pursuant
to Rule 424 under the 1933 Act which differs from the prospectus on file at the
time the Registration Statement was declared effective) and of the institution
by the Commission of any stop order proceedings in respect of the Registration
Statement, and will use its best efforts to prevent the issuance of any such
stop order and to obtain as soon as possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the Shares is required
to be delivered under the 1933 Act, any event shall have occurred as a result of
which, in the reasonable judgment of the Company after consultation with its
counsel and special counsel, the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
at any time to amend the Prospectus to comply with the 1933 Act, the Company
promptly will prepare and file with the Commission an amendment or supplement
which will correct such statement or omission or an amendment which will effect
such compliance.
(c) As soon as practicable, but not later than the Availability Date (as
defined below), the Company will make generally available to its security
holders an earnings statement (which need not be audited) covering a period of
at least 12 months beginning after the Effective Date which will satisfy the
provisions of Section 11(a) of the 1933 Act. For the purpose of the preceding
sentence only, "Availability Date" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes the Effective
Date, except that, if such fourth fiscal quarter is the last quarter of the
Company's fiscal year, "Availability Date" means the 90th day after the end of
such fourth fiscal quarter.
(d) The Company will furnish to the Agent copies of the Registration
Statement (one of which will be signed and will include all exhibits), the
Prospectus, all Sales Documents, if any, and all amendments and supplements to
such documents, in each case as soon as available and in such quantities as the
9
<PAGE>
Agent requests.
(e) The Company will use its best efforts to arrange for the qualification
of the Shares for sale under the state securities or Blue Sky laws of such
jurisdictions as the Agent reasonably designates including, without limitation,
Delaware, Florida, Maryland, New Jersey, New York, Ohio, Pennsylvania and Texas,
and will continue such qualifications in effect so long as required for the
distribution, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process.
(f) During the period of 5 years hereafter, the Company will furnish to
the Agent, as soon as practicable after the end of each fiscal year, a copy of
its annual report to stockholders for such year; and the Company will furnish to
the Agent (i) as soon as available, a copy of each report and definitive proxy
statement of the Company filed with the Commission under the Securities Exchange
Act of 1934, as amended ("1934 Act") or mailed to stockholders, and (ii) from
time to time, such other information concerning the Company as the Agent may
reasonably request.
(g) The Company will pay all expenses incident to the performance of its
obligations under this Agreement and will reimburse the Agent for any expenses
(including reasonable fees and disbursements of counsel) incurred by the Agent
in connection with the performance of its obligations under this Agreement
including, without limitation, any filing fee of the NASD relating to the Shares
and for expenses incurred in distributing the Prospectus (including any
amendments and supplements thereto) and any Sales Document, subject to and as
more fully provided in Sections 5, 6, 7 and 8 hereof.
(h) The Company will not offer, sell, contract to sell or otherwise
dispose of any additional shares of its Common Stock without the Agent's prior
written consent for a period of 90 days after the Community Offering Termination
Date.
(i) During the period when the Prospectus is required to be delivered, the
Company will comply, and will cause the Bank to comply, at the Company's own
expense, with all requirements imposed upon either or both of them by the OCC,
the FDIC, the Federal Reserve Board, applicable state law, and by the 1933 Act,
the 1933 Act Regulations, the 1934 Act and the rules and regulations of the
Commission promulgated thereunder, including, without limitation, Rule 10b-6
under the 1934 Act, in each case as from time to time in force, so far as
necessary to permit the continuance of sales or dealing in shares of Common
Stock during such period in accordance with the provisions hereof and the
Prospectus.
10
<PAGE>
(j) The Company will take, and will cause the Bank to take, such actions
and furnish such information as are reasonably requested by the Agent in order
for the Agent to ensure compliance with the NASD's Interpretation regarding
"Free Riding and Withholding."
(k) Prior to the Public Offering Termination Date, the Company will issue
no press release or other communication relating to the Offering and hold no
press conference with respect to the Company, the Bank, the financial condition,
results of operations, business, properties, assets or liabilities of either of
them, or the Offering, without the Agent's prior written consent.
SECTION 5. Payment of Expenses. The Company shall pay or cause to be paid
all expenses incident to the performance of the obligations of the Company under
this Agreement, including, but not limited to, the following:
(i) the preparation, issuance and delivery of
certificates for the Shares to the subscribers in the
Offering;
(ii) the fees and disbursements of the Company's
counsel and accountants;
(iii) the qualification of the Shares under all applicable state
securities or Blue Sky laws, including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with
the preparation of a Blue Sky Survey;
(iv) the printing and delivery to the Agent in such quantities as
the Agent shall reasonably request of copies of the Registration
Statement, the Prospectus and the Applications (as defined in Section 6)
as originally filed and as amended or supplemented and all other documents
in connection with the Offering and this Agreement;
(v) filing fees incurred in connection with the review
of the Offering by the Commission and by the NASD;
(vi) fees and expenses relating to advertising expenses, temporary
personnel expenses and other miscellaneous expenses relating to the
marketing by the Agent of the Shares;
(vii) the cost of all other documents applicable to the
Offering and the fees and charges of any transfer agent,
registrar and other agents;
(viii) fees of the Agent's legal counsel up to $15,000; and
11
<PAGE>
(ix) all actual out-of-pocket expenses not to exceed $7,500, unless
a greater amount is agreed upon in writing by the Company, incurred by the
Agent and its counsel in connection with the Offering other than costs and
expenses incurred by the Selected Dealers, if any, in connection with the
Public Offering.
SECTION 6. Indemnification.
(a) The Company shall indemnify and hold harmless the Agent and each
Selected Dealer, and their respective officers, directors, agents and employees
and each person, if any, who controls the Agent or anyof them within the meaning
of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and
all loss, liability, claim, damage or expense whatsoever, joint or several, that
the Agent or any of them may suffer or to which the Agent or any of them may
become subject under all applicable federal and state laws or otherwise, and to
promptly reimburse the Agent and any such persons upon written demand for any
expenses, including legal fees, disbursements of counsel and other expenses
incurred by the Agent or any of them in connection with investigating, preparing
or defending any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement or any amendment or supplement thereto), the Prospectus (or any
amendment or supplement thereto), or any Blue Sky application or other
instrument executed by the Company or the Bank or based upon written
information supplied by the Company or the Bank filed in any state or
jurisdiction to register or qualify any or all of the Shares under the
securities laws thereof (collectively, the "Applications"), or any notice,
request or other document, advertisement or communication (collectively,
the "Sales Documents") prepared or executed by or on behalf of the Company
or the Bank with their consent or based upon written information furnished
by or on behalf of the Company or the Bank, whether or not filed in any
jurisdiction, in order to qualify or register the Shares under the
securities laws thereof;
(ii) arise out of or are based upon the omission or alleged omission
to state in any of the foregoing documents a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(iii) arise from any theory of liability whatsoever relating to or
arising from or based upon the Registration Statement (or any amendment or
supplement thereto), the Prospectus, any Application or Sales Document, or
other
12
<PAGE>
documentation distributed in connection with the Offering;
or
(iv) arise from the sale of the Shares despite the failure to
satisfy one or more of the conditions set forth in Section 8 hereof,
except to the extent such losses, claims, damages, liabilities or actions
arise out of or are based upon any such untrue statement or alleged untrue
statement in, or such material fact or alleged material fact was omitted
from, the Registration Statement (or any amendment or supplement thereto),
the Prospectus (or any amendment or supplement thereto), or any
Application or Sales Document (or any amendment or Supplement thereto),
made in reliance upon and in conformity with information furnished in
writing to the Company by the Agent regarding the Agent expressly for use
under the caption "Plan of Distribution" therein; or
(v) arise from the services of the Agent or matters in connection
therewith that are the subject of the Letter Agreement and this Agreement;
provided, however, that the Company shall not be liable under this clause
(v) in respect of any loss, claim, damage or liability which resulted from
the Agent's negligence or willful misconduct.
(b) The Agent agrees to indemnify and hold harmless the Company, its
directors, officers, employees, agents and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20(a) of the
1934 Act against any and all loss, liability, claim damage or expense
whatsoever, joint or several which they, or any of them, may suffer or to which
they, or any of them, may become subject under all applicable federal and state
laws or otherwise, and to promptly reimburse the Company and any such persons
upon written demand for any expenses (including fees and disbursements of
counsel) incurred by them, or any of them, in connection with investigating,
preparing or defending any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment or supplement thereto), or the Prospectus (or
any amendment or supplement thereto), or are based upon the omission or
alleged omission to state in any of the foregoing documents a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading but only to the extent that such untrue statement or alleged
untrue statement was made in, or such material fact or alleged material
fact was omitted from, the Registration Statement (or any amendment or
supplement thereto) or the Prospectus (or any amendment
13
<PAGE>
or supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by the Agent regarding the Agent
expressly for use under the caption "Plan of Distribution" therein, or
(ii) arise from the services of the Agent or matters in connection
therewith that are the subject of the Letter Agreement and this Agreement,
but only to the extent that such losses, claims, damages, liabilities or
actions arise from the services of Agent or matters in connection
therewith that are resulted from Agent's gross negligence or willful
misconduct.
(c) Each indemnified party shall give prompt written notice to each
indemnifying party or any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 6 or
otherwise. An indemnifying party may participate at its own expense in the
defense of such action. In addition, if it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties that
are defendants in such action, unless such indemnified parties reasonably object
to such assumption on the ground that there may be legal defenses available to
them that are different from or in addition to those available to such
indemnifying party. If an indemnifying party assumes the defense of such action,
the indemnifying parties shall not be liable for any fees and expenses of
counsel for the indemnified parties incurred thereafter in connection with such
action, proceeding or claim, other than reasonable costs of investigation. In no
event shall the indemnifying parties be liable for the fees and expenses of more
than one separate firm of attorneys (and any special counsel that said firm may
retain) for all indemnified parties in connection with any one action,
proceeding or claim or separate but similar or related actions, proceedings or
claims in the same jurisdiction arising out of the same general allegations or
circumstances.
(d) The agreements contained in this Section 6 and in Section 7 hereof and
the representations and warranties of the Company set forth in this Agreement
shall remain in full force and effect regardless of:
(i) any investigation made by or on behalf of the Agent or the
Agent's officers, directors or controlling persons, agents or employees or
by or on behalf of the Company or any officers, directors or controlling
persons, agents or employees of the Company;
14
<PAGE>
(ii) delivery of and payment hereunder for the Shares;
or
(iii) any termination of this Agreement.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 6 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the Company and the Agent shall
contribute to the aggregate losses, claims, damages and liabilities (including
the investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of any action, suit or proceeding of any claims
asserted, but after deducting any contribution received by the Company or the
Agent from persons other than the other party thereto, who may also be liable
for contribution) in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Agent on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions, proceedings
or claims in respect thereof). The relative benefits received by the Company on
the one hand and the Agent on the other shall be deemed to be in the same
proportion as the total gross proceeds from the Offering (before deducting
expenses) received by the Company bear to the total fees (not including
expenses) received by the Agent. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact relates to information supplied by the Company on one hand or
the Agent on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Agent agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro-rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereof) referred to
above in this Section 7 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action, proceeding or claim. The Agent shall not be liable
for any loss, liability, claim, damage or expense or be required to contribute
any amount which in the aggregate exceeds the amount paid to the Agent under
this Agreement. It is understood that the above-stated limitation on the Agent's
liability is essential to the Agent and that the Agent would not have entered
into this Agreement if such limitation had not been agreed to by the parties to
this Agreement. No person found guilty of any fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution
15
<PAGE>
from any person who was not found guilty of such fraudulent misrepresentation.
