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EXHIBIT 10.12
[CONFORMED COPY]
PURCHASE AND ASSUMPTION AGREEMENT
by and between
Eastern American Bank, FSB
and
Century National Bank
July 24, 1997
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Table of Contents
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1 Purchase and Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Purchase and Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03 Closing Date Adjustments to Assets and Liabilities . . . . . . . . . . . . . . 3
1.04 Consideration for Purchase and Assumption . . . . . . . . . . . . . . . . . . 3
1.05 Pro Rata Adjustment and Reimbursement . . . . . . . . . . . . . . . . . . . . 3
1.06 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.07 Seller's Actions at Closing . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.08 Purchaser's Actions at Closing . . . . . . . . . . . . . . . . . . . . . . . . 5
1.09 Certain Pre-Closing Transitional Matters . . . . . . . . . . . . . . . . . . . 5
1.10 Certain Post-Closing Transitional Matters . . . . . . . . . . . . . . . . . . 6
1.11 Non-Solicitation of Business . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.12 Covenant Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.13 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.14 Survival of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2 Representations and Warranties of Seller . . . . . . . . . . . . . . . . . . . 9
2.01 Corporate Organization and Related Matters . . . . . . . . . . . . . . . . . . 9
2.02 Execution of Agreement; Enforceability . . . . . . . . . . . . . . . . . . . . 10
2.03 Title to and Condition of Assets . . . . . . . . . . . . . . . . . . . . . . . 10
2.04 Actions, Suits and Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 10
2.05 Agreements with Governmental Authorities . . . . . . . . . . . . . . . . . . . 10
2.06 No Brokers or Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.07 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.08 ▇▇▇ Account Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.09 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.10 Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.11 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.13 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.14 Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.15 FIRPTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.16 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.17 Absence of Certain Changes and Events . . . . . . . . . . . . . . . . . . . . 15
2.18 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.19 Representations Not Misleading . . . . . . . . . . . . . . . . . . . . . . . . 16
2.20 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . ▇▇
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▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ of Purchaser . . . . . . . . . . . . . . . . . 16
3.01 Corporate Organization and Related Matters . . . . . . . . . . . . . . . . . . 16
3.02 Execution of Agreement; Enforceability . . . . . . . . . . . . . . . . . . . . 17
3.03 Actions, Suits and Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 17
3.04 Agreements with Governmental Authorities . . . . . . . . . . . . . . . . . . . 17
3.05 No Brokers or Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.07 Representations Not Misleading . . . . . . . . . . . . . . . . . . . . . . . . 17
3.08 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . 17
SECTION 4 Conduct of Business Pending Closing Date . . . . . . . . . . . . . . . . . . . 18
4.01 Ordinary Course of Business . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.02 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.03 Indebtedness and Collateral Obligations . . . . . . . . . . . . . . . . . . . 18
4.04 Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.01 No Offers or Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.02 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.03 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.04 Applications, Consents and Approvals . . . . . . . . . . . . . . . . . . . . . 19
5.05 Reports to Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.06 Operational and Data Processing Conversion Matters . . . . . . . . . . . . . . 20
5.07 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.08 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6 Conditions to Obligations of Purchaser . . . . . . . . . . . . . . . . . . . . 21
6.01 Representations and Warranties True . . . . . . . . . . . . . . . . . . . . . 21
6.02 Obligations Performed by Seller . . . . . . . . . . . . . . . . . . . . . . . 21
6.03 No Adverse Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.04 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.05 Certain Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.06 Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.07 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.08 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.09 Lease Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . 22
7.01 Representations and Warranties True . . . . . . . . . . . . . . . . . . . . . 22
7.02 Obligations Performed by Purchaser . . . . . . . . . . . . . . . . . . . . . . 22
7.03 No Adverse Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.04 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.05 Regulatory and Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . 22
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7.06 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 8 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.01 Methods of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.02 Procedure Upon Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9 Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.01 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.02 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.03 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.04 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.05 Captions and Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.06 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.07 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.08 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.09 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.10 Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Exhibits
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PURCHASE AND ASSUMPTION AGREEMENT
THIS PURCHASE AND ASSUMPTION AGREEMENT ("Agreement"), dated this 24th
day of July, 1997, is by and between Eastern American Bank, FSB, a federal
savings bank ("Seller"), and Century National Bank, a national bank
("Purchaser").
