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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November
7, 1997
Republic Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Kentucky 33-77324 61-0862051
(State or other
jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
601 West Market Street, Louisville, Kentucky 40202
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (502)584-3600
Not Applicable
(Former name or former address, if changed since last report)
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Item 2. Disposition of Assets
During 1997, Republic elected to focus its resources on its North Central and
Central Kentucky markets. As a result of this decision, management
aggressively pursued opportunities to sell certain fixed assets and deposits
of its Western Kentucky banking centers, with the exception of Owensboro.
Republic's Western Kentucky assets contracted for sale include banking
centers in the cities of Murray, Benton, Paducah, and Mayfield. These banking
centers are comprised of approximately $180 million in deposits and
approximately $3.7 million in fixed assets. Republic will retain
substantially all of the loan portfolio associated with these banking centers
in the amount of approximately $155 million.
The pricing and other terms of these asset dispositions were arrived at
through arms-length negotiations with various potentially interested parties.
In addition to comparing offers, management evaluated terms offered by
prospective purchasers to information regarding pricing of similar
transactions. To the extent the purchase price in a transaction is less than
the deposit liabilities being assumed by the purchaser, the transaction
involves a cash payment by Republic to the purchaser. Management has funded
the closed transactions with additional deposits at its existing banking
centers, liquidation of available for sale investment securities and
additional advances from the Federal Home Loan Bank (FHLB).
On April 1, 1997, Republic entered into an agreement to sell its Murray
banking center to United Commonwealth Bank, FSB. The transaction included the
sale of real estate located in Murray, Kentucky, certain fixed assets, and a
transfer of certain deposit liabilities totaling approximately $18 million.
The transaction was closed on July 30, 1997 and Republic recognized a pre-tax
gain of approximately $1.7 million.
On July 21, 1997, Republic entered into an agreement to sell its Benton
banking center to The Peoples First National Bank and Trust Company of
Paducah. The transaction included the sale of real estate located in Benton,
Kentucky, certain fixed assets, and a transfer of certain deposit liabilities
totaling approximately $31 million. The transaction was closed on September
23, 1997 and Republic recognized a pre-tax gain of approximately $2.2
million.
On July 18, 1997, Republic entered into an agreement to sell its Paducah
banking centers to The Paducah Bank and Trust Company. The transaction
included the sale and lease of real estate located in Paducah, Kentucky,
certain fixed assets, and a transfer of certain deposit liabilities totaling
approximately $65 million. The transaction was closed on November 7, 1997 and
Republic recognized a pre-tax gain of approximately $3.6 million. The sale
was funded by maturing investment securities and overnight fed funds.
Republic also increased its borrowings from the FHLB by $36 million in order
to fund the remaining portion of the sale.
Republic has also entered into a contract to sell its Mayfield banking center
to First Federal Savings Bank of Leitchfield. The transaction will include
the sale of real estate located in Mayfield, Kentucky, certain fixed assets,
and a transfer of certain deposit liabilities totaling approximately $65
million. The Mayfield transaction is contingent upon regulatory approval and
is expected to close during the first quarter of 1998. Management anticipates
that Republic will realize a gain of approximately $2.0 to $4.0 million on
this transaction. Such gain will be dependent upon the attributes and the
amount of the liabilities assumed by the purchasers at closing. Republic
anticipates that it will fund this transaction through additional advances
from the FHLB.
While none of these transactions individually involves the disposition of
a significant amount of assets, with the closing of the sale of the Paducah
banking center on November 7, 1997, these transactions collectively involved
the disposition of a significant amount of Republic's total assets.
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ITEM 7. FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
b. Pro Forma Consolidated Financial Statements (unaudited)Republic
Bancorp, Inc..
At the time this Form 8-K is being filed, it is impracticable for Republic
to provide the required pro forma financial statements. The required pro
forma financial statements will be filed no later than sixty (60) days
after the date this Form 8-K is filed with the Securities and Exchange
Commission.
c. The exhibits furnished as a part of Form 8-K are identified in, and
immediately follow, the Exhibit Index appearing on page 4 of this report.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Republic Bancorp, Inc.
(Registrant)
Principal Executive Officer:
Date: November 21, 1997 /s/Bernard M. Trager
----------------- ------------------------------
Bernard M. Trager
Chairman and Chief
Executive Officer
Principal Financial Officer:
Date: November 21, 1997 /s/Mark A. Vogt
----------------- ------------------------------
Mark A. Vogt
Senior Vice President,
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Description
2.1 Agreement to Purchase Assets and Assume Liabilities dated
April 1, 1997 by and between United Commonwealth Bank, FSB and
Republic Bank & Trust Company
2.2 Purchase and Assumption Agreement dated July 18, 1997 between
The Paducah Bank & Trust Company and Republic Bank & Trust
Company
2.3 Purchase and Assumption Agreement dated July 21, 1997 between
Peoples First National Bank & Trust Company and Republic
Bank & Trust Company
2.4 Purchase and Assumption Agreement dated September 12, 1997
between First Federal Savings Bank of Leitchfield and Republic
Bank & Trust Company
AGREEMENT TO PURCHASE ASSETS
AND ASSUME LIABILITIES
This AGREEMENT TO PURCHASE ASSETS AND ASSUME LIABILITIES
("Agreement") is made and entered into as of the 1st day of April, 1997 by and
between UNITED COMMONWEALTH BANK, FSB, a federal savings bank ("Buyer"), and
REPUBLIC BANK AND TRUST COMPANY, a Kentucky banking corporation ("Seller").
W I T N E S S E T H:
WHEREAS, Buyer desires to acquire certain fixed assets and
assume certain deposit liabilities of Seller, and Seller desires to sell, assign
and transfer to Buyer such assets and liabilities as further described in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
representations, covenants and agreements set forth in this Agreement, the
parties agree as follows:
ARTICLE 1.
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following
terms have the definitions indicated:
"Accrued Interest" means interest on Deposits which is accrued but
unpaid through the Closing Date (as hereinafter defined).
"Assets" means the Cash on Hand, Fixed Assets, the Real Property and
Improvements, and the Records.
"Branch" means the branch office of Seller located in Calloway County,
Kentucky, including all Real Property and Improvements.
"Cash on Hand" means the amount of all actual United States currency
and coinage on hand at the Branch as of the Closing Date and identified on the
Final Balance Sheet.
"Closing Balance Sheet" means the balance sheet dated as of the close
of business on the business day immediately preceding the Closing Date
reflecting the balance sheet categories of assets and liabilities of Seller
being purchased, accepted and assumed by Buyer pursuant to this Agreement and
which is used to determine the Closing Payment (as defined herein).
"Deposits" means those deposit accounts as of the Closing Date which
are defined as deposits under Section 3(l) of the Federal Deposit Insurance Act
(12 U.S.C. 1813(l), which are maintained with or at the Branch and that remain
on deposit with Seller as of the Closing Date and are reflected on the Final
Balance Sheet. Notwithstanding the foregoing, Deposits shall not include
Overdrawn Accounts, or deposit accounts presently subject to escheat.
"Encumbrances" means all mortgages, claims, charges, liens,
encumbrances, easements, restrictions, options, pledges, calls, commitments,
security interests, conditional sales agreements, title retention agreements,
leases and other restrictions of any kind whatsoever other than the Permitted
Exceptions.
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"Final Balance Sheet" means the balance sheet dated as of the Closing
Date reflecting the balance sheet assets and liabilities of Seller being
purchased, accepted and assumed by Buyer pursuant to this Agreement and which is
used to determine the Final Closing Payment (as defined herein).
"Fixed Assets" includes all furniture, equipment, trade fixtures and
other tangible personal property (including safe deposit boxes) located in or
upon the Branch, including without limitation those assets listed on Exhibit A
hereto, but excluding those assets listed on Exhibit B.
"Loans" means the loans set forth on Exhibit C hereto, together with
all accrued but unpaid interest thereon, which were made by Seller at the Branch
and are collateralized by Deposits. The term "Loans" shall include, without
limitation, all right, title and interest of Seller in and to the collateral
held as security for the Loans, and any other right, title or interest related
in any way to the Loans.
"Out-of-Area Deposits" means all Deposits in deposit accounts owned [a]
by a depositor with an address that is not located in Calloway County, Kentucky
or a contiguous county or [b] by Seller or an affiliate of Seller.
"Overdrawn Accounts" means all Deposits that are overdrawn at the
Branch on the Closing Date, other than those overdrawn Deposits, if any, that
Buyer may designate at the Closing.
"Net Book Value" means the book value of an asset on the accounting
records of Seller.
"Permitted Exceptions" means liens for real estate taxes accrued but
not yet payable, and such imperfections of title and encumbrances as do not
materially detract from the value or interfere with the use of the property as
offices of a financial institution or other commercial enterprise.
"Real Property and Improvements" means the real property owned by
Seller on which the Branch is located as more particularly described on Exhibit
D hereto, together with all improvements made thereon.
"Records" means (a) all available records and original documents
(including warranties on Fixed Assets) pertaining to the Assets and (b) all
records and original documents relating to the Deposits.
ARTICLE 2.
TERMS OF PURCHASE
2.1 PURCHASE AND SALE OF ASSETS. At the Closing (as
hereinafter defined) and subject to the terms and conditions set forth in this
Agreement, Seller shall sell, convey, assign and transfer to Buyer, and Buyer
shall purchase from Seller, all of Seller's right, title and interest in and to
the Assets. The conveyance shall be effected by means of such appropriate deeds
of general warranty, bills of sale and other assignments, together with such
other appropriate instruments of title as Buyer may reasonably request, as shall
be sufficient to vest and confirm in Buyer good and marketable title thereto,
free and clear of all Encumbrances. Any recording fee, sales tax, documentary
transfer tax or other assessment with respect to recordation of such conveyance
shall be paid by Buyer.
2.2 PURCHASE PRICE AND ALLOCATION. Buyer shall assume at
the Closing the liabilities of Seller set forth in Section 2.3, and shall pay to
Seller at the Closing, in the manner set out in Section 3.2 hereof, the
following:
A. A core deposit premium equal to ten percent (10%) of
the principal amount of the Deposits (less Out-of-Area Deposits) at the Closing
Date;
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B. A sum equal to the Net Book Value of the Fixed Assets
and the Real Property and Improvements as of December 31, 1996, less accumulated
depreciation and amortization from December 31, 1996 through the Closing Date;
C. A sum equal to the Cash on Hand as of the Closing
Date; and
D. A sum equal to the outstanding principal balance of and all
accrued but unpaid interest on the Loans as of the Closing Date, calculated in
accordance with generally accepted accounting principles consistently applied.
2.3 ASSUMPTION OF LIABILITIES.
A. DEPOSITS. On the Closing Date, subject to the terms
and conditions set forth in this Agreement, Buyer shall assume liability for the
payment and performance of Seller's obligations on the Deposits, and all Accrued
Interest thereon, in accordance with the terms of such Deposits in effect on the
Closing Date.
B. RELATED ASSETS AND OBLIGATIONS. Except as expressly set
forth in this Section 2.3, it is expressly understood and agreed that Buyer
shall not assume or be liable for any of the debts, obligations or liabilities
of Seller of any kind or nature whatsoever including, but not limited to, any
obligations to provide services incidental to the operation of the Branch, any
tax or debt, any liability for unfair labor practices, any liability or
obligation of Seller arising out of any threatened or pending litigation, any
liability with respect to personal injury or property damage claims, any
liability arising out of claims of employees employed at the Branch for bonuses,
salaries, wages or other payments or benefits in respect of services performed
at the Branch prior to the Closing Date, any liability under or in connection
with any "employee benefit plan" as defined in Section 3(3) of ERISA which is
maintained by Seller and covers any employees at the Branch, any liability
Seller may have incurred or will incur in connection with the transactions
contemplated by this Agreement, or any other liability Seller may have incurred
prior to the Closing Date in connection with the operation of the Branch.
C. REIMBURSEMENT FOR DEPOSITS. In consideration for
assuming the Deposits and the Accrued Interest thereon, Seller shall pay to
Buyer an amount in immediately available funds equal to the sum of 100% of the
Deposits and all Accrued Interest thereon as of the Closing Date.
2.4 PRORATIONS. All personal property taxes with respect to
the Fixed Assets, all real property taxes with respect to the Real Property and
Improvements and all other items of income and expense attributable to the
Assets capable of proration, including without limitation deposit taxes and
assessments, if any, shall be prorated between the parties as of the Closing
Date on the basis of a 30-day month and 360-day year.
ARTICLE 3.
CLOSING
3.1 CLOSING. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Wyatt, Tarrant
& Combs, 2800 Citizens Plaza, Louisville, Kentucky 40202, at 10:00 a.m. on such
date as the parties may fix, but not later that the fifth business day after the
satisfaction of the conditions set forth in Sections 6.1C and 6.2C of this
Agreement ("the Closing Date"). The Closing shall be effective as of the close
of business of Seller on the Closing Date.
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3.2 CLOSING PAYMENT. The amount owed Seller by Buyer pursuant
to Section 2.2 will be deducted from the amount owed Buyer by Seller pursuant to
Section 2.3C and netted with the amount due the appropriate party under Section
2.4 to determine the closing payment due Buyer from Seller as of the Closing
(the "Closing Payment"). Seller shall pay the Closing Payment to Buyer on the
Closing Date in immediately available funds. Because the parties acknowledge
that certain amounts to be paid may not be finally determinable until after the
Closing Date, the Closing Payment will be paid as follows:
A. Prior to the Closing, Seller shall deliver to Buyer the
Closing Balance Sheet, certified by its Chief Financial Officer as being true
and correct, so that, at the Closing, Seller and Buyer can calculate the Closing
Payment, as if the Closing Date occurred at the close of business on the
business day prior to the Closing Date. Seller shall pay the amount of the
Closing Payment, so calculated, to Buyer at the Closing.
B. As promptly as practicable following the Closing Date, and
in any event not later than 30 days after the Closing Date, Seller and Buyer
shall agree upon a Final Balance Sheet, updating as of the Closing Date all
information set forth on the Closing Balance Sheet, and making a final
determination of the Closing Payment as of the Closing Date (the "Final Closing
Payment"). The Final Closing Payment calculated from the Final Balance Sheet
shall be netted against the amount paid on the Closing Date, and any resulting
amount payable by Seller to Buyer or by Buyer to Seller shall be paid in
immediately available funds within one business day of the parties agreeing upon
the Final Balance Sheet and the Final Closing Payment due as of such date. If
Seller and Buyer are unable to agree on the Final Balance Sheet and the Final
Closing Payment calculated thereby within 30 days following the Closing Date,
either party may, within 40 days after the Closing Date, refer any disputes
regarding preparation of the Final Balance Sheet and/or the calculation of the
Final Closing Payment as of such date to a firm of independent certified public
accountants mutually agreeable to Seller and Buyer whose written determination
with respect to such dispute shall be final and binding on such parties. The
costs and expenses of such submission shall be divided equally between Seller
and Buyer.
3.3 SALES TAXES AND RECORDING FEES. Seller shall pay all
transfer and sales taxes resulting from the sale or transfer of the Assets, and
Seller shall indemnify and hold Buyer harmless against all liabilities for any
taxes on or resulting from the sale or transfer of the Assets, including any tax
on any gain or income incurred by Seller as a result of such sale or transfer.
Buyer shall pay all recording and filing fees resulting from the sale or
transfer of the Assets, and Buyer shall indemnify and hold Seller harmless from
any and against all liabilities for any recording and filing fees resulting from
the sale or transfer of the Assets.
ARTICLE 4.
COVENANTS
4.1 CONDUCT OF BUSINESS PRIOR TO CLOSING. Except with the
prior written consent of Buyer or as expressly contemplated or permitted by this
Agreement, during the period from the date of this Agreement and continuing
until the Closing Date, Seller shall not:
A. Conduct business at the Branch other than in the
usual, regular and ordinary course or fail to use commercially reasonable
efforts to preserve the Branch intact or to preserve the good will of the
customers at and others having business relations with the Branch;
B. Cancel any claims that it might have possessed with
respect to the Assets, or cancel or waive any material rights related to the
Assets or sell, lease, encumber, or otherwise dispose of, or agree to sell,
lease, encumber or otherwise dispose of, any of the Assets;
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C. Cause the Branch to engage or participate in any
material transaction or incur or sustain any material obligation, except for
transactions or obligations entered into by Seller prior to the date hereof and
set out on SCHEDULE 4.1C hereto;
D. Offer, at the Branch, rates on accounts above or below, or
terms on accounts more or less restrictive than, those generally offered on the
same type of account by other financial institutions in the Calloway County,
Kentucky banking market, consistent with past practice;
E. Cause the Branch to transfer, including without
limitation to Seller's other operations or branches, any Deposits, Loans or
Fixed Assets at the Branch;
F. Cause the Branch to transfer any Deposits, including
without limitation to Seller's other operations or branches, except upon the
unsolicited request of a depositor in the ordinary course of business;
G. Transfer, assign, encumber or otherwise dispose of or
enter into any commitment, contract, agreement, understanding or other
arrangement to transfer, assign, encumber or otherwise dispose of any of the
Assets or any of the collateral securing the Loans, except as contemplated by
this Agreement;
H. Invest in any Fixed Assets on behalf of the Branch,
except for commitments made on or before the date of the Agreement and for
normal maintenance in the ordinary course of business;
I. Undertake any actions which are inconsistent with a
program to use all reasonable efforts to maintain good relations with employees
employed at the Branch, unless such actions are required or permitted by this
Agreement;
J. Increase or agree to increase the salary, remuneration or
compensation (including any insurance, pension or other benefit plan) payable or
to become payable to persons employed at the Branch other than in accordance
with Seller's customary policies and/or bank-wide changes, or pay or agree to
pay any uncommitted bonus to any such employees other than regular bonuses
granted based on historical practice;
K. Hire any new employees at the Branch, except in
replacement of current employees;
L. Violate any law, statute, rule, governmental
regulation, order or undertaking which violation might have an adverse effect on
the Assets;
M. Fail to maintain the Records in the usual manner on a
basis consistent with that heretofore employed; or
N. Transfer employees to and from the Branch and
Seller's other operations.
4.2 ASSISTANCE IN OBTAINING REGULATORY APPROVALS. Seller
agrees to use its best efforts to obtain all approvals and consents necessary to
complete the transactions contemplated hereby, and Seller will provide promptly
to Buyer or to the appropriate regulatory authorities all information reasonably
required to be submitted by Seller in connection with approvals of the
transactions contemplated by this Agreement.
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4.3 NO ENCUMBRANCES. Between the date of this Agreement and
the Closing Date, Seller will not create or suffer to exist any new Encumbrance
on any of the Assets, or otherwise enter into any transaction or make any
commitment or agreement relating to any of the Assets without the prior written
consent of Buyer.
4.4 INSURANCE POLICIES. Seller will maintain in effect
until the Closing all current insurance policies listed in Schedule 5.1G hereto.
4.5 BOOKS AND RECORDS. To the extent not limited or prohibited
by applicable law or by bank regulatory policies or regulations, all books and
records relating to the office operations, assets and liabilities of the Branch
prior to the Closing Date which are retained and/or maintained by one party
shall be open for inspection by the other party and its authorized agents,
representatives and regulators during regular business hours after the Closing
Date and the party with the right of inspection may, at its own expense, make
such copies of and excerpts from such records as it may deem desirable. All such
books and records shall be maintained by a party for a period which is at least
the longer of the period required by law or the normal retention period under
such party's records management program unless the parties shall, applicable law
permitting, agree upon a shorter period. Should one party's audit or inspection
of records in another party's possession result in the second party's employees
or agents having to devote any substantial amount of time or such party having
to allocate facilities or equipment or having to incur any substantial costs,
then the second party shall be entitled to reasonable reimbursement for all such
costs incurred.
4.6 FURTHER ASSURANCES. On and after the Closing Date, Seller
shall (a)ygive such further assistance to Buyer and shall execute, acknowledge
and deliver all such bills of sale, deeds, acknowledgments and other instruments
and take such further action as may be necessary and appropriate effectively to
vest in Buyer full, legal and equitable title to the Assets, and (b)yuse its
best efforts to assist Buyer in the orderly transition of the operations being
acquired by Buyer.
In particular, and without limiting the foregoing:
[1] Seller will remit to Buyer promptly after receipt by Seller after
the Closing Date at any of its other offices all payments relating to Loans or
amounts intended for deposit to the accounts which are part of the Deposits or
otherwise relating to the Deposits or the Loans; and
[2] With respect to checks or drafts drawn against accounts which are
Deposits, Seller will cooperate with Buyer and take all reasonable steps
requested by Buyer to ensure that, on or after the Closing Date, each such item
which is coded for presentment to Seller or to any bank for the account of
Seller is made available to Buyer in a timely manner and in accordance with
applicable law and clearing house rule or agreement.
4.7 INSPECTION. Seller will permit the accountants, counsel
and other authorized representatives of Buyer, during normal business hours, to
inspect the facilities, books, Records, files, contracts, agreements, books of
account, tax returns, compliance and other reports of examination by regulatory
authorities, and other corporate documents related to the Branch and/or the
Assets and confer with any officers or employees of it as the same relate to the
Branch. Seller shall cause to be furnished to Buyer and its advisors all such
other information concerning its business and properties, as it may reasonably
request from time to time, including without limitation historical information
relating to deposit accounts previously maintained at the Branch; provided,
however, that such information is in existence as of the date hereof and will
not require the generation of new or previously nonexisting data or reports.
Notwithstanding the foregoing, no investigation or inspection in accordance with
this Section 4.7 shall affect or otherwise diminish any of the representations
and warranties made by, or the conditions to the obligations to consummate the
transactions contemplated hereby, of Seller.
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4.8 NOTIFICATION OF MATERIAL CHANGES AND LITIGATION. Seller
shall provide Buyer with prompt written notice of (a) any adverse or potentially
adverse material change in the condition of the Assets; (b) any event or
condition of any character (whether actual, threatened or contemplated) that has
materially adversely affected, or can reasonably be expected to materially and
adversely affect, the Assets; (c) all claims, regulatory proceedings and
litigation involving the Assets; and (d) all changes in the information set
forth on any Exhibit or Schedule hereto.
4.9 DELIVERY OF STATEMENTS OF CONDITION. Prior to the Closing,
Seller shall furnish to Buyer, on the fifteenth (15th) and last business day of
each month, a summary trial balance for the Branch and, upon request by Buyer, a
complete trial balance for the Branch.
4.10 OBTAINING REGULATORY APPROVALS. Buyer agrees to use its
best efforts to obtain, and to file with the appropriate regulatory authorities
promptly all applications necessary to obtain, all approvals and consents
necessary to complete the transactions contemplated hereby, including any such
notices or applications required to be filed by Buyer with the Office of the
Thrift Supervision. Seller agrees to use its best efforts to file promptly any
regulatory applications and notices required to be filed by it in connection
with the transaction.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller
hereby represents and warrants to Buyer as follows:
A. CORPORATE STANDING; AUTHORIZATION. Seller is a banking
corporation duly organized, validly existing and in good standing under the laws
of Kentucky and has full corporate power and authority to own or hold under
lease the properties it now owns or holds under lease and to carry on the
business presently being conducted by it. Neither the execution and delivery by
Seller of this Agreement, nor the consummation of the transactions contemplated
hereby, will result in, nor will cause, any violation of, or constitute a
default under, any provision of the Articles of Incorporation or Bylaws of
Seller, or of any lease, mortgage, note, bond, loan agreement, license,
judgment, order or other instrument or obligation to which Seller is a party or
is bound or to which Seller or any of its properties or assets are subject,
except as set forth on Schedule 5.1A hereto. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of Seller. This
Agreement has been duly executed and delivered by Seller and constitutes the
legal, valid and binding obligation of Seller, enforceable against it in
accordance with its terms. Seller has all requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement.
B. LEGAL PROCEEDINGS. Except as set forth on Schedule
5.1B hereto, there are no claims of any kind or any actions, suits, proceedings,
arbitrations or investigations pending or, to the knowledge of Seller,
threatened against or affecting Seller or any interest or right of Seller, as
such might relate to the Branch, or against or affecting the Assets.
C. COMPLIANCE WITH LAWS. Except as set forth on Schedule 5.1C
hereto, Seller is in compliance in all material respects with all statutes and
regulations applicable to the conduct of Seller's business at the Branch.
Neither Seller nor any of its predecessors has received notice from any agency
or department of federal, state or local government asserting a violation of any
law, regulation, ordinance, rule or order (whether executive, judicial,
legislative or administrative) that would have a material adverse effect on the
financial condition, results of operations, business or Assets of the Branch.
Seller holds all permits, licenses, exemptions, orders and approvals of all
governmental entities which are necessary to the operation of the Branch and is
in compliance with the terms thereof.
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D. BROKERS. Buyer will not have any liability to any
broker, finder or financial advisor engaged by Seller or its affiliates in
connection with the negotiations relating to or the transactions contemplated by
this Agreement.
E. ASSETS. The Net Book Value of the Fixed Assets and Real
Property and Improvements as of December 31, 1996 was, and as of the Closing
Date will be, determined in accordance with generally accepted accounting
principles, consistently applied. Except as set forth on Schedule 5.1E hereto,
Seller has good and marketable title to (in the case of the Real Property and
Improvements, in fee simple) all of the Assets, free and clear of all
Encumbrances. Delivery to Buyer of the instruments of transfer of ownership
contemplated by this Agreement will vest good and marketable title to the Assets
in Buyer, free and clear of all Encumbrances. The current use of the Real
Property and Improvements fully complies with all applicable laws, regulations
and ordinances. Title to the Real Property and Improvements is insurable at
standard and customary rates without any exceptions, except for the Permitted
Exceptions. At Closing, all of the Real Property and Improvements and the Fixed
Assets will be in good condition and repair, ordinary wear and tear excepted,
and will be sufficient to enable Buyer to operate the Branch.
F. OPERATION. To the knowledge of Seller, there are no facts
or circumstances existing or threatened which would have a material adverse
effect on the present or future use of the Branch as a banking office. The
Branch and the current use thereof is in compliance with, and neither Seller nor
any of its predecessors has received notice nor has knowledge that any
governmental authority nor any employee or agent thereof considers the Branch to
violate or to have violated, fire, zoning, health, safety, building, hazardous
waste or environmental code or other ordinance, law or regulation or order of
any government or any agency, body or subdivision thereof, or any private
covenants, restrictions or easements. Except for the Permitted Exceptions,
neither Seller nor the Real Property and Improvements is subject to any other
agreement relating to the use of the Real Property and Improvements.
G. INSURANCE. All of the properties and assets of Seller at
the Branch are covered by effective insurance in amounts at least equal to their
fair market value and against such losses and risks as are generally insured
against by comparable businesses. All insurance policies and bonds maintained by
Seller with respect to the Assets are set out on Schedule 5.1G hereto. All of
such policies and bonds are in full force and effect and Seller has not received
any notice of premium increases or cancellations with respect to any of such
policies and bonds.
H. TAXES. All deposit, income, payroll, withholding,
property, excise, sales, use and transfer taxes relating to the Branch imposed
by the United States or by any state, municipality, subdivision or
instrumentality of the United States or by any other taxing authority which are
due and payable by Seller prior to the Closing have been paid in full, or will
be so paid prior to the Closing.
I. SERVICE CONTRACTS. Except as set forth on Schedule
5.1.I hereto, Seller has no contracts or other agreements relating to the
rendering by third parties of services to the Branch.
J. DEPOSITS. The deposit records of Seller accurately reflect
the Deposits and are and shall be sufficient to enable Buyer to conduct a
banking business with respect to the Branch in accordance with safe and sound
banking practices customary in the banking industry. The Deposits have been
established and maintained, and transactions affecting the Deposits have been
processed, in accordance with applicable laws and regulations. There are no
special agreements between Seller and any depositor at the Branch relating to
the Deposits. Since December 31, 1996, Seller has not transferred any of the
Deposits held by Seller at the Branches to any of Seller's other offices, or to
any banking office of any affiliate of Seller, except at the express unsolicited
request of the depositor in the ordinary course of business.
<PAGE>
M. LOANS. All of the Loans have been made for good, valuable
and adequate consideration in the ordinary course of business of Seller, are
evidenced by notes or other evidences of indebtedness that are true and genuine
and are, to the knowledge of Seller, collectible in full. There are no uncured
violations or violations with respect to which refunds or restitution may be
required with respect to the Loans and no alleged violations have been cited in
any compliance report to Seller as a result of examination by any regulatory
authority and the loan documentation with respect to the Loans complies in all
material respects with all applicable laws and regulations. No Loan has been
adversely classified in any regulatory examination or by Seller's internal
classification system and no Loan is 90 days or more past due, has been
restructured or is classified as nonaccrual. Each of the Loans is collateralized
by Deposits.
K. ENVIRONMENTAL MATTERS. The Real Property and Improvements
are in material compliance with all applicable federal, state and local laws,
rules, regulations, ordinances and requirements relating to the environment
("Environmental Laws"). Except as set forth on Schedule 5.1K hereto, and to the
knowledge of Seller [i] no "Hazardous Wastes" (as hereinafter defined) have ever
been generated, transported, treated, stored, or disposed of on any of the Real
Property and Improvements or the Branch, and [ii] Seller has not transported or
disposed of or caused or permitted any person to transport or dispose of any
Hazardous Wastes on the Real Property and Improvements or the Branch other than
in accordance with all Environmental Laws. There are no actions, suits or
proceedings, or demands, claims, notices or investigations (including without
limitation notices, demand letters or requests for information from any
environmental agency) instituted or pending, or, to the knowledge of Seller,
threatened, alleging violation of any Environmental Laws relating to the Real
Property and Improvements or the Branch. Without limiting the generality of the
foregoing, and to the knowledge of Seller no asbestos, PCBs or other Hazardous
Wastes or any petroleum product or constituents thereof is present on, in or
under any of the Real Property and Improvements or the Branch. "Hazardous
Wastes" for purposes of this Agreement shall include, without limitation: [i]
hazardous substances or hazardous wastes, as those terms are defined by the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 et seq., and any other applicable federal, state or local law,
rule, regulation, ordinance or requirement, all as amended or hereafter amended;
[ii] petroleum, including without limitation crude oil or any fraction thereof
which is liquid at standard conditions of temperature and pressure (60 degrees
Fahrenheit and 14.7 pounds per square inch absolute); [iii] any radioactive
material , including without limitation any source, special nuclear, or
by-product material as defined in 42 U.S.C. Section 2011 et seq.; and [iv]
asbestos or any asbestiform minerals in any form or condition.
L. CONSENTS. Except as set forth on Schedule 5.1A
hereto, no filing with or notification, consent, approval or authorization of
any governmental or non-governmental entity, is required for the execution,
delivery and performance by Seller of this Agreement and the transactions
contemplated hereby, other than the approvals of the Office of Thrift
Supervision, the Kentucky Department of Financial Institutions and the FDIC.
M. EMPLOYEES. SCHEDULE 5.1M hereto contains a true
and complete list of all employees employed by Seller at the Branch, their
current titles and/or positions and the rate of compensation currently paid to
each of them.
<PAGE>
N. FULL DISCLOSURE. No representation or warranty of
Seller contained in this Agreement and no statement of Seller contained in this
Agreement or in any instrument furnished or to be furnished to Buyer hereunder
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact necessary to make the statements contained
herein or therein not misleading.
5.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer
hereby represents and warrants to Seller that:
A. CORPORATE STANDING; AUTHORIZATION. Buyer is a federal
savings bank duly organized, validly existing and in good standing under the
laws of the United States and has full corporate power and authority to own or
hold under lease the properties is now owns or holds under lease and to carry on
the business presently being conducted by it. Neither the execution and delivery
by Buyer of this Agreement nor the consummation of the transactions contemplated
hereby will result in, nor will cause, any breach or violation of, or constitute
a default under, any provision of the Charter or Bylaws of Buyer, or of any
lease, mortgage, note, bond, loan agreement, license, judgment, order or other
instrument or obligation to which Buyer is a party or is bound or to which it or
any of its assets is subject. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby has been duly
authorized by all necessary corporate action on the part of Buyer. This
Agreement has been duly executed and delivered by Buyer and constitutes the
legal, valid and binding obligation of Buyer, enforceable against it in
accordance with its terms. Buyer has all requisite corporate power and authority
to enter into and to consummate the transactions contemplated by this Agreement.
B. BROKERS. Neither Buyer, nor any of its shareholders,
officers, directors, or employees, has employed any broker, finder or financial
advisor or incurred any liability for fees or commissions in connection with the
negotiations relating to or the transactions contemplated by this Agreement.
C. CONSENTS. Except as set forth on Schedule 5.2C
hereto, no filing with or notification, consent, approval or authorization of
any governmental or non-governmental entity, is required for the execution,
delivery and performance by Buyer of this Agreement and the transactions
contemplated hereby, other than the approvals of the Office of Thrift
Supervision, the Kentucky Department of Financial Institutions, and the Federal
Deposit Insurance Corporation.