The obligations of the Company under this Section 7 and under Section 6 shall be
in addition to any liability which the Company may otherwise have. For purposes
of this Section 7, each of the Agent's officers and directors and each person,
if any, who controls the Agent within the meaning of the 1933 Act and the 1934
Act shall have the same rights to contribution as the Agent and each person, if
any, who controls the Company within the meaning of the 1933 Act and the 1934
Act, and each officer and director of the Company shall have the same rights to
contribution as the Company. Any party entitled to contribution, promptly after
receipt of notice of commencement of any action, suit, claim or proceeding
against such party in respect of which a claim for contribution may be made
against another party under this Section 7, will notify such party from whom
contribution may be sought, but the omission to so notify such party shall not
relieve the party from whom contribution may be sought from any other obligation
it may have hereunder or otherwise than under this Section 7.
SECTION 8. Conditions of the Agent's Obligation. The Agent's obligations
hereunder are subject, in the Agent's discretion, to the condition that all
representations and warranties and other statements of the Company herein are,
at and as of the commencement of the Community Offering and at and as of the
Public Offering Termination Date, true and correct in all material respects, the
condition that the Company shall have performed in all material respects all of
its obligations hereunder to be performed on or before such dates, and to the
following further conditions:
(a) The Registration Statement shall have been declared effective by the
Commission not later than 5:30 P.M., Pittsburgh time, on the date of this
Agreement, or with the Agent's consent at a later time and date. At or prior to
the Public Offering Termination Date no stop order suspending the effectiveness
of the Registration Statement or the completion of the Offering shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened by the
Commission or by any state authority under any state securities of Blue Sky law,
and no order or other action suspending the effectiveness of the Prospectus or
the completion of the Offering shall have been issued or proceedings therefore
initiated or threatened by the Commission, any state authority, or any other
person.
(b) The Agent shall have received a letter addressed to the Agent, dated
the Effective Date, of S. R. Snodgrass, A.C., in form and substance satisfactory
to the Agent confirming that they are independent public accountants with
respect to the Company within the meaning of the 1933 Act and the applicable
published 1933 Act Regulations and stating in effect that:
(i) in their opinion the financial statements and
16
<PAGE>
schedules of the Company included in the Registration Statement and
covered by their opinion thereon dated February 16, 1996 (except as to
Note 15, as to which the date is June 20, 1996) comply as to form in all
material respects with the applicable accounting requirements of the 1933
Act and the related published 1933 Act Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial
Information, on the unaudited financial statements of the Company included
in the
Registration Statement;
(iii) on the basis of the procedures referred to in clause (ii)
above, a reading of the latest available interim financial statements of
the Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and a reading of minutes of the
Company and the Bank, nothing came to their attention that caused them to
believe that:
(A) the unaudited financial statements of the Company included
in the Registration Statement do not comply as to form in all
material respects with the applicable accounting requirements of the
1933 Act and the related published 1933 Act Regulations, or are not
in conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited
financial statements of the Company included in the Registration
Statement;
(B) at the date of the latest available balance sheet of the
Company, there was any change in the capital stock, any increase in
consolidated long-term debt, or any decrease in consolidated
stockholders' equity, total assets, total deposits, or the allowance
for loan losses, as compared with amounts shown on the latest
balance sheet of the Company included in the Prospectus; or
(C) for the period of time from the closing date of the latest
income statement of the Company included in the Prospectus to the
closing date of the latest available income statement of the
Company, there were any decreases, as compared with the
corresponding period of the previous year, in consolidated net
interest income, net interest income after provision from loan
losses, or the total or the fully diluted per share amounts of
consolidated net income; except in all cases set forth in clauses
(B) and (C) above for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
17
<PAGE>
described in such letter; and
(iv) they have compared the dollar amounts (or percentages derived
from such dollar amounts) and other financial information of the Company
and the Bank contained in the portions of the Registration Statement
identified in Exhibit B annexed hereto (in each case to the extent that
such dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and the Bank
and subject to the internal controls of the Company's accounting system,
or are derived directly from such records by analysis or computation) with
the amounts in the audited and unaudited financial statements of the
Company, as the case may be, included in the Registration Statement, the
amounts in the general accounting records of the Company and the Bank and
the amounts shown in analyses prepared by the Company or the Bank
therefrom, and have found such dollar amounts, percentages and other
financial information of the Company and the Bank to be in agreement and
have proved the arithmetic accuracy of the percentages based on the data
in such financial statements and general accounting records, except as
otherwise specified in such letter.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred
(i) any change, or any development involving a prospective change,
in or affecting particularly the business or properties of the Company or
the Bank which, in the reasonable judgment of the Agent, materially
impairs the investment quality of the Shares;
(ii) any suspension or limitation of trading in securities generally
on the New York Stock Exchange, or any setting of minimum prices for
trading on such exchange, or any suspension of trading of any securities
of the Company or the Bank on any exchange or in the over-the-counter
market;
(iii) any banking moratorium declared by Federal or
Pennsylvania authorities; or
(iv) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the
reasonable judgment of the Agent, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the sale of and payment for the
Shares.
(d) The Agent shall have received an opinion dated as of
18
<PAGE>
the Effective Date, of Malizia, Spidi, Sloane & Fisch, P.C., special counsel for
the Company, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the Commonwealth of
Pennsylvania, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus; and, the Company is
duly registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended;
(ii) The Bank has been duly organized and is validly existing as a
national banking association under the laws of the United States of
America and the rules and regulations of the OCC; all of the issued shares
of capita stock of the Bank have been duly and validly authorized and
issued, are fully paid and nonassessable (except as set forth under 12 USC
ss.55), provided that such counsel knows of no facts which currently or
with the passage of time would permit an assessment thereunder) and are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or other claims; and there are no outstanding
rights, warrants or options to acquire or instruments convertible into, or
exchangeable for, any shares of capital stock or other equity interests in
the Bank;
(iii) The Shares and all other outstanding shares of the Common
Stock have been or will be duly authorized and validly issued, fully paid
and non-assessable, and conform to the description thereof contained in
the Prospectus; and the stockholders of the Company and the Bank have no
preemptive rights;
(iv) There are no contracts, agreements or understandings known to
such counsel between the Company and any person granting such person the
right to require the Company to file a registration statement under the
1933 Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities
in the securities registered pursuant to the Registration Statement or in
any securities being registered pursuant to any other registration
statement filed by the Company under the 1933 Act;
(v) No consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance or sale of the Shares by the Company, except
such as have been obtained and made under the 1933 Act and those state
securities or Blue Sky laws designated by Agent pursuant to Section 4(e);
19
<PAGE>
(vi) The issuance and sale of the Shares and the compliance by the
Company with all of the provisions of this Agreement and the consummation
of the transactions herein and therein contemplated do not conflict with
or constitute a breach of any of the terms or provisions of, or constitute
a default under any indenture, mortgage, deed of trust, loan agreement,
debt agreement, or other agreement or instrument known to such counsel
after reasonable inquiry to which the Company or the Bank is a party or by
which the Company or the Bank is bound or to which the Bank is subject and
in each case described above which (A) are material, to the business of
the Company or the Bank, or where (B) such conflict, breach or default
would prohibit the issuance and sale of the Shares; nor do such actions
violate the provisions of the articles of incorporation, as amended, or
the byLaws of the Company or the Bank or violate any applicable Federal,
or state statute, order, rule or regulation or, to the best of such
counsel's knowledge after reasonable inquiry, violate any order of any
court, bank regulatory agency, or other governmental agency or body having
jurisdiction over the Company or the Bank or any of their respective
properties, except in each case where any such violation would not have a
material adverse effect on the issuance and sale of the Shares or on the
conditions, business or operations of the Company and the Bank;
(vii) This Agreement has been duly authorized,
executed and delivered by the Company;
(viii) The Registration Statement was initially declared effective
under the 1933 Act as of 10:00 A.M. on September **, 1996, the Prospectus
was filed, if required, with the Commission pursuant to the applicable
subparagraph of Rule 424(b) on the date specified therein and, to the best
of the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any part thereof has been
issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the 1933 Act or any state securities or Blue
Sky law, and the Registration Statement and each amendment thereto, as of
the Effective Date, and the Prospectus, and each supplement thereto, as of
their respective issue dates, complied as to their respective issue dates,
complied as to form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations; such counsel have no reason to
believe that the Registration Statement, the Prospectus, or any such
amendment or supplement, as of such respective dates, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading; the descriptions in the Registration Statement (as of the
Effective Date) and the Prospectus of statutes, legal and
20
<PAGE>
governmental proceedings and contracts and other documents are accurate in
all material respects and fairly present the information required to be
shown; and such counsel do not know of any legal or governmental
proceedings required to be described in the Registration Statement (as of
the Effective Date) or the Prospectus which are not described as required
or of any contracts or documents of a character required to be described
in the Registration Statement (as of the Effective Date), the Prospectus
or to be filed as exhibits to the Registration Statement (as of the
Effective Date) which are not described and filed as required; it being
understood that such counsel need express no opinion as to the financial
statements and other financial data contained in the Registration
Statement or the Prospectus; and
(ix) All securities issued or sold by the Company or the Bank within
the three (3) years immediately preceding the Effective Date were
registered under the 1933 Act and the applicable securities or Blue Sky
laws of the jurisdictions in which such securities were sold or issued;
or, if not registered, were sold or issued pursuant to and in full
compliance with applicable exemptions from registration available under
the 1933 Act and the applicable securities or Blue Sky laws of the
jurisdictions in which sold or issued; and, to the best knowledge of such
counsel, no stop order, denial, order to show cause, suspension or
revocation order, injunction or restraining order, or similar order
entered or issued by the Commission, any statement or other regulatory
authority or by any court, concerning any such securities, is in effect
and no proceeding with respect thereto is now pending.
(e) The Agent shall have received from Pepper, Hamilton & Scheetz, counsel
for the Agent, such opinion or opinions, dated the Effective Date, with respect
to such matters as the Agent may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(f) The Agent shall have received a certificate, dated the Effective Date,
of the President and the principal financial or accounting officer of the
Company in which such officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of the
Company in this Agreement are true and correct, that each of the Company and the
Bank has complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to the Community Offering
Termination Date, that no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission and that, subsequent to
the respective date of the most recent financial statements in the Prospectus,
there has been no material adverse
21
<PAGE>
change in the respective financial position or results of operation of the
Company and the Bank except as set forth in or contemplated by the Prospectus or
as described in such certificate.
(g) The Agent shall have received a letters addressed to the Agent dated
the Public Offering Termination Date which meets the requirements of subsections
(b) (iii) (B) and (C) of this Section as of the date of such letter.
(h) The Agent shall have received from Malizia, Spidi, Sloane & Fisch,
P.C., a letter addressed to the Agent dated the Public Offering Termination Date
to the effect that as of the date of such letter their opinion delivered under
subsection (d) of this Section remains in full force and effect.
(i) The Agent shall have received a certificate dated the Public Offering
Termination Date which meets the requirements of subsection (f) of this Section
as of the date of such certificate.