Recitals
A. Seller is the owner of certain assets and, as an insured
institution, has certain deposit and other liabilities at its branch office
located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (the "Branch").
B. Seller desires to sell, convey and transfer certain of such
assets and liabilities to Purchaser, and Purchaser desires to purchase and
acquire such assets from Seller, and to assume from Seller, certain liabilities
in connection therewith.
C. As a result of the transaction contemplated hereby, Purchaser
will commence the operation of branch banking facilities at the location of the
Branch and Seller will terminate the operation of its branch office and
relinquish all rights to any leasehold, real estate and certain personal
property interests at such location.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, Purchaser and Seller agree as follows:
SECTION 1.
Purchase and Assumption
1.01. Purchase and Sale of Assets. At the Closing (as hereinafter
defined), upon the terms and subject to the conditions of this Agreement and
subject to adjustment as provided herein, Purchaser shall purchase, acquire and
accept, and Seller shall sell, transfer, convey, assign and deliver to
Purchaser good and marketable title, free and clear of all liabilities,
obligations, liens, claims, charges, security interests and encumbrances of any
character (other than liabilities, obligations, liens, claims, charges,
security interests and encumbrances permitted hereunder), to the following
assets (collectively, the "Assets"):
(a) All of Seller's right, title and interest in and to the
leasehold interest and leasehold improvements relating to the Branch and
described in Exhibit 1.01(a) hereto and incorporated herein by reference (the
"Real Estate Interests");
(b) All of Seller's right, title and interest in and to the
personal property at the Branch, including without limitation, all furniture,
office equipment, vault, machinery, fixtures and other items (but excluding the
Seller's name and/or logo owned by Seller and non-compatible computer
equipment), described in Exhibit 1.01(b) hereto and incorporated herein by
reference (the "Personal Property");
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(c) All of Seller's right, title and interest in and to the loans
set forth on Exhibit 1.01(c) hereto and incorporated herein by reference,
together with any and all related liens, mortgages, deeds of trust,
instruments, documentation, security, guarantees and other rights and interests
related to or pledged with respect to such loans (the "Loans"), including all
balances relating to the Loans for which an escrow or other similar account is
maintained under the terms of such Loans, subject to adjustment as provided in
Section 1.09(d);
(d) All of Seller's right, title and interest in and to the
overdraft protection loans relating to Deposits as defined below ("Overdraft
Protection Loans") described in Exhibit 1.01(d) hereto and incorporated herein
by reference;
(e) All of Seller's right, title and interest in and to the
security deposit on the real estate lease pertaining to the Branch ("Security
Deposit");
(f) All cash on hand at the Branch as of the close of business on
the Closing Day (as defined below) including vault cash, ▇▇▇▇▇ cash, ATM cash,
if any, and tellers' cash ("Vault Cash");
(g) All right, title and interest of Seller in and to the safe
deposit business at the Branch as of the close of business on the Closing Day;
and
(h) All original records and documents related to the Assets
transferred or Liabilities assumed (as defined below) by Purchaser including,
but not limited to, the deposit accounts maintained by Seller at the Branch.
The Assets shall not include any assets, tangible or intangible, of Seller not
specifically identified herein or in the Exhibits hereto.
