Exhibit 6.(a) 2.
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PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
HUNTINGTON BANCSHARES INCORPORATED,
THE HUNTINGTON NATIONAL BANK
AND
SUNTRUST BANK
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PURCHASE AND ASSUMPTION AGREEMENT
TABLE OF CONTENTS
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ARTICLE I - CERTAIN DEFINITIONS............................................ 1
Section 1.1 Certain Definitions..................................... 1
ARTICLE II - TRANSFER OF ASSETS AND LIABILITIES............................ 9
Section 2.1 Transferred Assets...................................... 9
Section 2.2 Purchase Price.......................................... 13
Section 2.3 Deposit Liabilities..................................... 17
Section 2.4 Loans and Pipe-Line Loans............................... 17
Section 2.5 Brokerage and Advisory Assets........................... 19
Section 2.6 Employee Matters........................................ 19
Section 2.7 Security................................................ 22
Section 2.8 Proration; Other Closing Date Adjustments............... 22
Section 2.9 Title Insurance and Survey for Real Property............ 23
Section 2.10 Environmental Matters................................... 25
Section 2.11 Assumed Contracts....................................... 26
Section 2.12 Derivative Transactions................................. 27
Section 2.13 Assumption of IRA Account Deposits...................... 27
Section 2.14 Books and Records....................................... 27
Section 2.15 Determination of Defect Reduction Amounts............... 29
Section 2.16 No Duty To Cure......................................... 30
ARTICLE III - CLOSING AND EFFECTIVE TIME................................... 30
Section 3.1 Effective Time.......................................... 30
Section 3.2 Closing................................................. 31
Section 3.3 Post Closing Adjustments................................ 33
ARTICLE IV - TRANSITIONAL MATTERS.......................................... 34
Section 4.1 General................................................. 34
Section 4.2 Notices to Customers and Others......................... 35
Section 4.3 Direct Deposits......................................... 36
Section 4.4 Direct Debit............................................ 36
Section 4.5 Interest Reporting and Withholding...................... 37
Section 4.5 ATM/Debit Cards......................................... 38
Section 4.7 Leasing of Personal and Real Property................... 38
Section 4.8 Data Processing Conversion for the Branches and Handling
of Certain Items....................................... 38
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Section 4.9 Notices to Obligors on Loans............................ 39
ARTICLE V - INDEMNIFICATION................................................ 40
Section 5.1 Huntington's Indemnification of Purchaser............... 40
Section 5.2 Purchaser's Indemnification of Sellers.................. 40
Section 5.3 Claims for Indemnity.................................... 40
Section 5.4 Limitations on Indemnification.......................... 42
Section 5.5 Treatment of Indemnification Payments................... 42
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF SELLERS..................... 42
Section 6.1 Corporate Organization; Corporate Authority............. 43
Section 6.2 No Violation............................................ 43
Section 6.3 Enforceable Agreement................................... 43
Section 6.4 No Brokers.............................................. 43
Section 6.5 Personal Property....................................... 43
Section 6.6 Real Property and the Leased Premises................... 44
Section 6.7 Condition of Property................................... 44
Section 6.8 Labor Matters; Employees................................ 45
Section 6.9 Certain Contracts....................................... 46
Section 6.10 Loans................................................... 46
Section 6.11 Deposit Liabilities..................................... 47
Section 6.12 Books, Records, Documentation, Etc...................... 47
Section 6.13 Litigation and Regulatory Proceedings................... 47
Section 6.14 Tax Matters............................................. 47
Section 6.15 Consents and Approvals.................................. 48
Section 6.16 Brokerage Account Agreements; Advisory Agreements....... 48
Section 6.17 Registrations........................................... 48
Section 6.18 Environmental Laws...................................... 48
Section 6.19 Community Reinvestment Compliance....................... 49
Section 6.20 Derivative Transactions................................. 49
Section 6.21 Trust Agreements........................................ 49
Section 6.22 Deposit and Loan Data................................... 50
Section 6.23 Certain Information..................................... 50
Section 6.24 Compliance with Laws.................................... 50
Section 6.25 Limitation of Representations and Warranties............ 50
Section 6.26 Absence of Certain Changes.............................. 50
ARTICLE VII - REPRESENTATIONS AND WARRANTIES OF PURCHASER.................. 51
Section 7.1 Corporate Organization; Corporate Authority............. 51
Section 7.2 No Violation............................................ 51
Section 7.3 Enforceable Agreement................................... 51
Section 7.4 No Brokers.............................................. 51
Section 7.5 Litigation and Regulatory Proceedings................... 51
Section 7.6 Consents and Approvals.................................. 52
Section 7.7 Registrations........................................... 52
Section 7.8 Regulatory Capital and Condition........................ 52
Section 7.9 Financing............................................... 52
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Section 7.10 Community Reinvestment Act Compliance................... 52
ARTICLE VIII - OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME.... 53
Section 8.1 Full Access............................................. 53
Section 8.2 Application for Approval................................ 54
Section 8.3 Conduct of Business..................................... 55
Section 8.4 Solicitation of Customers by Purchaser Prior to Closing. 56
Section 8.5 No Solicitation by Sellers.............................. 56
Section 8.6 Efforts to Consummate; Further Assurances............... 57
Section 8.7 Fees and Expenses....................................... 57
Section 8.8 Third Party Consents.................................... 58
Section 8.9 Insurance............................................... 58
Section 8.10 Public Announcements.................................... 59
Section 8.11 Tax Reporting........................................... 59
Section 8.12 Advise of Changes....................................... 59
Section 8.13 Albertson's, Inc. Contract.............................. 59
Section 8.14 Deposits................................................ 60
Section 8.15 Non-Solicitation of Transactions........................ 60
Section 8.16 Supplements to Schedules................................ 60
Section 8.17 Loan Broker Contracts................................... 61
Section 8.18 Physical Damage to Owned Branches....................... 60
ARTICLE IX - CONDITIONS TO PURCHASER'S OBLIGATIONS......................... 61
Section 9.1 Representations and Warranties True..................... 61
Section 9.2 Obligations Performed................................... 62
Section 9.3 Delivery of Documents................................... 62
Section 9.4 Regulatory Approval..................................... 62
Section 9.5 No Legal Prohibition.................................... 62
Section 9.6 No Litigation........................................... 62
Section 9.7 No Sellers Material Adverse Effect...................... 62
ARTICLE X - CONDITIONS TO SELLERS' OBLIGATIONS............................. 63
Section 10.1 Representations and Warranties True..................... 63
Section 10.2 Obligations Performed................................... 63
Section 10.3 Delivery of Documents................................... 63
Section 10.4 Regulatory Approval..................................... 63
Section 10.5 No Legal Prohibition.................................... 64
ARTICLE XI - TERMINATION................................................... 64
Section 11.1 Methods of Termination.................................. 64
Section 11.2 Procedure Upon Termination.............................. 65
Section 11.3 Payment of Expenses..................................... 65
ARTICLE XII - MISCELLANEOUS PROVISIONS..................................... 65
Section 12.1 Assignment to Subsidiaries.............................. 65
Section 12.2 Amendment and Modification; Waiver...................... 66
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Section 12.3 Survival................................................ 66
Section 12.4 Assignment.............................................. 66
Section 12.5 Confidentiality......................................... 66
Section 12.6 Addresses for Notices, Etc.............................. 67
Section 12.7 Counterparts............................................ 67
Section 12.8 Headings................................................ 68
Section 12.9 Governing Law........................................... 68
Section 12.10 Entire Agreement........................................ 68
Section 12.11 No Third Party Beneficiaries............................ 68
Section 12.12 Calculation of Dates and Deadlines...................... 68
Section 12.13 Consent to Jurisdiction; Waiver of Jury Trial........... 68
Section 12.14 Severability............................................ 69
Section 12.15 Specific Performance.................................... 69
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PURCHASE AND ASSUMPTION AGREEMENT
THIS PURCHASE AND ASSUMPTION AGREEMENT (this "Agreement") is entered into
as of September 25, 2001, by and between HUNTINGTON BANCSHARES INCORPORATED, a
Maryland corporation having its principal offices in Columbus, Ohio
("Huntington"), THE HUNTINGTON NATIONAL BANK, a national banking association
having its principal offices in Columbus, Ohio ("HNB"), and SUNTRUST BANK, a
Georgia state bank having its principal offices in Atlanta, Georgia
("Purchaser"):
W I T N E S S E T H:
WHEREAS, Huntington, by its own actions and through the actions of HNB
(Huntington and HNB being hereinafter referred to as "Sellers"), wishes to
divest itself of certain assets, deposits, and other liabilities in connection
with Huntington's retail and corporate branch banking business in the State of
Florida (the "Florida Franchise"); and
WHEREAS, Purchaser wishes to purchase such assets and assume certain
specified liabilities upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, Sellers and Purchaser agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.1 CERTAIN DEFINITIONS.
(a) The terms set forth below are used in this Agreement with the
following meanings:
"ACH" shall have the meaning set forth in Section 4.3.
"Advisory Agreement" shall have the meaning set forth in Section 2.5.
"Adjustment Payment Date" shall have the meaning set forth in Section
3.3(c).
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlled by, controlling or under common control with
such Person.
"Agreement" shall have the meaning set forth in the recitals hereto.
"Albertson's Contract" shall have the meaning set forth in Section 8.13.
"Assumed Contracts" shall have the meaning set forth in Section 2.11.
"Assignment and Assumption Agreement" shall have the meaning set forth in
Section 3.2(b)(3).
"Assignment and Assumption of Leases" shall have the meaning set forth in
Section 3.2(b)(4).
"Assignment and Assumption of Transferred Lease" shall have the meaning
set forth in Section 3.2(b)(5).
"ATMs" shall have the meaning set forth in Section 2.1(a)(2).
"ATM Lease" shall have the meaning set forth in Section 2.1(a)(2).
"Average Deposit Balance" shall mean the average of the daily balances of
the Deposits for the ten (10) days ending as of the close of business on the
Closing Date or on the date of the Waiver Election, if any; provided that with
respect to Deposits booked at Branches (including in-store Branches at
Albertson's, Inc.) that are to be closed, consolidated with another branch of
HNB or Purchaser, or divested, where the written notice thereof provided for in
Section 4.2 is first sent to Deposit account holders prior to the Effective
Time, for purposes of calculating the Average Deposit Balance, the average daily
balance of such Deposits shall be deemed to be the balance of such Deposits on
the day such notice is first sent to such holders. Notwithstanding the
foregoing, no Deposits booked at any Branch to be closed, consolidated or
divested in connection with the transactions contemplated by this Agreement that
are moved, reopened or otherwise transferred to any other Branch shall be
counted more than once for purposes of calculating the Average Deposit Balance.
"Banking Operations" shall mean the business and operations of the Florida
Franchise.
"Benefit Plans" shall have the meaning set forth in Section 6.8(b).
"Branch Leases" shall have the meaning set forth in Section 2.1(a)(2).
"Branch Loans" shall have the meaning set forth in Section 2.4(a).
"Branches" shall have the meaning set forth in Section 2.1(a)(2).
"Brokerage Account Agreement" shall have the meaning set forth in Section
2.5.
"Brokerage and Advisory Assets" shall have the meaning set forth in
Section 2.5.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banks in Columbus, Ohio, Atlanta, Georgia or the State of Florida are
authorized or required to close for regular banking business.
"Claim Limitation Anniversary" shall have the meaning set forth in Section
5.3(a).
"Closing" shall have the meaning set forth in Section 3.1.
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"Closing Date" shall have the meaning set forth in Section 3.1.
"Closing Statement" shall have the meaning set forth in Section 3.2(b)(9).
"COBRA" shall mean the continuation coverage requirements of Section 601
et seq. of ERISA and Section 4980B of the Code.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Coins and Currency" shall mean all petty cash, foreign currency, vault
cash, teller cash, ATM cash, prepaid postage and cash equivalents located at the
Real Property and Leased Premises (exclusive of the contents of any safe deposit
boxes) as of the Effective Time.
"Comparable Job Offer" shall have the meaning set forth in Section 2.6(a).
"Confidentiality Agreement" shall mean the Confidentiality Agreement,
dated as of July 18, 2001, among Sellers and Purchaser.
"CRA" shall mean the Community Reinvestment Act of 1977 and the
regulations promulgated thereunder.
"Credit Card Program" shall have the meaning set forth in Section
2.1(b)(11).
"CRISP" shall mean the Customer Relationship and Profitability System, a
strategic and marketing system of Sellers which combines customer transaction,
balance and demographic data with an analytic methodology to produce specific
customer tools.
"Dealer Sales" shall have the meaning set forth in Section 2.1(b)(4).
"Defect" shall have the meaning set forth in Section 2.9(c).
"Defect Reduction Amount" shall have the meaning set forth in Section
2.15.
"Deposits" shall have the meaning set forth in Section 2.3(a).
"Deposit Liabilities" shall have the meaning set forth in Section 2.3(a).
"Derivative Documents" means the contracts and agreements constituting or
otherwise relating to a Derivative Transaction, as the same may have been
amended, modified or supplemented in writing.
"Derivative Purchase Price" shall have the meaning set forth in Section
2.12(a).
"Derivative Transaction" means any instrument, contract or transaction
involving interest rate or foreign currency forwards, swaps, caps, collars,
floors, options or futures between HNB and a derivative counterparty that is
related to a Deposit, Loan or other account of such counterparty that is being
transferred to Purchaser pursuant to this Agreement.
"Effective Time" shall have the meaning set forth in Section 3.1.
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"Employees" shall have the meaning set forth in Section 2.6(a).
"Environmental Defect Notice" shall have the meaning set forth in Section
2.10(c).
"Environmental Law" shall mean any federal or state law, statute, rule or
regulation relating to the protection of the environment or human health.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974 (as
amended from time to time).
"Excluded Assets" shall have the meaning set forth in Section 2.1(b)(16).
"Excluded Employee" shall mean any employee of Sellers or their Affiliates
listed on Schedule 2.6(a).
"Excluded Liabilities" shall have the meaning set forth in Section 2.2(c).
"Excluded IRA Account Deposits" shall have the meaning set forth in
Section 2.13(b).
"Fair Market Value" shall have the meaning set forth in Section 2.2(f).
"Federal Funds Rate" shall mean the average of the high and low rates
quoted for Federal Funds in the Money Rates column of The Wall Street Journal
from the Effective Time adjusted as such average may increase or decrease during
the period between the Effective Time and the date of the applicable payment.
"Federal Reserve Board" shall have the meaning set forth in Section
8.2(b).
"Florida Franchise" shall have the meaning set forth in the recitals
hereto.
"FMLA" shall mean the Family and Medical Leave Act of 1993 (as amended
from time to time).
"GAP" shall have the meaning set forth in Section 2.4(d).
"Governmental Authority" shall mean any government or any agency, bureau,
board, commission, court, department, official, political subdivision, tribunal
or other instrumentality of any government having authority in the United
States, whether federal, state or local.
"Hazardous Substance" shall mean any substance which is listed or
identified in any Environmental Law as hazardous or toxic.
"HIC" shall have the meaning set forth in Section 2.5.
"HNB" shall have the meaning set forth in the recitals hereto.
"Huntington" shall have the meaning set forth in the recitals hereto.
"Indirect Auto Loans" shall have the meaning set forth in Section 2.4(a).
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"IRA" means an "individual retirement account" or similar account created
by a trust for the benefit of any individual or his beneficiaries in accordance
with the provisions of Section 408 of the Code.
"JRD" shall have the meaning set forth in Section 2.1(b)(7).
"Knowledge" shall mean, with respect to Sellers, the actual knowledge of
the Persons set forth on Annex A following reasonable inquiry into the matters
in question, and with respect to Purchaser, the actual knowledge of the Persons
set forth on Annex B following reasonable inquiry into the matters in question.
"Leased Branches" shall have the meaning set forth in Section 2.1(a)(2).
"Leased Premises" shall have the meaning set forth in Section 2.1(a)(2).
"Liens" shall have the meaning set forth in Section 6.5.
"Loans" shall have the meaning set forth in Section 2.4(a).
"Loan Broker Contracts" shall mean those contracts and agreements pursuant
to which third-party brokers originate home equity loans and home equity credit
lines that would constitute Loans if arising prior to the Effective Time.
"Losses" shall mean losses, liabilities, damages, costs and expenses
(including reasonable attorneys fees) incurred or suffered by the indemnified
party or its Affiliates in connection with the matters described in Section
2.9(a) or Article V, as the case may be, net of any amounts actually recovered
by the indemnified party under insurance policies (other than any
self-insurance) with respect to such Loss, and (i) increased to take account of
any net tax cost (other than a reduction in tax basis) incurred by the
indemnified party arising from the receipt of indemnity payments hereunder
(grossed up for such increase) and (ii) reduced to take account of any net tax
benefit actually recognized for tax purposes by the indemnified party arising
from the incurrence or payment of any such Loss, in each case when and as such
tax cost or tax benefit is actually recognized for tax purposes through an
increase or reduction of taxes otherwise due.
"Material Adverse Environmental Condition" shall have the meaning set
forth in Section 2.10(c).
"Merchant Card Services" shall have the meaning set forth in Section
2.1(b)(6).
"Mortgage Loan Origination" shall have the meaning set forth in Section
2.1(b)(5).
"Net Book Value" shall mean (i) with respect to the leasehold improvements
associated with the Real Property Leases and the Leased Premises, the Personal
Property, the other Transferred Assets (other than the Loans and the Overdrafts)
and the Other Liabilities, the value of those assets and/or liabilities as
carried on Sellers' books and records based on Sellers' internal accounting
procedures (as such procedures have been previously disclosed to Purchaser)
consistently applied, (ii) with respect to the Loans and the Overdrafts, the
aggregate principal amount thereof, plus accrued and unpaid interest, late
charges and any other charges thereon and
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with respect to Loans, net of charge-offs and net of loan loss reserves of
eighty three (83) basis points of Loans as of the Closing Date (provided that
with respect to the Indirect Auto Loans, the Net Book Value shall include the
amount of any unamortized premium paid by Sellers to dealers to originate such
Indirect Auto Loans which amount is reflected on the Pre-Closing Balance Sheet
and the Post-Closing Balance Sheet as the "dealer reserve" provided that such
included amount shall not exceed ten million dollars ($10,000,000)).
"Non-Transferred Records" shall have the meaning set forth in Section
2.14(a).
"Order" shall have the meaning set forth in Section 9.4.
"Original Price" shall have the meaning set forth in Section 3.3(b).
"Other Facilities" shall have the meaning set forth in Section 2.1(a)(2).
"Other Facilities Leases" shall have the meaning set forth in Section
2.1(a)(2).
"Other Liabilities" shall mean the liabilities of Sellers relating to the
Transferred Assets set forth on Schedule 1.1(b) hereto.
"Overdrafts" shall mean overdrafts of the book balance of any accounts
constituting Deposit Liabilities and all consumer lines of credit made available
to customers of the Branches as a protection against overdrafts of such
accounts.
"Owned Branches" shall have the meaning set forth in Section 2.1(a)(1).
"Park ATMs" shall have the meaning set forth in Section 2.1(b)(17).
"Permitted Encumbrances" shall have the meaning set forth in Section
2.9(a).
"Person" shall mean any individual, association, corporation, limited
liability company, partnership, limited liability partnership, trust or any
other entity or organization, including any Governmental Authority.
"Personal Property" shall mean the personal property of Sellers located at
the Real Property or the Leased Premises consisting of the furniture, fixtures,
equipment, security systems, safe deposit boxes (exclusive of contents), vaults
and other tangible personal property that are owned by Sellers and are located
on or affixed to the Real Property or the Leased Premises and all tenant
improvements and fixtures owned by Sellers at any Leased Premises, in each case
as of the Effective Time, and any of such items on order at the Effective Time.
"Personal Property Leases" shall mean all leases of Personal Property.
"Pipe-Line Loans" shall have the meaning set forth in Section 2.4(b).
"Pre-Closing Balance Sheet" shall have the meaning set forth in Section
2.2(e).
"Pre-Closing Balance Sheet Date" shall have the meaning set forth in
Section 2.2(e).
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"Post-Closing Balance Sheet" shall have the meaning set forth in Section
3.3(a).
"Post-Closing Balance Sheet Delivery Date" shall have the meaning set
forth in Section 3.3(a).
"Private Financial Group Offices" shall have the meaning set forth in
Section 2.1(b)(3).
"Property Price" shall mean the Fair Market Value attributable to each
Owned Branch.
"Purchase Price" shall have the meaning set forth in Section 2.2(a).
"Purchase Right" shall have the meaning set forth in Section 5.1.
"Purchaser" shall have the meaning set forth in the recitals hereto.
"Purchaser Material Adverse Effect" shall mean an event, occurrence or
circumstance, individually or in the aggregate, that has had or is reasonably
likely to have a material adverse effect on Purchaser's ability to timely
perform its obligations under this Agreement or consummate the transactions
contemplated by this Agreement; provided, that a Purchaser Material Adverse
Effect shall not include (w) events or conditions resulting from general
economic conditions, including changes in interest rates and stock market
valuations, and other economic events or economic conditions generally affecting
the financial services industry either in Florida or nationwide (including as
may result from any terrorist attacks, any war, any armed hostilities or any
other national or international response related thereto), (x) changes in
accounting practices or changes to statutes, regulations or regulatory policies
generally applicable to financial service companies, or (y) events, impacts or
conditions caused by the public announcement of, and response or reaction of
customers, vendors, licensors or Employees to, this Agreement or any of the
transactions contemplated by this Agreement.
"Purchaser's 401(k) Plan" shall mean any qualified cash or deferred
arrangement (within the meaning of Section 401(k) of the Code) maintained by
Purchaser.
"Real Property" shall have the meaning set forth in Section 2.1(a)(1).
"Real Property Leases" shall have the meaning set forth in Section
2.1(a)(2).
"Regulatory Approvals" shall mean all regulatory approvals that are
required in order to consummate the transactions contemplated by this Agreement,
including the expiration of all waiting periods thereunder (including any
extensions thereof).
"Revised Price" shall have the meaning set forth in Section 3.3(b).
"Safe Deposit Contracts" shall mean all safe deposit contracts and leases
for the safe deposit boxes located at the Real Property and Leased Premises as
of the Effective Time.
"SEC" shall mean the Securities and Exchange Commission.
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"Secured Derivative Transaction" means each instrument, contract or
transaction involving interest rate or foreign currency forwards, swaps, caps,
collars, floors, options or futures to which HNB is a party that is not a
Derivative Transaction transferred to and assumed by Purchaser pursuant hereto
that, immediately prior to the sale of any Transferred Assets, is secured by any
collateral that secures any such Transferred Assets.
"Sellers" shall have the meaning set forth in the recitals hereto.
"Sellers' 401(k) Plan" shall mean any qualified cash or deferred
arrangement (within the meaning of Section 401(k) of the Code) maintained by
Sellers.
"Sellers Material Adverse Effect" shall mean an event, occurrence or
circumstance, individually or in the aggregate, that has had or is reasonably
likely to have a material adverse effect on (i) the business, operations or
financial condition of the Florida Franchise, taken as a whole, (ii) Sellers'
ability to timely perform their obligations under this Agreement or consummate
the transactions contemplated by this Agreement; provided, that a Sellers
Material Adverse Effect shall not include (w) events or conditions resulting
from general economic conditions, including changes in interest rates and stock
market valuations, and other economic events or economic conditions generally
affecting the financial services industry either in Florida or nationwide
(including as may result from any terrorist attacks, any war, any armed
hostilities or any other national or international response related thereto),
(x) changes in accounting practices or changes to statutes, regulations or
regulatory policies generally applicable to financial service companies, or (y)
events, impacts or conditions caused by the public announcement of, and response
or reaction of customers, vendors, licensors or Employees to, this Agreement or
any of the transactions contemplated by this Agreement.