(j) The Agent shall have received on or prior to the date of the execution
of this Agreement letters of each director of the Company in the form of Exhibit
C.
The Company will furnish the Agent with such conformed copies of such opinions,
certificates, letters and documents as the Agent shall reasonably request.
If any of the conditions specified in this Section shall not have been
fulfilled when and as required by this Agreement, this Agreement and all of the
Agent's obligations hereunder may be terminated by the Agent by notifying the
Company of such termination in writing or by telegram at any time at or prior to
the Public Offering Termination Date, and any such termination shall be without
liability of any party to any other party except as otherwise provided in this
paragraph and in Sections 1, 5, 6 and 7 hereof. If this Agreement is terminated
pursuant to this paragraph and any Shares are sold in the Offering nevertheless,
the Agent shall be entitled to receive, and the Company agrees to pay to the
Agent, the same amount of compensation to which the Agent would have been
entitled and which the Company would have been obligated to pay hereunder in the
absence of such termination.
SECTION 9. Termination.
(a) This Agreement may be terminated by the Company at any time after the
Community Offering Expiration Date, and no party to this Agreement shall have
any obligation to another hereunder, except for payment by the Company, as set
forth in Sections I (fourth paragraph thereof), 5, 6, 7 and 8 hereof
22
<PAGE>
(b) This Agreement may be terminated by the Agent, with respect to the
Agent's obligations hereunder, by notifying the Company at any time at or prior
to the Public Offering Termination Date, if any of the conditions specified in
Section 8 hereof shall not have been fulfilled when and as required by this
Agreement.
SECTION 10. Survival. The respective indemnities, agreements,
representations, warranties and other statements of the Company and the Agent
set forth in this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of the Agent or any of the Agent's officers or directors or any person
controlling the Company, and shall survive termination of this Agreement and the
receipt or delivery of any payment for the Shares.
SECTION 11. Miscellaneous.
(a) Notices hereunder, except as otherwise provided herein, shall be given
in writing or by telegraph, addressed:
To the Agent
1703 Oregon Pike
Lancaster, PA 17601
Attention: Eric G. Hoerner, Vice President
with a copy to:
Dennis M. Sheedy
Pepper, Hamilton & Scheetz
One Mellon Bank Building, 50th Floor
Pittsburgh, PA 15219
and to the Company at:
Emclaire Financial Corp.
612 Main Street, Box D
Emlenton, Pennsylvania 16373
Attention: President
with a copy to:
Gregory A. Gehlmann
Malizia, Spidi, Sloan & Fisch, P.C
1301 K Street, N.W., Suite 700E
Washington, DC 20005
(b) This Agreement is made solely for the benefit of and will be binding
upon the parties hereto and their respective successors and the controlling
persons referred to in Section 6 hereof, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
23
<PAGE>
of any of the Shares.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania.
(d) Time shall be of the essence of this Agreement.
(e) This Agreement may be signed in various counterparts which together
will constitute one agreement.
(f) Capitalized terms used herein that are not defined herein but are
defined in the Prospectus, shall have the meanings defined therein.
If the foregoing correctly sets forth the arrangement between the Company
and the Agent, please indicate acceptance thereof in the space provided below
for that purpose, whereupon this letter and the Agent's acceptance shall
constitute a binding agreement.
Very truly yours,
Emclaire Financial Corp.
By:
----------------------------------
Name
Confirmed and accepted as of the date first above written.
HOPPER SOLIDAY & CO., INC.
By:
-------------------------------
24
<PAGE>
EXHIBIT B
1. SUMMARY - The Company
2. SUMMARY - Financial Highlights - Profitability, Capital,
Asset Quality and Community Lending, Retail Deposit Base
3. THE Offering - Dividends on Common Stock
4. SUMMARY OF CONSOLIDATED FINANCIAL DATA
5. MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS -
Dividends
6. CAPITALIZATION
7. SELECTED FINANCIAL DATA
8. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
9. BUSINESS - Lending Activities
10. BUSINESS - Investment Portfolio
11. BUSINESS - Deposits
12. MANAGEMENT - table of beneficial ownership
13. EXECUTIVE COMPENSATION - Compensation Paid to Executive
Officers - SUMMARY COMPENSATION TABLE
25
<PAGE>
Exhibit C
Hopper Soliday & Co., Inc.
1703 Oregon Pike
Lancaster, PA 17601
Re: Proposed Community and Public Offering of Common Stock
of Emclaire Financial Corp.
Gentlemen:
In connection with the above-referenced proposed offering and in
consideration for your being named in the Agency Agreement between Emclaire
Financial Corp., a Pennsylvania corporation (the "Company"), and you (the
"Agency Agreement") and entering into the Agency Agreement, the undersigned, a
director of the Company hereby agrees with the Agent that for a period of 90
days after the Public Offering Termination Date (as defined in the Agency
Agreement), the undersigned will not, without your prior written consent,
directly or indirectly, offer to sell, contract to sell, sell, grant any option
for the sale of, or otherwise dispose of (other than to donees who agree to be
similarly bound) any shares of the Company's Common Stock owned or controlled by
the undersigned. For purposes of the preceding sentence, shares of the Company's
Common Stock owned or controlled by a trust of which the undersigned is trustee
and has sole power to dispose of such Common Stock shall be deemed to be
controlled by the undersigned.
Very truly yours,
-----------------------------
(type or print)
Dated:
----------------------------
26
Exhibit 1.2
<PAGE>
200,800
EMCLAIRE FINANCIAL CORP.
COMMON STOCK
Dealer Agreement
Hopper Soliday & Co., Inc.
1703 Oregon Pike
Lancaster, PA 17601
Dear Sirs:
We acknowledge receipt of the Prospectus dated September **, 1996
(hereinafter called the "Prospectus") relating to the offering of 200,800 shares
of common stock, $1.25 par value (hereinafter called the "Shares") of Emclaire
Financial Corp., a Pennsylvania corporation (hereinafter called the "Company").
We understand that the Underwriters are severally offering certain of the
Shares for sale to certain securities dealers at the public offering price of
$13.50 per share, less a concession of Concession$ per share and that any
Underwriter may allow, and dealers reallow, a concession not in excess of
Reallow$ per share to other dealers who enter into an agreement in this form.
We hereby agree with you as follows with respect to any purchase of the
Shares from you or from any dealer at a concession from the public offering
price.
In purchasing Shares, we will reply only on the Prospectus and on no other
statements whatsoever, written or oral.
1. Offering and Trading Provisions. The Shares purchased by us at a
concession from the public offering price shall be promptly offered to the
public upon the terms set forth in the Prospectus or for sale at a concession
not in excess of reallow$ per share to any other member of the National
Association of Securities Dealers, Inc. (the "NASD") who enters into an
agreement with you in this form or to foreign banks or dealers not eligible for
membership in the NASD who enter into an agreement with you in this form.
<PAGE>
Except as permitted by you, we will not, at any time prior to the
completion by us of distribution of the Shares acquired by us pursuant to this
Agreement, bid for, purchase, sell or attempt to induce others to purchase or
sell, directly or indirectly, any common stock of the Company (the "Common
Stock") other than (i) as provided for in this Agreement or the Underwriting
Agreement relating to the Shares or (ii) purchase or sales by us of any Common
Stock as broker on unsolicited orders for the account of others.
We represent that we have not participated in any transaction
prohibited by the preceding paragraph and that we have at all times complied
with the provisions of Rule 10b-6 of the Securities and Exchange Commission
applicable to this offering.
We agree to advise you from time to time upon request, prior to the
termination of this Agreement, of the number of Shares remaining unsold which
were purchased by us from you or from any other dealer at a concession from the
public offering price and, on your request, we will resell to you any such
Shares remaining unsold at the purchase price thereof if, in your opinion, such
Shares are needed to make deliver against sales made to others.
We agree that without your consent, we will not sell to any account
over which we exercise discretionary authority any of the Shares which we
purchase and which are subject to the terms of this Agreement.
If prior to the termination of this Agreement you purchase or
contract to purchase any Shares which were purchased by us from you or from any
other dealer at a concession from the public offering price (including any
Shares represented by certificates which may have been issued on transfer or in
exchange for certificates originally representing such Shares), in your
discretion you may (i) sell for our account the Shares so purchased and debit or
credit our account for the loss or profit resulting from such sale, (ii) charge
our account with an amount equal to the concession to dealers with respect
thereto and credit such amount against the cost thereof or (iii) require us to
purchase such Shares at a price equal to the total cost of such purchase
including commissions and transfer taxes on redelivery.
2. Delivery and Payment. If we purchase any Shares from
you hereunder, we agree that such purchases will be evidenced by
your written confirmation and will be subject to the terms and
conditions set forth in the confirmation and in the Prospectus.
Shares purchased by us from you hereunder shall be paid for in full
at the public offering price stated above, or, if you
2
<PAGE>
shall so advise us, at such price less the applicable concession at the office
of Manager*, at such time and on such day as you may advise us, by certified or
official bank check payable in New York Clearing House funds to the order of
Manager Address* against delivery of the Shares. If we are called upon to pay
the public offering price for the Shares purchased by us, the applicable
concession will be paid to us, less any amounts charged to our account pursuant
to Section 1 above, after termination of this Agreement.
3. Termination. You will advise us of the date and time
of termination of this Agreement or of any designated provisions
hereof. This Agreement shall in any event terminate 30 business
days after the date of the initial public offering of the Shares
unless sooner terminated by you.
4. Representations and Liability of Dealers and Underwriters. We represent
that we are a member in good standing of the NASD or that we are a foreign bank
or dealer not eligible for membership in the NASD which agrees to make no sales
of Shares within the United States, it territories or its possessions, or to
persons who are citizens thereof or residents therein. In making sales of
Shares, if we are such a member of the NASD, we agree to comply with all
applicable rules of the NASD, including without limitation, the NASD's
Interpretation with Respect to Free-Riding and Withholding and Section 24 of
Article III of the NASD's Rules of Fair Practice or, if we are such a foreign
bank or dealer, we agree to comply with such Interpretation, Sections 8.24 and
36 of such Article as though we were such a member and Section 25 of such
Article as it applies to a non-member broker or dealer in a foreign county.
We will not give any information or make any representations other
than those contained in the Prospectus, or act as agent for the Company or any
Underwriter.
We agree that you have full authority to take such action as may
seem advisable to you in respect of all matters pertaining to the offering of
the Shares. You shall not be under any liability to us for any act or omission,
except for obligations expressly assumed by you in this Agreement.
All communications to you relating to the subject matter of this
Agreement shall be addressed to the Syndicate Department, Manager*, Manager
Address*, and any notices to us shall be deemed to have been duly given if
mailed or telegraphed to us at the address shown below.
5. Blue Sky Matters. You will not have any responsibility with respect to
the right of any dealer to sell Shares in any jurisdiction, notwithstanding any
information you may furnish in that connection.
3
<PAGE>
6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
Very truly yours,
By:
-----------------------------------
Date:
-----------------------------------
4
================================================================================
COMMON STOCK EMCLAIRE FINANCIAL CORP. SHARES
CERTIFICATE NO.