D. CONSUMMATION OF TRANSACTIONS CONTEMPLATED BY
AGREEMENT. Buyer has no knowledge of any fact or circumstance that would
prevent it from consummating the transactions contemplated by this Agreement or
from obtaining the regulatory approvals necessary for it to consummate the
transactions contemplated by this Agreement.
E. FULL DISCLOSURE. No representation or warranty of
Buyer contained in this Agreement and no statement of Buyer contained in this
Agreement or in any instrument furnished to Seller hereunder contains or will
contain any untrue statement of a material fact or omits or will omit to state
any material fact necessary to make the statements contained herein or therein
not misleading.
ARTICLE 6.
CONDITIONS PRECEDENT
6.1 CONDITIONS TO OBLIGATION OF SELLER. The obligations of
Seller to consummate the transactions contemplated hereby are subject to the
satisfaction of the following conditions precedent on or before the Closing
Date, any of which may be waived by Seller:
<PAGE>
A. The representations and warranties of Buyer set forth in
Sectiony5.2 of this Agreement shall be true and correct in all material respects
as of the date of this Agreement and as of the Closing Date as if made on the
Closing Date, and Buyer shall have furnished to Seller a certificate of an
executive officer of Buyer to that effect;
B. Buyer in all material respects shall have performed
and observed its obligations and covenants as set forth in this Agreement prior
to or on the Closing Date and shall have delivered to Seller a certificate of an
executive officer of Buyer to that effect;
C. Receipt of all permits, consents, approvals and
authorizations from federal and state governmental authorities and regulatory
agencies necessary to effect the transactions contemplated herein (including the
expiration of all applicable waiting periods); and
D. There shall not be threatened, instituted or pending any
action or proceeding before any domestic or foreign court or governmental agency
or other regulatory or administrative agency or commission, or by any other
person [i]ychallenging the transactions contemplated by this Agreement or the
terms thereof or [ii]yseeking to prohibit the transactions contemplated by this
Agreement, which, in the opinion of Seller's counsel, has a reasonable
probability of success.
6.2 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of
Buyer to consummate the transactions contemplated by this Agreement are subject
to the satisfaction of the following conditions precedent on or before the
Closing Date, any of which may be waived by Buyer:
A. The representations and warranties of Seller set forth in
Section 5.1 of this Agreement shall be true and correct in all material respects
as of the date of this Agreement and as of the Closing Date as if made on the
Closing Date, and Seller shall have furnished to Buyer a certificate executed by
an executive officer of Seller to that effect;
B. Seller in all material respects shall have performed
and observed its obligations and covenants as set forth in this Agreement prior
to or at the Closing Date and shall have delivered to Buyer a certificate
executed by an executive officer of Seller to that effect;
C. Receipt of all permits, consents, approvals and
authorizations from federal and state governmental authorities and regulatory
agencies necessary to effect the transactions contemplated hereby and the
operation of the Branch by Buyer (including the expiration of all applicable
waiting periods), on terms and conditions which are satisfactory to Buyer (other
than standard terms and conditions);
D. Buyer shall have received (at its sole cost and expense)
with respect to the Real Property and Improvements: [i] a Level 1 site
assessment from a reputable environmental engineering firm, the results of which
are satisfactory to Buyer in its good faith judgment; [ii] current surveys
sufficient in detail to permit deletion of the survey exception from any owner's
policy of title insurance obtained by Buyer; and [iii] an owner's policy of
title insurance issued by a title insurer satisfactory to Buyer in an amount at
least equal to the Net Book Value insuring title to such real property to be in
Buyer as of the Closing, subject only to the Permitted Exceptions;
E. There shall not be threatened, instituted or pending any
action or proceeding before any domestic or foreign court or governmental agency
or other regulatory or administrative agency or commission, or by any other
person [i] challenging the transactions contemplated by this Agreement or the
terms thereof or [ii] seeking to prohibit the transactions contemplated by this
Agreement, which, in the opinion of Buyer's counsel, has a reasonable
probability of success; and
<PAGE>
F. There shall have been no material adverse change in the
business, condition, or operations of the Branch or the ability to conduct
banking operations at the Branch, or in the physical condition of the Real
Property and Improvements from the physical condition that exists as of the date
of this Agreement, or in the quality of the Loans from the quality that exists
as of the date of this Agreement.
ARTICLE 7.
INDEMNIFICATION
7.1 SURVIVAL. The representations and warranties made by the
parties to this Agreement, and their respective obligations to be performed
under the terms hereof at, prior to, or after the Closing, shall survive the
Closing.
7.2 INDEMNITY OF BUYER. Seller will indemnify, defend, and
hold harmless Buyer against and in respect of any and all claims, demands,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorneys' fees, that
Buyer incurs or suffers, which arise, result from or relate to [i] any breach
of, or failure by Seller to perform, any of the representations, warranties,
covenants, or agreements in this Agreement or in any schedule, certificate,
exhibit or other instrument furnished by Seller pursuant to this Agreement; [ii]
the operation of the Branch prior to the Closing; [iii] any violation of any
federal, state or local laws or regulations in connection with the origination
of the Loans or Deposits or Seller's acquisition of the Assets including,
without limitation, any failure by Seller or its predecessors to properly and
timely make disclosures to customers required by such laws or regulations; and
[iv] any liability of Seller, whether or not relating to the Branch, that is not
expressly assumed by Buyer under this Agreement. The right of indemnity of Buyer
as set forth in this Section 7.2 shall be in addition to all other rights or
remedies which Buyer may have against Seller at law or in equity. Buyer will,
promptly upon receiving notice of a claim against it by a third party for which
indemnification is sought under this Agreement, notify Seller of such claim. If
Seller agrees that it is liable to provide complete indemnification for any such
claim under this Agreement, Seller shall have the right to conduct, at its
expense, the defense of such claim and Buyer shall not settle such claim except
with the consent of Seller, which consent shall not be unreasonably withheld.
Failure to give prompt notice of any claim by a third party shall bar
indemnification for such claim under this Agreement only to the extent that the
indemnifying party was prejudiced by such failure.
7.3 INDEMNITY OF SELLER. Buyer will indemnify, defend, and
hold harmless Seller against and in respect of any and all claims, demands,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorneys' fees, that
Seller incurs or suffers, which arise, result from or relate to [i] any breach
of, or failure by Buyer to perform, any of the representations, warranties,
covenants, or agreements in this Agreement or in any schedule, certificate,
exhibit or other instrument furnished by Buyer pursuant to this Agreement, and
[ii] the operation of the Branch after the Closing. The right of indemnity of
Seller as set forth in this Section 7.3 shall be in addition to all other rights
or remedies which Seller may have against Buyer at law or in equity. Seller
will, promptly upon receiving notice of a claim against it by a third party for
which indemnification is sought under this Agreement, notify Buyer of such
claim. If Buyer agrees that it is liable to provide complete indemnification for
any such claim under this Agreement, Buyer shall have the right to conduct, at
its expense, the defense of such claim and Seller shall not settle such claim
except with the consent of Buyer, which consent shall not be unreasonably
withheld. Failure to give prompt notice of any claim by a third party shall bar
indemnification for such claim under this Agreement only to the extent that the
indemnifying party was prejudiced by such failure.
<PAGE>
ARTICLE 8.
TERMINATION
8.1 TERMINATION. This Agreement may be terminated as
follows:
A. This Agreement may be terminated by the mutual
agreement of the parties hereto.
B. Buyer may, in addition to other remedies which may be
available, upon prior written notice, terminate this Agreement (i) within thirty
(30) days following the date of this Agreement, if Buyer determines, in its sole
discretion, that it is not satisfied with the terms, conditions or amounts of
the Deposits and/or the Loans and/or the Real Property and Improvements, or (ii)
if Seller materially breaches any representation or warranty or materially
breaches any covenant in this Agreement or upon the failure and nonwaiver of any
condition precedent set out in Section 6.2 unless, in the case of a material
breach of a covenant or failure of a condition, within thirty (30) days after
written notice from Buyer, Seller shall have cured such breach or failure.
C. Seller may, in addition to other remedies which may be
available, upon prior written notice, terminate this Agreement in the event
Buyer breaches any representation or warranty or materially breaches any
covenant in this Agreement or upon the failure and nonwaiver of any condition
precedent set out in Section 6.1 unless, in the case of a material breach of a
covenant or failure of a condition, within thirty (30) days after written notice
from Seller, Buyer shall have cured such breach or failure.
D. Unless the Closing Date shall have occurred on or before
September 15, 1997, the Board of Directors of Buyer or Seller may terminate this
Agreement and declare it of no further effect.
8.2 Declaration. Any declaration of termination under this
Article 8 by Buyer or Seller shall be pursuant to resolution of its Board of
Directors or by executive officers thereof duly authorized by their respective
Board of Directors to make such a declaration, shall be made by written notice
given to the other party setting forth the grounds for the termination,
including, if applicable, the alleged material misrepresentation, breach or
failure, and, unless, in the case of a material breach of a covenant or a
failure of a condition, such material breach or failure is timely cured, shall
have the effect of terminating this Agreement effective upon the delivery of
such written notice or the expiration of any applicable cure period, whichever
is later, whereupon the same shall have no further effect. Notwithstanding the
foregoing, no termination of this Agreement shall affect the covenants set forth
in Section 11.6 relating to expenses, which shall survive any such termination,
and, except as otherwise expressly provided herein, no termination of this
Agreement on the grounds of a material misrepresentation or uncured material
breach of any covenant contained herein shall relieve the breaching party from
any liability for such uncured material misrepresentation or uncured material
breach of any covenant or agreement contained herein giving rise to such
termination.
ARTICLE 9.
NONCOMPETITION
9.1 Covenant Against Competition. Seller covenants and agrees
that, for a period of one year after the Closing Date, it shall not [i] engage
in the financial services industry in any manner whatsoever or compete with the
Branch within Calloway County, Kentucky; [ii] solicit or cause or attempt to
<PAGE>
cause any customer or depositor of the Branch to withdraw his, her or its
banking affiliation from the Branch; [iii] utilize its lists of the names and
addresses of the depositors at the Branch in order to solicit any deposits from
those depositors (unless the depositor shall remain a customer of Seller after
the Closing); or [iv] directly or indirectly solicit for employment any of
Buyer's employees at the Branch or induce or attempt to cause or induce any
person now or hereafter employed at the Branch to terminate such employment. In
the event that any provision hereof relating to the time period and/or the scope
of restriction and/or related aspects shall be declared by a court of competent
jurisdiction to exceed the maximum restrictiveness such court deems reasonable
and enforceable, the time period and/or scope of restriction and/or related
aspects deemed reasonable and enforceable by the court shall become and
thereafter be the maximum restriction in such regard, and the restriction shall
remain enforceable to the fullest extent deemed reasonable by such court.
9.2 REMEDIES FOR BREACH. In the event of a breach or
threatened breach of any of the covenants in Section 9.1, Buyer shall have the
right to seek monetary damages for any past breach and equitable relief,
including specific performance by means of an injunction to prevent or restrain
any such breach.
ARTICLE 10.
OTHER AGREEMENTS
10.1 RETURNED ITEMS. If Buyer is charged for any Returned
Item, as defined below, Buyer will use its best efforts to obtain reimbursement
from the account to which, or from the party to whom, the Returned Item was
credited. If there are sufficient funds in the account to which such Returned
Item was credited or any other accounts on deposit at the Branch or at any other
branch office of Buyer standing in the name of the party liable for such item,
Buyer will debit any or all of such accounts an amount equal in the aggregate to
the Returned Item plus a $20.60 processing fee for each Returned Item. If those
accounts do not contain funds sufficient to reimburse Buyer fully, Seller will,
upon notice from Buyer, immediately repay to Buyer the amount of the Returned
Item and Buyer will assign the Returned Item to Seller for collection. "Returned
Item" as used in this Section 10.1, shall mean any item that was credited for
deposit to or cashed against an account at the Branch prior to the Closing and
returned unpaid on or within twelve (12) months after the Closing.
10.2 CHECK CLEARING. Seller agrees to handle in accordance
with normal and standard clearing procedures customary in banking any check
clearing items drawn on deposit accounts transferred to Buyer at the Closing for
a period of up to 180 days following the Closing Date. The parties agree that
after 180 days following the Closing Date, customers having deposit accounts
assumed by Buyer at the Closing will be held accountable for using checks naming
Buyer as drawee, and Seller will not be obligated to honor any check clearing
items drawn on such accounts .
10.3 ACH DEPOSITS. Buyer will use its best efforts to have all
direct arrangements transferred to it from Seller within 180 days after the
Closing Date. Seller will provide Buyer, within 30 days prior to Closing, a list
of its ACH entries for electronic transfer accounts domiciled at the Branch
together with all supporting documentation, including the name, address and
identification or account number of each ACH originator and each deposit account
customer affected. Promptly upon receipt of such list, Buyer agrees to notify
each ACH originator and deposit account customer identified of the proposed
transfer and assumption of the deposit account which is the subject of the
direct deposit or credit arrangement. Seller will update the information on such
list as of the close of business on the Closing Date and deliver to Buyer such
updated information within seven (7) days following the Closing Date. After the
Closing for a period of 180 days, Seller will, on a daily basis, remit and
transfer to Buyer all ACH entries and corresponding direct deposits intended for
accounts to be assumed hereunder.
10.4 BACKUP WITHHOLDING. Any amounts required by any
governmental agencies to be withheld from any of the Deposits (the "Withholding
Obligations") will be handled as follows:
<PAGE>
A. Any Withholding Obligations required to be remitted
to the appropriate governmental agency prior to the Closing will be withheld and
remitted by Seller.
B. Any Withholding Obligations required to be remitted to the
appropriate governmental agency on or after the Closing will be remitted by
Buyer. At the Closing, Seller will remit to Buyer all sums withheld by Seller
pursuant to Withholding Obligations which funds are or may be required to be
remitted to governmental agencies on or after the Closing.
10.5 INTEREST REPORTING. Seller shall report from January 1,
1997 through the Closing Date and Buyer shall report from the day after the
Closing Date through the end of the calendar year all interest credited to,
interest withheld from and early withdrawal penalties charged to the Deposits.
Said reports shall be made to the holders of these accounts and to the
applicable federal and state regulatory agencies. If as a result of the transfer
of books and records required hereunder, Seller is unable to report interest as
contemplated hereby, Seller and Buyer will cooperate to arrive at a mutually
acceptable alternative arrangement for the reporting of interest.
10.6 NOTICES TO DEPOSITORS. Seller shall use its best efforts
to provide Buyer an intermediate customer list of the Deposits to be assumed,
together with one (1) set of mailing labels, as of month-end prior to the
Closing Date. On the Closing Date, Seller shall provide a final customer list on
the assumed Deposits. At least fourteen (14) days before the Closing (or on such
earlier or later date as may be required by law), Seller shall mail notice (the
"Notification") to the holders of the Deposits to be assumed that, subject to
the closing requirements, Buyer will be assuming the liability of the Deposits.
The Notification will be based on the list and labels referred to above and a
log maintained at the Branch of the new accounts opened since the date of said
list. Seller shall provide Buyer with a copy of said log up to the date of
Seller's mailing. After Seller has mailed the Notification, Buyer shall send
notification to the same holders setting out the details of its administration
of the assumed accounts and may, with Seller's prior written consent (which
shall not be unreasonably withheld), communicate with and mail information,
brochures, bulletins, press releases and other communications to depositors of
the Branch concerning the business and operations of Buyer. Each party shall
obtain the other party's approval of its notification letter(s) and any other
communications to depositors of the Branch regarding the transactions
contemplated hereby. The Notification may be made jointly if [i] it is permitted
by applicable statutes and regulations and [ii] Seller and Buyer can agree to
the content thereof.
10.7 DATA PROCESSING. In the event Buyer is unable to
completely convert the data processing functions of the Branch to its system on
or prior to the Closing Date, Seller agrees that it will use its best efforts to
negotiate in good faith with the current servicer of the data processing
functions of the Branch for the provision of data processing services at the
Branch until such conversion by Buyer is complete.
10.8 EMPLOYEES. The parties acknowledge that Buyer may, but
shall be under no obligation, expressed or implied, to offer employment or
employ any of the employees of the Branch at or following the Closing. Within 30
days of the date of this Agreement, Buyer will identify for Seller any of the
employees of the Branch Buyer is interested in employing upon the Closing, and
Seller will make available to Buyer for employment those employees who desire
employment by Buyer following the Closing.
<PAGE>
ARTICLE 11.
GENERAL PROVISIONS
11.1 PRESS RELEASES. All parties to this Agreement agree that
any press release or other public announcement by either party pertaining to the
transactions contemplated hereby shall be coordinated with the other party
hereto; provided, however, that nothing contained herein shall prohibit either
party from making any disclosure which its counsel deems necessary by law.
11.2 LAW AND SECTION HEADINGS. This Agreement shall be
construed and interpreted in accordance with the laws of the Commonwealth of
Kentucky. Section headings are used in this Agreement for convenience only and
are to be ignored in the construction of the terms of this Agreement.
11.3 MODIFICATIONS. No modification, extension, renewal,
rescission, termination or waiver of any of the provisions contained herein or
any future representation, promise or condition in connection with the subject
matter hereof, shall be binding upon any of the parties unless made in writing
and duly executed by the parties and authorized by resolution of their
respective Boards of Directors or their respective officers authorized by their
respective Boards of Directors.
11.4 SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
the remaining provisions.
11.5 NOTICES. All notices hereunder shall be in writing and
shall be deemed to have been given or made when delivered or mailed, first
class, registered or certified mail, postage prepaid, addressed as follows,
until notice of another address or additional addresses has been received by the
other parties:
If to Buyer, to:
United Commonwealth Bank, FSB
1111 Main Street
Murray, Kentucky 42071
Attention: John E. Peck, President
With a copy to:
CBT Corporation
333 Broadway
Paducah, Kentucky 42001
Attention: William J. Jones, President
Stewart E. Conner, Esq.
WYATT, TARRANT & COMBS
2800 Citizens Plaza
Louisville, Kentucky 40202
If to Seller, to:
Republic Bank and Trust Company
601 West Market Street
Louisville, Kentucky 40202
Attention: Steven E. Trager
<PAGE>
11.6 EXPENSES; RISK OF LOSS. Each of the parties hereto will
pay its own fees and expenses incurred in connection with the transactions
contemplated by this Agreement. Until Closing, the risk of loss to the Assets
shall remain with Seller.
11.7 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute one and the same instrument.
11.8 TIME OF ESSENCE; BEST EFFORTS. Time is of the essence to
the performance of the obligations set forth in this Agreement. Seller and Buyer
each agree to use their respective best efforts to obtain the satisfaction of
the conditions to their respective obligations specified herein, and to advise
the other party hereto in writing, as to any unusual delays or impediments in
obtaining the same.
11.9 CLOSING. At the Closing, each party shall execute and
deliver all documents required by this Agreement, and such further documents as
the other party shall reasonably request in order to satisfy the fulfillment of
each party's agreements and undertakings hereunder.
11.10 PARTIES IN INTEREST; ASSIGNMENT; THIRD PARTY RIGHTS. All
covenants and agreements contained in this Agreement by or on behalf of any of
the parties hereto shall bind and inure to the benefit of their respective
successors and permitted assigns. No party to this Agreement may however, assign
its rights hereunder or delegate its obligations hereunder to any other person
or entity without the express prior written consent of the other parties hereto.
It is the intention of the parties that nothing in this Agreement shall be
deemed to create any right with respect to any person or entity not a party to
this Agreement.
11.11 ENTIRE AGREEMENT; WAIVER. This Agreement including the
Schedules and Exhibits hereto constitutes and contains the entire agreement of
Seller and Buyer with respect to the subject matter hereof and supersedes any
prior agreement between the parties hereto, whether written or oral. The waiver
of a breach of any term or condition of this Agreement must be in writing signed
by the party sought to be charged with such waiver and such waiver shall not be
deemed to constitute the waiver of any other breach of the same or of any other
term or condition of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
UNITED COMMONWEALTH BANK, FSB
By /S/
----------------
Title
---------------
REPUBLIC BANK AND TRUST COMPANY
By /S/
------------------
Title
-----------------
AMENDMENT NO. 1 TO
AGREEMENT TO PURCHASE ASSETS AND ASSUME LIABILITIES
This Amendment No. 1 ("Amendment"), dated May 21 , 1997, amends
the AGREEMENT TO PURCHASE ASSETS AND ASSUME LIABILITIES ("Agreement"), dated
April 1, 1997, by and between UNITED COMMONWEALTH BANK, FSB, a federal savings
bank ("Buyer"), and REPUBLIC BANK AND TRUST COMPANY, a Kentucky banking
corporation ("Seller").
Except as otherwise provided herein, capitalized terms used in
this Amendment have the meanings ascribed to them in the Agreement.
WHEREAS, the parties mutually desire to modify the Loans to be
purchased by Buyer pursuant to the Agreement;
NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, Buyer and Seller agree as follows:
1. AMENDMENT TO ARTICLE 1 AND EXHIBIT C. Exhibit C of
the Agreement is hereby amended and restated to read in its entirety as set
forth in Exhibit C attached hereto.
The term "Assets" as used in the Agreement shall, in each
case, mean the Cash on Hand, Fixed Assets, the Real Property and Improvements,
the Loans and the Records.
The term "Loans" as used in the Agreement shall, in each case,
mean the loans identified on Exhibit C, as so amended, together with all accrued
but unpaid interest thereon, and all right, title and interest of Seller in and
to the collateral held as security for the Loans, and any other right, title or
interest related in any way to the Loans.
2. REAFFIRMATION OF OTHER TERMS AND CONDITIONS. Except as
modified by this Amendment, all other terms and conditions of the Agreement, as
in effect prior to the execution of this Amendment, shall remain in full force
and effect and the same are hereby reaffirmed and ratified as if fully set forth
herein.
IN WITNESS WHEREOF, Buyer and Seller have caused this
Amendment No. 1 to the Agreement to be signed by their respective officers
thereunto duly authorized, on this 21st day of May, 1997.
UNITED COMMONWEALTH BANK, FSB
By /S/
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REPUBLIC BANK AND TRUST COMPANY
By /S/
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<PAGE>
The exhibits to the Agreement have been omitted from this filing in reliance on
Rule 601(b)(2) of Regulation S-K. Republic Bancorp, Inc. will furnish
supplemental a copy of any omitted exhibit to the Securities and Exchange
Commission upon request.
PURCHASE AND ASSUMPTION AGREEMENT
This is a Purchase and Assumption Agreement (this "Agreement") dated as of July
18, 1997, between The Paducah Bank & Trust Company, a Kentucky banking
corporation ("Purchaser"), and Republic Bank & Trust Company, a Kentucky banking
corporation ("Seller").
WHEREAS, Seller conducts business (the "Business") at two branches in Paducah,
Kentucky ("Seller Offices"); and
WHEREAS, Purchaser desires to acquire and assume and Seller desires to sell and
assign certain assets and certain deposit liabilities associated with the Seller
Offices.
NOW, THEREFORE, in consideration of the mutual promises hereinafter contained,
and other good and valuable consideration, the parties agree as follows:
ARTICLE I
PURCHASE AND ASSUMPTION
1.01 PURCHASE AND SALE OF ASSETS. At the Closing (defined below), Purchaser
shall purchase and Seller shall sell certain assets relating to the Seller
Offices pursuant to the terms and conditions set forth herein. The assets of the
Seller Offices, as more fully described in Section 1.02 below, are hereinafter
referred to as the "Seller Assets". At the Closing, Purchaser shall assume the
"Seller Deposit Liabilities" (as hereinafter defined) relating to the Seller
Offices. The acquisition by Purchaser from Seller of the Seller Assets and the
assumption of Seller Deposit Liabilities pursuant to the terms and conditions
set forth herein is sometimes referred to herein as the "Acquisition".
1.02 TRANSFER OF ASSETS. Subject to the terms and conditions of this Agreement,
on and as of the close of business on the Closing Date (defined below), Seller
shall assign, transfer, convey and deliver to Purchaser, the Seller Assets, as
described in subparagraphs (a) through (i), inclusive of this Section 1.02:
(A) REAL ESTATE. The real estate on which the Seller Office on Lone Oak
Road (the "Lone Oak Office") is situated together with all improvements
thereon and all easements associated therewith (the "Real Estate") by
general warranty deed, substantially in the form attached hereto as
Annex 1.02(a). Seller shall provide to Purchaser as soon as reasonably
possible after the execution of this Agreement the legal descriptions
for such real estate, and all title information, surveys and
environmental assessments or investigations in the possession of, or
available to, Seller.
(B) PERSONAL PROPERTY. All of the furniture, fixtures and equipment and
other tangible personal property located at the Lone Oak Office (the "Fixed
Assets"). The Fixed Assets shall include, without limitation, the assets to
which the Purchase Price is allocated as set forth on Annex 1.02(b). The Fixed
Assets shall not include the assets specifically listed on Annex 1.02(b) as
being retained by Seller.
<PAGE>
(C) RECORDS OF THE SELLER OFFICES. All records and original documents
(if available) related to Seller Assets transferred or liabilities
assumed by Purchaser hereunder including, but not limited to Seller
Deposit Liabilities.
(D) SAFE DEPOSIT BUSINESS. The safe deposit business conducted at the
Seller Offices (the "Safe Deposit Business"), including safe deposit
vaults containing safe deposit boxes at the Lone Oak Office and all
prepaid rent for any time period following the Closing Date. A true and
complete list of safe deposit boxes (including but not limited to the
location, lessee, lease term, and lease rate) is attached hereto as
Annex 1.02(d) and shall be updated as of the Closing Date.
(E) CONTRACTS OR AGREEMENTS. All of Seller's right, title and interest
in and to the maintenance and service agreements attributable to the
Lone Oak Office, as listed on Annex 1.02(e) (the "Assumed Contracts").
(F) CASH ON HAND. All cash on hand at the Seller Offices as of the
close of business on the Closing Date.
(G) PREPAID EXPENSES. Those prepaid expenses attributable to the Lone
Oak Office as of the close of business on the Closing Date, which
prepaid expenses shall be identified on a list mutually acceptable to
both parties hereto within 30 days from the date of the execution of
this Agreement.
(H) LOANS SECURED BY DEPOSIT ACCOUNTS. All loans attributable to the
Seller Offices (including all interest earned but not collected) that
are either (i) at least 100% collateralized by Seller Deposit
Liabilities and are not more than twenty (20) days past due on the
Closing Date or otherwise involved in any type of litigation or (ii)
particular loans outstanding pursuant to overdraft lines that are
specifically identified in writing by Purchaser prior to the Closing as
being acquired by the Purchaser. The foregoing loans are collectively
referred to as the "Loans". The Loans as of the date of this Agreement
are set forth on Annex 1.02(h).
(I) RESIDUAL ASSETS. All of the remaining intangible assets, including,
without limitation, goodwill (Purchaser understands that Seller does
not have any goodwill reflected on its books with respect to the Seller
Offices), associated with the Seller Assets, Seller Offices and Seller
Deposit Liabilities and any claims of Seller against third parties with
respect to such Seller Assets, Seller Offices and Seller Deposit
Liabilities, to be transferred to the Purchaser hereunder; provided,
that Seller shall not hereby transfer to Purchaser any intangible
assets that relate solely to the real estate at which the Seller Office
on Broadway (the "Broadway Office") is situated.
1.03 ACCEPTANCE AND ASSUMPTION. Subject to the terms and conditions of
this Agreement on and as of the close of business on the Closing Date, Purchaser
shall:
<PAGE>
(A) SELLER ASSETS. Receive and accept all of the Seller Assets
assigned, transferred, conveyed and delivered to Purchaser by Seller
pursuant to this Agreement.
(B) SELLER DEPOSIT LIABILITIES. Assume and thereafter discharge the
"Seller Deposit Liabilities" (as hereinafter defined). The term "Seller
Deposit Liabilities" means all of Seller's obligations, duties and
liabilities under each deposit account which is attributable to the
Seller Offices as of the close of business on the Closing Date (the
"Deposit Accounts"), as reflected on the books of Seller. The Seller
Deposit Liabilities include accrued, but unpaid interest on the Deposit
Accounts calculated through the close of business on the Closing Date
in accordance with the Seller's books and records. The Seller Deposit
Liabilities do not include (i) escheatable accounts or accounts subject
to or involved in any form of litigation, (ii) accounts that are
overdrawn on the Closing Date, and (iii) affiliate accounts. The
Deposit Accounts referred to in the immediately preceding sentence
include, without limitation, passbook accounts, statement savings
accounts, super NOW accounts, money market accounts, checking accounts
and NOW accounts, Individual Retirement Accounts ("IRAs") of the type
Purchaser is eligible to administer, and certificates of deposit. Annex
1.03(b) is a listing of the Deposit Accounts and their respective
balances as of the date listed therein. The aggregate balance of the
Seller Deposit Liabilities at the Seller Offices as of May 31, 1997,
was approximately $65 million. The "obligations, duties and
liabilities" referred to in this Section 1.03(b) include, without
limitation, the obligation to pay and otherwise process all Seller
Deposit Liabilities in accordance with applicable law and their
respective contractual terms as reflected in the Seller's books and
records, and the duty to supply all applicable reporting forms for
post-closing periods, including, without limitation, Form 1099s,
relating to the Deposit Liabilities. Notwithstanding anything in this
Agreement to the contrary, Seller Deposit Liabilities and Deposit
Accounts do not include accounts (other than those transaction accounts
that may be designated in writing by Seller at or prior to the Closing)
for which the mailing address on the official records of the Seller
reflects a zip code (excluding any four digit suffix) (the "Account's
Zip Code") other than one of those listed on Annex 1.03(b)(1).
(C) OTHER LIABILITIES. Fully and timely perform and discharge,
as the same may be or become due, the Assumed Contracts and any other
liabilities specifically assumed by Purchaser under the terms of this
Agreement.
(D) NO ASSUMPTION OF LIABILITIES. Except for the Assumed Contracts,
Seller Deposit Liabilities, and any other obligations or liabilities
specifically assumed by Purchaser under this Agreement, it is expressly
understood and agreed that Purchaser shall not assume or be liable for
any of the debts, obligations or liabilities of Seller of any kind or
nature whatsoever including, but not limited to, any debt (except to
the extent the same has been credited to Purchaser by proration at
Closing) or tax including any bank shares, franchise or related tax,
any liability for unfair labor practices, any liability or obligation
of Seller arising out of any threatened or pending litigation, any
liability with respect to personal injury or property damage claims,
any liability related to Seller's safe deposit business, any liability
arising out of claims of employees employed at the Seller Offices for
bonuses, salaries, sick leave, vacation, wages or other payments or
benefits in respect of services performed at the Seller Offices prior
to the Closing, any liability under or in connection with any "employee
benefit plan" as defined in Section 3(3) of ERISA which is maintained
by Seller and covers any employees at the Seller Offices, any liability
<PAGE>
Seller may have incurred or will incur in connection with the
transactions contemplated by this Agreement, any liability arising out
of any action or inaction occurring on or prior to the Closing Date and
relating to one or more Seller Deposit Accounts, including but not
limited to the lack of a taxpayer identification number for an account
holder or the lack of compliance with any federal or state law or
regulation with respect to one or more Seller Deposit Accounts, or any
other liability Seller may have incurred prior to the Closing in
connection with the operation of the Seller Offices and which has not
been credited to Purchaser through proration or specifically assumed by
Purchaser under this Agreement.
1.04 PAYMENT OF FUNDS. Subject to the terms and conditions hereof, at the
Closing:
(A) NET PAYMENT. Seller shall make available and transfer to Purchaser
in the manner specified in Sections 4.04 and 4.05 hereof, funds equal
to the difference between the aggregate balance of Seller Deposit
Liabilities (including interest posted or accrued to such accounts but
excluding accrued interest paid directly to depositors by check or
otherwise transferred to an account which is not being assumed
hereunder; for all purposes under this Section 1.04, the amount of the
Seller Deposit Liabilities with respect to certificates of deposit and
time deposits shall be determined as if the average effective interest
rate over the term of the deposit accrues throughout the term of the
deposit regardless of whether, under the terms of the deposit, the
interest rate increases or decreases at different times; for example,
if a $100,000 certificate of deposit has an average effective interest
rate of 6%, but, has only paid interest at a 5% rate, the Seller
Deposit Liabilities would include the $100,000 principal plus interest
calculated at 6% through the Closing Date minus any amount of interest
already paid out on that certificate of deposit ), less the following:
(1) the "Deposit Premium" which shall equal to seven percent
(7%) of the Total Seller Deposit Liabilities for accounts
whose Account's Zip Code is one of those listed as part of the
primary area in Annex 1.03(b)(1) plus five percent (5%) of the
Total Seller Deposit Liabilities for accounts whose Account's
Zip Code is one of those listed as part of the extended area
in Annex 1.03(b)(1). "Total Seller Deposit Liabilities" shall
equal the daily average of the balances of the applicable
Seller Deposit Liabilities for the five business day period
ending on the business day prior to Closing;
(2) the amount (net of depreciation) that the Real Estate and
the Fixed Assets are reflected on Seller's financial
statements (determined in accordance with generally accepted
accounting practices, consistently applied, as of the last
calendar month-end to occur on or before the Closing Date)
minus any prepaid rent received by Seller in connection with
the Safe Deposit Business;
(3) the amount of cash on hand at the Seller Offices as of the
close of business on the Closing Date;
(4) the amount of prepaid expenses agreed upon as provided in
Paragraph 1.02(g) recorded or otherwise reflected on the books
of Seller as being attributable to the Seller Assets as of the
close of business on the Closing Date; and
<PAGE>
(5) the value of the Loans. For purposes of this subparagraph
5, the term "value" shall mean the aggregate of the
outstanding principal balances of the Loans together with
accrued but unpaid interest to the date of Closing and accrued
unpaid loan fees for periods prior to the Closing Date
calculated in accordance with generally accepted accounting
principles, consistently applied.