1.02. Assumption of Liabilities. At the Closing, upon the terms and
subject to the conditions of this Agreement and subject to adjustment as
provided herein, Seller shall assign and Purchaser shall assume the liabilities
and obligations of Seller to be discharged, performed, satisfied or paid after
the Closing Date with respect to the following (collectively, the
"Liabilities"):
(a) The deposit accounts held at the Branch, whether represented
by collected or uncollected funds, together with all accrued and unpaid
interest thereon as of the close of business on the Closing Date, including the
fiduciary obligations of Seller for individual retirement accounts ("IRAs")
which are funded by assumed deposit accounts, which deposit accounts are
identified by account number, category, balance, interest rate and, if
applicable, due date, in Exhibit 1.02(a) hereto and incorporated herein by
reference (the "Deposits"); such Deposits exclude deposit accounts that cannot
be assumed by Purchaser because of legal impediments and those deposit accounts
which are security for or associated with equity lines of credit or deposit
overdraft and collateral loans not acquired by Purchaser;
(b) The real estate lease pertaining to the Branch, described in
Exhibit 1.02(b) hereto and incorporated herein by reference (the "Lease"); and
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(c) The unfunded commitments or lines of credit relating to the
Overdraft Protection Loans.
The Liabilities shall not include any liabilities of Seller of any kind or
description not specifically identified herein or in the Exhibits hereto.
1.03. Closing Date Adjustments to Assets and Liabilities. At and as
of the Closing Date, Seller shall update all Exhibits provided for in Sections
1.01 and 1.02 (including in Exhibit 1.02(a) the names and addresses of
customers for accounts included in the Deposits) and shall deliver such updated
Exhibits to Purchaser.
1.04. Consideration for Purchase and Assumption. In consideration
for the sale of the Assets by Seller and the assumption by Purchaser of the
Liabilities, Seller shall make available and transfer to Purchaser, in the
manner specified in Section 1.06 hereof, funds equal to the sum of the
aggregate balance of all of the Liabilities (as set forth on the balance sheet
of Seller at the close of business on Closing Date prepared in accordance with
generally accepted accounting principles applied on a basis consistent with
prior periods) including interest posted or accrued to such accounts as of the
close of business on the Closing Date, less an amount equal to the sum of:
(a) The face value of the Vault Cash;
(b) The net book value of the Real Estate Interests;
(c) The net book value of the Personal Property;
(d) The amount of the Security Deposit;
(e) The unpaid principal balance and accrued interest thereon of
the Overdraft Protection Loans and the Loans determined as of the close of
business of the Branch on the Closing Date;
(f) The Purchaser's share of the pro rata adjustment of items
required pursuant to Section 1.05; and
(g) An amount equal to 5.6% of the Deposits on the Closing Date,
provided that such amount shall not exceed $2,000,000 ("Premium").
In the event that the sum of items (a) through (g) above should be in
excess of the aggregate amount to be transferred by Seller pursuant to the
first paragraph of this Section 1.04, the full amount of such excess shall
constitute an amount due from Purchaser to Seller and shall be paid to Seller
at the Closing in the manner specified in Section 1.06 hereof.
1.05. Pro Rata Adjustment and Reimbursement. Unless otherwise
provided herein, it is the intention of the parties that Seller will operate
the Branch for its own account until the close of business on Closing Date and
that Purchaser shall operate the Branch, hold the Assets and assume the
Liabilities for its own account after the close of business on the Closing
Date. Thus, except as otherwise specifically provided herein, items of
proration and other adjustments shall be prorated as of close of business of
the Branch on the Closing Date and settled between Seller and Purchaser on the
Closing Date whether or not such adjustment would normally be made as of such
time. Items of proration and adjustment will be handled at Closing as an
adjustment to the amount of funds to be delivered by Seller to Purchaser, or
Purchaser to Seller, as appropriate, unless otherwise agreed.
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For purposes of this Agreement, items of proration and other
adjustments shall consist of: (i) rental payments under the Lease; (ii) sales
and use taxes and personal and real property taxes and assessments; (iii) FDIC
deposit insurance assessments; (iv) safe deposit rental payments; and (v) other
prepaid expenses and items and accrued and unpaid liabilities, if any, as of
the close of business on the Closing Date.