"Software Licenses" shall have the meaning set forth in Section 2.1(a)(3).
"Statute" shall have the meaning set forth in Section 8.8(b).
"Surveys" shall have the meaning set forth in Section 2.9(a).
"Tellers and Platform Employees" shall have the meaning set forth in
Section 2.6.
"Tenant Leases" shall have the meaning set forth in Section 2.1(a)(2).
"Third Party Purchaser" shall have the meaning set forth in Section
4.1(e).
"Title Commitments" shall have the meaning set forth in Section 2.9(a).
"Title Defects" shall have the meaning set forth in Section 2.9(a).
"Title Defect Notice" shall have the meaning set forth in Section 2.9(a).
"Transaction Account" shall mean accounts at Branches in respect of which
deposits there are withdrawable in practice or upon demand or upon which third
party drafts may be drawn by the depositor, including checking accounts,
negotiable order of withdrawal (NOW) accounts and money market deposit accounts.
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"Transfer Date" shall have the meaning set forth in Section 2.6(a).
"Transferred Assets" shall have the meaning set forth in Section 2.1(a).
"Transferred Employees" shall have the meaning set forth in Section
2.6(a).
"Transferred Lease" shall have the meaning set forth in Section 2.1(b)(5).
"Transferred Liabilities" shall have the meaning set forth in Section
2.2(b).
"Trust Accounts" shall mean HNB's fiduciary and non-fiduciary trust,
custody, estate administration and guardian administration accounts described on
Schedule 1.1(a).
"Trust Account Assets" shall mean all Trust Agreements and any rights of
HNB to the physical assets of Trust Accounts or to hold the physical assets of
Trust Accounts in accordance with Trust Agreements.
"Trust Agreement" shall mean any contract or agreement which creates,
modifies or governs a Trust Account.
"Waiver Date" shall have the meaning set forth in Section 3.1.
"Waiver Election" shall have the meaning set forth in Section 3.1.
"WARN" shall have the meaning set forth in Section 2.6(e).
(b) The words "include" and "including" as used herein shall be
deemed to be followed by the phrase "without limitation." References to an
Article, Section, Exhibit or Schedule shall be deemed to be references to an
Article or Section of, or an Exhibit or Schedule to, this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such term.
ARTICLE II
TRANSFER OF ASSETS AND LIABILITIES
SECTION 2.1 TRANSFERRED ASSETS.
(a) As of the Effective Time, and subject to the terms and
conditions set forth herein, Sellers will (or will cause their applicable direct
or indirect subsidiaries to) sell, assign, transfer, convey, and deliver to
Purchaser, and Purchaser will purchase from Sellers (or their applicable direct
or indirect subsidiaries), any and all right, title and interest of the Sellers
(or
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their applicable direct or indirect subsidiaries) in and to the following assets
attributable to the Florida Franchise, except as otherwise excluded from sale
pursuant to the provisions of Section 2.1(b) below (collectively, the
"Transferred Assets"):
(1) subject to Sections 2.9 and 2.10 hereof, all of Sellers'
transferable fee simple right, title and interest in and to the real
estate and the related improvements and fixtures located at HNB's owned
Florida banking offices described on Schedule 2.1(a)(1) hereto, together
with all assignable real property rights and appurtenances pertaining
thereto (each such owned branch, an "Owned Branch" and, collectively, the
"Real Property");
(2) subject to Section 8.8, including the receipt of the
applicable consents referred to therein, all leases or licenses of real
property relating to (w) HNB's leased banking offices (including offices
located inside other stores) at the locations identified on Schedule
2.1(a)(2)(w) (collectively, the "Leased Branches" and, together with the
Owned Branches, the "Branches"; and such leases or licenses relating to
the Leased Branches, collectively, the "Branch Leases"), (x) HNB's Florida
operations center, headquarters and other facilities identified in
Schedule 2.1(a)(2)(x) (collectively, the "Other Facilities"; and such
leases relating to the Other Facilities, collectively, the "Other Facility
Leases"), and (y) HNB's remote site, free-standing automated teller
machines ("ATMs") identified in Schedule 2.1(a)(2)(y) (such leases or
licenses relating to the ATMs, the "ATM Leases" and, together with the
Branch Leases and the Other Facility Leases, the "Real Property Leases";
and the premises leased under the Real Property Leases, collectively, the
"Leased Premises"), together with any leases or subleases of space in any
Branches or Other Facilities under which Sellers (or one of their
Affiliates) are the lessors or sublessors, as identified in Schedule
2.1(a)(2)(z) (collectively, the "Tenant Leases");
(3) all software licenses relating to the Florida Franchise
and listed on Schedule 2.1(a)(3) (the "Software Licenses");
(4) all Personal Property and all Personal Property Leases,
a complete and accurate list of which leases are listed on Schedule
2.1(a)(4);
(5) all Safe Deposit Contracts;
(6) all Loans (a complete and accurate list of which, as of
the dates set forth on Schedule 2.1(a)(6), is set forth on such Schedule),
and Pipe-Line Loans, including the collateral therefor and (except to the
extent set forth in Section 2.1(b)) the servicing rights under the Loans
for which the Sellers have retained servicing rights, and excluding any
rights and obligations of Sellers or their Affiliates with respect to
motor vehicle dealers in connection with Loans originated through
Huntington's Dealer Sales line of business;
(7) all Brokerage and Advisory Assets;
(8) all Trust Account Assets;
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(9) all Overdrafts;
(10) all Assumed Contracts;
(11) all Derivative Transactions and Derivative Documents
relating thereto;
(12) all routing and transit numbers with respect to the
Branches;
(13) all claims, counter-claims and causes of action with
respect to the Transferred Assets and Transferred Liabilities, including
without limitation any claims, counterclaims and other rights with respect
to any litigation assumed by Purchaser pursuant to Section 2.2(b);
(14) all off-balance sheet sweeps and off-balance sheet AFI
accounts ("Off-Balance Sheet Accounts"), which as of July 31, 2001, had a
value of $34,300,000; and
(15) all Coins and Currency.
(b) The following items shall be excluded from the Transferred
Assets:
(1) the proprietary merchandising equipment and other assets
listed on Schedule 2.1(b) hereto;
(2) Sellers' rights in and to the names "Huntington" and any
of their predecessor banks' names and any of Sellers' or Sellers'
predecessors' corporate logos, trademarks, trade names, signs, paper stock
forms, and other supplies containing any such logos, trademarks, or trade
names;
(3) the three offices listed on Schedule 2.1(b) hereto and
all directly related operations, leases, owned real property and other
assets of the private financial group line of Huntington's business in
Naples, Florida and Stuart, Florida which provide an array of products and
services including personal trust, asset management, investment advisory,
insurance, and deposit and loan products ("Private Financial Group
Offices");
(4) the line of Huntington's business which pertains to the
origination of indirect automobile lending and leasing and includes floor
plan financing ("Dealer Sales");
(5) the line of Huntington's business which deals in
origination of mortgage loans ("Mortgage Loan Origination") and the
related leased real estate described in Schedule 2.1(b) hereto, including
the tenant's rights, title and interest under the Tenant Lease described
in Schedule 2.1(b) (the "Transferred Lease") pursuant to which The
Huntington Mortgage Company will continue to sublease space at the Other
Facility located in Sarasota, Florida for use in the Mortgage Loan
Origination business pursuant to the terms of such Transferred Lease;
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(6) the line of Huntington's business which deals in
merchant services for credit and debit card processing, which operates
through Huntington Merchant Services, L.L.C., which is jointly owned with
First Data Merchant Services, Inc. ("Merchant Card Services");
(7) all offices, operations, employee benefit plans (and any
related assets) and other assets of J. Rolfe Davis Insurance Agency
("JRD");
(8) residential mortgage servicing rights for all 1-4 family
residential mortgages loans serviced by The Huntington Mortgage Company or
any third party service provider;
(9) any regulatory licenses (other than any assignable
regulatory license primarily related to the Transferred Assets, which
shall constitute Transferred Assets) or any other nonassignable licenses
and permits;
(10) any deposit account or other service of Sellers at any
office of Sellers (other than the Branches) or their Affiliates that may
be linked to the Deposits;
(11) HNB's credit card program with Chase Manhattan Bank USA,
National Association, and all rights, duties, obligations and
relationships arising in connection therewith (the "Credit Card Program");
(12) any tax refunds, tax credits or deferred tax assets;
(13) all personal property utilized primarily in the conduct
of lines of business not being transferred hereunder pursuant to this
Section 2.1(b);
(14) all software licenses and leases not set forth on
Schedule 2.1(a)(3);
(15) the Loan Broker Contracts;
(16) any assets related to any of the Benefit Plans;
(17) unless the promotional agreements between HNB and each
of Sea World of Florida, Inc. d/b/a Discovery Cove, Busch Entertainment
Corporation, and Sea World of Florida, Inc., relating to certain
promotional and banking services, are assumed by Purchaser in Purchaser's
sole discretion (it being understood that Purchaser shall be permitted to
have conversations with such persons following the signing of this
Agreement to explore the potential for Purchaser to assume such agreements
or enter into a similar commercial arrangement therewith and that Sellers
shall use their commercially reasonable efforts to assist Purchaser in
connection therewith), such agreements and the ATMs located at the
entertainment parks governed by such agreements (the "Park ATMs"); and
(18) all of the contracts and agreements listed on Schedule
2.1(b) (collectively, the "Excluded Assets").
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SECTION 2.2 PURCHASE PRICE.
(a) As consideration for the purchase of the Florida Franchise,
Purchaser shall pay Sellers a purchase price (the "Purchase Price") equal to the
sum of the following:
(1) the Fair Market Value of the Real Property;
(2) a premium for the Deposits and franchise value assigned
to the Florida Franchise equal to 15.0% of the Average Deposit Balance;
provided that the aggregate dollar value of such premium shall not exceed
$747,765,341.
(3) the Net Book Value of the Loans, the Overdrafts, the
Personal Property, the improvements associated with the Real Property
Leases and the Leased Premises, and the other Transferred Assets (other
than the Real Property, the Derivative Transactions and Derivative
Documents relating thereto, the Off-Balance Sheet Accounts, the Tenant
Leases and the Coins and Currency) as of the Effective Time;
(4) the aggregate net Derivative Purchase Price;
(5) the face amount of the Coins and Currency; and
(6) if the in-store Branches at Albertson's, Inc. are closed
prior to or simultaneously with the Closing, the lesser of ten million
dollars ($10,000,000) and the amount of the reasonably documented costs
incurred by Sellers in connection with the termination of the Albertson's,
Inc. relationship (including the write-off of fixed assets, retrofitting
the branches back to grocery stores, severance payments to employees of
Sellers who work at such branches and lease termination fees); provided
that if the in-store Branches at Albertson's, Inc. are closed by Sellers
after the Effective Time, Purchaser shall make the applicable foregoing
payment, as an adjustment to the Purchase Price, promptly following such
Branch closings.
(b) In addition, Purchaser shall assume as of the Effective Time
and pay, perform and discharge as of or after the Effective Time, as the case
may be, all of the duties, obligations, and liabilities of Sellers from and
after the Effective Time relating to the following (the "Transferred
Liabilities"):
(1) the Deposit Liabilities and all terms and agreements
relating thereto (including all of Sellers' responsibilities with respect
to (w) cashier checks issued prior to the Effective Time, (x) the
abandoned property laws of any state, (y) any legal process that is served
on Sellers on or before the Closing Date with respect to claims against or
for the Deposit Liabilities that does not exceed the amount of the
applicable Deposit(s) (except to the extent attributable to any act or
omission taken or omitted to be taken by Sellers prior to the Effective
Time) and (z) any other applicable laws (except to the extent attributable
to any act or omission taken or omitted to be taken by Sellers prior to
the Effective Time in violation of any such laws));
(2) the Real Property and the Personal Property;
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(3) the Real Property Leases, the Tenant Leases and the
Personal Property Leases, and the Leased Premises and other property
leased under such leases;
(4) the Software Licenses;
(5) the Safe Deposit Contracts (including all of Sellers'
duties, obligations and responsibilities with respect to (x) any legal
process that is served on Sellers on or before the Closing Date with
respect to claims against or for the contents thereof (except to the
extent attributable to any act or omission taken or omitted to be taken by
Sellers prior to the Effective Time in violation of the applicable Safe
Deposit Contract or applicable law) and (y) any other applicable laws
(except to the extent attributable to any act or omission taken or omitted
to be taken by Sellers prior to the Effective Time in violation of any
such laws));
(6) the Brokerage and Advisory Assets (including all of
Sellers' duties, obligations and responsibilities with respect to (x) any
legal process that is served on Sellers on or before the Closing Date with
respect to claims against or for the mutual fund asset allocations
products relating to the Advisory Assets that does not exceed the amount
of funds or other assets related thereto and transferred to Purchaser
hereunder (except to the extent attributable to any act or omission taken
or omitted to be taken by Sellers prior to the Effective Time in violation
of the applicable Advisory Agreement or applicable law) and (y) any other
applicable laws (except to the extent attributable to any act or omission
taken or omitted to be taken by Sellers prior to the Effective Time in
violation of any such laws));
(7) the Trust Account Assets (including all of Sellers'
duties, obligations and responsibilities with respect to (x) any legal
process that is served on Sellers on or before the Closing Date with
respect to claims against or for any funds or other assets relating to the
Trust Account Assets that does not exceed the amount of the funds or other
assets related thereto and transferred to Purchaser hereunder (except to
the extent attributable to any act or omission taken or omitted to be
taken by Sellers prior to the Effective Time in violation of the
applicable Trust Agreement or applicable law) and (y) any other applicable
laws (except to the extent attributable to any act or omission taken or
omitted to be taken by Sellers prior to the Effective Time in violation of
any such laws));
(8) the Loans and the Pipe-Line Loans and the servicing
thereof (except to the extent that such Loan, Pipe-Line Loan or servicing
constitutes an Excluded Asset);
(9) the Overdrafts;
(10) the Assumed Contracts; provided, however that Purchaser
shall not assume any liabilities, duties or obligations arising under any
Assumed Contract that is not assigned to Purchaser at the Closing due to
the failure to receive a necessary consent or otherwise;
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(11) the Derivative Transactions and Derivative Documents
relating thereto;
(12) all liabilities, duties and obligations expressly
assumed by Purchaser pursuant to Section 2.6 (excluding liabilities and
obligations (w) relating to acts or omissions of Sellers, (x) under the
Benefit Plans, (y) relating to compensation, benefits or other claims or
amounts for periods prior to the Effective Time and (z) expressly retained
by Sellers pursuant to Section 2.6(f)); and
(13) the Off-Balance Sheet Accounts (including all of
Sellers' duties, obligations and responsibilities with respect to (x) any
legal process that is served on Sellers on or before the Closing Date with
respect to claims against or for the Off-Balance Sheet Accounts that do
not exceed the amount of funds or other assets related thereto and
transferred to Purchaser hereunder (except to the extent attributable to
any act or omission taken or omitted to be taken by Sellers prior to the
Effective Time in violation of the applicable account agreement or
applicable law) and (y) any other applicable laws (except to the extent
attributable to any act or omission taken or omitted to be taken by
Sellers prior to the Effective Time in violation of any such laws)).
(c) Notwithstanding anything to the contrary contained herein,
Purchaser shall not assume any duties, obligations or liabilities of Sellers of
any kind, whether known, unknown, contingent or otherwise, (i) not relating to
the Transferred Assets or the Transferred Liabilities, (ii) attributable to any
acts or omissions to act taken or omitted to be taken by Sellers (or any of
their direct or indirect Subsidiaries) prior to the Effective Time in violation
of any applicable laws, contracts or fiduciary duties, (iii) attributable to any
actions, causes of action, claims, suits or proceedings or violations of law or
regulation attributable to any acts or omissions to act taken or omitted to be
taken by Sellers (or any of their direct or indirect Subsidiaries) prior to the
Effective Time, (iv) relating to tax accruals of Sellers (or any of their direct
or indirect Subsidiaries) or (v) arising from circumstances, events or
conditions prior to the Effective Time and not expressly assumed hereunder (the
"Excluded Liabilities"). Without limiting the generality of the foregoing, it is
not the intention that the assumption by Purchaser of the Assumed Liabilities
shall in any way enlarge the rights of any third parties relating thereto.
Nothing contained in this Agreement shall prevent any party hereto from
contesting matters relating to the Assumed Liabilities with any third party
obligee. From and after the Effective Time, (i) Purchaser shall have complete
control over the payment, settlement or other disposition of the Assumed
Liabilities and the right to commence, control and conduct all negotiations and
proceedings with respect thereto and (ii) Sellers shall have complete control
over the payment, settlement or other disposition of the Excluded Liabilities
and the right to commence, control and conduct all negotiations and proceedings
with respect thereto. Except as otherwise provided in Article IV or any
transition plan entered into thereunder, (i) Sellers shall promptly notify
Purchaser of any claim made against it with respect to the Assumed Liabilities
or the Transferred Assets and shall not voluntarily make any payment of, settle
or offer to settle, or consent or compromise or admit liability with respect to,
any Assumed Liabilities or Transferred Assets and (ii) Purchaser shall promptly
notify Sellers of any claim made against it with respect to the Excluded
Liabilities or the Excluded Assets and shall not voluntarily make any payment
of, settle or offer to settle, or consent or compromise or admit liability with
respect to, any Excluded Liabilities or Excluded Assets.
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(d) All excise, sales, use and transfer taxes that are payable or
that arise as a result of the consummation of the transactions contemplated
hereby shall be paid one-half by Purchaser and one-half by Sellers, and each of
Purchaser, on the one-hand, and Sellers, on the other hand, shall indemnify and
hold the other harmless from and against any such taxes in excess of the portion
to be paid by such party.
(e) Sellers shall prepare, in consultation with Purchaser, a
balance sheet (the "Pre-Closing Balance Sheet") as of a date not earlier than
thirty (30) days, or later than five (5) Business Days, prior to the Effective
Time anticipated by the parties (the "Pre-Closing Balance Sheet Date") based on
Sellers' books and records and using the internal accounting procedures of
Sellers consistently applied reflecting the assets to be sold and assigned
hereunder and the liabilities to be transferred and assumed hereunder. Sellers
agree to pay to Purchaser at the Closing (as defined in Section 3.1 hereof), in
immediately available funds, the excess amount, if any, of the sum of (x) the
amount of Deposit Liabilities assumed by Purchaser pursuant to paragraph (b)
above and (y) the Net Book Value of the Other Liabilities, each of (x) and (y)
as reflected by the Pre-Closing Balance Sheet, over the aggregate Purchase Price
computed in accordance with paragraph (a) above, as reflected by the Pre-Closing
Balance Sheet. Purchaser agrees to pay Sellers at the Closing, in immediately
available funds, the excess, if any, of the aggregate Purchase Price computed in
accordance with paragraph (a) above, as reflected by the Pre-Closing Balance
Sheet, over the sum of (x) the amount of Deposit Liabilities assumed by
Purchaser pursuant to paragraph (b) above and (y) the Net Book Value of the
Other Liabilities, each of (x) and (y) as reflected by the Pre-Closing Balance
Sheet. All amounts paid at the Closing shall be subject to subsequent adjustment
based on the Post-Closing Balance Sheet (as defined in Section 3.3 hereof).
(f) The "Fair Market Value" of the Real Property is set forth on
Schedule 2.2(e) attached hereto, with each Owned Branch's Property Price being
as indicated in Schedule 2.2(e).
(g) Sellers and Purchaser agree to cooperate in good faith to
determine a reasonable allocation of the Purchase Price, as finally determined
pursuant to Section 2.2 and Section 3.3, in accordance with Section 1060 of the
Code. On or prior to the date forty-five (45) days prior to the Closing Date,
Sellers shall provide to Purchaser Sellers' proposed allocation of the Purchase
Price as finally determined by Sellers hereunder. Within thirty (30) days after
the receipt of such allocation, Purchaser shall propose to Sellers any changes
to such allocation or otherwise shall be deemed to have agreed with such
allocation. Sellers and Purchaser shall cooperate in good faith to mutually
agree to such allocation and shall reduce such agreement to writing, including
jointly and properly executing completed Internal Revenue Service Form 8594, and
any other forms or statements required by the Code, Treasury Regulations or the
Internal Revenue Service, together with any and all attachments required to be
filed therewith. Sellers and Purchaser shall file timely any such forms and
statements with the Internal Revenue Service. To the extent consistent with
applicable law, Sellers and Purchaser shall not file any tax return or other
documents or otherwise take any position with respect to taxes which is
inconsistent with such allocation of the final Purchase Price, provided,
however, that neither Sellers nor Purchaser shall be obligated to litigate any
challenge to such allocation of the final Purchase Price by any Governmental
Authority. Sellers and Purchaser shall promptly inform one another of any
challenge by any Governmental Authority to any allocation made pursuant to
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this paragraph and agree to consult with and keep one another informed with
respect to the state of, and any discussion, proposal or submission with respect
to, such challenge.
SECTION 2.3 DEPOSIT LIABILITIES.
(a) "Deposit Liabilities" shall mean all of Sellers' rights,
duties, obligations and liabilities relating to the deposits ("Deposits") that
are booked at each of the Branches or otherwise opened and maintained as part of
the Florida Franchise (including accrued but unpaid or uncredited interest
thereon and uncollected funds related thereto) as of the Effective Time (or,
solely for the purpose of determining the Average Deposit Balance, for the
period set forth in the definition of the Average Deposit Balance) and that
constitute "deposits" for purposes of the Federal Deposit Insurance Act, 12
U.S.C. Section 1813, but excluding (i) deposit liabilities with respect to
accounts registered in the name of a trust for which a Seller serves as trustee
or accounts for which a Seller serves as a fiduciary that, by their terms or by
applicable law, are not capable of assignment, (ii) deposit liabilities with
respect to accounts booked by a Seller at any Branch for which such Seller
serves as guardian or custodian that, by their terms or by applicable law, are
not capable of assignment, (iii) deposit liabilities with respect to Excluded
IRA Account Deposits, (iv) deposit liabilities with respect to accounts
associated with or securing lines of credit or loans where the line of credit or
loan is excluded in accordance with paragraph 2.4(b), (v) deposit liabilities
with respect to accounts that a Seller is not permitted to transfer or otherwise
dispose of pursuant to applicable law or contract, (vi) deposit liabilities to
the extent constituting Off-Balance Sheet Accounts and (vii) Excluded
Liabilities.
(b) Sellers do not represent or warrant that any deposit customers
whose accounts are assumed by Purchaser will become or continue to be customers
of Purchaser after the Effective Time.
SECTION 2.4 LOANS AND PIPE-LINE LOANS.
(a) "Loans" shall mean, collectively, all of Sellers' rights,
duties, obligations and liabilities relating to loans and other extensions of
credit in connection with the operation of the Florida Franchise as follows: (i)
all loans and other extensions of credit (other than Overdrafts) booked at the
Branches as of the Effective Time ("Branch Loans"), (ii) all retail installment
contracts (excluding auto leases) purchased by HNB from motor vehicle dealers in
the State of Florida and booked in HNB's accounting systems as an earning asset
as of the Effective Time ("Indirect Auto Loans"); (iii) all residential mortgage
loans in the Florida Franchise and booked on Sellers' or an Affiliate's
accounting systems as an earning asset as of the Effective Time; and (iv) all
commercial loans and commercial real estate loans not booked at the Branches
that have been originated and serviced through the Florida Franchise and are
outstanding as of the Effective Time, excluding any such loans to dealers
related to Huntington's Dealer Sales line of business; provided that the Loans
shall not include any loans or other extensions of credit described in paragraph
(c) below or any servicing rights or obligations constituting Excluded Assets.