INCORPORATED UNDER THE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA
Authorized Shares 12,000,000 Par Value $1.25 Per Share
This Certifies that _________________________________________ is the owner
(See reverse for certain definitions)
of _____________________________________________________________ shares of
EMCLAIRE FINANCIAL CORP.
full paid and non-assessable, transferable only on the books of the
Corporation in person or by Attorney, upon the surrender of this
Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be
hereunto affixed this _______________________ day of ____________________
A.D. 19____
____________________________________ ____________________________________
SECRETARY PRESIDENT
SEAL
================================================================================
<PAGE>
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ____________ Custodian___________
(Cus) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act
_______________________
JT TEN - as joint tenants with right of (State)
survivorship and not as tenants
in common
</TABLE>
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED ______________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
________________________________________________________________________________
Shares represented by the within Certificate, and do hereby irrevocably
constitute and appoint_________________________________________________ Attorney
to transfer the said Shares on the books of the within named Corporation with
full power of substitution in the premises.
Dated ______________ 19_____
In presence of
X__________________________________________________
X_____________________________________________________
NOTICE: The signatures to this assignment must correspond with the name
as written upon the face of the certificate, in every particular, without
alteration or enlargement or any change whatever.
PURCHASE AND ASSUMPTION AGREEMENT
between
MELLON BANK, N.A.
as Seller
and
FARMERS NATIONAL BANK OF EMLENTON
as Purchaser
as of
May 3, 1996
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
ARTICLE I - PURCHASE OF ASSETS AND ASSUMPTION OF
<S> <C>
LIABILITIES................................................ 1
1.1 Effective Date................................................. 1
1.2 Transfer and Consideration..................................... 1
1.3 Adjustment to Cash Premium..................................... 2
1.4 Purchase of Loans.............................................. 3
1.5 Additional Obligations of the Seller........................... 3
1.6 Additional Obligations of the Purchaser........................ 4
1.7 Certain Transitional Matters................................... 4
1.8 Imdemnification................................................ 5
1.9 Pro-Rata Adjustment of Expenses................................ 6
1.10 Environmental Assessment....................................... 6
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF THE SELLER.............. 6
2.1 Corporate Organization......................................... 7
2.2 No Violation................................................... 7
2.3 Corporate Authority and Validity............................... 7
2.4 Title to Real and Personal Property; Encumbrances.............. 7
2.5 Deposit Liability Records...................................... 8
2.6 Loan Records................................................... 8
2.7 Non-solicitation of Business................................... 8
2.8 Limitation of Warranties....................................... 8
2.9 Broker's Commissions; Finder's Fees............................ 9
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF
PURCHASER................................................ 9
3.1 Corporate Organization......................................... 9
3.2 No Violation................................................... 9
3.3 Corporate Authority and Validity............................... 9
ARTICLE IV - CONDUCT OF BUSINESS PENDING THE EFFECTIVE
DATE...................................................... 9
4.1 Activity in the Ordinary Course................................ 9
ARTICLE V - OBLIGATION OF PARTIES PRIOR TO AND AFTER
THE EFFECTIVE DATE........................................ 10
5.1 Full Access.................................................... 10
5.2 Requirements to Obtain Approval of Regulatory Authorities...... 10
5.3 Further Assurance.............................................. 11
5.4 Right to Intervene............................................. 11
ARTICLE VI - CONDITIONS TO PURCHASER'S OBLIGATIONS..................... 11
6.1 Representations And Warranties True............................ 11
6.2 Obligations Performed.......................................... 11
ii
<PAGE>
6.3 No Adverse Litigation.......................................... 11
6.4 Regulatory Approval............................................ 11
6.5 Certificate of Compliance...................................... 11
6.6 Purchaser's Inspection of the Premises......................... 11
ARTICLE VII - CONDITIONS TO THE SELLER'S OBLIGATIONS................... 12
7.1 Representations and Warranties True............................ 12
7.2 Obligations Performed.......................................... 12
7.3 No Adverse Litigation.......................................... 12
7.4 Regulatory Approval............................................ 12
7.5 Certificate of Compliance...................................... 12
ARTICLE VIII - TERMINATION............................................. 12
8.1 Methods of Termination......................................... 12
8.2 Procedure Upon Termination..................................... 13
ARTICLE IX - MISCELLANEOUS PROVISIONS.................................. 13
9.1 Amendment and Modification..................................... 13
9.2 Waiver of Extension............................................ 13
9.3 Assignment..................................................... 13
9.4 Survival of Representations and Warranties..................... 13
9.5 Payment of Expenses............................................ 13
9.6 Addresses for Notice, etc...................................... 14
9.7 Press Releases, Public Disclosure.............................. 14
9.8 Counterparts................................................... 14
9.9 Headings....................................................... 14
9.10 Governing Law.................................................. 15
SIGNATURE PAGE......................................................... 15
EXHIBIT A - Real Estate................................................ 16
EXHIBIT B - Listing of Furniture, Fixtures and Equipment to be
Excluded from the Sale.................................. 17
.
EXHIBIT C - Stipulated Values of Real Estate, Furniture, Fixtures
Equipment Transferred................................... 18
EXHIBIT D - Deposit Liabilities Assumed................................ 19
EXHIBIT E - Instrument of Assumption of Certain Liabilities............ 20
EXHIBIT F - Sample Settlement Worksheets............................... 21
EXHIBIT F-1 - Allocation of Purchase Price............................. 23
EXHIBIT G - Deconversion Tasks......................................... G-1 and G-2
iii
</TABLE>
<PAGE>
THIS PURCHASE AND ASSUMPTION AGREEMENT made as of this 3rd day of May,
1996, between MELLON BANK, N.A., a national bank organized and existing under
the laws of The United States of America and having its principal office in
Pittsburgh, Pennsylvania the ("Seller"), and FARMERS NATIONAL BANK OF EMLENTON,
a national bank organized and existing under the laws of The United States of
America and having its principal office in Emlenton, Pennsylvania (the
"Purchaser").
WHEREAS, the Seller desires to sell certain assets and certain deposits and
other liabilities of its branch office located at Knox, Pennsylvania (the
"Branch") to Purchaser; and
WHEREAS, the Purchaser desires to buy such assets and assume such liabilities of
the Branch upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and the mutual covenants and
agreements contained herein, and for other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending legally to be bound, agree and covenant as follows:
ARTICLE I
PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES
1.1 Effective Date
Except as otherwise provided herein, the closing date for the purchase and
assumption herein described (hereinafter termed the "Effective Date") shall be
on the date of Purchaser's computer conversion or a date mutually agreed to by
the parties hereto, which date shall be within 45 days of the day on which all
regulatory approvals required by law and this Agreement have been obtained and
all applicable waiting periods have expired, or by such later date as may be
agreed by the parties, but in no event later than September 30, 1996.
1.2 Transfer and Consideration
(a) The Seller agrees, subject to the terms and conditions of this
agreement, to validly sell, assign, transfer, convey and deliver to the
Purchaser, on the Effective Date:
(i) all right, title and interest in and to the real estate on
which the Branch is situated by special warranty deed as shown
on Exhibit A attached to and made a part hereof, together with
all improvements thereon, except as otherwise shown on Exhibit
A;
(ii)all right, title and interest in and to the furniture,
fixtures and equipment owned or (to the extent of the lessee's
interest) leased by the Seller, except those listed on Exhibit
B attached hereto and made a part hereof; and those that
Purchaser notifies Seller that Purchaser does not desire to
acquire, such notification must be given at least forty-five
(45) days prior to the Effective Date; and
(iii) all right, title and interest in and to the safe deposit box
business conducted at the Branch
(b) The Purchaser agrees that on the Effective Date, subject to the terms and
conditions of this Agreement and as consideration for the aforesaid sale,
assignment, transfer, conveyance and delivery:
(i) it will pay to the Seller a cash premium (the "Cash Premium")
of ten percent (10.00%) of the deposit liabilities assumed by
Purchaser pursuant to paragraph (b)(iii) of this Section 1.2.
For purposes of this Agreement deposit liabilities shall mean
all deposits (as defined in Section 3(1)(1) of the Federal
Deposit Insurance Act) of Seller shown on the books and records
of the Branch as of the close of business on the Effective
Date, including accrued but unpaid interest and both collected
and uncollected funds (including overdrawn accounts), together
with Seller's rights and responsibilities under any related
customer agreement, but excluding: (1) deposits subject to
legal process, (2) deposits which have been reported as
abandoned property under the abandoned property law of any
jurisdiction, (3) deposits held in accounts for which Seller
acts as fiduciary (other than deposits held in an Individual
Retirement Account), (4) deposits held in any Individual
Retirement Account that the Purchaser is prohibited from
<PAGE>
assuming under applicable law or where the account holder has
notified Seller or Purchaser of his, her or its objection to
Purchaser acting as custodian or trustee of such Individual
Retirement Account, (5) deposits owned by Seller, (6) deposits
constituting official checks, travelers checks, money order or
certified checks of Seller, (7) deposits held in the name of
any political subdivision, unless agreed to by Purchaser, (8)
brokered deposits (as defined in Section 29 (g) of the Federal
Deposit Insurance Act), unless agreed by Purchaser, (9)
deposits that are not insured deposits (as defined by Section 3
(m) of the Federal Deposit Insurance Act), unless agreed by
Purchaser and (10) accounts designated as closed on the books
and records of Seller;
(ii)it will pay to the Seller the value stipulated in Exhibit C
hereto of the real property, furniture, fixtures and equipment
owned by the Seller, which shall be mutually established by
Purchaser and Seller within 60 days of the execution of this
Agreement. If a mutually agreed upon price is not established
in said 60 days, then Purchaser will pay Seller the appraised
fair market value of such property as determined by an
appraiser(s) acceptable to both Seller and Purchaser (the cost
of such appraisal(s) shall be divided evenly between Seller and
Purchaser);
(iii) it will assume and thereafter fully and timely perform and
discharge in accordance with their terms all deposit
liabilities identified on Exhibit D attached hereto and made a
part hereof, with only such changes therein as shall be
occurred in the ordinary course of business between the date
shown on Exhibit D and the Effective Date;
(iv)it will assume and thereafter fully and timely perform and
discharge, in accordance with their terms, all liabilities and
obligations of Seller under any and all equipment and leases
sold, transferred and assigned to the Purchaser under this
Agreement; and
(v) it will exercise its best efforts to operate the Branch.
1.3 Preliminary Settlement and Adjustment to Cash Premium.
One business day before the Effective Date, Seller shall deliver a preliminary
closing statement accumulated through the close of business at the Branch on a
date prior to the Effective Date as mutually agreed to by the parties in the
form of Exhibit F which shall be certified by an authorized officer of Seller.