1.06. Closing.
(a) The consummation and closing ("Closing") of the transactions
contemplated by this Agreement shall take place as of the close of business of
the Branch on the Friday next following the receipt of all necessary
regulatory, corporate and other approvals, the expiration of any mandatory
waiting periods and the satisfaction or waiver of all other conditions set
forth in Sections 6 and 7, or on such other date as shall be mutually agreed to
by the parties hereto. The date on which the Closing takes place is referred
to herein as the "Closing Date". The Closing shall take place at Eastern
American Bank, FSB, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ as of the close
of business of the Branch, on the Closing Date, or at such other place and time
as shall be mutually agreed to by the parties hereto. Notwithstanding the
foregoing, it is the intention of the parties as of the date hereof that the
Closing become effective on the Closing Date by means of an exchange of
documents without the physical meeting of the parties as set forth above.
(b) Subject to the adjustment procedures set forth in this Section
1.06, the transfer of the funds, if any, due to Purchaser or to Seller, as the
case may be, as set forth pursuant to the terms of Section 1.04 hereof, shall
be made on the Closing Date in immediately available United States Federal
Funds. At least two business days prior to the Closing, Seller and Purchaser
shall provide written notice to one another indicating the account and bank to
which such funds shall be wire transferred. In order to facilitate the
Closing, the parties agree: (i) that the amount of funds transferred on the
Closing Date, pursuant to Section 1.04 hereof, shall be computed based upon (a)
the aggregate book value of the Assets and the Liabilities as of the close of
business on the day immediately preceding the Closing Date and (b) the
estimated amount of the Premium; and (ii) that within ten (10) business days
after the Closing, the parties shall make appropriate post-closing adjustments,
consistent with the provisions of Section 1.04 hereof, based upon actual
Deposits, Loans, Overdraft Protection Loans and cash transactions which took
place on the Closing Date or which took place prior to the Closing Date but
which were not reflected as of the close of business on the day immediately
preceding the Closing Date. Such adjustment amount shall bear interest
computed from the Closing Date to the settlement date based on the rate
prevailing on the settlement date for Federal Funds sold to Signet Bank.
(c) The payments to be made pursuant to Section 1.04 shall be as
set forth and calculated in accordance with the settlement statement prepared
in connection with the Closing, substantially in the form attached hereto as
Exhibit 1.06(c).
1.07. Seller's Actions at Closing. On the Closing Date, the
Seller shall:
(a) deliver to Purchaser such of the Assets as are capable of
physical delivery, including, without limitation, all records, documents and
files of Seller relating to the Assets and Liabilities and
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keys and combinations to the Branch premises, except as otherwise provided
elsewhere in this Agreement;
(b) execute, acknowledge and deliver to Purchaser all such
endorsements, assignments, bills of sale and other instruments of conveyance,
assignment and transfer as shall reasonably be necessary or advisable to
consummate the sale, assignment and transfer of the Assets to Purchaser as
provided herein; provided that all of the documents and instruments to be
delivered by Seller hereunder shall be in form and substance reasonably
satisfactory to counsel for Purchaser;
(c) assign, transfer and deliver to Purchaser each of the
following records pertaining to the Deposits on the Closing Date: signature
cards, orders and contracts between Seller and depositors and records of
similar character; canceled checks and/or negotiable orders of withdrawal, if
any; and all other miscellaneous records, statements and materials maintained
by Seller at the Branch relative to any deposit, provided, however, with
respect to the records, statements, other data and materials not maintained at
the Branch, Seller shall provide Purchaser with reasonable access to such
records as provided in this Agreement;
(d) assign, transfer and deliver to Purchaser all records in
possession of Seller pertaining to the Deposits necessary for Purchaser to
comply with all of the requirements of federal and state law and regulations;
(e) transfer and deliver the contents of the safe deposit boxes
maintained at the Branch as the same exist as of the close of business on the
Closing Date, along with keys, documents and other records pertaining thereto
and to the unrented boxes;
(f) make available and transfer to Purchaser on the Closing Date
any funds required to be paid to Purchaser pursuant to the terms of this
Agreement; and
(g) execute, acknowledge and deliver to Purchaser all certificates
and other documents required to be delivered to Purchaser by Seller at the
Closing pursuant to the terms of this Agreement.