The aggregate payment by Purchaser of the purchase price of the Assets
as referenced in this Section 1.04(a)(1) though (5), inclusive, is
sometimes hereinafter referred to as the "Acquisition Consideration".
(B) ACQUISITION CONSIDERATION. The Acquisition Consideration shall be
computed as set forth in this Agreement. The allocation of the
Acquisition Consideration is set forth in Annex 1.02(b), and except as
otherwise set forth herein, is subject to adjustment by written
agreement between Purchaser and Seller. Such agreement shall not,
however, result in a recalculation or adjustment to the total
Acquisition Consideration which shall be computed in accordance
herewith.
(C) REIMBURSEMENT AND PRORATION OF CERTAIN EXPENSES. All other expenses
due and payable at the time of Closing relating to (1) the Seller
Deposit Liabilities assumed by Purchaser (excepting any entrance and/or
exit fees imposed by the FDIC but including regular premiums paid to
the FDIC for insurance on the Seller Deposit Liabilities which regular
premiums will be prorated according to a formula agreed to by the
Seller and Purchaser based on the standard formula promulgated by the
FDIC, the amount of the Seller Deposit Liabilities assumed by Purchaser
and the number of days during any period for which Seller has prepaid
premiums to the FDIC that Purchaser has held the Seller Deposit
Liabilities), (2) the Seller Assets transferred to Purchaser hereunder,
including all rents, real estate taxes, assessments (but not bank
deposit taxes), utility payment, payments due on leases assigned,
payments due on assigned service and maintenance contracts and similar
expenses, shall be prorated between Purchaser and Seller as of the
close of business on the Closing Date. Any reimbursement payment due
from Purchaser to Seller or from Seller to Purchaser pursuant to the
terms of this Section 1.04(c) shall be made in the manner specified in
Section 4.04 herein.
(D) EXIT/ENTRANCE FEES. Any exit and entrance fees imposed by the FDIC
or any other authorized government or regulatory entity upon Purchaser
or Seller as a result of the transaction contemplated herein, whether
assessed before or after the Closing, shall be paid directly by
Purchaser. Purchaser shall be solely responsible for paying such fees
directly (or reimbursing Seller for such fees if levied against
Seller), as it may be required by applicable law and regulation, and
Purchaser shall have no claim or recourse against Seller resulting from
the imposition or collection of such fees. Any one time assessment
relating to savings association insurance fund insured deposits, levied
against Seller or Purchaser and relating to the Seller Deposit
Liabilities shall be paid by the party against whom it is levied.
1.05 LEASE OF BROADWAY OFFICE. Subject to the terms and conditions of this
Agreement, on and as of the close of business on the Closing Date (defined
below), Seller shall enter into a lease (the "Lease") with Purchaser
substantially in the form of Annex 1.05 with respect to the real estate on which
<PAGE>
the Broadway Office is situated together with all improvements thereon and all
easements associated therewith and all of the furniture, fixtures and equipment
and other tangible personal property located at the Broadway Office
(collectively, the "Leased Assets"). The Leased Assets shall include, without
limitation, those listed on Annex 1.05(b). The Leased Assets shall not include
the assets specifically listed on Annex 1.05(b) as being excluded. Seller shall
provide to Purchaser as soon as reasonably possible after the execution of this
Agreement the legal descriptions for such real estate, and all title
information, surveys and environmental assessments or investigations in the
possession of, or available to, Seller.
ARTICLE II
COVENANTS OF THE PARTIES
2.01 REGULATORY APPROVALS. As promptly as practicable (but in any case within 30
days) after execution of this Agreement, Purchaser and Seller shall prepare and
submit for filing any and all applications, filings, and registrations with and
notifications to, all state and federal authorities required on the part of
Purchaser and Seller for the transaction contemplated by this Agreement to be
consummated at the Closing. Thereafter, Purchaser and Seller shall pursue all
such applications, filings, registrations, and notifications diligently and in
good faith and shall file such supplements, amendments, and additional
information in connection therewith as may be reasonably necessary for said
transaction to be consummated at such Closing. Prior to filing any such
application, filing, registration or notification, or amendment or supplement
thereto, the filing party shall provide the other party with reasonable
opportunity to review and comment thereon. The filing party shall provide the
other party with final copies of such documents, as filed, and, promptly after
receipt, copies of written communications from the agency or authority with
which such filing was made, or telephonic notice of material non-written
communications. Notwithstanding the foregoing, neither party shall be required
to provide the other party with any such information which constitutes
confidential business information which is subject to confidentiality pursuant
to the Freedom of Information Act or corresponding state law.
2.02 OPERATION OF OFFICES. Seller shall continue to operate Seller Offices in a
manner equivalent to that manner and system of operation employed immediately
prior to the date of this Agreement. Seller will use commercially reasonable
efforts to prevent harm or damage to the reputation of the Seller Offices or
material reduction of the existing Seller Deposit Liabilities. Except with the
prior written consent of the Purchaser, (which consent shall not be unreasonably
withheld or delayed) or as expressly contemplated or permitted by this
Agreement, during the period from the date of this Agreement and continuing
until the Closing, Seller shall not:
(a) conduct business at the Seller Offices other than in the usual,
regular and ordinary course or fail to use its best efforts to preserve
the Seller Offices intact or to preserve the good will of the customers
at and others having business with the Seller Offices;
(b) sell, lease, encumber, or otherwise dispose of, or agree to sell,
lease, encumber or otherwise dispose of, any of the Seller Assets or
any of the collateral securing the Loans;
<PAGE>
(c) cause the Seller Offices to transfer any Deposits, including,
without limitation, to Seller's or any affiliates' other operations or
branches, except upon the unsolicited request of a depositor in the
ordinary course of business;
(d) agree to increase the salary, remuneration or compensation
(including insurance, pension or other benefit plan) payable or to
become payable to persons employed at the Seller Offices other than in
accordance with Seller's customary policies and/or bank-wide changes,
or pay or agree to pay any uncommitted bonus to any such employees
other than regular bonuses granted based on historical practice;
(e) hire any new employees at the Seller Offices without making a good
faith effort to give Purchaser prior notice;
(f) violate any law, statute, rule, governmental regulation, order or
undertaking which violation would have a material adverse effect on the
Seller Assets;
(g) invest in any Fixed Assets on behalf of the Seller Offices, except
for commitments made on or before the date of the Agreement and for
replacements of furniture, furnishings and equipment and normal
maintenance and refurbishing purchased or made in the ordinary course
of business;
(h) offer any special deposit rate promotion with respect to the
Deposit Accounts or potential accounts except those offered by Seller
at all or substantially all of its branch offices;
(i) take any action to artificially inflate the amount of the Seller
Deposit Liabilities.
2.03 INSURANCE. During the period from the date of this Agreement and continuing
until the Closing, Seller shall maintain in effect all current insurance
policies insuring the Seller Assets.
2.04 INFORMATION CONCERNING AND ACCESS TO SELLER OFFICES. Seller shall permit
officers and authorized representatives of Purchaser access upon reasonable
notice to Seller to inspect the Seller Offices during normal business hours or
at such other time mutually agreed upon by both parties, and to permit Purchaser
to make or cause to be made such reasonable investigation of information and
materials relating to the financial condition, assets and liabilities of the
Seller Offices including general and subsidiary ledgers, deposit records, audit
reports and any other information concerning the business, property, personnel
and legal questions concerning the Seller Offices (or related to the physical
condition of the Seller Offices) as Purchaser reasonably deems necessary;
provided, however, that such access and investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere with the
normal operations of the Seller Offices; and provided further, that nothing in
this Section 2.04 shall be deemed to require Seller to breach any obligation of
confidentiality not to reveal any proprietary information, trade secrets,
marketing plans, strategic plans or information not related to the transaction
contemplated by this Agreement.
2.05 INFORMATION CONCERNING TITLE TO REAL ESTATE. As soon as reasonably
practicable after the date of this Agreement, Purchaser shall obtain preliminary
title reports and surveys with respect to the Real Estate. Purchaser shall
notify Seller in writing of any disapproved liens, encumbrances, easements,
<PAGE>
restrictions, conditions, covenants, rights, rights of way, or other matters
affecting title to the Real Estate (collectively the "Liens"). Seller shall have
thirty (30) days following receipt of such written notice of objection to any
such Liens to cause a removal of any such Liens. Unless the Purchaser objects to
any such Liens they shall be considered accepted and Purchaser shall be deemed
to have accepted such Liens and shall have no further recourse with respect
thereto (thereafter such Liens shall be "Permitted Liens"), provided that, the
following shall be Permitted Liens and shall not be disapproved: (a) mechanics',
carriers', workers and other similar liens arising in the ordinary course of
business (but only to the extent that Seller shall have paid off the entire
liability giving rise to such liens prior to the Closing), (b) minor
imperfections of title, none of which shall individually or in the aggregate
materially detract from the value of or impair the use of the real property
subject thereto, or impair the operation of the Business; (c) zoning laws that
do not impair the present use of the property subject thereto; and (d) liens for
current taxes not yet due and payable.
2.06 COOPERATION OF PARTIES. Purchaser hereby covenants to Seller and Seller
hereby covenants to Purchaser that, from the date hereof until the Closing, such
party shall cooperate fully with the other party in obtaining any consents,
approvals, permits or authorizations which are required to be obtained pursuant
to any federal or state law, or any federal or state regulation thereunder, for
or in connection with the transactions described and contemplated in this
Agreement. The parties further agree to consult and cooperate with each other
and to get the prior approval of the other regarding press releases and other
media releases in connection with the transaction contemplated by this Agreement
and to otherwise cooperate to effect the smooth transition of the Seller Assets
and Seller Deposit Liabilities to Purchaser. In addition, within thirty (30)
days of the date hereof, Seller shall provide to Purchaser (1) a detailed
explanation of Seller's file layouts used in connection with the servicing of
the Deposit Accounts, and (ii) a computer tape listing the current balances and
account numbers for the Deposit Accounts.
2.07 DISCLOSURES. From the date hereof until and through the Closing Date,
neither party shall, except for the making of filings with the Securities and
Exchange Commission, issue or publicly disclose, or permit any of its affiliates
to issue or publicly disclose, any press release or other information concerning
the transactions contemplated hereby, without first providing a copy of such
press release or other information to, and obtaining a written approval of, the
other party, which approval shall not be unreasonably withheld.
2.08 CONVERSION. From the date hereof through the Closing Date, Seller shall
cooperate and work with Purchaser to complete the tasks required to facilitate
the conversion. Such tasks include, but are not limited to, providing Purchaser
with updated cartridges, files and other items as are reasonably necessary to
complete the conversion process and related testing procedures. Within thirty
(30) days from the date hereof, Seller shall provide Purchaser with initial
computer cartridge reports and related documentation on the Deposit Accounts in
a format currently used by Seller and Seller will reasonably cooperate with
Purchaser in Purchaser's conversion of such format to one which is reasonably
acceptable to Purchaser. Seller shall provide to Purchaser on the day following
the Closing, conversion tapes as of the Closing Date. Seller agrees to
reasonably cooperate in resolving any conversion-related issues arising from the
conversion of the Deposit Accounts for a period of ninety (90) days following
the date that the conversion is completed. If Purchaser requests, Seller shall
reformat or data scrub the conversion tapes and Purchaser shall reimburse Seller
for any costs and expenses incurred by Seller in such reformatting or data
scrubbing. Promptly following the Closing, Seller will provide to its customers
<PAGE>
final statements, including interest payments/credits of accrued interest, for
all Deposit Accounts, other than IRA accounts, as of the Closing. Seller shall
also provide magnetic records of the final customer statements to Purchaser.
2.09 SAFE DEPOSIT BUSINESS. From and after the Closing Date, Purchaser shall
perform and discharge all of Seller's obligations to the customers of the Safe
Deposit Business in accordance with the provisions of the applicable leases or
other agreements relating to such customers.
2.10 CONDUCT OF BUSINESS. Between the date hereof and the Closing Date,
Purchaser and its affiliates shall not undertake any marketing or advertising
efforts specifically directed to Seller's customers or take any other action
intended to reduce the amount of the Deposits as of the Closing Date. Purchaser
shall not, between the date of this Agreement and the Closing Date, conduct its
business and operations in such a manner as to intentionally impair its ability
to consummate the transactions contemplated hereunder nor will it intentionally
engage in any transaction, take any action or omit to take any action, which
could be expected to impair its ability to consummate the transactions
contemplated hereunder.
2.11 FIDUCIARY RELATIONSHIPS. Purchaser shall perform all of the fiduciary
relationships of Seller arising out of any retirement accounts included within
the Deposits, and with respect to such accounts, Purchaser shall assume all of
the obligations and duties of Seller as fiduciary and succeed to all such
fiduciary relationships of Seller as fully and to the same extent as if
Purchaser had originally acquired, incurred or entered into such fiduciary
relationship; provided that Purchaser is not hereby assuming any liability for
any breach of fiduciary duty that occurs prior to the Closing.
2.12 NOTICES OF DEFAULT. Seller and Purchaser shall each promptly give written
notice to the other upon becoming aware of the impending or threatened
occurrence of any event which could reasonably be expected to cause or
constitute a material breach of any of their respective representations,
warranties, covenants or agreements contained in this Agreement.
2.13 REGULATORY MATTERS. Neither Purchaser nor Seller, nor any of their
respective affiliates, has received any indication from any federal, state or
other governmental agency, or has any other reason to believe, that such agency
would oppose or refuse to grant or issue its consent or approval, if required,
or impose any materially adverse condition, with respect to the transaction
contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents and
warrants to Seller as follows:
(A) GOOD STANDING AND POWER OF PURCHASER. Purchaser is a state banking
corporation, duly organized, and validly existing, and in good standing
under the laws of the Commonwealth of Kentucky, with corporate power to
own its properties and to carry on its business as presently conducted
and to consummate the transactions contemplated hereby. The deposits of
Purchaser are insured by the Bank Insurance Fund.
<PAGE>
(B) AUTHORIZATION OF AGREEMENT. The execution and delivery of this
Agreement, and the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on the part of Purchaser,
and this Agreement is a valid and binding obligation of Purchaser,
enforceable against the Purchaser in accordance with its terms.
(C) EFFECTIVE AGREEMENT. Subject to the receipt of any and all
necessary regulatory approvals and required consents, the execution,
delivery, and performance of this Agreement by Purchaser and a
consummation of the transactions contemplated hereby, will not conflict
with, result in the breach of, constitute a violation or default,
result in the acceleration of payment or other obligations, or create a
lien, charge or encumbrance, under any of the provisions of the
Articles of Incorporation or By-laws of Purchaser, under any judgment,
decree or order, under any law, rule or regulation of any government or
agency thereof, or under any contract, agreement or instrument to which
Purchaser is subject, except for any such conflict, breach, violation,
default, acceleration or lien which would not have a material adverse
effect on the Purchaser's ability to perform its obligations hereunder.
(D) NO BROKER. No broker or finder, or other party or agent performing
similar functions, has been retained by Purchaser or is entitled to be
paid based upon any agreements, arrangements or understandings made by
Purchaser in connection with the transaction contemplated hereby. Any
payment to which such a broker or finder is entitled shall be the sole
responsibility of Purchaser.
3.02 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Purchaser as follows:
(A) GOOD STANDING AND POWER OF SELLER. Seller is a state banking
corporation, duly organized, and validly existing, and in good standing
under the laws of the Commonwealth of Kentucky, with corporate power to
own its properties and to carry on its business as presently conducted
and to consummate the transactions contemplated hereby. The deposits of
Seller are insured by the Bank Insurance Fund and the Savings
Association Insurance Fund ("SAIF") in accordance with FDIC
regulations.
(B) AUTHORIZATION OF AGREEMENT. The execution and delivery of this
Agreement, and the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on the part of Seller, and
this Agreement is a valid and binding obligation of Seller, enforceable
against the Seller in accordance with its terms.
(C) EFFECTIVE AGREEMENT. Subject to the receipt of any and all
necessary regulatory approvals and required consents, the execution,
delivery, and performance of this Agreement by Seller and a
consummation of the transactions contemplated hereby, will not conflict
with, result in the breach of, constitute a violation or default,
result in the acceleration of payment or other obligations, or create a
lien, charge or encumbrance, under any of the provisions of the
<PAGE>
Charter, Articles of Incorporation or By-laws of Seller, under any
judgment, decree or order, under any law, rule or regulation of any
government or agency thereof, or under any contract, agreement or
instrument to which Seller is subject, except for any such conflict,
breach, violation, default, acceleration or lien which would not have a
material adverse effect on the Seller Assets or Seller's ability to
perform it obligations hereunder.
(D) TITLE TO SELLER ASSETS. Seller is the sole owner of each of the
Seller Assets and the Leased Assets free and clear of any mortgage,
lien or encumbrance. The Real Estate and the real estate portion of the
Leased Assets (the "Broadway Real Estate") constitutes all of the real
property used in the operation of the Seller Offices, including without
limitation, for parking and ingress and egress. Seller is the sole
owner of a fee simple interest in, and has good and marketable title
to, the Real Estate and the Broadway Real Estate, free and clear of any
mortgage, lien or encumbrance other than the Permitted Liens, and shall
convey the Real Estate to Purchaser by delivery at Closing of a general
warranty deed conveying title subject to said Permitted Exceptions.
(E) ZONING MATTERS. There are no uncorrected violations of zoning
and/or building codes relating to the Seller Offices.
(F) ENVIRONMENTAL MATTERS. There is no material environmental defect in
or associated with the Seller Offices or the Real Estate resulting from
actions or omissions to act of Seller, and to Seller's best knowledge,
there is no condition existing thereon which would give rise to
liability of Purchaser under federal, state or local environmental laws
and regulations. Seller has not received written notification from any
person that any hazardous substance, as defined under Section 104(14)
of the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, has been disposed of, buried beneath,
percolated beneath or otherwise exists on the aforementioned real
estate, or that it is a "potentially responsible party" as defined
under said statute. Seller agrees to permit Purchaser, or its designees
to enter upon the Real Estate to conduct environmental site
assessments, and Seller agrees to cooperate with Purchaser or its
designees in this regard.
(G) TAXES. Seller shall pay, credit Purchaser for paying, or make
appropriate provision to pay in accordance with ordinary business
practices all federal, state and local income, excise, payroll,
withholding, property, franchise, shares, sales, use and transfer
taxes, if any, which have accrued (whether or not they are due and
payable) through the date of Closing,. Any claims for refunds of taxes
which have been paid by Seller shall remain the property of Seller.
(H) THIRD-PARTY CLAIMS. There are no actions, suits or proceedings,
pending or, to the best of Seller's knowledge, threatened against or
affecting Seller or any interest or right of Seller, as such might
relate to the Seller Offices or against or affecting the Seller Assets,
the Seller Deposit Liabilities, or the banking business of the Seller
Offices.
(I) NO BROKER. No broker or finder, or other party or agent performing
similar functions, has been retained by Seller or is entitled to be
paid based upon any agreements, arrangements or understandings made by
<PAGE>
Seller in connection with the transaction contemplated hereby. Any
payment to which such a broker or finder is entitled shall be the sole
responsibility of Seller.
(J) ASSETS. Seller has not received notice nor has knowledge that any
governmental authority considers the Seller Offices to violate or to
have violated, fire, zoning, heath, safety, building, hazardous waste
or environmental code or other ordinance, law or regulation or order of
any government or agency, body or subdivision thereof, or any private
covenants, restrictions or easements. The Fixed Assets are used in the
operation of the Seller Offices and are in satisfactory condition
taking into account their age and reasonable wear and tear.
(K) COMPLIANCE WITH LAWS. Seller is in material compliance with all
statutes and regulations applicable to the Seller Assets, the Seller
Deposit Liabilities and the conduct of the Seller Offices. Seller has
not received notice from any agency or department of federal, state or
local government asserting a violation of any law, regulation,
ordinance, rule or order (whether executive, judicial, legislative or
administrative) that would have a material adverse effect on the
financial condition, results of operations or business of the Seller
Offices or the Seller Assets. Seller holds all permits, licenses,
exemptions, orders and approvals of all governmental entities which are
necessary to the operation of the Seller Offices and to the best of
Seller's knowledge, is in compliance with the terms thereof. Seller has
filed all Currency Transaction Reports with respect to all transactions
required to be reported under the Bank Secrecy Act and regulations
adopted pursuant thereto. With respect to the Deposit Accounts, Seller
has complied with specified information reporting requirements pursuant
to Section 6723 of the Code and any applicable regulations thereunder,
or established "reasonable cause" pursuant to Section 6724 of the Code
for information returns required to be filed on or after December 31,
1995.
(L) DEPOSITS. The deposit records of Seller accurately reflect the
Deposit Accounts and are and shall be sufficient to enable Purchaser to
conduct a banking business with respect to the Seller Offices. Seller
has not transferred any deposit accounts held by Seller at the Seller
Offices to any of Seller's other branches, or to any branch of any
Seller affiliate, except at the express unsolicited request of the
depositor in the ordinary course of business. Seller has not
transferred any deposit accounts from any of Seller's other branches or
from any branches of an affiliate of Seller to the Seller Offices,
except as set forth in schedule 3.02(i) or at the express unsolicited
request of the depositor in the ordinary course of business. There are
no material uncured violations or violations with respect to which
material refunds or restitution may be required with respect to the
Seller Deposit Liabilities and the terms and conditions and other
documentation with respect to the Seller Deposit Liabilities complies
in all material respects with all applicable laws and regulations and
has been provided to Purchaser. The Seller Deposit Liabilities are
insured by the Federal Deposit Insurance Corporation to the full extent
provided by federal law and regulations. Seller is in material
compliance with all terms and conditions and other documentation
applicable to the Seller Deposit Liabilities. Seller shall deliver to
Purchaser as of the Closing Date (i) TINs (or record of appropriate
exemption) for all holders of Seller Deposit Liabilities; and (ii) all
other information in Seller's possession or reasonably available to
Seller required by applicable law to be provided to the IRS with
respect to the Seller Assets or Seller Deposit Liabilities and the
holders thereof. Seller hereby certifies that such information, when
delivered, shall accurately reflect the information provided by
<PAGE>
Seller's customers. To the best of Seller's knowledge, there are not
any "kiting" schemes associated with any of the Seller Deposit
Liabilities.
(M) LOANS. All of the Loans have been made for good, valuable and
adequate consideration in the ordinary course of business of Seller,
are evidenced by notes or other evidences of indebtedness that are
true, genuine, and enforceable in accordance with their terms. Each of
the Loans is secured by a first priority security interest in a Deposit
Account with a balance greater than that of the Loan. Each such
security interest is evidenced by a security agreement that is true,
genuine, and enforceable in accordance with its terms. No Loan has been
adversely classified in any regulatory examination or by Seller's
internal classification system and no Loan is 90 days or more past due,
has been restructured or is classified as nonaccrual. There are no
material uncured violations or violations with respect to which
material refunds or restitution may be required with respect to the
Loans that have been cited in any compliance report to Seller as a
result of examination by any regulatory authority and the loan
documentation with respect to the Loans complies in all material
respects with all applicable laws and regulations.
(N) ASSUMED CONTRACTS. Seller has delivered to the Purchaser true and
correct copies of the Assumed Contracts. Each of the Assumed Contracts
is valid and in full force and effect in accordance with its terms and
the Seller knows of no defaults under any Assumed Contract. No event or
condition has occurred or exists, or , to the best knowledge of the
Seller, is alleged by any of the other parties thereto to have occurred
or existed, which constitutes, or with lapse of time or giving of
notice or both might constitute, a default or breach under any of the
Assumed Contracts. There are no contracts or agreements that relate to
the Seller Offices that have not been disclosed to the Purchaser.
Seller has delivered to Purchaser all safe deposit box lease agreements
in effect with respect to the Seller Offices. Seller shall provide
Purchaser with the proper trust documents for any retirement accounts
assumed by Purchaser under this Agreement.
3.03 EMPLOYEE MATTERS.
(a) Purchaser shall consider for employment each person (each an
"Affected Employee") who is employed at the Seller Offices on the date
of this Agreement after the Closing Date on an at will basis as a new
employee of Purchaser and in accordance with this Section 3.03. Each
Affected Employee who is employed by Purchaser as of the Closing Date
shall be (i) employed upon terms and conditions, including, without
limitation, salary and eligibility for benefits, including welfare,
pension, severance and vacation benefits, substantially equivalent to
other newly hired employees of Purchaser with similar responsibilities
and (ii) given credit for their length of service with Seller for
purposes of eligibility and vesting (but not benefit accrual) under
Purchaser's employee benefit plans (including, without limitation, any
vacation, sick leave, and severance policies); provided that there may
be an interim period of time between the Closing and the effectiveness
of eligibility under the plans.
<PAGE>
(b) Purchaser shall not assume any accrued vacation or sick days,
severance benefits or other benefits owed to any Affected Employee by
Seller as of (and including) the Closing Date.
ARTICLE IV
CLOSING
4.01 CLOSING AND CLOSING DATE. Unless otherwise agreed to in writing, the
transaction contemplated by this Agreement shall be consummated and closed (the
"Closing") at the offices of Brown, Todd & Heyburn PLLC at 12:00 noon on the
twelfth business day after all required regulatory approvals have been obtained
and all applicable waiting periods have expired, or such other time and date
which is mutually agreed upon by Purchaser and Seller (the "Closing Date").
Notwithstanding anything contained in this Section 4.01 to the contrary, if the
Closing does not occur on or before November 30, 1997, either party may
terminate this Agreement, upon written notification to the other party. Such
deadline shall be automatically extended to January 31, 1998 if the Closing does
not occur by the November 30, 1997 deadline due to the failure (which is beyond
the control of Purchaser) of state or federal regulatory authorities to approve
the transaction by a date which would allow the Closing to occur by November 30,
1997 (the "Termination Date"). The parties may, however, prior to either
deadline, agree to an extension of that deadline.
4.02 PURCHASER'S ACTION AT CLOSING. At the Closing, Purchaser shall:
(a) execute, acknowledge, and deliver to Seller to evidence the
assumption of the liabilities and obligations of Seller in connection
with the Seller Deposit Liabilities and Assumed Contracts, an
instrument or instruments of assumption in forms reasonably
satisfactory to Purchaser;
(b) receive, accept and acknowledge delivery of all Seller Assets, and
all records and documentation relating thereto, sold, assigned,
transferred, conveyed or delivered to Purchaser by Seller hereunder;
(c) execute and deliver to Seller such written receipts for the Seller
Assets assigned, transferred, conveyed or delivered to Purchaser
hereunder as Seller may reasonably have requested at or before the
Closing;
(d) execute and deliver to Seller the Lease.
4.03 SELLER'S ACTIONS AT CLOSING. At Closing, Seller shall:
(a) deliver to Purchaser a duly executed and recordable general
warranty deed conveying title to the Real Estate free and clear of all
claims, liens and encumbrances (other than the Permitted Liens);
(b) assign to Purchaser, Seller's rights in and to the Assumed
Contracts, which are assignable and which constitute a part of the
Seller Assets;
<PAGE>
(c) deliver to Purchaser the Seller Assets purchased hereunder which
are capable of physical delivery and such appropriate bills of sale and
other instruments of title as Purchaser may reasonably request to vest
in Purchaser good and marketable title thereto, free and clear of all
encumbrances (other than the Permitted Liens);
(d) assign, transfer, and deliver to Purchaser the records and original
documents (if available) pertaining to the Seller Deposit Liabilities
(in whatever form or medium then maintained by Seller);
(e) execute and deliver to Purchaser an instrument which shall assign
and transfer Individual Retirement Accounts attributable to the Seller
Offices to Purchaser and which shall additionally appoint Purchaser as
a successor trustee for such accounts;
(f) assign, transfer and deliver and endorse over to Purchaser all
promissory notes and other credit agreements, together with
corresponding collateral (including, without limitation, mortgages and
personal property liens) related to the Loans and all files and records
and original documents, if available (in whatever form or medium then
maintained by Seller), pertaining to the Loans;
(g) deliver all other records and original documents (if available)
related to the Seller Assets transferred to, and the Seller Deposit
Liabilities assumed by, Purchaser; and,
(h) make available and transfer to Purchaser all funds required to be
paid to Purchaser pursuant to the terms of this Agreement;
(i) execute and deliver to Purchaser the Lease.
4.04 CLOSING STATEMENT/METHOD OF PAYMENT. The parties shall prepare and execute
at Closing a Closing Statement (the "Preliminary Settlement Statement")
supported by appropriate exhibits, substantially in the form of Annex 4.04,
showing the computation of the funds, if any, due to Purchaser (the "Cash
Payment"). The Cash Payment, as set forth pursuant to the terms of Section 1.04
hereof but determined as if the Closing occurred on the business immediately
prior to the Closing Date, shall be made on the Closing Date in immediately
available federal funds. At least two business days prior to Closing, Purchaser
and Seller shall provide written notice to one another indicating the account
and bank to which such funds shall be wire transferred.
4.05 POST CLOSING ADJUSTMENTS.
(a) As soon as reasonably practicable after the Closing Date, but no
later than twelve (12) business days thereafter, Seller shall provide
Purchaser with: (1) final Annexes 1.02(h) and 1.03(b) that shall
accurately reflect the related balances as shown on the financial
records of Seller as of the close of business on the Closing Date
calculated in accordance with generally accepted accounting principles
consistently applied, and (ii) a final schedule that shall accurately
reflect the amount of Cash on Hand as of the close of business on the
Closing date, which schedule shall be prepared by Seller based upon a
cash count to be mutually conducted by Seller and Purchaser at the
close of business on the day of the Closing Date.
<PAGE>
(b) Purchaser and its accountants and attorneys shall have the right to
review any and all documents (and to interview any and all Seller
personnel) reasonably necessary or desirable to confirm the accuracy of
final Annexes 1.02(h) and 1.03(b) and the final cash schedule.
(c) As soon as reasonably practicable after the Closing Date, but no
later than twelve (12) business days thereafter, Seller shall prepare
and deliver to Purchaser a final settlement statement (the "Final
Settlement Statement"), in the form of Annex 4.05(c) hereto, which
shall show the calculation of the final Acquisition Consideration based
on the final Annexes and Schedules delivered pursuant to Section
4.05(a) hereof. Upon delivery of the Final Settlement Statement,
Purchaser or Seller, as the case maybe, shall promptly make such
payments in the amount and manner as are specified in Section 4.05(d)
hereof.
(d) If the Cash Payment shown on the Final Settlement Statement (the
"Final Payment Amount") is different from the Cash Payment made on the
Closing Date, then a payment or refund shall be promptly made by Seller
or Purchaser necessary to reflect the Final Payment Amount. Such refund
or payment shall be made by wire transfer in immediately available
funds, together with interest thereon for the number of days from and
including the Closing Date to such settlement date, but excluding such
settlement date, at the rate per annum equal to the average during such
period of the average of the daily high and low rates for federal funds
on each business day during such period, as such rates are published in
the Midwestern Edition of the Wall Street Journal, computed on the
basis of a 365-day year.
4.06 CONDITIONS TO OBLIGATION OF SELLER. The obligations of Seller to consummate
the transactions contemplated hereby are subject to the satisfaction of the
following conditions precedent on or before the Closing, any of which may be
waived by Seller:
(a) the representations and warranties of Purchaser set forth in
Section 3.01 of this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the
Closing as if made on the Closing;
(b) Purchaser, in all material respects, shall have performed and
observed its obligations and covenants as set forth in this Agreement
prior to or on the Closing;
(c) receipt of all permits, consents, approvals and authorizations from
federal and state governmental authorities and regulatory agencies
necessary to effect the transactions contemplated herein (including the
expiration of all applicable waiting periods);
(d) there shall not be threatened, instituted or pending any action or
proceeding before any domestic or foreign court or governmental agency
or other regulatory or administrative agency or commission, or by any
other person (1) challenging the transactions contemplated by this
Agreement or the terms thereof; or (2) seeking to prohibit the
transactions contemplated by this Agreement, which, in the reasonable
opinion of Seller's counsel, has a reasonable probability of success.