(b) "Pipe-Line Loans" shall mean, collectively, all of Sellers'
rights, duties, obligations and liabilities relating to loans or other
extensions of credit in connection with the operation of the Florida Franchise
that (x) would constitute Loans if arising prior to the Effective
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Time, (y) arise either (i) under a Loan Broker Contract or (ii) from the
ordinary course lending activities of Sellers (or their applicable direct or
indirect subsidiaries) and not in breach of this Agreement and (z) with respect
to which a loan has been approved by Sellers but has not yet been closed;
provided that the Pipe-Line Loans shall not include any loans or other
extensions of credit described in paragraph (c) below or any servicing rights or
obligations constituting Excluded Assets.
(c) Notwithstanding the provisions of paragraph (a) above, neither
the Loans nor the Pipe-Line Loans shall include:
(1) loans generated in connection with the retained Private
Financial Group Offices and loans to borrowers where the primary customer
relationship is through an office outside of the Florida Franchise;
(2) any loans excluded from the Transferred Assets under
Section 2.1(b);
(3) loans made after July 31, 2001 that are not made in a
manner consistent with past practice as relates to the normal and
customary credit standards and policies of Sellers and that are identified
by Purchaser in writing at least five (5) Business Days prior to the
Effective Time; and
(4) loans made on or before July 31, 2001 that are
materially modified thereafter (other than collection and work-out
procedures undertaken in a manner consistent with past practice) such that
the loans, if they had been made as of the date that they are so modified,
would not be consistent with past practice as relates to the normal and
customary credit standards and policies of Sellers and that are identified
by Purchaser in writing at least five (5) Business Days prior to the
Effective Time.
(d) Schedule 2.4(d) identifies the insurance companies who are the
current underwriters of credit life insurance and credit disability insurance
sold in connection with Branch Loans. Prior to the Effective Time, Sellers agree
to notify such insurance companies in writing of the sale of such Branch Loans
to Purchaser. Sellers' records provided to Purchaser will identify Branch Loans
which have credit life or credit disability insurance coverage. Purchaser agrees
to work directly with such insurance companies in the handling and processing of
premium rebates and insurance claims. After the Effective Time, Sellers will
promptly deliver to Purchaser (i) the proceeds of any credit life insurance
and/or credit disability insurance received by it in connection with any of the
Branch Loans sold to Purchaser; and (ii) any written notices or other
correspondence or written inquiries made by any of the relevant insurance
companies and relating to any such proceeds.
(e) Purchaser shall honor and be responsible for all bona fide and
qualifying claims from obligors arising in connection with HNB's Guaranteed Auto
Protection ("GAP") product sold to the obligor in connection with any Loan. Upon
receipt by HNB from Purchaser of the documentation required by HNB to process a
GAP claim, HNB agrees to process the claim in accordance with the same
procedures applicable to its own internal GAP claims and to
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reimburse Purchaser for the amount of the Loan balance that HNB determines
Purchaser is required to cancel in accordance with the GAP coverage.
(f) All Loans will be transferred without recourse and without any
warranties or representations as to their collectibility or the creditworthiness
of any of the obligors of such Loans. Notwithstanding the foregoing, nothing
contained in this Section 2.4(f) shall alter or otherwise limit the
representations and warranties contained in Section 6.10.
(g) If the balance due on any Loan purchased hereunder has been
reduced by Sellers as a result of a payment by check received prior to the
Effective Time, which item is returned after the Effective Time, the asset value
represented by the Loan transferred shall be correspondingly increased and an
amount in cash equal to such increase shall be paid by Purchaser to Sellers
promptly.
SECTION 2.5 BROKERAGE AND ADVISORY ASSETS.
"Brokerage and Advisory Assets" shall mean (i) the customer account
agreements between Huntington Investment Company ("HIC") and customers of the
Branches relating to accounts maintained through one of the Branches in
connection with HIC's business of providing investment products (including
mutual funds, fixed income products, equities, equity options and fixed and
variable annuities) to such customers ("Brokerage Account Agreements"), (ii) all
of Sellers' rights to or interests in any commissions or income arising from the
sale of such products pursuant to Brokerage Account Agreements and not paid
prior to the Effective Time and (iii) the advisory agreements between HIC and
customers of the Branches listed on Schedule 2.5 relating to HIC's sponsored
mutual fund asset allocation product ("Advisory Agreements"). Sellers and
Purchaser shall cooperate in good faith and shall use their reasonable best
efforts to effect the transfer of such assets.
SECTION 2.6 EMPLOYEE MATTERS.
(a) Purchaser will make Comparable Job Offers (as defined below)
to all "customer service representatives," "customer services representative
seniors," "customer service representative leaders," "personal bankers,"
"personal banker seniors," and "sales and service managers" employed at Branches
(other than in-store Branches at Albertson's, Inc.) who are satisfactory
performers within the meaning discussed by the parties (such employees, "Tellers
and Platform Employees") and shall offer employment to such other individuals
employed by Sellers (or one of their Affiliates) at or primarily in support of
the Florida Franchise, and who reside in Florida, as of the Closing Date as
Purchaser in its sole discretion shall determine (the "Employees") effective as
of the Effective Time, other than to any Excluded Employee. Purchaser will
communicate offers of employment in accordance with legal requirements and in a
form determined by Purchaser and which form is not reasonably objected to by
Sellers. All such Employees shall be offered employment with Purchaser (i) in a
position requiring comparable skills and abilities as such Employee's position
with Sellers on the Closing Date, (ii) with annual base salary, or weekly or
hourly rate of pay which is equal to such Employee's pay with Sellers on the
Closing Date (provided that incentive pay, where applicable, shall be determined
based on incentive compensation programs provided by Purchaser and its
Affiliates to their similarly situated (based on position and responsibilities,
location and rate of
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compensation) employees from time to time), (iii) at a work location that does
not require such Employee to travel more than an additional twenty-five miles
(one way each day) to work than such Employee traveled prior to the Closing
Date, and (iv) with a work status (full or part-time, including number of
hours-per-week worked) that is not changed from that in effect with Sellers or
its Affiliates immediately prior to the Closing Date (a "Comparable Job Offer");
provided that Purchaser in its sole discretion shall determine the nature of the
employment offered to Employees other than Tellers and Platform Employees. Each
Employee who accepts Purchaser's offer of employment and commences employment
with Purchaser shall be referred to as a "Transferred Employee" for purposes of
this Agreement at the time the Employee first commences active employment with
Purchaser. Purchaser shall provide each Transferred Employee who has commenced
active employment with Purchaser or one of its Affiliates with employee benefits
substantially similar in the aggregate to the employee benefits provided by
Purchaser and its Affiliates to its similarly situated (based on position and
responsibilities, location and rate of compensation) employees from time to
time. With respect to any Employee who accepts an offer of employment from
Purchaser who on the Closing Date is on military leave, sick leave, maternity
leave, short-term disability or other leave of absence approved by Sellers,
except as required by applicable law, Purchaser need only employ such Employee
for the period beginning after such absence if such Employee returns to
employment in accordance with the terms of such Employee's leave, provided that
such Employee commences active employment with Purchaser no later than six (6)
months after the commencement of the leave. Any Employee, who is on leave on the
Closing Date and commences active employment with Purchaser in accordance with
the preceding sentence will cease employment with Sellers at the end of such
leave of absence and the date of commencement of active employment with
Purchaser shall be referred to herein as the "Transfer Date."
(b) Purchaser agrees to give all Transferred Employees service
credit for all employment and employee benefits related purposes (including but
not limited to for purposes of FMLA entitlement), for all periods of employment
with each of Sellers and their Affiliates (or their predecessor entities) prior
to the Closing Date, and with respect to employee benefits for purposes of
eligibility, participation and vesting under any employee benefit or
compensation plan, program and arrangement adopted or maintained by Purchaser or
any of its Affiliates in which Transferred Employees are eligible to
participate. Notwithstanding the foregoing, service completed with and
compensation received from Sellers and their Affiliates shall not be used for
purposes of benefit accruals or calculation of the amount of any benefit under
any defined benefit pension plan of Purchaser or any of its Affiliates. To the
extent that any Transferred Employee has satisfied in whole or in part any
annual deductible under a welfare benefit plan, or has paid any out-of-pocket
expenses pursuant to any welfare benefit plan co-insurance provision, in each
case, with respect to the calendar year in which the Closing Date (or
commencement of participation in such new plan occurs), such amount shall be
counted toward the satisfaction of any applicable deductible or out-of-pocket
expense maximum, respectively, under the comparable benefit plans and programs
provided to Transferred Employees by Purchaser and its Affiliates. In any event,
the welfare benefit plans and programs of Purchaser and its Affiliates shall be
applied without regard to any limitations relating to preexisting conditions,
waiting periods or required physical examinations.
(c) Purchaser shall offer and pay severance benefits as described
in this subsection (c) to all individuals employed by Sellers (or one of their
Affiliates) at or primarily in
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support of the Florida Franchise as of the Closing Date, and who reside in
Florida to whom Comparable Job Offers are not made, other than Excluded
Employees. In addition, Purchaser shall offer and pay severance benefits as
described in this Section 2.6(c) to any Transferred Employee terminated by
Purchaser within one year of the Closing Date. Notwithstanding the foregoing,
Purchaser shall not be required to offer severance benefits to individuals who
are employed at the in-store Branches at Albertson's, Inc. as of September 1,
2001, unless any such employee actually becomes a Transferred Employee, or to
any Excluded Employee. In addition, from and after the Closing Date, Purchaser
shall determine in its sole discretion whether a Transferred Employee who has a
termination of employment following the Closing Date meets the requirements of
severance payments and shall provide, and be solely liable for, severance
benefits to each Transferred Employee whose employment ceases during the period
that commences on the Closing Date and ends on the one-year anniversary thereof
and to each Employee to whom Purchaser does not make a Comparable Job Offer;
provided, however that Purchaser shall not be responsible for the payment of
severance or transition benefits to any individual, or for the payment of any
amount to any Employee who is offered, but does accept, a Comparable Job Offer
(provided that for purposes of this proviso, the proviso to the definition of
Comparable Job Offer shall be ignored). Severance benefits payable under this
Section 2.6(c) shall be equal to the amount of severance payments that would be
payable under the applicable plan of Sellers and their Affiliates effective
immediately prior to the Closing Date (without giving effect to the transactions
contemplated by this Agreement) as set forth on Schedule 2.6(c). Purchaser, in
its sole discretion, may determine to pay such severance amounts in a lump sum
instead of installment. In no event shall Sellers be liable for any severance or
transition benefits to any Transferred Employee or to any Employee to whom
Purchaser does not make a Comparable Job Offer, other than Excluded Employees.
(d) Each Transferred Employee who participated or who was eligible
to participate in Sellers' 401(k) Plan immediately prior to the Closing shall be
immediately eligible to participate, without any waiting time, in Purchaser's
401(k) Plan applicable to the Transferred Employees. Sellers shall cause
Sellers' 401(k) Plan to provide the Transferred Employees with the option to
voluntarily rollover their eligible account balances from Sellers' 401(k) Plan
into the Purchaser's 401(k) Plan (or into an Individual Retirement Account of
the Transferred Employee's choosing), and Purchaser shall cause Purchaser's
401(k) Plan to accept such eligible rollovers from the Transferred Employees.
(e) Purchaser shall be responsible for the administration of and
shall assume any and all obligations, if any, arising under COBRA with respect
to the Transferred Employees and their beneficiaries. Sellers shall be
responsible for providing any notice required pursuant to the United States
Federal Worker Adjustment and Retraining Notification Act of 1988, any successor
United States federal law, and any other applicable plant closing notification
law (collectively, "WARN") with respect to a layoff or plant closing relating to
the Florida Franchise that occurs prior to or on the Closing Date and Purchaser
shall be responsible for providing any notice required pursuant to WARN with
respect to a layoff or plant closing relating to the Florida Franchise that
occurs after the Closing Date.
(f) Sellers shall be responsible for the filing of Forms W-2 with
the Internal Revenue Service and any required filing with state tax authorities,
with respect to wages and
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benefits paid to each Transferred Employee for periods ending on or prior to the
Closing Date or the Transfer Date, as applicable.
(g) Sellers and Purchaser shall cooperate in order to permit
Purchaser to train Employees who choose to accept employment with Purchaser, and
Sellers shall, as scheduled by Purchaser for reasonable periods of time and
subject to Sellers' reasonable approval, such that Sellers' ongoing operations
at the applicable Branches shall not be materially disrupted, excuse such
employees from their duties at the Branches for the purpose of training and
orientation by Purchaser.
SECTION 2.7 SECURITY.
As of the Effective Time, Purchaser shall be solely responsible for the
security of and insurance on all Persons and property located in or about the
Real Property or Leased Premises.
SECTION 2.8 PRORATION; OTHER CLOSING DATE ADJUSTMENTS.
(a) Except as otherwise specifically provided in this Agreement,
it is the intention of the parties that Sellers will operate the Florida
Franchise, hold the Transferred Assets and retain the Transferred Liabilities
for their own account until the Effective Time, and that Purchaser shall operate
the Florida Franchise, hold the Transferred Assets and assume the Transferred
Liabilities for its own account as of such time. Thus, except as otherwise
expressly provided in this Agreement, items of income and expense, as defined
herein, shall be prorated as of the Effective Time, and settled between Sellers
and Purchaser on the Closing Date, whether or not such adjustment would normally
be made as of such time. Items of proration will be handled at Closing as an
adjustment to the Purchase Price unless otherwise agreed by the parties hereto.
In furtherance of the foregoing, Purchaser shall promptly forward to Sellers
complete and accurate copies of all invoices, billing statements and similar
documents received by Purchaser after the Effective Time and relating to the
Banking Operations conducted prior to the Effective Time, and Sellers shall
promptly forward to Purchaser complete and accurate copies of all invoices and
billing statements received by Sellers relating to the Banking Operations
conducted after the Effective Time. To the extent the exact amounts of any real
property taxes or other items to be prorated are not known on the Closing Date,
the parties shall make reasonable estimates of such taxes or other items for
purposes of making prorations at Closing and shall thereafter adjust the
prorations as promptly as practicable after such exact amounts are finally
ascertained. Purchaser shall be solely responsible for payments to vendors with
respect to items of personal property that have been ordered but not delivered
as of the Effective Time.
(b) For purposes of this Agreement, items of proration and other
adjustments shall include, without limitation: (i) rental payments under the
Real Property Leases and the Tenant Leases; (ii) personal and real property
taxes and assessments arising from Real Property or the Leased Premises or
otherwise from the Banking Operations (determined by assuming that the taxable
year or period ended at the Effective Time); (iii) FDIC deposit insurance
assessments; (iv) trustee or custodian fees on IRA accounts and Trust Accounts
that are transferred to Purchaser as part of the Transferred Assets; (v) prepaid
expenses and items and accrued but unpaid liabilities a portion of which is
attributable to periods after the Effective Time (it being understood that
Purchaser shall have no liability for any accrued but unpaid liabilities
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attributable to Excluded Assets or Excluded Liabilities), as of the close of
business on the Closing Date; and (vi) safe deposit rental payments previously
received by Sellers.
SECTION 2.9 TITLE INSURANCE AND SURVEY FOR REAL PROPERTY.
(a) Sellers shall obtain and deliver to Purchaser as soon as
practicable after the date of this Agreement an ALTA title insurance commitment
or a title report (as the case may be, the "Title Commitments") for each Owned
Branch, issued by First American Title Insurance Company by and through its
agent, Porter, Wright, Morris & Arthur, LLP, which shall indicate the state of
title for each Owned Branch. Sellers shall also deliver to Purchaser within
fifteen (15) days after the date of this Agreement, without any representation
or warranty of any kind, a copy of any surveys in their possession for the Real
Property. Purchaser, at its sole expense, may cause a survey (collectively the
"Surveys") of each or any parcel of the Real Property to be performed by a
Florida registered and licensed land surveyor of Purchaser's choice, and shall
provide Sellers a copy of each such survey within ten (10) days after its
completion. Purchaser agrees to notify Sellers in writing (a "Title Defect
Notice") no later than thirty (30) days after the date of this Agreement (or, if
Purchaser shall not have received a Title Commitment with respect to any Owned
Branch at least ten (10) Business Days prior to the expiration of such thirty
(30) day period, then, solely with respect to matters disclosed by such Title
Commitment, no later than ten (10) Business Days after Purchaser's receipt of
such Title Commitment) of any mortgages, pledges, liens, encumbrances,
reservations, encroachments, overlaps or other title defects related to any Real
Property which are disclosed by the Title Commitments or Surveys and as to which
Purchaser reasonably objects (the "Title Defects"), provided that the Title
Defects and the Title Defect Notice shall not include or refer to any Permitted
Encumbrances. If Purchaser does not notify Sellers of Title Defects within such
time period (adjusted as aforesaid), Purchaser shall be deemed to have waived
its rights to provide a Title Defect Notice or to object to the condition of
title to the Real Property under this Section 2.9, and any Title Defect Notice
sent after such time shall not be valid. Purchaser agrees that the Title Defects
shall not include: (i) real property ad valorem taxes for the year of Closing or
any assessments, charges or taxes not yet due and payable; (ii) mechanics or
materialmens liens incurred in the ordinary course or which relate to sums not
yet due and payable; (iii) zoning, building code and other use restrictions
imposed by a Governmental Authority, a subdivision plat, or customary covenants,
conditions, easements or restrictions for a community or mixed use development,
in each case that do not materially interfere with the use of the applicable
Owned Branch as a bank branch operated in the manner it is currently operated;
or (iv) such encumbrances and other title, survey or other matters (including
liens, reservations, encroachments, easements, overlaps, covenants, conditions
and restrictions, and title defects or deficiencies) (x) as are customary or
typical for similar properties in the State of Florida or (y) as would cost less
than $75,000 to cure or eliminate in the case of any Owned Branch (and less than
$200,000 aggregating the costs associated with curing any such Title Defects
applicable to any other Owned Branch), provided that, in the case of either (x)
or (y), such matters do not materially interfere with the use of the applicable
Owned Branch as a bank branch operated in the manner it is currently operated
(all such matters described in clauses (i), (ii), (iii) or (iv), collectively,
the "Permitted Encumbrances"); and any Permitted Encumbrances included in any
Title Defect Notice shall be disregarded and shall not constitute Title Defects
for any purpose hereunder. If Sellers shall timely receive any Title Defect
Notice with respect to any Owned Branch, then Sellers shall, at their option and
in their sole discretion, elect to take one of the following actions with
respect to
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each Title Defect referenced in such Title Defect Notice: (i) cure or eliminate
such Title Defect prior to the Closing, in which event the Closing shall proceed
with respect to the Owned Branch subject to such Title Defect without any
reduction in the applicable Property Price; (ii) accept a reduction in the
Property Price applicable to the Owned Branch subject to such Title Defect equal
to any applicable Defect Reduction Amount to reflect the greater of the
diminution in value (if any) resulting from such Title Defect or the cost of
curing such Title Defect, if applicable, as determined pursuant to Section 2.15
below; or (iii) lease to Purchaser the Owned Branch subject to such Title Defect
in accordance with the provisions of Section 2.9(c); provided, however, that if
any such Title Defect materially interferes with the use of the applicable Owned
Branch as a bank branch operated in the manner it is currently operated, then
Purchaser shall not be obligated to lease the Owned Branch subject to such Title
Defect and Sellers shall be required to elect either (i) or (ii). For purposes
of this Section 2.9, a Title Defect shall be deemed to have been "cured" or
"eliminated" if title insurance coverage or a bond reasonably acceptable to
Purchaser shall have been obtained against such Title Defect or if Sellers shall
provide (in their sole discretion) an indemnity reasonably acceptable to
Purchaser in favor of Purchaser against any Losses resulting from such Title
Defect.
(b) Purchaser shall have the right, at its sole cost and expense,
to obtain an updated title search prior to the Closing Date to determine whether
any title changes may have arisen between the effective date of the applicable
Title Commitment and such update. If such update indicates that any Title
Defects have been placed of record in respect of any Owned Branch since the
effective date of the applicable Title Commitment, then Purchaser shall have the
right to provide Sellers a Title Defect Notice in respect thereof at least ten
(10) Business Days prior to the Closing Date, and thereafter Sellers shall have
the right to address such Title Defect Notice in the same manner as is set forth
in Section 2.9(a) with respect to Title Defect Notices received by Sellers
within thirty (30) days after the date of this Agreement (by electing to cure
the Title Defect in question, accept a reduction in the applicable Property
Price or lease the Owned Branch in question, all as more particularly set forth
in Section 2.9(a)). Failure by Purchaser to provide any Title Defect Notice
pursuant to the immediately preceding sentence at least ten (10) Business Days
prior to the Closing Date shall constitute waiver of any further right to do so,
and any Title Defect Notice received after such time shall not be valid. Sellers
shall have the right to delay the Closing for a reasonable period if Sellers
determine that such delay is required in order for Sellers to cure or eliminate
any Title Defect pursuant to Section 2.9(a) or (b), to determine any potential
Defect Reduction Amount pursuant to Section 2.15, or to otherwise carry out the
terms of this Section 2.9.
(c) If pursuant to Section 2.9(a) or (b) or Section 2.10(a),
Sellers lease to Purchaser any Owned Branch which is subject to a Title Defect
or a Material Adverse Environmental Condition (as the case may be, a "Defect"),
then Sellers shall lease such Owned Branch to Purchaser, on a triple net basis,
at existing market rents for a term of ten (10) years commencing at the Closing
pursuant to a lease substantially in the form attached hereto as Exhibit 2.9(c).
The parties agree that, if they cannot agree upon the "existing market rent" to
be payable for any such Owned Branch under any such lease, then such "existing
market rent" shall be determined by an appraisal to be conducted by an appraiser
selected in the manner set forth in Section 2.15 below, with the cost of such
appraisal to be shared equally by both parties. The "existing market rent"
applicable to any such lease shall be the rent which a willing tenant would pay
to lease the Owned Branch in question on the terms set forth above for use as a
bank branch.
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Sellers shall have the right to require determination of the rent to be payable
under any lease to be entered into hereunder prior to Sellers' electing to enter
into such lease pursuant to Sections 2.9(a) or 2.10(a). If any Owned Branch is
leased to Purchaser pursuant to this provision, the Purchase Price shall be
reduced by the amount of the Property Price attributable to such Owned Branch
pursuant to Schedule 2.2(e), but if Sellers cure or eliminate the Defect related
thereto at any time during the term of such lease, then Purchaser shall promptly
thereafter purchase such Owned Branch according to the applicable provisions of
this Agreement and pay Sellers the Property Price for such Owned Branch (less
any lease payments made by Purchaser to Sellers with respect to such Owned
Branch) at the time of transfer of title thereto to Purchaser.
SECTION 2.10 ENVIRONMENTAL MATTERS.
(a) Sellers have made available to Purchaser complete and accurate
copies of all environmental studies, reports and audits in Sellers' possession
related to the Real Property (the "Existing Environmental Reports"). Sellers do
not make any representation or warranty regarding any aspect of any study,
report or audit delivered to Purchaser, including without limitation, the
accuracy or completeness of such study, report or audit, its preparation, or any
information upon which it is based. Any reliance on the report or any
information contained in the report shall be at Purchaser's risk.