Seller agrees that it will preserve and safely keep, for so long as
may be required under applicable law, all of the files and records not
transferred to Purchaser which relate to the Assets and Liabilities, for the
mutual benefit of itself and Purchaser, and that it will, upon the request of
Purchaser and in a timely manner, consult and review such files and records and
provide Purchaser with such information relating to pre-Closing transactions
and activity relating to the Assets and Liabilities as Purchaser may reasonably
require. For purposes of this Section 1.07, where possible, physical delivery
may be accomplished by the transfer of control over the Branch from Seller to
Purchaser at the Closing.
1.08. Purchaser's Actions at Closing. On the Closing Date, the
Purchaser shall:
(a) pay to Seller any funds required to be paid to Seller pursuant
to the terms of this Agreement; and
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(b) execute, acknowledge and deliver to Seller all certificates
and other documents required to be delivered to Seller by Purchaser at the
Closing pursuant to the terms of this Agreement.
1.09. Certain Pre-Closing Transitional Matters.
(a) Seller shall provide such records and other information as
shall be necessary to enable Purchaser to send, subsequent to the receipt of
all required regulatory approvals and approximately 10 days prior to the
Closing Date, at Purchaser's cost and expense, to each depositor or other
holder of a Liability, a letter prepared by Purchaser and reasonably acceptable
to Seller, notifying each such depositor or holder of the prospective
assignment of the Liability pursuant to this Agreement and providing
information about Purchaser and its banking services. Seller shall cooperate
with Purchaser to enable Purchaser, at Purchaser's expense, prior to the
Closing, to reissue checks and other similar documents and instruments to
depositors whose Liabilities are to be assumed by Purchaser hereunder.
(b) Prior to the Closing Date, Purchaser shall designate a
successor trustee or custodian, which may be Purchaser, as to any ▇▇▇
constituting a Liability and for which Seller acts as trustee or custodian.
Seller will transfer the trusteeship or custodianship of all such IRAs to such
successor trustee or custodian on the Closing Date. Seller shall be
responsible for all federal, state and local income tax reporting for such
accounts for the period ending on the Closing Date, and the successor trustee
or custodian shall be responsible for such reporting thereafter.
(c) In order to assist Purchaser with the conversion of Seller's
data concerning Branch operations to Purchaser's systems, Seller shall, at its
cost and expense, within 10 days of the date of this Agreement, provide to
Purchaser a master file original and record file layout tape or tapes
concerning the Deposits and Loans and a master file print and all product
specifications to include all detail account coding in hard copy. The
foregoing shall include information on Deposits, Loans, safe deposit boxes and
ATM cards. Such tape(s) and other information shall be as of a recent date
mutually agreeable to Purchaser and Seller and shall be updated by Seller and
delivered to Purchaser at and as of the Closing Date.
(d) To determine which of Seller's first mortgage residential real
estate loans shall comprise the Loans, prior to the Closing Date, Purchaser
shall be entitled to review any and all files and records related to the
respective first mortgage loans listed on Exhibit 1.09(d) hereto. From such
Exhibit 1.09(d), Purchaser may select loans with an aggregate unpaid principal
balance of up to approximately $9,240,000, which loans selected by Purchaser
shall comprise the "Loans" as defined herein and as set forth on Exhibit
1.01(c) hereto. Prior to the Closing, Purchaser will continue to have access
to all files and records of Seller respecting the loans on Exhibit 1.09(d) and
at any time prior to the Closing, Purchaser may elect to reject and not to
purchase one or more first mortgage loans included on Exhibit 1.01(c) and may
select a different loan from Exhibit 1.09(d) in substitution for any such
rejected loan, such that the aggregate principal balance of all Loans acquired
by Purchaser at the Closing shall be approximately equal to the aggregate
principal balance of the Loans contained in Exhibit 1.01(c) on the date of this
Agreement, provided that if the Purchaser does not select another loan to
replace a rejected loan, then the principal balance of all Loans acquired by
Purchaser at the Closing may be less than
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$9,240,000. For purposes of this Section 1.09(d), "approximately $9,240,000"
shall mean an amount which does not vary by more than 5% of such amount.