<PAGE>
4.07 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of Purchaser to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions precedent on or before the Closing, any
of which may be waived by Purchaser:
(a) the representations and warranties of Seller set forth in Section
3.02 of this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing as if
made on the Closing;
(b) Seller, in all material respects, shall have performed and observed
its obligations and covenants as set forth in this Agreement prior to
or at the Closing;
(c) Receipt of all permits, consents, approvals and authorizations from
federal and state governmental authorities and regulatory agencies
necessary to effect the transactions contemplated hereby and the
operation of the Seller Offices by Purchaser (including the expiration
of all applicable waiting periods), on terms and conditions
satisfactory to Purchaser (other than standard terms and conditions);
(d) there shall not be threatened, instituted or pending any action or
proceeding before any domestic or foreign court or governmental agency
or other regulatory or administrative agency or commission, or by any
other person (1) challenging the transactions contemplated by this
Agreement or the terms thereof or (2) seeking to prohibit the
transactions contemplated by this Agreement, which, in the opinion of
Purchaser's counsel, has a reasonable probability of success; and
(e) there shall have been no material adverse change in the business,
financial condition, or operations of the Seller Offices (other than
changes resulting from or attributable to (i) changes in laws and
regulations, or (ii) economic conditions (including without limitation
interest rates), in either case that affect banking institutions
generally or the ability to conduct banking operations at the Seller
Offices, or in the physical condition of the Seller Assets from the
physical condition that exists as of the date of this Agreement, or in
the quality of the Loans (taken as a whole) from the quality that
exists as of the date of this Agreement.
ARTICLE V
GENERAL COVENANTS AND INDEMNIFICATION
5.01 CONFIDENTIALITY OBLIGATIONS OF SELLER. From and after the date hereof,
Seller shall, and shall cause its subsidiaries and affiliates to, treat all
information received from Purchaser concerning the business, assets, operations,
and financial condition of Purchaser as confidential, unless and to the extent
that Seller can demonstrate that such information was already known to Seller or
such subsidiary or affiliates or in the public domain or was subsequently
independently developed by Seller; and Seller shall, and shall cause its
subsidiaries and affiliates to, not use any such information (so required to be
treated as confidential) for any purposes except in furtherance of the
transactions contemplated hereby. From and after the date of Closing, Seller
shall, and shall cause its subsidiaries and affiliates to, treat all information
regarding the Seller Offices as confidential, and Seller shall, and shall cause
its subsidiaries and affiliates to, not use any such information so required to
<PAGE>
be treated as confidential for any purpose. Upon the termination of this
Agreement, Seller shall, and shall cause its affiliates to, promptly return all
documents and work papers containing, and all copies of, any such information
(so required to be treated as confidential) received from or on behalf of
Purchaser in connection with the transactions contemplated hereby. The covenants
of Seller contained in this Section 5.01 shall survive any termination of this
Agreement; provided, however, that neither Seller nor any of its affiliates
shall be deemed to have violated the covenants set forth in this Section 5.01 if
Seller or any of such affiliates shall in good faith disclose any of such
confidential information in compliance with any legal process, order or decree
issued by any court or agency of government of competent jurisdiction, provided
that prior to such disclosure, Seller shall give Purchaser reasonable prior
notice thereof.
5.02 CONFIDENTIALITY OBLIGATIONS OF PURCHASER. From and after the date hereof,
Purchaser shall, and shall cause its subsidiaries and affiliates to, treat all
information received from Seller concerning the business, assets, operations,
and financial condition of Seller, as confidential, unless and to the extent
that Purchaser can demonstrate that such information was already known to
Purchaser or such subsidiary or affiliates or in the public domain or was
subsequently independently developed by Purchaser; and Purchaser shall, and
shall cause its subsidiaries and affiliates to, not use any such information (so
required to be treated as confidential) for any purposes except in furtherance
of the transactions contemplated hereby. Upon the termination of this Agreement,
Purchaser shall, and shall cause its affiliates to, promptly return all
documents and work papers containing, and all copies of, any such information
(so required to be treated as confidential) received from or on behalf of Seller
in connection with the transactions contemplated hereby. The covenants of
Purchaser contained in this Section 5.02 are of the essence and shall survive
any termination of this Agreement; provided, however, that neither Purchaser nor
any of its affiliates shall be deemed to have violated the covenants set forth
in this Section 5.02 if Purchaser or any of such affiliates shall in good faith
disclose any of such confidential information in compliance with any legal
process, order or decree issued by any court or agency of government of
competent jurisdiction, provided that, prior to such disclosure, Purchaser shall
give Seller reasonable prior notice thereof.
5.03 INDEMNIFICATION BY BOTH PARTIES. Purchaser, on the one hand, and Seller, on
the other hand. mutually agree to indemnity and hold each other harmless from,
and to reimburse each other promptly for, any and all losses, liabilities,
damages, expenses and other costs (including court costs, costs of investigation
and reasonable attorneys' fees) ("Losses") that one party may suffer as the
result of the material breach by the other party of any covenant, representation
or warranty of that other party set forth in this Agreement.
5.04 INDEMNIFICATION BY SELLER. Seller shall indemnify, hold harmless and defend
Purchaser from and against any and all Losses arising out of any actions, suits,
or other proceedings, claims or demands commenced by any third party prior to or
after the Closing, which arise out of, or are in any way related to, (i) the
operations of the Seller Offices (including but not limited to claims for
personal injuries arising from incidents occurring prior to the Closing) or the
administration of any of the Deposit Accounts or Loans by Seller prior to the
Closing, (ii) the Fixed Assets, Assumed Contracts, Records, or Safe Deposit
Business, insofar as the basis for such action, suit, or other proceedings,
claim or demand arose prior to the Closing, or (iii) the fiduciary duties of
Seller arising prior to the Closing with respect to the individual retirement
accounts assumed by Purchaser or included within the Seller Deposit Liabilities.
<PAGE>
5.05 INDEMNIFICATION BY PURCHASER. Purchaser shall indemnity, hold harmless and
defend Seller from and against all Losses arising out of any actions, suits or
other proceedings, claims or demands, which arise out of, or are in any way
related to, (i) the operations of the Seller Offices or the administration of
any of the Seller Deposit Liabilities or Loans by Purchaser subsequent to the
Closing, (ii) Fixed Assets, Assumed Contracts, Records or Safe Deposit Business,
insofar as the basis for such action, suit or other proceeding, claim or demand
arises subsequent to the Closing, or (iii) the fiduciary duties of Purchaser
arising subsequent to Closing with respect to the individual retirement accounts
assumed by Purchaser or included within the Seller Deposit Liabilities.
5.06 CLAIMS.
(A) DEFENSE OF CLAIMS. Should any claim be made, or suit or proceeding
be instituted against a Buyer or Seller (the "Indemnified Party"),
which, if valid or prosecuted successfully, would be a matter for which
such Indemnified Party is entitled to indemnification under this
Agreement (a "Claim") from the other party (the "Indemnifying Party"),
the Indemnified Party shall notify the Indemnifying Party in writing
concerning the same promptly after the assertion or commencement
thereof. The Indemnified Party shall in the first instance file in a
timely manner any answer or pleading with respect to a suit or
proceeding if such action is necessary to avoid default or other
material adverse results. The party having the greater risk of
financial loss with respect to such Claim (the "Lead Party") shall
control the defense thereof and shall use reasonable efforts to defeat
or minimize any loss resulting from such Claim. The Lead Party shall
provide the other party (the "Non-Lead Party") with such information
and opportunity for consultation (including estimations regarding costs
and fees) as may reasonably be requested and the Non-Lead Party shall
be entitled, at its own expense, to participate in the defense of a
claim and to engage counsel for such purpose. All costs and expenses
incurred by the Lead Party in connection with the defense of a Claim
shall in the first instance be paid by the Lead Party. Any reasonable
costs and expenses so paid by the Indemnified Party shall be subject to
the Indemnified Party's rights to indemnification under this Agreement.
(b) SETTLEMENT OF CLAIMS. No settlement of a Claim involving liability
of an Indemnified Party subject to indemnification under this Agreement
shall be made without prior written consent by or on behalf of the
Indemnifying Party, which consent shall not be unreasonably withheld or
delayed. For these purposes, consent shall be presumed in the case of
settlements of $5,000 or less wherein the Indemnifying Party has not
responded within ten (10) business days of written notice of a proposed
settlement. In the event of any dispute regarding the reasonableness of
a proposed settlement, the party which will bear the larger financial
loss resulting from such settlement and the application of the
indemnification provisions set forth in this Agreement will make the
final determination in respect thereto, which determination will be
final and binding on all involved parties.
5.07 REQUEST FOR INDEMNIFICATION. If at any time or from time to time any party
shall determine that it is entitled to indemnification under this Agreement,
such party shall give written notice to the other party specifying the basis on
which indemnification is sought, the amount of the asserted loss, damage or
expense, as the case may be, and requesting indemnification. If indemnification
is required under this Agreement with respect to a Claim, the parties
contemplate that payment shall be made to the Indemnified Party at or about the
time the Indemnified Party shall be required to make payment with respect to the
Claim, unless there shall be a dispute as to the Indemnified Party's entitlement
<PAGE>
to indemnification, in which case adjustment will be made upon resolution of
said dispute. Upon receipt of any request for indemnification, the Indemnifying
Party may object thereto by delivering written notice of such objection to the
Indemnified Party specifying in reasonable detail the basis on which such
objection is made. In the case of objection to a request for indemnification as
to a Claim, such objection shall be made within thirty (30) business days of
notice from the Indemnified Party's requesting payment, unless the Indemnifying
Party shall have earlier agreed to such liability. Failure on the part of the
Indemnifying Party so to object shall constitute acceptance by such party of the
request to indemnify as to such matter.
5.08 REDUCTION FOR INSURANCE. The amount which an Indemnifying Party is required
to indemnify the Indemnified Party pursuant to this Agreement shall be reduced
(including, without limitation, retroactively) by any insurance proceeds
actually recovered by or on behalf of such Indemnified Party in reduction of the
related indemnifiable loss (the "Indemnifiable Loss"). Amounts required to be
paid, as so reduced, are hereafter called an "Indemnity Payment." If an
Indemnified Party shall have received or shall have had paid on its behalf an
Indemnity Payment in respect of an Indemnifiable Loss and shall subsequently
receive, directly or indirectly, insurance proceeds in respect of such
Indemnifiable Loss, then such Indemnified Party shall pay to such Indemnifying
Party a sum equal to the amount of such insurance proceeds up to an amount equal
to the Indemnity Payment.
5.09 FURTHER ASSURANCES. From and after the date hereof, each party agrees to
execute and deliver such instruments and to take such other actions as the other
party hereto may reasonably request in order to carry out and implement this
Agreement. The covenants of each of the parties hereto pursuant to this Section
5.06 shall survive the Closing.
ARTICLE VI
TERMINATION
6.01 TERMINATION BY MUTUAL AGREEMENT. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned by mutual consent and
agreement of the parties hereto.
6.02 TERMINATION BY PURCHASER. This Agreement may be terminated and the
transaction contemplated hereby abandoned by Purchaser:
(a) Upon written notice to Seller, if at the time of such termination
any of the conditions set forth in section 4.07 hereof are not
satisfied and cannot reasonably be expected to be satisfied before the
Termination Date.
(b) If any regulatory approval required for consummation of this
transaction is denied by the applicable regulatory authority or is
granted upon satisfaction of conditions unacceptable in the reasonable
judgment of Purchaser or Seller, or in the event that at any time prior
to the Closing Date it shall become reasonably certain to Purchaser,
with the advice of counsel, that a regulatory approval required for
consummation of the transaction will not be obtained. For purposes
hereof, a condition may be deemed "unacceptable" if in the reasonable,
<PAGE>
good faith judgment of Purchaser, it is reasonably probable that it
would have a material adverse effect on the business, operations,
assets or financial condition of Purchaser upon completion of the
acquisition contemplated hereby or otherwise materially impair the
value of Seller's business to be acquired hereunder, provided that in
each case no such term or condition imposed by any regulatory authority
shall be deemed to have such an effect unless it materially differs
from terms and conditions customarily imposed by such an authority in
connection with approvals of similar such transactions.
(c) In accordance with Section 4.01.
6.03 TERMINATION BY SELLER. This Agreement may be terminated and the
transaction contemplated hereby abandoned by Seller:
(a) Upon written notice to Purchaser, if at the time of such
termination any of the conditions set forth in Section 4.06 hereof are
not satisfied and cannot reasonably be expected to be satisfied before
the Termination Date.
(b) If any regulatory approval required for consummation of this
transaction is denied by the applicable regulatory authority or is
granted upon satisfaction of conditions unacceptable in the reasonable
judgment of Seller, or in the event that at any time prior to the
Closing Date it shall become reasonably certain to Seller, with the
advice of counsel, that a regulatory approval required for consummation
of the transaction will not be obtained. For purposes hereof, a
condition may be deemed "unacceptable" if in the reasonable, good faith
judgment of Seller, it is reasonably probable that it would have a
material adverse effect on the business, operations, assets or
financial condition of Seller, provided that in each case no such term
or condition imposed by any regulatory authority shall be deemed to
have such an effect unless it materially differs from terms and
conditions customarily imposed by such an authority in connection with
approvals of similar such transactions.
(c) In accordance with Section 4.01.
6.04 TERMINATION BY EITHER PARTY. Upon written notice by either Seller (a
"Party") or Purchaser (also a "Party"), at any time prior to the day of the
Closing if and only if such Party is not in material breach of this Agreement
and if the other Party has breached in any material respect any covenant or
undertaking contained herein and such breach is not cured within thirty days of
the date the nonbreaching Party gives notice of such breach to the breaching
Party (provided no cure period shall be available for any breach which, due to
the nature of the breach, cannot be cured, or for any breach which is the same
or substantially similar to a prior breach for which a cure period has been
given).
6.05 NOTICE OF TERMINATION. To exercise the right to terminate as provided in
this section, the exercising party must advise the other party in writing, which
notice shall be effective immediately upon its being delivered as referenced in
Section 7.09 hereof.
6.06 EFFECT OF TERMINATION. The termination of this Agreement pursuant to
Sections 6.02 or 6.03 of this Agreement shall not release any party hereto from
any liability or obligation to the other party hereto arising from a breach of
any provision of this Agreement occurring prior to the termination hereof. No
<PAGE>
termination of this Agreement shall affect or diminish the parties' obligations
under Sections 5.01 and 5.02 of this Agreement, which shall survive the
termination.
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.01 NO SOLICITATION BY SELLER. For a period of three (3) years after the
Closing Date, Seller shall not specifically target and solicit customers of the
Seller Offices for the provision of services offered by or competitive with
services offered by Purchaser in McCracken County, Kentucky; provided, however,
these restrictions shall not restrict (i) general mass mailings or other similar
communications provided such communications do not utilize or incorporate any
customer or mailing list compiled from customers of the Seller Offices or which
consists primarily of customers of the Seller Offices or which are targeted only
to the McCracken County area or (ii) communications with Seller's then loan
customers for the purpose of renewing, extending or modifying their loans. In
addition, Seller will not, for a period of three (3) years after the Closing
Date, establish a banking or thrift office in McCracken County, Kentucky;
provided however that nothing herein shall prevent Seller from acquiring and
operating a branch in McCracken County, Kentucky through the purchase of a
financial institution whose main office is not located in McCracken County,
Kentucky.
7.02 NOTICES TO DEPOSITORS. Seller shall use its best efforts to provide
Purchaser an intermediate customer list (on paper and on a computer diskette)
and mailing labels of the Deposits to be assumed as of forty-five days prior to
the Closing. On the Closing Date, Seller shall provide a final customer list of
the Seller Deposit Liabilities. At least fourteen (14) days before the Closing
(or on such earlier or later date as may be required by law), Purchaser shall
mail notice (the "Notification") to the holders of the Deposit Accounts to be
assumed that, subject to the closing requirements, Purchaser will be assuming
the liability of the Seller Deposit Liabilities. The Notification will be based
on the list and labels referred to above and a log maintained at the Seller
Offices of the new accounts opened since the date of said list. Seller shall
provide Purchaser with a copy of said log up to the date of Seller's mailing. In
the Deposit Account Notification, Purchaser shall set out the details of its
administration of the assumed accounts and may, with Seller's prior written
consent (which shall not be unreasonably withheld), communicate and mail
information, brochures, bulletins, press releases and other communications to
depositors of the Seller Offices concerning the business and operations of
Purchaser. Each party shall obtain the other party's prior approval of its
notification letter(s) and any other communications to depositors of the Seller
Offices regarding the transactions contemplated hereby (which approval shall not
be unreasonably withheld). The Notification may be made jointly if (a) it is
permitted by applicable statutes and regulations and (b) Seller and Purchaser
can agree to the content thereof.
7.03 POST CLOSING RECONCILIATION.
(A) INCLEARING ITEMS. As of the opening of business on the Closing
Date, Seller shall expedite the clearing and sorting of all checks,
drafts, instruments and other commercial paper relative to the Deposit
Accounts (hereinafter collectively referred to as the "Paper Items").
For a period of sixty (60) days following the Closing Date (the
"Inclearing Period"), Seller shall continue to process checks or drafts
<PAGE>
drawn on Deposits which are not intercepted by the FRB. On each banking
day during the Inclearing Period, Seller shall send to Purchaser by
overnight mail all inclearing items received for payment that day. Upon
expiration of the Inclearing Period, Seller shall cease honoring
inclearing items presented against the Deposit Accounts and such items
shall be returned marked "Refer to Maker". Seller and Purchaser shall
settle amounts due under this Section 7.03 by wire transfer.
(B) ACH TRANSACTIONS. At least thirty (30) days prior to the Closing
Date, Seller shall deliver to Purchaser (i) copies of all ACH
origination forms for social security payments, and (ii) all other
records and information necessary for Purchaser to administer the ACH
transactions. For a period of one hundred twenty (120) days following
the Closing Date, Seller agrees to continue to accept and immediately
forward to Purchaser in paper format all automated clearinghouse
entries ("ACH") and corresponding funds. Seller also agrees to include
the originator identification number, and Purchaser agrees to
immediately notify and instruct the originator of the ACH to reroute
the entries directly to Purchaser. Upon expiration of such one hundred
twenty (120) day period, Seller shall discontinue accepting and
forwarding ACH transactions to the Purchaser. Transactions will be
returned to the originators marked "Branch Sold to Another DFI," with
code R12 included as the reason for the return. Purchaser agrees to
complete and obtain Federal Reserve acceptance of the ACH Federal
Reserve Agreement prior to the Closing Date. All returns received by
Seller after the Closing Date for ACH transactions processed on or
before the Closing Date for any of the Deposit Accounts will be
provided to Purchaser as received for appropriate posting to the
Deposit Accounts. Simultaneously, Seller shall credit or debit the Due
to Account (defined in Section 7.16, below) as appropriate. Purchaser
shall notify Seller of any ACH returns which it initiates after the
Closing Date with respect to ACH transactions processed on or before
the Closing Date for any of the Deposit Accounts and Seller shall make
any appropriate entries to the Due to Account.
(C) OVER-THE-COUNTER RETURNED ITEMS. For a period of ninety (90) days
following the Closing Date, Seller shall, by facsimile, provide
Purchaser with-a list of any over-the-counter returned items on the day
they are received by Seller. Over-the-counter returned items are those
items that are included within the Seller Deposit Liabilities
transferred to Purchaser but that are returned unpaid to Seller after
the Closing Date. Seller shall send such items by overnight mail to
Purchaser for "next banking day" delivery. On the same day, Purchaser
shall transmit to Seller in immediately available funds by wire
transfer, the sum of over-the-counter returned items for which
sufficient available funds were in the applicable accounts to cover the
over-the-counter returned items, and Seller shall refund to Purchaser
any Deposit Premium paid with respect to such amounts. Purchaser agrees
to prohibit withdrawals from, or debits to, any Deposit Accounts which
do not have a sufficient available funds balance to cover any
over-the-counter returned items until such over-the-counter returned
items are paid to Seller. Notwithstanding the foregoing, Seller shall
bear all liability for items deposited or negotiated at the Seller
Offices prior to or on the Closing Date and subsequently returned as
uncollectible to the extent that an overdraft is created immediately
after (i) the exercise of Purchaser's lawful rights of offset and (ii)
the application of any availability under any overdraft line of credit
relating to the affected account or accounts, provided that Purchaser
shall handle returned items expeditiously under the permanent rules
established by the FRB in Regulation J and Regulation CC.
<PAGE>
(D) WITHHOLDING. Seller shall deliver to Purchaser (i) on or before the
Closing Date, a list of all "B" (TINs do not match) and "C" (under
reporting/IRS imposed withholding) notices from the IRS imposing
withholding restrictions and (ii) for a period of one hundred twenty
(120) calendar days after the Closing Date, all notices received by the
Seller from the IRS imposing or releasing withholding restrictions on
the Seller Deposit Liabilities. Any amounts withheld by Seller up to
and including the Closing Date shall be remitted by Seller to the
appropriate governmental agency on or prior to the time they are due.
Any withholding obligations required to be remitted to the appropriate
governmental agency up to and including the Closing Date will be
withheld and remitted by Seller. Any withholding obligations required
to be remitted to the appropriate governmental agency after the Closing
Date with respect to withholding obligations after the Closing Date and
not withheld by Seller as set forth above will be remitted by
Purchaser. Any penalties described on a "B" notice from the IRS or any
similar penalties that relate to the Seller Deposit Liabilities opened
by Seller prior to the Closing Date will be paid by Seller promptly
upon receipt of the notice (subject to Seller's rights to contest such
penalties).
(E) REPORTING OBLIGATIONS. Seller shall comply with all federal and
state income tax reporting requirements with respect to the Seller
Deposit Liabilities and interest paid thereon through the Closing.
Purchaser shall comply with all federal and state income tax reporting
requirements with respect to the Seller Deposit Liabilities and
interest paid thereon after the Closing. Seller shall provide TINs and
any other information that may be required by Purchaser in this regard.
(F) LOAN PAYMENTS. For a period of ninety (90) days after the Closing
Date, Seller will forward to Purchaser loan payments received by Seller
with respect to the Loans.
7.04 EFFECT OF TRANSITIONAL ACTION. Except as and to the extent expressly set
forth in this Article VII, nothing contained in this Article VII shall be
construed to be an abridgement or nullification of the rights, customs, and
established practices under applicable banking laws and regulations as they
affect any of the matters addressed in this Article VII.
7.05 EXPENSES. Except as and to the extent specifically allocated otherwise
herein, each of the parties hereto shall bear its own expense, whether or not
the transactions contemplated hereby are consummated.
7.06 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. Respective
covenants, representations and warranties of Purchaser and Seller contained or
referred to in this Agreement shall survive the Closing for a period of five
years and shall not be deemed to merge therewith or terminate thereby.
7.07 SUCCESSORS AND ASSIGNS. All of the obligations of the parties hereunder,
including, without limitation, the indemnification obligations in section 5.03
and 5.04, shall be binding upon the successors and assigns of the parties.
<PAGE>
7.08 WAIVERS. Each party hereto, by written instrument signed by duly authorized
officers of such party, may extend the time for the performance of any of the
obligations or other acts of the other party hereto and may waive, but only as
affects the party signing such instruments:
(a) Any inaccuracies in the representations or warranties of the other
party contained or referred to in this Agreement or in any document
delivered pursuant hereto.
(b) Compliance with any of the covenants or agreements of the
other party contained in this Agreement.
(c) The performance (including performance to the satisfaction of
a party or its counsel) by the other party of such of its obligations
set out herein.
(d) Satisfaction of any condition to the obligations of the
waiving party pursuant to this Agreement.
7.09 NOTICES. Any notice or other communication required or permitted pursuant
to this Agreement shall be effective only if it is in writing and delivered
personally, by facsimile transmission, or by registered or certified
return-receipt mail, postage prepaid addressed as follows:
IF TO SELLER: REPUBLIC BANK &TRUST COMPANY
601 West Market Street
Louisville, Kentucky 40202-2700
Attention: Bill Petter, Chief Financial Officer
WITH COPIES TO: REPUBLIC BANK &TRUST COMPANY
601 West Market Street
Louisville, Kentucky 40202-2700
Attention: Steve Trager, Vice Chairman
IF TO PURCHASER: THE PADUCAH BANK & TRUST COMPANY
555 Jefferson Street
P.O. Box 2600
Paducah, Kentucky 42001-2600
Attention: Joseph H. Framptom, Chairman
WITH COPIES TO: Brown, Todd & Heyburn, PLLC
3200 Providian Center
Louisville, Kentucky 40202-3363
Attention: R. James Straus
<PAGE>
or to such other person or address as any such party may designate by notice to
the other parties and shall be deemed to have been given as of the date
received.
7.10 COOPERATION ON OPEN ITEMS AND OTHER MATTERS. After Closing the parties
agree to cooperate with each other with respect to the processing of outstanding
checks, ATM transactions and other open items which originated prior to Closing.
7.11 PARTIES IN INTEREST; ASSIGNMENT; AMENDMENT. This Agreement is binding upon
and is for the benefit of the parties hereto and their respective successors,
legal representatives, and assigns, and no person who is not a party hereto (or
a successor or assignee of such party) shall have any rights or benefits under
this Agreement, either as a third party beneficiary or otherwise. This Agreement
cannot be assigned (except by operation of law due to a merger of Purchaser or
Seller with a third party), and this Agreement cannot be amended or modified,
except by a written agreement executed by the parties hereto or their respective
successor and assigns.
7.12 ENTIRE AGREEMENT. This Agreement supersedes any and all oral or written
agreements and understandings heretofore made relating to the subject matter
hereof and contains the entire agreement of the parties relating to the subject
matter hereof. Annexes and Appendices to this Agreement are incorporated into
this Agreement by reference and made a part hereof.
7.13 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Kentucky, except to the
extent precluded by federal law of mandatory application.
7.14 COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
7.15 RISK OF LOSS. The risk of any loss or damage to any of the Seller Assets by
fire or any other casualty or cause shall be borne by Seller at all times
through the Closing Date, and by Purchaser thereafter.
7.16 TRANSACTION ACCOUNT. Purchaser shall establish a transaction account with
Seller (the "Due to Account") for purposes of accepting credits to, and
absorbing debits against, the cash balances to be transferred as a result of
adjustments made pursuant to this Agreement after the Closing Date. Seller shall
be authorized to make the deposits and withdrawals from and to the Due to
Account without the signature of Purchaser but only to the extent of the
adjustments specifically provided for in this Agreement. Seller shall provide to
Purchaser a full record of all transactions in the Due to Account by 8:00 a.m.
eastern time of the business day following any such transactions. Any negative
(collected) balances in the Due to Account shall represent an advance to
Purchaser bearing interest, which shall be debited against the Due to Account at
the end of each month at the applicable Federal Funds Rate on the last business
day of such month.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by the respective officers thereunto duly authorized, all as of the
date first above written.
THE PADUCAH BANK & TRUST COMPANY REPUBLIC BANK & TRUST COMPANY
By: /s/ By: /S/
----------------------------- -----------------------------
Its: Its:
----------------------------- -----------------------------
ATTEST: ATTEST:
By: /s/ By: /s/
----------------------------- -----------------------------
Its: Its:
----------------------------- -----------------------------
<PAGE>
The exhibits to the Agreement have been omitted from this filing in reliance on
Rule 601(b)(2) of Regulation S-K. Republic Bancorp, Inc. will furnish
supplemental a copy of any omitted exhibit to the Securities and Exchange
Commission upon request.
PURCHASE AND ASSUMPTION AGREEMENT
This is a Purchase and Assumption Agreement (this "Agreement") dated as of July
21, 1997, between Peoples First National Bank and Trust, a national banking
association ("Purchaser"), and Republic Bank & Trust Company, a Kentucky banking
corporation ("Seller").
WHEREAS, Seller conducts business (the "Business") at a branch in Benton,
Kentucky ("Seller Office"); and
WHEREAS, Purchaser desires to acquire and assume and Seller desires to sell and
assign certain assets and certain deposit liabilities associated with the Seller
Office.
NOW, THEREFORE, in consideration of the mutual promises hereinafter contained,
and other good and valuable consideration, the parties agree as follows:
ARTICLE I
PURCHASE AND ASSUMPTION
1.01 PURCHASE AND SALE OF ASSETS. At the Closing (defined below), Purchaser
shall purchase and Seller shall sell certain assets relating to the Seller
Office pursuant to the terms and conditions set forth herein. The assets of the
Seller Office, as more fully described in Section 1.02 below, are hereinafter
referred to as the "Seller Assets". At the Closing, Purchaser shall assume the
"Seller Deposit Liabilities" (as hereinafter defined) relating to the Seller
Office. The acquisition by Purchaser from Seller of the Seller Assets and the
assumption of Seller Deposit Liabilities pursuant to the terms and conditions
set forth herein is sometimes referred to herein as the "Acquisition".
1.02 TRANSFER OF ASSETS. Subject to the terms and conditions of this Agreement,
on and as of the close of business on the Closing Date (defined below), Seller
shall assign, transfer, convey and deliver to Purchaser, the Seller Assets, as
described in subparagraphs (a) through (i), inclusive of this Section 1.02:
(A) REAL ESTATE. The real estate on which the Seller Office is situated
together with all improvements thereon and all easements associated
therewith (the "Real Estate") by general warranty deed, substantially
in the form attached hereto as Annex 1.02(a). Seller shall provide to
Purchaser as soon as reasonably possible after the execution of this
Agreement the legal descriptions for such real estate, and all title
information, surveys and environmental assessments or investigations in
the possession of, or available to, Seller.
(B) PERSONAL PROPERTY. All of the furniture, fixtures and equipment and
other tangible personal property located at the Seller Office (the
"Fixed Assets"). The Fixed Assets shall include, without limitation,
the assets to which the Purchase Price is allocated as set forth on
Annex 1.02(b). The Fixed Assets shall not include the assets
specifically listed on Annex 1.02(b) as being retained by Seller.
<PAGE>
(C) RECORDS OF THE SELLER OFFICE. All records and original documents
(if available) related to Seller Assets transferred or liabilities
assumed by Purchaser hereunder including, but not limited to Seller
Deposit Liabilities.
(D) SAFE DEPOSIT BUSINESS. Not applicable to this Agreement.
(E) CONTRACTS OR AGREEMENTS. All of Seller's right, title and interest
in and to the maintenance and service agreements attributable to the
Seller Office, as listed on Annex 1.02(e) (the "Assumed Contracts").
(F) CASH ON HAND. All cash on hand at the Seller Office as of the
close of business on the Closing Date.
(G) PREPAID EXPENSES. Those prepaid expenses attributable to the Seller
Office as of the close of business on the Closing Date, which prepaid
expenses shall be identified on a list mutually acceptable to both
parties hereto within 30 days from the date of the execution of this
Agreement.
(H) LOANS SECURED BY DEPOSIT ACCOUNTS. All loans attributable to the
Seller Office (including all interest earned but not collected) that
are either (i) at least 100% collateralized by Seller Deposit
Liabilities and are not more than twenty (20) days past due on the
Closing Date or otherwise involved in any type of litigation or (ii)
particular loans outstanding pursuant to overdraft lines that are
specifically identified in writing by Purchaser prior to the Closing as
being acquired by the Purchaser. The foregoing loans are collectively
referred to as the "Loans". The Loans as of the date of this Agreement
are set forth on Annex 1.02(h).
(I) RESIDUAL ASSETS. All of the remaining intangible assets, including,
without limitation, goodwill (Purchaser understands that Seller does
not have any goodwill reflected on its books with respect to the Seller
Office), associated with the Seller Assets, Seller Office and Seller
Deposit Liabilities and any claims of Seller against third parties with
respect to such Seller Assets, Seller Office and Seller Deposit
Liabilities, to be transferred to the Purchaser hereunder.
1.03 ACCEPTANCE AND ASSUMPTION. Subject to the terms and conditions of
this Agreement on and as of the close of business on the Closing Date, Purchaser
shall:
(A) SELLER ASSETS. Receive and accept all of the Seller Assets
assigned, transferred, conveyed and delivered to Purchaser by Seller
pursuant to this Agreement.
(B) SELLER DEPOSIT LIABILITIES. Assume and thereafter discharge the
"Seller Deposit Liabilities" (as hereinafter defined). The term "Seller
Deposit Liabilities" means all of Seller's obligations, duties and
liabilities under each deposit account which is attributable to the
Seller Office as of the close of business on the Closing Date (the
"Deposit Accounts"), as reflected on the books of Seller. The Seller
Deposit Liabilities include accrued, but unpaid interest on the Deposit
Accounts calculated through the close of business on the Closing Date
in accordance with the Seller's books and records. The Seller Deposit
<PAGE>
Liabilities do not include (i) escheatable accounts or accounts subject
to or involved in any form of litigation, (ii) accounts that are
overdrawn on the Closing Date, and (iii) affiliate accounts. The
Deposit Accounts referred to in the immediately preceding sentence
include, without limitation, passbook accounts, statement savings
accounts, super NOW accounts, money market accounts, checking accounts
and NOW accounts, Individual Retirement Accounts ("IRAs") of the type
Purchaser is eligible to administer, and certificates of deposit. Annex
1.03(b) is a listing of the Deposit Accounts and their respective
balances as of the date listed therein. Seller represents and warrants
that the Total Seller Deposit Liabilities (as defined below) is equal
to $33,563,291. The "obligations, duties and liabilities" referred to
in this Section 1.03(b) include, without limitation, the obligation to
pay and otherwise process all Seller Deposit Liabilities in accordance
with applicable law and their respective contractual terms as reflected
in the Seller's books and records, and the duty to supply all
applicable reporting forms for post-closing periods, including, without
limitation, Form 1099s, relating to the Deposit Liabilities.
