BRANCH Office Purchase and Assumption Agreement

 

by and among

 

First National Bank, National Association

 

and

 

NBOH Properties, LLC

 

and

 

Premier Bank & Trust, National Association

 

Dated as of the 1st day of February, 2013

 

 

 

 

TABLE OF CONTENTS

 

      Page         1. PURCHASE AND ASSUMPTION 1   1.1 Purchase and Sale of
Assets 1   1.2 Transfer of Assets 1   1.3 Acceptance and Assumption 3   1.4
Payment of Funds 4 2. CONDUCT OF THE PARTIES PRIOR TO CLOSING 6   2.1 Covenants
of SELLERS 6   2.2 Covenants of BUYER 10   2.3 Covenants of All Parties 10 3.
REPRESENTATIONS AND WARRANTIES 11   3.1 Representations and Warranties of
SELLERS 11   3.2 Representations and Warranties of BUYER 14 4. ACTIONS
RESPECTING EMPLOYEES AND PENSIONS AND EMPLOYEE BENEFIT PLANS 15   4.1 Employment
of Employees 15   4.2 Terms and Conditions of Employment 15   4.3 Actions to be
Taken by FNB 16 5. CONDITIONS PRECEDENT TO CLOSING 17   5.1 Conditions to
SELLERS’ Obligations 17   5.2 Conditions to BUYER's Obligations 18   5.3 Waivers
of Conditions Precedent 19 6. CLOSING 20   6.1 Closing and Closing Date 20   6.2
SELLERS’ Actions at Closing 20   6.3 BUYER's Actions at the Closing 21   6.4
Method of Payment 22 7. CERTAIN TRANSITIONAL MATTERS 22   7.1 Transitional
Action by BUYER 22   7.2 Transitional Actions by SELLERS 24   7.3 Overdrafts and
Transitional Action 27   7.4 ATMs and Debit Cards 28   7.5 Environmental Matters
28   7.6 Effect of Transitional Action 30 8. GENERAL COVENANTS AND
INDEMNIFICATION 31   8.1 Confidentiality Obligations of BUYER 31   8.2
Confidentiality Obligations of SELLERS 31   8.3 Indemnification by SELLERS 32  
8.4 Indemnification by BUYER 33   8.5 Solicitation of Customers by BUYER Prior
to Closing 33   8.6 Solicitation of Customers by FNB After the Closing 34   8.7
Further Assurances 34   8.8 Operation of the Office 34   8.9 Information After
Closing 35

 

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  8.10 Individual Retirement Accounts 35   8.11 Covenant Not to Compete 35  
8.12 Non-solicitation of Employees 35   8.13 Office-Originated Loans after
Closing 36 9. TERMINATION 36   9.1 Termination by Mutual Agreement 36   9.2
Termination by SELLERS 36   9.3 Termination by BUYER 37   9.4 Effect of
Termination 37 10. MISCELLANEOUS PROVISIONS 38   10.1 Expenses 38   10.2
Limitations on Indemnification 38   10.3 Waivers 38   10.4 Notices 39   10.5
Parties in Interest; Assignment; Amendment 40   10.6 Headings 40   10.7
Terminology 40   10.8 Press Releases 41   10.9 Entire Agreement 41   10.10
Governing Law 41   10.11 Flexible Structure 42   10.12 Counterparts 42   10.13
Tax Matters 42   10.14 Updating of Disclosure Schedules and Exhibits 42

 

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SCHEDULES     3.1(c) Noncontravention 3.1(r) Home Equity Loans     EXHIBITS    
1.2(a) Description of Real Estate 1.2(b) Furniture, Fixtures and Equipment
1.2(e) Office Loans 1.2(g) Assumed Contracts 1.3(b) Deposit Liabilities; Deposit
Accounts 1.4(b) Allocation of Acquisition Consideration 4.1(a) Office Offered
Employees 6.2(b) Bill of Sale/Assignment and Assumption

 

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BRANCH OFFICE PURCHASE AND ASSUMPTION AGREEMENT

 

This Branch Office Purchase and Assumption Agreement (this "Agreement") is made
and entered into this 1st day of February, 2013, by and among Premier Bank &
Trust, N.A., a national banking association with its principal office at 6141
Whipple Avenue, N.W., North Canton, Ohio 44720 ("BUYER"), First National Bank,
N.A., a national banking association with its principal office located at 112
West Market Street, Orrville, Ohio 44667 (“FNB”), and NBOH Properties, LLC, an
Ohio limited liability company, with its principal office located at 112 West
Market Street, Orrville, Ohio 44667 (“NBOH” and collectively with FNB,
"SELLERS"; each of NBOH and FNB, a “SELLER”). Certain terms used but not
otherwise defined herein shall have the meanings given such terms in Section
10.7 hereof.

 

WHEREAS, BUYER desires to purchase and assume from SELLERS, and SELLERS desire
to sell and assign to BUYER, certain assets and liabilities associated with the
Office (as defined below);

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
BUYER and SELLERS hereby agree as follows:

 

1.           PURCHASE AND ASSUMPTION.

 

1.1         Purchase and Sale of Assets. At the Closing (as defined in Section
6.1 hereof), BUYER shall purchase, acquire and assume, and SELLERS shall sell
and assign, the real estate and other assets described in Section 1.2 hereof,
including all leases for such real estate on which the Office (as defined below)
and other premises are located (collectively, the "Assets"), all of which are
used in and/or relate primarily to the business conducted by FNB at its branch
office commonly known for street numbering purposes as 3085 West Market Street,
Akron, Ohio 44333 and located at the site described in Exhibit 1.2(a) attached
hereto and incorporated herein by reference, pursuant to the terms and
conditions, and subject to the exceptions, set forth herein. The foregoing
branch office is referred to as the "Office." The transactions contemplated by
this Agreement and the purchase of the Assets and assumption of the Assumed
Liabilities (as defined below) provided for herein is referred to herein as the
"Acquisition." The parties hereby agree that, effective as of the Closing, that
certain lease agreement between NBOH and FNB for the lease of the Office shall
be terminated and shall not be assigned to or assumed by BUYER hereunder.

 

1.2         Transfer of Assets. Subject to the terms and conditions of this
Agreement, SELLERS shall sell, assign, transfer, convey and deliver to BUYER, on
the Closing Date (as defined in Section 6.1 hereof), free and clear of any
liens, charges, mortgages, pledges, easements, encumbrances, impairments,
security interests, claims, or any other title defects or restrictions
whatsoever (collectively, “Liens”), except for the Permitted Exceptions, the
Assets, which shall include the following:

 

(a)          Real Estate. All of NBOH's right, title and interest in and to the
real estate described in attached Exhibit 1.2(a) on which the Office and other
premises are situated, together with all of NBOH’s rights in and to all
improvements thereon and all easements rights, privileges and appurtenances
associated therewith (collectively, the "Real Estate"). Exhibit 1.2(a)
identifies the Real Estate by street address, legal description and/or tax
parcel number;

 

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(b)          Furniture and Equipment. All of SELLERS’ right, title and interest
to the furniture, fixtures and equipment located at the Office and listed in
Exhibit 1.2(b) attached hereto and incorporated herein by reference
(collectively, the "Fixed Assets"), free and clear of any Liens, except for the
Permitted Exceptions; provided, however, that such Fixed Assets shall
specifically exclude, among other items, teller software, branch capture
software, branch capture CPUs, controllers, servers, sign "skins" with FNB’s
name, printed supplies and documents and other materials bearing any name and/or
logo of FNB or any affiliate of FNB, network communications equipment and
related devices, leased or licensed software, and marketing fixtures;

 

(c)          Cash on Hand. All cash on hand at the Office as of the close of
business on the Closing Date, including vault cash, petty cash, ATM cash and
tellers' cash;

 

(d)          Prepaid Expenses. All prepaid expenses recorded or otherwise
reflected on the books of SELLERS and attributable to the Office as of the close
of business on the Closing Date;

 

(e)          Office Loans. All right, title and interest in and to all of those
loans attributable to the Office as of the close of business on the Closing
Date, as set forth in Exhibit 1.2(e) attached hereto and incorporated herein by
reference, together with such other loans that BUYER and FNB may mutually agree
upon prior to the Closing, less (i) any loans that may be removed from the
Office Loans by the mutual agreement of BUYER and FNB, free and clear of any and
all Liens (other than interests of third parties that are subordinate to those
of FNB), and (ii) any loans not over thirty (30) days outstanding that are
automatically created as the result of an overdraft of a Deposit Account (as
defined below) pursuant to an overdraft protection program offered by FNB
(collectively, "Overdraft Loans"), except for those Overdraft Loans which are
charged to credit card accounts not transferred to BUYER hereunder. Such loans
shall be referred to herein individually and collectively as the "Office Loans;"

 

(f)          Records of the Office. All records and documents related to the
Assets transferred or the Assumed Liabilities (as defined below) as exist and
are available, whether or not physically maintained at the Office (in whatever
form or medium then maintained by SELLERS) including, but not limited to, those
relating to (i) the Deposit Accounts and (ii) the promissory notes, files and
documents and instruments relating to the Office Loans; and

 

(g)          Contracts or Agreements. All of SELLERS’ right, title and interest
in and to the contracts or agreements listed on Exhibit 1.2(g) attached hereto
and incorporated herein by reference, including, but not limited to, the
maintenance and service agreements related to the Office and those certain lease
agreements between NBOH and any tenants occupying portions of the Real Estate,
but excluding therefrom any listed contracts or agreements that are not
assignable without cost to BUYER unless BUYER consents to the inclusion of such
contracts or agreements in writing prior to the Closing (collectively, the
"Assumed Contracts").

 

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Any other assets of SELLERS not included in the foregoing (a) through (g) shall
remain the property of SELLERS and shall not be sold or transferred to BUYER
pursuant to this Agreement.

 

1.3         Acceptance and Assumption. Subject to the terms and conditions of
this Agreement, on and as of the Closing on the Closing Date, BUYER shall:

 

(a)          Assets. Receive and accept all of the Assets assigned, transferred,
conveyed and delivered to BUYER by SELLERS pursuant to this Agreement, as
identified in Section 1.2 above;

 

(b)          Deposit Liabilities. Assume and thereafter discharge, pay in full
and perform all of FNB's obligations and duties relating to the Deposit
Liabilities (as defined below) attributable to the Office as of the close of
business on the Closing Date. The term "Deposit Liabilities" means all of FNB's
obligations, duties and liabilities of every type and character relating to all
Deposit Accounts (as defined below) attributable to the Office as of the close
of business on the Closing Date, other than (i) KEOGH accounts, (ii) deposit
accounts securing any loan of FNB which is not an Office Loan, for which BUYER
assumes no liability, (iii) deposits of FNB’s employees who are not Transferred
Employees (as defined below), and (iv) deposits of current directors of FNB and
its affiliates (collectively (i)-(iv), the “Excluded Deposit Accounts”). The
deposit accounts (other than the Excluded Deposit Accounts) referred to in the
immediately preceding sentence, as set forth in Exhibit 1.3(b) attached hereto
and incorporated herein by reference (collectively, the "Deposit Accounts"),
include, without limitation, passbook, statement savings, checking, money market
and negotiable order of withdrawal accounts, certificates of deposit and
individual retirement accounts ("IRAs") for which FNB has not received, on or
before the Closing Date, the written advice from the account holder of such
account holder's objection or failure to accept BUYER as successor. The
"obligations, duties and liabilities" referred to in the definition of Deposit
Liabilities include, without limitation, the obligation to pay and otherwise
process all Deposit Accounts in accordance with applicable law and their
respective contractual terms (including the accrual and payment of interest
after the Closing Date), and the duty to supply all applicable reporting forms
for periods following the Closing Date including, without limitation, IRS Form
1099 reports relating to the Deposit Accounts to be filed and provided after the
Closing Date relating to interest accrued on and after the Closing Date;

 

(c)          Liabilities Under Assumed Contracts. Assume and thereafter fully
and timely perform and discharge, in accordance with their respective terms, all
of the liabilities and obligations of SELLERS arising after the Closing Date
with respect to the Assumed Contracts, which are sold, assigned or transferred
to BUYER by SELLERS pursuant to this Agreement; and

 

(d)          Other Liabilities. Except as otherwise provided herein, fully and
timely perform and discharge, as the same may be or become due, the Assumed
Contracts and all additional liabilities and obligations of SELLERS as of the
date of this Agreement, which will be reflected on the books of SELLERS as being
attributable to the Office as of the close of business on the Closing Date;
provided, however, that, during the Pre-Closing Period (as defined below),
SELLERS shall not incur any liabilities or obligations, other than the Deposit
Liabilities of FNB, without the prior consent of BUYER, which consent shall not
be unreasonably withheld or delayed.

 

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The liabilities and obligations of SELLERS assumed by BUYER pursuant to this
Section 1.3 are collectively referred to as the “Assumed Liabilities.”

 

1.4         Payment of Funds.

 

(a)          Consideration. The total consideration payable by BUYER to SELLERS
for the Assets (collectively, the “Acquisition Consideration”) shall be the
aggregate of the following:

 

(i)          the amount of the Assumed Liabilities, as reflected on the books of
SELLERS as of the close of business on the Closing Date;

 

(ii)         plus, the amount of cash on hand at the Office transferred to BUYER
as of the close of business on the Closing Date pursuant to Section 1.2(c);

 

(iii)        plus, the sum of $1,100,000, as and for the purchase of the Real
Estate (the “Real Estate Consideration”);

 

(iv)        plus, the net aggregate book value as reflected on SELLERS' books of
the Fixed Assets, as of the last day of the month ending immediately prior to
the month in which the Closing Date occurs, plus an amount equal to $25,000;

 

(v)         plus, a premium (the “Premium”) of five and twenty-five one
hundredths percent (5.25%) of the aggregate "Eligible Deposits" (as hereinafter
defined) of the Office as of the close of business on the Closing Date between
$13,000,000 and $16,000,000, plus an amount equal to $20,000; provided, however,
that the Premium shall not be less than $682,500. The term "Eligible Deposits"
shall mean the average aggregate principal balance of all Deposit Liabilities of
the Office for a period commencing ten (10) days prior to the Closing Date and
ending at the close of business on the Closing Date, excluding any certificates
of deposit with a deposit balance in excess of $100,000;

 

(vi)        plus, the amount of prepaid expenses described in Section 1.2(d) of
this Agreement, prorated as of the close of business on the Closing Date;

 

(vii)       plus, an amount equal to 99.22% of the outstanding principal balance
of the Office Loans, together with accrued and unpaid interest thereon and any
and all late fees relating thereto computed as of the close of business on the
Closing Date. The aggregate principal balance of the Office Loans shall be no
less than $10,000,000 and no more than $12,000,000;

 

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(viii)      plus, the amount of any credits to SELLERS at the Closing under
Sections 1.4(c) and 1.4(d) hereof, or minus any credits to BUYER at the Closing
under Sections 1.4(c) and 1.4(d) hereof; and

 

(ix)         minus, the aggregate balance of all Deposit Accounts (including
interest posted or accrued to such Deposit Accounts as of the close of business
on the Closing Date) as of the close of business on the Closing Date, which
balance shall be paid and transferred to BUYER at the Closing.