1.10. Certain Post-Closing Transitional Matters.
(a) Seller and Purchaser agree that each party shall be solely
responsible for providing to the Internal Revenue Service and to each
depositor, other holder of a Liability or customer, to the extent required by
law, Forms 1098, 1099 INT, 1099R and 5498 and other applicable reporting forms
with respect to each of the Liabilities and Assets for the period during which
Seller or Purchaser, as applicable, administers such Liabilities and Assets
during 1997.
(b) Within ten (10) business days following the Closing Date,
Seller shall prepare and mail closing statements for each Deposit for which
there has been any activity between the last statement prior to Closing and the
close of business on the Closing Date, for the period from the date of the last
statement to and including the Closing Date, and provide Purchaser with a
copy.
(c) Purchaser agrees to pay in accordance with law and customary
banking practices all properly drawn and presented checks, drafts and
withdrawal orders presented to Purchaser by mail, over the counter or through
the check clearing system of the banking industry, by depositors relating to
the Deposits, whether drawn on checks, withdrawal or draft forms provided by
Purchaser or Seller, and in all other respects to discharge, in the usual
course of the banking business, the duties and obligations of Seller with
respect to the balances due and owing to the depositors with respect to whom
Purchaser has assumed the Deposits. Purchaser's obligation hereunder to honor
checks, drafts and withdrawal orders on forms provided by Seller and carrying
its imprint shall not apply to any such check, draft or withdrawal order
presented to Purchaser more than 120 days following the Closing Date.
(d) Holds that have been placed on particular Liabilities by
Seller or on individual checks, draws or other instruments shall be continued
by Purchaser under the same terms. Seller shall deliver to Purchaser a list or
tape of any such holds at the Closing.
(e) Seller will promptly and fully recompense Purchaser for:
(i) items returned to Purchaser or Seller on account of
fraud, negligence, errors or improper banking practices or procedures,
which are drawn on or chargeable to Deposits assumed by Purchaser
hereunder and for which the transaction date on the item was on or
prior to the Closing Date; and
(ii) items returned to Purchaser or Seller for
"uncollected funds" which are drawn on or chargeable to Deposits
assumed by Purchaser hereunder, for which the transaction date of such
returned item is on or prior to the Closing Date, but only to the
extent that Seller has paid or honored items withdrawn on "uncollected
funds" on or prior to the Closing Date.
Notwithstanding the foregoing, Seller shall not be charged for any
item unless Purchaser has sustained a loss with respect to such item,
after normal collection efforts (normal collection
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efforts, however, shall not require Purchaser to institute a lawsuit
or any other legal action). At time of payment by Seller to Purchaser
pursuant to this Section 1.10(e), Purchaser shall assign to Seller any
rights Purchaser may have to prosecute a claim against a third party
relating to the items.
(f) Purchaser and Seller will instruct the office of the Federal
Reserve Bank ("FRB") in Baltimore, Maryland to deliver all processed and paid
checks or draws drawn on assumed Deposits to Purchaser immediately following
the Closing Date. For a period of 120 days following the Closing Date, Seller
agrees to act as Purchaser's limited correspondent with respect to the FRB cash
letter to process and pay checks or draws drawn on assumed Deposits which are
delivered to Seller, on forms provided by Seller, on any such Deposits assumed
by Purchaser hereunder. Seller agrees in this regard that it shall:
(i) Maintain a mechanism to receive such items on a daily
basis: and
(ii) Shall prepare for shipping all physical items
received by it in its FRB cash letter or otherwise received by it by 9
a.m. of any business day, for pickup by Purchaser by 1:00 p.m. on the
same business day, or otherwise delivered to Purchaser by such means
as agreed to by the parties.