(C) OTHER LIABILITIES. Fully and timely perform and discharge, as the
same may be or become due, the Assumed Contracts and any other
liabilities specifically assumed by Purchaser under the terms of this
Agreement.
(D) NO ASSUMPTION OF LIABILITIES. Except for the Assumed Contracts,
Seller Deposit Liabilities, and any other obligations or liabilities
specifically assumed by Purchaser under this Agreement, it is expressly
understood and agreed that Purchaser shall not assume or be liable for
any of the debts, obligations or liabilities of Seller of any kind or
nature whatsoever including, but not limited to, any debt (except to
the extent the same has been credited to Purchaser by proration at
Closing) or tax including any bank shares, franchise or related tax,
any liability for unfair labor practices, any liability or obligation
of Seller arising out of any threatened or pending litigation, any
liability with respect to personal injury or property damage claims,
any liability arising out of claims of employees employed at the Seller
Office for bonuses, salaries, sick leave, vacation, wages or other
payments or benefits in respect of services performed at the Seller
Office prior to the Closing, any liability under or in connection with
any "employee benefit plan" as defined in Section 3(3) of ERISA which
is maintained by Seller and covers any employees at the Seller Office,
any liability Seller may have incurred or will incur in connection with
the transactions contemplated by this Agreement, any liability arising
out of any action or inaction occurring on or prior to the Closing Date
and relating to one or more Seller Deposit Accounts, including but not
limited to the lack of a taxpayer identification number for an account
holder or the lack of compliance with any federal or state law or
regulation with respect to one or more Seller Deposit Accounts, or any
other liability Seller may have incurred prior to the Closing in
connection with the operation of the Seller Office and which has not
been credited to Purchaser through proration or specifically assumed by
Purchaser under this Agreement.
1.04 PAYMENT OF FUNDS. Subject to the terms and conditions hereof, at the
Closing:
(A) NET PAYMENT. Seller shall make available and transfer to Purchaser
in the manner specified in Sections 4.04 and 4.05 hereof, funds equal
to the difference between the aggregate balance of Seller Deposit
Liabilities (including interest posted or accrued to such accounts but
excluding accrued interest paid directly to depositors by check or
otherwise transferred to an account which is not being assumed
<PAGE>
hereunder; for all purposes under this Section 1.04, the amount of the
Seller Deposit Liabilities with respect to certificates of deposit and
time deposits shall be determined as if the average effective interest
rate over the term of the deposit accrues throughout the term of the
deposit regardless of whether, under the terms of the deposit, the
interest rate increases or decreases at different times; for example,
if a $100,000 certificate of deposit has an average effective interest
rate of 6%, but, has only paid interest at a 5% rate, the Seller
Deposit Liabilities would include the $100,000 principal plus interest
calculated at 6% through the Closing Date minus any amount of interest
already paid out on that certificate of deposit), less the following:
(1) the "Deposit Premium" which shall equal to seven and
one-quarter percent (7.25%) of the Total Seller Deposit
Liabilities. "Total Seller Deposit Liabilities" shall equal
the daily average of the balances of the Seller Deposit
Liabilities for the thirty day period ending on May 15, 1997;
(2) the amount (net of depreciation) that the Real Estate and
the Fixed Assets are reflected on Seller's financial
statements (determined in accordance with generally accepted
accounting practices, consistently applied, as of the last
calendar month-end to occur on or before the Closing Date );
(3) the amount of cash on hand at the Seller Office as of the
close of business on the Closing Date;
(4) the amount of prepaid expenses agreed upon as provided in
Paragraph 1.02(g) recorded or otherwise reflected on the books
of Seller as being attributable to the Seller Assets as of the
close of business on the Closing Date; and
(5) the value of the Loans. For purposes of this subparagraph
5, the term "value" shall mean the aggregate of the
outstanding principal balances of the Loans together with
accrued but unpaid interest to the date of Closing and accrued
unpaid loan fees for periods prior to the Closing Date
calculated in accordance with generally accepted accounting
principles, consistently applied.
The aggregate payment by Purchaser of the purchase price of the Assets
as referenced in this Section 1.04(a)(1) though (5), inclusive, is
sometimes hereinafter referred to as the "Acquisition Consideration".
(B) ACQUISITION CONSIDERATION. The Acquisition Consideration shall be
computed as set forth in this Agreement. The allocation of the
Acquisition Consideration is set forth in Annex 1.02(b), and except as
otherwise set forth herein, is subject to adjustment by written
agreement between Purchaser and Seller. Such agreement shall not,
however, result in a recalculation or adjustment to the total
Acquisition Consideration which shall be computed in accordance
herewith.
(C) REIMBURSEMENT AND PRORATION OF CERTAIN EXPENSES. All other expenses
due and payable at the time of Closing relating to (1) the Seller
Deposit Liabilities assumed by Purchaser (excepting any entrance and/or
<PAGE>
exit fees imposed by the FDIC but including regular premiums paid to
the FDIC for insurance on the Seller Deposit Liabilities which regular
premiums will be prorated according to a formula agreed to by the
Seller and Purchaser based on the standard formula promulgated by the
FDIC, the amount of the Seller Deposit Liabilities assumed by Purchaser
and the number of days during any period for which Seller has prepaid
premiums to the FDIC that Purchaser has held the Seller Deposit
Liabilities), (2) the Seller Assets transferred to Purchaser hereunder,
including all rents, real estate taxes, assessments (but not bank
deposit taxes), utility payment, payments due on leases assigned,
payments due on assigned service and maintenance contracts and similar
expenses, shall be prorated between Purchaser and Seller as of the
close of business on the Closing Date. Any reimbursement payment due
from Purchaser to Seller or from Seller to Purchaser pursuant to the
terms of this Section 1.04(c) shall be made in the manner specified in
Section 4.04 herein.
(D) EXIT/ENTRANCE FEES. Any exit and entrance fees imposed by the FDIC
or any other authorized government or regulatory entity upon Purchaser
or Seller as a result of the transaction contemplated herein, whether
assessed before or after the Closing, shall be paid directly by
Purchaser. Purchaser shall be solely responsible for paying such fees
directly (or reimbursing Seller for such fees if levied against
Seller), as it may be required by applicable law and regulation, and
Purchaser shall have no claim or recourse against Seller resulting from
the imposition or collection of such fees. Any one time assessment
relating to savings association insurance fund insured deposits, levied
against Seller or Purchaser and relating to the Seller Deposit
Liabilities shall be paid by the party against whom it is levied.
ARTICLE II
COVENANTS OF THE PARTIES
2.01 REGULATORY APPROVALS. As promptly as practicable (but in any case within 30
days) after execution of this Agreement, Purchaser and Seller shall prepare and
submit for filing any and all applications, filings, and registrations with and
notifications to, all state and federal authorities required on the part of
Purchaser and Seller for the transaction contemplated by this Agreement to be
consummated at the Closing. Thereafter, Purchaser and Seller shall pursue all
such applications, filings, registrations, and notifications diligently and in
good faith and shall file such supplements, amendments, and additional
information in connection therewith as may be reasonably necessary for said
transaction to be consummated at such Closing. Prior to filing any such
application, filing, registration or notification, or amendment or supplement
thereto, the filing party shall provide the other party with reasonable
opportunity to review and comment thereon. The filing party shall provide the
other party with final copies of such documents, as filed, and, promptly after
receipt, copies of written communications from the agency or authority with
which such filing was made, or telephonic notice of material non-written
communications. Notwithstanding the foregoing, neither party shall be required
to provide the other party with any such information which constitutes
confidential business information which is subject to confidentiality pursuant
to the Freedom of Information Act or corresponding state law.
2.02 OPERATION OF OFFICE. Seller shall continue to operate Seller Office in a
manner equivalent to that manner and system of operation employed immediately
prior to the date of this Agreement. Seller will use commercially reasonable
efforts to prevent harm or damage to the reputation of the Seller Office or
<PAGE>
material reduction of the existing Seller Deposit Liabilities. Except with the
prior written consent of the Purchaser, (which consent shall not be unreasonably
withheld or delayed) or as expressly contemplated or permitted by this
Agreement, during the period from the date of this Agreement and continuing
until the Closing, Seller shall not:
(a) conduct business at the Seller Office other than in the usual,
regular and ordinary course or fail to use its best efforts to preserve
the Seller Office intact or to preserve the good will of the customers
at and others having business with the Seller Office;
(b) sell, lease, encumber, or otherwise dispose of, or agree to sell,
lease, encumber or otherwise dispose of, any of the Seller Assets or
any of the collateral securing the Loans;
(c) cause the Seller Office to transfer any Deposits, including,
without limitation, to Seller's or any affiliates' other operations or
branches, except upon the unsolicited request of a depositor in the
ordinary course of business;
(d) agree to increase the salary, remuneration or compensation
(including insurance, pension or other benefit plan) payable or to
become payable to persons employed at the Seller Office other than in
accordance with Seller's customary policies and/or bank-wide changes,
or pay or agree to pay any uncommitted bonus to any such employees
other than regular bonuses granted based on historical practice;
(e) hire any new employees at the Seller Office without making a good
faith effort to give Purchaser prior notice;
(f) violate any law, statute, rule, governmental regulation, order or
undertaking which violation would have a material adverse effect on the
Seller Assets;
(g) invest in any Fixed Assets on behalf of the Seller Office, except
for commitments made on or before the date of the Agreement and for
replacements of furniture, furnishings and equipment and normal
maintenance and refurbishing purchased or made in the ordinary course
of business;
(h) offer any special deposit rate promotion with respect to the
Deposit Accounts or potential accounts except those offered by Seller
at all or substantially all of its branch offices;
(i) take any action to artificially inflate the amount of the Seller
Deposit Liabilities.
2.03 INSURANCE. During the period from the date of this Agreement and continuing
until the Closing, Seller shall maintain in effect all current insurance
policies insuring the Seller Assets.
2.04 INFORMATION CONCERNING AND ACCESS TO SELLER OFFICE. Seller shall permit
officers and authorized representatives of Purchaser access upon reasonable
notice to Seller to inspect the Seller Office during normal business hours or at
such other time mutually agreed upon by both parties, and to permit Purchaser to
make or cause to be made such reasonable investigation of information and
materials relating to the financial condition, assets and liabilities of the
<PAGE>
Seller Office including general and subsidiary ledgers, deposit records, audit
reports and any other information concerning the business, property, personnel
and legal questions concerning the Seller Office (or related to the physical
condition of the Seller Office) as Purchaser reasonably deems necessary;
provided, however, that such access and investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere with the
normal operations of the Seller Office; and provided further, that nothing in
this Section 2.04 shall be deemed to require Seller to breach any obligation of
confidentiality not to reveal any proprietary information, trade secrets,
marketing plans, strategic plans or information not related to the transaction
contemplated by this Agreement.
2.05 INFORMATION CONCERNING TITLE TO REAL ESTATE. As soon as reasonably
practicable after the date of this Agreement, Purchaser shall obtain preliminary
title reports and surveys with respect to the Real Estate. Purchaser shall
notify Seller in writing of any disapproved liens, encumbrances, easements,
restrictions, conditions, covenants, rights, rights of way, or other matters
affecting title to the Real Estate (collectively the "Liens"). Seller shall have
thirty (30) days following receipt of such written notice of objection to any
such Liens to cause a removal of any such Liens. Unless the Purchaser objects to
any such Liens they shall be considered accepted and Purchaser shall be deemed
to have accepted such Liens and shall have no further recourse with respect
thereto (thereafter such Liens shall be "Permitted Liens"), provided that, the
following shall be Permitted Liens and shall not be disapproved: (a) mechanics',
carriers', workers and other similar liens arising in the ordinary course of
business (but only to the extent that Seller shall have paid off the entire
liability giving rise to such liens prior to the Closing), (b) minor
imperfections of title, none of which shall individually or in the aggregate
materially detract from the value of or impair the use of the real property
subject thereto, or impair the operation of the Business; (c) zoning laws that
do not impair the present use of the property subject thereto; and (d) liens for
current taxes not yet due and payable.
2.06 COOPERATION OF PARTIES. Purchaser hereby covenants to Seller and Seller
hereby covenants to Purchaser that, from the date hereof until the Closing, such
party shall cooperate fully with the other party in obtaining any consents,
approvals, permits or authorizations which are required to be obtained pursuant
to any federal or state law, or any federal or state regulation thereunder, for
or in connection with the transactions described and contemplated in this
Agreement. The parties further agree to consult and cooperate with each other
and to get the prior approval of the other regarding press releases and other
media releases in connection with the transaction contemplated by this Agreement
and to otherwise cooperate to effect the smooth transition of the Seller Assets
and Seller Deposit Liabilities to Purchaser. In addition, within thirty (30)
days of the date hereof, Seller shall provide to Purchaser (1) a detailed
explanation of Seller's file layouts used in connection with the servicing of
the Deposit Accounts, and (ii) a computer tape listing the current balances and
account numbers for the Deposit Accounts.
2.07 DISCLOSURES. From the date hereof until and through the Closing Date,
neither party shall, except for the making of filings with the Securities and
Exchange Commission, issue or publicly disclose, or permit any of its affiliates
to issue or publicly disclose, any press release or other information concerning
the transactions contemplated hereby, without first providing a copy of such
press release or other information to, and obtaining a written approval of, the
other party, which approval shall not be unreasonably withheld.
<PAGE>
2.08 CONVERSION. From the date hereof through the Closing Date, Seller shall
cooperate and work with Purchaser to complete the tasks required to facilitate
the conversion. Such tasks include, but are not limited to, providing Purchaser
with updated cartridges, files and other items as are reasonably necessary to
complete the conversion process and related testing procedures. Within thirty
(30) days from the date hereof, Seller shall provide Purchaser with initial
computer cartridge reports and related documentation on the Deposit Accounts in
a format currently used by Seller and Seller will reasonably cooperate with
Purchaser in Purchaser's conversion of such format to one which is reasonably
acceptable to Purchaser. Seller shall provide to Purchaser on the day following
the Closing, conversion tapes as of the Closing Date. Seller agrees to
reasonably cooperate in resolving any conversion-related issues arising from the
conversion of the Deposit Accounts for a period of ninety (90) days following
the date that the conversion is completed. If Purchaser requests, Seller shall
reformat or data scrub the conversion tapes and Purchaser shall reimburse Seller
for any costs and expenses incurred by Seller in such reformatting or data
scrubbing. Promptly following the Closing, Seller will provide to its customers
final statements, including interest payments/credits of accrued interest, for
all Deposit Accounts, other than IRA accounts, as of the Closing. Seller shall
also provide magnetic records of the final customer statements to Purchaser.
2.09 SAFE DEPOSIT BUSINESS. Not applicable to this Agreement.
2.10 CONDUCT OF BUSINESS. Between the date hereof and the Closing Date,
Purchaser and its affiliates shall not undertake any marketing or advertising
efforts specifically directed to Seller's customers or take any other action
intended to reduce the amount of the Deposits as of the Closing Date. Purchaser
shall not, between the date of this Agreement and the Closing Date, conduct its
business and operations in such a manner as to intentionally impair its ability
to consummate the transactions contemplated hereunder nor will it intentionally
engage in any transaction, take any action or omit to take any action, which
could be expected to impair its ability to consummate the transactions
contemplated hereunder.
2.11 FIDUCIARY RELATIONSHIPS. Purchaser shall perform all of the fiduciary
relationships of Seller arising out of any retirement accounts included within
the Deposits, and with respect to such accounts, Purchaser shall assume all of
the obligations and duties of Seller as fiduciary and succeed to all such
fiduciary relationships of Seller as fully and to the same extent as if
Purchaser had originally acquired, incurred or entered into such fiduciary
relationship; provided that Purchaser is not hereby assuming any liability for
any breach of fiduciary duty that occurs prior to the Closing.
2.12 NOTICES OF DEFAULT. Seller and Purchaser shall each promptly give written
notice to the other upon becoming aware of the impending or threatened
occurrence of any event which could reasonably be expected to cause or
constitute a material breach of any of their respective representations,
warranties, covenants or agreements contained in this Agreement.
2.13 REGULATORY MATTERS. Neither Purchaser nor Seller, nor any of their
respective affiliates, has received any indication from any federal, state or
other governmental agency, or has any other reason to believe, that such agency
would oppose or refuse to grant or issue its consent or approval, if required,
or impose any materially adverse condition, with respect to the transaction
contemplated hereby.
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents and
warrants to Seller as follows:
(A) GOOD STANDING AND POWER OF PURCHASER. Purchaser is a state banking
corporation, duly organized, and validly existing, and in good standing
under the laws of the Commonwealth of Kentucky, with corporate power to
own its properties and to carry on its business as presently conducted
and to consummate the transactions contemplated hereby. The deposits of
Purchaser are insured by the Bank Insurance Fund.
(B) AUTHORIZATION OF AGREEMENT. The execution and delivery of this
Agreement, and the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on the part of Purchaser,
and this Agreement is a valid and binding obligation of Purchaser,
enforceable against the Purchaser in accordance with its terms.
(C) EFFECTIVE AGREEMENT. Subject to the receipt of any and all
necessary regulatory approvals and required consents, the execution,
delivery, and performance of this Agreement by Purchaser and a
consummation of the transactions contemplated hereby, will not conflict
with, result in the breach of, constitute a violation or default,
result in the acceleration of payment or other obligations, or create a
lien, charge or encumbrance, under any of the provisions of the
Articles of Incorporation or By-laws of Purchaser, under any judgment,
decree or order, under any law, rule or regulation of any government or
agency thereof, or under any contract, agreement or instrument to which
Purchaser is subject, except for any such conflict, breach, violation,
default, acceleration or lien which would not have a material adverse
effect on the Purchaser's ability to perform its obligations hereunder.
(D) NO BROKER. No broker or finder, or other party or agent performing
similar functions, has been retained by Purchaser or is entitled to be
paid based upon any agreements, arrangements or understandings made by
Purchaser in connection with the transaction contemplated hereby. Any
payment to which such a broker or finder is entitled shall be the sole
responsibility of Purchaser.
3.02 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Purchaser as follows:
(A) GOOD STANDING AND POWER OF SELLER. Seller is a state banking
corporation, duly organized, and validly existing, and in good standing
under the laws of the Commonwealth of Kentucky, with corporate power to
own its properties and to carry on its business as presently conducted
and to consummate the transactions contemplated hereby. The deposits of
Seller are insured by the Bank Insurance Fund and the Savings
Association Insurance Fund ("SAIF") in accordance with FDIC
regulations.
<PAGE>
(B) AUTHORIZATION OF AGREEMENT. The execution and delivery of this
Agreement, and the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on the part of Seller, and
this Agreement is a valid and binding obligation of Seller, enforceable
against the Seller in accordance with its terms.
(C) EFFECTIVE AGREEMENT. Subject to the receipt of any and all
necessary regulatory approvals and required consents, the execution,
delivery, and performance of this Agreement by Seller and a
consummation of the transactions contemplated hereby, will not conflict
with, result in the breach of, constitute a violation or default,
result in the acceleration of payment or other obligations, or create a
lien, charge or encumbrance, under any of the provisions of the
Charter, Articles of Incorporation or By-laws of Seller, under any
judgment, decree or order, under any law, rule or regulation of any
government or agency thereof, or under any contract, agreement or
instrument to which Seller is subject, except for any such conflict,
breach, violation, default, acceleration or lien which would not have a
material adverse effect on the Seller Assets or Seller's ability to
perform it obligations hereunder.
(D) TITLE TO SELLER ASSETS. Seller is the sole owner of each of the
Seller Assets free and clear of any mortgage, lien or encumbrance. The
Real Estate constitutes all of the real property used in the operation
of the Seller Office, including without limitation, for parking and
ingress and egress. Seller is the sole owner of a fee simple interest
in, and has good and marketable title to, the Real Estate, free and
clear of any mortgage, lien or encumbrance other than the Permitted
Liens, and shall convey the Real Estate to Purchaser by delivery at
Closing of a general warranty deed conveying title subject to said
Permitted Exceptions.
(E) ZONING MATTERS. There are no uncorrected violations of zoning
and/or building codes relating to the Seller Office.
(F) ENVIRONMENTAL MATTERS. There is no material environmental defect in
or associated with the Seller Office or the Real Estate resulting from
actions or omissions to act of Seller, and to Seller's best knowledge,
there is no condition existing thereon which would give rise to
liability of Purchaser under federal, state or local environmental laws
and regulations. Seller has not received written notification from any
person that any hazardous substance, as defined under Section 104(14)
of the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, has been disposed of, buried beneath,
percolated beneath or otherwise exists on the aforementioned real
estate, or that it is a "potentially responsible party" as defined
under said statute. Seller agrees to permit Purchaser, or its designees
to enter upon the Real Estate to conduct environmental site
assessments, and Seller agrees to cooperate with Purchaser or its
designees in this regard.
(G) TAXES. Seller shall pay, credit Purchaser for paying, or make
appropriate provision to pay in accordance with ordinary business
practices all federal, state and local income, excise, payroll,
withholding, property, franchise, shares, sales, use and transfer
taxes, if any, which have accrued (whether or not they are due and
payable) through the date of Closing. Any claims for refunds of taxes
which have been paid by Seller shall remain the property of Seller.
<PAGE>
(H) THIRD-PARTY CLAIMS. There are no actions, suits or proceedings,
pending or, to the best of Seller's knowledge, threatened against or
affecting Seller or any interest or right of Seller, as such might
relate to the Seller Office or against or affecting the Seller Assets,
the Seller Deposit Liabilities, or the banking business of the Seller
Office.
(I) NO BROKER. No broker or finder, or other party or agent performing
similar functions, has been retained by Seller or is entitled to be
paid based upon any agreements, arrangements or understandings made by
Seller in connection with the transaction contemplated hereby. Any
payment to which such a broker or finder is entitled shall be the sole
responsibility of Seller.
(J) ASSETS. Seller has not received notice nor has knowledge that any
governmental authority considers the Seller Office to violate or to
have violated, fire, zoning, heath, safety, building, hazardous waste
or environmental code or other ordinance, law or regulation or order of
any government or agency, body or subdivision thereof, or any private
covenants, restrictions or easements. The Fixed Assets are used in the
operation of the Seller Office and are in satisfactory condition taking
into account their age and reasonable wear and tear.
(K) COMPLIANCE WITH LAWS. Seller is in material compliance with all
statutes and regulations applicable to the Seller Assets, the Seller
Deposit Liabilities and the conduct of the Seller Office. Seller has
not received notice from any agency or department of federal, state or
local government asserting a violation of any law, regulation,
ordinance, rule or order (whether executive, judicial, legislative or
administrative) that would have a material adverse effect on the
financial condition, results of operations or business of the Seller
Office or the Seller Assets. Seller holds all permits, licenses,
exemptions, orders and approvals of all governmental entities which are
necessary to the operation of the Seller Office and to the best of
Seller's knowledge, is in compliance with the terms thereof. Seller has
filed all Currency Transaction Reports with respect to all transactions
required to be reported under the Bank Secrecy Act and regulations
adopted pursuant thereto. With respect to the Deposit Accounts, Seller
has complied with specified information reporting requirements pursuant
to Section 6723 of the Code and any applicable regulations thereunder,
or established "reasonable cause" pursuant to Section 6724 of the Code
for information returns required to be filed on or after December 31,
1995.
(L) DEPOSITS. The deposit records of Seller accurately reflect the
Deposit Accounts and are and shall be sufficient to enable Purchaser to
conduct a banking business with respect to the Seller Office. Seller
has not transferred any deposit accounts held by Seller at the Seller
Office to any of Seller's other branches, or to any branch of any
Seller affiliate, except at the express unsolicited request of the
depositor in the ordinary course of business. Seller has not
transferred any deposit accounts from any of Seller's other branches or
from any branches of an affiliate of Seller to the Seller Office,
except as set forth in schedule 3.02(i) or at the express unsolicited
request of the depositor in the ordinary course of business. There are
no material uncured violations or violations with respect to which
material refunds or restitution may be required with respect to the
Seller Deposit Liabilities and the terms and conditions and other
documentation with respect to the Seller Deposit Liabilities complies
in all material respects with all applicable laws and regulations and
has been provided to Purchaser. The Seller Deposit Liabilities are
insured by the Federal Deposit Insurance Corporation to the full extent
<PAGE>
provided by federal law and regulations. Seller is in material
compliance with all terms and conditions and other documentation
applicable to the Seller Deposit Liabilities. Seller shall deliver to
Purchaser as of the Closing Date (i) TINs (or record of appropriate
exemption) for all holders of Seller Deposit Liabilities; and (ii) all
other information in Seller's possession or reasonably available to
Seller required by applicable law to be provided to the IRS with
respect to the Seller Assets or Seller Deposit Liabilities and the
holders thereof. Seller hereby certifies that such information, when
delivered, shall accurately reflect the information provided by
Seller's customers. To the best of Seller's knowledge, there are not
any "kiting" schemes associated with any of the Seller Deposit
Liabilities.
(M) LOANS. All of the Loans have been made for good, valuable and
adequate consideration in the ordinary course of business of Seller,
are evidenced by notes or other evidences of indebtedness that are
true, genuine, and enforceable in accordance with their terms. Each of
the Loans is secured by a first priority security interest in a Deposit
Account with a balance greater than that of the Loan. Each such
security interest is evidenced by a security agreement that is true,
genuine, and enforceable in accordance with its terms. No Loan has been
adversely classified in any regulatory examination or by Seller's
internal classification system and no Loan is 90 days or more past due,
has been restructured or is classified as nonaccrual. There are no
material uncured violations or violations with respect to which
material refunds or restitution may be required with respect to the
Loans that have been cited in any compliance report to Seller as a
result of examination by any regulatory authority and the loan
documentation with respect to the Loans complies in all material
respects with all applicable laws and regulations.
(N) ASSUMED CONTRACTS. Seller has delivered to the Purchaser true and
correct copies of the Assumed Contracts. Each of the Assumed Contracts
is valid and in full force and effect in accordance with its terms and
the Seller knows of no defaults under any Assumed Contract. No event or
condition has occurred or exists, or , to the best knowledge of the
Seller, is alleged by any of the other parties thereto to have occurred
or existed, which constitutes, or with lapse of time or giving of
notice or both might constitute, a default or breach under any of the
Assumed Contracts. There are no contracts or agreements that relate to
the Seller Office that have not been disclosed to the Purchaser. Seller
shall provide Purchaser with the proper trust documents for any
retirement accounts assumed by Purchaser under this Agreement.
3.03 EMPLOYEE MATTERS.
(a) Purchaser shall consider for employment each person (each an
"Affected Employee") who is employed at the Seller Office on the date
of this Agreement after the Closing Date on an at will basis as a new
employee of Purchaser and in accordance with this Section 3.03. Each
Affected Employee who is employed by Purchaser as of the Closing Date
shall be (i) employed upon terms and conditions, including, without
limitation, salary and eligibility for benefits, including welfare,
pension, severance and vacation benefits, substantially equivalent to
other newly hired employees of Purchaser with similar responsibilities
and (ii) given credit for their length of service with Seller for
purposes of eligibility and vesting (but not benefit accrual) under
Purchaser's employee benefit plans (including, without limitation, any
<PAGE>
vacation, sick leave, and severance policies); provided that there may
be an interim period of time between the Closing and the effectivenes
of eligibility under the plans.
(b) Purchaser shall not assume any accrued vacation or sick days,
severance benefits or other benefits owed to any Affected Employee by
Seller as of (and including) the Closing Date.
ARTICLE IV
CLOSING
4.01 CLOSING AND CLOSING DATE. Unless otherwise agreed to in writing, the
transaction contemplated by this Agreement shall be consummated and closed (the
"Closing") at the offices of Brown, Todd & Heyburn PLLC at 12:00 noon on the
twelfth business day after all required regulatory approvals have been obtained
and all applicable waiting periods have expired, or such other time and date
which is mutually agreed upon by Purchaser and Seller (the "Closing Date").
Notwithstanding anything contained in this Section 4.01 to the contrary, if the
Closing does not occur on or before November 30, 1997, either party may
terminate this Agreement, upon written notification to the other party. Such
deadline shall be automatically extended to January 31, 1998 if the Closing does
not occur by the November 30, 1997 deadline due to the failure (which is beyond
the control of Purchaser) of state or federal regulatory authorities to approve
the transaction by a date which would allow the Closing to occur by November 30,
1997 (the "Termination Date"). The parties may, however, prior to either
deadline, agree to an extension of that deadline.
4.02 PURCHASER'S ACTION AT CLOSING. At the Closing, Purchaser shall:
(a) execute, acknowledge, and deliver to Seller to evidence the
assumption of the liabilities and obligations of Seller in connection
with the Seller Deposit Liabilities and Assumed Contracts, an
instrument or instruments of assumption in forms reasonably
satisfactory to Purchaser;
(b) receive, accept and acknowledge delivery of all Seller Assets, and
all records and documentation relating thereto, sold, assigned,
transferred, conveyed or delivered to Purchaser by Seller hereunder;
(c) execute and deliver to Seller such written receipts for the Seller
Assets assigned, transferred, conveyed or delivered to Purchaser
hereunder as Seller may reasonably have requested at or before the
Closing.
4.03 SELLER'S ACTIONS AT CLOSING. At Closing, Seller shall:
(a) deliver to Purchaser a duly executed and recordable general
warranty deed conveying title to the Real Estate free and clear of all
claims, liens and encumbrances (other than the Permitted Liens);
<PAGE>
(b) assign to Purchaser, Seller's rights in and to the Assumed
Contracts, which are assignable and which constitute a part of the
Seller Assets;
(c) deliver to Purchaser the Seller Assets purchased hereunder which
are capable of physical delivery and such appropriate bills of sale and
other instruments of title as Purchaser may reasonably request to vest
in Purchaser good and marketable title thereto, free and clear of all
encumbrances (other than the Permitted Liens);
(d) assign, transfer, and deliver to Purchaser the records and original
documents (if available) pertaining to the Seller Deposit Liabilities
(in whatever form or medium then maintained by Seller);
(e) execute and deliver to Purchaser an instrument which shall assign
and transfer Individual Retirement Accounts attributable to the Seller
Office to Purchaser and which shall additionally appoint Purchaser as a
successor trustee for such accounts;
(f) assign, transfer and deliver and endorse over to Purchaser all
promissory notes and other credit agreements, together with
corresponding collateral (including, without limitation, mortgages and
personal property liens) related to the Loans and all files and records
and original documents, if available (in whatever form or medium then
maintained by Seller), pertaining to the Loans;
(g) deliver all other records and original documents (if available)
related to the Seller Assets transferred to, and the Seller Deposit
Liabilities assumed by, Purchaser; and,
(h) make available and transfer to Purchaser all funds required to be
paid to Purchaser pursuant to the terms of this Agreement.
4.04 CLOSING STATEMENT/METHOD OF PAYMENT. The parties shall prepare and execute
at Closing a Closing Statement (the "Preliminary Settlement Statement")
supported by appropriate exhibits, substantially in the form of Annex 4.04,
showing the computation of the funds, if any, due to Purchaser (the "Cash
Payment"). The Cash Payment, as set forth pursuant to the terms of Section 1.04
hereof but determined as if the Closing occurred on the business immediately
prior to the Closing Date, shall be made on the Closing Date in immediately
available federal funds. At least two business days prior to Closing, Purchaser
and Seller shall provide written notice to one another indicating the account
and bank to which such funds shall be wire transferred.
4.05 POST CLOSING ADJUSTMENTS.
(a) As soon as reasonably practicable after the Closing Date, but no
later than twelve (12) business days thereafter, Seller shall provide
Purchaser with: (1) final Annexes 1.02(h) and 1.03(b) that shall
accurately reflect the related balances as shown on the financial
records of Seller as of the close of business on the Closing Date
calculated in accordance with generally accepted accounting principles
consistently applied, and (ii) a final schedule that shall accurately
reflect the amount of Cash on Hand as of the close of business on the
Closing date, which schedule shall be prepared by Seller based upon a
cash count to be mutually conducted by Seller and Purchaser at the
close of business on the day of the Closing Date.
<PAGE>
(b) Purchaser and its accountants and attorneys shall have the right to
review any and all documents (and to interview any and all Seller
personnel) reasonably necessary or desirable to confirm the accuracy of
final Annexes 1.02(h) and 1.03(b) and the final cash schedule.