Such preliminary closing statement shall be the basis of the preliminary payment
made to Purchaser on the Effective Date. Within ten (10) days after the
Effective Date, Seller shall deliver an Exhibit D as of the Effective Date. The
parties shall use their best efforts to agree upon the Exhibit D as of the
Effective Date. At the same time, the parties shall agree upon and jointly
prepare and attach to this Agreement as of the Effective Date an Allocation of
Purchase Price on Exhibit F-1 reflecting the allocation of the Purchase Price as
negotiated by the parties. Within 60 days of the Effective Date, the Seller
shall prepare an IRS Form 8594 reflecting the allocation of the Purchase Price
in accordance with Allocation of Purchase Price on Exhibit F-1 and shall submit
such Form 8594 to Purchaser for review. Purchaser shall inform Seller in writing
of any disagreement with the amounts allocated on Form 8594 within 15 days after
receipt. The amounts shown on Form 8594 shall become final should Purchaser fail
to inform Seller within 15 days. The parties agree to use the allocations on
Exhibit F-1 and IRS Form 8594 for all tax purposes, including the preparation of
federal and state income tax returns. For purposes of the preparation of IRS
Form 8594, the name, address and taxpayer identification number of the parties
will be as listed in Section 9.6 of this Agreement. Not later than two business
days after delivery of the Exhibit D as of the Effective Date, Seller shall pay
to Purchaser (or Purchaser to Seller as the case may be) the adjusting
settlement payment together with accrued interest calculated at the Fed. Fund
Rate for the number of days lapsed between the Effective Date and the date of
such adjusting settlement payment. Based on the preliminary settlement sheet
data, which shall include a calculation of the Cash Premium, the amount due the
Purchaser and the amount due the Seller shall be netted and Seller will transfer
to Purchaser, in a manner as hereinafter described, the netted difference on or
prior to the Effective Date. For purposes of this Agreement, Fed. Fund Rate
shall mean the weighted average of the rates on overnight federal funds
transactions arranged on such day by the Federal Funds Brokers computed and
released by the Federal Reserve Bank of Cleveland in substantially the same
manner as such Federal Reserve Bank currently computes and releases the weighted
average it refers to as the Federal Funds Effective Rate. Subject to the
provisions of paragraph (c) of Section 1.7 hereof, an appropriate adjustment to
the Cash Premium shall be made in the event of an error in calculating deposits
listed on Exhibit D as of the Effective Date, is discovered by the Purchaser
within forty-five (45) days of the Effective Date. All amounts due or
adjustments to the cash premium (after notice and
2
<PAGE>
the amount of the adjustment has been given) shall be made within two (2)
business days by timely wire transfer, or crediting or debiting (as the case may
be) to an account of Purchaser in Seller.
1.4 Purchase of Loans.
(a) In addition to the purchase of assets and assumption of liabilities
described above, the Purchaser shall purchase from Seller on the
Effective Date any loans identified by the Seller as being
collateralized by deposit liabilities of the Branch to be assumed by the
Purchaser pursuant to Section 1.2(b)(iii) hereof, such loans to be
identified by the Seller in writing on or before sixty (60) days prior
to the Effective Date. Thereafter, the Seller shall make available to
the Purchaser for inspection at the Branch, or at such other of Seller's
offices, in accordance with the provisions of Section 5.1, all pertinent
records and documents of Seller pertaining to such loans, which records
and documents shall be treated confidentially by the Purchaser. The
Purchaser shall have the option of rejecting any such loans which are
more than thirty (30) days past due as of seven (7) business days
immediately preceding the Effective Date or not fully collateralized.
The purchase price of each loan shall be principal balance plus accrued
but unpaid interest as of the Effective Date. Such purchase price shall
be paid by offsetting the entire amount thereof against the funds
payable by the Seller to the Purchaser pursuant to Paragraph (c) of
Section 1.5 hereof for the assumption of deposit liabilities by the
Purchaser pursuant to this Agreement.
(b) All loans (and any notes, other evidences of indebtedness or security
instruments associated therein) transferred to the Purchaser on the
Effective Date pursuant to paragraph (a) of this Section 1.4 shall be
transferred without recourse and without any warranties or
representations as to the collectability of any such loans or the
creditworthiness or the solvency of any such obligors except as
hereinafter set forth in Section 2.6.
1.5 Additional Obligations of the Seller.
On the Effective Date, the Seller shall:
(a) deliver to the Purchaser at the Branch such of the assets purchased as
shall be capable of physical delivery, including, without limitation,
the furniture, fixtures and equipment purchased hereunder and all assets
comprising the safe deposit box business at the Branch:
(b) execute, acknowledge and deliver to the Purchaser all such endorsements,
assignments, bills of sale, and other instruments of conveyance,
assignment and transfer in such form as shall be satisfactory to the
Purchaser to consummate the sale and transfer of the assets purchased to
the Purchaser;
(c) update Exhibit D to accurately reflect the deposit liabilities and
accrued interest thereon as of the close of business on the business day
immediately preceding the Effective Date and make available to Purchaser
immediately available funds equal to the amount of deposit liabilities,
with accrued interest, assumed by the Purchaser pursuant to paragraph
(b)(iii) of Section 1.2 hereof;
(d) assign, transfer and deliver to the Purchaser all of the following
records pertaining to the deposit liabilities to be assumed by the
Purchaser as exist and are available in whatever form or medium is
maintained by the Seller: signature cards, orders and contracts between
the Seller and the Branch depositors, and records of similar character;
(e) assign, transfer and deliver to the Purchaser the loans to be acquired
by the Purchaser pursuant to Section 1.4 hereof and all collateral
security of any nature whatsoever held by the Seller as collateral for
any of such loans together with all notes, other evidence of
indebtedness, documents, files and records in whatever form or medium is
maintained by the Seller as may pertain to such loans.
From and after the Effective Date the Seller agrees that it will preserve and
safely keep, for as long as may be required by applicable law, all of the
historical books and records of account pertaining to the deposit liabilities
assumed by the Purchaser and not otherwise transferred to the Purchaser on the
Effective Date for the joint benefit of itself and the Purchaser, and that it
will permit the Purchaser or its representatives, at any reasonable time and at
the Purchaser's expense, to inspect, make extracts from or copies of, any such
books and records as the Purchaser shall reasonably deem necessary; provided,
however, nothing herein shall require the Seller to breach any obligation of
confidentiality of any depositor.
3
<PAGE>
1.6 Additional Obligations of the Purchaser.
(a) To evidence the assumption by the Purchaser of the liabilities and
obligations of the Seller assumed pursuant to this Agreement, the
Purchaser shall execute, acknowledge and deliver to the Seller, on the
Effective Date, an instrument of assumption in the form attached hereto
as Exhibit E; and
(b) At the Effective Date, the Purchaser shall offer employment to all
employees of the Seller working at the Branch on the date hereof,
including regular part-time employees, at base wages equal to their
current wages and salaries for one year after the Effective Date.
Purchaser shall grant to all employees accepting employment credit for
all their respective service with Seller for the purposes of determining
their participation, eligibility and vesting rights, but not for
purposes of benefit accrual, in any and all thrift, medical, life
insurance, disability, pension plans and other employee benefits plans
or programs currently maintained by Purchaser. Purchaser reserves the
right to exclude past service in the calculation of profit sharing
contributions or benefits. Purchaser shall provide coverage for
pre-existing medical conditions to the extent that such condition is
currently covered under Seller's plan, provided that such conditions
would be covered under Purchaser's plan if it were not pre-existing. In
such an event of differing coverages such person shall be covered by
Seller's COBRA plan. For a period of twelve months after the Effective
Date, the Purchaser will not terminate or reduce the level of
compensation for any of such employees who accept Purchaser's offer of
employment; provided, however, any such employee maybe terminated or
disciplined for cause as set forth in Purchaser's employee policies.
(c) The Purchaser agrees that it will preserve and safely keep, for as long
as may be required by applicable law, all of the files, books of account
and the records referred to in Section 1.5(d) and (e) above for the
joint benefit of itself and the Seller, and that it will permit the
Seller or its representatives, at any reasonable time and at the
Seller's expense, to inspect, make extracts from or copies of, any such
files, books of account, or records as the Seller shall reasonably deem
necessary; provided, however, noting herein shall require the Purchaser
to breach any obligation of confidentiality of any depositor or
borrower.
1.7 Certain Transitional Matters.
Following the Effective Date:
(a) The Purchaser agrees to pay in accordance with law and customary banking
practices all properly drawn and presented checks, drafts and withdrawal
orders presented to the Purchaser by-mail, over the counter or through
the check clearing system of the banking industry, by depositors of the
deposit accounts assumed, whether drawn on the checks, drafts or
withdrawal order forms provided by the Seller or by the Purchaser, and
in all other respects to discharge, in the usual course of the banking
business, the duties and obligations of the Seller with respect to the
balances due and owing to the depositors whose accounts are assumed by
the Purchaser. The Purchaser's obligation under this paragraph to honor
checks, drafts and withdrawal orders on forms provided by the Seller and
carrying its imprint (including name and transit routing number) shall
not apply to any such check, draft or withdrawal order presented to
Purchaser more than sixty (60) days following the Effective Date.
(b) Purchaser shall honor all stop payment orders initiated prior to the
Effective Date and reflected in the stop payment documents delivered to
Purchaser on the Effective Date or thereafter. If following receipt of
appropriate stop order documentation, Purchaser makes any payment in
violation of any such order, Purchaser shall be solely liable for any
such payment and shall indemnify, hold harmless and defend Seller from
and against all claims, liabilities, losses, fines or other expenses,
including reasonable attorneys' fees and expenses, arising out of any
such payment. In the event that Purchaser shall make any payment in
violation of a stop payment order initiated prior to the Effective Date
but not reflected in stop payment documents delivered to Purchaser prior
to such payment, Seller shall indemnify, hold harmless and defend
Purchaser from and against all claims, losses and liabilities, including
reasonable attorneys' fees and expenses, arising out of any such
payment.
(c) Seller will promptly remit to Purchaser all payments on Loans, all
amounts intended as Deposits and all other amounts properly payable to
Purchaser rather than Seller as a result of the transactions
contemplated hereby which may be received by Seller after the Effective
Date. If the balance due on any Loan has been reduced by Seller as a
result of a payment by check or other instrument received prior to the
Effective Date, and if such instrument is returned to Seller after the
Effective Date as uncollectible, an amount in
4
<PAGE>
cash equal to such reduction shall be paid by Purchaser to Seller
promptly upon demand, and Seller shall assign promptly all right,
title and interest in such uncollectible item to Purchaser.
(d) Upon request after the Effective Date either to Seller or Purchaser from
any state or the Federal government to reclaim funds relating to forged
social security checks, unemployment checks or welfare checks credited
by Seller or cash by Seller prior to the Effective Date to a Deposit
transferred to and assumed by Purchaser pursuant to this Agreement,
Purchaser hereby agrees to honor such request and to pay to such
governmental entity the amount requested as of the date of such request.
Seller shall remain liable for remitting any deficiency to such
governmental entity and shall reimburse Purchaser promptly in the amount
paid by Purchaser pursuant to the preceding sentence.
(e) If within sixty (60) days following the Effective Date, any of the
depositors of the accounts assumed, instead of accepting the obligation
of the Purchaser to pay the deposit liabilities assumed, shall demand
payment from the Seller for all or any part of any such assumed deposit
liabilities, the Seller shall not be liable or responsible for making
such payment. If any of such depositors draws a check, draft or
withdrawal order against the deposit liabilities, including accrued
interest, assumed from the Seller hereunder which is presented or
charged to the Seller within sixty (60) days after the Effective Date,
the Seller may pay same and the Purchaser agrees to reimburse the Seller
for any such payments or charges, provided there are sufficient funds in
the depositor's account. The Seller shall not be deemed to have made any
representation or warranty to the Purchaser with respect to any such
checks, drafts or withdrawal orders of depositors whose accounts have
been assumed by the Purchaser, and any such representations or
warranties implied by law are hereby disclaimed. The Purchaser will
settle with the Seller any such checks, drafts or orders of withdrawal
presented by Seller to Purchaser for reimbursement, provided there are
sufficient funds in the depositor's account, no later than the start of
the second business day after presentment. In order to reduce the
continuing charges to the Seller through the check clearing system of
the banking industry which will result from check forms of the Seller
being used after the Effective Date by the depositors whose accounts are
assumed, the Purchaser agrees, at its cost and expense, and without
charge to such depositors to notify such depositors, prior to the
Effective Date but after Seller's notice set forth in the immediately
following sentence, of the Purchaser's assumption of deposit liabilities
and to furnish each depositor of an assumed account with checks on the
forms of the Purchaser with instructions to utilize the Purchaser's
checks and to destroy unused checks of the Seller. In addition,
subsequent to regulatory approval of the transactions contemplated
hereunder and prior to the Effective Date, the Seller will notify its
affected depositors by letter, in a form mutually acceptable to the
Seller and the Purchaser, of the pending assignment of the Seller's
deposit accounts and business operations at the Branch to the Purchaser,
which notice shall be at the Seller's cost and expense.