 

In the event that the Acquisition Consideration is positive (i.e., the aggregate
of the amounts set forth in items (i) through (viii) of this Section 1.4(a) is
greater than the amount of item (ix) of this Section 1.4(a)), the amount of such
excess shall be due and paid by BUYER to SELLERS at the Closing in the manner
specified in Section 6.4 hereof (collectively, the “Cash Consideration”). In the
event that the Acquisition Consideration is negative (i.e., the amount of item
(ix) of this Section 1.4(a) is greater than the aggregate of the amounts set
forth in items (i) through (viii) of this Section 1.4(a)), the amount of such
excess shall be due and paid by SELLERS to BUYER at the Closing in the manner
specified in Section 6.4 hereof. The parties hereto shall execute a Preliminary
Settlement Statement (as defined below) at the Closing and a Final Settlement
Statement (as defined below) post-Closing in accordance with Section 6.4 hereof.

 

(b)          Allocation of Acquisition Consideration. The Acquisition
Consideration shall be allocated in accordance with Exhibit 1.4(b) to be
prepared by BUYER and SELLERS and attached to this Agreement and incorporated
herein by reference prior to the Closing. BUYER and SELLERS agree that the
Acquisition Consideration will be allocated to the Assets for all purposes
(including tax and financial accounting) in a manner consistent with the fair
market values set forth in Exhibit 1.4(b), as jointly determined by BUYER and
SELLERS. BUYER and SELLERS shall file all tax returns (including amended returns
and claims for refund) and information reports in a manner consistent with such
allocation and no party shall take any position (whether in audits, tax returns
or otherwise) that is inconsistent with such allocation unless required to do so
by law.

 

(c)          Reimbursement and Proration of Certain Expenses. Except as
otherwise expressly provided herein, all expenses (i) due and payable at times
after the Closing Date for periods prior to the close of business on the Closing
Date or (ii) paid prior to the close of business on the Closing Date for periods
following the Closing Date, including the prepaid expenses described in Section
1.2(d) hereof and deferred expenses described in Section 1.3(d) hereof,
including, without limitation, real estate Taxes (as defined below) which are a
Lien but not yet due and payable, utility payments, payments due on leases
assigned, payments due on assigned service and maintenance contracts and similar
expenses relating to the Office, shall be prorated among SELLERS and BUYER as of
the close of business on the Closing Date; provided, however, that all real
estate Taxes, to the extent payable by SELLERS and/or BUYER, shall be prorated
on the Closing Date on the basis of the most recent tax bill (or, if not
available, the last available tax duplicate). All prorations shall be final. All
utility payments and lease payments shall be prorated on the basis of the best
information available on the Closing Date. SELLERS will contact all applicable
utility providers to effectuate a reading on the Closing Date so that an
appropriate transfer from SELLERS to BUYER can occur as of the Closing Date.
SELLERS hereby agree to credit BUYER for security deposits relating to the
leases included in the Assumed Contracts in an amount equal to Two Thousand
Seven Hundred Thirty-Four Dollars and 46/100 ($2,734.46). Any credits to SELLERS
at the Closing under this Section 1.4(c) will be added to the Acquisition
Consideration, and any credits to BUYER at the Closing under this Section 1.4(c)
shall be subtracted from the Acquisition Consideration.

 

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(d)          Expenses Relating to Real Estate and other Assets. The transfer (or
conveyance) fees relating to the sale of the Real Estate and the costs, fees and
expenses of the title examination relating to the procurement of the Title
Commitment related to the Real Estate referred to in Sections 2.1(b) and 5.2(f)
herein, shall be allocated to, and shall be borne, solely and exclusively by
SELLERS. The costs, fees and expenses relating to the premiums, including any
endorsements for extended coverage, for all title insurance policies (net of the
costs of the Title Commitment and examination), recording costs and other
similar costs, fees and expenses, if any, relating to the sale and transfer of
the Real Estate, including, but not limited to, any conveyance fees, Taxes,
recording costs and other similar fees and expenses relating to the sale and
transfer of any other Assets, shall be allocated to, and shall likewise be
borne, solely and exclusively, by SELLERS. To the extent BUYER requests SELLERS
or their attorneys to seek certain title endorsements or removal of exceptions
noted on the Title Commitment, BUYER shall reimburse SELLERS at Closing for
their attorney fees related thereto. In no event shall SELLERS be required to
undertake any negotiations with the Title Company (defined below) for any
matters that relate to the scope of title insurance coverage or the Permitted
Exceptions. BUYER shall be credited at the Closing for all the costs, fees and
expenses allocated to SELLERS pursuant to this Section 1.4(d) but paid by BUYER,
and SELLERS shall be credited at the Closing for all of the costs, fees and
expenses allocated to BUYER pursuant to this Section 1.4(d) but paid by SELLERS.
Any credits to BUYER at the Closing under this Section 1.4(d) shall be
subtracted from the Acquisition Consideration, and any credits to SELLERS at the
Closing under this Section 1.4(d) will be added to the Acquisition
Consideration. If this transaction does not close by virtue of a breach of this
Agreement, the breaching party shall be responsible for and shall, as
appropriate, reimburse the other party for its expenses set forth in this
Section 1.4(d). If this transaction does not close for any other reason after
the date hereof, each party shall reimburse the other party upon termination of
this Agreement for such party's share of expenses pursuant to this Section
1.4(d) so that each party shall pay the same share of expenses as it would have
paid at Closing.

 

(e)          Insurance Premium Refunds. With respect to the Insured Office Loans
(as defined in Section 7.2(l) herein), SELLERS shall provide a credit to BUYER
equal to the sum of unearned premiums relating to the Insured Office Loans to
compensate BUYER, in advance, for estimated refunds otherwise payable to FNB in
conjunction with future payoffs of such Insured Office Loans prior to maturity
(the "Premium Settlement Payment"). Such Premium Settlement Payment shall be
calculated as of the Closing Date and shall appear as a credit to BUYER in the
Final Settlement Statement referenced in Section 6.4 herein.

 

2.           CONDUCT OF THE PARTIES PRIOR TO CLOSING.

 

2.1           Covenants of SELLERS. SELLERS hereby covenant to BUYER that, from
the date hereof until the Closing Date (the “Pre-Closing Period”):

 

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(a)          Operation of the Office. SELLERS shall continue to operate the
Office in a manner substantially equivalent to that employed immediately prior
to the date of this Agreement. Notwithstanding the foregoing, during the
Pre-Closing Period, except as may be required to obtain the required
authorizations, consents and approvals referred to in Section 2.3(a) of this
Agreement and except as may be otherwise required by a regulatory authority,
SELLERS shall not, without the prior consent of BUYER:

 

(i)          permit the Office to engage or participate in any transaction or
incur or sustain any obligation except in the ordinary course of business;

 

(ii)         permit the Office to transfer to SELLERS' other operations any of
the Assets, except for (A) supplies, if any, which have unique function in the
business of SELLERS and its affiliates and ordinarily would not be useful to
BUYER, (B) cash and other normal intrabank transfers which may be transferred in
the ordinary course of business in accordance with normal banking practices, (C)
any current loans not included among the Office Loans, and (D) any loans
originated by the Office in the market served thereby during the Pre-Closing
Period that are not included among the Office Loans;

 

(iii)        permit the Office to transfer to FNB’s other operations any Deposit
Liabilities, other than (A) Deposit Liabilities securing loans made by FNB which
are not Office Loans, (B) Deposit Liabilities owned in whole or in part by
employees of FNB who are not Transferred Employees, or (C) Deposit Liabilities
of current directors of FNB or its affiliates, except in the ordinary course of
business at the unsolicited request of depositors, or cause any of FNB's other
operations to transfer to the Office any Deposit Liabilities, except in the
ordinary course of business at the unsolicited request of depositors; provided,
however, that FNB shall be permitted to make such transfers of any Deposit
Liabilities to or from the Office as are in the ordinary course of business;

 

(iv)        invest in any Fixed Assets on behalf of the Office, except for
commitments made on or before the date of this Agreement which are disclosed to
BUYER on Exhibit 1.2(b) of this Agreement and for replacements of furniture,
furnishings and equipment and normal maintenance and refurbishing purchased or
made in the ordinary course of business;

 

(v)         enter into or amend any continuing contract (other than those
related to Deposit Liabilities and loans which are not included as Office
Loans), which cannot be terminated without cause and without payment of any
amounts as a penalty, bonus, premium or other compensation for termination;

 

(vi)        make any change to FNB’s customary policies for setting rates on
deposits offered at the Office.

 

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(b)          Title Commitment for Real Estate. NBOH shall make commercially
reasonable efforts to deliver to BUYER, at NBOH’s expense, as soon as reasonably
practicable after the date of this Agreement but in no event later than
forty-five (45) days after the date of this Agreement, a commitment (the "Title
Commitment"), having an effective date as near as practicable to the date of
delivery of such Title Commitment, from Kropf, Wagner, Hohenberger & Lutz,
L.L.P. d.b.a. Kropf Title and Escrow (the “Title Company”), to issue to BUYER as
soon as practicable after the Closing Date, an American Land Title Association
("ALTA") owners (6-17-06 Form) policy, having an effective date as of the
Closing Date, covering the Real Estate, in an amount equal to the portion of the
Acquisition Consideration allocated to the Real Estate in Section 1.4(a)(iii)
hereof, subject to the exceptions specified in the Title Commitment. If title to
all or part of the Real Estate is unmarketable or is subject to any Lien, other
than the Permitted Exceptions (as defined below) (each a “Title Defect”), then
BUYER shall provide written notice thereof to NBOH. NBOH shall have thirty (30)
days after written notice thereof from BUYER, to notify BUYER in writing which
of such Title Defects shall be cured by NBOH prior to or at Closing. With
respect to any Title Defect not elected to be cured by NBOH, BUYER may elect to
attempt to cure or remove such Title Defect, for a period of thirty (30) days
thereafter. If NBOH elects not to cure any or all Title Defects or any such
Title Defect is not cured by BUYER prior to or at the Closing, in addition to
any other rights which BUYER may have hereunder, BUYER shall have the right (i)
to reduce the Real Estate Consideration by an amount equal to the cost to remove
or cure any such Title Defect, as reasonably estimated by BUYER, (ii) to
negotiate with the Title Company for certain endorsements to the standard
insurance coverage to address any such Title Defects, the cost of which shall be
credited against and reduce the Real Estate Consideration, or (ii) to waive any
objection to any such Title Defect in which event such Title Defect shall be
deemed to be a Permitted Exception. The Real Estate is being sold by NBOH to
BUYER hereunder free and clear of all Liens, except for the Permitted
Exceptions, and the conveyance by limited warranty deed to be delivered by NBOH
pursuant hereto shall be subject only to the Permitted Exceptions (the "Deed").
NBOH also shall execute and deliver to BUYER at the time of the Closing such
affidavits and other instruments, if any, as the Title Company may reasonably
require to delete any inapplicable standard exceptions appearing as "Schedule B"
items in a standard ALTA owners title insurance policy, other than those which
may only be deleted by a survey. NBOH also shall execute and deliver a so-called
"FIRPTA" affidavit at Closing.

 

(c)          Required Authorizations. SELLERS shall obtain and procure all
necessary consents, approvals and authorizations, if any, required by SELLERS to
enable them to fully perform all obligations imposed on them hereunder which
must be performed by them at or prior to the Closing.

 

(d)          Creation of Liens. With respect to the Real Estate, SELLERS shall
not create or allow any Liens, other than the Permitted Exceptions.

 

(e)          Insurance Proceeds and Casualty Payments. SELLERS shall maintain
adequate insurance on all of the Real Estate and Fixed Assets. In the event of
any damage or destruction affecting such Assets during the Pre-Closing Period,
SELLERS shall deliver to BUYER at the Closing any such insurance proceeds
received by SELLERS as a result thereof (adding into such amount the amount of
any deductible), to the extent of the applicable amount in Section 1.4(a)(iii)
with respect to the Real Estate and to the extent of the amount set forth in
Section 1.4(a)(iv) with respect to the Fixed Assets, as the case may be, unless
SELLERS have repaired or replaced the damaged or destroyed property.

 

8

 

 

(f)          IRAs. Not later than thirty (30) days prior to the Closing Date,
FNB shall, at FNB's expense, mail notice of FNB's resignation as custodian and
the appointment of BUYER as the successor custodian, effective upon the Closing
Date, of each IRA maintained at the Office. The notice shall include such other
information as is mutually agreed upon by FNB and BUYER.

 

(g)          Assignment of Leases. SELLERS shall obtain any consent necessary to
assign or transfer to BUYER, or substitute BUYER as landlord under, the lease by
which a third party leases space in the Real Estate, in form and content
reasonably satisfactory to BUYER, it being understood that the assignments of
said leases in their current forms or without material changes shall be
acceptable to BUYER. In the event that any such assignment is not obtained or
other arrangements reasonably satisfactory to BUYER are not made prior to the
Closing, SELLERS shall indemnify, defend and hold BUYER harmless from and
against any Losses arising from or relating to such lease and lessee.

 

(h)          BUYER Attendance. SELLERS shall permit representatives of BUYER to
attend such meetings of SELLERS with regard to the Office and business of the
Office as BUYER may reasonably request, to review such books and records of
SELLERS (during normal business hours) as may reasonably be relevant to the
transactions contemplated hereby (in SELLERS’ opinion), and to consult with FNB
with regard to any of the Office Loans.

 

(i)          New Loans. FNB shall make available to BUYER the opportunity to
participate in any new loans originated at the Office in the market served by it
during the Pre-Closing Period (each such loan an “Interim Loan” and collectively
with all other Interim Loans the “Interim Loans”). Prior to issuing a loan
commitment for any such Interim Loan, FNB shall notify BUYER in writing of the
terms of such Interim Loan and BUYER shall have the right, exercisable within
ten (10) days after receipt of such notice, to agree to participate in such
Interim Loan up to fifty percent (50%) of the principal amount of the Interim
Loan. If BUYER so elects to participate, the parties hereby agree that BUYER
shall be the originating lender and FNB shall be the participating lender and
the Interim Loan shall be originated using BUYER’s forms.

 

(j)          Real Estate Documentation. SELLERS shall provide to BUYER copies of
the following documents/information in its possession, if any, relating to the
Real Estate: (i) blueprints and schematic drawings, and (ii) true and complete
copies of all reports and results of any studies, analyses, tests,
investigations or monitoring, possessed or initiated by SELLERS pertaining to
the Real Estate, including, without limitation, any prior title commitments and
title policies. In the event this Agreement terminates for any reason, BUYER
shall promptly return to SELLERS any such documents/information received from
SELLERS.