(c) As soon as reasonably practicable after the Closing Date, but no
later than twelve (12) business days thereafter, Seller shall prepare
and deliver to Purchaser a final settlement statement (the "Final
Settlement Statement"), in the form of Annex 4.05(c) hereto, which
shall show the calculation of the final Acquisition Consideration based
on the final Annexes and Schedules delivered pursuant to Section
4.05(a) hereof. Upon delivery of the Final Settlement Statement,
Purchaser or Seller, as the case maybe, shall promptly make such
payments in the amount and manner as are specified in Section 4.05(d)
hereof.
(d) If the Cash Payment shown on the Final Settlement Statement (the
"Final Payment Amount") is different from the Cash Payment made on the
Closing Date, then a payment or refund shall be promptly made by Seller
or Purchaser necessary to reflect the Final Payment Amount. Such refund
or payment shall be made by wire transfer in immediately available
funds, together with interest thereon for the number of days from and
including the Closing Date to such settlement date, but excluding such
settlement date, at the rate per annum equal to the average during such
period of the average of the daily high and low rates for federal funds
on each business day during such period, as such rates are published in
the Midwestern Edition of the Wall Street Journal, computed on the
basis of a 365-day year.
4.06 CONDITIONS TO OBLIGATION OF SELLER. The obligations of Seller to consummate
the transactions contemplated hereby are subject to the satisfaction of the
following conditions precedent on or before the Closing, any of which may be
waived by Seller:
(a) the representations and warranties of Purchaser set forth in
Section 3.01 of this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the
Closing as if made on the Closing;
(b) Purchaser, in all material respects, shall have performed and
observed its obligations and covenants as set forth in this Agreement
prior to or on the Closing;
(c) receipt of all permits, consents, approvals and authorizations from
federal and state governmental authorities and regulatory agencies
necessary to effect the transactions contemplated herein (including the
expiration of all applicable waiting periods);
(d) there shall not be threatened, instituted or pending any action or
proceeding before any domestic or foreign court or governmental agency
or other regulatory or administrative agency or commission, or by any
other person (1) challenging the transactions contemplated by this
Agreement or the terms thereof; or (2) seeking to prohibit the
transactions contemplated by this Agreement, which, in the reasonable
opinion of Seller's counsel, has a reasonable probability of success.
<PAGE>
4.07 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of Purchaser to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions precedent on or before the Closing, any
of which may be waived by Purchaser:
(a) the representations and warranties of Seller set forth in Section
3.02 of this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing as if
made on the Closing;
(b) Seller, in all material respects, shall have performed and observed
its obligations and covenants as set forth in this Agreement prior to
or at the Closing;
(c) Receipt of all permits, consents, approvals and authorizations from
federal and state governmental authorities and regulatory agencies
necessary to effect the transactions contemplated hereby and the
operation of the Seller Office by Purchaser (including the expiration
of all applicable waiting periods), on terms and conditions
satisfactory to Purchaser (other than standard terms and conditions);
(d) there shall not be threatened, instituted or pending any action or
proceeding before any domestic or foreign court or governmental agency
or other regulatory or administrative agency or commission, or by any
other person (1) challenging the transactions contemplated by this
Agreement or the terms thereof or (2) seeking to prohibit the
transactions contemplated by this Agreement, which, in the opinion of
Purchaser's counsel, has a reasonable probability of success; and
(e) there shall have been no material adverse change in the business,
financial condition, or operations of the Seller Office (other than
changes resulting from or attributable to (i) changes in laws and
regulations, or (ii) economic conditions (including without limitation
interest rates), in either case that affect banking institutions
generally or the ability to conduct banking operations at the Seller
Office, or in the physical condition of the Seller Assets from the
physical condition that exists as of the date of this Agreement, or in
the quality of the Loans (taken as a whole) from the quality that
exists as of the date of this Agreement.
ARTICLE V
GENERAL COVENANTS AND INDEMNIFICATION
5.01 CONFIDENTIALITY OBLIGATIONS OF SELLER. From and after the date hereof,
Seller shall, and shall cause its subsidiaries and affiliates to, treat all
information received from Purchaser concerning the business, assets, operations,
and financial condition of Purchaser as confidential, unless and to the extent
that Seller can demonstrate that such information was already known to Seller or
such subsidiary or affiliates or in the public domain or was subsequently
independently developed by Seller; and Seller shall, and shall cause its
subsidiaries and affiliates to, not use any such information (so required to be
treated as confidential) for any purposes except in furtherance of the
transactions contemplated hereby. From and after the date of Closing, Seller
shall, and shall cause its subsidiaries and affiliates to, treat all information
regarding the Seller Office as confidential, and Seller shall, and shall cause
its subsidiaries and affiliates to, not use any such information so required to
<PAGE>
be treated as confidential for any purpose. Upon the termination of this
Agreement, Seller shall, and shall cause its affiliates to, promptly return all
documents and work papers containing, and all copies of, any such information
(so required to be treated as confidential) received from or on behalf of
Purchaser in connection with the transactions contemplated hereby. The covenants
of Seller contained in this Section 5.01 shall survive any termination of this
Agreement; provided, however, that neither Seller nor any of its affiliates
shall be deemed to have violated the covenants set forth in this Section 5.01 if
Seller or any of such affiliates shall in good faith disclose any of such
confidential information in compliance with any legal process, order or decree
issued by any court or agency of government of competent jurisdiction, provided
that prior to such disclosure, Seller shall give Purchaser reasonable prior
notice thereof.
5.02 CONFIDENTIALITY OBLIGATIONS OF PURCHASER. From and after the date hereof,
Purchaser shall, and shall cause its subsidiaries and affiliates to, treat all
information received from Seller concerning the business, assets, operations,
and financial condition of Seller, as confidential, unless and to the extent
that Purchaser can demonstrate that such information was already known to
Purchaser or such subsidiary or affiliates or in the public domain or was
subsequently independently developed by Purchaser; and Purchaser shall, and
shall cause its subsidiaries and affiliates to, not use any such information (so
required to be treated as confidential) for any purposes except in furtherance
of the transactions contemplated hereby. Upon the termination of this Agreement,
Purchaser shall, and shall cause its affiliates to, promptly return all
documents and work papers containing, and all copies of, any such information
(so required to be treated as confidential) received from or on behalf of Seller
in connection with the transactions contemplated hereby. The covenants of
Purchaser contained in this Section 5.02 are of the essence and shall survive
any termination of this Agreement; provided, however, that neither Purchaser nor
any of its affiliates shall be deemed to have violated the covenants set forth
in this Section 5.02 if Purchaser or any of such affiliates shall in good faith
disclose any of such confidential information in compliance with any legal
process, order or decree issued by any court or agency of government of
competent jurisdiction, provided that, prior to such disclosure, Purchaser shall
give Seller reasonable prior notice thereof.
5.03 INDEMNIFICATION BY BOTH PARTIES. Purchaser, on the one hand, and Seller, on
the other hand. mutually agree to indemnity and hold each other harmless from,
and to reimburse each other promptly for, any and all losses, liabilities,
damages, expenses and other costs (including court costs, costs of investigation
and reasonable attorneys' fees) ("Losses") that one party may suffer as the
result of the material breach by the other party of any covenant, representation
or warranty of that other party set forth in this Agreement.
5.04 INDEMNIFICATION BY SELLER. Seller shall indemnify, hold harmless and defend
Purchaser from and against any and all Losses arising out of any actions, suits,
or other proceedings, claims or demands commenced by any third party prior to or
after the Closing, which arise out of, or are in any way related to, (i) the
operations of the Seller Office (including but not limited to claims for
personal injuries arising from incidents occurring prior to the Closing) or the
administration of any of the Deposit Accounts or Loans by Seller prior to the
Closing, (ii) the Fixed Assets, Assumed Contracts, or Records, insofar as the
basis for such action, suit, or other proceedings, claim or demand arose prior
to the Closing, or (iii) the fiduciary duties of Seller arising prior to the
Closing with respect to the individual retirement accounts assumed by Purchaser
or included within the Seller Deposit Liabilities.
<PAGE>
5.05 INDEMNIFICATION BY PURCHASER. Purchaser shall indemnity, hold harmless and
defend Seller from and against all Losses arising out of any actions, suits or
other proceedings, claims or demands, which arise out of, or are in any way
related to, (i) the operations of the Seller Office or the administration of any
of the Seller Deposit Liabilities or Loans by Purchaser subsequent to the
Closing, (ii) Fixed Assets, Assumed Contracts, or Records, insofar as the basis
for such action, suit or other proceeding, claim or demand arises subsequent to
the Closing, or (iii) the fiduciary duties of Purchaser arising subsequent to
Closing with respect to the individual retirement accounts assumed by Purchaser
or included within the Seller Deposit Liabilities.
5.06 CLAIMS.
(a) DEFENSE OF CLAIMS. Should any claim be made, or suit or proceeding
be instituted against a Buyer or Seller (the "Indemnified Party"),
which, if valid or prosecuted successfully, would be a matter for which
such Indemnified Party is entitled to indemnification under this
Agreement (a "Claim") from the other party (the "Indemnifying Party"),
the Indemnified Party shall notify the Indemnifying Party in writing
concerning the same promptly after the assertion or commencement
thereof. The Indemnified Party shall in the first instance file in a
timely manner any answer or pleading with respect to a suit or
proceeding if such action is necessary to avoid default or other
material adverse results. The party having the greater risk of
financial loss with respect to such Claim (the "Lead Party") shall
control the defense thereof and shall use reasonable efforts to defeat
or minimize any loss resulting from such Claim. The Lead Party shall
provide the other party (the "Non-Lead Party") with such information
and opportunity for consultation (including estimations regarding costs
and fees) as may reasonably be requested and the Non-Lead Party shall
be entitled, at its own expense, to participate in the defense of a
claim and to engage counsel for such purpose. All costs and expenses
incurred by the Lead Party in connection with the defense of a Claim
shall in the first instance be paid by the Lead Party. Any reasonable
costs and expenses so paid by the Indemnified Party shall be subject to
the Indemnified Party's rights to indemnification under this Agreement.
(b) SETTLEMENT OF CLAIMS. No settlement of a Claim involving liability
of an Indemnified Party subject to indemnification under this Agreement
shall be made without prior written consent by or on behalf of the
Indemnifying Party, which consent shall not be unreasonably withheld or
delayed. For these purposes, consent shall be presumed in the case of
settlements of $5,000 or less wherein the Indemnifying Party has not
responded within ten (10) business days of written notice of a proposed
settlement. In the event of any dispute regarding the reasonableness of
a proposed settlement, the party which will bear the larger financial
loss resulting from such settlement and the application of the
indemnification provisions set forth in this Agreement will make the
final determination in respect thereto, which determination will be
final and binding on all involved parties.
5.07 REQUEST FOR INDEMNIFICATION. If at any time or from time to time any party
shall determine that it is entitled to indemnification under this Agreement,
such party shall give written notice to the other party specifying the basis on
which indemnification is sought, the amount of the asserted loss, damage or
expense, as the case may be, and requesting indemnification. If indemnification
is required under this Agreement with respect to a Claim, the parties
contemplate that payment shall be made to the Indemnified Party at or about the
time the Indemnified Party shall be required to make payment with respect to the
Claim, unless there shall be a dispute as to the Indemnified Party's entitlement
<PAGE>
to indemnification, in which case adjustment will be made upon resolution of
said dispute. Upon receipt of any request for indemnification, the Indemnifying
Party may object thereto by delivering written notice of such objection to the
Indemnified Party specifying in reasonable detail the basis on which such
objection is made. In the case of objection to a request for indemnification as
to a Claim, such objection shall be made within thirty (30) business days of
notice from the Indemnified Party's requesting payment, unless the Indemnifying
Party shall have earlier agreed to such liability. Failure on the part of the
Indemnifying Party so to object shall constitute acceptance by such party of the
request to indemnify as to such matter.
5.08 REDUCTION FOR INSURANCE. The amount which an Indemnifying Party is required
to indemnify the Indemnified Party pursuant to this Agreement shall be reduced
(including, without limitation, retroactively) by any insurance proceeds
actually recovered by or on behalf of such Indemnified Party in reduction of the
related indemnifiable loss (the "Indemnifiable Loss"). Amounts required to be
paid, as so reduced, are hereafter called an "Indemnity Payment." If an
Indemnified Party shall have received or shall have had paid on its behalf an
Indemnity Payment in respect of an Indemnifiable Loss and shall subsequently
receive, directly or indirectly, insurance proceeds in respect of such
Indemnifiable Loss, then such Indemnified Party shall pay to such Indemnifying
Party a sum equal to the amount of such insurance proceeds up to an amount equal
to the Indemnity Payment.
5.09 FURTHER ASSURANCES. From and after the date hereof, each party agrees to
execute and deliver such instruments and to take such other actions as the other
party hereto may reasonably request in order to carry out and implement this
Agreement. The covenants of each of the parties hereto pursuant to this Section
5.06 shall survive the Closing.
ARTICLE VI
TERMINATION
6.01 TERMINATION BY MUTUAL AGREEMENT. This Agreement may be terminated and
the transactions contemplated hereby may be abandoned by mutual consent and
agreement of the parties hereto.
6.02 TERMINATION BY PURCHASER. This Agreement may be terminated and the
transaction contemplated hereby abandoned by Purchaser:
(a) Upon written notice to Seller, if at the time of such termination
any of the conditions set forth in section 4.07 hereof are not
satisfied and cannot reasonably be expected to be satisfied before the
Termination Date.
(b) If any regulatory approval required for consummation of this
transaction is denied by the applicable regulatory authority or is
granted upon satisfaction of conditions unacceptable in the reasonable
judgment of Purchaser or Seller, or in the event that at any time prior
to the Closing Date it shall become reasonably certain to Purchaser,
with the advice of counsel, that a regulatory approval required for
consummation of the transaction will not be obtained. For purposes
hereof, a condition may be deemed "unacceptable" if in the reasonable,
<PAGE>
good faith judgment of Purchaser, it is reasonably probable that it
would have a material adverse effect on the business, operations,
assets or financial condition of Purchaser upon completion of the
acquisition contemplated hereby or otherwise materially impair the
value of Seller's business to be acquired hereunder, provided that in
each case no such term or condition imposed by any regulatory authority
shall be deemed to have such an effect unless it materially differs
from terms and conditions customarily imposed by such an authority in
connection with approvals of similar such transactions.
(c) In accordance with Section 4.01.
6.03 TERMINATION BY SELLER. This Agreement may be terminated and the
transaction contemplated hereby abandoned by Seller:
(a) Upon written notice to Purchaser, if at the time of such
termination any of the conditions set forth in Section 4.06 hereof are
not satisfied and cannot reasonably be expected to be satisfied before
the Termination Date.
(b) If any regulatory approval required for consummation of this
transaction is denied by the applicable regulatory authority or is
granted upon satisfaction of conditions unacceptable in the reasonable
judgment of Seller, or in the event that at any time prior to the
Closing Date it shall become reasonably certain to Seller, with the
advice of counsel, that a regulatory approval required for consummation
of the transaction will not be obtained. For purposes hereof, a
condition may be deemed "unacceptable" if in the reasonable, good faith
judgment of Seller, it is reasonably probable that it would have a
material adverse effect on the business, operations, assets or
financial condition of Seller, provided that in each case no such term
or condition imposed by any regulatory authority shall be deemed to
have such an effect unless it materially differs from terms and
conditions customarily imposed by such an authority in connection with
approvals of similar such transactions.
(c) In accordance with Section 4.01.
6.04 TERMINATION BY EITHER PARTY. Upon written notice by either Seller (a
"Party") or Purchaser (also a "Party"), at any time prior to the day of the
Closing if and only if such Party is not in material breach of this Agreement
and if the other Party has breached in any material respect any covenant or
undertaking contained herein and such breach is not cured within thirty days of
the date the nonbreaching Party gives notice of such breach to the breaching
Party (provided no cure period shall be available for any breach which, due to
the nature of the breach, cannot be cured, or for any breach which is the same
or substantially similar to a prior breach for which a cure period has been
given).
6.05 NOTICE OF TERMINATION. To exercise the right to terminate as provided in
this section, the exercising party must advise the other party in writing, which
notice shall be effective immediately upon its being delivered as referenced in
Section 7.09 hereof.
6.06 EFFECT OF TERMINATION. The termination of this Agreement pursuant to
Sections 6.02 or 6.03 of this Agreement shall not release any party hereto from
any liability or obligation to the other party hereto arising from a breach of
any provision of this Agreement occurring prior to the termination hereof. No
termination of this Agreement shall affect or diminish the parties' obligations
under Sections 5.01 and 5.02 of this Agreement, which shall survive the
termination.
<PAGE>
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.01 NO SOLICITATION BY SELLER. For a period of three (3) years after the
Closing Date, Seller shall not specifically target and solicit customers of the
Seller Office for the provision of services offered by or competitive with
services offered by Purchaser in Marshall County, Kentucky; provided, however,
these restrictions shall not restrict (i) general mass mailings or other similar
communications provided such communications do not utilize or incorporate any
customer or mailing list compiled from customers of the Seller Office or which
consists primarily of customers of the Seller Office or which are targeted only
to the Marshall County area or (ii) communications with Seller's then loan
customers for the purpose of renewing, extending or modifying their loans. In
addition, Seller will not, for a period of three (3) years after the Closing
Date, establish a banking or thrift office in Marshall County, Kentucky;
provided however that nothing herein shall prevent Seller from acquiring and
operating a branch in Marshall County, Kentucky through the purchase of a
financial institution whose main office is not located in Marshall County,
Kentucky.
7.02 NOTICES TO DEPOSITORS. Seller shall use its best efforts to provide
Purchaser an intermediate customer list (on paper and on a computer diskette) of
the Deposits to be assumed as of forty-five days prior to the Closing. On the
Closing Date, Seller shall provide a final customer list of the Seller Deposit
Liabilities. At least fourteen (14) days before the Closing (or on such earlier
or later date as may be required by law), Purchaser shall mail notice (the
"Notification") to the holders of the Deposit Accounts to be assumed that,
subject to the closing requirements, Purchaser will be assuming the liability of
the Seller Deposit Liabilities. The Notification will be based on the list and
labels referred to above and a log maintained at the Seller Office of the new
accounts opened since the date of said list. Seller shall provide Purchaser with
a copy of said log up to the date of Seller's mailing. In the Deposit Account
Notification, Purchaser shall set out the details of its administration of the
assumed accounts and may, with Seller's prior written consent (which shall not
be unreasonably withheld), communicate and mail information, brochures,
bulletins, press releases and other communications to depositors of the Seller
Office concerning the business and operations of Purchaser. Each party shall
obtain the other party's prior approval of its notification letter(s) and any
other communications to depositors of the Seller Office regarding the
transactions contemplated hereby (which approval shall not be unreasonably
withheld). The Notification may be made jointly if (a) it is permitted by
applicable statutes and regulations and (b) Seller and Purchaser can agree to
the content thereof.
7.03 POST CLOSING RECONCILIATION.
(A) INCLEARING ITEMS. As of the opening of business on the Closing
Date, Seller shall expedite the clearing and sorting of all checks,
drafts, instruments and other commercial paper relative to the Deposit
Accounts (hereinafter collectively referred to as the "Paper Items").
For a period of sixty (60) days following the Closing Date (the
"Inclearing Period"), Seller shall continue to process checks or drafts
drawn on Deposits which are not intercepted by the FRB. On each banking
day during the Inclearing Period, Seller shall send to Purchaser by
overnight mail all inclearing items received for payment that day. Upon
expiration of the Inclearing Period, Seller shall cease honoring
inclearing items presented against the Deposit Accounts and such items
shall be returned marked "Refer to Maker". Seller and Purchaser shall
settle amounts due under this Section 7.03 by wire transfer.
<PAGE>
(B) ACH TRANSACTIONS. At least thirty (30) days prior to the Closing
Date, Seller shall deliver to Purchaser (i) copies of all ACH
origination forms for social security payments, and (ii) all other
records and information necessary for Purchaser to administer the ACH
transactions. For a period of one hundred twenty (120) days following
the Closing Date, Seller agrees to continue to accept and immediately
forward to Purchaser in paper format all automated clearinghouse
entries ("ACH") and corresponding funds. Seller also agrees to include
the originator identification number, and Purchaser agrees to
immediately notify and instruct the originator of the ACH to reroute
the entries directly to Purchaser. Upon expiration of such one hundred
twenty (120) day period, Seller shall discontinue accepting and
forwarding ACH transactions to the Purchaser. Transactions will be
returned to the originators marked "Branch Sold to Another DFI," with
code R12 included as the reason for the return. Purchaser agrees to
complete and obtain Federal Reserve acceptance of the ACH Federal
Reserve Agreement prior to the Closing Date. All returns received by
Seller after the Closing Date for ACH transactions processed on or
before the Closing Date for any of the Deposit Accounts will be
provided to Purchaser as received for appropriate posting to the
Deposit Accounts. Simultaneously, Seller shall credit or debit the Due
to Account (defined in Section 7.16, below) as appropriate. Purchaser
shall notify Seller of any ACH returns which it initiates after the
Closing Date with respect to ACH transactions processed on or before
the Closing Date for any of the Deposit Accounts and Seller shall make
any appropriate entries to the Due to Account.
(C) OVER-THE-COUNTER RETURNED ITEMS. For a period of ninety (90) days
following the Closing Date, Seller shall, by facsimile, provide
Purchaser with-a list of any over-the-counter returned items on the day
they are received by Seller. Over-the-counter returned items are those
items that are included within the Seller Deposit Liabilities
transferred to Purchaser but that are returned unpaid to Seller after
the Closing Date. Seller shall send such items by overnight mail to
Purchaser for "next banking day" delivery. On the same day, Purchaser
shall transmit to Seller in immediately available funds by wire
transfer, the sum of over-the-counter returned items for which
sufficient available funds were in the applicable accounts to cover the
over-the-counter returned items, and Seller shall refund to Purchaser
any Deposit Premium paid with respect to such amounts. Purchaser agrees
to prohibit withdrawals from, or debits to, any Deposit Accounts which
do not have a sufficient available funds balance to cover any
over-the-counter returned items until such over-the-counter returned
items are paid to Seller. Notwithstanding the foregoing, Seller shall
bear all liability for items deposited or negotiated at the Seller
Office prior to or on the Closing Date and subsequently returned as
uncollectible to the extent that an overdraft is created immediately
after (i) the exercise of Purchaser's lawful rights of offset and (ii)
the application of any availability under any overdraft line of credit
relating to the affected account or accounts, provided that Purchaser
shall handle returned items expeditiously under the permanent rules
established by the FRB in Regulation J and Regulation CC.
<PAGE>
(D) WITHHOLDING. Seller shall deliver to Purchaser (i) on or before the
Closing Date, a list of all "B" (TINs do not match) and "C" (under
reporting/IRS imposed withholding) notices from the IRS imposing
withholding restrictions and (ii) for a period of one hundred twenty
(120) calendar days after the Closing Date, all notices received by the
Seller from the IRS imposing or releasing withholding restrictions on
the Seller Deposit Liabilities. Any amounts withheld by Seller up to
and including the Closing Date shall be remitted by Seller to the
appropriate governmental agency on or prior to the time they are due.
Any withholding obligations required to be remitted to the appropriate
governmental agency up to and including the Closing Date will be
withheld and remitted by Seller. Any withholding obligations required
to be remitted to the appropriate governmental agency after the Closing
Date with respect to withholding obligations after the Closing Date and
not withheld by Seller as set forth above will be remitted by
Purchaser. Any penalties described on a "B" notice from the IRS or any
similar penalties that relate to the Seller Deposit Liabilities opened
by Seller prior to the Closing Date will be paid by Seller promptly
upon receipt of the notice (subject to Seller's rights to contest such
penalties).
(E) REPORTING OBLIGATIONS. Seller shall comply with all federal and
state income tax reporting requirements with respect to the Seller
Deposit Liabilities and interest paid thereon through the Closing.
Purchaser shall comply with all federal and state income tax reporting
requirements with respect to the Seller Deposit Liabilities and
interest paid thereon after the Closing. Seller shall provide TINs and
any other information that may be required by Purchaser in this regard.
(F) LOAN PAYMENTS. For a period of ninety (90) days after the Closing
Date, Seller will forward to Purchaser loan payments received by Seller
with respect to the Loans.
7.04 EFFECT OF TRANSITIONAL ACTION. Except as and to the extent expressly set
forth in this Article VII, nothing contained in this Article VII shall be
construed to be an abridgement or nullification of the rights, customs, and
established practices under applicable banking laws and regulations as they
affect any of the matters addressed in this Article VII.
7.05 EXPENSES. Except as and to the extent specifically allocated otherwise
herein, each of the parties hereto shall bear its own expense, whether or not
the transactions contemplated hereby are consummated.
7.06 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. Respective
covenants, representations and warranties of Purchaser and Seller contained or
referred to in this Agreement shall survive the Closing for a period of five
years and shall not be deemed to merge therewith or terminate thereby.
7.07 SUCCESSORS AND ASSIGNS. All of the obligations of the parties hereunder,
including, without limitation, the indemnification obligations in section 5.03
and 5.04, shall be binding upon the successors and assigns of the parties.
<PAGE>
7.08 WAIVERS. Each party hereto, by written instrument signed by duly authorized
officers of such party, may extend the time for the performance of any of the
obligations or other acts of the other party hereto and may waive, but only as
affects the party signing such instruments:
(a) Any inaccuracies in the representations or warranties of the other
party contained or referred to in this Agreement or in any document
delivered pursuant hereto.
(b) Compliance with any of the covenants or agreements of the other
party contained in this Agreement.
(c) The performance (including performance to the satisfaction of a
party or its counsel) by the other party of such of its obligations set
out herein.
(d) Satisfaction of any condition to the obligations of the waiving
party pursuant to this Agreement.
7.09 NOTICES. Any notice or other communication required or permitted pursuant
to this Agreement shall be effective only if it is in writing and delivered
personally, by facsimile transmission, or by registered or certified
return-receipt mail, postage prepaid addressed as follows:
IF TO SELLER: REPUBLIC BANK &TRUST COMPANY
601 West Market Street
Louisville, Kentucky 40202-2700
Attention: Bill Petter, Chief Financial Officer
WITH COPIES TO: REPUBLIC BANK &TRUST COMPANY
601 West Market Street
Louisville, Kentucky 40202-2700
Attention: Steve Trager, Vice Chairman
IF TO PURCHASER: PEOPLES FIRST NATIONAL BANK AND TRUST
Kentucky Ave at 4th Street
P.O. Box 2200
Paducah, Kentucky 42002-2200
Attention:
WITH COPIES TO: Brown, Todd & Heyburn, PLLC
3200 Providian Center
Louisville, Kentucky 40202-3363
Attention: R. James Straus
or to such other person or address as any such party may designate by notice to
the other parties and shall be deemed to have been given as of the date
received.
<PAGE>
7.10 COOPERATION ON OPEN ITEMS AND OTHER MATTERS. After Closing the parties
agree to cooperate with each other with respect to the processing of outstanding
checks, ATM transactions and other open items which originated prior to Closing.
7.11 PARTIES IN INTEREST; ASSIGNMENT; AMENDMENT. This Agreement is binding upon
and is for the benefit of the parties hereto and their respective successors,
legal representatives, and assigns, and no person who is not a party hereto (or
a successor or assignee of such party) shall have any rights or benefits under
this Agreement, either as a third party beneficiary or otherwise. This Agreement
cannot be assigned (except by operation of law due to a merger of Purchaser or
Seller with a third party), and this Agreement cannot be amended or modified,
except by a written agreement executed by the parties hereto or their respective
successor and assigns.
7.12 ENTIRE AGREEMENT. This Agreement supersedes any and all oral or written
agreements and understandings heretofore made relating to the subject matter
hereof and contains the entire agreement of the parties relating to the subject
matter hereof. Annexes and Appendices to this Agreement are incorporated into
this Agreement by reference and made a part hereof.
7.13 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Kentucky, except to the extent
precluded by federal law of mandatory application.
7.14 COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
7.15 RISK OF LOSS. The risk of any loss or damage to any of the Seller Assets by
fire or any other casualty or cause shall be borne by Seller at all times
through the Closing Date, and by Purchaser thereafter.
7.16 TRANSACTION ACCOUNT. Purchaser shall establish a transaction account with
Seller (the "Due to Account") for purposes of accepting credits to, and
absorbing debits against, the cash balances to be transferred as a result of
adjustments made pursuant to this Agreement after the Closing Date. Seller shall
be authorized to make the deposits and withdrawals from and to the Due to
Account without the signature of Purchaser but only to the extent of the
adjustments specifically provided for in this Agreement. Seller shall provide to
Purchaser a full record of all transactions in the Due to Account by 8:00 a.m.
eastern time of the business day following any such transactions. Any negative
(collected) balances in the Due to Account shall represent an advance to
Purchaser bearing interest, which shall be debited against the Due to Account at
the end of each month at the applicable Federal Funds Rate on the last business
day of such month.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by the respective officers thereunto duly authorized, all as of the
date first above written.
7.1
PEOPLES FIRST NATIONAL BANK AND TRUST REPUBLIC BANK & TRUST COMPANY
By: /s/ By: /s/
---------------------------------- ----------------------------------
Its: Its:
---------------------------------- ----------------------------------
ATTEST: ATTEST:
By: /s/ By: /s/
---------------------------------- ----------------------------------
Its: Its:
---------------------------------- ----------------------------------
<PAGE>
The exhibits to the Agreement have been omitted from this filing in reliance on
Rule 601(b)(2) of Regulation S-K. Republic Bancorp, Inc. will furnish
supplemental a copy of any omitted exhibit to the Securities and Exchange
Commission upon request.
PURCHASE AND ASSUMPTION AGREEMENT
This is a Purchase and Assumption Agreement (this "AGREEMENT")
dated as of September 12, 1997, between First Federal Savings Bank of
Leitchfield, a federal savings bank ("PURCHASER"), and Republic Bank & Trust
Company, a Kentucky banking corporation ("SELLER").
WHEREAS, Seller conducts business (the "BUSINESS") at a branch
in Mayfield, Kentucky (the "SELLER OFFICE");
WHEREAS, Purchaser desires to acquire and assume and Seller
desires to sell and assign certain assets and certain deposit liabilities
associated with the Seller Office; and
WHEREAS, Purchaser intends, upon the Closing (defined below),
to assign its interests in the Agreement to its affiliate, First Kentucky Bank
("FKB").
NOW, THEREFORE, in consideration of the mutual promises
hereinafter contained, and other good and valuable consideration, the parties
agree as follows:
ARTICLE I
PURCHASE AND ASSUMPTION
I.1 PURCHASE AND SALE OF ASSETS. At the Closing (defined
below), Purchaser shall purchase and Seller shall sell certain assets relating
to the Seller Office pursuant to the terms and conditions set forth herein. The
assets of the Seller Office, as more fully described in Section 1.02 below, are
hereinafter referred to as the "SELLER ASSETS." At the Closing, Purchaser shall
assume the "Seller Deposit Liabilities" (as hereinafter defined) relating to the
Seller Office. The acquisition by Purchaser from Seller of the Seller Assets and
the assumption of Seller Deposit Liabilities pursuant to the terms and
conditions set forth herein is sometimes referred to herein as the
"ACQUISITION".
I.2 TRANSFER OF ASSETS. Subject to the terms and conditions of
this Agreement, on and as of the close of business on the Closing Date (defined
below), Seller shall assign, transfer, convey and deliver to Purchaser, the
Seller Assets, as described in subparagraphs (a) through (i), inclusive of this
Section 1.02:
(a) REAL ESTATE. The real estate on which the Seller Office is
situated together with all improvements thereon and all easements
associated therewith as provided in the legal description attached to
the general warranty deed to be attached as Annex 1.02(a) (the "REAL
ESTATE"). Seller represents and warrants that it has provided to
Purchaser all title information, surveys, and environmental assessments
or investigations in the possession of, or available to, Seller.
<PAGE>
(b) PERSONAL PROPERTY. All of the furniture, fixtures and
equipment and other tangible personal property located at the Seller
Office including the automated teller machine ("ATM") located at the
Seller Office (the "FIXED ASSETS"). The Fixed Assets shall include,
without limitation, the assets to which the Purchase Price is allocated
as shall be set forth on Annex 1.02(b). The Fixed Assets shall not
include the assets specifically to be listed on Annex 1.02(b) as being
retained by Seller.
(c) RECORDS OF THE SELLER OFFICE. All records and original
documents (if available) related to the Seller Assets transferred or
liabilities assumed by Purchaser hereunder including but not limited to
the Seller Deposit Liabilities.
(d) SAFE DEPOSIT BUSINESS. All safe deposit rentals,
agreements, and business attributable to the Seller Office together
with all the records relating thereto (the "SAFE DEPOSIT BUSINESS").
Purchaser agrees to assume, honor and discharge the duties and
obligations of Seller with respect to such Safe Deposit Business and
shall be entitled to any right or benefit heretofore accrued or
hereafter accruing therefrom. The customer agreements relating to the
Safe Deposit Business and the prepaid rentals for the services are to
be set forth on Annex 1.02(d).