(b) Prior to the Effective Time, and subject to compliance with
Section 8.1(b), Purchaser shall have the right, but not the obligation, at its
sole cost and expense, to cause such investigations and tests to be made as it
reasonably deems necessary to determine whether there has been any soil, surface
water, groundwater or building space contamination on or under the Real
Property. Sellers shall cooperate reasonably with Purchaser and/or its agents or
contractors in their evaluation and testing of the Real Property, including by
providing Purchaser and/or its agents or contractors reasonable access to
pertinent records and documents in Sellers' possession. Any investigations or
tests performed by Purchaser shall be conducted in a manner so as not to damage
in any material respect the Real Property and so as not to interfere in any
material respect with the business or operations conducted thereat. If any
damage is caused to the Real Property, Purchaser shall immediately repair and
restore the Real Property to its former condition. Without the prior written
consent of Sellers (which consent will not unreasonably be withheld or delayed)
and execution of a satisfactory property access agreement, Purchaser shall not
conduct subsurface or intrusive testing or any ground water monitoring or
install any test well or undertake any other investigation which requires a
permit or license from, or the reporting of the investigation or the results
thereof to, any environmental regulatory authority. Purchaser shall give Sellers
reasonable prior notice of its intention to conduct any investigation or test
hereunder, and Sellers reserve the right to be present and to have a
representative present while any such investigations are conducted. Purchaser
shall furnish Sellers with a copy of each report or investigation setting forth
the results of any test performed by Purchaser as soon as reasonably practicable
after receipt. Purchaser shall not submit a copy of any such report or disclose
the contents thereof to any Governmental Authority unless specifically required
by applicable law, and if so required, Purchaser shall provide Sellers five (5)
days' prior written notice of any submission and shall simultaneously provide to
Sellers a copy of any information submitted to such Governmental Authority.
Purchaser agrees that Purchaser and Purchaser's agents, representatives,
contractors and designees will not reveal to any third party not approved in
writing by Sellers (other than Purchaser's attorneys, accountants and other
professional
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advisors who agree to keep such information confidential) the results of its
inspections or tests, unless required by law.
(c) If Purchaser objects to a Material Adverse Environmental
Condition at an Owned Branch by providing written notice thereof (an
"Environmental Defect Notice") to Sellers within forty-five (45) days after the
date of this Agreement, then Sellers shall, at their option and in their sole
discretion (except as provided in clause (iii)), elect to take one of the
following actions with respect to each such Material Adverse Environmental
Condition: (i) cure such Material Adverse Environmental Condition in a manner
reasonably satisfactory to Purchaser prior to the Closing, in which event the
Closing shall proceed with respect to the Owned Branch subject to such Material
Adverse Environmental Condition without any reduction in the applicable Property
Price; (ii) accept a reduction in the applicable Property Price equal to any
applicable Defect Reduction Amount to reflect the diminution in value (if any)
resulting from such Material Adverse Environmental Condition, as determined
pursuant to Section 2.15; or (iii) if acceptable to Purchaser, in Purchaser's
sole discretion (except to the extent such condition was disclosed in the
Existing Environmental Reports, in which case Sellers shall have discretion to
select among (i) - (iii)), lease to Purchaser the Real Property subject to such
Material Adverse Environmental Condition in accordance with the provisions of
Section 2.9(c). It is understood and agreed that if Purchaser has discretion to
not lease the Real Property subject to such Material Adverse Environmental
Condition, and Purchaser elects not to lease such Real Property, Sellers shall
elect either (i) or (ii) of the preceding sentence. If Purchaser shall fail to
provide notice of its objection to any Material Adverse Environmental Conditions
within forty-five (45) days after the date hereof, then Purchaser shall be
deemed to have waived its rights under this Section 2.10 to provide such notice,
and any such notice received after such forty-five (45) day period shall be
invalid. Sellers shall be deemed to have cured any Material Adverse
Environmental Condition if they agree, in their sole discretion, to indemnify
Purchaser against or to remediate such Material Adverse Environmental Condition
to Purchaser's reasonable satisfaction. The term "Material Adverse Environmental
Condition" as used herein means contamination at an Owned Branch by Hazardous
Substances in violation of any applicable Environmental Law (other than
contamination to the extent disclosed in any Existing Environmental Report),
which contamination at such Branch (without aggregation of contamination at
other Branches) has, or would be reasonably expected to have, individually or in
the aggregate, a material adverse impact on the financial condition, operations
or business of the Florida Franchise, taken as a whole. Either party shall have
the right to delay the Closing for a reasonable period (but not in excess of 30
calendar days) if such party determines that such delay is required in order for
Sellers to cure any Material Adverse Environmental Condition, to determine any
potential Defect Reduction Amount or otherwise carry out the terms of this
Section 2.10.
SECTION 2.11 ASSUMED CONTRACTS.
Attached as Schedule 2.11 is a list of all service or similar contracts in
effect as of the date hereof (which Schedule Sellers shall modify on or prior to
the 10th day prior to the Closing Date to reflect any such contracts that have
been terminated or modified or have been entered into in the ordinary course of
business since the date hereof) that relate to the Real Property, the Leased
Premises or the Banking Operations subject to this Agreement (and not to
Sellers'
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operations generally) and that are capable of assignment in connection herewith
("Assumed Contracts"). Purchaser shall assume all such Assumed Contracts at the
Closing.
SECTION 2.12 DERIVATIVE TRANSACTIONS.
(a) For each Derivative Transaction, HNB and Purchaser will act in
good faith to reach agreement, on or before the Effective Time, as to an amount
in U.S. dollars to be paid as consideration by HNB to Purchaser, or by Purchaser
to HNB, for that transfer. If no such agreement is reached with respect to a
Derivative Transaction, then the amount to be paid as consideration for the
transfer shall be determined by taking the average of mid-market quotes obtained
from three derivatives dealers acceptable to both HNB and Purchaser. The amount
of such payment is referred to herein as the "Derivative Purchase Price".
(b) In the case of any collateral securing both a Transferred
Asset acquired by Purchaser under this Agreement and a Secured Derivative
Transaction, HNB and Purchaser shall enter into an intercreditor agreement upon
mutually acceptable terms with (i) Purchaser acting as the custodian and
collateral agent for each of HNB and Purchaser, (ii) each of HNB and Purchaser
having a pari passu security interest in such collateral, and (iii) Purchaser as
collateral agent having control over the decision to liquidate the collateral.
SECTION 2.13 ASSUMPTION OF IRA ACCOUNT DEPOSITS.
(a) With respect to Deposits in IRAs, prior to the Closing Date,
Sellers will accomplish either the appointment of Purchaser as successor
custodian or the delegation to Purchaser (or to an Affiliate of Purchaser) of
Sellers' authority and responsibility as custodian of all such IRA deposits
(except self-directed IRA deposits), each to be effective as of the Effective
Time, including, but not limited to, sending to the depositors thereof
appropriate notices, cooperating with Purchaser (or such Affiliate) in
soliciting consents from such depositors, and filing any appropriate
applications with applicable regulatory authorities. If any such delegation is
made to Purchaser (or such Affiliate), Purchaser (or such Affiliate) will
perform all of the duties so delegated and comply with the terms of Sellers'
agreement with the depositor of the IRA deposits affected thereby.
(b) If, notwithstanding the foregoing, as of the Closing Date,
Purchaser shall be unable to retain deposit liabilities in respect of an IRA,
such deposit liabilities shall be excluded from Deposits for purposes of this
Agreement and shall constitute "Excluded IRA Account Deposits."
SECTION 2.14 BOOKS AND RECORDS.
(a) As of the Effective Time, Sellers shall deliver to Purchaser
all files, documents and records in Sellers' possession that pertain to and are
utilized by Sellers to administer, monitor, evidence or record information
respecting the business or conduct of the Florida Franchise, including all such
files, documents and records maintained on electronic or magnetic media in the
electronic data base system of Sellers that are reasonably accessible on a
branch-by-branch basis. Notwithstanding the foregoing, all files, documents and
records (i) that contain information regarding customers and/or accounts not
being transferred to Purchaser
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hereunder where such information is not reasonably separable from the files,
documents or records otherwise to be delivered to Purchaser hereunder or (ii)
that are contained in digitally imaged files ("Non-Transferred Records") shall
remain in the possession of Sellers. Purchaser agrees, at the Sellers' expense,
to return to Sellers all files, documents and records contained in any Branch or
Other Facility that Purchaser believes do not relate to the business or conduct
of the Florida Franchise.
(b) As of the Effective Time, Purchaser shall become responsible
for maintaining the files, documents and records transferred to it pursuant to
this Agreement. Purchaser will preserve and hold such files, documents and
records in safekeeping as required by applicable law and in accordance with
Purchaser's customary practices.
(c) After the Effective Time, Purchaser will permit Sellers and
their representatives, at reasonable times and upon reasonable written notice,
to examine, inspect, copy and reproduce any such files, documents or records,
and to access Sellers' former employees, to the extent reasonably required in
connection with any third party claim, action, litigation or other proceeding
involving Sellers or their Affiliates or in connection with any legal obligation
owed by Sellers or their Affiliates to any present or former depositor or other
customer or any Governmental Authority, including for purposes of preparing
regulatory and tax reports and returns. After the Effective Time, Sellers will
permit Purchaser and its representatives, at reasonable times and upon
reasonable notice, to examine, inspect, copy and reproduce files, documents or
records retained by Sellers regarding the Transferred Assets and Transferred
Liabilities (including Non-Transferred Records) to the extent reasonably
required in connection with any third party claim, action, litigation or other
proceeding involving Purchaser or its Affiliates or in connection with any legal
obligation owed by Purchaser or its Affiliates to any present or former
depositor or other customer or any Governmental Authority, including for
purposes of preparing regulatory and tax reports and returns.
(d) For a period of ninety (90) days after the Effective Time, the
party providing copies of records hereunder shall do so without charge, and
thereafter it may charge its customary rate for providing such copies; provided
that the provision of information contained in the Non-Transferred Records shall
be provided to Purchaser for a period of six (6) months after the Effective Time
without charge, and thereafter such information shall be provided at the
Sellers' cost.
(e) It is understood that certain of Sellers' records may be
available only in electronic or magnetic form, or in the form of photocopies,
film copies or other non-original and non-paper media, or held by third-parties.
(f) Except for data expressly required to be provided by Sellers
hereunder, all CRISP data and information and any copies or extracts thereof or
other data or analyses derived therefrom, and all internal reports and data
relating to, containing or derived from the operating results of Huntington and
its Affiliates or any subsidiary or division or line of business thereof,
whether contained in books, records or other paper format, accessed through the
computer and data processing systems of Huntington and its Affiliates, or
otherwise in the possession of Sellers, shall remain solely the property of
Sellers, and nothing contained in this Agreement shall be construed as
transferring to or vesting in Purchaser or any of Purchaser's Affiliates any
right
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or interest in or to such data and information or to grant to Purchasers any
ongoing rights to the use of the CRISP or data derived therefrom. Purchaser
acknowledges that Sellers shall be entitled to take all such steps prior to or
following the Closing as shall be necessary in Sellers' sole discretion to
effect the foregoing, including taking such actions as are necessary to ensure
that all access to such information at the offices of Sellers shall be
terminated as of the Closing. Purchaser shall promptly return to Sellers any
such information or data described herein, which remains at any facilities
transferred hereunder following the Closing.
SECTION 2.15 DETERMINATION OF DEFECT REDUCTION AMOUNTS.
If Sellers shall receive a Title Defect Notice or an Environmental Defect
Notice in respect of any Owned Branch, either party shall have the right to
require the determination of any related Defect Reduction Amount (if any) which
Sellers might elect to accept pursuant to Sections 2.9, 2.10 and this Section
2.15, by providing written notice to the other party that such party requires
such determination. Upon the recipient's receipt of any such notice, Sellers and
Purchaser shall cooperate in good faith in an attempt to reach agreement as to
the applicable Defect Reduction Amount, if any. If the parties are unable to
reach such agreement within fifteen (15) days after the date of Sellers' notice,
then the Defect Reduction Amount shall be determined by an appraisal prepared in
accordance with customary practices and procedures (except as provided herein)
by an M.A.I. appraiser selected by agreement between Sellers and Purchaser,
provided that in the event the parties cannot agree on the selection of an
appraiser within five (5) days, then such appraiser shall be selected as
follows: Sellers and Purchaser shall each select an appraiser within five (5)
days and the two selected appraisers shall then select a third appraiser, who
shall be the appraiser who shall determine the Defect Reduction Amount, if any.
If either party does not select an appraiser within five (5) days, then the
appraiser chosen by the other party shall be solely responsible for determining
the Defect Reduction Amount, and if the two initial appraisers shall fail to
agree on the third appraiser within five (5) Business Days then the parties
shall request that a court of competent jurisdiction in Florida select an
impartial appraiser. For all purposes under this Agreement, the "Defect
Reduction Amount" attributable to any Defect shall be (and any appraisal thereof
shall determine) the amount of the greater of any diminution in the fair market
value of the Owned Branch subject to such Defect which results directly from the
Defect and the costs of remedying such Defect. The fair market value of any Real
Property for purposes of this Section 2.15 shall be the amount of cash which
would be expected to be realized by Sellers if Sellers sold such Real Property,
as willing sellers, to a willing buyer on the Closing Date, in its existing
condition and for its currently contemplated use. If any appraiser selected
hereunder shall be unable to determine any Defect Reduction Amount pursuant to
the foregoing provisions, then the parties shall cooperate and work reasonably
with the appraiser in order to ascertain the Defect Reduction Amount in a
reasonable and mutually satisfactory manner. Any appraiser selected hereunder
shall be an M.A.I. appraiser of good professional standing who has experience
appraising properties similar to the Real Property in question. Any appraisal
costs incurred pursuant to this Section 2.15 shall be shared equally by Sellers
and Purchaser. Any determination of a Defect Reduction Amount pursuant to this
Section 2.15 shall be final. After any Defect Reduction Amount is determined
pursuant to this Section 2.15, Sellers shall, subject to the provisions of
Sections 2.9 and 2.10, elect whether to accept such Defect Reduction Amount (in
which case it shall be deducted from the applicable Property Price) or to lease
the Real Property in question to Purchaser pursuant to Sections 2.10(c) or
exercise the other options available to Sellers pursuant to Sections 2.9 or
2.10, as
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applicable. In determining the Defect Reduction Amount applicable to any Owned
Branch, any appraiser selected hereunder shall determine the fair market value
of such Owned Branch and if such appraisal shall determine that the fair market
value of any Owned Branch exceeds its Property Price under this Agreement, then
such Property Price (and the Purchase Price payable hereunder) shall be
increased accordingly.
SECTION 2.16 NO DUTY TO CURE.
Notwithstanding any provision of this Agreement to the contrary, Sellers
shall not have any obligation or duty to cure any Defect either before or after
the Closing and whether or not Sellers elect to lease to Purchaser any Owned
Branch subject to a Defect (subject to clause (iii) of Section 2.10(c)), and
Sellers shall not have any liability for or in connection with any Defect after
the Closing except as provided in Article V. Purchaser's only rights in
connection with any Defect shall be the rights set forth in Sections 2.9, 2.10
and 2.15 and Article V.
ARTICLE III
CLOSING AND EFFECTIVE TIME
SECTION 3.1 EFFECTIVE TIME.
The purchase of assets and assumption of liabilities provided for in this
Agreement, and the conversion referred to in Sections 4.1 and 4.8 (unless
otherwise mutually agreed to by the parties hereto), shall occur at a closing
(the "Closing") to be held at the offices of Sellers in Columbus, Ohio, at 10:00
a.m., local time, or at such other time, place, and manner as the parties shall
mutually agree, on a date to be mutually agreed upon between the parties, which
date shall occur not earlier than three (3) days nor later than ten (10) days
following the satisfaction or, where legally permitted, waiver of all conditions
set forth in Article IX and Article X (other than those conditions that by their
nature are to be satisfied at the Closing); provided that such date shall not be
before February 15, 2002; provided further that, if Purchaser has agreed in
writing that the conditions to Closing set forth in Sections 9.1 and 9.2 have
been satisfied, and agrees irrevocably to waive such conditions to Closing for
all purposes hereunder (provided that such waiver shall be revocable solely in
the event of any willful breach of the representations and warranties contained
in this Agreement by Sellers after such time or any breach of the covenants and
agreements of Sellers contained in this Agreement after such time that would,
individually or in the aggregate with all other such breaches, result in the
failure of such conditions to be satisfied), then Purchaser may elect (the
"Waiver Election") to extend the Closing until March 15, 2002 (the date of the
Waiver Election being the "Waiver Date"), if such extension is necessary to
permit the consummation of the sale of Branches by Purchaser to a third party
where such sale is required in connection with any Regulatory Approval. If
Purchaser elects to exercise the Waiver Election, each Seller agrees to deliver
to Purchaser on the Waiver Date a certificate of a proper officer of such
Seller, dated as of the Waiver Date, certifying as to the satisfaction of the
conditions set forth in Section 9.1 and Section 9.2 (except to the extent
previously waived, if at all, pursuant to Section 4.2(a)). The effective time
(the "Effective Time") shall be 11:59 p.m., local time in Columbus, Ohio, on the
day on which the Closing occurs (the "Closing Date"). Each of Purchaser and
Sellers shall use their reasonable best efforts
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to effect the Closing as of February 15, 2002, or as promptly as reasonably
practicable thereafter, subject to the satisfaction or waiver, where permitted
by law, of the conditions to Closing set forth in Articles IX and X, and the
second proviso of the preceding sentence.
SECTION 3.2 CLOSING.
(a) All actions taken and documents delivered at the Closing shall
be deemed to have been taken and executed simultaneously, and no action shall be
deemed taken nor any document delivered until all have been taken and delivered.
(b) At the Closing, subject to all the terms and conditions of
this Agreement, including receipt of all consents and approvals hereunder,
Sellers shall execute and deliver to Purchaser the following:
(1) special warranty deeds executed by the appropriate
Seller transferring all of such Seller's right, title and interest in and
to each parcel of Real Property to Purchaser, subject to Permitted
Encumbrances, in substantially the form attached hereto as Exhibit
3.2(b)(1);
(2) a Bill of Sale, in substantially the form attached
hereto as Exhibit 3.2(b)(2), transferring to Purchaser all of Sellers'
interest in the Personal Property and the Coins and Currency;
(3) an Assignment and Assumption Agreement in substantially
the form attached hereto as Exhibit 3.2(b)(3), with respect to the
Transferred Liabilities ("Assignment and Assumption Agreement");
(4) an Assignment and Assumption of Leases executed by the
appropriate Seller, in substantially the form attached hereto as Exhibit
3.2(b)(4), assigning such Seller's interest in the Real Property Leases
and pursuant to which Purchaser shall assume the Real Property Leases
("Assignment and Assumption of Leases");
(5) an Assignment and Assumption of Transferred Lease, in
substantially the form attached hereto as Exhibit 3.2(b)(5), assigning
HNB's interest as lessor in the Transferred Lease and pursuant to which
Purchaser shall assume the Transferred Lease ("Assignment and Assumption
of Transferred Lease");
(6) subject to the provisions of Section 8.8, such consents
of landlords as shall have been obtained as required pursuant to the terms
of the Real Property Leases to the assignment of the Branch Leases to
Purchaser;
(7) estoppel certificates executed by the lessors of the
Leased Premises, to the extent Sellers can obtain such certificates using
their commercially reasonable efforts and without the payment of any fees
to such lessors;
(8) a certificate of a proper officer of each Seller, dated
as of the Closing Date, certifying as to the satisfaction of the
conditions set forth in Section 9.1
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and Section 9.2 (provided that in the event that Purchaser has waived such
conditions pursuant to Section 3.1 or 4.2(a), such certificate need only
address such matters as have not been waived under the terms of such
Sections);
(9) a Closing Statement using amounts shown on the
Pre-Closing Balance Sheet, substantially in the form attached hereto as
Exhibit 3.2(b)(9) (the "Closing Statement");
(10) an affidavit of HNB certifying that HNB is not a
"foreign Person" as defined in the federal Foreign Investment in Real
Property Tax Act of 1980 and a "No Lien Affidavit," in the forms attached
hereto as Exhibit 3.2(b)(10);
(11) immediately available funds in the net amount shown as
owing to Purchaser by Sellers on the Closing Statement, if any;
(12) a limited power of attorney to allow Purchaser, in the
name of Sellers, to effect transfers of Transferred Assets after the
Closing, which shall be in substantially the form attached hereto as
Exhibit 3.2(b)(12); and
(13) such certificates and other documents as the parties
determine to be reasonably necessary in connection with the consummation
of the transactions contemplated hereby and which do not alter the
parties' respective obligations or liability hereunder.
(c) At the Closing, subject to all the terms and conditions of
this Agreement, Purchaser shall execute and deliver to Sellers:
(1) the Assignment and Assumption Agreement;
(2) the Assignment and Assumption of Leases;
(3) the Assignment and Assumption of Transferred Lease;
(4) a certificate and receipt acknowledging the delivery and
receipt of possession of the Transferred Assets and records referred to in
this Agreement;
(5) immediately available funds in the net amount shown as
owing to Sellers by Purchaser on the Closing Statement, if any;
(6) a certificate of a proper officer of each Seller, dated
as of the Closing Date, certifying as to the satisfaction of the
conditions set forth in Section 10.1 and Section 10.2; and
(7) such certificates and other documents as the parties
determine to be reasonably necessary in connection with the consummation
of the transactions contemplated hereby and which do not alter the
parties' respective obligations or liability hereunder.
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SECTION 3.3 POST CLOSING ADJUSTMENTS.
(a) Not later than the close of business on the 60th day after the
Effective Time (such actual date of delivery, the "Post-Closing Balance Sheet
Delivery Date"), Huntington shall deliver to Purchaser a balance sheet dated as
of the Effective Time based on Sellers' books and records and using the internal
accounting procedures of Sellers consistently applied reflecting the assets sold
and assigned and the liabilities transferred and assumed hereunder (the
"Post-Closing Balance Sheet"), together with a copy of Huntington's calculation
of the Purchase Price as adjusted hereunder and the amounts payable thereunder.
Huntington shall afford Purchaser and its accountants and attorneys the
opportunity to review all work papers and documentation used by Huntington in
preparing the Post-Closing Balance Sheet.
(b) Except as otherwise expressly provided herein, the
determination of the Post-Closing Balance Sheet shall be final and binding on
the parties hereto unless within thirty (30) days after receipt by Purchaser of
the Post-Closing Balance Sheet, Purchaser shall notify Sellers in writing of its
disagreement with any amount included therein or omitted therefrom, in which
case, if the parties are unable to resolve the disputed items within ten (10)
Business Days of the receipt by Sellers of notice of such disagreement, such
items shall be determined by a "big five" independent accounting firm selected
by mutual agreement between Sellers and Purchaser; provided, however, that in
the event the fees of such firm as estimated by such firm would exceed fifty
percent (50%) of the net amount in dispute, the parties agree that such firm
will not be engaged by either party and that such net amount in dispute will be
equally apportioned between Sellers, on the one hand, and Purchaser, on the
other hand. Such accounting firm shall be instructed to resolve the disputed
items within ten (10) Business Day of engagement, to the extent reasonably
practicable. The determination of such accounting firm shall be final and
binding on the parties hereto. The fees of any such accounting firm shall be
divided equally between Sellers, on the one hand, and Purchaser, on the other
hand. Notwithstanding the foregoing provisions of this Section 3.3(b), if at any
time within three (3) months after the Post-Closing Balance Sheet Delivery Date
either party discovers an error in the calculation of the Post-Closing Balance
Sheet that resulted in the Purchase Price actually paid, as adjusted pursuant to
this Section 3.3 ("Original Price"), being at least $250,000, individually or in
the aggregate with all such errors, more or less than the Purchase Price would
have been but for such error ("Revised Price"), and notifies the other party
thereof, the parties agree to cooperate in good faith to correct the error. If
the parties disagree on the existence or magnitude of an error within ten (10)
Business Days after notice thereof, such matter shall be resolved by an
independent accounting firm in the same manner as described above for resolving
disputed items; provided, however, that in the event the fees of such firm as
estimated by such firm would exceed fifty percent (50%) of the net amount in
dispute, the parties agree that such firm will not be engaged by either party
and that such net amount in dispute will be equally apportioned between Sellers,
on the one hand, and Purchaser, on the other hand. Upon the determination of the
Revised Price, the appropriate party shall pay an amount to the other that is
the difference between the amount actually paid by such party pursuant to
Section 2.2 and the amount that such party would have paid to the other if the
Original Price had been equal to the Revised Price, together with interest
thereon computed from the Effective Time up to but not including the Adjustment
Payment Date at the applicable Federal Funds Rate.