 

9

 

 

2.2         Covenants of BUYER. BUYER hereby covenants to SELLERS that, during
the Pre-Closing Period:

 

(a)          Regulatory Applications. BUYER shall prepare and submit for filing,
at no expense to SELLERS, any and all applications, filings, and registrations
with, and notifications to, all federal and state authorities, and all public
notices, required on the part of BUYER or any affiliate of BUYER for the
Acquisition to be consummated on the terms set forth herein and for BUYER to
operate the Office following the Closing. BUYER shall provide SELLERS with a
draft copy of each application, filing, registration, and notification for
SELLERS' approval prior to filing, which approval by SELLERS will not be
unreasonably withheld or delayed. Such applications will be submitted to SELLERS
in draft form within thirty (30) days from the date of this Agreement and filed
by BUYER without delay following SELLERS' approval of such applications;
provided, however, that in no event will such applications be filed later than
sixty (60) days from the date of this Agreement. Thereafter, BUYER shall pursue
all such applications, filings, registrations, and notifications diligently and
in good faith, and shall file such supplements, amendments, and additional
information in connection therewith as may be reasonably necessary for the
Acquisition to be consummated on the terms set forth herein and for BUYER to
operate the Office following the Closing. BUYER shall deliver to SELLERS
evidence of the filing of each and all of such applications, filings,
registrations and notifications (except for any confidential portions thereof),
and any supplement, amendment or item of additional information in connection
therewith (except for any confidential portions thereof). BUYER shall also
deliver to SELLERS a copy of each material notice, order, opinion and other item
of correspondence received by BUYER from such federal and state authorities
(except for any confidential portions thereof) and shall advise SELLERS, at
SELLERS' request, of developments and progress with respect to such matters.

 

(b)          Required Authorizations. BUYER shall obtain and procure all
necessary consents, approvals and authorizations, if any, required on its part
to enable it to fully perform all obligations imposed on it hereunder which must
be performed by it at or prior to the Closing.

 

(c)          Satisfaction of Conditions. BUYER shall not undertake any course of
action inconsistent with the satisfaction of the requirements or the conditions
applicable to it, or its agreements, undertakings, obligations, or covenants set
forth in this Agreement, and it shall promptly do all such reasonable acts and
take all such reasonable measures as may be appropriate to enable it to perform
as early as possible the agreements, undertakings, obligations, and covenants
herein provided to be performed by it, and to enable the conditions precedent to
SELLERS' obligations to consummate the Closing of the Acquisition to be fully
satisfied. Additionally, BUYER shall not, directly or through any existing or
future subsidiary or affiliate, take any action that would be in conflict with,
or result in the denial, delay, termination, or withdrawal of, any of the
regulatory approvals referred to in this Agreement.

 

2.3         Covenants of All Parties.

 

(a)          SELLERS hereby covenant to BUYER, and BUYER hereby covenants to
SELLERS that, during the Pre-Closing Period, each such party shall cooperate
fully with the other party(ies) in attempting to obtain all consents, approvals,
permits, or authorizations which are required to be obtained pursuant to any
federal or state law, or any federal or state regulation thereunder, for or in
connection with the transactions described and contemplated in this Agreement.

 

(b)          During the Pre-Closing Period, SELLERS and BUYER agree to consult
with each another as to the form and substance of any press release or other
public disclosure of matters related to this Agreement or any of the
transactions contemplated hereby, except as may be required by applicable law or
by any governmental authority or the rules of any stock exchange or trading
system.

 

10

 

 

3.           REPRESENTATIONS AND WARRANTIES.

 

3.1         Representations and Warranties of SELLERS. Except as set forth in
the Disclosure Schedules, SELLERS, jointly and severally, represent and warrant
to BUYER as follows:

 

(a)          Good Standing and Power of SELLERS. FNB is a banking association
validly existing under the laws of the United States with corporate power to own
its properties and to carry on its business as presently conducted. FNB is an
"insured bank" as defined in the Federal Deposit Insurance Act. NBOH is a
limited liability company existing under the laws of the State of Ohio with the
power to own its properties and to carry on its business as presently conducted.

 

(b)          Authorization of Agreement and Transaction Documents. The execution
and delivery of this Agreement and all other agreements, certificates,
instruments and documents to be executed or delivered in connection with the
transactions contemplated by this Agreement (collectively, the “Transaction
Documents”), and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action, shareholder
action (if any) and member action on the part of SELLERS, and this Agreement is,
and each of the Transaction Documents will upon such delivery be, a valid and
binding obligation of SELLERS, subject to the application of applicable
bankruptcy, insolvency or other laws affecting creditors' rights generally.

 

(c)          Effective Agreement. Except as otherwise set forth on Schedule
3.1(c), the execution, delivery, and performance of this Agreement and each of
the Transaction Documents by SELLERS and the consummation of the transactions
contemplated hereby and thereby, will not conflict with, result in the breach
of, constitute a violation or default, result in the acceleration of payment or
other obligations, or create any Liens, under any of the provisions of the
Articles of Association, Articles of Organization, By-Laws or other
organizational documents or agreements of SELLERS (as applicable), under any
judgment, decree or order, under any law, rule, or regulation of any government
or agency thereof, or under any material contract, material agreement or
material instrument to which SELLERS are subject, where such conflict, breach,
violation, default, acceleration or Lien would have a material adverse effect on
the Assets or SELLERS' ability to perform their respective obligations hereunder
or under any of the Transaction Documents.

 

(d)          Title to Real Estate And Other Assets. FNB is the sole owner of the
Assets (other than the Real Estate), free and clear of any Liens. As to the Real
Estate, NBOH is the sole owner of a fee simple interest in, and has good and
marketable title to, such Real Estate, free and clear of all Liens and rights of
tenants in possession except for the Permitted Exceptions. FNB has a valid
leasehold interest in the Office.

 

11

 

 

(e)          Zoning Variations. In the past two (2) years, SELLERS have not
received any written notice from any governmental authority of any uncorrected
violations of zoning and/or building codes relating to the Real Estate.

 

(f)          Condemnation Proceedings. In the past two (2) years, SELLERS have
not received any written notice of any condemnation proceeding affecting or
relating to the Office or the Assets, nor, to SELLERS’ Knowledge, is there any
pending or threatened condemnation proceeding affecting or relating to the
Office or the Assets.

 

(g)          Taxes. All federal, state and local payroll, withholding, property,
sales, use and transfer taxes and other assessments (collectively, “Taxes”), if
any, which are due and payable by SELLERS relating to the Office or the Real
Estate prior to the Closing Date (which are not being contested) shall be paid
in full as of the Closing Date or SELLERS shall have made appropriate provision
for such payment in accordance with ordinary business practices. Any claims for
refunds of Taxes which have been paid by SELLERS shall remain the property of
SELLERS.

 

(h)          Operations Lawful. The conduct of banking business at the Office,
and, to SELLERS’ knowledge, the ownership and use of the Real Estate are in
compliance in all material respects with all federal, state, county and
municipal laws, ordinances and regulations applicable to conduct of such
business or the ownership and use of the Real Estate.

 

(i)          Third-Party Claims. There are no actions, suits or proceedings,
pending or, to SELLERS' Knowledge, threatened against or affecting SELLERS
which, if determined adversely to SELLERS, could have a material adverse effect
on the aggregate value of the Assets or the Real Estate.

 

(j)          Insurance. SELLERS maintain such insurance on the Office, the Fixed
Assets and the Real Estate as may be required or as is customary in the business
of banking and for such assets, real property and improvements.

 

(k)          Labor Relations. To SELLERS’ Knowledge, no employee located at the
Office is represented, for purposes of collective bargaining, by a labor
organization of any type. To SELLERS’ Knowledge, there have been no efforts
during the past three years to unionize or organize any employees at the Office,
and no material claim related to employees at the Office under the Fair Labor
Standards Act, National Labor Relations Act, Civil Rights of 1964, Walsh-Healy
Act, Davis Bacon Act, Civil Rights of Act of 1866, Age Discrimination in
Employment Act, Equal Pay Act of 1963, Executive Order No. 11246, Federal
Unemployment Tax Act, Vietnam Era Veterans Readjustment Act, Occupational Safety
and Health Act, Americans with Disabilities Act or any state or local employment
related law, order, ordinance or regulation, no unfair labor practice,
discrimination or wage-and-hour claim is pending or, to SELLERS' Knowledge,
threatened against or with respect to FNB.

 

(l)          Governmental Notices. SELLERS have not received any written notice
from any federal or state governmental agency indicating that it would oppose or
not approve, if required, the transactions contemplated by this Agreement.

 

12

 

 

(m)          Environmental. There are no actions, proceedings or investigations
pending, or, to SELLERS’ Knowledge, threatened, before any environmental
regulatory body, federal or state court against SELLERS in respect of the Real
Estate under any Environmental Law (as defined in Section 7.5) and in connection
with any release of any Hazardous Substance (as defined in Section 7.5) with
respect to the Real Estate, nor are there any such actions or proceedings or
investigations in which SELLERS are a plaintiff or complainant. SELLERS are not
responsible in any material respect under any applicable Environmental Law for
any release caused by the spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing of
Hazardous Substances into the environment by SELLERS, nor are SELLERS
responsible for any material costs (as a result of the acts or omissions of
SELLERS, or, to SELLERS’ Knowledge, as a result of the acts or omissions of any
other person) of any material remedial action including, without limitation,
costs arising out of security fencing, alternative water supplies, temporary
evacuation and housing and other emergency assistance undertaken by any
environmental regulatory body having jurisdiction over SELLERS to prevent or
minimize any actual or threatened release by SELLERS on the Real Estate of any
Hazardous Substances into the environment which would endanger the public health
or the environment.

 

(n)          Access to Real Estate. In the past two (2) years, SELLERS have not
received any written notice of any termination or impairment of access to the
Real Estate from adjoining public or private streets or ways or discontinuation
of necessary sewer, water, electric, gas, telephone, or other utilities or
services, and sewage, sanitation, plumbing, refuse disposal, and similar
facilities servicing the Real Estate.

 

(o)          Mechanic's Liens. SELLERS have paid or will pay in full prior to
the Closing Date, all bills and invoices for labor and material of any kind
(performed or requested by or on behalf of SELLERS) arising from SELLERS'
ownership, operation, management, repair, maintenance, or leasing as tenant of
the Real Estate, and no actual or potential mechanic's Lien or other claims are
outstanding or available to any party in connection with SELLERS' ownership,
operation, management, repair, maintenance, or leasing as tenant of the Real
Estate and relating to any work or materials provided by or on behalf of
SELLERS.

 

(p)          Personal Property. The Fixed Assets are sufficient to operate the
business of the Office as presently conducted.

 

(q)          Assumed Contracts. Exhibit 1.2(g) is a true and accurate schedule
of all Assumed Contracts. Each Assumed Contract is valid and subsisting and in
full force and effect in accordance with its terms, and there is no actual or,
to SELLERS’ Knowledge, threatened breach or termination of any such Assumed
Contract or claims or defenses thereto by the other party(ies) thereto.

 

13

 

 

(r)          Office Loans. FNB is the sole owner of each Office Loan and no
Office Loan is subject to Lien superior to the rights of FNB in such Office
Loan, except Liens for Taxes which are not yet due and payable and with respect
to those home equity loans listed on Schedule 3.1(r). No consents of any third
parties are required for transfer of the Office Loans to BUYER as provided in
this Agreement, other than the consents or approvals of certain regulatory
authorities as contemplated by Section 2.2(a) hereof. As of the date hereof, the
Office Loans are not, and as of the Closing Date will not be, past due more than
ninety (90) days in accordance with their respective terms or on non-accrual
status on the books of FNB. FNB has provided BUYER with the current
classification of each Office Loan as of the date hereof (corresponding to asset
classifications by the Office of the Comptroller of the Currency). As to each
Office Loan, such loan is adequately documented, is enforceable in accordance
with its terms, and FNB has an enforceable security interest in collateral where
applicable, in each instance, subject to general principles of equity,
regardless of whether such enforceability is considered a proceeding in equity
or at law, or is limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors’ rights generally. FNB has no
Knowledge of any claims, defenses, or set-off rights by any third parties with
respect thereto, including borrowers. SELLERS have no duty or obligation to
BUYER to file any UCC financing statements, or amendments thereto or
continuations thereof, or to take any other action, send any notice, or make any
other filing as and from the Closing Date to perfect or continue any such
security interest or the enforceability thereof.

 

For purposes of this Agreement, the term “Knowledge,” as to SELLERS or as to
either SELLER, shall mean the actual knowledge of Mark Witmer and Jay VanSickle,
as well as the knowledge such persons would have obtained after making
reasonable inquiry of any employee of the Office who may have responsibility for
the matter at hand.

 

3.2         Representations and Warranties of BUYER. BUYER represents and
warrants to SELLERS as follows:

 

(a)          Good Standing and Power of BUYER. BUYER is a banking association
validly existing under the laws of the United States with corporate power to own
its properties and to carry on its business as presently conducted. BUYER is an
"insured bank" as defined in the Federal Deposit Insurance Act.

 

(b)          Authorization of Agreement and Transaction Documents. The execution
and delivery of this Agreement and all of the Transaction Documents, and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of BUYER, and this
Agreement is, and each of the Transaction Documents will upon such delivery be,
a valid and binding obligation of BUYER, subject to the application of
applicable bankruptcy, insolvency or other laws affecting creditors’ rights
generally.

 

(c)          Effective Agreement. Subject to the receipt of any and all
necessary regulatory approvals and required consents, the execution, delivery,
and performance of this Agreement and each of the Transaction Documents by BUYER
and the consummation of the transactions contemplated hereby and thereby, will
not conflict with, result in the breach of, constitute a violation or default,
result in the acceleration of payment or other obligations, or create any Liens,
under any of the provisions of the Articles of Incorporation, Code of
Regulations or other governing documents of BUYER, under any judgment, decree or
order, under any law, rule or regulation of any government or agency thereof, or
under any material agreement, material contract or material instrument to which
BUYER is subject, where such conflict, breach, violation, default, acceleration
or Lien would have a material adverse effect on BUYER's ability to perform its
obligations hereunder or under any of the Transaction Documents.

 

14

 

 

(d)          Governmental Notices. BUYER has not received any written notice
from any federal or state governmental agency indicating that it would oppose or
not approve, if required, the transactions contemplated by this Agreement and
has no reason to believe any such agency may oppose or not approve the
Acquisition.

 

4.           ACTIONS RESPECTING EMPLOYEES AND PENSIONS AND EMPLOYEE BENEFIT
PLANS.

 

4.1         Employment of Employees.

 

(a)          BUYER shall extend offers of employment, to be effective as of the
Closing Date, to those employees of the Office as BUYER, in its discretion,
selects. No later than fifteen (15) days prior to the Closing Date, BUYER shall
prepare and the parties shall attach to this Agreement as Exhibit 4.1(a)
(incorporated herein by reference) a list of all such employees. Employees
accepting employment with BUYER are referred to as the "Transferred Employees".
Nothing contained in this Agreement shall create any rights in any third
parties, including but not limited to FNB’s employees, or restrict or prohibit
BUYER and any Transferred Employee from entering into an employment agreement
satisfactory to both BUYER and the Transferred Employee.

 

(b)          FNB will cooperate with BUYER, to the extent reasonably requested
and legally permissible, to provide BUYER with information about the employees
of the Office including, without limitation, providing BUYER with the personnel
files of those employees of the Office who provide FNB with their written
consent thereto, and a means to meet with the subject employees. FNB's
managerial and supervisory employees will not participate in any way in the
hiring decisions of BUYER.