(e) CONTRACTS OR AGREEMENTS. Not applicable to this
Agreement.
(f) CASH ON HAND. All cash on hand at the Seller Office
as of the close of business on the Closing Date ("CASH ON HAND").
(g) PREPAID EXPENSES. Those prepaid expenses
attributable to the Seller Office as of the close of business on the
Closing Date, which prepaid expenses shall be identified on Annex
1.02(g).
(h) LOANS. All loans attributable to the Seller Office
(including all interest earned but not collected) that are either (i)
at least 100% collateralized by the Seller Deposit Liabilities and are
not more than twenty (20) days past due as of the close of business on
the Closing Date or otherwise involved in any type of litigation, (ii)
particular loans outstanding pursuant to overdraft lines that are
specifically identified in writing by Purchaser prior to the Closing as
being acquired by Purchaser, or (iii) other loans attributable to the
Seller Office that are specifically identified in writing by Purchaser
prior to the Closing as being acquired by Purchaser (the "LOANS"). The
Loans shall be set forth on Annex 1.02(h).
<PAGE>
(i) RESIDUAL ASSETS. All of the remaining intangible assets,
including, without limitation, goodwill (Purchaser understands that
Seller does not have any goodwill reflected on its books with respect
to the Seller Office), associated with the Seller Assets, Seller
Office, and Seller Deposit Liabilities and any claims of Seller against
third parties with respect to such Seller Assets, Seller Office and
Seller Deposit Liabilities, to be transferred to the Purchaser
hereunder.
(j) SAFEKEEPING ITEMS. Not applicable to this Agreement.
I.3 ACCEPTANCE AND ASSUMPTION. Subject to the terms and
conditions of this Agreement on and as of the close of business on the Closing
Date, Purchaser shall:
(a) SELLER ASSETS. Receive and accept all of the Seller
Assets assigned, transferred, conveyed and delivered to Purchaser by
Seller pursuant to this Agreement.
(b) SELLER DEPOSIT LIABILITIES. Assume and thereafter
discharge the "Seller Deposit Liabilities" (as hereinafter defined).
The term "SELLER DEPOSIT LIABILITIES" means all of Seller's
obligations, duties and liabilities under each deposit account which is
attributable to the Seller Office as of the close of business on the
Closing Date (the "DEPOSIT ACCOUNTS"). The Seller Deposit Liabilities
include accrued, but unpaid interest on the Deposit Accounts calculated
through the close of business on the Closing Date. The Seller Deposit
Liabilities do not include (i) escheatable accounts or accounts subject
to or involved in any form of litigation, (ii) accounts that are
overdrawn on the Closing Date, and (iii) affiliate accounts. The
Deposit Accounts referred to in the immediately preceding sentence
include, without limitation, passbook accounts, statement savings
accounts, super NOW accounts, money market accounts, checking accounts
and NOW accounts, Individual Retirement Accounts ("IRAS"), ATM-related
accounts, and certificates of deposit. Annex 1.03(b) shall be a listing
of the Deposit Accounts and their respective balances as of the date
listed therein. Seller represents and warrants that the total balance
of such accounts are approximately equal to $64 million as of this
Agreement's date and that all such deposits are insured by the Bank
Insurance Fund ("BIF") or the Savings Association Insurance Fund
("SAIF") of the Federal Deposit Insurance Corporation ("FDIC"). The
"obligations, duties and liabilities" referred to in this Paragraph
1.03(b) include, without limitation, the obligation to pay and
otherwise process the Seller Deposit Liabilities in accordance with
applicable law and their respective contractual terms as reflected in
Seller's books and records, and the duty to supply all applicable
reporting forms for post-closing periods, including, without
limitation, Form 1099s, relating to the Seller Deposit Liabilities.
Seller shall retain responsibility for all backup withholding and Form
1099 reporting with respect to interest paid by Seller. Seller shall
<PAGE>
provide Purchaser or FKB a copy (on paper, microfiche, or other medium
agreed to by Purchaser and Seller) of all Form 1099s relating to the
Seller Deposit Liabilities and shall make employees available to
respond to Purchaser's or FKB's inquiries regarding Form 1099 reporting
prior to and following the Closing.
(c) OTHER LIABILITIES. Not applicable to this Agreement.
(d) NO ASSUMPTION OF LIABILITIES. Except for the Seller
Deposit Liabilities and any other obligations or liabilities
specifically assumed by Purchaser under this Agreement, it is expressly
understood and agreed that Purchaser shall not assume or be liable for
any of the debts, obligations or liabilities of Seller of any kind or
nature whatsoever including, but not limited to, any debt or tax
including any bank shares, franchise or related tax, any liability for
unfair labor practices, any liability or obligation of Seller arising
out of any threatened or pending litigation, any liability with respect
to personal injury or property damage claims, any liability arising out
of claims of employees employed at the Seller Office for bonuses,
salaries, sick leave, vacation, wages or other payments or benefits in
respect of services performed at the Seller Office prior to the
Closing, any liability under or in connection with any "employee
benefit plan" as defined in Section 3(3) of ERISA which is maintained
by Seller and covers any employees at the Seller Office, any liability
Seller may have incurred or will incur in connection with the
transactions contemplated by this Agreement, any liability arising out
of any action or inaction occurring on or prior to the Closing Date and
relating to one or more Seller Deposit Liabilities, including but not
limited to the lack of a taxpayer identification number for an account
holder or the lack of compliance with any federal or state law or
regulation with respect to one or more Seller Deposit Liabilities, or
any other liability Seller may have incurred prior to the Closing in
connection with the operation of the Seller Office.
I.4 PAYMENT OF FUNDS. Subject to the terms and conditions
hereof, at the Closing:
(a) NET PAYMENT. Seller shall make available and transfer to
Purchaser in the manner specified in Sections 4.04 and 4.05 hereof,
funds equal to the aggregate balance of the Seller Deposit Liabilities
(including interest posted or accrued to such accounts), plus prepaid
rents relating to the Safe Deposit Business, plus any amount payable
pursuant to paragraph 2.05(b), less the amounts provided in
subparagraphs (1)-(4). For all purposes under this Section 1.04, the
amount of the Seller Deposit Liabilities with respect to certificates
of deposit and time deposits shall be determined as if the average
<PAGE>
effective interest rate over the term of the deposit accrues throughout
the term of the deposit regardless of whether, under the terms of the
deposit, the interest rate increases or decreases at different times;
for example, if a $100,000 certificate of deposit has an average
effective interest rate of 6%, but, has only paid interest at a 5%
rate, the Seller Deposit Liabilities would include the $100,000
principal plus interest calculated at 6% through the Closing Date minus
any amount of interest already paid out on that certificate of
deposit).
(1) the "DEPOSIT PREMIUM" which shall equal:
(A) seven percent of the Demand
Deposits. "DEMAND DEPOSITS" shall
include all demand deposits included
in the Deposit Accounts and shall
equal the daily average balances of
such accounts (exclusive of accrued
but unpaid interest) for the
thirty-day period ending at the
close of business two business days
before the Closing Date; plus
(B) seven percent of Other Deposits.
"OTHER DEPOSITS" shall include all
deposit accounts included in the
Deposit Accounts other than Demand
Deposits and shall equal the balance
of such accounts (exclusive of
accrued but unpaid interest) as of
the close of business two business
days before the Closing Date;
(2) the amount (net of depreciation) at which the
Real Estate and the Fixed Assets are reflected on Seller's
financial statements (determined in accordance with generally
accepted accounting practices, consistently applied) as of the
close of business on the Closing Date;
(3) the amount of Cash on Hand at the Seller Office
as of the close of business on the Closing Date.
(4) the value of the Loans. For purposes of this
subparagraph (4), "VALUE" means the aggregate of the
outstanding principal balances of the Loans together with
accrued but unpaid interest to the close of business on the
Closing Date.
(b) REIMBURSEMENT AND PRORATION OF CERTAIN EXPENSES. All
expenses due and payable at the time of Closing relating to any prepaid
expenses included in the Seller Assets pursuant to Paragraph 1.02(g)
shall be prorated between Purchaser and Seller as of the close of
<PAGE>
business on the Closing Date (including any FDIC insurance premiums,
which premiums will be prorated according to a formula agreed to by the
Seller and Purchaser based upon the standard formula promulgated by the
FDIC, the amount of the Seller Deposit Liabilities assumed by
Purchaser, and the number of days during any period for which Seller
has prepaid premiums to the FDIC to the FDIC that Purchaser will hold
the Seller Deposit Liabilities). Seller shall pay all taxes due and
payable with respect to the Real Estate on or prior to the Closing Date
and a prorated portion of all taxes assessable and first becoming a
lien with respect to the Real Estate during the year in which the
Closing Date occurs. The present tax rates and assessed values shall be
used for the purpose of setting Seller's prorated payment with respect
to the Real Estate taxes if applicable rates and assessed values have
not been set.
ARTICLE II
COVENANTS OF THE PARTIES
II.1 REGULATORY APPROVALS. As promptly as practicable (but in
any case within 30 days) after execution of this Agreement, Purchaser and Seller
shall prepare and submit for filing any and all applications, filings, and
registrations with and notifications to, all state and federal authorities
required on the part of Purchaser and Seller for the transaction contemplated by
this Agreement to be consummated at the Closing. Thereafter, Purchaser and
Seller shall pursue all such applications, filings, registrations, and
notifications diligently and in good faith and shall file such supplements,
amendments, and additional information in connection therewith as may be
reasonably necessary for said transaction to be consummated at such Closing.
Prior to filing any such application, filing, registration or notification, or
amendment or supplement thereto, the filing party shall provide the other party
with reasonable opportunity to review and comment thereon. The filing party
shall provide the other party with final copies of such documents, as filed,
and, promptly after receipt, copies of written communications from the agency or
authority with which such filing was made, or telephonic notice of material
non-written communications. Notwithstanding the foregoing, neither party shall
be required to provide the other party with any such information which
constitutes confidential business information which is subject to
confidentiality pursuant to the Freedom of Information Act or corresponding
state law.
II.2 OPERATION OF OFFICE. Since January 1, 1997, Seller has
conducted the business of the Seller Office only in the ordinary course
consistent with past practice, and there has not been any material adverse
change in the business, prospects, assets, capital, financial condition, results
of operations, liabilities (absolute, accrued, contingent or otherwise) or
commitments of the Seller with respect to the Seller Office. Hereafter, Seller
<PAGE>
shall continue to operate the Seller Office in a manner equivalent to that
manner and system of operation employed immediately prior to the date of this
Agreement. Seller will use commercially reasonable efforts to prevent harm or
damage to the reputation of the Seller Office or material reduction of the
existing Seller Deposit Liabilities. Except with the prior written consent of
Purchaser, (which consent shall not be unreasonably withheld or delayed) or as
expressly contemplated or permitted by this Agreement, during the period from
the date of this Agreement and continuing until the Closing, Seller shall not:
(a) conduct business at the Seller Office other than in the
usual, regular and ordinary course or fail to use its best efforts to
preserve the Seller Office intact or to preserve the good will of the
customers at and others having business with the Seller Office;
(b) sell, lease, encumber, or otherwise dispose of, or agree
to sell, lease, encumber or otherwise dispose of, any of the Seller
Assets or any of the collateral securing the Loans;
(c) cause the Seller Office to transfer any Deposits,
including, without limitation, to Seller's or any affiliates' other
operations or branches, except upon the unsolicited request of a
depositor in the ordinary course of business;
(d) agree to increase the salary, remuneration or compensation
(including insurance, pension or other benefit plan) payable or to
become payable to persons employed at the Seller Office other than in
accordance with Seller's customary policies and/or bank-wide changes,
or pay or agree to pay any uncommitted bonus to any such employees
other than regular bonuses granted based on historical practice;
(e) hire any new employees at the Seller Office without
Purchaser's written consent, which will not be unreasonably withheld;
(f) violate any law, statute, rule, governmental regulation,
order or undertaking which violation would have a material adverse
effect on the Seller Assets;
(g) invest in any material amount of Fixed Assets on behalf of
the Seller Office and no Fixed Assets, except for commitments made on
or before the date of the Agreement and for replacements of furniture,
furnishings and equipment and normal maintenance and refurbishing
purchased or made in the ordinary course of business;
<PAGE>
(h) offer any special deposit rate promotion with respect to
the Deposit Accounts or potential accounts except those offered by
Seller at all or substantially all of its branch offices;
(i) take any action to artificially inflate the amount of the
Seller Deposit Liabilities.
II.3 INSURANCE. During the period from the date of this
Agreement and continuing until the Closing, Seller shall maintain in effect all
current insurance policies insuring the Seller Assets.
II.4 INFORMATION CONCERNING AND ACCESS TO THE SELLER OFFICE.
Seller shall permit officers and authorized representatives of Purchaser access
upon reasonable notice to Seller to inspect the Seller Office during normal
business hours or at such other time mutually agreed upon by both parties, and
to permit Purchaser to make or cause to be made such reasonable investigation of
information and materials relating to the financial condition, assets and
liabilities of the Seller Office including general and subsidiary ledgers,
deposit records, audit reports and any other information concerning the
business, property, personnel and legal questions concerning the Seller Office
(or related to the physical condition of the Seller Office) as Purchaser
reasonably deems necessary; provided, however, that such access and
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere with the normal operations of the Seller Office;
and provided further, that nothing in this Section 2.04 shall be deemed to
require Seller to breach any obligation of confidentiality not to reveal any
proprietary information, trade secrets, marketing plans, strategic plans or
information not related to the transaction contemplated by this Agreement.
II.5 INFORMATION CONCERNING THE REAL ESTATE. As soon as
reasonably practicable after the date of this Agreement,
(a) Purchaser shall obtain or waive in writing the right to
obtain commitments issued in the name of Purchaser for an ALTA owner's
policy of title insurance for a "Title Commitment," which Title
Commitment shall (1) be issued by an insurer acceptable to Purchaser,
and (2) contain an agreement to insure, for amounts to be agreed upon
by the parties, merchantable and marketable fee simple title to the
Real Estate, together with (i) an appropriate zoning endorsement, (ii)
a comprehensive endorsement, (iii) a contiguity endorsement, if
applicable, and (iv) such other endorsements as Purchaser shall
reasonably request, free of the standard policy exceptions, and subject
only to the lien of current real property taxes not yet due and
payable, and Permitted Encumbrances (as hereinafter defined). All
exceptions (as hereinafter defined) (or portions thereof) to which
Purchaser does not provide Seller written notice of objection prior to
the Closing (and all exception documents in connection with such Title
Commitment) shall be deemed permitted encumbrances (the "PERMITTED
ENCUMBRANCES"). As used herein, the term "EXCEPTIONS" shall mean those
<PAGE>
matters as set forth in Schedule B to each Title Commitment. With
respect to any non-Permitted Encumbrance (or portions thereof) to which
Purchaser objects, Seller shall promptly, at Seller's expense, use its
best efforts to cure, remove or otherwise satisfy such objection to
Purchaser's reasonable satisfaction prior to Closing. If Seller, in the
exercise of Seller's best efforts, is unable to cure any such
Encumbrance, Seller shall notify Purchaser and Purchaser shall have the
right to (i) waive all objectionable Exceptions to title which have not
been cured, in which event all uncured Exceptions shall be deemed
Permitted Encumbrances; (ii) terminate Purchaser's obligation to
purchase the Real Estate, in which case the parties shall meet promptly
to agree in good faith upon an amendment to this Agreement; or (iii)
terminate this Agreement. In the event of any termination pursuant to
clause (ii) or (iii) immediately above, Purchaser and Seller shall each
be released from any and all liability to the other under the terms
hereof to the extent of the transaction pertaining to Real Estate with
regard to the transactions contemplated hereby, as applicable. At
Closing, Seller, at its cost and expense, shall deliver to Purchaser a
policy of title insurance issued in conformity with each Title
Commitment.
(b) Seller shall reimburse up to $1,500 (payable at Closing)
to Purchaser for Seller's actual expenses in obtaining a current Phase
I environmental assessment report of the Real Estate prepared by an
independent environmental engineering firm acceptable to Purchaser (the
"ENVIRONMENTAL REPORT").
II.6 COOPERATION OF PARTIES. Purchaser hereby covenants to
Seller and Seller hereby covenants to Purchaser that, from the date hereof until
the Closing, such party shall cooperate fully with the other party in obtaining
any consents, approvals, permits or authorizations which are required to be
obtained pursuant to any federal or state law, or any federal or state
regulation thereunder, for or in connection with the transactions described and
contemplated in this Agreement. The parties further agree to consult and
cooperate with each other and to get the prior approval of the other regarding
press releases and other media releases in connection with the transaction
contemplated by this Agreement and to otherwise cooperate to effect the smooth
transition of the Seller Assets and Seller Deposit Liabilities to Purchaser. In
addition, within fifteen (15) days of the date hereof, Seller shall provide to
Purchaser (1) a detailed explanation of Seller's file layouts used in connection
with the servicing of the Deposit Accounts, and (2) a computer tape listing the
current balances and account numbers and other account codings for the Deposit
Accounts.
<PAGE>
II.7 DISCLOSURES. From the date hereof until and through the
Closing Date, neither party shall, except for the making of filings with the
Securities and Exchange Commission, issue or publicly disclose, or permit any of
its affiliates to issue or publicly disclose, any press release or other
information concerning the transactions contemplated hereby, without first
providing a copy of such press release or other information to, and obtaining a
written approval of, the other party, which approval shall not be unreasonably
withheld.
II.8 CONVERSION. From the date hereof through the Closing
Date, Seller shall cooperate and work with Purchaser to complete the tasks
required to facilitate the conversion. Such tasks include, but are not limited
to, providing Purchaser with updated data on computer media acceptable to
Purchaser, files and other items as are reasonably necessary to complete the
conversion process and related testing procedures. Within fifteen (15) days from
the date hereof, Seller shall provide Purchaser with initial computer data on
media acceptable to Purchaser, reports, and related documentation on the Deposit
Accounts in a format currently used by Seller, and Seller will reasonably
cooperate with Purchaser in Purchaser's conversion of such format to one which
is reasonably acceptable to Purchaser. Seller shall provide to Purchaser on the
day following the Closing, conversion tapes as of the Closing Date. Seller
agrees to reasonably cooperate in resolving any conversion-related issues
arising from the conversion of the Deposit Accounts for a period of ninety (90)
days following the date that the conversion is completed. If Purchaser requests,
Seller shall reformat or data scrub the conversion tapes and Purchaser shall
reimburse Seller for any costs and expenses incurred by Seller in such
reformatting or data scrubbing. Promptly following the Closing, Seller will
provide to its customers final statements, including interest payments/credits
of accrued interest, for all Deposit Accounts, other than for certificates of
deposit and IRA accounts, as of the Closing. Seller shall also provide
microfiche records of the final customer statements to Purchaser.
II.9 SAFE DEPOSIT BUSINESS. All agreements relating to the
Safe Deposit Business are assignable, and Seller shall take all steps necessary
to transfer and assign all Paragraph 1.02(d) items and records relating to the
Safe Deposit Business to Purchaser, including, to the extent necessary,
informing Safe Deposit Business customers of a change in terms of Safe Deposit
Business agreements.
<PAGE>
II.10 CONDUCT OF BUSINESS. Between the date hereof and the
Closing Date, Purchaser and its affiliates shall not undertake any marketing or
advertising efforts specifically directed to Seller's customers or take any
other action intended to reduce the amount of the Deposits as of the Closing
Date. Purchaser shall not, between the date of this Agreement and the Closing
Date, conduct its business and operations in such a manner as to intentionally
impair its ability to consummate the transactions contemplated hereunder. Seller
agrees not to offer any special rate promotions with respect to the Seller
Deposit Liabilities except those promotions that may be offered in the normal
course of business at all of Seller's branch offices. Seller will not take any
actions that would act to artificially inflate the amount of the Seller Deposit
Liabilities and specifically will not offer rates on the Seller Deposit
Liabilities above or below those generally offered on similar accounts by other
financial institutions in the Graves County, Kentucky banking market.
II.11 FIDUCIARY RELATIONSHIPS. After the Closing, Purchaser
shall perform all of the fiduciary relationships of Seller arising out of any
IRAs included within the Deposits, and with respect to such accounts, Purchaser
shall assume all of the obligations and duties of Seller as fiduciary and
succeed to all such fiduciary relationships of Seller as fully and to the same
extent as if Purchaser had originally acquired, incurred or entered into such
fiduciary relationship; provided that Purchaser is not hereby assuming any
liability for any breach of fiduciary duty that occurs prior to the Closing.
II.12 NOTICES OF DEFAULT. Seller and Purchaser shall each
promptly give written notice to the other upon becoming aware of the impending
or threatened occurrence of any event which could reasonably be expected to
cause or constitute a material breach of any of their respective
representations, warranties, covenants or agreements contained in this
Agreement.
II.13 REGULATORY MATTERS. Neither Purchaser nor Seller, nor
any of their respective affiliates, has received any indication from any
federal, state or other governmental agency, or has any other reason to believe,
that such agency would oppose or refuse to grant or issue its consent or
approval, if required, or impose any materially adverse condition, with respect
to the transaction contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
III.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to Seller as follows:
(a) GOOD STANDING AND POWER OF PURCHASER. Purchaser is a
federal savings bank, duly organized, and validly existing, and in good
standing under the laws of the United States of America with corporate
power to own its properties and to carry on its business as presently
conducted and to consummate the transactions contemplated hereby. The
deposits of Purchaser are insured by the BIF or SAIF in accordance with
FDIC regulations.
<PAGE>
(b) AUTHORIZATION OF AGREEMENT. The execution and delivery of
this Agreement, and the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on the part of
Purchaser, and this Agreement is a valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms.
(c) EFFECTIVE AGREEMENT. Subject to the receipt of any and all
necessary regulatory approvals and required consents, the execution,
delivery, and performance of this Agreement by Purchaser and a
consummation of the transactions contemplated hereby, will not conflict
with, result in the breach of, constitute a violation or default,
result in the acceleration of payment or other obligations, or create a
lien, charge or encumbrance, under any of the provisions of the Charter
or By-laws of Purchaser, under any judgment, decree or order, under any
law, rule or regulation of any government or agency thereof, or under
any contract, agreement or instrument to which Purchaser is subject,
except for any such conflict, breach, violation, default, acceleration
or lien which would not have a material adverse effect on the
Purchaser's ability to perform its obligations hereunder.
(d) NO BROKER. No broker or finder, or other party or agent
performing similar functions, has been retained by Purchaser or is
entitled to be paid based upon any agreements, arrangements or
understandings made by Purchaser in connection with the transaction
contemplated hereby. Any payment to which such a broker or finder is
entitled shall be the sole responsibility of Purchaser.
III.2 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller
represents and warrants to Purchaser as follows:
(a) GOOD STANDING AND POWER OF SELLER. Seller is a state
banking corporation, duly organized, and validly existing, and in good
standing under the laws of the Commonwealth of Kentucky, with corporate
power to own its properties and to carry on its business as presently
conducted and to consummate the transactions contemplated hereby. The
deposits of Seller are insured by the BIF or the SAIF in accordance
with FDIC regulations.
<PAGE>
(b) AUTHORIZATION OF AGREEMENT. The execution and delivery of
this Agreement, and the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on the part of
Seller, and this Agreement is a valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms.
(c) EFFECTIVE AGREEMENT. Subject to the receipt of any and all
necessary regulatory approvals and required consents, the execution,
delivery, and performance of this Agreement by Seller and a
consummation of the transactions contemplated hereby, will not conflict
with, result in the breach of, constitute a violation or default,
result in the acceleration of payment or other obligations, or create a
lien, charge or encumbrance, under any of the provisions of the
Articles of Incorporation or By-laws of Seller, under any judgment,
decree or order, under any law, rule or regulation of any government or
agency thereof, or under any contract, agreement or instrument to which
Seller is subject, except for any such conflict, breach, violation,
default, acceleration or lien which would not have a material adverse
effect on the Seller Assets or Seller's ability to perform it
obligations hereunder.
(d) TITLE TO SELLER ASSETS. Seller is the sole owner of each
of the Seller Assets and has good, valid, and marketable title thereto,
free and clear of any mortgage, lien or encumbrance. The Real Estate
constitutes all of the real property used in the operation of the
Seller Office, including without limitation, for parking and ingress
and egress. Seller is the sole owner of a fee simple interest in, and
has good and marketable title to, the Real Estate, free and clear of
any mortgage, lien or encumbrance other than the Permitted
Encumbrances, and shall convey the Real Estate to Purchaser by delivery
at Closing of a general warranty deed conveying title subject to said
Permitted Encumbrances. The Real Estate is not located in a flood way,
flood plain, or flood hazard area. There are no encroachments on the
Real Estate. All improvements are located entirely within the bounds of
the Real Estate. All sub-parcels comprising the Real Estate have
continuous and abutting property lines so as to constitute a single
parcel with no gaps or gores.
(e) ZONING MATTERS. There are no uncorrected violations of
zoning and/or building codes relating to the Seller Office.
(f) ENVIRONMENTAL MATTERS. With respect to the Real Estate, to
the best of Seller's knowledge after due inquiry, Seller is, and the
Real Estate is, in compliance with all federal, state, regional and
local laws, statutes, ordinances, judgments, rulings and regulations
relating to any matters of pollution, protection of the environment or
environmental regulation or control (collectively, the "ENVIRONMENTAL
LAWS"). Seller has not placed, held, located, released, transported or
disposed of any Hazardous Waste (as hereinafter defined) on, under, at
or from the Real Estate, and to Seller's knowledge, none of the Real
Estate or soils or groundwaters on, under, at, beneath or within the
Real Estate is contaminated with any Hazardous Waste in excess of
levels allowed by an applicable Environmental Law. Seller has not
<PAGE>
placed, held, located, released, transported or disposed of any
Hazardous Waste from the Real Estate at, to or upon any other location.
Seller has not received any written notice relating to its operations
(i) of the violation of any Environmental Law or any other law,
statute, rule or regulation regarding Hazardous Waste, (ii) of the
institution or pendency of any suit, action, claim, proceeding or
investigation by an governmental entity or any third party of any such
violation or (iii) requiring the removal of Hazardous Waste from any of
the Real Estate or any other location, or the remediation of Hazardous
Waste at the Real Estate or any other location, or notifying it of
potential liability for such removal or remediation. Seller has not
used the Real Estate for the storage, sale, and/or distribution of any
petroleum products, and to Seller's knowledge, no petroleum or
petroleum product or byproduct, including but not limited to gasoline,
has been disposed of, spilled, released, percolated or migrated into
the Real Estate. To Seller's knowledge, none of the improvements on the
Real Estate contain asbestos-containing material, and there are no
underground storage tanks at, on, or in the Real Estate. To Seller's
knowledge, Seller is not a potentially responsible party under any
Environmental Law with respect to the Real Estate or with respect to
any location where Hazardous Waste from the Real Estate may have been
taken, stored or disposed. Seller is not the subject of any pending, or
to its knowledge threatened, criminal, civil, or administrative action
under any Environmental Laws. For purposes of this Agreement, the term
"HAZARDOUS WASTE" shall mean radon, regulated radioactive materials,
asbestos or any substances defined as, or included in the definition
of, "hazardous substance," "hazardous waste," "hazardous materials,"
"toxic chemicals" or "hazardous chemicals" under any Environmental Law.
(g) TAXES. Seller shall pay, credit Purchaser for paying, or
make appropriate provision to pay in accordance with ordinary business
practices all federal, state and local income, excise, payroll,
withholding, property, franchise, shares, sales, use and transfer
taxes, if any, which have accrued (whether or not they are due and
payable) through the Closing Date. Any claims for refunds of taxes
which have been paid by Seller shall remain the property of Seller.
(h) THIRD-PARTY CLAIMS. There are no actions, suits or
proceedings, pending or, to the best of Seller's knowledge, threatened
against or affecting Seller of any interest or right of Seller, as such
might relate to the Seller Office or against or affecting the Seller
Assets, the Seller Deposit Liabilities, or the banking business of the
Seller Office.
(i) NO BROKER. No broker or finder, or other party or agent
performing similar functions, has been retained by Seller or is
entitled to be paid based upon any agreements, arrangements or
understandings made by Seller in connection with the transaction
contemplated hereby. Any payment to which such a broker or finder is
entitled shall be the sole responsibility of Seller.
<PAGE>
(j) ASSETS. Seller has not received notice nor has knowledge
that any governmental authority considers the Seller Office to violate
or to have violated, fire, zoning, heath, safety, building, hazardous
waste or environmental code or other ordinance, law or regulation or
order of any government or agency, body or subdivision thereof, or any
private covenants, restrictions or easements. The Fixed Assets are used
in the operation of the Seller Office and are in satisfactory
condition, ordinary wear and tear excepted.
(k) COMPLIANCE WITH LAWS. Seller is in material compliance
with all statutes and regulations applicable to the Seller Assets, the
Seller Deposit Liabilities and the conduct of the Seller Office. Seller
has not received notice from any agency or department of federal, state
or local government asserting a violation of any law, regulation,
ordinance, rule or order (whether executive, judicial, legislative or
administrative) that would have a material adverse effect on the
financial condition, results of operations or business of the Seller
Office or the Seller Assets. Seller holds all permits, licenses,
exemptions, orders and approvals of all governmental entities which are
necessary to the operation of the Seller Office and to the best of
Seller's knowledge, is in compliance with the terms thereof. Seller has
filed all Currency Transaction Reports with respect to all transactions
required to be reported under the Bank Secrecy Act and regulations
adopted pursuant thereto. With respect to the Deposit Accounts, Seller
has complied with specified information reporting requirements pursuant
to Section 6723 of the Internal Revenue Code, as amended (the "CODE"),
and any applicable regulations thereunder or established "reasonable
cause" pursuant to Section 6724 of the Code for information returns
required to be filed on or after December 31, 1995.
(l) DEPOSITS. The deposit records of Seller accurately reflect
the Deposit Accounts and are and shall be sufficient to enable
Purchaser to conduct a banking business with respect to the Seller
Office. Seller has not transferred any deposit accounts held by Seller
at the Seller Office to any of Seller's other branches, or to any
branch of any Seller affiliate, except at the express unsolicited
request of the depositor in the ordinary course of business. Seller has
not transferred any deposit accounts from any of Seller's other
branches or from any branches of any affiliate of Seller to the Seller
Office, except at the express unsolicited request of the depositor in
the ordinary course of business. There are no material uncured
violations or violations with respect to which material refunds or
<PAGE>
restitution may be required with respect to the Seller Deposit
Liabilities comply in all material respects with all applicable laws
and regulations and have been provided to Purchaser. The Seller Deposit
Liabilities are insured by the FDIC and to the full extent provided by
federal law and regulations. Seller is in material compliance with all
terms and conditions and other documentation applicable to the Seller
Deposit Liabilities. Seller shall deliver to Purchaser as of the
Closing Date (i) TINs (or record of appropriate exemption) for all
holders of Seller Deposit Liabilities; and (ii) all other information
in Seller's possession or reasonably available to Seller required by
applicable law to be provided to the Internal Revenue Service (the
"IRS") with respect to the Seller Assets or Seller Deposit Liabilities
and the holders thereof. Seller hereby certifies that such information,
when delivered, shall accurately reflect the information provided by
Seller's customers. To the best of Seller's knowledge, there are not
any "kiting" schemes associated with any of the Seller Deposit
Liabilities.
(m) LOANS. All of the Loans have been made for good, valuable
and adequate consideration in the ordinary course of business of
Seller, are evidenced by notes or other evidences of indebtedness that
are true, genuine, and enforceable in accordance with their terms. Each
of the Loans is secured by a first priority security interest in a
Deposit Account with a balance greater than that of the Loan. Each such
security interest is evidenced by a security agreement that is true,
genuine, and enforceable in accordance with its terms. No Loan has been
adversely classified in any regulatory examination or by Seller's
internal classification system and no Loan is 20 days or more past due,
has been restructured, or is classified as nonaccrual. There are no
material uncured violations or violations with respect to which
material refunds or restitution may be required with respect to the
Loans that have been cited in any compliance report to Seller as a
result of examination by any regulatory authority and the loan
documentation with respect to the Loans complies in all material
respects with all applicable laws and regulations.
(n) IRAS. Seller shall provide Purchaser with the proper trust
documents for any IRAs assumed by Purchaser under this Agreement. The
terms of the trust documents provide for the designation of Purchaser
and FKB as successor trustees. Seller shall take all steps and provide
all notices necessary for Purchaser and FKB to be designated successor
trustees for such IRAs as of the Closing.
<PAGE>
III.3 EMPLOYEE MATTERS. Subject to the continuing discretion
and judgment of Purchaser following the Closing Date, Purchaser may offer to
employ any of the employees of the Seller Office. Seller will terminate the
employment of all of its employees at the Seller Office as of the Closing and
will pay all compensation and benefits owing to such employees through and
including the date of termination. While Purchaser has expressed an interest in
retaining the staff of the Seller Office, nothing in this Agreement shall
obligate Purchaser to employ any of Seller's former employees, or if employed by
Purchaser, to employ any of such persons for any specified period of time, and
all of such employees shall be "at will" employees. On the Closing Date, Seller
shall have given all notices required by law pursuant to the Workers Adjustment
and Retraining Notification Act ("WARN") and shall, to the extent required by
law or by contract, satisfy all obligations to bargain with its employees.