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(c) Not later than the close of business on the 15th day following
the determination of the Post-Closing Balance Sheet (the "Adjustment Payment
Date"), Huntington and Purchaser shall meet at the offices of Huntington in
Columbus, Ohio, or such other location as may be mutually agreed, to effect the
transfer of any funds as may be necessary to reflect changes in such assets and
liabilities between the Pre-Closing Balance Sheet and the Post-Closing Balance
Sheet and resulting changes in the Purchase Price, together with interest
thereon computed from the Effective Time up to but not including the Adjustment
Payment Date at the applicable Federal Funds Rate.
ARTICLE IV
TRANSITIONAL MATTERS
SECTION 4.1 GENERAL.
(a) Sellers and Purchaser shall cooperate in good faith to assure
an orderly transition of ownership of the Transferred Assets and Transferred
Liabilities to Purchaser hereunder. Commencing promptly following the date
hereof, appropriate personnel of Sellers and Purchaser shall meet to discuss and
draft a mutually acceptable transition plan covering operational aspects of the
transition consistent with the terms of this Agreement, including handling and
settlement of the following, as applicable: checks on deposit accounts and home
credit line accounts, loan payments, direct deposits and direct debits through
ACH or otherwise, point of sale transactions, ATM transactions, error resolution
matters pursuant to Regulations E and Z of the Federal Reserve Board,
miscellaneous account adjustments, daily settlement, and other settlement and
transition items. Upon finalizing such agreed upon transition plan, such
transition plan shall be incorporated herein and deemed a part hereof, and shall
be binding upon the parties hereto.
(b) In furtherance of the foregoing, appropriate personnel of
Sellers and Purchaser shall meet to discuss and agree upon mutually acceptable
transaction settlement procedures and specifications, files (including without
limitation conversion sample files) and schedules for the transfer of data
processing responsibilities relating to the Florida Franchise from Sellers to
Purchaser, to be effective as of the Closing. Purchaser will have responsibility
for all product mapping and the creation of all conversion programs and
procedures but Sellers will provide qualified personnel to reasonably consult
and confer with Purchaser to facilitate this process. Not later than fifteen
(15) days following the date hereof, Sellers shall deliver to Purchaser the
specifications and conversion sample files in Sellers' possession and, as
promptly as reasonable practicable following the date hereof, shall deliver to
Purchaser such specifications and conversion sample files held by third parties
and relating to the Banking Operations. Sellers shall have no obligation to
furnish Purchaser with any customer information other than that which is
necessary for purposes of the ongoing operation of the Florida Franchise.
(c) From time to time prior to the Closing, after Purchaser has
tested and confirmed the conversion sample files, Purchaser may request and
Sellers shall provide reasonable additional file-related information.
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(d) Not later than thirty (30) days prior to the Closing Date,
Sellers shall deliver to Purchaser a complete and accurate list of all
applicable customer routing and transit numbers and account numbers.
(e) Sellers shall cooperate with Purchaser in good faith in
connection with the sale to a third party of Branches where such sale is
required in connection with any Regulatory Approval. In furtherance of the
foregoing, Sellers shall provide to Purchaser and any potential purchasers in
connection with such sales (each a "Third Party Purchaser") who have entered
into confidentiality agreements reasonably satisfactory to Sellers and Purchaser
all financial and other information relating to the assets to be sold and
liabilities to be assumed by such Third Party Purchaser as would reasonably be
requested in connection with a customary due diligence review by such Third
Party Purchaser. In connection with the preceding two sentences, Sellers shall
not be required to take any action that is unreasonably disruptive to the
business of the Sellers or the Florida Franchise. In addition, Sellers shall
cooperate with Purchaser and such Third Party Purchasers, and Purchaser and such
Third Party Purchasers shall cooperate with Sellers, in connection with
transitional matters in the same manner and to the same extent provided pursuant
to this Article IV.
SECTION 4.2 NOTICES TO CUSTOMERS AND OTHERS.
(a) Not later than thirty (30) days prior to the Closing Date (or
such other time as may be required by law), Sellers and Purchaser shall jointly,
at Purchaser's expense, notify customers with Deposits, Trust Accounts and
Brokerage and Advisory Assets that, subject to the terms and conditions of this
Agreement, Purchaser will be assuming all Deposit Liabilities, Trust Accounts
and Brokerage Advisory Assets, as the case may be, and each of Sellers and
Purchaser shall join in providing where appropriate, all notices to customers of
the Branches and all other Persons as Sellers or Purchaser, as the case may be,
is or are required to give under applicable law or the terms of any agreements
between Sellers and any customer in connection with the transactions
contemplated hereby. Following the signing of this Agreement, Purchaser may
communicate with and deliver information to depositors and other customers of
the Branches concerning this Agreement and the business of Purchaser. When
requested, upon request by Purchaser, Sellers will provide reasonable assistance
to Purchaser in mailing or causing to be mailed such communications, at
Purchaser's expense. Purchaser and Sellers shall jointly approve in good faith
the content of all notices and communications under this Section 4.2 prior to
the distribution of any such notices and communications. Notwithstanding
anything to the contrary contained herein, no communications referring to the
closing, consolidation or divestiture of any Branch (other than the in-store
Branches at Albertson's, Inc.) shall be sent to Deposit account holders of the
Florida Franchise prior to the later of (i) the thirtieth (30th) day preceding
the anticipated Closing Date and (ii) the date on which SunTrust agrees in
writing that the conditions to Closing set forth in Sections 9.1 and 9.2 have
been satisfied and agrees irrevocably to waive such conditions to Closing for
all purposes hereunder (provided that such waiver shall be revocable solely in
the event of any willful breach of the representations and warranties contained
in this Agreement by Sellers after such time or any breach of the covenants and
agreements of Sellers contained in this Agreement after such time that would,
individually or in the aggregate with all other such breaches, result in the
failure of such conditions to be satisfied). At the time Purchaser makes the
foregoing waiver, each Seller agrees to deliver to Purchaser on the date of such
waiver a certificate of a proper officer of such Seller, dated as of
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such date, certifying as to the satisfaction of the conditions set forth in
Section 9.1 and Section 9.2 (except to the extent previously waived, if at all,
pursuant to Section 3.1).
(b) A party proposing to send or publish any notice or
communication pursuant to any paragraph of this Article IV shall furnish to the
other party a copy of the proposed form of such notice or communication at least
five (5) days in advance of the proposed date of the first mailing, posting, or
other dissemination thereof to customers, and shall incorporate any changes in
such notice as the other party reasonably proposes as necessary to comply with
applicable law or which the other party reasonably requests for any proper
business purpose. All costs and expenses of any notice or communication sent or
published by Purchaser or Sellers shall be the responsibility of the party
sending such notice or communication and all costs and expenses of any joint
notice or communication shall be shared equally by Sellers, on the one hand, and
Purchaser, on the other hand.
(c) Without limiting the generality of the foregoing, Sellers
shall send or permit Purchaser to send, on Purchaser's behalf and at Purchaser's
sole cost and expense, such notices to customers as are reasonably requested by
Purchaser, subject to the fourth and fifth sentences of Section 4.2(a).
SECTION 4.3 DIRECT DEPOSITS.
Sellers will transfer to Purchaser not later than the Closing Date all of
those Automated Clearing House ("ACH") and FedWire direct deposit arrangements
related (by agreement or other standing arrangement) to Deposits. As soon as
practicable after the receipt of all Regulatory Approvals (except for the
expiration of statutory waiting periods), Sellers will deliver to Purchaser a
listing in a format mutually agreed upon by the parties of all such direct
deposit records which Sellers, in the exercise of all reasonable efforts, is
able to identify. In connection with the obligations under Section 4.1,
Purchaser and Sellers shall cooperate in good faith (i) to determine the method
and timing for remitting to Purchaser and settling, for a 180-day period
following the Closing Date, ACH direct deposits and FedWire direct deposits
relating to accounts constituting Deposits, as well as such other matters
relating thereto as may be necessary or advisable for purposes of assuring an
orderly transition of ownership of the Deposit Liabilities to Purchaser
hereunder and (ii) to determine the method and timing for remitting to Sellers
and settling, for a 180-day period following the Closing Date, ACH direct
deposits and FedWire direct deposits relating to deposit accounts of Sellers
that are not Deposits, but which transactions are nonetheless routed to
Purchaser as a result of the transfer to Purchaser of the routing and transit
numbers or for other reasons, as well as such other matters relating thereto as
may be necessary or advisable for purposes of assuring the orderly processing of
transactions routed to Purchaser that relate to deposit accounts of Sellers that
are not Deposits.
SECTION 4.4 DIRECT DEBIT.
As soon as practicable after the receipt of all Regulatory Approvals
(except for the expiration of statutory waiting periods), and after the notice
provided in Section 4.2(a), Purchaser will send appropriate notice to all
customers having accounts constituting Deposits the terms of which provide for
direct debit of such accounts by third parties, instructing such customers
concerning transfer of customer direct debit authorizations from Sellers to
Purchaser. Sellers
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shall cooperate in soliciting the transfer of such authorizations. Such notice
shall be in a form agreed to by the parties acting in good faith. In connection
with the obligations under Section 4.1, Purchaser and Sellers shall cooperate in
good faith (i) to determine the method and timing for forwarding to Purchaser
and settling, for a 180-day period following the Closing Date, all direct debits
relating to accounts constituting Deposits, as well as such other matters
relating thereto as may be necessary or advisable for purposes of assuring an
orderly transition of ownership of the Deposit Liabilities to Purchaser
hereunder and (ii) to determine the method and timing for forwarding to Sellers
and settling, for a 180-day period following the Closing Date, all direct debits
relating to deposit accounts of Sellers that are not Deposits, but which
transactions are nonetheless routed to Purchaser as a result of the transfer to
Purchaser of the routing and transit numbers or for other reasons, as well as
such other matters relating thereto as may be necessary or advisable for
purposes of assuring the orderly processing of transactions routed to Purchaser
that relate to deposit accounts of Sellers that are not Deposits.
SECTION 4.5 INTEREST REPORTING AND WITHHOLDING.
(a) Unless otherwise agreed to by the parties, Sellers will report
to applicable taxing authorities and holders of Deposits, with respect to the
period from January 1 of the year in which the Closing occurs through the
Closing Date, all interest (including for purposes hereof dividends and other
distributions with respect to money market accounts) credited to, withheld from
and any early withdrawal penalties imposed upon the Deposits. Purchaser will
report to the applicable taxing authorities and holders of Deposits, with
respect to all periods from the day after the Closing Date, all such interest
credited to, withheld from and early withdrawal penalties imposed upon such
Deposits. Any amounts required by any governmental agencies to be withheld from
any of the Deposits through the Closing Date will be withheld by Sellers in
accordance with applicable law or appropriate notice from any governmental
agency and will be remitted by Sellers to the appropriate agency on or prior to
the applicable due date. Any such withholding required to be made subsequent to
the Closing Date shall be withheld by Purchaser in accordance with applicable
law or the appropriate notice from any governmental agency and will be remitted
by Purchaser to the appropriate agency on or prior to the applicable due date.
Promptly after the Closing Date, but in no event later than the date Purchaser
is obligated to remit such amounts to the applicable governmental agency,
Sellers will pay to Purchaser that portion of any sums theretofore withheld by
Sellers from any Deposits which are required to be remitted by Purchaser
pursuant to the foregoing and shall directly remit to the applicable
governmental agency that portion of any such sums which are required to be
remitted by Sellers.
(b) Unless otherwise agreed by the parties, Sellers shall be
responsible for delivering to payees all IRS notices with respect to information
reporting and tax identification numbers required to be delivered through the
Closing Date with respect to the Deposits, and Purchaser shall be responsible
for delivering to payees all such notices required to be delivered following the
Closing Date with respect to the Deposits. Purchaser and Sellers shall, prior to
the Closing Date, consult and Sellers shall take reasonable actions as are
necessary to permit Purchaser timely to deliver such IRS notices required to be
delivered following the Closing Date.
(c) Unless otherwise agreed by the parties, Sellers will make all
required reports to applicable Tax authorities and to obligors on Loans
purchased on the Closing Date, with respect to the period from January 1 of the
year in which the Closing occurs through the
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Closing Date, concerning all interest and points received by the Sellers.
Purchaser will make all required reports to applicable Tax authorities and to
obligors on Loans purchased on the Closing Date, with respect to all periods
from the day after the Closing Date, concerning all such interest and points
received.
SECTION 4.6 ATM/DEBIT CARDS.
Sellers will provide Purchaser with a list of ATM access/debit cards
(including any point-of-sale cards) issued by Sellers to depositors of any
Deposits, and a data processing record in the Sellers' standard format
containing all addresses therefor and all related information required to
support an automated conversion, as soon as practicable after the receipt of all
Regulatory Approvals (except for the expiration of any statutory waiting
periods). At or promptly after the Closing, Sellers will provide Purchaser with
a revised data processing record through the Closing, and, within thirty days
(30) following the date hereof, all customer PINs or algorithms or logic used to
generate PINs. Purchaser shall reissue ATM access/debit cards to depositors of
any Deposits prior to the Closing Date, which cards shall be effective as of the
Closing Date.
SECTION 4.7 LEASING OF PERSONAL AND REAL PROPERTY.
Sellers shall use commercially reasonable efforts to renew or extend on
a-month-to-month basis, any Personal Property Lease or Real Property Lease that
is currently in effect but that would otherwise expire on or prior to the
Closing; provided, however, that no such renewal or extension shall be for a
fixed term exceeding one year without the prior written consent of Purchaser
(which consent shall not be unreasonably withheld or delayed). Sellers shall not
cancel, terminate or amend (other than as provided in the preceding sentence
relating to extensions) any such Personal Property Lease or Real Property Lease
without the prior written consent of Purchaser (which consent shall not be
unreasonably withheld or delayed). Notwithstanding the foregoing, Sellers shall
use commercially reasonable efforts to amend any Personal Property Leases in
order to transfer the related Personal Property to Purchaser pursuant to Article
II if such amendment is required to effect such transfer.
SECTION 4.8 DATA PROCESSING CONVERSION FOR THE BRANCHES AND HANDLING OF
CERTAIN ITEMS.
(a) The conversion of the data processing with respect to the
Transferred Assets and Transferred Liabilities will be completed on the Closing
Date unless otherwise agreed by the parties. Sellers and Purchaser agree to
cooperate to facilitate the orderly transfer of data processing information in
connection with the transactions contemplated hereby. Within fifteen (15) days
of the date of this Agreement, Purchaser and/or its representatives shall be
permitted access (subject to the provisions of Section 8.1) to review each
Branch and Other Facility for the purpose of installing automated equipment for
use by the personnel of the Branches and the Other Facilities. Following the
receipt of all Regulatory Approvals (except for the expiration of statutory
waiting periods), Purchaser shall be permitted, at its expense, to install and
test communications lines, both internal and external, from each site and
prepare for the installation of automated equipment on the Closing Date.
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(b) During the one hundred eighty (180) day period after the
Closing Date, (i) Sellers shall pay all Transaction Account drafts presented to
it for payment that are drawn on accounts constituting Deposits and (ii)
Purchaser shall pay all Transaction Account drafts presented to it for payment
that are drawn on deposit accounts of Sellers that are not Deposits, but which
items are nonetheless routed to Purchaser as a result of the transfer to
Purchaser of the routing and transit numbers or for other reasons. Each party
shall make available to the other on a next-day basis such drafts that it pays.
Each party shall promptly reimburse the other on a daily settlement basis for
the amount of all such drafts paid by the other party. Neither party shall
return any such drafts to the other, but shall handle any returns directly with
the payee bank or other parties in the clearing process.
(c) Purchaser agrees to accept from Sellers, and reimburse Sellers
on a daily settlement basis for, all returns of the following items: (i) any
item which Sellers credited for deposit to or cashed against a Deposit account
or posted as payments to a Loan account before Closing and the item is returned
to Sellers after the Closing; and (ii) any item which Sellers credited for
deposit to or cashed against a Deposit account or posted as payments to a Loan
account within the ninety (90) day period following the Closing and the item is
returned to Sellers.
(d) Purchaser agrees to pay in accordance with law and customary
banking practices all properly drawn and presented checks, drafts and withdrawal
orders presented to Purchaser by mail, over the counter or through the check
clearing system of the banking industry, by depositors of the accounts assumed,
whether drawn on the checks, withdrawal orders or draft forms provided by
Sellers or by Purchaser, and in all other respects to discharge, in the usual
course of the banking business, the duties and obligations of Sellers with
respect to the balances due and owing to the depositors whose accounts are
assumed by Purchaser.
SECTION 4.9 NOTICES TO OBLIGORS ON LOANS.
(a) Purchaser shall no later than fifteen (15) days prior to the
Closing Date prepare and transmit, at Purchaser's sole cost and expense, each
obligor on each Loan, a notice in a form satisfying all legal requirements and
reasonably acceptable to Sellers to the effect that the Loan will be transferred
to Purchaser and directing that payments be made after the Closing Date to
Purchaser at any address of Purchaser specified by Purchaser, with Purchaser's
name as payee on any checks or other instruments used to make as payments, and,
with respect to all such Loans on which payment notices or coupon books have
been issued, to issue new notices or coupon books reflecting the name and
address of Purchaser as the Person to whom and the place at which payments are
to be made. To the extent that Purchaser's notice pursuant to the prior sentence
shall be legally insufficient, Sellers agree, at Purchaser's sole expense, to
provide all Loan obligors with all required notices of the assignment and
transfer of the Loans.
(b) Sellers will render a final statement to each depositor of a
Deposit account assumed under this Agreement for which statements are provided
as to transactions occurring through the Effective Time and will comply with all
laws, rules and regulations regarding tax reporting of transactions of such
accounts through the Effective Time. Sellers will be entitled to impose normal
fees and service charges on a per-item basis, but Sellers will not impose
periodic fees or blanket charges in connection with such final statements.
Purchaser will comply with all
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laws, rules and regulations regarding tax reporting of transactions of such
accounts after the Effective Time.
(c) To the extent that any of the Loans transferred from Sellers
to Purchaser involve a transfer of servicing as defined and governed by the Real
Estate Settlement Procedure Act (12 U.S.C. Section 2601 et seq.), Sellers and
Purchaser will jointly coordinate any appropriate required customer notices.
ARTICLE V
INDEMNIFICATION
SECTION 5.1 HUNTINGTON'S INDEMNIFICATION OF PURCHASER.
Subject to any limitations in this Section 5.1 and Section 5.4, Sellers
shall jointly and severally indemnify, hold harmless, and defend the Purchaser
from and against any Losses that Purchaser incurs as a result of (a) any breach
by Sellers of any of their covenants or agreements contained herein occurring
prior to the Effective Time, (b) any breach by Sellers of any of their
representations and warranties contained herein (other than the representations
and warranties set forth in Section 6.10, as to which Purchaser's only remedies
shall be as set forth in this Section 5.1), and (c) any Excluded Liabilities. In
the event of any breach of the representations and warranties contained in
Section 6.10, Purchaser's sole remedy shall be to require the Sellers to (i)
purchase the Loan which breaches such representation and warranty at the
principal amount thereof, plus accrued and unpaid interest, late charges and any
other charges thereon, in each case as of the time of the applicable purchase,
and net of loan loss reserves of eighty-three (83) basis points of such Loan as
of the time of the applicable purchase (a "Purchase Right") or (ii) indemnify
Sellers in accordance with the other provisions of this Article V, with Sellers
having the right to choose between such measures. Purchaser shall not be
entitled to indemnity for any alleged or actual breach of the representations
and warranties contained in Section 6.6 to the extent that such breach has been
taken into account pursuant to the provisions set forth in Section 2.9 or 2.10
or is reflected in the determination of the applicable Property Price.
SECTION 5.2 PURCHASER'S INDEMNIFICATION OF SELLERS.
Purchaser shall indemnify, hold harmless, and defend Sellers from and
against any Losses that Sellers incur as a result of (i) any breach by Purchaser
of any of its covenants or agreements contained herein occurring prior to the
Effective Time, (ii) any breach by Purchaser of any of its representations and
warranties contained herein, and (iii) any Loss that either of the Sellers may
incur in connection with Banking Operations as conducted by Purchaser occurring
from and after the Effective Time or otherwise relating to the Transferred
Assets or the Transferred Liabilities (other than Excluded Liabilities).
SECTION 5.3 CLAIMS FOR INDEMNITY.
(a) A claim for indemnity shall be made by the claiming party at
any time prior to the applicable Claim Limitation Anniversary by the giving of
written notice thereof to the other party. Such written notice shall set forth
in reasonable detail the basis upon which such
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claim for indemnity is made. In the event that any bona fide claim is made
within such period, the indemnity relating to such claim shall survive until
such claim is resolved. No claim for indemnity may be made at any time at or
after the 18-month anniversary of the Effective Time (excluding claims for
indemnity with respect to (i) the representations and warranties contained in
Section 6.3, which may be made for a period of five (5) years after the
Effective Time, (ii) the representations and warranties contained in Section
6.14, which may be made at any time up to the date ending thirty (30) days after
the applicable statutes of limitations with respect thereto and (iii) Excluded
Liabilities, which may be made at any time after the Effective Time) and no
indemnity shall be available therefor in accordance with the provisions of this
Article V. The applicable claim limitation period, as provided in the preceding
sentence, is hereby referred to as the "Claim Limitation Anniversary."