 

4.2         Terms and Conditions of Employment. Except as otherwise provided
explicitly in this Agreement, the terms of employment for each Transferred
Employee shall be determined solely by BUYER' s policies, procedures, and
programs; provided, however, that BUYER agrees that each Transferred Employee
shall be provided employment subject to the following terms and conditions:

 

(a)          Except as otherwise specifically provided herein, Transferred
Employees shall be provided employee benefits that are no less favorable in the
aggregate than those provided to similarly situated employees of BUYER. BUYER
shall provide such Transferred Employees with credit for the Transferred
Employee's period of service with FNB (including any service credited from
predecessors by merger or acquisition to FNB) towards the calculation of
eligibility and vesting for such purposes as vacation, sick days, personal days,
severance and other benefits, and participation and vesting in BUYER's qualified
pension and/or profit sharing 401(k) plans, as such plans may exist (but not for
purposes of funding of any accrued pension or profit sharing plans for such
Transferred Employees with respect to any period prior to the Closing Date).

 

15

 

 

(b)          Each Transferred Employee shall be eligible to participate in the
medical, dental, or other welfare plans of BUYER, as such plans may exist, on
and after the Closing Date, and any pre-existing conditions or waiting period
provisions of such plans shall be waived with respect to any such Transferred
Employees.

 

(c)          Except as provided herein, FNB shall pay, discharge, and be
responsible for (i) all salary and wages arising out of employment of the
Transferred Employees through the Closing Date, and (ii) any employee benefits
arising under FNB's employee benefit plans and employee programs prior to the
Closing Date including but not limited to benefits with respect to claims
incurred prior to the Closing Date but reported after the Closing Date and
benefits inuring to any employees who may have been on leave prior to the
Closing Date. BUYER shall pay, discharge, and be responsible for (i) all salary
and wages arising out of employment of the Transferred Employees on or after the
Closing Date, and (ii) any employee benefits arising under BUYER's employee
benefit plans and employee programs on or after the Closing Date. From and after
the Closing Date, Transferred Employees shall be considered "at will" employees
of BUYER and BUYER shall pay, discharge, and be responsible for all salary,
wages, and benefits arising out of or relating to the employment of the
Transferred Employees by BUYER from and after the Closing Date, including,
without limitation, all claims for welfare benefits plans incurred on or after
the Closing Date. To the extent permitted under BUYER's applicable 401(k) plan,
FNB and BUYER shall cooperate in arranging for the transfer to BUYER's 401(k)
plan, as soon as practicable after the Closing Date and in a manner that
satisfies sections 414(1) and 411(d)(6) of the Internal Revenue Code, as
amended, of those accounts held under SELLERS’ 401(k) plan on behalf of
Transferred Employees.

 

4.3         Actions to be Taken by FNB. FNB covenants to BUYER that it will do
or cause the following to occur:

 

(a)          Compliance with Law. FNB agrees that it shall comply with any and
all applicable requirements under the Worker Adjustment and Retraining
Notification Act in connection with the transactions contemplated by this
Agreement.

 

(b)          Employee Benefit Programs. During the Pre-Closing Period, FNB's
obligations to employees of the Office, including Transferred Employees, will be
as set forth in established policies of FNB, and FNB shall continue its employee
benefit programs in full force and effect. After the Closing, FNB shall retain
the responsibility and liability for the funding and payment of all claims
incurred under such employee benefit programs through the Closing Date. BUYER
shall have no obligation or liability to compensate Transferred Employees for
benefits of any kind earned, accrued, promised and/or provided to Transferred
Employees as employees of FNB, except with respect to eligibility and vesting as
set forth in Section 4.2 above.

 

(c)          Employees of the Office. During the Pre-Closing Period, FNB shall
not, without BUYER's prior written consent (i) hire any new employee of the
Office or increase the aggregate full-time equivalent size of the work force at
the Office above the aggregate normal staffing levels designated by FNB for the
Office at the date hereof, (ii) terminate any employee of the Office, unless
such person is terminated for cause as determined by FNB or otherwise pursuant
to FNB’s existing policies or procedures, (iii) increase the compensation of any
Transferred Employee except pursuant to FNB’s existing policies and procedures,
(iv) promote any employee of the Office except pursuant to FNB’s existing
policies and procedures or (v) transfer or reassign any employee of the Office
(other than a transfer of any employee who is not or, as determined by BUYER,
will not be a Transferred Employee).

 

16

 

 

The obligations of SELLERS (or of either SELLER) and BUYER pursuant to
Sections 4.1 through 4.3 shall survive the Closing in accordance with the terms
of Sections 4.1 through 4.3.

 

5.           CONDITIONS PRECEDENT TO CLOSING.

 

5.1         Conditions to SELLERS’ Obligations. The obligations of SELLERS to
consummate the Acquisition are subject to the satisfaction, or the waiver in
writing by SELLERS to the extent permitted by applicable law, of the following
conditions at or prior to the Closing:

 

(a)          Prior Regulatory Approval. All filings and registrations with, and
notifications to, all federal and state authorities, and all public notices,
required for the consummation of the Acquisition and the operation of the Office
by BUYER shall have been made by BUYER, and all approvals, consents and
authorizations of all federal and state authorities required to be obtained by
BUYER for the consummation of the Acquisition and the operation of the Office by
BUYER shall have been received and shall be in full force and effect, and any
applicable waiting periods shall have expired.

 

(b)          Corporate Action. BUYER shall have furnished SELLERS with a
certified copy of each such resolution duly adopted by the Board of Directors of
BUYER evidencing the corporate action(s) taken to authorize (i) the execution
and delivery of this Agreement and the Transaction Documents by BUYER and the
consummation of the transactions contemplated hereby and thereby, and (ii) the
Acquisition by BUYER.

 

(c)          Representations and Warranties. The representations and warranties
of BUYER set forth in this Agreement shall be true and correct in all material
respects on the Closing Date with the same effect as though all such
representations and warranties had been made on and as of such date (unless a
different date is specifically indicated in such representations and
warranties), and BUYER shall have delivered to SELLERS a certificate to that
effect, dated as of the Closing Date, in a form reasonably acceptable to
SELLERS.

 

(d)          Covenants. Each and all of the covenants and agreements of BUYER to
be performed or complied with at or prior to the Closing Date shall have been
duly performed or complied with in all material respects by BUYER, or waived by
SELLERS, and BUYER shall have delivered to SELLERS a certificate to that effect,
dated as of the Closing Date, in a form reasonably acceptable to SELLERS.

 

(e)          No Proceedings or Prohibitions. At the time of the Closing, there
shall not be any litigation, investigation, inquiry, or proceeding pending or
threatened in or by any court or agency of any government or by any third party
by which it is sought to restrain, enjoin, or prohibit consummation of the
transactions contemplated by this Agreement, impose any conditions upon the
Closing, or which might result in rescission in connection with such
transactions.

 

17

 

 

(f)          Consents and Approvals. SELLERS shall have received, in form and
substance reasonably satisfactory to SELLERS, all consents, approvals,
authorizations and waivers of third parties (other than regulatory approvals,
consents and authorizations which are covered under Section 5.1(a) hereof)
required to be obtained by BUYER in connection with the consummation of the
transactions contemplated by this Agreement.

 

5.2         Conditions to BUYER's Obligations. The obligations of BUYER to
consummate the Acquisition are subject to the satisfaction, or the waiver in
writing by BUYER to the extent permitted by applicable law, of the following
conditions at or prior to the Closing:

 

(a)          Prior Regulatory Approval. All filings and registrations with, and
notifications to, all federal and state authorities, and all public notices,
required for the consummation of the Acquisition and the operation of the Office
by BUYER shall have been made by SELLERS, and all approvals, consents and
authorizations of all federal and state authorities required to be obtained by
SELLERS for the consummation of the Acquisition and the operation of the Office
by BUYER shall have been received and shall be in full force and effect, and any
applicable waiting periods shall have expired.

 

(b)          Corporate Action. SELLERS shall have furnished BUYER with a
certified copy of each such resolution duly adopted by the Board of Directors
and members or managers of SELLERS evidencing the corporate action(s) taken to
authorize (i) the execution and delivery of this Agreement and the Transaction
Documents by SELLERS and the consummation of the transactions contemplated
hereby and thereby, and (ii) the Acquisition by SELLERS.

 

(c)          Representations and Warranties. The representations and warranties
of SELLERS set forth in this Agreement shall be true and correct in all material
respects on the Closing Date with the same effect as though all such
representations and warranties had been made on and as of such date (unless a
different date is specifically indicated in such representations and
warranties), and SELLERS shall have delivered to BUYER a certificate to that
effect, dated as of the Closing Date, in a form reasonably acceptable to BUYER.

 

(d)          Covenants. Each and all of the covenants and agreements of SELLERS
to be performed or complied with at or prior to the Closing Date shall have been
duly performed or complied with in all material respects by SELLERS, or waived
by BUYER, and SELLERS shall have delivered to BUYER a certificate to that
effect, dated as of the Closing Date, in a form reasonably acceptable to BUYER.

 

(e)          No Proceedings or Prohibitions. At the time of the Closing, there
shall not be any litigation, investigation, inquiry, or proceeding pending or
threatened in or by any court or agency of any government or by any third party
by which it is sought to restrain, enjoin, or prohibit consummation of the
transactions contemplated by this Agreement, impose any conditions upon the
Closing, or which might result in rescission in connection with such
transactions.

 

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(f)          Real Property. The Title Commitment (as defined in Section 2.1(b)
herein) shall have been delivered to BUYER, and updated to or as close as
practicable to, the Closing Date, in accordance with the terms of such Section,
and such updated Title Commitment shall not include any special exceptions other
than those set forth in the original Title Commitment or those caused by
SELLERS' actions after execution of this Agreement or is a Lien that can be
removed by the payment of a sum certain (unless caused by BUYER) and any other
Permitted Exceptions. BUYER shall have been provided the opportunity to inspect
the Real Estate and shall be reasonably satisfied that there are no material
defects or damages to the Real Estate (normal wear and tear excepted) and, in
the event there are material defects or damage, BUYER and SELLERS shall have
negotiated corresponding adjustments to the value of such Real Estate under
Section 1.4(a)(iii) above reasonably satisfactory to all of the parties.

 

(g)          Fixed Assets. Since the date hereof, there shall have been no
material alteration in or material adjustment to the Fixed Assets except with
the written consent of BUYER. It will not be considered to be a material
alteration or material adjustment to the Fixed Assets if (i) there is damage or
destruction to the Fixed Assets as contemplated by Section 2.1(e) hereof and
SELLERS comply with said Section 2.1(e), (ii) SELLERS make additions to the
Fixed Assets with the prior written consent of BUYER, (iii) SELLERS make
additions to the Fixed Assets without BUYER's consent in order to correct
emergency situations which are threatening to impair SELLERS’ operations at the
Office, or (iv) SELLERS make additions to the Fixed Assets otherwise permitted
by this Agreement.

 

(h)          Consents and Approvals. BUYER shall have received, in form and
substance reasonably satisfactory to BUYER, all consents, approvals,
authorizations and waivers of third parties (other than regulatory approvals,
consents and authorizations which are covered under Section 5.2(a) hereof)
required to be obtained by SELLERS in connection with the consummation of the
transactions contemplated by this Agreement.

 

(i)          No Material Adverse Changes. There shall have been no material
adverse change in the business of the Office or in the condition of the Office
Loans from the date hereof.

 

(j)          Office Loans. The Office Loans as of the Closing Date shall have an
outstanding principal balance of no less than $10,000,000 and no more than
$12,000,000. No Office Loan shall have been downgraded from its risk rating
classification as of the date of this Agreement and no Office Loan shall be in
default as of the Closing Date where such default would permit acceleration
under such Office Loan, and any such downgraded or delinquent Office Loans may,
in the discretion of BUYER, be excluded from the Office Loans to be assumed by
BUYER hereunder.

 

(k)          Integration/Conversion of Financial Technology Systems. The
financial technology system for the Office shall be converted to BUYER's FiServ
system, including all necessary integrations of software and hardware at the
Office.

 

5.3         Waivers of Conditions Precedent. The conditions specified in
Sections 5.1 and 5.2 herein shall be deemed satisfied or, to the extent not
satisfied, waived if the Closing occurs, unless such failure of satisfaction is
reserved in a writing executed by BUYER and SELLERS at or prior to the Closing.

 

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6.           CLOSING.

 

6.1         Closing and Closing Date. Subject to the satisfaction or waiver (to
the extent permitted by applicable law) of all of the conditions set forth in
Sections 5.1 and 5.2 hereof (other than those conditions that by their nature
are to be satisfied at the Closing (as defined below), but subject to the
satisfaction or waiver thereof), the consummation of the Acquisition
contemplated by this Agreement shall be closed (the "Closing") on the date that
is no later than May 1, 2013, or such other date as mutually agreed upon by the
parties hereto. The date on which the Closing actually occurs is referred to
herein as the "Closing Date." The transfers and deliveries described in Sections
5.1 and 5.2 hereof shall be mutually interdependent and shall be regarded as
occurring simultaneously, and, any other provision of this Agreement
notwithstanding, no such transfer or delivery shall become effective or shall be
deemed to have occurred until all of the other transfers and deliveries provided
for in Sections 5.1 and 5.2 hereof shall also have occurred or been waived in
writing by the party entitled to waive the same. For purposes of allocation of
expenses, adjustments, tax and other financial effects of the transactions
contemplated hereby, the Closing shall be deemed to have occurred at 11:59 p.m.
Eastern Standard Time on the Closing Date. For all other purposes, including
passage of title and risk of loss, the effective time shall be at the Closing.

 

6.2         SELLERS’ Actions at Closing. At the Closing (unless another time is
specifically stated), SELLERS shall, with respect to the Office:

 

(a)          deliver or make available to BUYER at the Office such of the Assets
purchased hereunder as shall be capable of physical delivery;

 

(b)          execute, acknowledge and deliver to BUYER: (i) the Deed; (ii) a
bill or sale and assignment and assumption agreement, substantially in the form
attached hereto and incorporated herein by reference as Exhibit 6.2(b) (the
“Bill of Sale/Assignment and Assumption”); (iii) other instruments of
conveyance, assignment, and transfer as shall reasonably be necessary or
advisable to consummate the sale, assignment, and transfer of the Assets
hereunder; (iv) all such endorsements, other instruments of conveyance and other
documents as the Title Company may reasonably require (including as set forth in
Section 2.1(b) hereof); and (v) the originals of all blueprints, construction
plans, specifications and plats relating to the Real Estate, which are now in
SELLERS' possession;

 

(c)          execute, acknowledge and deliver to BUYER, any consent necessary to
assign or transfer to BUYER, or substitute BUYER as landlord under, each lease
by which a third party leases space in the Real Estate, in each case in form and
content reasonably satisfactory to BUYER (it being understood that the
assignment of said lease in its current form or without material changes shall
be acceptable to BUYER); and

 

(d)          assign, transfer, and make available to BUYER such of the following
records as exist and are available and maintained at the Office (in whatever
form or medium then maintained by SELLERS) pertaining to the Deposit Liabilities
and Office Loans:

 

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(i)          signature cards Deposit Account documents (which will be provided
in electronic media form and format acceptable to BUYER and delivered directly
to BUYER from FNB’s image storage vendor. BUYER shall contract directly with
such vendor, at BUYER's expense, to obtain paper copies of electronically stored
documents); and

 

(ii)         other orders, contracts, and agreements between FNB and depositors
of the Office with respect to the Deposit Liabilities and borrowers with respect
to Office Loans, and records of similar character (which may be provided, at the
option of FNB, in electronic format on CD-ROM or otherwise) excepting,
specifically (A) W8, and W9 forms which BUYER may obtain from customers, (B)
internally generated CTR and SAR forms, and (C) retail loan credit information
(for which no paper-based documents are maintained by FNB) and any relevant tax
forms and documents; and

 

(iii)        a true and accurate trial balance listing of records of Deposit
Accounts; and

 

(e)          make available and transfer to BUYER any funds required to be
transferred to BUYER pursuant to the terms of this Agreement; and

 

(f)          execute, acknowledge and deliver to BUYER all certificates,
instruments, agreements and documents required to be delivered to BUYER by
SELLERS at the Closing pursuant to the terms of this Agreement; and

 

(g)          assign by endorsement in a form reasonably satisfactory to BUYER
the documents and files pertaining to the Office Loans, including, but not
limited to, any and all contracts, promissory notes and other evidence of
indebtedness and Liens related to the Office Loans, together with the loan file
and records (in whatever form or medium then maintained by FNB) pertaining to
such Office Loans.