(f) The Purchaser will pay to the Seller within two business days after
presentment an amount equivalent to the amount of any checks, drafts or
withdrawal orders credited to an account which has been assumed by the
Purchaser which are returned to the Seller after the Effective Date.
(g) Manifest errors in calculation or data entry relating to any amount
supplied hereunder may be corrected by notice to the other party within
forty-five (45) days after the Effective Date. Each party hereunder
agrees to take any action, including the payment of money or the
amendment of any records, necessary to reflect such correction within
five (5) business days after receiving such notice from the other party.
(h) Exhibit G, attached hereto, sets forth specifics on Seller's and
Purchaser's deconversion tasks and post Effective Data processing.
1.8 Indemnification.
(a) The Seller shall indemnify the Purchaser and hold it harmless from and
against any losses (including loss of revenues or profits), liabilities,
damages or expenses collectively, "Losses") that the Purchaser may
sustain or become subject to as a result of (i) any breach of any
representation, warranty or agreement of Seller contained in this
Agreement, (ii) any claim, legal action or administrative proceeding
based on any conduct of Seller or resulting from or arising in
connection with the operation of the Branch prior to or on the Effective
Date or ownership by Seller of the Branch or any of the assets
transferred hereunder, or (iii) the assertion against Purchaser of any
liability or obligation with respect to Taxes (as defined below) or
information reporting requirements of any taxing authority attributable
to the assets or operations of the Branch prior to or on the Effective
Date or that Seller is obligated to pay hereunder; provided, however,
Seller shall have no obligation to indemnify Purchaser against any
Losses for which a claim for
5
<PAGE>
indemnification has not been made by Purchaser prior to one year after
the Effective Date with respect to clause (i) above, prior to two
years after the Effective Date with respect to clause (ii) above, and
prior to expiration of the applicable statute of limitations taking
into consideration any extensions thereof pertaining to such Taxes or
information reporting requirements with respect to clause (iii) above.
"Taxes" shall include, but not be limited to, any federal, state,
local, foreign and other income, franchise, capital stock, employees'
income withholding, non-resident alien withholding, social security,
unemployment, disability, real property, personal property, sales,
use, excise, transfer, business privilege, bank shares tax, loans and
other taxes or governmental fees or charges, including any interest,
penalties or additions to tax on the foregoing.
(b) The Purchaser shall indemnify the Seller and hold it harmless from and
against any Losses that the Seller may sustain or become subject to as a
result of (i) any breach of any representation, warranty or agreement of
Purchaser contained in this Agreement, (ii) any claim, legal action or
administrative proceeding based on any conduct of Purchaser or resulting
from or arising in connection with the operation of the Branch after the
Effective Date or ownership by Purchaser of the Branch or any of the
assets transferred hereunder, or (iii) the assertion against Purchaser
of any liability or obligation with respect to Taxes or information
reporting requirements of any taxing authority attributable to the
assets or operations of the Branch after the Effective Date or that
Purchaser is obligated to pay hereunder; provided, however, Purchaser
shall have no obligation to indemnify Seller against any Losses for
which a claim for indemnification has not been made by Seller prior to
one year after the Effective Date with respect to clause (i) above,
prior to two years after the Effective Date with respect to clause (ii)
above, and prior to expiration of the applicable statute of limitations
taking into consideration any extensions thereof pertaining to such
Taxes or information reporting requirements with respect to clause (iii)
above.
(c) To exercise its indemnification rights under this Section 1.8 as a
result of the assertion against it of any claim or liability for which
indemnification is provided, the indemnified party shall promptly notify
the indemnifying party that such claim or liability has been asserted,
shall advise the indemnifying party of all facts relating thereto within
the knowledge of the indemnified party, and shall afford the
indemnifying party the opportunity, at the indemnifying party's sole
cost and expense, to defend against such claim or liability (in which
event the indemnified party may participate in the defense at its sole
expense). The indemnified party shall not settle or compromise any such
claim or liability and to be indemnified from and against all Losses
resulting therefrom, without the prior written consent of the
indemnifying party, which consent shall not be unreasonably withheld.
1.9 Pro-Rata Adjustment of Expenses.
Taxes and any items either of which may become a municipal lien upon the
premises shall be pro-rated on a daily basis and settled between the parties as
of the Effective Date.
1.10 Environmental Assessment
Seller and Purchaser shall select a reputable, mutually acceptable environmental
consultant who will perform an environmental assessment of the Branch owned by
Seller as listed on Exhibit "A". Purchaser will order, at Purchaser's expense,
the assessments promptly after execution of this Agreement and selection of a
consultant. The reports shall be addressed to Purchaser and Purchaser shall make
copies available to Seller. If any of the assessments indicate the likely
existence of significant adverse environmental conditions, Purchaser and Seller
shall mutually agree upon a course of action (including how the cost of any
additional investigation will be allocated), which might include further
environmental investigation to confirm and/or qualify the extent of
contamination and the cost of remediation. If any assessment confirms the
existence of environmental contamination, either party may elect to terminate
this Agreement by written notice in accordance with Article VIII.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser as follows:
6
<PAGE>
2.1 Corporate Organization.
The Seller is a national bank validly existing and in good standing under the
laws of The United States of America. The Seller has the corporate power and
authority to own the property being transferred, to carry on its business as
presently conducted and to effect the transactions contemplated hereunder. The
Seller's deposit liabilities are insured by the Federal Deposit Insurance
Corporation.
2.2 No Violation.
The execution and delivery of this Agreement by Seller does not, and the
consummation of the transactions contemplated hereby it will not, constitute (i)
a breach or violation of, or a default under, any law, rule, regulation,
judgment, decree, order, governmental permit or license, agreement, indenture or
instrument of Seller or to which Seller is subject, which breach, violation or
default would have material adverse effect on the financial condition, business
or result of operation of Seller and its subsidiaries taken as a whole or (ii) a
breach or violation of, or a default under, Seller's articles of association or
by-laws; and the consummation of the transactions contemplated hereby will not
require any consent or approval under any such law, rule, regulation, judgment,
decree, order, governmental permit or license or the consent or approval of any
other party to any such agreement, indenture or instrument, other than the
approval of applicable regulatory authorities, which shall have been obtained
prior to the Effective Date.
2.3 Corporate Authority and Validity.
The execution and delivery of this Agreement and consummation of the
transactions contemplated hereunder have been duly authorized by all necessary
corporate action and no further corporate authorization on the part of the
Seller is necessary to consummate such transactions. This Agreement is a valid
and binding agreement of the Seller enforceable against the Seller in accordance
with its terms, subject as to enforcement to bankruptcy, insolvency, moratorium
and other laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
2.4 Title to Real and Personal Property; Encumbrances.
(a) The Seller is the owner of the real property on which the Branch is
situated and the Seller has, and at the Effective Date will have, good
and marketable title to such real property free from any mortgage,
pledge, lien, security interest, conditional sale agreement, encumbrance
or charge of any nature whatsoever, except as noted in Exhibit A hereto
and shall be insurable by a reputable insurance company at the regular
rates. The title to the real property, buildings, and other improvements
conveyed hereunder shall be free and clear of all liens and
encumbrances, except as noted in Exhibit A, and shall be insurable as
good and marketable title.
(b) The Seller is the owner of the furniture, fixtures, equipment and other
such assets to be transferred to the Purchaser pursuant to this
agreement, and in no case are any of such assets subject to any
mortgage, pledge, lien, security interest, conditional sales agreement,
lease, encumbrance or charge of any nature whatsoever except as noted in
Exhibit B hereto.
(c) The improved real estate and the furniture, fixtures and equipment being
sold pursuant to this Agreement are substantially all of the tangible
assets owned by the Seller and used by it to conduct the business
operations of the Branch as of the date hereof, other than Bunker
terminals and associated printers, controllers and operating system
which are not being sold to the Purchaser hereunder. The improved real
estate and the furniture, fixtures and equipment being sold are all in
good operating condition and repair, giving consideration to their age
and use and subject to ordinary wear and tear.
(d) No notice of any violation of zoning laws, building or fire codes, or
other statutes, ordinances or regulations relating to the Branch or the
operation thereof has been received by the Seller.
(e) The deed transferring the real property from Seller to Purchaser shall
include the standard coal clauses and the following clause, "No
hazardous waste, as the term "hazardous waste" is defined by the Solid
Waste Management Act, Act 97 of 1980, is presently being disposed of by
the grantor, nor to the grantor's actual knowledge has been, on the
premises herein described."
7
<PAGE>
2.5 Deposit Liability Records.
The Seller will provide the Purchaser with access to all current records of
account pertaining to deposit liabilities of the Branch to be assumed by the
Purchaser pursuant to this Agreement in such form or medium as is maintained by
the Seller, which form or medium is recognized by the regulatory authorities as
being appropriate. All such records of account are accurate, and all purported
signatures on and the executions of any documents are genuine. With respect to
the deposit records, Seller is in good faith compliance with the Internal
Revenue Code of 1986 and the regulations thereunder (the Code), relative to
obtaining from depositors executed Forms W-8 and W-9. Seller has made the two
consecutive annual mailing pursuant to Section 3406 and 6724 of the Code for
those deposit liabilities for which an annual mailing is required. The records
assigned, transferred and delivered to the Purchaser pursuant to paragraph (d)
of Section 1.5 and as provided for in Exhibit G hereof will, at the Effective
Date, be in a form or medium which has been recognized by the regulatory
authorities as being appropriate, will be accurate, and will constitute all such
records as are required by such regulatory authorities to be necessary to
lawfully conduct the business of taking deposits at the Branch except for those
historical books and records of account retained by the Seller for the joint
benefit of the Seller and the Purchaser pursuant to Section 1.5 hereof.
2.6 Loan Records.
The Seller will provide the Purchaser with access to all current records of
account pertaining to the loans which may be purchased by the Purchaser pursuant
to this Agreement in such form or medium as is maintained by the Seller, which
form or medium is recognized by the regulatory authorities as being appropriate.
All such records are complete and accurate and all purported signatures on and
the execution of any documents are genuine. To the knowledge of Seller (not
having made a specific investigation for these purposes) each loan being
purchased is a valid loan made and serviced in conformity with applicable laws
and regulations and in the ordinary course of business and is not subject to any
defense, set-off, offer or counter claim. The records assigned, transferred and
delivered to the Purchaser pursuant to paragraph (e) of Section 1.5 hereof will,
at the Effective Date, be accurate and will constitute all such records
necessary to lawfully conduct the business of holding such loans.