(b) In the event that any Person or entity not a party to this
Agreement shall make any demand or claim or file or threaten to file any
lawsuit, which demand, claim or lawsuit may result in any Loss to a party hereto
of the kind for which such party is entitled to indemnification pursuant to
Section 5.1 or Section 5.2 hereof, such indemnified party shall notify the
indemnifying party of such demand, claim or lawsuit within thirty (30) Business
Days of such demand, claim, filing or threat; provided, however, that any
failure by the indemnified party to so notify the indemnifying party shall not
relieve the indemnifying party from its obligations hereunder, except to the
extent that the indemnified party is actually prejudiced by such failure to give
such notice. Following receipt of notice of a demand, claim or lawsuit, and
unless counsel to the indemnified party shall have determined in good faith that
the assumption of such defense by the indemnifying party would be inappropriate
due to a conflict or potential conflict of interest or the availability of
defenses not available to the indemnifying party, the indemnifying party shall
have the option, at its cost and expense, to assume the defense of such matter
and to retain counsel (not reasonably objected to by the indemnified party) to
defend any such demand, claim or lawsuit, and the indemnifying party shall not
be liable to the indemnified party for any fees of other counsel or any other
expenses (except as expressly provided to the contrary herein) with respect to
the defense of such claim or litigation, other than reasonable fees and expenses
of counsel employed by the indemnified party for any period during which the
indemnifying party has not assumed the defense thereof. The indemnified party
shall have the option of joining the defense of such demand, claim or lawsuit
(which shall be at the cost and expense of the indemnified party unless (i)
counsel to the indemnified party determines in good faith that joint
representation would be inappropriate due to a conflict or potential conflict of
interest or the availability of defenses not available to the indemnifying party
or (ii) the indemnifying party fails to assume the defense of such demand, claim
or lawsuit within a reasonable period of time following written notice thereof)
with counsel not reasonably object to by the indemnifying party and counsel for
each party shall, to the extent consistent with its professional
responsibilities, cooperate with the other party and any counsel designated by
that party. In effecting the settlement of any such demand, claim or lawsuit,
the indemnifying party, or the indemnified party, as the case may be, shall act
in good faith, shall consult with the other party and shall enter into only such
settlement as the other party shall consent, such consent not to be unreasonably
withheld or delayed. An indemnifying party shall not be liable for any
settlement not made in accordance with the preceding sentence.
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SECTION 5.4 LIMITATIONS ON INDEMNIFICATION.
(a) Huntington shall not be required to indemnify Purchaser, and
Purchaser shall not be required to indemnify Huntington, unless the aggregate
amount of all Losses incurred by Purchaser or Sellers pursuant to Section 5.1 or
5.2 (as the case may be), exceeds $1,500,000. Once such aggregate amount of
Losses incurred by Purchaser, on the one hand, or Sellers, on the other hand,
exceeds $1,500,000, Purchaser or Sellers, as the case may be, shall thereupon be
entitled to indemnification only for amounts in excess of such $1,500,000;
provided, however that the limitations contained in this sentence and the
immediately preceding sentence shall not apply to any claim of common law fraud
or claims for indemnification for Excluded Liabilities. In addition, no party
hereto shall assert any claim for indemnification hereunder, including claims
relating to Excluded Liabilities, to which such party is otherwise entitled
unless and until the aggregate of all such Losses (including any related claims
for Losses or any claims for Losses arising out of the same operative set of
facts) submitted for indemnification at such time exceeds $10,000, at which time
all such Losses may be asserted. No party hereto shall have any obligation
hereunder for any consequential liability, damage or loss or any lost profits.
(b) Neither Sellers, on the one hand, nor Purchaser, on the other
hand, shall be obligated to indemnify the other for Losses that exceed
$75,000,000 in the aggregate with all Losses asserted by such party; provided,
however that the limitations contained in this sentence shall not apply to any
claim of common law fraud or claims for indemnification for Excluded
Liabilities.
(c) Following the Closing, the sole and exclusive remedy of the
parties hereto with respect to any and all claims relating to the matters
addressed in Sections 5.1 and 5.2 (other than claims of common law fraud) shall
be pursuant to the indemnification provisions set forth in this Article IV;
provided however that the parties may seek to enforce specifically this
Agreement and the terms and conditions hereof.
(d) Nothing in this Article V shall affect the rights and remedies
of Purchaser or Sellers with respect to any breach by the other of any of their
covenants or agreements to be performed at or after the Effective Time.
SECTION 5.5 TREATMENT OF INDEMNIFICATION PAYMENTS.
Sellers and Purchaser agree to treat any indemnification payment under
this Article V as an adjustment of the consideration paid for the Transferred
Assets for income tax purposes.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLERS
Except as otherwise disclosed to Purchaser in writing prior to the date
hereof in a Schedule hereto, each of the Sellers jointly and severally
represents and warrants to Purchaser as follows:
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SECTION 6.1 CORPORATE ORGANIZATION; CORPORATE AUTHORITY.
Huntington is a financial holding company duly organized, validly
existing, and in good standing under the laws of the State of Maryland. HNB is a
national banking association duly organized, validly existing and in good
standing under the laws of the United States. Sellers have the corporate power
and authority to carry on their respective businesses as currently conducted, to
execute and deliver this Agreement and related documents and to effect the
transactions contemplated herein. No further corporate authorization is
necessary for Sellers to consummate the transactions contemplated hereunder.
SECTION 6.2 NO VIOLATION.
Assuming receipt of the required approvals referenced under Section 6.15,
neither the execution and delivery of this Agreement, nor the consummation of
the transactions contemplated herein, will violate or conflict with (i) Sellers'
charters or bylaws; (ii) any material provision of any material agreement or any
other material restriction of any kind to which Sellers are parties or by which
Sellers, the Transferred Assets or the Transferred Liabilities are bound; (iii)
any material statute, law, decree, regulation, or order of any Governmental
Authority; (iv) any of the leases constituting Transferred Assets (subject to
obtaining all required landlord consents) or (v) any material provision which
will result in a default under, or cause the acceleration of the maturity of,
any material obligations or loans to which Sellers are parties.
SECTION 6.3 ENFORCEABLE AGREEMENT.
This Agreement has been duly executed and delivered by Huntington and HNB
and, upon execution and delivery by Purchaser, will be the legal, valid, and
binding agreement of Huntington and HNB, enforceable against each of Huntington
and HNB in accordance with its terms, except as the availability of equitable
remedies may be limited by equitable principles of general applicability.
SECTION 6.4 NO BROKERS.
All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Huntington and Purchaser, and there
has been no participation or intervention by any other Person, firm or
corporation employed or engaged by or on behalf of Sellers in such a manner as
to give rise to any valid claim against Sellers or Purchaser for a brokerage
commission, finder's fee or like commission, except that Sellers have engaged
Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated and will be solely
responsible for their fees and expenses.
SECTION 6.5 PERSONAL PROPERTY.
Sellers own, and will convey to Purchaser at the Closing, all of Sellers'
right, title, and interest to all of the Personal Property, which constitutes
good and marketable title, free and clear of any mortgages, liens, security
interests pledges or encumbrances of any kind or nature ("Liens"), other than
any such Liens that are reflected in the Net Book Value of the Personal Property
for purposes of Section 2.2 or that do not materially detract from the value of
or interfere with the use of the Personal Property. Except for the Excluded
Assets, the Personal
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Property and other Transferred Assets constitute (or, in the case of the books
and records, provide access to) all of the assets required to conduct the
Banking Operations in all material respects as presently conducted, other than
such assets relating to human resources, finance, data processing and recording,
marketing and similar support services provided to the Florida Franchise by
Sellers from offices outside of Florida.
SECTION 6.6 REAL PROPERTY AND THE LEASED PREMISES.
(a) Except as set forth in Schedule 6.6, Sellers have good,
marketable and insurable fee simple title to the Real Property, subject to any
applicable Permitted Encumbrances and any Title Defect addressed pursuant to the
provisions of Section 2.9, and valid leasehold interests in all of the Leased
Premises, subject to any applicable Permitted Encumbrances, a complete and
accurate description of which properties (together with a complete and accurate
list of all tenants under Tenant Leases) is set forth on Schedules 2.1(a)(1) and
2.1(a)(2)(w) - (z).
(b) Except as specifically set forth in Schedule 2.1(a)(1), there
are no pending, or, to the Knowledge of Sellers, threatened or contemplated
condemnation or similar proceeding affecting the Real Property or any portion
thereof. Sellers will present to Purchaser, within five (5) days after receipt
by Sellers, any notices that it receives relating to such a project or any
condemnation that relates to the Property. To the Knowledge of Sellers, there
exists no fact or condition that would result in the termination of the existing
access to the Real Property.
(c) Except as specifically set forth in Schedule 2.1(a)(1),
Sellers have not entered into any agreement for the sale, transfer, assignment
or other disposition of the Real Property or the Leased Premises.
(d) Except as specifically set forth on Schedule 2.1(a)(1), and
other than the Assumed Contracts, Sellers have not contracted for any services
and or made any commitments or obligations therefor that will become binding
upon Purchaser with respect to the Real Property.
SECTION 6.7 CONDITION OF PROPERTY.
Except as expressly set forth herein, Purchaser hereby acknowledges and
agrees that: (i) Purchaser is expressly purchasing the Real Property and
accepting the Leased Premises (and taking assignments of and assuming the Real
Property Leases) in their respective existing condition "AS IS, WHERE IS, AND
WITH ALL FAULTS" with respect to any and all facts, circumstances, conditions
and defects (other than with respect to repair obligations of Sellers arising
after the date hereof and on or prior to the Effective Time); (ii) Sellers have
no obligation to repair or correct any such facts, circumstances, conditions or
defects or to compensate Purchaser for same; (iii) Sellers have specifically
bargained for the assumption by Purchaser of all responsibility to inspect and
investigate the Real Property and the Leased Premises and of all risk of adverse
conditions; and (iv) Purchaser will have prior to the Closing undertaken all
such physical inspections and examinations of the Real Property and the Leased
Premises as Purchaser deems necessary or appropriate as to the condition of the
Real Property and the Leased Premises. Except as expressly set forth herein,
Purchaser acknowledges that Sellers have made no representations or warranties
and shall have no liability to Purchaser (and Purchaser hereby
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waives any right to recourse against Sellers) with respect to the conditions of
the soil, improvements or fixtures included in the Real Property or Leased
Premises, the existence or nonexistence of hazardous substances, any past use of
the Real Property or the Leased Premises, the economic feasibility of the Real
Property and the Leased Premises, the Real Property's and Leased Premises'
compliance or noncompliance with all laws, rules or regulations affecting the
Real Property and the Leased Premises, or any other aspect of the Real Property
or the Leased Premises.
SECTION 6.8 LABOR MATTERS; EMPLOYEES.
(a) No Employee is a party to any collective bargaining agreement,
contract or other agreement or understanding with a labor organization of any
type, nor are the Sellers the subject of any material proceeding asserting it
has committed an unfair labor practice in violation of the National Labor
Relations Act or any other similar or comparable state law seeking to compel it
to bargain with any labor organization as to wages and conditions of employment,
nor is any such proceeding threatened, nor is there any strike or similar labor
dispute by the Employees pending or threatened. Sellers are unaware of any
efforts during the past three years involving any Employee seeking to certify a
collective bargaining unit or engaging in any other union organizational
activity.
(b) Schedule 6.8 contains a complete and accurate list in all
material respects (and Sellers will deliver a revised Schedule 6.8 no fewer than
fifteen (15) Business Days prior to the Closing complete and accurate in all
respects (other than with respect to any mutually agreed upon additions)) of all
Employees, their positions, their business locations, their annual/weekly/hourly
rates of compensation, average scheduled hours per week and their status as full
or part-time and active or on leave. Schedule 6.8 lists and Sellers have made
available to Purchaser each employee benefit plan, program or other arrangement
providing benefits to any Employee or any beneficiary or dependent thereof that
is sponsored or maintained by Sellers or any of its Affiliates or to which
Sellers or any of its Affiliates contributes or is obligated to contribute,
including without limitation any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA, any employee pension benefit plan within the
meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA)
and any bonus, incentive, deferred compensation, vacation, stock purchase, stock
option, severance, employment, change of control or fringe benefit plan, program
or policy (collectively, the "Benefit Plans"). No Employee is a party to any
individual contract, written or oral, express or implied, for the employment of
the Employee or the provision of severance or change of control benefits.
(c) Sellers' 401(k) Plan is in compliance in all material respects
with applicable law, and Sellers have received a favorable determination letter
from the IRS with respect to such plan and know of no reason why such letter
would be revoked.
(d) No liability has been incurred by or is expected to be
incurred by Sellers or any of their Affiliates that could subject Purchaser to
liability under Title IV of ERISA, Section 301 of ERISA, Sections 412 or 4971 of
the Code or COBRA.
(e) Sellers do not contribute to, and have not contributed to any
"multiemployer plan" (as defined in Section 3(37) of ERISA) with respect to the
Employees.
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(f) Sellers are in compliance in all material respects with all
legal requirements relating to the employment of the Employees, including in all
material respects with respect to affirmative action, employment discrimination,
equal pay, wages and hours and there are no material complaints, charges or
claims against Sellers pending or, to the Knowledge of Sellers, threatened in
respect thereof.
SECTION 6.9 CERTAIN CONTRACTS.
Each of the material Personal Property Leases, Software Licenses, Safe
Deposit Contracts and Assumed Contracts is valid and subsisting, in full force
and effect, and Sellers (and, to the Knowledge of Sellers, all other parties
thereto) have performed in all material respects all obligations required to be
performed by Sellers (or such other party, as applicable) thereunder; and no
condition exists which constitutes or, with notice, or lapse of time, or both,
would constitute a default thereunder on the part of Sellers, or, to the
Knowledge of Sellers, on the part of any of the other parties to any thereof.
SECTION 6.10 LOANS.
(a) Each of the Sellers has full power and authority to hold each
Loan, and has good and marketable title to the Loans, free and clear of any
Liens. Each of the Sellers is authorized to sell and assign the Loans to
Purchaser and, upon assignment, Purchaser will have the rights of Sellers with
respect to the Loans in accordance with the terms and conditions thereof (it
being agreed and understood that such rights do not include any rights of
Sellers with respect to motor vehicle dealers in connection with Loans
originated through Huntington's Dealer Sales line of business).
(b) Each Loan (such term to include, for purposes of this
paragraph, the principal documents relating in any way to such Loans, including
notes, mortgages, security instruments, and guarantees) was originated and has
been administered in conformity in all material respects with applicable laws
and regulations; and its principal balance as shown on Sellers' books and
records is true and correct as of the last day shown thereon. Sellers have
complied in all material respects with all of their obligations under the Loans
and each Loan represents the valid and binding obligation of the obligor(s)
thereunder, enforceable by the holder thereof in accordance with its terms,
except as (i) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights generally, (ii) the availability of equitable remedies may be
limited by equitable principles of general applicability and (iii) such
modifications to the terms thereof as may be required pursuant to the Soldiers
and Sailors Relief Act of 1940, as amended.
(c) Each Loan that is secured by collateral is secured by a
perfected mortgage or security interest in the collateral in favor of Sellers as
mortgagee or secured party. No collateral has been released from the lien
granted to Sellers, unless approved by Sellers and documented in their files.
(d) Except as may be otherwise specifically set forth in this
Agreement, all Loans (such term to include, for purposes of this paragraph, the
principal documents relating in
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any way to such Loans, including notes, mortgages, security instruments, and
guarantees) transferred to Purchaser hereunder are transferred "AS IS, WHERE
IS," no warranties or representations whatsoever, except as may be expressly
represented or warranted in this Agreement.
SECTION 6.11 DEPOSIT LIABILITIES.
The Deposit Liabilities are insured by the FDIC to the fullest extent
permitted by federal law and no action is pending or has been threatened by the
FDIC against Sellers with respect to the termination of such insurance, and all
premiums and assessments required to be paid in connection therewith have been
paid when due by Sellers. The Deposit Liabilities were opened, extended or made,
and have been maintained, in all material respects in accordance with all
applicable federal, state and local laws, regulations, rules and orders. The
Deposit Liabilities (i) are in all respects genuine and enforceable obligations
of Sellers and (ii) except as set forth in Schedule 6.11 were acquired in the
ordinary course of Sellers' business.
SECTION 6.12 BOOKS, RECORDS, DOCUMENTATION, ETC.
The books and records being transferred to Purchaser hereunder are
complete, correct and accurate in all material respects, have been maintained in
a consistent and a customary manner, and are in material compliance with all
applicable federal and state laws and regulations and customary banking
practices. The deposit- and lending-related forms, notices, statements, and
related documentation, as well as Sellers' policies, procedures, and practices
with respect thereto, used in connection with the Banking Operations comply in
all material respects with applicable federal and state laws and regulations and
customary banking practices.
SECTION 6.13 LITIGATION AND REGULATORY PROCEEDINGS.
There are no material actions, causes of action, complaints, claims, suits
or proceedings, pending or, to Sellers' Knowledge, threatened, against Sellers
and affecting the Transferred Assets or Transferred Liabilities, whether at law
or in equity or before or by a Governmental Authority. No Governmental Authority
has notified Sellers that it would oppose or not approve or consent to the
transactions contemplated by this Agreement and Sellers know of no reason for
any such opposition, disapproval or nonconsent. Neither of Sellers or any of
their Affiliates is a party to any written order, decree, agreement or
memorandum or understanding with, or commitment letter or similar submission to,
any Governmental Authority charged with the supervision or regulation of
depository institutions, nor have Sellers been advised by any such agency or
authority that it is contemplating issuing or requesting any such order, decree,
agreement, memorandum or understanding, commitment letter or submission, in each
case which, individually or in the aggregate, would materially and adversely
affect the ability of Purchaser to own the Transferred Assets or conduct the
Banking Operations after the Closing Date.
SECTION 6.14 TAX MATTERS.
Except as set forth in Schedule 6.14, Sellers have paid or will have paid
prior to the Closing all federal, state and local taxes required to be paid with
respect to the Florida Franchise, the non-payment of which would result in a
Lien upon any of the Transferred Assets or would
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result in Purchaser becoming liable or responsible therefor. Sellers have filed
all real property and personal property tax returns relating to the Transferred
Assets and has paid all taxes shown as due thereon.
SECTION 6.15 CONSENTS AND APPROVALS.
Except for required regulatory approvals and third party consents set
forth on Schedule 6.15, no consents, approvals, filings or registrations with
any third party or any public body, agency or authority are required in
connection with Sellers' consummation of the transactions contemplated by this
Agreement, other than any required lessor consents to the assignment of the Real
Property Leases and as may be required as a result of any facts or circumstances
relating solely to Purchaser.
SECTION 6.16 BROKERAGE ACCOUNT AGREEMENTS; ADVISORY AGREEMENTS.
(a) HIC is in compliance with the terms of each Brokerage Account
Agreement and Advisory Agreement, except for such instances of noncompliance
which do not have, and are not reasonably likely to have, either individually or
in the aggregate, a Sellers Material Adverse Effect, and each Brokerage Account
Agreement and Advisory Agreement is in full force and effect with respect to the
applicable customer and enforceable in accordance with its terms, except as (i)
the enforceability hereof may be limited by bankruptcy, insolvency, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and (ii) the availability of equitable remedies may be limited by equitable
principles of general applicability. No condition exists which constitutes, or
with notice or the lapse of time would constitute, a material default by Sellers
or, to the Knowledge of Sellers, by any other party to any of the Brokerage
Account Agreements or Advisory Agreements.
(b) All advisory services provided by HIC pursuant to an Advisory
Agreement have been provided in all material respects in accordance with
applicable laws.
SECTION 6.17 REGISTRATIONS.
Each of the Employees who are or who are required to be registered as a
broker dealer, a registered representative or a sales Person or otherwise with
the SEC, the securities commission of any state or foreign jurisdiction or any
applicable non-governmental self-regulatory agency, commission or authority are
duly registered as such and such registrations are in full force and effect,
except for such instances of noncompliance which do not have, and are not
reasonably likely to have, either individually or in the aggregate, a Sellers
Material Adverse Effect.
SECTION 6.18 ENVIRONMENTAL LAWS.
Sellers have made available to Purchaser copies of all environmental
studies, reports and audits in Sellers' possession related to the Real Property.
Notwithstanding the foregoing and anything to the contrary set forth in this
Agreement, Sellers shall have no obligation or liability hereunder relating to
the environmental condition of the Real Property or the Leased Premises except
as set forth in Section 2.10 of this Agreement and in Article V.
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SECTION 6.19 COMMUNITY REINVESTMENT COMPLIANCE.
HNB is in compliance in all material respects with the applicable
provisions of the CRA and has received a CRA rating of "satisfactory" in its
most recent exam under the CRA, and Sellers have no knowledge of the existence
of any fact or circumstance or set of facts or circumstances which could be
reasonably expected to result in HNB failing to be in compliance in all material
respects with such provisions or having its current rating lowered.
SECTION 6.20 DERIVATIVE TRANSACTIONS.
(a) Attached as Schedule 6.20 is a list of all Derivative
Transactions existing as of the date hereof. HNB has delivered to Purchaser
complete and accurate copies of the Derivative Documents relating to existing
Derivative Transactions in Sellers' possession and HNB shall provide to
Purchaser copies of the Derivative Documents relating to Derivative Transactions
entered into by HNB between the date of this Agreement and the Closing Date
within five (5) days of the execution of the Derivative Documents by the parties
thereto.
(b) HNB has full power and authority to hold its rights in each
Derivative Transaction, and has good and marketable title to such rights free
and clear of all Liens. Upon transfer of such rights to Purchaser, HNB will be
authorized to assign such rights to Purchaser and, upon assignment, Purchaser
will have the rights of HNB with respect to the Derivative Transactions in
accordance with the terms and conditions thereof.
(c) With respect to the Derivative Transactions being transferred
to Purchaser pursuant to this Agreement, each such Derivative Transaction was
originated and has been administered in conformity in all material respects with
applicable laws and regulations; and its remaining payment terms as shown on
HNB's books and records are true and correct as of the last day shown thereon.
HNB has complied in all material respects with all of its obligations under the
Derivative Transactions and the Derivative Documents relating thereto and each
Derivative Transaction is a valid and legally binding obligation of HNB,
enforceable in accordance with its terms, except as (i) the enforceability
hereof may be limited by bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable principles of
general applicability. Each Derivative Transaction, to the extent secured, is
secured by a valid and enforceable Lien in the collateral therefor, which Lien
is assignable and is being assigned pursuant to this Agreement.
(d) Other than the representations and warranties in Section
6.20(b) and (c), all Derivative Transactions and Derivative Documents relating
thereto transferred to Purchaser shall be transferred on an "AS IS," "WHERE IS"
basis and without recourse to HNB and without any representations or warranties
as to the collectibility of any such Derivative Transactions or the
creditworthiness of any counterparty or any other obligor thereto.
SECTION 6.21 TRUST AGREEMENTS.
Sellers (and, to the Knowledge of Sellers, all other parties thereto) are
in compliance with the terms of each Trust Agreement, except for such instances
of noncompliance which do not have, and are not reasonably likely to have,
either individually or in the aggregate, a Sellers
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Material Adverse Effect, and each Trust Agreement is in full force and effect
with respect to the applicable customer and enforceable in accordance with its
terms, except as (i) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability. No condition exists
which constitutes, or with notice or the lapse of time would constitute, a
material default by Sellers or, to the Knowledge of Sellers, by any other party
to any of the Trust Agreements.
SECTION 6.22 DEPOSIT AND LOAN DATA.
The amount, rate and accrued interest on Deposits and Loans as of July 31,
2001, and the past-due status of Loans as of July 31, 2001, provided by Sellers
to Purchaser in connection with the transactions contemplated by this Agreement
was complete and accurate in all material respects as of the date so provided
based on Sellers' books and records and the internal accounting procedures of
Sellers consistently applied.
SECTION 6.23 CERTAIN INFORMATION.
The information set forth on Schedule 6.23 relating to "direct
non-interest income" and "direct non-interest expenses" as of July 31, 2001 was
complete and accurate in all material respects as of such date based on Sellers'
books and records and internal accounting policies of Sellers.
SECTION 6.24 COMPLIANCE WITH LAWS.
The Banking Operations have been conducted in compliance in all material
respects with all federal, state and local laws, regulations and ordinances
applicable thereto.
SECTION 6.25 LIMITATION OF REPRESENTATIONS AND WARRANTIES.
Except as may be expressly represented or warranted in this Agreement,
neither Huntington nor any other Sellers makes any representation or warranty
whatsoever with regard to any asset being transferred to Purchaser or any
liability or obligation being assumed by Purchaser or as to any other matter or
thing.