 

6.3         BUYER's Actions at the Closing. At the Closing (unless another time
is specifically stated), BUYER shall:

 

(a)          execute, acknowledge and deliver to SELLERS, the Bill of
Sale/Assignment and Assumption;

 

(b)          coordinate with the Title Company to effectuate the recording of
the Deed on or after the Closing Date and secure gap insurance coverage in the
event the Deed is recorded after the Closing Date, at BUYER'S sole cost and
expense, and deliver any instruments, resolutions, documents or certificates as
may be reasonably required to vest title to the Real Estate in BUYER; and

 

(c)          pay to SELLERS the Cash Consideration, if any, pursuant to the
terms of this Agreement; and

 

(d)          execute, acknowledge and deliver to SELLERS all certificates,
instruments, agreements and documents required to be delivered to SELLERS by
BUYER at the Closing pursuant to the terms hereof.

 

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6.4         Method of Payment. Subject to the adjustment procedures set forth in
this Section 6.4, (i) the payment of any sum required to be paid by SELLERS to
BUYER under Section 1.4(a) hereof, and (ii) the payment of the Cash
Consideration, if any, to be paid by BUYER to SELLERS under Section 1.4(a)
hereof, shall be made on the Closing Date in immediately available United States
Dollars. At least two (2) business days prior to the Closing, SELLERS and BUYER
shall provide written notice to one another indicating the account(s) and
bank(s) to which such payments shall be wire transferred. The parties agree that
the amount of funds to be transferred on the Closing Date by SELLERS or BUYER,
as the case may be, shall be computed as set forth in Section 1.4(a) hereof and
shall be based, in part, upon (a) the outstanding balance of the Office Loans as
of the close of business on the Closing Date, (b) cash on hand at the Office as
of the close of business on the Closing Date, and (c) the aggregate balance of
all Deposit Accounts (including interest posted or accrued to such accounts and
individual retirement accounts which have become IRAs as a result of the written
appointment of BUYER as the successor custodian and the failure of the account
holders to object to such appointment) as of the close of business on the
Closing Date, unless otherwise agreed to by the parties hereto. The parties
hereto shall prepare a preliminary closing statement in a form mutually agreed
upon by BUYER and SELLERS (the “Preliminary Closing Statement”) to reflect the
calculation of the Cash Consideration. Furthermore, within ten (10) business
days after the Closing, the parties shall make appropriate post-Closing
adjustments, if any, consistent with the provisions of Section 1.4 hereof, based
upon actual Deposit Accounts as of the Closing Date, Office Loans as of the
Closing Date, and cash transactions which took place on the Closing Date or
which took place prior to the Closing Date but which were not reflected in the
Preliminary Closing Statement, and shall execute a final settlement statement in
a form mutually agreed upon by BUYER and SELLERS (the “Final Settlement
Statement”). In addition, prorations of prepaid and deferred income and expenses
that cannot be reasonably calculated at the Closing shall be settled and paid
based on actual amounts and calculations as soon as possible after the Closing.

 

7.           CERTAIN TRANSITIONAL MATTERS.

 

7.1         Transitional Action by BUYER. After the Closing, unless another time
is otherwise indicated:

 

(a)          BUYER shall: (i) pay in accordance with the law and customary
banking practices and applicable Deposit Account contract terms, all properly
drawn and presented checks, negotiable orders of withdrawal, drafts, debits, and
withdrawal orders presented to BUYER by mail, over the counter, through
electronic media, or through the check clearing system of the banking industry,
by depositors of the Deposit Accounts assumed by BUYER hereunder, whether drawn
on checks, negotiable orders or withdrawal, drafts, or withdrawal order forms
provided by BUYER or SELLERS; and (ii) in all other respects discharge, in the
usual course of the banking business, the duties and obligations of FNB with
respect to the balances due and owing to the depositors whose Deposit Accounts
are assumed by BUYER hereunder; provided, however, that any obligations of BUYER
pursuant to this Section 7.1 to honor checks, negotiable orders of withdrawal,
drafts, and withdrawal orders on forms provided by FNB and carrying its imprint
(including its name and transit routing number) shall not apply to any checks,
drafts, withdrawal orders, or returned items (i) presented to BUYER more than
one hundred eighty (180) days following the Closing Date, or (ii) on which a
stop payment has been requested by the deposit customer. BUYER shall submit and
file any required reports on IRS Form 1099 with respect to interest accrued on
Deposit Liabilities after the Closing Date. The provisions of this subsection
7.1(a) shall in no way limit BUYER's duties or obligations arising under Section
1.3(b) hereof.

 

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(b)          Not earlier than the time of procurement of all applicable
regulatory approvals, authorizations and consents required for consummation of
the transactions contemplated by this Agreement nor later than ten (10) days
prior to the Closing Date, BUYER shall notify all depositors of the Office by
letter, acceptable to FNB, produced in, if appropriate, several similar, but
different forms calculated to provide necessary and specific information to the
owners of particular types of Deposit Accounts, of BUYER's pending assumption of
the Deposit Liabilities hereunder, and, in appropriate instances, notify
depositors that on and after the Closing Date certain FNB deposit-related
services and/or FNB’s debit card and automatic teller machine ("ATM") services
impacted by the transactions contemplated by this Agreement, will be terminated.
As an enclosure to such notices, BUYER may furnish appropriate depositors with
brochures, forms and other written materials related or necessary to the
assumption of the Deposit Accounts by BUYER and the conversion of said accounts
to BUYER accounts, including the provision of checks and debit and ATM cards to
appropriate depositors using the forms of BUYER with instructions to such
depositors to utilize such BUYER checks and debit and ATM cards on and after the
Closing Date and thereafter to destroy any unused checks on FNB’s forms and any
FNB debit and ATM cards. The expenses of the printing, processing and mailing of
such letter notices and providing new BUYER checks and other forms and written
materials and replacement debit and ATM cards to appropriate customers shall be
borne by BUYER. Before Closing, except as provided in this Section, BUYER will
not contact FNB’s customers except joint customers in the normal course of
business and except as may occur in connection with advertising or solicitations
directed to the public generally or in the course of obtaining the requisite
regulatory approvals of the transaction. Anything to the contrary herein
notwithstanding, BUYER shall provide, at no cost to SELLERS, any and all
notices, communications, and filings which may be required by law, regulation,
or otherwise, relating to any changes in terms and other matters relating to the
Deposit Accounts and the Office Loans occurring subsequent to the Closing Date.
Any and all such notices, communications, and filings which may be required to
be provided prior to the Closing Date shall be submitted on a timely basis for
review by FNB and shall be subject to the written approval of FNB prior to
delivery to any third party. BUYER shall provide, at its sole cost and expense,
that any and all customer and other notices, communications, and filings
provided by BUYER hereunder, including the substance and timing of same, fully
comply with the requirements of applicable law and regulation.

 

(c)          BUYER shall promptly pay to FNB an amount equivalent to the amount
of any checks, negotiable orders of withdrawal, drafts, withdrawal orders, or
returned items credited as of the close of business on the Closing Date to a
Deposit Account assumed by BUYER hereunder which are returned uncollected to FNB
or BUYER after the Closing Date. The foregoing shall include an amount
equivalent to holds placed upon such Deposit Account for items cashed by FNB as
of the close of business on the Closing Date.

 

(d)          All tasks and obligations concerning the provision of data
processing services to or for the Office after the Closing, other than those
specifically set forth in Section 7.2(b) herein, if any, are the sole and
exclusive responsibility of, and shall be performed solely and exclusively by,
BUYER.

 

23

 

 

(e)          Not later than the close of business on the business day
immediately following the Closing Date, BUYER shall supply suitable
government-backed securities as security for any deposits of governmental units
or other public deposits included among the Deposit Liabilities for which FNB
had provided similar security.

 

(f)          As soon as practicable but not more than ten (10) business days
after the Closing Date, BUYER shall prepare and transmit at BUYER's expense to
each of the obligors on Office Loans transferred to BUYER pursuant to this
Agreement a notice to the effect that such Office Loan has been transferred to
BUYER and directing that payment be made to BUYER at the address specified by
BUYER, with BUYER's name as payee on any checks or other instruments used to
make payments, and, with respect to such Office Loan on which a payment notice
or coupon book has been issued, to issue a new notice or coupon book reflecting
the name and an address of BUYER as the person to whom and place at which
payments are to be made. BUYER shall submit and file any required reports on IRS
Form 1098 with respect to interest collected on Office Loans for the full
calendar year in which the Closing Date occurs including interest collected
during the period prior to the Closing Date.

 

(g)          If the balance due on any Office Loan transferred to BUYER pursuant
to this Agreement has been reduced by FNB as a result of a payment by check or
draft received prior to the close of business on the Closing Date, which item is
returned unpaid to FNB after the day immediately preceding the Closing Date, the
asset value represented by such Office Loan transferred shall be correspondingly
increased and an amount in cash equal to such increase shall be promptly paid by
BUYER to FNB.

 

(h)          BUYER shall use its reasonable best efforts to cooperate with
SELLERS in assuring an orderly transition of ownership of the Assets and
responsibility for the liabilities, including the Deposit Liabilities, assumed
by BUYER hereunder.

 

(i)          BUYER hereby grants to FNB and its representatives access to the
Office until the close of business on second business day following the Closing
Date or such other later date and time as the parties may agree, at no cost or
expense to FNB, for conduct of activities consistent with this Agreement in
conjunction with the transactions contemplated hereby and to remove from the
Office any assets of FNB not transferred to BUYER hereunder without cost to
BUYER.

 

(j)          The duties and obligations of BUYER in this Section 7.1 shall
survive the Closing in accordance with the terms of this Section 7.1.

 

7.2           Transitional Actions by SELLERS. After the Closing, unless another
time is otherwise indicated herein:

 

(a)          SELLERS shall cooperate with BUYER in assuring an orderly
transition of ownership of the Assets and responsibility for the liabilities,
including the Deposit Liabilities, assumed by BUYER hereunder. FNB shall provide
final statements as of the Closing Date, as appropriate, for the Deposit
Liabilities, reflecting interest and service charges pro-rated to the close of
business on the Closing Date. FNB shall submit and file any required reports on
IRS Form 1099 with respect to interest paid on Deposit Liabilities through the
Closing Date. FNB shall provide to BUYER information regarding interest
collected on Office Loans during the calendar year in which the Closing Date
occurs, up to and including the Closing Date.

 

24

 

 

(b)          FNB’s sole and exclusive responsibilities concerning the provision
of data processing services to or for the Deposit Accounts of the Office after
the Closing Date, if any, shall be as set forth in this Section 7.2(b). As soon
as practicable following the date of this Agreement, FNB shall provide BUYER
with applicable product functions and specifications relating to the data
processing support required for the Deposit Accounts and Office Loans (if such
data processing support currently is provided with respect thereto) maintained
at the Office (such Deposit Accounts and Office Loans, if applicable,
hereinafter called the "Accounts"). As soon as practicable following the date of
this Agreement, FNB shall provide to BUYER file formats relating to the Accounts
and up to three (3) sets of test tapes or other media reasonably acceptable to
BUYER related to the Accounts in generic form which are machine readable in form
specified by BUYER. By not later than 3:00 P.M. local Akron, Ohio time on the
business day immediately following the Closing Date, FNB shall make the
foregoing documents and materials available for pick-up by BUYER. BUYER shall
review and analyze such materials including, but not limited to, the file
formats and tapes or other such media, and shall advise FNB in writing of any
defects or concerns relating thereto not later than 10 business days following
receipt thereof.

 

(c)          Prior to the Closing Date, FNB shall cooperate with BUYER in making
Transferred Employees available at reasonable times for whatever program of
training BUYER deems advisable; provided, however, that BUYER shall conduct such
training program in a manner that does not materially interfere with or prevent
the performance of the normal duties and activities of such Transferred
Employees, and BUYER shall reimburse FNB for any employee expenses incurred by
FNB in connection with such training. BUYER shall make request of FNB for
training opportunities prior to the Closing Date and consent by FNB shall not be
unreasonably withheld or delayed. Such requests, shall specify the time,
duration and place of such training.

 

(d)          FNB shall cooperate with BUYER to make provision for the
installation of teller and platform equipment in the Office subject to approval
by FNB; provided, however, that BUYER shall arrange for the installation and
placement of such equipment at such times and in a manner that does not
significantly interfere with the normal business activities and operation of FNB
or the Office.

 

(e)          FNB shall resign as custodian of each IRA account maintained at the
Office and assign the custodianship of such accounts to BUYER upon Closing
subject to receipt of applicable customer consents and other provisions of this
Agreement including the provisions of Section 8.10 hereof.

 

(f)          FNB shall terminate its ATM/debit card service effective as of
close of business on the business day preceding the Closing Date or such other
date and time as FNB and BUYER may agree. FNB shall have no obligation with
respect to conversion or change over with respect to direct deposit or payroll
and retirement payments service relating to the Deposit Accounts following the
Closing and, further, BUYER shall assume all responsibility and liability with
respect thereto following the Closing. FNB will continue to redirect and/or pass
through relevant Automated Clearing House ("ACH") transactions on Deposit
Accounts for a period of ninety (90) days following the Closing Date.

 

25

 

 

(g)          As of the opening of business on the first business day after the
Closing Date, FNB and BUYER shall provide the appropriate Federal Reserve Bank
(the "FRB") with all information necessary in order to expedite the clearing and
sorting of all checks, drafts, instruments and other commercial paper relative
to the Deposit Liabilities and/or the Office Loans (hereinafter collectively
referred to as "Paper Items"). BUYER shall bear all charges and costs imposed by
the FRB in connection with the reassignment of account number ranges for sorting
the Paper Items.