2.7 Non-solicitation of Business.
The Seller will not, for 24 months following the Effective Date, solicit
customers whose deposit accounts are included in the deposits shown on Exhibit D
as expected to be transferred (as it may be amended to and including the
Effective Date to include additional customers of the Branch) except as may
occur in connection with (a) credit card solicitations and (b) advertising or
solicitations directed to the public generally, using print, television or
radio, and not targeted to depositors at the Branch. The Purchaser recognizes
that, in connection with solicitations directed to the public generally, the
Seller cannot easily control telemarketing and mass mailings which may be
received by customers of the Branch and agrees to permit the Seller to engage in
such activities. Also, the Purchaser agrees to permit the Seller to distribute
"Statement Stuffer" materials to customers who hold accounts or maintain banking
relationships at other branches, departments, or entities of the Seller
notwithstanding the fact that some of such customers may also be depositors at
the Branch. It is the understanding of the Purchaser and the Seller that
solicitation does not include the circumstances wherein a customer of the Branch
initiates discussions with the Seller. The Seller will give instructions to the
personnel located at the neighboring community offices not to solicit the
Branch's customers for 24 months following the Effective Date.
The Seller further represents and covenants that for a period of 24 months
following the Effective Date it will not establish a branch office, an automated
teller machine (owned by the Seller) a loan production office or an affiliate
lender's office for the purpose of conducting deposit or loan business within a
radius of five (5) miles of the Branch.
2.8 Limitation of Warranties
Except as may be expressly represented or warranted in this Agreement by the
Seller, the Seller makes no representations or warranties whatsoever with regard
to any assets being transferred, assigned or delivered to the Purchaser or any
liability or obligation being assumed by the Purchaser.
8
<PAGE>
2.9 Broker's Commissions; Finder's Fees.
All negotiations relative to this Agreement and the transactions contemplated
herein have been carried on by the Seller directly with the Purchaser and no
action has been taken that would give rise to any valid claim against the
Purchaser for a brokerage commission, finder's fee or other like commission.
This representation and warranty shall survive the Effective Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Seller as follows:
3.1 Corporate Organization.
The Purchaser is a national bank, validly existing and in good standing under
the laws of The United States of America. The Purchaser has the corporate power
and authority to own the properties being acquired, to assume the liabilities
being transferred, and to effect the transactions contemplated hereunder. The
Purchaser's deposit liabilities are insured by the FDIC.
3.2 No Violation.
The execution and delivery of this Agreement by Purchaser does not, and the
consummation of the transactions contemplated hereby by it will not, constitute
(i) a breach or violation of, or a default under, any law, rule, regulation,
judgment, decree, order, governmental permit or license, agreement, indenture or
instrument of Purchaser or to which Purchaser is subject, which breach,
violation or default would have a material adverse effect on the financial
condition, business or results of operation of Purchaser and its subsidiaries
taken as a whole or (ii) a breach or violation of, or a default under,
Purchaser's articles of association or by-laws; and the consummation of the
transactions contemplated hereby will not require any consent or approval under
any such law, rule, regulation, judgment, decree, order, governmental permit or
license or the consent or approval of any other party to any such agreement,
indenture or instrument, other than the approval of applicable regulatory
authorities.
3.3 Corporate Authority and Validity.
The execution and delivery of this Agreement, and consummation of the
transactions contemplated hereunder, have been duly authorized by all necessary
corporate action and no further corporate authorization on the part of the
Purchaser is necessary to consummate the transactions contemplated hereunder.
The Agreement is a valid and binding agreement of the Purchaser enforceable
against the Purchaser in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE EFFECTIVE DATE
4.1 Activity in the Ordinary Course.
(a) The Seller shall conduct the business of the Branch in substantially the
same manner as heretofore conducted, and the Seller shall not, with
regard to the Branch, engage in any activities or transactions outside
its ordinary course of business as conducted as of the date hereof which
shall include, but not be limited to, the interest rates on deposit
accounts offered by the Branch being the same as that offered al all
other Branches of Seller's Northern Region; provided, however, that the
Seller need not, in its sole discretion, advertise or promote new or
substantially new customer services in the Branch's principal market
area; and
9
<PAGE>
(b) The Seller shall use its best efforts to preserve its business operation
as presently conducted at the Branch, to preserve for the Purchaser the
good will of the Seller's customers and others doing business with the
Branch, and shall cooperate with and assist the Purchaser in assuring
the orderly transition of such business from the Seller to the
Purchaser. Nothing in this paragraph (b) shall be construed as requiring
the Seller to engage in any activities or efforts outside the ordinary
course of business as presently conducted.
ARTICLE V
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER THE EFFECTIVE DATE
5.1 Full Access.
The Seller shall afford to the officers and authorized representatives of the
Purchaser, upon prior notice, access to the properties, books and records
pertaining to the Branch, at reasonable times without interfering with the
Branch's normal business and operations, in order that the Purchaser may have
full opportunity to make reasonable investigations of the affairs of the Seller
relating to the Branch, and the officers of the Seller shall furnish the
Purchaser with such additional financial and operating data and other
information as to its business operations at the Branch as may be reasonably
necessary for the orderly transfer of the business operations of the Branch,
including, without limitation, information required for inclusion in all
governmental applications necessary to effect the transactions contemplated
hereunder. Nothing in this Section 5.1 shall be deemed to require the Seller to
breach any obligation of confidentiality or to reveal any proprietary
information, trade secrets or marketing or strategic plans. Anything to the
contrary notwithstanding, the Purchaser shall not require the Seller to disclose
the Seller's profitability analysis of the Branch or any other proprietary
financial information.
5.2 Requirements to Obtain Approval of Regulatory Authorities.
(a) Purchaser's Requirements. In order to consummate the transactions
contemplated by this Agreement and to acquire and operate the Branch,
the Purchaser will require the approval of the Office of the Comptroller
of the Currency (the "OCC"). Not later than twenty (20) business days
after execution of this Agreement, the Purchaser shall prepare and file
an application with the OCC for approval to consummate the transactions
contemplated hereunder and to acquire and operate the Branch and
thereafter shall (i) comply with the normal and usual requirements
imposed by the OCC applicable to effectuate the transactions
contemplated hereunder, and (ii) use its good faith efforts on a
priority basis to obtain any required permission of the OCC to
consummate such transactions and to acquire and operate the Branch. The
Purchaser agrees to provide the Seller promptly with copies of any
application as filed (except for any confidential portions thereof) and
all notices, orders, opinions, correspondence and other documents with
respect thereto.
(b) Seller's Requirements. The Seller shall, as soon as practicable
following the execution of this Agreement, prepare and file any
notice(s) or application(s), as required by law, with the appropriate
regulatory authorities regarding the termination of its operation of the
Branch, the sale of the Branch to the Purchaser and to effect in all
other respects the transactions contemplated hereunder. The Seller
agrees to process any application in a diligent manner, and to provide
the Purchaser promptly with a copy of any application as filed (except
for any confidential portions thereof) and all notices, order, opinions,
correspondence and other documents with respect thereto, and to use its
good faith efforts on a priority basis to obtain all necessary
regulatory approvals to terminate its operation of the Branch, to sell
the business operations of the Branch and to consummate the transactions
contemplated hereunder.
5.3 Further Assurance.
The parties hereto agree to execute and deliver such instruments and to take
such other actions as the other party may reasonably require in order to carry
out the intent of this Agreement. The Seller agrees to duly execute and deliver
such bills of sale, acknowledgments and other instruments of conveyance and
transfer as, in the reasonable judgment of the Purchaser, shall be necessary and
appropriate to vest in the Purchaser the legal and equitable title to the assets
of the Seller being sold hereunder, free and clear of all liens and encumbrances
except as otherwise
10
<PAGE>
noted in the Exhibits hereto. Purchaser shall be responsible for all costs of
deed recordation and, Purchaser shall also pay, or reimburse Seller for Seller's
payment of, all state or local sales or compensating use or transfer taxes,
except for realty transfer tax, payable in connection with the transactions
contemplated hereunder, other than any tax or portion thereof calculated
directly or indirectly with respect to the income of Seller. Applicable realty
transfer taxes, if any, shall be borne equally by Seller and Purchaser.
5.4 Right to Intervene.
In the event that any claim, protest, suit or other proceeding is instituted
against the Purchaser under this Agreement, the Seller shall have the right, at
its discretion and expense, to intervene in such litigation, and Purchaser
hereby consents to such intervention.
ARTICLE VI
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of the Purchaser to consummate the transactions provided for in
this Agreement is conditioned upon fulfillment, at or before the Effective Date,
of each of the following conditions:
6.1 Representations and Warranties True.
Each of the representations and warranties contained herein of the Seller shall
be true in all material respects on the Effective Date as if made on and as of
such date, except for any changes permitted by the terms hereof or consented to
by the Purchaser in writing.
6.2 Obligations Performed.
The Seller shall have performed and complied in all material respects with all
obligations and agreements contained herein of the Seller required to be
performed or complied with by it prior to or at the Effective Date.
6.3 No Adverse Litigation.
On the Effective Date, no action, suit or proceeding shall be pending or
threatened against the Seller which (a) might reasonably be expected to
materially and adversely affect the business, results of operation or financial
condition of the Branch, or (b) challenges the validity or consummation of the
transactions contemplated by this Agreement.
6.4 Regulatory Approval.
The Purchaser shall have received from the appropriate regulatory authorities
approval without the imposition of any non-standard conditions to effect the
transactions contemplated hereunder and to acquire and operate the Branch.
6.5 Certificate of Compliance.
The Seller shall have delivered to the Purchaser a certificate of a duly
authorized officer, dated the Effective Date, certifying to the best of such
officer's knowledge after reasonable investigation to the fulfillment of all of
the foregoing conditions.
6.6 Purchaser's inspection of the Premises.
Purchaser shall conduct promptly after the execution of this Agreement any and
all inspections Purchaser deems necessary or appropriate, including but not
limited to a termite inspection, structural inspection, or HVAC inspection. If
upon receipt or any such report, said inspection reveals evidence of
deficiencies on or to the aforesaid premises, as in Purchaser's sole discretion,
Purchaser promptly, but no later than 45 days before the Effective Date, shall
provide Seller with said report and Seller shall promptly correct said
deficiency or credit Purchaser the estimated amount of the cost for said
correction against the allocated purchase price.
11
<PAGE>
ARTICLE VII
CONDITIONS TO THE SELLER'S OBLIGATIONS
The obligation of the Seller to consummate the transactions provided for in this
Agreement is conditioned upon fulfillment, at or before the Effective Date, of
each of the following conditions:
7.1 Representations and Warranties True.
Each of the representations and warranties contained herein of the Purchaser
shall be true in all material respects on the Effective Date as if made on and
as of such date, except for any changes permitted by the terms hereof or
consented to by the Seller in writing.
7.2 Obligations Performed.
The Purchaser shall have performed and complied in all material respects with
all obligations and agreements contained herein of the Purchaser required to be
performed or complied with by it prior to or at the Effective Date.
7.3 No Adverse Litigation.
On the Effective Date, no action, suit or proceeding shall be pending or
threatened against the Purchaser which challenges the validity or consummation
of the transactions contemplated under this Agreement.
7.4 Regulatory Approval.
The Seller shall have received from the appropriate regulatory authorities
approval without the imposition of any non-standard conditions to effect the
transactions contemplated hereunder and to sell and terminate its operation of
the Branch.
7.5 Certificate of Compliance.
The Purchaser shall have delivered to the Seller a certificate of a duly
authorized officer, dated the Effective Date, certifying to the best of such
officer's knowledge after reasonable investigation to the fulfillment of all of
the foregoing conditions.