SECTION 6.26 ABSENCE OF CERTAIN CHANGES.
Since July 31, 2001, and except as set forth in Schedule 6.26, (i) there
has not been any action taken of the type described in Section 8.3(ix) which,
had such action occurred after the date hereof, would be in violation of such
Section 8.3(ix), (ii) Loans have been made in a manner consistent with past
practice as relates to the normal and customary credit standards and policies of
Sellers and (iii) the overall status of the Loans that were outstanding as of
July 31, 2001 as relates to credit quality does not differ in any material
respect from such status as of such date.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as otherwise specifically herein provided, Purchaser hereby
represents and warrants to Sellers as follows:
SECTION 7.1 CORPORATE ORGANIZATION; CORPORATE AUTHORITY.
Purchaser is a national banking association duly organized, validly
existing and in good standing under the laws of the United States. Purchaser has
the corporate power and authority to carry on the business being acquired, to
assume the liabilities being transferred, to execute and deliver this Agreement
and related documents and to effect the transactions contemplated herein. No
further corporate authorization is necessary for Sellers to consummate the
transactions contemplated hereunder.
SECTION 7.2 NO VIOLATION.
Assuming receipt of the required approvals referenced under Section 7.6,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated herein will violate or conflict with (i) the charter
or bylaws of Purchaser, (ii) any material provision of any material agreement or
any other material restriction of any kind to which Purchaser is a party or by
which Purchaser is bound, (iii) any material statute, law, decree, regulation or
order of any Governmental Authority, or (iv) any material provision which will
result in a default under, or cause the acceleration of the maturity of, any
material obligation or loan to which Purchaser is a party.
SECTION 7.3 ENFORCEABLE AGREEMENT.
This Agreement has been duly executed and delivered by Purchaser and, upon
execution and delivery by Sellers, will be the legal, valid, and binding
agreement of Purchaser, enforceable in accordance with its terms, except as the
availability of equitable remedies may be limited by equitable principles of
general applicability.
SECTION 7.4 NO BROKERS.
All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Purchaser and Huntington and there
has been no participation or intervention by any other Person, firm, or
corporation employed or engaged by or on behalf of Purchaser in such a manner as
to give rise to any valid claim against Sellers or Purchaser for a brokerage
commission, finder's fee, or like commission.
SECTION 7.5 LITIGATION AND REGULATORY PROCEEDINGS.
There are no actions, causes of action, complaints, claims, suits or
proceedings, pending or, to Purchaser's Knowledge, threatened, against
Purchaser, whether at law or in equity or before or by a Governmental Authority,
that, individually or in the aggregate, would reasonably be expected to have a
Purchaser Material Adverse Effect. No Governmental Authority has
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notified Purchaser that it would oppose or not approve or consent to the
transactions contemplated by this Agreement, and Purchaser knows of no reason
for any such opposition, disapproval or nonconsent. Neither Purchaser or any of
its Affiliates is a party to any written order, decree, agreement or memorandum
or understanding with, or commitment letter or similar submission to, any
Governmental Authority charged with the supervision or regulation of depository
institutions, nor has Purchaser been advised by any such agency or authority
that it is contemplating issuing or requesting any such order, decree,
agreement, memorandum or understanding, commitment letter or submission, in each
case which, individually or in the aggregate, would materially and adversely
affect the ability of Purchaser to consummate the transactions contemplated by
this Agreement.
SECTION 7.6 CONSENTS AND APPROVALS.
Except for required regulatory approvals set forth on Schedule 7.6, no
consents, approvals, filings or registrations with any third party or any public
body, agency or authority are required of Purchaser in connection with
Purchaser's consummation of the transactions contemplated by this Agreement,
other than what may be required as a result of any facts or circumstances
relating solely to Sellers. Purchaser has no reason to believe that it will not
be able to obtain all required regulatory approvals in a prompt and timely
manner.
SECTION 7.7 REGISTRATIONS.
Purchaser (or one or more of its Affiliates) is duly registered as a
broker dealer with the SEC, the securities commission of any state or foreign
jurisdiction or any applicable non-governmental self-regulatory agency,
commission or authority and such registration is in full force and effect,
except for such instances of noncompliance which do not have, and are not
reasonably likely to have, a Purchaser Material Adverse Effect.
SECTION 7.8 REGULATORY CAPITAL AND CONDITION.
Purchaser is in compliance with all capital standards as of the date
hereof, and has no reason to believe that it will be unable to obtain the
required regulatory approvals for the transactions contemplated by this
Agreement solely as a result of its current level of regulatory capital. As of
the date of this Agreement, there is no pending or threatened legal or
governmental proceedings against Purchaser or any Affiliate that would affect
Purchaser's ability to obtain the required regulatory approvals or satisfy any
of the other conditions required to be satisfied in order to consummate any of
the transactions contemplated by this Agreement.
SECTION 7.9 FINANCING.
Purchaser will have not later than the close of business on the day prior
to the Effective Time sufficient funds available to consummate the transactions
contemplated hereby, including to make any payment pursuant to Section 2.2.
SECTION 7.10 COMMUNITY REINVESTMENT ACT COMPLIANCE.
Purchaser is in compliance in all material respects with the applicable
provisions of the CRA and has received a CRA rating of "satisfactory" in its
most recent exam under the CRA,
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and Purchaser has no knowledge of the existence of any fact or circumstance or
set of facts or circumstances which could be reasonably expected to result in
Purchaser failing to be in compliance in all material respects with such
provisions or having its current rating lowered.
ARTICLE VIII
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME
SECTION 8.1 FULL ACCESS.
(a) Until the Closing Date, Sellers shall afford to the officers
and authorized representatives of Purchaser, upon prior notice and subject to
Huntington's normal security requirements, reasonable access to the properties,
books, and records pertaining to the Banking Operations, specifically including
but not limited to all books and records relating to the Deposit Liabilities,
the Loans, the Real Property, the Leased Premises and the Personal Property, and
copies of the Software Licenses in order that Purchaser may have full
opportunity to conduct a pre-closing audit of the Loans and make reasonable
investigations and to engage in operational planning, at reasonable times,
without interfering with the normal conduct of the Banking Operations or the
affairs of Sellers. Sellers will cooperate with Purchaser to the extent
reasonably requested and legally permissible to provide Purchaser with
information about Employees and a reasonable opportunity to meet with Employees.
Nothing in this Section 8.1 shall require Sellers to provide access to or
disclose information where such access or disclosure would violate the rights of
customers, result in the loss of any attorney-client privilege or contravene any
law, rule, regulation, order, judgment, decree, fiduciary duty or binding
agreement entered into prior to the date of this Agreement. The parties hereto
shall make appropriate substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply.
(b) Between the date hereof and the Closing Date, the parties
shall meet on a monthly basis to discuss matters relating to the Banking
Operations (including credit quality and related issues), customer
communications, employee matters and other issues relating to the Florida
Franchise and the transactions contemplated hereby to the extent permitted by
applicable law. In addition, Sellers shall provide to Purchaser monthly reports
regarding the Loans and Deposits, as well as monthly asset quality reports as
reasonably requested by Purchaser, including but not limited to watch loans,
past due reports, non-performing assets, charge-offs, risk rating distribution,
portfolio growth, industry and product concentrations and composition, and
changes to off-balance sheet exposures.
(c) Purchaser hereby agrees (which agreement shall survive Closing
or termination of this Agreement for a period of 18 months, and shall be subject
to the limitations of Section 5.4) to indemnify, defend and hold Sellers and
Sellers' successors and assigns free and harmless from and against any loss,
injury, damage, claim, lien, cost and expense, including reasonable attorney
fees and costs, arising from any entry, use or occupancy of the Real Property by
Purchaser pursuant to Sections 2.9 and 2.10.
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(d) Any information discovered, disclosed or revealed pursuant to
Sections 2.9, 2.10, 2.15 or 6.20, Article IV or this Section 8.1, or otherwise
disclosed in connection with entering into or performing the covenants and
agreements contemplated under this Agreement, shall be subject to the provisions
of the Confidentiality Agreement.
SECTION 8.2 APPLICATION FOR APPROVAL.
(a) Within thirty (30) days following the execution of this
Agreement, Purchaser shall have prepared and have filed applications and notices
relating to the Regulatory Approvals. Purchaser agrees to process such
applications as promptly as reasonably practicable and to provide Huntington
promptly with a copy of such applications as filed (except for any confidential
portions thereof) and all material notices, orders, opinions, correspondence,
and other documents with respect thereto, and to use its reasonable best efforts
to obtain all Regulatory Approvals. Purchaser shall promptly notify Huntington
upon receipt by Purchaser of notification that any application provided for
hereunder has been accepted or denied. Sellers shall provide such cooperation
and information reasonably requested by Purchaser in connection with Purchaser's
compliance with the requirements of the applicable regulatory authorities.
(b) The parties shall use their reasonable best efforts to (i)
cooperate in all respects with each other in connection with any filing or
submission and in connection with any investigation or other inquiry relating to
the Regulatory Approvals, (ii) subject to applicable law, permit the other party
to review and discuss in advance, and consider in good faith the views of the
other in connection with, any proposed written or material oral communication
(or other correspondence or memoranda) between it and any Governmental
Authority, (iii) promptly inform each other of and supply to such other party
any communication (or other correspondence or memoranda) received by such party
from, or given by such party to, the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board") or any other Governmental Authority, in
each case regarding any of the transactions contemplated hereby, and (iv)
consult with each other in advance of any meeting or conference with the Federal
Reserve Board or any other Governmental Authority, and to the extent permitted
by the Federal Reserve Board or such other applicable Governmental Authority,
give the other party the opportunity to attend and participate in such meetings
and conferences.
(c) In furtherance and not in limitation of the parties
obligations hereunder, if any objections are asserted with respect to the
transactions contemplated hereby under any antitrust or competition law,
Purchaser agrees to use its reasonable best efforts to resolve any antitrust
concerns, federal, state, foreign or private, obtain all Regulatory Approvals
and obtain termination of any applicable waiting periods and the termination of
any outstanding federal or state judicial or administrative orders prohibiting
the Closing so as to permit the prompt completion of the transactions
contemplated hereby, including selling, holding separate or otherwise disposing
of or conducting its business and the business of the Florida Franchise in a
specified manner, or agreeing to sell, hold separate or otherwise dispose of or
conduct its business and the business of the Florida Franchise in a specified
manner, or permitting the sale, holding separate or other disposition of, any of
the Transferred Assets or Transferred Liabilities or any assets or liabilities
of Purchaser, or any combination of the foregoing, or such other required action
(any such actions, "Regulatory Actions").
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SECTION 8.3 CONDUCT OF BUSINESS.
Except as provided in this Agreement or as may otherwise be agreed upon by
Purchaser, (a) Sellers will continue to conduct the Banking Operations
(including Deposit and Loan pricing) until the Closing in the ordinary course of
business consistent with past practices, and (b) Sellers shall not:
(i) increase or agree to increase the salary, remuneration,
severance or compensation of, or pay any bonus to, any Employee (other
than (1) normal individual increases in salary, remuneration or
compensation to Employees in the ordinary course of business consistent
with past practice (it being understood and agreed that references in this
Agreement to "past practice" shall refer to the practices of Sellers prior
to June 30, 2001), (2) increases or payments pursuant to agreements
outstanding on the date hereof, including pursuant to any existing
severance, retention or bonus program, and (3) any other changes to the
extent required by applicable law), or materially increase or
intentionally materially decrease the number of Employees;
(ii) sell, transfer, assign, encumber or otherwise dispose of
or enter into any contract, agreement or understanding to sell, transfer,
assign, encumber or dispose of any of the Transferred Assets existing as
of the date hereof, except in the ordinary course of business consistent
with past practice and in an immaterial aggregate amount (both in terms of
monetary value and in terms of utility); provided, however, that in no
event shall either of Sellers knowingly take any action that would create
any Lien on any of the Transferred Assets;
(iii) make or agree to make any material improvements to any
Real Property or Leased Premises, except with respect to commitments for
such made prior to the date hereof and previously disclosed to Purchaser
in writing and for normal maintenance or refurbishing made in the ordinary
course of business;
(iv) file any application or give any notice to relocate or
close any Branch or ATM or relocate or close or, absent an emergency
situation requiring such action, suspend operations at any Branch or ATM
(in which event such suspension shall be permitted only for the duration
of such emergency);
(v) subject to Section 4.7, except in the ordinary course of
business consistent with past practice, amend, terminate or extend in any
material respect any Real Property Lease, Personal Property Lease,
Software License, Safe Deposit Contract or Assumed Contract without the
prior written consent of Purchaser (other than any amendment to any
Personal Property Lease, Software License or Assumed Contract required in
order to transfer the related assets to Purchaser pursuant to Article II);
(vi) take, or permit any Affiliate to take, any action
impairing in any material respect Purchaser's rights in any Deposit
Liabilities or Transferred
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Assets or waive any material right, whether in equity or at law, that it
has with respect to any Loan (other than collection and work-out
procedures undertaken in all material respects in accordance with Sellers
normal and customary practices relating thereto);
(vii) knowingly take, or permit any Affiliate to knowingly
take, any action or knowingly fail to take, or permit any Affiliate to
knowingly fail to take, any action that is intended to or is reasonably
likely to cause any of the representations or warranties set forth in
Article VI to be or become untrue;
(viii) increase its pricing on Deposits such that its rates
exceed the highest of the rates paid by AmSouth Bank of Florida, Bank of
America, National Association, First Union National Bank, and SunTrust
Bank, or their respective affiliates, in the cities of Orlando, Florida
and Tampa, Florida, as the case may be;
(ix) fail to follow Sellers' normal and customary practices
and procedures regarding loan pricing, underwriting and recognition of
charge-offs in a manner consistent with past practice; or
(x) agree with, or commit to, any Person to do any of the
things described in the foregoing (i) through (viii) except as permitted
hereunder.
SECTION 8.4 SOLICITATION OF CUSTOMERS BY PURCHASER PRIOR TO CLOSING.
At any time prior to the Closing Date, Purchaser will not, and will not
permit any of its Affiliates, if any, to conduct any mass marketing which is
specifically targeted to induce customers whose Deposit Liabilities are to be
assumed or whose Loans are to be acquired by Purchaser pursuant to this
Agreement to discontinue or limit their account relationships with Huntington or
to conduct any media or customer solicitation activities outside of the ordinary
course of business of Purchaser, consistent with past practice, which are
specifically targeted to induce any such customers to discontinue or limit any
such relationships, it being understood and agreed that the foregoing is not
intended to prohibit general advertising or solicitations directed to the public
generally or other similar activities conducted in the ordinary course of
business of Purchaser, consistent with past practice.
SECTION 8.5 NO SOLICITATION BY SELLERS.
For a period of three (3) years following the Effective Time, Sellers will
not (a) establish a branch deposit and loan business in Florida, other than the
Private Financial Group Offices (which will not be expanded geographically
beyond their current markets) or (b) directly or indirectly, solicit deposit or
loan business from customers whose Deposit Liabilities and/or Loans are assumed
or acquired by Purchaser pursuant to this Agreement, except (i) as may occur in
connection with mass media advertising (but not including solicitations)
directed to the public generally within a geographic region that includes states
other than the State of Florida alone; (ii) to Persons who have a banking,
lending or other business relationship outside of the Florida Franchise with
either of the Sellers or any of their Affiliates and (iii) to Persons who have a
banking, lending or other business relationship through Huntington's Private
Financial Group Offices that is not included as part of the Transferred Assets;
provided that the foregoing will not
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prohibit Sellers or any of their Affiliates from (i) engaging in Florida in the
lines of business excluded from the Transferred Assets, namely, the Dealer Sales
line of business, the Mortgage Loan Origination line of business, the Merchant
Card Services line of business, the business of JRD, and the Credit Card
Program, (ii) extending credit to or accepting deposits from any Person in
connection with the banking business outside of the Florida Franchise of Sellers
or any of their Affiliates and (iii) if the Park ATMs constitute Excluded
Assets, operating the Park ATMs until the expiration of the applicable agreement
with HNB relating thereto pursuant to the current terms thereof. It shall not be
a violation of this Section 8.5 to take deposits or make loans where such
deposits and/or loans have not been solicited in violation of this Section 8.5.
In addition, it is understood and agreed that the restrictions contained in this
Section 8.5 shall not be binding upon or apply to any Person who merges,
consolidates, or otherwise becomes affiliated with Sellers, or any of such
Persons' Affiliates or successors, as a result of a business combination
transaction where such business combination transaction was not undertaken for
the primary purpose of re-entering the retail and corporate branch banking
business in the State of Florida.
SECTION 8.6 EFFORTS TO CONSUMMATE; FURTHER ASSURANCES.
The parties hereto agree to use all reasonable efforts to satisfy or cause
to be satisfied as soon as practicable their respective obligations hereunder
and the conditions precedent to Closing. After the Effective Time, Sellers will
duly execute and deliver such assignments, bills of sale, deeds, acknowledgments
and other instruments of conveyance and transfer as shall at any time be
necessary or appropriate to vest in Purchaser the full legal and equitable title
to the Transferred Assets.
SECTION 8.7 FEES AND EXPENSES.
Unless expressly stated to the contrary in this Agreement, each party will
assume and pay for the expenses it incurs with respect to the purchase and sale
of the Transferred Assets and the assumption of the Transferred Liabilities
under this Agreement; provided, however, that (i) Purchaser shall pay all fees
and expenses associated with the regulatory application process, (ii) each party
shall be responsible for any fee payable to any agent, broker or finder acting
on its behalf in this transaction, (iii) except as provided in Section 2.2(d)
with respect to excise, sales, use and transfer taxes that are payable or that
arise as a result of the consummation of the transactions contemplated hereby,
Purchaser shall be responsible for the costs, charges and expenses relating to
all title examinations, title search fees, surveys, title insurance (including
but not limited to premiums and the costs of any endorsements), documentary
stamp taxes, intangible taxes, environmental investigation costs, its own
attorneys' and accountants' fees and expenses, software license and transfer
fees, recording fees, transfer fees, sales and use and other transfer taxes,
regulatory applications and other expenses arising in connection therewith as
well as all costs and expenses associated with the transfer or perfection of any
security interests or liens securing Loans and related motor vehicles
transferred hereunder, (iv) Purchaser shall be responsible for the costs of
removing Sellers' signage from the Branches and (v) Sellers shall be responsible
for their own attorneys' and accountants' fees and expenses related to this
transaction.
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SECTION 8.8 THIRD PARTY CONSENTS.
(a) Sellers shall use their commercially reasonable efforts to
obtain from lessors or sublessors under Real Property Leases any consents to the
assignment of such leases required under the terms thereof in connection with
the consummation of the transactions contemplated hereby. If any such required
consent shall not have been obtained prior to the Closing then, notwithstanding
any other provision hereof, the applicable Real Property Lease shall not be
assigned to Purchaser at Closing (and the Purchase Price shall not include the
Net Book Value thereof) but all other Transferred Assets and Transferred
Liabilities associated with the relevant Leased Premises shall nevertheless be
transferred to Purchaser at the Closing and the parties shall negotiate in good
faith and Sellers and Purchaser shall use reasonable best efforts to make
alternative arrangements reasonably satisfactory to Purchaser and Sellers that
provide Purchaser, to the maximum extent reasonably possible, the benefits and
burdens of the underlying Leased Premises in a manner that does not violate the
applicable Real Property Lease (for the same cost as would have applied if the
relevant consent had been obtained). In no event shall the Closing be delayed
for or conditioned on receipt of any landlord's or sublessor's consent. If any
alternative arrangement is implemented between Sellers and Purchaser at or prior
to the Closing, the parties shall continue after the Closing to exercise
commercially reasonable efforts to obtain the related consents which could not
be obtained prior to the Closing, and if such consent is obtained, Sellers shall
assign to Purchaser the applicable Real Property Lease pursuant to the terms of
this Agreement applicable to leases assigned at the Closing and the parties
shall restructure the applicable alternative arrangement and Purchaser shall pay
Sellers any consideration for the lease assignment which Sellers would have
received had the lease been assigned at the Closing.
(b) Sellers shall use their commercially reasonable efforts to
obtain from the parties to any material contract, agreement, license (including
any Software License) or Personal Property Lease to be transferred hereunder,
including any Brokerage Account Agreement, Advisory Agreement and Trust
Agreement, any consents to the assignment of any such material contracts,
agreements, licenses and leases required under the terms of such contract,
agreement, license or lease in connection with the consummation of the
transactions contemplated hereby. Upon request of Purchaser, HNB agrees to join
with Purchaser to initiate proceedings under the Florida Fiduciary Substitution
Statute (Florida Code Section 660.46) (the "Statute") to substitute Purchaser
for HNB as fiduciary of the Trust Accounts, and HNB will use its reasonable best
efforts to give proper notice to "Interested Parties" of "Fiduciary Accounts"
(as such terms are defined in or used by the Statute) or obtain from Interested
Parties proper waivers or consents to the substitution proceedings in accordance
with the Statute. Any transfer hereunder of any such contracts, agreements,
licenses, leases and Trust Agreements shall be made subject to such consents,
approvals or substitutions being obtained.
SECTION 8.9 INSURANCE.
Sellers will maintain in effect until the Closing Date all casualty and
public liability policies relating to the Real Property and Leased Premises and
the activities conducted thereon and maintained by Sellers on the date hereof or
procure comparable replacement policies and maintain such replacement policies
in effect until the Effective Time. As of the Effective Time,
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Huntington's insurance coverage shall cease, and from and after the Effective
Time Purchaser shall be responsible for all insurance protection for the Real
Property and Leased Premises and the activities conducted thereon.
SECTION 8.10 PUBLIC ANNOUNCEMENTS.
Other than the mutually agreed upon press releases and other materials to
be issued upon the announcement of this Agreement, Sellers and Purchaser agree
that from and after the date hereof neither shall make any public announcement
or public comment regarding this Agreement or the transactions contemplated
herein without the prior written consent of the other party (which consent shall
not be unreasonably withheld or delayed), unless and only to the extent that (i)
the furnishing or use of such information is required in making any filing or
obtaining any consent or approval required for the consummation of the
transactions contemplated hereunder or (ii) the furnishing or use of such
information is required by applicable law, legal proceedings or the rules or
regulations of the SEC, the Nasdaq National Market or the New York Stock
Exchange. Further, Sellers and Purchaser acknowledge the sensitivity of this
transaction to the Employees and agree that, until the Effective Time, no
announcements or communications with the Employees (other than communications by
Sellers that do not relate to the transactions contemplated hereby) shall be
made without the prior consent of the other party, which consent shall not be
unreasonably withheld or delayed.
SECTION 8.11 TAX REPORTING.
Sellers shall comply with all tax reporting obligations in connection with
the Transferred Assets and the Transferred Liabilities on or before the
Effective Time, and Purchaser shall comply with all tax reporting obligations
with respect to the Transferred Assets and the Transferred Liabilities after the
Effective Time.
SECTION 8.12 ADVISE OF CHANGES.
Each of Sellers and Purchaser shall each promptly advise the other party
of any change or event (i) having a Sellers Material Adverse Effect or Purchaser
Material Adverse Effect, respectively, (ii) which it believes would or would be
reasonably likely to cause or constitute a material breach of any of its
representations, warranties or covenants contained herein or (iii) which it
believes would or would be reasonably likely to cause any of the conditions set
forth in Article IX or X not being satisfied; provided that a breach of this
Section 8.12 shall not be considered for purposes of determining the
satisfaction of the closing conditions set forth in Sections 9.1, 9.2, 10.1 or
10.2, or give rise to a right of termination under Article XI, if the underlying
breach or breaches with respect to which the other party failed to give notice
would not result in the failure of the closing conditions set forth in Section
9.1 or Section 9.2, in the case of a termination by Purchaser, or in Section
10.1 or Section 10.2, in the case of a termination by Sellers, to be satisfied.