Purchaser and Seller agree that any courier or telephone costs
associated with paragraph (ii) shall be borne by Purchaser. Seller
further agrees that it shall notify Purchaser of any information
received regarding the settlement and clearance of any foreign checks,
savings bonds, or coupons deposited with it on or prior to the Closing
Date.
(g) From and after the Closing Date, Seller shall continue to
accept and immediately forward to Purchaser all automated clearinghouse ("ACH")
entries and corresponding funds for a period of 90 days. Seller also agrees to
include the originator identification number and tracer number.
(h) Seller agrees to notify Purchaser of the return to it of any
items with respect to assumed Deposits deposited in or cashed at any of the
Seller's offices on or prior to the Closing Date and shall expeditiously
forward any such items to Purchaser.
(i) During the processing period set out in Section 1.10(f)
hereof, Purchaser agrees to honor and pay all properly payable drafts, checks
or negotiable orders of withdrawal delivered to it by Seller pursuant to
Section 1.10(f) hereof.
(j) In settlement of transactions described in Sections 1.10(e),
(f), (g) and (h) Purchaser and Seller agree that Seller shall provide Purchaser
by facsimile with a daily net settlement figure together with a detailed
transaction listing for all such transactions then pending by 1:00 p.m.
Virginia time of each business day; the parties agree that the party obligated
to remit any funds thereunder shall do so by wire transfer before 3:00 p.m.
Virginia time of such day. Any such settlement shall be provisional pending
receipt by the respective parties of the physical items relating to such
settlement; the parties
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shall adjust the next daily settlement to reflect any adjustments resulting
from its receipt of the physical items.
(k) In case of any dispute with or inquiry by an account holder
whose Deposit is assumed under this Agreement, which dispute or inquiry relates
to the servicing of such Deposit by Seller prior to the date for which a
Deposit history has been provided to Purchaser, Seller will provide Purchaser
with the appropriate information regarding the Deposit and copies of pertinent
documents or instruments to the extent available with respect to such dispute
or inquiry so as to permit Purchaser to respond to the account holder within a
period of time and in a manner which would comply with standard banking
practices and customs.
(l) As soon as practicable following the Closing Date, Purchaser
will substitute its name and logo for the name and logo of the Seller on all
signs located at the Branch and shall be entitled to remove and dispose of all
signs which carry the name and logo of the Seller which Seller has not removed.
1.11. Non-Solicitation of Business. In consideration of the
purchase of Assets and assumption of Liabilities by Purchaser, neither Seller
nor its subsidiaries, affiliates (including the directors, officers, employees
or principal shareholders), successors or assigns will, for a period of two
years after the Closing Date, solicit, on behalf of itself or others, deposits,
loans or other business from customers whose Deposits are assumed or Loans or
Overdraft Protection Loans acquired by Purchaser hereunder; provided, however,
that nothing contained in this Section 1.11 shall prohibit Seller or any of its
subsidiaries, affiliates, successors or assigns from engaging in general media
advertising by means of publications of general circulation in the Washington,
D.C. Metropolitan market or broadcast stations serving such market.
1.12. Covenant Not to Compete. From and after the Closing, and for
a period of two years following the Closing Date, Seller and its subsidiaries,
affiliates, successors or assigns shall not, and shall not enter into any
agreement to, acquire, lease, purchase, own, operate or use any building,
office or other facility or premises located within a two and one half (2 1/2)
mile radius of the Branch location for the purpose of accepting deposits or
cashing checks.