 

(h)          In the event the FRB and/or any other regional or local
clearinghouse for negotiable instruments fails, refuses or is unable to direct
sort such Paper Items for delivery to BUYER with the result that such Paper
Items are presented to FNB, by not later than 3:00 p.m. local time on each
business day following the Closing and continuing for ninety (90) days after the
Closing, FNB will make available to BUYER for pick up from FNB’s offices or the
offices of FNB’s agent and/or processor all of the Paper Items which are
received by FNB from the FRB and/or any regional or local clearinghouse during
the morning of each such business day on an "as-received basis." At the same
time FNB shall also make available to BUYER information and records, including
but not limited to systems printouts, concerning such Paper Items and concerning
incoming ACH items as well as outstanding ATM transactions. Such information and
records, including but not limited to systems printouts, will utilize the most
recent account number designated by FNB for each of the Deposit Accounts and/or
the Office Loans. BUYER shall initiate appropriate Notification of Change
requests relating to appropriate routing matters at the sole expense of BUYER
within 30 days following the Closing Date. Except as otherwise expressly
provided herein, FNB shall provide the foregoing at no charge to BUYER for a
period not to exceed thirty (30) days from the Closing Date, except that BUYER
shall pay any charges assessed to FNB by the FRB, any national or local
clearinghouse and/or FNB’s agent and/or processor to the extent such assessments
relate to the Deposit Accounts or Office Loans. BUYER shall be responsible for
pick-up of the data to be provided by FNB. Except as otherwise expressly
provided herein, BUYER shall be responsible for processing any and all ACH
returns received subsequent to the Closing directly through the appropriate
Federal Reserve Bank. FNB and BUYER shall arrange for appropriate daily
settlement between the parties in order that the transmission of all monies
associated with the matters set forth in this Section 7.2(h) might be affected
promptly.

 

(i)          FNB shall not be liable to BUYER for any failure to provide the
data required by Section 7.2(h) to the extent any such failure results from
causes beyond FNB’s control including war, strike or other labor disputes, acts
of God, errors or failures of the FRB, and/or a participating regional or local
clearinghouse, or equipment failure or other emergency wherein FNB and/or its
agent processor has been unable to process inclearings from the FRB or such
clearinghouse.

 

26

 

 

(j)          FNB shall, not earlier than the time of procurement of all
regulatory approvals, authorizations and consents required for consummation of
the transaction contemplated by this Agreement nor later than thirty (30) days
prior to the Closing Date, notify all depositors of the Office and all borrowers
of any Office Loan by letter reasonably acceptable to BUYER, produced in, if
appropriate, several similar, but different forms calculated to provide
necessary and specific information to the owners of particular types of accounts
and/or loans, of BUYER's pending assumption of the Deposit Liabilities and
acquisition of the Office Loans hereunder, and, in appropriate instances, notify
depositors that on and after the Closing Date certain FNB deposit-related
services and/or FNB’s debit card and ATM services, will be terminated. The
expenses of the printing, processing and mailing of such letter notices shall be
shared equally by BUYER and FNB.

 

(k)          For a period of sixty (60) days after the Closing Date, FNB will
forward to BUYER, within two (2) business days of receipt, payments received by
FNB with respect to the Office Loans. BUYER will forward, within two (2)
business days of receipt, payments received by BUYER with respect to any loans
not assigned to BUYER under this Agreement. BUYER and FNB further agree to refer
customers to the offices of the other when such customers present payments over
the counter to the party not holding their respective loan. BUYER shall
reimburse FNB within two (2) business days of notice by FNB to BUYER for any
payments tendered by borrowers which were credited to the outstanding balance of
any Office Loan prior to the Closing Date and which are subsequently returned or
otherwise withdrawn for any reason and FNB shall assign to BUYER any rights of
FNB to recovery of such payments as against the relevant borrower.

 

(l)          FNB shall forward notice to appropriate carriers for single premium
prepaid life and A&H/Disability insurance related to the Office Loans (the
"Insured Office Loans") of BUYER's acquisition of the Insured Office Loans
within thirty (30) days following the Closing Date. Such notice shall identify
BUYER as the new obligee of the Insured Office Loans and shall direct the
insurance carriers to forward any premium refunds otherwise payable to FNB with
respect to the Insured Office Loans following the Closing (the "Premium
Refunds") to BUYER. In the event that, following the Closing, any such Insured
Office Loans are paid in full prior to maturity and BUYER receives a Premium
Refund, BUYER shall credit the account of such Insured Office Loan customer with
the appropriate portion of any such Premium Refund. The Premium Settlement
Payment by FNB shall constitute the only obligation of FNB to BUYER with respect
to matters pertaining to Premium Refunds, and BUYER shall be responsible for any
and all payments or credits due or owing the Insured Office Loan customers with
respect to payment in full of the Insured Office Loans prior to maturity. The
Premium Settlement Payment defined in Section 1.4(e) herein shall be calculated
as of the Closing Date and based upon FNB’s actual commission rate on loans with
such insurance coverage.

 

(m)          The duties and obligations of the parties in this Section 7.2 shall
survive the Closing in accordance with the terms of this Section 7.2.

 

7.3           Overdrafts and Transitional Action. Overdrafts on the Deposit
Accounts will be the responsibility and risk of BUYER except to the extent that
such overdrafts are 30 days or more past due.

 

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7.4           ATMs and Debit Cards.

 

(a)          FNB shall provide to BUYER, no later than sixty (60) days prior to
the Closing Date, a test tape, along with a file format or file layout and a
production tape thirty (30) days before the Closing Date, containing customer
name, card number, withdrawal limits, the Deposit Accounts activated by,
accessible to or committed to such cards issue dates and/or open dates, last
transaction dates, and expiration dates as to all ATM and debit cards issued to
customers of the Office and shall notify the appropriate processor to deactivate
the operation of the such ATM and debit cards completely or to deactivate or
disconnect the Deposit Accounts from such ATM and debit cards no later than the
business day cutoff on the date prior to the Closing Date so that all activity
generated by the such ATM and debit cards shall have settled prior to the
Closing Date. All transactions and activity related to the FNB ATM and debit
cards for Deposit Accounts transferred to BUYER following the Closing Date which
are received or forwarded to FNB will be accepted and forwarded by FNB to BUYER
along with all corresponding funds. FNB thereafter agrees to immediately notify
its processor to deactivate such ATM and debit cards and to forward all
transactions related thereto directly to BUYER.

 

(b)          FNB agrees to deactivate the ATMs located at the Office on or
before the business day cutoff on the day prior to the Closing Date. Thereafter,
BUYER shall reconfigure the ATMs to its standards for activation after the
business day cutoff on the Closing Date.

 

(c)          BUYER and FNB agree to cooperate with each other to assure that all
transactions originated through the ATM or originated with ATM cards prior to or
on the Closing Date shall be for the account of FNB and all transactions
originated after the Closing Date shall be for the account of BUYER. A
post-Closing adjustment shall be made in the manner set forth in Section 6.4
hereof to reflect all such transactions which cannot be reasonably calculated as
of the Closing.

 

(d)          For a period of two (2) years from the Closing, (i) BUYER shall
permit any customer or employee of FNB to use BUYER's ATMs located at the Office
or at any other branch or location of BUYER without the imposition of any
transaction fee, surcharge or "foreign use" charges by BUYER, and (i) FNB shall
permit any customer or employee of BUYER to use FNB's ATMs located at any branch
or other location of FNB without the imposition of any transaction fee,
surcharge or "foreign use" charges by FNB.

 

(e)          The obligations of the parties under this Section 7.4 shall survive
the Closing in accordance with the terms of this Section 7.4.

 

7.5           Environmental Matters.

 

(a)          Within thirty (30) days of the date of this Agreement, SELLERS
shall provide to BUYER, at SELLERS’ expense, copies of any environmental site
assessments in SELLERS’ possession (the "Environmental Assessments" herein) for
the Real Estate.

 

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(b)          Within ten (10) business days of BUYER’s receipt of any such
Environmental Assessment, or any Phase I environmental site assessment performed
or obtained by BUYER, as the case may be, that identifies any Recognized
Environmental Condition (as such term is defined in ASTM E1527-00, Standard
Practice for Environmental Site Assessments: Phase I Environmental Site
Assessment Process) that would reasonably be expected to create a serious risk
of material liability to BUYER related to the presence of Hazardous Substances
at the Real Estate should it acquire the Real Estate, BUYER shall notify SELLERS
in writing of BUYER's desire to have a qualified environmental consultant
selected by BUYER and reasonably satisfactory to SELLERS (the "Environmental
Consultant"), to the extent reasonable and appropriate, conduct a Phase II
environmental site assessment ( the "Phase II Assessment" herein). In the event
that BUYER desires to have an Environmental Consultant perform a Phase II
Assessment, BUYER shall provide SELLERS with a written scope of work for the
Phase II testing prepared by the Environmental Consultant which shall include,
without limitation, the number and location of samples to be taken and proposed
analyses, protocols, procedures and methodologies to be used in analyzing such
samples (the “Scope of Work” herein), along with a statement of the
Environmental Consultant’s qualifications. BUYER shall not perform any soil,
ground water or other Phase II sampling or testing at the Real Estate without
SELLERS’ prior written approval of the Environmental Consultant and the Scope of
Work.

 

(c)          In the event that BUYER fails to provide written notice of its
election to perform a Phase II Assessment to SELLERS as provided in
Section 7.5(b) hereof, BUYER shall take the Real Estate “as is” at the Closing
and shall assume all risks associated with the environmental condition of the
Real Estate, regardless of the cause or date of origin of such condition.

 

(d)          SELLERS shall have a period of ten (10) business days from receipt
of such notice to elect, at their sole option, to consent to the conduct of the
Phase II Assessment. In the event that SELLERS consent to the conduct of the
Phase II Assessment, the following shall apply:

 

(i)          Any such further investigation or testing shall be conducted in
such a manner so as not to interfere with operations on the Real Estate. BUYER
understands and acknowledges that access by the Environmental Consultant, its
employees, agents, representatives, contractors and subcontractors, will be
limited to those areas of the Real Estate reasonably required in connection with
performance of the Phase II Assessment;

 

(ii)         BUYER shall provide notice to SELLERS at least forty-eight (48)
hours prior to performing any work in connection with the Phase II Assessment.
All work performed in connection with the Phase II Assessment shall occur during
business hours;

 

(iii)        No investigation or testing will be performed beyond what is set
forth in the Scope of Work agreed to by BUYER and SELLERS without SELLERS’ prior
written consent;

 

(iv)         BUYER shall be solely responsible for any characterization,
transportation, manifesting and disposal of any waste generated in the course of
the Phase II Assessment in accordance with applicable Environmental Law;

 

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(v)          In connection with the performance of the Phase II Assessment,
BUYER shall require the Environmental Consultant, its contractors and
subcontractors, to maintain in full force and effect comprehensive general
liability insurance in such amounts as are customary in the industry and shall
deliver to SELLERS, upon request, certificates of such insurance policies
executed by the respective insurers; and

 

(vi)         Any Phase II Assessment shall be (A) conducted at BUYER's expense,
(B) treated as information subject to Section 8.1 of this Agreement, and (C)
completed not more than sixty (60) days after the signing of this Agreement.

 

(e)          BUYER agrees that it and the Environmental Consultant shall conduct
the Phase II Assessment pursuant to this Section with reasonable care and
subject to customary practices among environmental consultants and engineers,
including, without limitation, following completion thereof, the restoration of
any site to its condition prior to such site assessment or investigation and the
removal or closure of all monitoring wells in accordance with applicable
Environmental Law. BUYER agrees to indemnify, defend and hold SELLERS harmless
from and against any liability or obligation arising out of any act or omission
of BUYER, Environmental Consultant or their respective employees, contractors,
subcontractors, agents or representatives in connection with the performance of
the Phase II Assessment.

 

(f)          For purposes of this Agreement, the term "Environmental Law" shall
mean any Federal or state law, statute, rule, regulation, code, order, judgment,
decree, injunction, or agreement with any Federal or state governmental
authority, (x) relating to the protection, preservation, or restoration of the
environment (including, without limitation, air, water, vapor, asbestos, surface
water, groundwater, drinking water supply, surface land, subsurface land, plant
and animal life or any other natural resource) or to human health or (y) the
exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of hazardous substances, in each case as amended and now in effect.
Environmental Laws include, without limitation, the Clean Air Act (42 U.S.C.
section 7401 et seq.); the Comprehensive Environmental Response Compensation and
Liability Act (42 U.S.C. section 9601 et seq.); and the Federal Water Pollution
Control Act (33 U.S.C. section 1251 et seq.).

 

(g)          For purposes of this Agreement, the term "Hazardous Substance"
shall mean any substance, whether liquid, solid, or gas, (a) listed, identified
or designated as hazardous or toxic to a level which requires remediation under
any Environmental Law including, without limitation, asbestos; (b) which,
applying criteria specified in any Environmental Law, is hazardous or toxic; or
(c) the use or disposal of which is regulated under Environmental Law.

 

7.6           Effect of Transitional Action. Except as and to the extent
expressly set forth in this Article 7, nothing contained in this Article 7 shall
be construed to be an abridgment or nullification of the rights, customs and
established practices under applicable banking laws and regulations as they
affect any of the matters addressed in this Article 7.

 

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8.           GENERAL COVENANTS AND INDEMNIFICATION.

 

8.1           Confidentiality Obligations of BUYER. From and after the date
hereof, until the earlier of (i) four (4) years following the Closing Date, or
(ii) four (4) years following the earlier termination of this Agreement, BUYER
shall, and shall cause its affiliates and parent company to, treat all
information received from SELLERS concerning the business, assets, operations,
and financial condition of SELLERS and their affiliates, and SELLERS’ and their
affiliates’ respective customers (including, without limitation, the Office), as
confidential, unless and to the extent that BUYER can demonstrate that such
information was already known to BUYER, its parent company or its affiliates, if
any, or in the public domain or received from a third person not known by BUYER,
its parent company or its affiliates, if any, to be under any obligation to
SELLERS; and BUYER shall not, and shall cause its parent company and affiliates
not to, use any such information for any purpose except in furtherance of the
transactions contemplated hereby (including in the filing of required regulatory
applications, provided that, if available, a confidential treatment request will
be made regarding such confidential information). Upon any termination of this
Agreement, BUYER shall, and shall cause its parent company and affiliates, if
any, to, promptly return all documents and workpapers containing, and all copies
of, any such information received from or on behalf of SELLERS in connection
with the transactions contemplated hereby. The covenants of BUYER contained in
this Section 8.1 are of the essence and shall survive any termination of this
Agreement in accordance with the terms of this Section 8.1, but shall terminate
at the Closing, if it occurs, with respect to any information that is limited
solely to the activities and transactions of the Office; provided, however, that
neither BUYER nor its parent company or any of its affiliates shall be deemed to
have violated the covenants set forth in this Section 8.1 if any of such
confidential information is required to be disclosed in compliance with any
legal process, order or decree issued by any court or agency of government of
competent jurisdiction. It is expressly acknowledged by SELLERS that all
information provided to BUYER related to the Acquisition may be provided to
BUYER's parent company and affiliates, if any, as necessary for the purpose of
consummating the Acquisition.