SECTION 8.13 ALBERTSON'S, INC. CONTRACT.
Sellers acknowledge that (i) Purchaser has not determined to assume
Sellers' agreement with Albertson's, Inc. providing for the operation of
in-store bank branches (the "Albertson's
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Contract"), (ii) Purchaser shall be permitted to have conversations with
Albertson's, Inc. for a period of thirty (30) days following the signing of this
Agreement to explore the potential for Purchaser to enter into a similar
contractual arrangement with Albertson's, Inc., and (iii) Purchaser shall have
the ability to determine in its sole discretion whether to enter into any such
arrangement. Sellers agree that they shall remain liable for all duties,
liabilities and obligations under the Albertson's Contract except to the extent
provided in Section 2.2(a)(6) and except to the extent that Purchaser determines
in its sole discretion to assume such contract. If requested by Purchaser,
Sellers shall use their commercially reasonable efforts to close the in-store
Branches at Albertson's, Inc. simultaneously with the Closing. Notwithstanding
anything to the contrary contained herein, if Purchaser determines not to assume
the Albertson's Contract or otherwise succeed to the in-store Branches at
Albertson's, Inc., the Transferred Assets and the Transferred Liabilities shall
include all Transferred Assets and Transferred Liabilities other than those
assets and liabilities related thereto and referred to in Sections 2.1(a)(1),
(2), (3) and (4) and 2.2(b)(2), (3), (4), (10) and (12) (and such assets and
liabilities shall constitute Excluded Assets and Excluded Liabilities,
respectively), regardless of whether such Branches have been closed prior to, or
are closed simultaneously with, the Closing, and Sellers and Purchaser shall
cooperate in making all necessary transfers out of such Branches.
SECTION 8.14 DEPOSITS.
Sellers shall deliver to Purchaser on the date of the calculation of the
Average Deposit Balance and on the Closing Date, a list in electronic format
reasonably acceptable to Purchaser (it being understood and agreed that the
electronic format previously provided by Sellers to Purchaser shall be deemed to
be reasonably acceptable to Purchaser) of all Deposits, as of such dates, used
to calculate the Average Deposit Balance and the name, address and social
security numbers of the applicable Deposit holder.
SECTION 8.15 NON SOLICITATION OF TRANSACTIONS.
Neither the Sellers nor any of their Affiliates will, directly or
indirectly, through any officer, director or agent of any of them or otherwise,
encourage, solicit, participate in or initiate discussions or agreements with
respect to the sale of the Florida Franchise. Sellers will notify Purchaser
orally (within one Business Day) and in writing (as promptly as practicable) of
any inquiry or proposal received with respect to any such transaction. As of the
date hereof, Sellers shall, and shall cause their and their Affiliates'
officers, directors and agents of to, cease any pending discussions or
negotiations regarding any such transaction.
SECTION 8.16 SUPPLEMENTS TO SCHEDULES.
On the fifteenth (15th) day prior to the Closing Date anticipated by
the parties, Sellers shall, for informational purposes only, supplement or amend
the Schedules that they have delivered pursuant to this Agreement with respect
to any matter first existing or occurring after the date hereof which, if
existing or occurring at or prior to the date hereof, would have been required
to be set forth or described in such Schedules or which is necessary to correct
any information in such Schedules that has been rendered inaccurate thereby. No
supplement or amendment to any Schedule will have any effect with respect to
claims for indemnification pursuant to Article V or for the purpose of
determining the satisfaction of the conditions set forth
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in Article IX. For purposes of determining whether there is any breach of any
representation, warranty, covenant or agreement by Sellers hereunder, the
Schedules delivered by Sellers shall be deemed to include only the information
contained therein on the date hereof and shall be deemed to be Purchaser's only
Knowledge with respect to the matters required to be disclosed therein.
SECTION 8.17 LOAN BROKER CONTRACTS.
Not later than forty-five (45) days prior to the Closing Date anticipated
by the parties, Sellers shall terminate the Loan Broker Contracts to the extent
relating to the Florida Franchise. Purchaser shall reimburse Sellers for any
payments made by Sellers under Loan Broker Contracts and relating to Pipe-Line
Loans within fifteen (15) Business Days of written notice by Sellers to
Purchaser of any such payments.
SECTION 8.18 PHYSICAL DAMAGE TO OWNED BRANCHES.
In the event of any physical damage or destruction, other than ordinary
wear and tear, to any Owned Branch, at the election of Sellers, either (i)
Sellers shall prior to the Closing Date repair such damage or destruction to
return such property to its condition prior to such damage or destruction, (ii)
the Property Price of such Owned Branch shall be adjusted in the same manner
described in Section 2.15 with respect to Defect Reduction Amounts or (iii)
Sellers shall pay to SunTrust an amount equal to the sum of (x) the insurance
proceeds received by Sellers with respect to such damage or destruction, (y) any
applicable deductible amount and (z) such additional amount (up to, but not in
excess of, an amount, when aggregated with the amounts paid under the preceding
clauses (x) and (y), equal to the Property Price of the applicable Branch) as
may be required to repair such damage or destruction to return such property to
its condition prior to such damage or destruction, or, if the damage or
destruction is not reasonably capable of repair, to reflect the difference
between the amounts paid under the preceding clauses (x) and (y) and the
Property Price of the applicable Owned Branch.
ARTICLE IX
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of Purchaser to complete the transactions contemplated in
this Agreement is conditioned upon fulfillment or, where legally permitted,
waiver, on or before the Closing Date, of each of the following conditions:
SECTION 9.1 REPRESENTATIONS AND WARRANTIES TRUE.
Except to the extent waived pursuant to Section 3.1 or 4.2(a), the
representations and warranties made by Sellers in this Agreement shall be true
and correct as of the Effective Time as though such representations and
warranties were made at and as of such time (except that representations and
warranties that speak as of a specified date shall be true and correct as of
such date); provided, however, that for purposes of determining the satisfaction
of the condition contained in this Section 9.1, such representations and
warranties shall be deemed to be true and correct unless the failure or failures
of such representations and warranties to be so true and
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correct (excluding the effect of any qualification set forth therein relating to
"materiality" or "Sellers Material Adverse Effect") have, individually or in the
aggregate, a Sellers Material Adverse Effect; provided further that for purposes
of determining the satisfaction of the condition contained in this Section 9.1,
the representations and warranties contained in Section 6.6 shall be disregarded
to the extent that any alleged or actual breach of the representations and
warranties contained in such Section has been taken into account pursuant to the
provisions set forth in Section 2.9 or 2.10 or has been reflected in the
determination of the applicable Property Price.
SECTION 9.2 OBLIGATIONS PERFORMED.
Except to the extent waived pursuant to Section 3.1 or 4.2(a), Sellers
shall have performed and complied in all material respects, with all
obligations, covenants and agreements, taken as a whole, required by this
Agreement to be performed or complied with by them prior to or at the Effective
Time.
SECTION 9.3 DELIVERY OF DOCUMENTS.
Sellers shall have delivered to Purchaser those items required by Section
3.2(b) hereof.
SECTION 9.4 REGULATORY APPROVAL.
The parties shall have obtained the Regulatory Approvals. No Governmental
Authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, judgment, decree, legal restraint or other
order (whether temporary, preliminary or permanent) (an "Order") that is in
effect and prohibits consummation of the transactions contemplated by this
Agreement; provided, however, that no Order requiring Purchaser to take any
Regulatory Action shall be considered a prohibition hereunder.
SECTION 9.5 NO LEGAL PROHIBITION.
No court or other governmental authority of competent jurisdiction shall
have issued any Order which is in effect and which prohibits or makes illegal
the consummation of the transactions contemplated by this Agreement; provided,
however, that no Order requiring Purchaser to take any Regulatory Action shall
be considered a prohibition hereunder or to make consummation illegal hereunder.
SECTION 9.6 NO LITIGATION.
There shall not be pending before any court or Governmental Authority of
competent jurisdiction any action or proceeding by any third party that seeks to
prohibit the consummation of the transactions contemplated by this Agreement and
that has a substantial probability of so prohibiting the transactions
contemplated by this Agreement; provided, however, that Purchaser shall not be
entitled to assert the condition to Closing contained in this Section 9.6 if it
has breached in any material respect its obligations under Section 8.2.
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SECTION 9.7 NO SELLERS MATERIAL ADVERSE EFFECT.
There shall not have occurred and be continuing since the date of this
Agreement any change, condition, event or development (except to the extent
contemplated by the Schedules provided to Purchaser prior to the date hereof)
that, individually or in the aggregate, would constitute a Sellers Material
Adverse Effect (provided that the condition set forth in this Section 9.7 shall
not apply to the extent arising from any breach of this Agreement waived
pursuant to Section 3.1 or 4.2(a)).
ARTICLE X
CONDITIONS TO SELLERS' OBLIGATIONS
The obligation of Sellers to complete the transactions contemplated in
this Agreement is conditioned upon fulfillment or, where legally permitted,
waiver, on or before the Closing Date, of each of the following conditions:
SECTION 10.1 REPRESENTATIONS AND WARRANTIES TRUE.
The representations and warranties made by Purchaser in this Agreement
shall be true and correct as of the Effective Time as though such
representations and warranties were made at and as of such time (except that
representations and warranties that speak as of a specified date shall be true
and correct as of such date); provided, however, that for purposes of
determining the satisfaction of the condition contained in this Section 10.1,
such representations and warranties shall be deemed to be true and correct
unless the failure or failures of such representations and warranties to be so
true and correct (excluding the effect of any qualification set forth therein
relating to "materiality" or "Purchaser Material Adverse Effect") have,
individually or in the aggregate, a Purchaser Material Adverse Effect.
SECTION 10.2 OBLIGATIONS PERFORMED.
Purchaser shall have performed and complied in all material respects, with
all obligations and agreements, taken as a whole, required by this Agreement to
be performed or complied with by it prior to or on the Effective Time.
SECTION 10.3 DELIVERY OF DOCUMENTS.
Purchaser shall have delivered to Sellers those items required by Section
3.2(c) hereof.
SECTION 10.4 REGULATORY APPROVAL.
The parties shall have obtained all Regulatory Approvals. No Governmental
Authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any Order that is in effect and prohibits consummation of
the transactions contemplated by this Agreement; provided, however, that no
Order requiring Purchaser to take any Regulatory Action shall be considered a
prohibition hereunder.
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SECTION 10.5 NO LEGAL PROHIBITION.
No court or other governmental authority of competent jurisdiction shall
have issued any Order which is in effect and which prohibits or makes illegal
the consummation of the transactions contemplated by this Agreement; provided,
however, that no Order requiring Purchaser to take any Regulatory Action shall
be considered a prohibition hereunder or to make consummation illegal hereunder.
ARTICLE XI
TERMINATION
SECTION 11.1 METHODS OF TERMINATION.
This Agreement may be terminated in any of the following ways:
(1) by either Purchaser or Sellers, in writing five (5) days
in advance of such termination, if the Closing has not occurred by June
30, 2002 (provided that no party shall be permitted to terminate this
Agreement hereunder if the failure of the Closing to occur prior to such
date arises out of or results from the actions or omissions of the
terminating party);
(2) at any time on or prior to the Effective Time by the
mutual consent in writing of Huntington and Purchaser;
(3) as a result of any breach of any representation,
warranty or covenant of the other party contained herein if (i) the
terminating party has given notice of such breach and such breach is not,
or is not capable of being, cured within thirty (30) days after such
notice and (ii) such breach, individually or in the aggregate with all
other such breaches, would cause the closing condition set forth in
Section 9.1 or Section 9.2, in the case of a termination by Purchaser, or
in Section 10.1 or Section 10.2, in the case of a termination by Sellers,
not to be satisfied; or
(4) (i) any Regulatory Approval shall have been denied by
final, nonappealable action of such Governmental Authority, or such
Governmental Authority shall have requested permanent withdrawal of any
application therefor or (ii) any injunction, decree or other order issued
by any Governmental Authority or other legal restraint or prohibition
preventing consummation of the transactions contemplated by this Agreement
shall have been entered by any Governmental Authority of competent
jurisdiction or any applicable law shall have been enacted or adopted that
enjoins, prohibits or makes illegal consummation of any of the
transactions contemplated by this Agreement and such injunction, decree or
other order shall be final and nonappealable; provided that no such action
or request, and no such injunction, decree or other order, legal restraint
or prohibition shall permit Purchaser to terminate the Agreement pursuant
to this clause if such order, prohibition or restraint could be removed by
complying with the provisions of Section 8.2.
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SECTION 11.2 PROCEDURE UPON TERMINATION.
In the event of termination pursuant to Section 11.1 hereof, and except as
otherwise stated therein, written notice thereof shall be given to the other
party, and this Agreement shall terminate immediately upon receipt of such
notice unless an extension is consented to by the party having the right to
terminate. If this Agreement is terminated as provided herein:
(1) each party will return all documents, work papers and
other materials of the other party, including photocopies or other
duplications thereof, relating to this transaction, whether obtained
before or after the execution hereof, to the party furnishing the same;
(2) all information received by either party hereto with
respect to the business of the other party (other than information which
is a matter of public knowledge or which has heretofore been published in
any publication for public distribution or filed as public information
with any Governmental Authority) shall not at any time be used for any
business purpose by such party or disclosed by such party to third
Persons; and
(3) each party will pay its own expenses.
(b) In the event of termination of this Agreement pursuant to this
Article XI, this Agreement (other than as set forth in Sections 8.1 and 12.5)
shall become void and of no effect with no liability on the part of any party
hereto (or of any of its directors, officers, employees, agents, legal and
financial advisors or other representatives); provided, however, that, no such
termination shall absolve the breaching party from any liability to the other
party arising out of its knowing or willful breach of this Agreement.
SECTION 11.3 PAYMENT OF EXPENSES.
Should the transactions contemplated herein not be consummated because of
a party's breach of this Agreement, in addition to such damages as may be
recoverable in law or equity, the other party shall be entitled to recover from
the breaching party upon demand, itemization, and documentation, its reasonable
outside legal, accounting, consulting, and other out-of-pocket expenses.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.1 ASSIGNMENT TO SUBSIDIARIES.
At its discretion, Huntington may cause the obligations of Sellers under
this Agreement to be fulfilled by its respective banking and corporate
subsidiaries; provided that no such actions shall relieve Sellers of any of
their obligations hereunder. Upon identification by Huntington of the
subsidiaries to be considered a Seller, Huntington shall cause those
subsidiaries to enter into such agreements as may be necessary to bind those
subsidiaries as additional parties to this Agreement.
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SECTION 12.2 AMENDMENT AND MODIFICATION; WAIVER.
This agreement may not be amended or modified in any manner except by
mutual agreement of the parties and as set forth in a writing signed by the
parties hereto or their respective successors in interest.
Subject to applicable law, either party, by written instrument signed by a
duly authorized officer, may extend the time for the performance of any of the
obligations or other acts of the other party and may waive (i) any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto or (ii) compliance with any of the undertakings,
obligations, covenants or other acts contained herein. The waiver of any breach
of any provision under this Agreement by a party shall not be deemed to be a
wavier of any preceding or subsequent breach under this Agreement.
SECTION 12.3 SURVIVAL.
Except as otherwise provided herein, the parties' respective
representations and warranties contained in this Agreement shall survive (i) in
all cases other than with respect to the representations and warranties
contained in Sections 6.3 and 6.14, until the 18-month anniversary of the
Effective Time, (ii) in the case of the representations and warranties contained
in Section 6.3, the five-year anniversary of the Effective Time and (iii), in
the case of the representations and warranties contained in Section 6.14, the
thirtieth (30th) day after the expiration of the applicable statute of
limitations with respect thereto; provided that any representation or warranty
shall be deemed to survive its relevant anniversary solely for the purpose of
resolving any claim with respect thereto submitted by an indemnified party in
accordance with Article V prior to such relevant anniversary with respect to
Losses incurred by the applicable indemnified party prior to such anniversary
and asserted under such claim and relating to the relevant surviving
representations and warranties). The covenants and agreements contained in this
Agreement which by their terms contemplates performance after the Effective Time
shall survive the Effective Time in accordance with such terms.
SECTION 12.4 ASSIGNMENT.
This Agreement and all of the provisions hereof shall be binding upon, and
shall inure to the benefit of, the parties hereto and their successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by either of the parties hereto
without the prior written consent of the other, except as set forth in Section
12.1 and except that Purchaser may assign its rights to another wholly owned
subsidiary of Purchaser (whether direct or indirect) without such prior written
approval (provided that no such assignment shall relieve Purchaser of any of its
obligations hereunder).
SECTION 12.5 CONFIDENTIALITY.
Purchaser and Sellers agree that the Confidentiality Agreement shall
survive the execution hereof, any termination hereof or any the consummation of
the transactions contemplated herein.
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SECTION 12.6 ADDRESSES FOR NOTICES, ETC.
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (i)
delivered by hand (with written confirmation of receipt), (ii) deposited in the
United States Mail by registered or certified mail, return receipt requested,
(iii) sent by telecopier (with electronic confirmation of receipt), provided
that a copy is mailed by registered or certified mail, return receipt requested,
or (iv) when received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to the appropriate
addresses or telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):
If to Sellers, to: Milton D. Baughman
Senior Vice President
Huntington Bancshares Incorporated
41 South High Street
Columbus, Ohio 43287
Facsimile Number: (614) 480-5284
with a copy to: Richard A. Cheap, Esq.
General Counsel and Secretary
Huntington Bancshares Incorporated
41 South High Street
Columbus, Ohio 43287
Facsimile Number: (614) 480-5485
If to Purchaser, to: John W. Spiegel
Vice Chairman and Chief Financial Officer
SunTrust Banks, Inc.
303 Peachtree Street, NE, 30th Floor
Atlanta, Georgia 30308
Facsimile Number: (404) 827-6173
with a copy to: Raymond D. Fortin
General Counsel
SunTrust Banks, Inc.
303 Peachtree Street, NE, 29th Floor
Atlanta, Georgia 30308
Facsimile Number: (404) 724-3550
SECTION 12.7 COUNTERPARTS.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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SECTION 12.8 HEADINGS.
The headings of the Articles and Sections of this Agreement are inserted
for convenience only and shall not constitute a part thereof.
SECTION 12.9 GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Florida applicable to contracts made and to be performed
entirely within such state.
SECTION 12.10 ENTIRE AGREEMENT.
Except for the Confidentiality Agreement, this Agreement and the exhibits
and attachments hereto represent the entire agreement between the parties hereto
respecting the transactions contemplated hereby and all prior or contemporaneous
written or oral proposals, agreements in principle, representations, warranties
and understandings between the parties with respect to such matters are
superseded hereby and merged herein.
SECTION 12.11 NO THIRD PARTY BENEFICIARIES.
Nothing in this Agreement is intended to or shall confer upon or give to
any Person (other than the parties hereto, their successors and permitted
assigns) any rights or remedies under or by reason of this Agreement, or any
term, provision, condition, undertaking, warranty, representation, indemnity,
covenant or agreement contained herein.
SECTION 12.12 CALCULATION OF DATES AND DEADLINES.
Unless otherwise specified, any period of time to be determined under this
Agreement shall be deemed to commence at 12:01 a.m. on the first full day after
the specified starting date, event, or occurrence. Any deadline, due date,
expiration date, or period-end to be calculated under this Agreement shall be
deemed to end at 5 p.m. on the last day of the specified period. The time of day
shall be determined with reference to the then current local time in Florida.
SECTION 12.13 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
Each of the parties hereto hereby irrevocably and unconditionally submits
to the jurisdiction of any state court of the State of Florida and any federal
court sitting in Orlando, Florida, and irrevocably agrees that all actions or
proceedings arising out of or relating to this agreement or the transactions
contemplated hereby or in aid or arbitration or for enforcement of an arbitral
award shall be litigated exclusively in such courts. Each of the parties hereto
agrees not to commence any legal proceedings related hereto except in such
courts. Each of the parties hereto irrevocably waives any objection which he or
it may now or hereafter have to the laying of the venue of any such proceeding
in any such court and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
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RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 12.14 SEVERABILITY.
Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
SECTION 12.15 SPECIFIC PERFORMANCE.
Each of the parties acknowledges and agrees that the other party would be
damaged irreparably in the event any of the provisions of this Agreement are not
performed in accordance with their specific terms or otherwise are breached.
Accordingly, each of the parties agrees that the other party shall be entitled
to seek an injunction or injunctions to prevent breaches of the provisions of
this Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having jurisdiction over the parties and the matter, in
addition to any other remedy to which it may be entitled, at law or in equity.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers as of the date first written
above.
HUNTINGTON BANCSHARES INCORPORATED
By: /s/ Thomas E. Hoaglin
--------------------------------------
Name: Thomas E. Hoaglin
Title: Chairman, President and Chief Executive
Officer
THE HUNTINGTON NATIONAL BANK
By: /s/ Thomas E. Hoaglin
--------------------------------------
Name: Thomas E. Hoaglin
Title: Chairman, President and Chief Executive
Officer
SUNTRUST BANK
By: /s/ John W. Spiegel
--------------------------------------
Name: John W. Spiegel
Title: Vice Chairman and Chief Financial Officer
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
HUNTINGTON BANCSHARES INCORPORATED
AND
SUNTRUST BANK
LIST OF EXHIBITS AND SCHEDULES
Exhibit No. Description
- ----------- -----------
2.9(c) Form of Lease
3.2(b)(1) Form of Deed
3.2(b)(2) Form of Bill of Sale
3.2(b)(3) Form of Assignment and Assumption Agreement
3.2(b)(4) Form of Assignment and Assumption of Leases
3.2(b)(5) Form of Assignment and Assumption of Transferred Lease
3.2(b)(9) Form of Closing Statement
3.2(b)(10) Forms of FIRPTA Affidavit and No Lien Affidavit
3.2(b)(12) Form of Power of Attorney
Schedule No. Description (All schedules to be provided)
- ------------ ------------------------------------------
1.1(a) Trust Accounts
1.1(b) Other Liabilities
2.1(a)(1) Real Property
2.1(a)(2)(w) Leased Branches
2.1(a)(2)(x) Other Facilities
2.1(a)(2)(y) ATMs
2.1(a)(2)(z) Tenant Leases
2.1(a)(3) Software Licenses
2.1(a)(4) Personal Property Leases
2.1(a)(6) Loans
2.1(b) Excluded Assets
2.2(e) Fair Market Value of Real Estate
2.4(b)(2) Excluded Loans
2.4(d) Underwriters of Credit Life Insurance and Credit Disability
Insurance Sold in connection with Branch Loans
2.5 Advisory Agreements
2.6(a) Excluded Employees
2.6(c) Severance
2.11 Assumed Contracts
6.6 Real Property and Leased Premises Exceptions
6.8 Employees and Employee Benefit Plans
6.11 Deposit Liabilities
6.14 Taxes
6.15 Regulatory Approvals and Third Party Consents
6.20 Derivative Transactions
6.23 Direct Non-Interest Income and Direct Non-Interest Expense
6.26 Absence of Certain Changes
7.6 Regulatory Approvals
ANNEX A
Thomas E. Hoaglin
Michael J. McMennamin
Ronald C. Baldwin
Richard A. Cheap
Daniel B. Benhase
ANNEX B
John W. Spiegel
Raymond D. Fortin
Richard K. McCrea
Richard G. Blumberg