ARTICLE VIII
TERMINATION
8.1 Methods of Termination.
This Agreement may be terminated prior to the Effective Date:
(a) By the mutual consent of Seller and Purchaser;
(b) By Purchaser, in the event of a material breach by Seller of any
representation, warranty or agreement contained herein which cannot be
cured or is not cured within five (5) business days after written notice
of such breach is given to Seller;
(c) By Seller, in the event of a material breach by Purchaser of any
representation, warranty or agreement contained herein which cannot be
cured or is not cured within five (5) business days after written notice
of such breach is given to Purchaser; or
(d) By Seller or Purchaser, in the event that the Effective Date does not
occur by September 30, 1996; provided, however, that any termination by
Purchaser pursuant to subsection (a) or (b) above must have been
approved by its board of directors.
12
<PAGE>
8.2 Procedure Upon Termination.
In the event of termination pursuant to Section 8.1 hereof, written notice
thereof shall forthwith be given to the other party, and this Agreement shall
terminate immediately upon receipt of such notice unless an extension is
consented to by the party having the right to terminate. If this Agreement is
terminated as provided herein:
(a) each party will return all documents, work papers and other materials of
the other party relating to this Agreement whether obtained before or
after the execution hereof, to the party furnishing the same; and
(b) all information received by either party hereto with respect to the
business of the other party (other than information which is a matter of
public knowledge or which has heretofore been or is hereafter published
in any publication for public distribution or filed as public
information with any government authority) shall not at any time be used
for any purpose by such party or disclosed by such party to third
persons.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Amendment and Modification.
The parties hereto, by mutual consent of their duly authorized officers, may
amend, modify or supplement this Agreement in such manner as may be agreed upon
by them in writing.
9.2 Waiver or Extension.
Except with respect to required approvals of the applicable governmental
authorities, either party, by written instrument signed by a duly authorized
executive officer, may extend the time for the performance of any of the
obligations or other acts of the other party and may waive (a) any inaccuracies
in the representations or warranties in any document delivered pursuant hereto
or (b) compliance with any of the undertakings, obligations, covenants or the
acts contained herein.
9.3 Assignment.
This Agreement and all of the provisions hereof shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned, prior to the Effective Date, by
either of the parties hereto without the prior written consent of the other.
9.4 Survival of Representations and Warranties.
The representations, warranties, conditions and obligations set out in this
Agreement shall not survive the Effective Date, except as expressly provided to
the contrary herein or unless the context otherwise requires.
9.5 Payment of Expenses.
Except as otherwise specifically provided in this Agreement, each party hereto
shall bear and pay all costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated hereunder. Except as otherwise
provided herein, any expenses, fees, and costs necessary for any approvals of
the appropriate regulatory authorities, or for any notice to depositors of the
assumption of deposit liabilities provided for in this Agreement shall be paid
by the party seeking such approval or giving such notice.
13
<PAGE>
9.6 Addresses for Notice, etc.
All notices, requests, demands, consents and other communications provided for
hereunder and under the related documents shall be in writing (including
telegraphic communication) and mailed (by registered or certified mail) or
telegraphed or delivered to the applicable party at the addresses indicated
below:
If to the Seller: With copy to:
Thomas B. Black Joseph R. Worden
Mellon Bank Mellon Bank
1128 State Street Room 1925
P.O. Box 300 One Mellon Bank Center
Erie, Pennsylvania 16522 Pittsburgh, Pennsylvania 15258
EIN # 25-0659306
If to the Purchaser: With copy to:
Ronald L. Ashbaugh _____________________________
President _____________________________
Farmers National Bank of Emlenton _____________________________
Drawer D
Emlenton, PA 16373
EIN # _______________
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section.
9.7 Press Releases, Public Disclosure.
The Purchaser and the Seller each hereby covenants and agrees that unless
approved by the other party hereto in advance it will not issue any press
release for general circulation or otherwise make any public disclosure relating
to the transactions contemplated hereby except as otherwise may be required by
law.
9.8 Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
9.9 Headings.
The headings of the Sections and Articles of this Agreement are inserted for
convenience only and shall not constitute a part hereof.
14
<PAGE>
9.10 Governing Law.
This Agreement shall be governed by, and construed in accordance with, the
substantive law of the Commonwealth of Pennsylvania.
<PAGE>
EXHIBIT A
REAL ESTATE
KNOX OFFICE
All that piece or parcel of land situate in the Borough of Knox (formerly
Edenburg), in Clarion County, Pennsylvania having a frontage of 75 feet on Main
Street and extending of uniform width in a westerly direction for 106 feet which
with two smaller lots included within the bounds of a larger parcel of land
bounded and described as follows:
Commencing at the Southeast corner of land here-by conveyed; thence
Westerly along State Street one hundred and fifty one (151) feet to lot
owned by Lutheran Church; thence Northerly along lot of Lutheran Church
about one hundred and five (105) feet to lot of J. I. Patterson; thence
Easterly along lot of J. I. Patterson on hundred and fifty one (151)
feet to West line of Main Street; thence Southerly along said Main
Street one hundred and five (105 feet to place of beginning. Containing
fifteen thousand eight hundred and fifty (15,850) square feet be the
same more or less.
Excepting therefrom the following lots of land, towit:
Lot conveyed to H. B. Beels et al. fronting 30 feet on Main Street
and extending of uniform width Westerly for 106 feet and being a parcel
out of the northeasterly portion of the lot above described. See Deed
Book Vol. 148, page 225 Recorder's Office, Clarion, County, Pa.
Lot conveyed to James Irwin fronting 45 feet on State Street and
extending of uniform width for 105 feet in a northerly direction and
being a parcel out of the west portion of the lot above described. See
Deed Book Vol. 148, page 156 Recorder's Office, Clarion County, Pa.
16
<PAGE>
EXHIBIT B
FURNITURE, FIXTURES & EQUIPMENT
TO BE EXCLUDED FROM SALE
1) Bunker CSR Terminals
2) Bunker Teller Terminals
3) Bunker Controllers
4) Bunker Operating Systems
5) Printers connected to the Bunker System
17
<PAGE>
EXHIBIT C
STIPULATED VALUES
OF
REAL ESTATE, FURNITURE, FIXTURES AND EQUIPMENT TRANSFERRED
Item Stipulated Value
- ---- ----------------
TOTAL
Land $
Building $
Equipment $
TOTAL: $
TO BE COMPLETED
18
<PAGE>
EXHIBIT D
DEPOSIT LIABILITIES ASSUMED (1)
AS OF DECEMBER 31, 1995
TOTAL
-----
Interest-Free Demand $ 1,975,000
Interest-Bearing Demand $ 3,114.000
Savings $ 1,526,000
Money Market $ 2,296,000
Other Time (CD's) $ 9,837,000
TOTAL DEPOSITS EXPECTED $18,748,000
TO BE TRANSFERRED
- ----------------------------
(1) Excludes accrued interest.
19
<PAGE>
EXHIBIT E
INSTRUMENT OF ASSUMPTION OF CERTAIN LIABILITIES
-----------------------------------------------
KNOW ALL MEN BY THESE PRESENTS THAT:
WHEREAS, Mellon Bank, N.A., a national bank organized and existing under the
laws of the United States (the "Seller"), and Farmers National Bank of Emlenton,
a national bank organized and existing under the laws of the United States of
America (the "Purchaser"), are parties to a certain Purchase and Assumption
Agreement dated as of ____________ __, 1996 (the "Agreement"), pursuant to which
for the consideration and upon other terms and conditions therein prescribed,
the Seller is this day transferring, conveying, assigning and delivering to the
Purchaser certain of the Seller's assets, namely, those constituting the branch
office of the Seller located at Knox, Pennsylvania (the "Branch") and
WHEREAS, the Agreement requires that, in connection with the transfer,
assignment, conveyance and delivery to the Purchaser of such assets, the
Purchaser shall assume and agree to pay, perform and discharge certain
liabilities and duties of the Seller;
NOW, THEREFORE, in consideration of the premises and in accordance with the
provisions of the Agreement, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the Purchaser hereby agrees to pay,
perform and discharge such liabilities and obligations of the Seller as the same
exist at the time of the delivery of this instrument as follows:
(a) The deposit liabilities of the Seller attributed on the records of account
of the Seller to the Branch, as listed on Exhibit D to the Agreement, a copy
of which Exhibit is attached hereto.
(b) All other liabilities and obligations of the Seller with respect to the
Branch to the extent described in the Agreement transferred and delivered to
the Purchaser.
IN WITNESS WHEREOF, THE Purchaser has caused this instrument to be executed on
its behalf by duly authorized officer and its corporate seal to be affixed
hereto, this _______ day of _____________, 1996.
ATTEST: FARMERS NATIONAL BANK OF EMLENTON
_____________________________ By:_________________________________
Title: Title:
AGREED: MELLON BANK, N.A.
By:__________________________
Title:
20
<PAGE>
EXHIBIT F
________________ _____/____/____
Prepared By Date
Sale of Knox Office
Preliminary Settlement
Worksheet
<TABLE>
<CAPTION>
Due Purchaser Due Seller
------------- ----------
<S> <C> <C> <C>
Assumption of Deposit Liabilities Sale of Assets
Real Estate $________
Retail Demand $___________ Furniture, Fixtures, Equipment $________
Installment Loans $________
Cash in Vault $________
Cash Premium (1) $________
Savings $___________
Total Due Seller $________
Time $___________
(1) Premium Calculation
Deposits Subject
Total Deposits $___________ to Premium $________
Premium at 10.00% $________
Transfer tax (Seller's portion) $___________
Total Due Purchaser $___________
Net Due Purchaser $_______
Amount Wired to Purchaser $_______
Approved: Purchaser Approved: Seller
By___________________________ By_________________________________
</TABLE>
21
<PAGE>
________________ _____/____/____
Prepared By Date
Sale of Knox Office
Adjusting Settlement
Worksheet
<TABLE>
<CAPTION>
Due Purchaser Due Seller
------------- ----------
<S> <C> <C> <C>
Assumption of Deposit Liabilities Sale of Assets
Real Estate $________
Retail Demand $___________ Furniture, Fixtures, Equipment $________
Installment Loans $________
Cash in Vault $________
Cash Premium (1) $________
Savings $___________
Accrued Interest $___________
Total Due Seller $________
Time $___________
Accrued Interest $___________ (1) Premium Calculation
-----------------------
Deposits Subject
Total Deposits $___________ to Premium $________
Premium at 10.00% $________
Total Deposits: $___________
Accrued Liabilities $___________
Transfer tax
(Seller's portion) $___________
Total Due Purchaser $___________
Net Due Purchaser $___________
Amount previously Wired to Purchaser $______________________________
Adjustment Difference $______________________________
Accrued Interest on Difference
at Fed Funds Rate $______________________________
Amount Wired to Purchaser $______________________________
Approved: Purchaser Approved: Seller
By__________________________________ By___________________________
</TABLE>
22
<PAGE>
Exhibit F-1
Allocation of Purchase Price
Cash Paid at Closing $
Liabilities Assumed at Closing _______________________
Total Purchase Price $
=======================
Cash $
Installment Loans
Furniture & Fixtures
Land
Buildings
Equipment
Goodwill - Residual Amount _______________________
Total Purchase Price $
=======================
23