 

8.2           Confidentiality Obligations of SELLERS. From and after the date
hereof, until the earlier of (i) four (4) years following the Closing Date, or
(ii) four (4) years following the earlier termination of this Agreement, SELLERS
shall, and shall cause their respective affiliates and their respective parent
corporations to, treat all information received from BUYER concerning BUYER's
business, assets, operations, and financial condition as confidential, unless
and to the extent that SELLERS can demonstrate that such information was already
known to SELLERS, their respective affiliates or their respective parent
corporations, or in the public domain, or received from a third person not known
by SELLERS, their respective affiliates or their respective parent corporations
to be under any obligation to BUYER; and SELLERS shall not, and shall cause
their respective affiliates and their respective parent corporations not to, use
any such information for any purpose except in furtherance of the transactions
contemplated hereby (including in the filing of required regulatory
applications, provided that, if available, a confidential treatment request will
be made regarding such confidential information). Upon any termination of this
Agreement, SELLERS shall, and shall cause their respective affiliates and their
respective parent corporations to, promptly return all documents and workpapers
containing, and all copies of, any such information received from or on behalf
of BUYER in connection with the transactions contemplated hereby. The covenants
of SELLERS contained in this Section 8.2 are of the essence and shall survive
any termination of this Agreement in accordance with the terms of this Section
8.2; provided, however, that neither SELLERS nor any of their respective
affiliates or their respective parent corporations shall be deemed to have
violated the covenants set forth in this Section 8.2 if any of such confidential
information is required to be disclosed in compliance with any legal process,
order or decree issued by any court or agency of government of competent
jurisdiction. It is expressly acknowledged by BUYER that all information
provided to SELLERS related to the Acquisition may be provided to SELLERS’
respective affiliates and SELLERS’ respective parent corporations for the
purpose of consummating the Acquisition.

 

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8.3           Indemnification by SELLERS. Subject to the limitations set forth
in Section 10.2 hereof, from and after the Closing Date, SELLERS, jointly and
severally, shall indemnify, hold harmless, and defend BUYER from and against all
claims, losses, liabilities and obligations, including reasonable attorneys'
fees and expenses (collectively, "Losses"), which BUYER may receive, suffer or
incur arising out of, relating to or in connection with any actions, suits or
proceedings (other than any proceedings to prevent or limit the consummation of
the Acquisition) related to (i) any inaccuracy in any of the representations and
warranties, or breach or nonperformance of any of the covenants, made by SELLERS
herein, (ii) operations and transactions occurring on or prior to the Closing
Date and which involve the Assets transferred, the Deposit Liabilities or the
Office Loans being transferred to BUYER, (iii) the operations at the Office on
or prior to the Closing Date, and (iv) the ownership of the Real Estate on or
prior to the Closing Date. The obligations of SELLERS under this Section 8.3
shall be contingent upon BUYER giving SELLERS written notice (i) of receipt by
BUYER of any process and/or pleadings in or relating to any actions, suits, or
proceedings of the kinds described in this Section 8.3, including copies
thereof, and (ii) of the assertion of any claim or demand relating to the
foregoing, including, to the extent known to BUYER, the identity of the
person(s) asserting such claim or making such demand and the nature thereof, and
including copies of any correspondence or other writings relating thereto. All
notices required by the preceding sentence shall be given within fifteen (15)
days of the receipt by BUYER of any such process or pleadings or any oral or
written notice of the assertion of any such claims or demands. SELLERS shall
have the right to assume BUYER's defense in any such actions, suits, or
proceedings through counsel selected by SELLERS (reasonably acceptable to
BUYER), to compromise and/or settle the same and to prosecute any available
appeals or review any adverse judgment or ruling that may be entered therein;
provided, however, that BUYER shall have the right, at its own expense, to
participate jointly with SELLERS in the defense of any such actions, suits or
proceedings. Notwithstanding the right of BUYER to participate, SELLERS shall
have the sole right to compromise and/or settle any such actions, suits or
proceedings on such terms as SELLERS, in their sole discretion, shall deem
appropriate with respect to any issue involved in any such actions, suits or
proceedings as to which: (a) SELLERS have acknowledged the obligation to
indemnify BUYER hereunder and the settlement is solely for cash (and BUYER
receives a complete release in connection therewith); or (b) BUYER shall have
declined to participate. The availability of indemnification pursuant to this
Section 8.3 shall not prevent BUYER from seeking any other remedy otherwise
available to BUYER, including remedies at law or in equity.

 

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8.4           Indemnification by BUYER. Subject to the limitations set forth in
Section 10.2 hereof, from and after the Closing Date, BUYER shall indemnify,
hold harmless and defend SELLERS from and against any and all Losses which
SELLERS may receive, suffer, or incur arising out of, relating to or in
connection with any actions, suits or proceedings (other than any proceedings to
prevent or limit the consummation of the Acquisition) related to (i) any
inaccuracy in any of the representations and warranties, or breach or
nonperformance of any of the covenants, made by BUYER herein, (ii) SELLERS'
compliance with instructions from BUYER made pursuant to Section 7.4 of this
Agreement and not related to any gross negligence or malfeasance on the part of
SELLERS, (iii) operations and transactions occurring after the Closing Date and
which involve the Assets transferred, the Deposit Liabilities or the Office
Loans being transferred to BUYER or the Assumed Liabilities (except to the
extent that the Losses arise from or relate to the operations at the Office on
or prior to the Closing Date), (iv) the operations at the Office after the
Closing Date, (v) the ownership of the Real Estate after the Closing Date, and
(vi) the imposition (including by operation of law or otherwise) by a third
party of any of the Assumed Liabilities on SELLERS. The obligations of BUYER
under this Section 8.4 shall be contingent upon SELLERS giving BUYER written
notice (i) of the receipt by SELLERS of any process and/or pleadings in or
relating to any actions, suits or proceedings of the kinds described in this
Section 8.4, including copies thereof, and (ii) of the assertion of any claim or
demand relating to the foregoing, including, to the extent known to SELLERS, the
identity of the person(s) asserting such claim or making such demand and the
nature thereof, and including copies of any correspondence or other writings
relating thereto. All notices required by the preceding sentence shall be given
within fifteen (15) days of the receipt by SELLERS of any such process or
pleadings or any oral or written notice of the assertion of any such claims or
demands. BUYER shall have the right to assume SELLERS’ defense in any such
actions, suits, or proceedings through counsel selected by BUYER (reasonably
acceptable to SELLERS), to compromise and/or settle the same and to prosecute
any available appeals or review any adverse judgment or ruling that may be
entered therein; provided, however, that SELLERS shall have the right, at their
own expense, to participate jointly with BUYER in the defense of any such
actions, suits or proceedings. Notwithstanding the right of SELLERS to
participate, BUYER shall have the sole right to compromise and/or settle any
such actions, suits or proceedings on such terms as BUYER, in its sole
discretion, shall deem appropriate with respect to any issue involved in any
such actions, suits or proceedings as to which: (a) BUYER has acknowledged the
obligation to indemnify SELLERS hereunder and the settlement is solely for cash
(and SELLERS receive a complete release in connection therewith); or (b) SELLERS
shall have declined to participate. The availability of indemnification pursuant
to this Section 8.4 shall not prevent SELLERS from seeking any other remedy
otherwise available to SELLERS, including remedies at law or in equity.

 

8.5           Solicitation of Customers by BUYER Prior to Closing. At any time
during the Pre-Closing Period, BUYER will not, and will cause its affiliates not
to, conduct any marketing, media or customer solicitation campaign which is
specifically or directly targeted to induce customers whose Deposit Account
liabilities are to be assumed or Office Loans are to be acquired by BUYER
pursuant to this Agreement to discontinue their account or business
relationships with FNB.

 

33

 

 

8.6           Solicitation of Customers by FNB After the Closing. For a period
of four (4) years following the Closing Date, neither FNB nor any affiliate
thereof will solicit (a) deposit accounts from customers whose Deposit
Liabilities and/or Office Loans are assumed or acquired by BUYER pursuant to
this Agreement, (b) refinancing of Office Loans from borrowers whose Office
Loans are being acquired by BUYER hereunder, or (c) any persons located within a
ten (10) mile radius of the Office, provided that, such radius does not extend
beyond the boundaries of Summit County, Ohio (the “Territory”), to provide to
such persons any retail, commercial, fiduciary, or wealth management services
similar to or competitive with those services provided by BUYER; provided,
however, that the foregoing (a), (b) and (c) shall not apply to (i) existing
customers of FNB’s offices other than the Office or persons who are employees or
current directors of FNB or any affiliate of FNB, (ii) any general advertisement
by FNB or an affiliate regarding its banking products or other services, or
(iii) any person who becomes a customer of FNB or an affiliate of FNB or seeks
the services provided by FNB or an affiliate of FNB on such person's own
initiative.

 

8.7           Further Assurances. From and after the date hereof, each party
hereto agrees to execute and deliver such instruments and to take such other
actions as the other party(ies) hereto may reasonably request in order to carry
out and implement this Agreement. Without limiting the foregoing, SELLERS agree
to execute and deliver such deeds, bills of sale, acknowledgments, and other
instruments of conveyance and transfer as shall be necessary and appropriate to
vest in BUYER the legal and equitable title to the Assets being conveyed to
BUYER hereunder. Further, BUYER, at its sole cost and expense, shall prepare and
shall file, or shall cause to be prepared and filed, with any appropriate third
parties, any and all documents and notices which are necessary and proper to
transfer to BUYER any security interests and other rights of FNB in and to
collateral securing the Office Loans. SELLERS shall cooperate with BUYER in
executing any necessary and proper documents and notices as may be appropriate
in furtherance of the foregoing covenant and consistent with the terms of this
Agreement; provided, however, that nothing contained herein shall relieve BUYER
of its obligations as set forth herein.

 

8.8           Operation of the Office. Except as otherwise expressly provided in
this Agreement, after the Closing Date, neither FNB, nor its subsidiaries or
affiliates shall be obligated to provide for any managerial, financial,
business, or other services to the Office, including, without limitation, any
personnel, employee benefit, data processing, accounting, risk management, or
other services or assistance that may have been provided to the Office prior to
the Closing Date, and BUYER shall take such action as may in its judgment be
necessary or advisable to provide for the ongoing operation and management of,
and the provision of services and assistance to, the Office after the Closing
Date. Within five (5) days after the Closing Date, BUYER shall change the legal
name of the Office and, except for any documents or materials in possession of
the customers of the Office (including, but not limited to, deposit tickets and
checks), shall not use and shall cause the Office to cease using any signs,
stationery, advertising, documents, or printed or written materials that refer
to the Office by any name that includes the words "First National Bank," the
name of any affiliate of FNB, or any derivations thereof. FNB will retain its
signs located at the Office. During the Pre-Closing Period, SELLERS shall
cooperate with any reasonable requests of BUYER directed to obtaining
specifications for the procurement of new signs of BUYER's choosing for
installation by BUYER of new signs immediately following the close of business
on the Closing Date; provided, however, that BUYER's receipt of all sign
specifications shall be obtained by BUYER in a manner that does not interfere
with the normal business activities and operations of the Office and shall be at
the sole and exclusive expense of BUYER. BUYER shall remove the “skins” of FNB’s
signs with FNB’s name and logo and shall hold them pending pickup by FNB. It is
understood by the parties hereto that, with the exception of the “skins,” all
mounting facilities, electronics and components for the signs shall be
considered as Fixed Assets for purposes of this Agreement.

 

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8.9           Information After Closing. For a period of five (5) years
following the Closing Date, upon written request of SELLERS to BUYER or BUYER to
SELLERS, as the case may be, such requested party(ies) shall provide the
requesting party(ies) with reasonable access to, or copies of, information and
records relating to the Office which are then in the possession or control of
the requested party(ies) reasonably necessary to permit the requesting
party(ies) or any of its subsidiaries or affiliates to comply with or contest
any applicable legal, tax, banking, accounting, or regulatory policies or
requirements, or any legal or regulatory proceeding thereunder or requests
related to customer relationships at the Office prior to the Closing. In the
event of any such requests, the requesting party(ies) shall reimburse the
requested party(ies) for the reasonable costs of the requested party(ies)
related to such request.

 

8.10         Individual Retirement Accounts. All IRAs related to the Office that
shall not have been transferred to BUYER by the close of business on the
thirtieth (30th) day following the Closing Date may be retained by FNB at its
option, and for any such IRAs retained, FNB shall advise the account holders
that it has withdrawn its resignation as custodian or transfer the amount in
such IRAs to the account holders.

 

8.11         Covenant Not to Compete. For a period of four (4) years following
the Closing Date, FNB and its affiliates shall not, and shall not enter into any
agreement to, (i) provide to any persons located within the Territory retail,
commercial, fiduciary, or wealth management services similar to or competitive
with the services provided by BUYER, or (ii) own, operate or use any building,
office or other facility or premises located within the Territory for the
purpose of operating a branch or loan production office similar to or
competitive with the business of the Office as of the Closing Date; provided,
however, that the foregoing (i) shall not apply to (A) existing customers of
FNB’s offices other than the Office or persons who are employees or current
directors of FNB or any affiliate of FNB, (B) any general advertisement by FNB
or any affiliate of FNB regarding its banking products or other services, or (C)
any person who becomes a customer of FNB or an affiliate of FNB or seeks the
services provided by FNB or any affiliate of FNB on such person's own
initiative.

 

8.12         Non-solicitation of Employees. BUYER and SELLERS agree that for a
period of twenty-four (24) months after the Closing Date, neither BUYER nor
SELLERS nor any of their respective subsidiaries or affiliates will directly or
indirectly solicit for employment or employ any persons who are employees of the
other party(ies) or its/their respective subsidiaries or affiliates as of the
Closing Date (except in the case of BUYER, the employment of any Transferred
Employees after the Closing). As used solely in this Section 8.12, the term
"solicit" shall not be deemed to include general advertisements or general
solicitations that are not targeted or directed specifically to individuals who
are employees of the other party(ies) or its/their respective subsidiaries or
affiliates. Nothing in this Section 8.12 shall prohibit the parties or their
respective affiliates or subsidiaries from hiring a person covered by this
Section 8.12 who contacts the hiring party on his/her own initiative (and not in
response to solicitation by the hiring party in violation of this section) or a
person covered by this Section 8.12 who is no longer in the employ of the other
party or its respective subsidiaries or affiliates at the time of such
solicitation.

 

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8.13         Office-Originated Loans after Closing. BUYER and SELLERS agree that
for a period of two (2) years after the Closing Date, BUYER shall make available
to FNB the opportunity to participate on any new loans originated at the Office
in the market served by it for which loans BUYER seeks or requires
participation. BUYER shall provide written notice to FNB prior to the closing of
any such loans, and FNB shall have five (5) days from receipt of such notice to
elect to so participate in the loans. The terms for participation shall be
mutually agreed upon by the parties upon exercise of such option by FNB.

 

The covenants and obligations of the parties in this Article 8 shall survive the
Closing or the earlier termination of this Agreement, if applicable, in
accordance with their respective terms.

 

9.           TERMINATION.

 

9.1          Termination by Mutual Agreement. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned by mutual written
consent of the parties.