Without limiting Seller's indemnity obligation set forth hereafter, Seller shall
indemnify and hold Purchaser harmless from all loss, cost, damage or expense
arising as a result of any alleged violation of WARN or of any bargaining
obligation to which Seller is subject or is alleged to be subject. Seller will
comply with the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"), for all of Seller's former employees and other qualified
beneficiaries for whom COBRA qualifying events occurred before or coincident
with the Closing and Purchaser shall have no responsibility for any such
coverage.
ARTICLE IV
CLOSING
IV.1 CLOSING AND CLOSING DATE. Unless otherwise agreed to in
writing, the transaction contemplated by this Agreement shall be consummated and
closed (the "CLOSING") at the Seller Office at the close of business on the
third business day after confirmation of all required regulatory approvals
(including approvals relating to Purchaser's assignment to FKB) have been
received by Purchaser and all applicable waiting periods have expired, or such
other time and date which is mutually agreed upon by Purchaser and Seller (the
"CLOSING DATE").
Notwithstanding anything contained in this Section 4.01 to the
contrary, if the Closing does not occur on or before January 31, 1998, either
party may terminate this Agreement, upon written notification to the other
party. Such deadline shall be automatically extended to February 28, 1998 if the
Closing does not occur by the January 31, 1998 deadline due to the failure
(which is beyond the control of Purchaser or Seller) of state or federal
regulatory authorities to approve the transaction by a date which would allow
the Closing to occur by January 31, 1998 (the "TERMINATION DATE"). The parties
may, however, prior to either deadline, agree to an extension of that deadline.
<PAGE>
IV.2 PURCHASER'S ACTION AT CLOSING. At the Closing,
Purchaser shall:
(a) execute, acknowledge, and deliver to Seller to evidence
the assumption of the liabilities and obligations of Seller in
connection with the Seller Deposit Liabilities, an instrument or
instruments of assumption in forms reasonably satisfactory to
Purchaser;
(b) receive, accept and acknowledge delivery of the Seller
Assets, and all records and documentation relating thereto, sold,
assigned, transferred, conveyed or delivered to Purchaser by Seller
hereunder;
(c) execute and deliver to Seller such written receipts for
the Seller Assets assigned, transferred, conveyed or delivered to
Purchaser hereunder as Seller may reasonably have requested at or
before the Closing.
IV.3 SELLER'S ACTIONS AT CLOSING. At the Closing, Seller
shall:
(a) deliver to Purchaser a duly executed and recordable
general warranty deed conveying title to the Real estate free and clear
of all claims, liens and encumbrances (other than the Permitted
Encumbrances);
(b) deliver to Purchaser the Seller Assets purchased hereunder
which are capable of physical delivery and such appropriate bills of
sale and other instruments of title as Purchaser may reasonably request
to vest in Purchaser good and marketable title thereto, free and clear
of all encumbrances (other than the Permitted Encumbrances);
(c) assign, transfer, and deliver to Purchaser the records and
original documents pertaining to the Seller Deposit Liabilities;
(d) execute and deliver to Purchaser an instrument which shall
assign and transfer IRAs attributable to the Seller Office to Purchaser
and FKB and which shall additionally appoint Purchaser and FKB as a
successor trustees for such accounts;
(e) assign, transfer and deliver and endorse over to Purchaser
all promissory notes and other credit agreements, together with
corresponding collateral (including without limitation, mortgages and
personal property liens) related to the Loans and all files and records
and original documents pertaining to the Loans;
<PAGE>
(f) deliver all other records and original documents
(if available) related to the Seller Assets transferred to, and the
Seller Deposit Liabilities assumed by, Purchaser;
(g) make available and deliver to Purchaser all funds required
to be paid to Purchaser pursuant to the terms of this Agreement; and
(h) deliver such other documents as Purchaser may reasonably
request to demonstrate satisfaction of conditions and compliance with
the agreements set forth in this Agreement.
IV.4 PRE-CLOSING MATTERS/METHOD OF PAYMENT.
(a) Two business days prior to the Closing Date, Seller shall
deliver Annexes to this Agreement, which Annexes shall be subject to
Purchaser's approval.
(b) The parties shall prepare and execute at Closing a
settlement statement (the "SETTLEMENT STATEMENT") supported by
appropriate exhibits, to be attached as Annex 4.04, showing the
computation of the funds due to Purchaser (the "CASH PAYMENT"). The
Cash Payment shall be calculated as set forth pursuant to the terms of
Section 1.04 hereof but determined as if the Closing occurred as of the
close of business of the business day immediately prior to the Closing
Date and shall be made on the Closing Date in immediately available
federal funds. Cash on Hand shall be determined by a count conducted by
Purchaser and Seller together. At least two business days prior to
Closing, Purchaser and Seller shall provide written notice to one
another indicating the account and bank to which such funds shall be
wire transferred.
IV.5 POST CLOSING ADJUSTMENTS.
(a) No later that three (3) business days after the Closing
Date, Seller shall provide Purchaser with updated Annexes 1.02(h) and
1.03(b) that shall accurately reflect the related balances as shown on
the financial records of Seller as of the close of business on the
Closing Date calculated in accordance with generally accepted
accounting principles consistently applied.
(b) Purchaser and its accountants and attorneys shall have the
right to review any and all documents (and to interview any and all
Seller personnel) reasonably necessary or desirable to confirm the
accuracy of the updated Annexes 1.02(h) and 1.03(b). If Purchaser and
Seller do not agree to the contents of the Annexes, then the dispute
<PAGE>
shall be submitted to an independent auditor (the "AUDITOR"), who shall
be selected by mutual agreement or if the parties shall fail to agree,
selected by agreement by one independent auditor designated by
Purchaser and one independent auditor designated by Seller. The
decision of the Auditor shall be final and binding. Any Auditor
expenses shall be split evenly by Seller and Purchaser.
(c) Based upon the agreed Annexes 1.02(h) and 1.03(b), the
Cash Payment shall be recalculated. Any difference between the original
Cash Payment and the recalculated Cash Payment shall be settled by
payment by wire transfer.
IV.6 CONDITIONS TO OBLIGATION OF SELLER. The obligations of
Seller to consummate the transactions contemplated hereby are subject to the
satisfaction of the following conditions precedent on or before the Closing, any
of which may be waived by Seller:
(a) the representations and warranties of Purchaser set forth
in Section 3.01 of this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the
Closing as if made on the Closing;
(b) Purchaser, in all material respects, shall have performed
and observed its obligations and covenants as set forth in this
Agreement prior to or on the Closing;
(c) receipt of all permits, consents, approvals and
authorizations from federal and state governmental authorities and
regulatory agencies necessary to effect the transactions contemplated
herein (including the expiration of all applicable waiting periods);
(d) there shall not be threatened, instituted or pending any
action or proceeding before any domestic or foreign court or
governmental agency or other regulatory or administrative agency or
commission, or by any other person (1) challenging the transactions
contemplated by this Agreement or the terms thereof; or (2) seeking to
prohibit the transactions contemplated by this Agreement, which, in the
opinion of Seller's counsel, has a reasonable probability of success.
IV.7 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations
of Purchaser to consummate the transactions contemplated by this Agreement is
subject to the satisfaction of the following conditions precedent on or before
the Closing, any of which may be waived by Purchaser:
<PAGE>
(a) the representations and warranties of Seller set forth in
Section 3.02 of this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the
Closing as if made on the Closing;
(b) Seller, in all material respects, shall have performed
and observed its obligations and covenants as set forth in this
Agreement prior to or at the Closing;
(c) Receipt of all permits, consents, approvals and
authorizations from federal and state governmental authorities and
regulatory agencies necessary to effect the transactions contemplated
hereby (including Purchaser's assignment to FKB) and the operation of
the Seller Office (including the expiration of all applicable waiting
periods), on terms and conditions satisfactory to Purchaser (other than
standard terms and conditions);
(d) there shall not be threatened, instituted or pending any
action or proceeding before any domestic or foreign court or
governmental agency or other regulatory or administrative agency or
commission, or by any other person (1) challenging the transactions
contemplated by this Agreement or the terms thereof or (2) seeking to
prohibit the transactions contemplated by this Agreement which, in the
opinion of Purchaser's counsel, has a reasonable probability of
success;
(e) there shall have been no material adverse change in the
business, financial condition, or operations of the Seller Office
(other than changes resulting from or attributable to (i) changes in
laws and regulations, or (ii) economic conditions (including without
limitation interest rates), in either case that affect banking
institutions generally or the ability to conduct banking operations at
the Seller Office, or in the physical condition of the Seller Assets
from the physical condition that exists as of the date of this
Agreement, or in the quality of the Loans (taken as a whole) from the
quality that exists as of the date of this Agreement; and
(f) the Environmental Report provided pursuant to Paragraph
2.05(c) shall be satisfactory to Purchaser in Purchaser's sole
discretion.
<PAGE>
ARTICLE V
GENERAL COVENANTS AND INDEMNIFICATIONS
V.1 CONFIDENTIALITY OBLIGATIONS OF SELLER. From and after the
date hereof, Seller shall, and shall cause its subsidiaries and affiliates to,
treat all information received from Purchaser concerning the business, assets,
operations, and financial condition of Purchaser as confidential, unless and to
the extent that Seller can demonstrate that such information was already known
to Seller or such subsidiary or affiliates or in the public domain or was
subsequently independently developed by Seller; and Seller shall, and shall
cause its subsidiaries and affiliates to, not use any such information (so
required to be treated as confidential) for any purposes except in furtherance
of the transactions contemplated hereby. From and after the Closing Date, Seller
shall, and shall cause its subsidiaries and affiliates to, treat all information
regarding the Seller Office as confidential, and Seller shall, and shall cause
its subsidiaries and affiliates to, not use any such information so required to
be treated as confidential for any purpose. Upon the termination of this
Agreement, Seller shall, and shall cause its affiliates to, promptly return all
documents and work papers containing, and all copies of, any such information
(so required to be treated as confidential) received from or on behalf of
Purchaser in connection with the transactions contemplated hereby. The covenants
of Seller contained in this Section 5.01 shall survive any termination of this
Agreement; provided, however, that neither Seller nor any of its affiliates
shall be deemed to have violated the covenants set forth in this Section 5.01 if
Seller or any of such affiliates shall in good faith disclose any of such
confidential information in compliance with any legal process, order or decree
issued by any court or agency of government of competent jurisdiction, provided
that prior to such disclosure, Seller shall give Purchaser reasonable prior
notice thereof.
V.2 CONFIDENTIALITY OBLIGATIONS OF PURCHASER. From and after
the date hereof, Purchaser shall, and shall cause its subsidiaries and
affiliates to, treat all information received from Seller concerning the
business, assets, operations, and financial condition of Seller, as
confidential, unless and to the extent that Purchaser can demonstrate that such
information was already known to Purchaser or such subsidiary or affiliates or
in the public domain or was subsequently independently developed by Purchaser;
and Purchaser shall, and shall cause its subsidiaries and affiliates to, not use
any such information (so required to be treated as confidential) for any
purposes except in furtherance of the transactions contemplated hereby. Upon the
termination of this Agreement, Purchaser shall, and shall cause its affiliates
to, promptly return all documents and work papers containing, and all copies of,
any such information (so required to be treated as confidential) received from
or on behalf of Seller in connection with the transactions contemplated hereby.
The covenants of Purchaser contained in this Section 5.02 shall survive any
termination of this Agreement; provided, however, that neither Purchaser nor any
of its affiliates shall be deemed to have violated the covenants set forth in
this Section 5.02 if Purchaser or any of such affiliates shall in good faith
disclose any of such confidential information in compliance with any legal
process, order or decree issued by any court or agency of government of
competent jurisdiction, provided that, prior to such disclosure, Purchaser shall
give Seller reasonable prior notice thereof.
<PAGE>
V.3 INDEMNIFICATION BY BOTH PARTIES. Purchaser, on the one
hand, and Seller, on the other hand mutually agree to indemnity and hold each
other harmless from, and to reimburse each other promptly for, any and all
losses, liabilities, damages, expenses and other costs (including court costs,
costs of investigation and reasonable attorneys' fees) ("LOSSES") that one party
may suffer as the result of the material breach by the other party of any
covenant, representation or warranty of that other party set forth in this
Agreement.
V.4 INDEMNIFICATION BY SELLER. Seller shall indemnify, hold
harmless and defend Purchaser from and against any and all Losses arising out of
any actions, suits, or other proceedings, claims or demands commenced by any
third party prior to or after the Closing, which arise out of, or are in any way
related to, (i) the operations of the Seller Office (including but not limited
to claims for personal injuries arising from incidents occurring prior to the
Closing) or the administration of any of the Deposit Accounts or Loans by Seller
prior to the Closing, (ii) the Fixed Assets and related records, insofar as the
basis for such action, suit, or other proceedings, claim or demand arose prior
to the Closing, or (iii) the fiduciary duties of Seller arising prior to Closing
with respect to the IRAs included in the Seller Deposit Liabilities.
V.5 INDEMNIFICATION BY PURCHASER. Purchaser shall indemnity,
hold harmless and defend Seller from and against all Losses arising out of any
actions, suits or other proceedings, claims or demands, which arise out of, or
are in any way related to, (i) the operations of the Seller Office or the
administration of any of the Seller Deposit Liabilities or Loans by Purchaser
subsequent to the Closing, (ii) Fixed Assets and related records, insofar as the
basis for such action, suit or other proceeding, claim or demand arises
subsequent to the Closing, or (iii) the fiduciary duties of Purchaser arising
subsequent to Closing with respect to the IRAs included in the Seller Deposit
Liabilities.
V.6 CLAIMS.
(a) DEFENSE OF CLAIMS. Should any claim be made, or suit or
proceeding be instituted against Purchaser or Seller (an "INDEMNIFIED
PARTY"), which, if valid or prosecuted successfully, would be a matter
for which such Indemnified Party is entitled to indemnification under
this Agreement (a "Claim") from the other party (the "INDEMNIFYING
PARTY"), the Indemnified Party shall notify the Indemnifying Party in
writing concerning the same promptly after the assertion or
commencement thereof. The Indemnified Party shall in the first instance
<PAGE>
file in a timely manner any answer or pleading with respect to a suit
or proceeding if such action is necessary to avoid default or other
material adverse results. The party having the greater risk of
financial loss with respect to such Claim (the "LEAD PARTY") shall
control the defense thereof and shall use reasonable efforts to defeat
or minimize any loss resulting from such Claim. The Lead Party shall
provide the other party (the "NON-LEAD PARTY") with such information
and opportunity for consultation (including estimations regarding costs
and fees) as may reasonably be requested and the Non-Lead Party shall
be entitled, at its own expense, to participate in the defense of a
claim and to engage counsel for such purpose. All costs and expenses
incurred by the Lead Party in connection with the defense of a Claim
shall in the first instance be paid by the Lead Party. Any reasonable
costs and expenses so paid by the Indemnified Party shall be subject to
the Indemnified Party's rights to indemnification under this Agreement.
(b) SETTLEMENT OF CLAIMS. No settlement of a Claim involving
liability of an Indemnified Party subject to indemnification under this
Agreement shall be made without prior written consent by or on behalf
of the Indemnifying Party, which consent shall not be reasonably
withheld or delayed. For these purposes, consent shall be presumed in
the case of settlements of $5,000 or less wherein the Indemnifying
Party has not responded within ten (10) business days of written notice
of a proposed settlement. In the event of any dispute regarding the
reasonableness of a proposed settlement, the party which will bear the
larger financial loss resulting from such settlement and the
application of the indemnification provisions set forth in this
Agreement will make the final determination in respect thereto, which
determination will be final and binding on all involved parties.
V.7 REQUEST FOR INDEMNIFICATION. If at any time or from time
to time any party shall determine that it is entitled to indemnification under
this Agreement, such party shall give written notice to the other party
specifying the basis on which indemnification is sought, the amount of the
asserted loss, damage or expense, as the case may be, and requesting
indemnification. If indemnification is required under this Agreement with
respect to a Claim, the parties contemplate that payment shall be made to the
Indemnified Party at or about the time the Indemnified Party shall be required
to make payment with respect to the Claim, unless there shall be a dispute as to
the Indemnified Party's entitlement to indemnification, in which case adjustment
will be made upon resolution of said dispute. Upon receipt of any request for
indemnification, the Indemnifying Party may object thereto by delivering written
notice of such objection to the Indemnified Party specifying in reasonable
detail the basis on which such objection is made. In the case of objection to a
request for indemnification as to a Claim, such objection shall be made within
thirty (30) business days of notice from the Indemnified Party's requesting
payment, unless the Indemnifying Party shall have earlier agreed to such
liability. Failure on the part of the Indemnifying Party so to object shall
constitute acceptance by such party of the request to indemnify as to such
matter.
<PAGE>
V.8 FURTHER ASSURANCES. From and after the date hereof, each
party agrees to execute and deliver such instruments and to take such other
actions as the other party hereto may reasonably request in order to carry out
and implement this Agreement. The covenants of each of the parties hereto
pursuant to this Section 5.08 shall survive the Closing.
ARTICLE VI
TERMINATION
VI.1 TERMINATION BY MUTUAL AGREEMENT. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned by mutual
consent and agreement of the parties hereto.
VI.2 TERMINATION BY PURCHASER. This Agreement may be
terminated and the transaction contemplated hereby abandoned by Purchaser.
(a) Upon written notice to Seller, if at the time of such
termination any of the conditions set forth in Section 4.07 hereof are
not satisfied and cannot reasonably be expected to be satisfied before
the Termination Date.
(b) If any regulatory approval required for consummation of
this transaction is denied by the applicable regulatory authority or is
granted upon satisfaction of the conditions unacceptable in the
reasonable judgment of Purchaser or Seller, or in the event that at any
time prior to the Closing Date it shall become reasonably certain to
Purchaser, with the advice of counsel, that a regulatory approval
required for consummation of the transaction will not be obtained. For
purposes hereof, a condition may be deemed "unacceptable" if in the
reasonable, good faith judgment of Purchaser, it is reasonably probable
that it would have a material adverse effect on the business,
operations, assets or financial condition of Purchaser upon completion
of the acquisition contemplated hereby or materially impair the value
of the Business to be acquired hereunder, provided that in each case no
such term or condition imposed by any regulatory authority shall be
deemed to have such an effect unless it materially differs from terms
and conditions customarily imposed by such an authority in connection
with approvals of similar such transactions.
(c) In accordance with Section 4.01.
(d) In accordance with Section 2.05.
<PAGE>
VI.3 TERMINATION BY SELLER. This Agreement may be terminated
and the transaction contemplated hereby abandoned by Seller:
(a) Upon written notice to Purchaser, if at the time of such
termination any of the conditions set forth in Section 4.06 hereof are
not satisfied and cannot reasonably be expected to be satisfied before
the Termination Date.
(b) If any regulatory approval required for consummation of
this transaction is denied by the applicable regulatory authority or is
granted upon satisfaction of conditions unacceptable in the reasonable
judgment of Seller, or in the event that at any time prior to the
Closing Date it shall become reasonably certain to Seller, with the
advice of counsel, that a regulatory approval required for consummation
of the transaction will not be obtained. For purposes hereof, a
condition may be deemed "unacceptable" if in the reasonable, good faith
judgment of Seller, it is reasonably probable that it would have a
material adverse effect on the business, operations, assets or
financial condition of Seller, provided that in each case no such term
or condition imposed by any regulatory authority shall be deemed to
have such an effect unless it materially differs from terms and
conditions customarily imposed by such an authority in connection with
approvals of similar such transactions.
(c) In accordance with Section 4.01.
VI.4 TERMINATION BY EITHER PARTY. Upon written notice by
either party, at any time prior to the day of the Closing if and only if such
party is not in material breach of this Agreement and if the other party has
breached in any material respect any covenant or undertaking contained herein
and such breach is not cured within thirty (30) days of the date the
non-breaching party gives notice of such breach to the breaching party (provided
no cure period shall be available for any breach which, due to the nature of the
breach, cannot be cured, or for any breach which is the same or substantially
similar to a prior breach for which a cure period has been given).
VI.5 NOTICE OF TERMINATION. To exercise the right to terminate
as provided in this Section, the exercising party must advise the other party in
writing, which notice shall be effective immediately upon its being delivered as
referenced in Section 7.09 hereof.
VI.6 EFFECT OF TERMINATION. The termination of this Agreement
pursuant to Sections 6.02 or 6.03 of this Agreement shall not release a party
hereto from any liability or obligation to the other party hereto arising from a
breach of any provision of this Agreement occurring prior to the termination
hereof. No termination of this Agreement shall affect or diminish the parties'
obligations under Sections 5.01 and 5.02 of this Agreement, which shall survive
the termination.
<PAGE>
ARTICLE VII
MISCELLANEOUS PROVISIONS
VII.1 NO SOLICITATION. For a period of one (1) year after
the Closing Date:
(a) Seller shall not target or solicit customers of the Seller
Office or residents of Graves County, Kentucky, for the provision of
deposit services offered by or competitive with deposit services
offered by Purchaser or FKB in Graves County, Kentucky. In addition,
Seller will not, for a period of three (3) years after the Closing
Date, establish a banking, thrift, loan or other office (including any
ATM) in Graves County, Kentucky; provided however that nothing herein
shall prevent Seller from acquiring and operating a branch in Graves
County, Kentucky through the purchase of a financial institution whose
main office is not located in Graves County, Kentucky, but that
operates a branch in Graves County, Kentucky.
(b) Purchaser shall not specifically target customers of
Seller who are residents of Graves County, Kentucky, who have
outstanding loans from Seller as of the Closing Date (that are not
among the Loans) (the "SELLER LOANS") for the purpose of having the
customers rewrite the Seller Loans as Purchaser loans. Notwithstanding
the foregoing limitation on rewriting Seller Loans, nothing in this
subparagraph shall prevent Purchaser from soliciting or lending to
Seller Loan customers; nor shall this subparagraph prohibit Purchaser
from rewriting a Seller Loan upon a customer's request or inquiry.
VII.2 NOTICES TO DEPOSITORS. Seller shall provide Purchaser
with a customer list (on paper and on a computer medium acceptable to Purchaser)
of the Deposit Accounts to be assumed as of forty-five (45) days prior to the
Closing. On the Closing Date, Seller shall provide a final customer list (on
paper and on a computer medium acceptable to Purchaser) of the Seller Deposit
Liabilities. With Seller's prior consent (which shall not be unreasonably
withheld), Purchaser may, prior to the Closing, communicate and mail
information, brochures, bulletins, press release, and other communications to
depositors of the Seller Office concerning the business and operations of
Purchaser.
VII.3 POST CLOSING RECONCILIATION.
(a) INCLEARING ITEMS. As of the opening of business on the
Closing Date, Seller shall expedite the clearing and sorting of all
checks, drafts, instruments and other commercial paper relative to the
Deposit Accounts (hereinafter collectively referred to as the "PAPER
Items"). For a period of ninety (90) days following the Closing Date
(the "INCLEARING PERIOD"), Seller shall continue to process checks or
drafts drawn on Deposits which are not intercepted by the Federal
Reserve Bank. On each banking day during the Inclearing Period, Seller
shall send to Purchaser by same-day courier all inclearing items
received for payment that day. Upon expiration of the Inclearing
Period, Seller shall cease honoring inclearing items presented against
the Deposit Accounts and such items shall be returned marked "Refer to
Maker." Seller and Purchaser shall settle amounts due under this
Section 7.03 by payment by wire transfer.
<PAGE>
(b) ACH TRANSACTIONS. At least thirty (30) days prior to the
Closing Date, Seller shall deliver to Purchaser (i) copies of all ACH
origination forms for social security payments, and (ii) all other
records and information necessary for Purchaser to administer the ACH
transactions. For a period of one hundred twenty (120) days following
the Closing Date, Seller agrees to continue to accept and immediately
forward to Purchaser by telefacsimile all automated clearinghouse
entries ("ACH") and corresponding funds. Seller also agrees to include
the originator identification number, and Purchaser agrees to
immediately notify and instruct the originator of the ACH to reroute
the entries directly to Purchaser. Upon expiration of such one hundred
twenty (120) day period, Seller shall discontinue accepting and
forwarding ACH transactions to the Purchaser. Transactions will be
returned to the originators marked "Branch Sold to Another DFI," with
code R12 included as the reason for the return. All returns received by
Seller after the Closing Date for ACH transactions processed on or
before the Closing Date for any of the Deposit Accounts will be
provided by telefacsimile to Purchaser as received for appropriate
posting to the Deposit Accounts. Simultaneously, Seller shall make or
receive payment by wire transfer, as appropriate. Purchaser shall
notify Seller of any ACH returns which it initiates after the Closing
Date with respect to ACH transactions processed on or before the
Closing Date for any of the Deposit Accounts and Seller shall make any
payments by wire transfer.
(c) OVER-THE-COUNTER RETURNED ITEMS. For a period of ninety
(90) days following the Closing Date, Seller shall, by facsimile,
provide Purchaser with a list of any over-the-counter returned items on
the day they are received by Seller. Over-the-counter returned items
are those items that are included within the Seller Deposit Liabilities
transferred to Purchaser but that are returned unpaid to Seller after
the Closing Date. Seller shall send such items by same-day courier to
Purchaser for "next banking day" delivery. On the same day by wire
transfer, Purchaser shall credit Seller the sum of over-the-counter
returned items for which sufficient available funds were in the
applicable accounts to cover the over-the-counter returned items, and
Seller shall refund to Purchaser any Deposit Premium paid with respect
to such amounts. Purchaser agrees to prohibit withdrawals from, or
debits to, any Deposit Accounts which do not have a sufficient
available funds balance to cover any over-the-counter returned items
until such over-the-counter returned items are paid to Seller.
Notwithstanding the foregoing, Seller shall bear all liability for
items deposited or negotiated at the Seller Office prior to or on the
Closing Date and subsequently returned as uncollectible to the extent
that an overdraft is created immediately after (i) the exercise of
Purchaser's lawful rights of offset and (ii) the application of any
availability under any overdraft line of credit relating to the
affected account or accounts, provided that Purchaser shall handle
returned items expeditiously under the permanent rules established by
the Federal Reserve Bank in Regulation J and Regulation CC.
<PAGE>
(d) WITHHOLDING. Seller shall deliver to Purchaser (i) 10
business days before and on the Closing Date, a list of all "B" (TINs
do not match) and "C" (under reporting/IRS imposed withholding) notices
from the IRS imposing withholding restrictions and (ii) for a period of
one hundred twenty (120) calendar days after the Closing Date, all
notices received by Seller from the IRS imposing or releasing
withholding restrictions on the Seller Deposit Liabilities. Any amounts
withheld by Seller up to and including the Closing Date shall be
remitted by Seller to the appropriate governmental agency on or prior
to the time they are due. Any withholding obligations required to be
remitted to the appropriate governmental agency up to and including the
Closing Date will be withheld and remitted by Seller. Any withholding
obligations required to be remitted to the appropriate governmental
agency after the Closing Date with respect to withholding obligations
after the Closing Date and not withheld by Seller as set forth above
will be remitted by Purchaser. Any penalties described on a "B" notice
from the IRS or any similar penalties that relate to the Seller Deposit
Liabilities opened by Seller prior to the Closing Date will be paid by
Seller promptly upon receipt of the notice (subject to Seller's rights
to contest such penalties).
(e) REPORTING OBLIGATIONS. Seller shall comply with all
federal and state income tax reporting requirements with respect to the
Seller Deposit Liabilities and interest paid thereon and all required
reporting with respect to IRAs through the Closing. Purchaser shall
comply with all federal and state income tax reporting requirements
with respect to the Seller Deposit Liabilities and interest paid
thereon and all required reporting with respect to IRAs after the
Closing. Seller shall provide TINs and any other information that may
be required by Purchaser in this regard.
(f) LOAN PAYMENTS. After the Closing Date, Seller will
forward to Purchaser loan payments received by Seller with respect to the Loans.
VII.4 EFFECT OF TRANSITIONAL ACTION. Except as and to the
extent expressly set forth in this Article VII, nothing contained in this
Article VII shall be construed to be an abridgement or nullification of the
rights, customs, and established practices under applicable banking laws and
regulations as they affect any of the matters addressed in this Article VII.
<PAGE>
VII.5 EXPENSES. Except as and to the extent specifically
allocated otherwise herein, each of the parties hereto shall bear its own
expense, whether or not the transactions contemplated hereby are consummated.
VII.6 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES.
Respective covenants, representations and warranties of Purchaser and Seller
contained or referred to in this Agreement shall survive the Closing for a
period of five years and shall not be deemed to merge therewith or terminate
thereby.
VII.7 SUCCESSORS AND ASSIGNS. All of the obligations of the
parties hereunder, including without limitation, the indemnification obligations
in Sections 5.03, 5.04, and 5.05 shall be binding upon the successors and
assigns of the parties.
VII.8 WAIVERS. Each party hereto, by written instrument signed
by duly authorized officers of such party, may extend the time for the
performance of any of the obligations or other acts of the other party hereto
and may waive, but only as affects the party signing such instruments:
(a) Any inaccuracies in the representations or warranties of
the other party contained or referred to in this Agreement or in any
document delivered pursuant hereto.
(b) Compliance with any of the covenants or agreements of the
other party contained in this Agreement.
(c) The performance (including performance to the satisfaction
of a party or its counsel) by the other party of such of its
obligations set out herein.
(d) Satisfaction of any condition to the obligations of the
waiving party pursuant to this Agreement.
VII.9 NOTICES. Any notice or other communication required or
permitted pursuant to this Agreement shall be effective only if it is in writing
and delivered personally, by facsimile transmission, or by registered or
certified return-receipt mail, postage prepaid addressed as follows:
<PAGE>
IF TO SELLER: REPUBLIC BANK & TRUST COMPANY
601 West Market Street
Louisville, Kentucky 40202-2700
Attention: Bill Petter, Chief Financial Officer
WITH COPIES TO: REPUBLIC BANK & TRUST COMPANY
601 West Market Street
Louisville, Kentucky 40202-2700
Attention: Steve Trager, Vice Chairman
IF TO PURCHASER: FIRST FEDERAL SAVINGS
BANK OF LEITCHFIELD
211 North Main Street
Leitchfield, Kentucy 42754
Attn: Robert T. Crawford, President
WITH COPIES TO: NATIONAL CITY BANCSHARES, INC.
227 Main Street
P.O. Box 868
Evansville, Indiana 47705-0868
Attn: Robert A. Keil, President
AND TO: BAKER & DANIELS
300 North Meridian Street, Suite 2700
Indianapolis, Indiana 46204-1782
Attn: David C. Worrell
or to such other person or address as any such party may designate by notice to
the other parties and shall be deemed to have been given as of the date
received.
<PAGE>
VII.10 COOPERATION ON OPEN ITEMS AND OTHER MATTERS. After
Closing the parties agree to cooperate with each other with respect to the
processing of outstanding checks, ATM transactions and other open items which
originated prior to Closing.
VII.11 PARTIES IN INTEREST; ASSIGNMENT; AMENDMENT. This
Agreement is binding upon and is for the benefit of the parties hereto and their
respective successors, legal representatives, and assigns, and no person who is
not a party hereto (or a successor or assignee of such party, including FKB)
shall have any rights or benefits under this Agreement, either as a third party
beneficiary or otherwise. This Agreement cannot be assigned (except by operation
of law due to a merger of Purchaser or Seller with a third party or by
assignment to FKB or other banking affiliate of the assigning party who agrees
in writing to assume all of the obligations of the assigning party hereunder),
and this Agreement cannot be amended or modified, except by a written agreement
executed by the parties hereto or their respective successor and assigns.
VII.12 ENTIRE AGREEMENT. This Agreement supersedes any and all
oral or written agreements and understandings heretofore made relating to the
subject matter hereof and contains the entire agreement of the parties relating
to the subject matter hereof. Annexes and Appendices to this Agreement are
incorporated into this Agreement by reference and made a part hereof.
VII.13 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Kentucky, except
to the extent precluded by federal law of mandatory application.
VII.14 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
VII.15 RISK OF LOSS. Legal title, equitable title, and risk of
loss with respect to the Seller Assets shall not pass to Purchaser until the
Closing.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by the respective officers thereunto duly
authorized, all as of the date first above written.
FIRST FEDERAL SAVINGS BANK OF LEITCHFIELD
By: /s/
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Its:
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ATTEST:
By: /s/
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Its:
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REPUBLIC BANK & TRUST COMPANY
By: /s/
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Its:
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ATTEST:
By: /s/
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Its
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<PAGE>
The exhibits to the Agreement have been omitted from this filing in reliance on
Rule 601(b)(2) of Regulation S-K. Republic Bancorp, Inc. will furnish
supplemental a copy of any omitted exhibit to the Securities and Exchange
Commission upon request.