 

9.2          Termination by SELLERS. This Agreement may be terminated and the
transactions contemplated hereby abandoned by SELLERS:

 

(a)          in the event of a material breach by BUYER of this Agreement, if
such breach is not waived or cured within thirty (30) days after being notified
of the same or is incapable of being cured;

 

(b)          in the event any of the conditions precedent specified in Section
5.1 of this Agreement (i) has not been met as of the date specified for such
condition in this Agreement or if no date is specified, the Closing Date, or
(ii) is not capable of being met, and in the case of either (i) or (ii), has not
been waived by SELLERS;

 

(c)          in the event any required regulatory approval, authorization or
consent for the consummation of the Acquisition is denied by any applicable
regulatory authority;

 

(d)          on or after the date which is 150 calendar days following the date
of this Agreement (the "Termination Date") if the Closing has not then occurred
unless the failure to consummate by such date is due to a breach of this
Agreement by SELLERS;

 

(e)          in the event that a governmental authority of competent
jurisdiction has issued an order permanently enjoining or otherwise prohibiting
the consummation of the transactions contemplated by this Agreement, and such
order has become final and non-appealable; or

 

(f)          in the event that BUYER fails to obtain within one hundred twenty
(120) days after the effective date hereof, any required regulatory approval,
authorization or consent of which it is BUYER’s responsibility to obtain, in
which event BUYER shall pay to SELLERS the actual costs, fees and expenses
incurred by SELLERS in connection with this Agreement and the Acquisition,
including, without limitation, attorneys’ fees, filing costs and out of pocket
expenses subject to a maximum payment of $250,000.

 

The payment obligations of BUYER under Section 9.2(f) shall survive any
termination of this Agreement pursuant to such section.

 

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9.3           Termination by BUYER. This Agreement may be terminated and the
transactions contemplated hereby abandoned by BUYER:

 

(a)          in the event of a material breach by SELLERS of this Agreement, if
such breach is not waived or cured within thirty (30) days after being notified
of the same or is incapable of being cured;

 

(b)          in the event any of the conditions precedent specified in Section
5.2 of this Agreement (i) has not been met as of the date specified for such
condition in this Agreement or if no date is specified, the Closing Date, or
(ii) is not capable of being met, and in the case of either (i) or (ii), has not
been waived by BUYER;

 

(c)          in the event any required regulatory approval, authorization or
consent required for consummation of the Acquisition is denied by any applicable
regulatory authority;

 

(d)          in the event that a governmental authority of competent
jurisdiction has issued an order permanently enjoining or otherwise prohibiting
the consummation of the transactions contemplated by this Agreement, and such
order has become final and non-appealable;

 

(e)          on or after the Termination Date if the Closing has not then
occurred unless the failure to consummate by such time is due to a breach of
this Agreement by BUYER; or

 

(f)          in the event that SELLERS fails to obtain within one hundred twenty
(120) days after the effective date hereof, any required regulatory approval,
authorization or consent of which it is SELLERS’ responsibility to obtain, in
which event SELLERS shall pay to BUYER the actual costs, fees and expenses
incurred by BUYER in connection with this Agreement and the Acquisition,
including, without limitation, attorneys’ fees, filing costs and out of pocket
expenses subject to a maximum payment of $250,000.

 

The payment obligation of SELLERS under Section 9.3(f) shall survive any
termination of this Agreement pursuant to such section.

 

9.4           Effect of Termination. The termination of this Agreement pursuant
to Sections 9.2 or 9.3 of this Article 9 shall not release any party hereto from
any liability or obligation to the other party(ies) hereto arising from (i) a
breach of any provision of this Agreement occurring prior to the termination
hereof or (ii) the failure of timely satisfaction of conditions precedent to the
obligations of a party(ies) to the extent that such failure of timely
satisfaction is attributable to the actions or inactions of such party(ies). If
this Agreement is terminated pursuant to Sections 9.2 or 9.3 of this Article 9,
then all provisions of this Agreement shall thereupon become void without any
liability on the part of any party hereto to any other party(ies) hereto except
that this Section 9.4 and Article 10 shall survive any such termination.

 

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10.         MISCELLANEOUS PROVISIONS.

 

10.1         Expenses.

 

Except as and to the extent specifically allocated otherwise herein, each of the
parties hereto shall bear its own expenses in connection with the transactions
contemplated by this Agreement, whether or not the transactions contemplated
hereby are consummated.

 

10.2         Limitations on Indemnification.

 

(a)          Termination of Representations and Warranties. The respective
representations and warranties of SELLERS and BUYER contained in this Agreement
shall terminate on the one (1)-year anniversary of the Closing Date, except for
the representations and warranties of (i) SELLERS contained in Sections 3.1(a),
(b), (c), (d), (g), (m) and (r), and (ii) BUYER contained in Sections 3.2(a),
(b) and (c), which shall survive for a period of twenty-four (24) months
following the Closing. The respective representations and warranties of SELLERS
contained in Section 3.1(a), (b), (c) and (d), and of BUYER contained in
Section 3.2 (a), (b) and (c), are collectively, the “Fundamental
Representations”.

 

(b)          Basket; Cap.

 

(i)          Except for claims for indemnification with respect to any
inaccuracy in or breach of any of the Fundamental Representations, neither BUYER
nor SELLERS shall be entitled to indemnification for any Losses arising under
Section 8.3 or 8.4, as the case may be, until the aggregate amount of all of the
claims for indemnification exceeds Fifty Thousand Dollars ($50,000) and
thereafter, BUYER or SELLERS, as applicable, shall be entitled to
indemnification for all of the Losses.

 

(ii)         Except for claims for indemnification with respect to any
inaccuracy in or breach of any of the Fundamental Representations, the maximum
aggregate indemnification amount to which BUYER or SELLERS, as applicable, may
be entitled under this Agreement shall be an amount equal to One Million Dollars
($1,000,000).

 

10.3        Waivers.

 

Each party hereto, by written instrument signed by a duly authorized officer of
such party, may extend the time for the performance of any of the obligations or
other acts of the other party(ies) hereto and may waive, but only as affects the
party(ies) signing such instrument:

 

(a)          any inaccuracies in the representations or warranties of the other
party(ies) contained or referred to in this Agreement;

 

(b)          compliance with any of the covenants or agreements of the other
party(ies) contained in this Agreement;

 

(c)          the performance (including performance to the satisfaction of a
party or its counsel) by the other party(ies) of such of its obligations set out
herein; and

 

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(d)          satisfaction of any condition to the obligations of the waiving
party(ies) pursuant to this Agreement.

 

10.4         Notices.

 

All notices and other communications hereunder may be made by mail,
hand-delivery, courier service, facsimile or electronic transmission, and notice
shall be deemed to have been given when received; provided, however, if notices
and other communications are made by nationally recognized overnight courier
service for overnight delivery, such notice shall be deemed to have been given
one business day after being forwarded to such a nationally recognized overnight
courier service for overnight delivery.

 

If to BUYER:

 

Premier Bank & Trust, N.A.

6141 Whipple Avenue, N.W.

North Canton, Ohio 44720

Attn: Rick L. Hull, President & CEO

E-mail: rick.hull@mypbandtbank.com

Facsimile: (330) 244-2992

 

With a copy to:

 

Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.

4775 Munson Street NW

Canton, Ohio 44718

Attn: Jason F. Haupt

E-mail: jhaupt@kwgd.com

Facsimile: (330) 497-4020

 

If to SELLERS:

 

First National Bank, N.A.

112 West Market Street

Orrville, Ohio 44667

Attn: Mark R. Witmer, President & CEO

E-mail: MarkWitmer@discoverfirstnational.com

Facsimile: (330) 682-4644

 

With a copy to:

 

Calfee, Halter & Griswold LLP

1405 East Sixth Street

Cleveland, Ohio 4414

Attn: Joseph K. Juster

E-mail: jjuster@calfee.com

Facsimile: (216) 241-0816

 

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or such other person or address as any such party may designate by notice to the
other parties, and shall be deemed to have been given as of the date received.

 

10.5         Parties in Interest; Assignment; Amendment. The rights and
obligations of each party hereto shall be binding upon, by the operation of law
or otherwise, and shall inure to the benefit of, the parties hereto and their
respective successors, legal representatives, and permitted assigns. Except as
expressly provided herein, no person who is not a party hereto (or a permitted
successor or assignee of such party) shall have any rights or benefits under
this Agreement, either as a third party beneficiary or otherwise. This Agreement
cannot be amended or modified, except by a written agreement executed by the
parties hereto or their respective successors and permitted assigns. This
Agreement may not be assigned by any party hereto without the prior written
consent of the other party(ies); provided, however, that BUYER shall have the
right to assign all of BUYER’s rights and obligations hereunder with respect to
the assignment of any leases or other Assumed Contracts related to the Real
Estate to be assigned by NBOH to BUYER hereunder.

 

10.6         Headings. The headings and table of contents used in this Agreement
are inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.

 

10.7         Terminology. The specific terms that are defined in various
provisions of this Agreement shall apply throughout this Agreement (including,
without limitation, each Schedule hereto), unless expressly indicated otherwise.
In addition, the following terms and phrases shall have the meanings set forth
for purposes of this Agreement (including such Schedule):

 

(a)          The term "business day" shall mean any day other than a Saturday,
Sunday, or a day on which SELLERS or BUYER is/are closed in accordance with
applicable law or regulation. Any action, notice, or right which is to be taken
or given or which is to be exercised or lapse on or by a given date which is not
a business day may be taken, given, or exercised, and shall not lapse, until the
next business day following.

 

(b)          The term "affiliate" shall mean, with respect to any person, any
other person directly or indirectly controlling, controlled by or under common
control with such person.

 

(c)          The term "Permitted Exceptions" shall mean, with respect to the
Real Estate, (i) those standard exceptions appearing as Schedule B items in a
standard ALTA owners or leasehold title insurance policy, and any other
exceptions, restrictions, easements, rights of way, and encumbrances referenced
in the Title Commitment delivered by SELLERS to BUYER as indicated in Section
2.1(b) of this Agreement reasonably satisfactory to BUYER; (ii) statutory liens
for current taxes or assessments not yet due, or if due not yet delinquent, or
the validity of which is being contested in good faith by appropriate
proceedings; (iii) such other liens, imperfections in title, charges, easements,
covenants, restrictions, and encumbrances (but in all cases relating to the Real
Estate excluding those which secure borrowed money), rights-of-way and other
similar restrictions (including zoning or building restrictions) which,
individually and in the aggregate do not materially detract from the value of,
or materially interfere with the present use of, any property subject thereto or
affected thereby as determined by BUYER in its reasonable discretion; and (iv)
such other exceptions as are approved by BUYER in writing.

 

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(d)          The term "person" shall mean any individual, corporation
partnership, limited liability company, association, trust, or other entity,
whether business, personal, or otherwise.

 

(e)          Unless expressly indicated otherwise in a particular context, the
terms "herein," "hereunder," "hereto," "hereof," and similar references refer to
this Agreement in its entirety and not to specific articles, sections,
Schedules, or subsections of this Agreement. Unless expressly indicated
otherwise in a particular context, references in this Agreement to enumerated
articles, sections, and subsections refer to designated portions of this
Agreement (but do not refer to portions of any Schedule unless such Schedule is
specifically referenced) and do not refer to any other document.

 

(f)          The term "subsidiary" shall mean a corporation, partnership,
limited liability company, joint venture, or other business organization more
than 50% of the voting securities or interests in which are beneficially owned
or controlled by, directly or indirectly, the indicated parent of such entity.

 

(g)          The term "overdraft protection" shall include all such programs and
product offerings that provide depositor protection for overdrafts including,
but not limited to, features sometimes referred to as "overdraft privileges" and
the loan relationships created thereby.

 

(h)          Capitalized terms used in this Agreement that are defined elsewhere
in this Agreement shall have the meanings ascribed to herein, unless the context
otherwise requires.

 

10.8         Press Releases. SELLERS or BUYER, as the case may be, shall
approve, in writing prior to issuance, the form and substance of any press
release or other public disclosure relating to any matters relating to this
Agreement issued by the other(s), which approval shall not be unreasonably
withheld. Nothing contained herein shall restrict or prohibit BUYER or SELLERS
from issuance of press releases or public disclosures which, based on the advice
of counsel, are required by applicable law or regulation or stock market
requirement and limited to information necessary for compliance with same.

 

10.9         Entire Agreement. This Agreement and the Transaction Documents
supersede any and all oral or written agreements and understandings heretofore
made relating to the subject matter hereof and thereof and contain the entire
agreement of the parties relating to the subject matter hereof and thereof. All
Schedules, Exhibits, appendices to, and documents delivered in connection with,
this Agreement are incorporated into this Agreement by reference and made a part
hereof.

 

10.10        Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Ohio and the laws of the United
States, as well as regulations issued by relevant agencies thereof.

 

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10.11         Flexible Structure. References in this Agreement to federal or
state laws or regulations, jurisdictions, or chartering or regulatory
authorities shall be interpreted broadly to allow maximum flexibility in
consummating the transactions contemplated hereby in light of changing business,
economic, and regulatory conditions. Without limiting the foregoing, in the
event SELLERS and BUYER agree in writing to alter the legal structure of the
Acquisition contemplated by this Agreement references in this Agreement to such
laws, regulations, jurisdictions, and authorities shall be deemed to be altered
to reflect the laws, regulations, jurisdictions, and authorities that are
applicable in light of such change.

 

10.12         Counterparts. This Agreement may be executed in several
counterparts and by facsimile and electronic transmission (including by .pdf),
each of which shall be deemed an original, but all of which together shall
constitute one and the same Agreement.

 

10.13         Tax Matters. BUYER and SELLERS agree that they will file
applicable tax returns and other related schedules and documents related to
their respective interests based on the allocations in this Agreement
(including, without limitation, in Section 1.4(b) hereof).

 

10.14         Updating of Disclosure Schedules and Exhibits. From time to time
prior to the Closing, SELLERS shall have the right to supplement or amend the
Disclosure Schedules and the Exhibits with respect to any matter hereafter
arising or discovered after the delivery of the Disclosure Schedules and the
Exhibits pursuant to this Agreement, subject to BUYER’s written approval of any
supplement or amendment to any Disclosure Schedule or Exhibit other than Exhibit
1.2(e) and Exhibit 1.3(b), which approval shall not be unreasonably withheld or
delayed. No such supplement or amendment shall have any effect on the
satisfaction of the condition to closing set forth in Sections 5.2(c) and
5.2(d); provided, however, if the Closing shall occur, then BUYER shall be
deemed to have waived any right or claim pursuant to the terms of this Agreement
or otherwise, with respect to any and all matters disclosed or updated pursuant
to any such supplement or amendment made by SELLERS (and, where applicable,
approved by BUYER) at or prior to the Closing and, in any such event, any and
all matters so disclosed or updated shall be deemed to be a part of this
Agreement for all purposes.

 

[Remainder of page intentionally blank; signatures follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Branch Office Purchase
and Assumption Agreement to be duly executed by their respective officers
thereunto duly authorized, all as of the date first above written.

 

ATTEST:   Premier Bank & Trust, National Association         By:       Rick L.
Hull, its President & CEO       ATTEST:   First National Bank, National
Association           By:       Mark R. Witmer, its President & CEO      
ATTEST:   NBOH Properties, LLC           By:       James R. VanSickle, Secretary

 

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