1.13. Indemnification.
(a) Seller agrees to and does hereby indemnify, defend and hold
Purchaser harmless from any loss, demand, obligation, cost, expense or
liability (including reasonable attorney's fees and expenses) (i) arising out
of any actions, suits or other proceedings commenced prior to, or on or after,
the Closing Date which relate to the operations at the Branch on or prior to
the Closing Date, or which arise out of any wrongful act, omission or
negligence of Seller relating to the operations of the Branch, the Assets or
Liabilities on or prior to the Closing Date; or (ii) arising out of any breach
by Seller of its representations, warranties, covenants or agreements contained
herein or in any instrument, document or certificate delivered to Purchaser
pursuant hereto.
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(b) Purchaser agrees to and does hereby indemnify, defend and hold
Seller harmless from any loss, demand, obligation, cost, expense or liability
(including reasonable attorney's fees and expenses) (i) arising out of any
actions, suits or other proceedings which relate to the operations at the
Branch subsequent to the Closing Date, or which arise out of any wrongful act,
omission or negligence of Purchaser relating to the operations of the Branch,
the Assets or Liabilities subsequent to the Closing Date; or (ii) arising out
of any breach by Purchaser of its representations, warranties, covenants or
agreements contained herein or in any instrument, document or certificate
delivered to Seller pursuant hereto.
1.14. Survival of Covenants. The obligations and covenants of the
parties under this Section shall survive the Closing.
SECTION 2.
Representations and Warranties of Seller
Except as specified in the Schedule of Exceptions accompanying this
Agreement, Seller represents and warrants to Purchaser as follows:
2.01. Corporate Organization and Related Matters. Seller is a
federally chartered savings bank duly organized, validly existing and in good
standing under the laws of the United States, with the corporate power and
authority to transact business in the State of Virginia and to engage in the
savings bank business and all other businesses in which it engages and to own
the Assets and hold the Deposits. Seller has the requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby violate, conflict with
or constitute a breach of any provision of the charter of Seller or its Bylaws
or any agreement or instrument to which it is a party or by which its assets
are bound, or (subject to any consent required to be obtained hereunder) any
law, rule or regulation or any order or decree applicable by its terms
specifically to Seller or its assets.
2.02. Execution of Agreement; Enforceability. The execution and
delivery of this Agreement and each of the documents and instruments
contemplated hereby, and the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on the part of Seller. This
Agreement constitutes, and such documents and instruments will constitute,
legal, valid and binding obligations of Seller, enforceable in accordance with
their respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship and similar laws relating to the
rights and remedies of creditors, as well as to general principles of equity.
2.03. Title to and Condition of Assets. Seller is the owner of the
Assets and has good and marketable title thereto, free and clear of any
mortgage, pledge, lien, security interest, conditional sales agreement,
encumbrance or charge of any kind or description, other than liens for current
taxes not yet due and payable and such encumbrances and imperfections in title,
if any, which are not substantial in character or amount or which otherwise do
not materially impair the use and enjoyment of such Assets.
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No notice of any violation of zoning laws, building or fire codes or other
statutes, ordinances or regulations relating to the use or operation of the
Real Estate Interests has been received by Seller and Seller has not undertaken
any construction or improvements on the Real Estate Interests which could
result in the imposition of any mechanics, materialmen or other similar liens
on the Real Estate Interests. There are no condemnation proceedings pending
or, to the knowledge of Seller, threatened against the Real Estate Interests or
any part thereof. Neither the Real Estate Interests nor any other real estate
owned or leased to be conveyed or transferred to Purchaser hereunder, nor any
real estate which is pledged or stands as collateral security for any of the
Loans is the subject of any action, suit or proceeding pending or, to the
knowledge of Seller, threatened, under environmental, hazardous waste disposal
or other similar federal or state laws, rules or regulations, and none of the
Real Estate Interests or other real estate owned or leased which is to be
conveyed or leased to Purchaser hereunder or which is pledged or stands as
collateral security for any of the Loans has been used in any manner which
would violate any such laws, rules or regulations.
2.04. Actions, Suits and Proceedings. There are no actions, suits
or proceedings pending or, to the knowledge of Seller, threatened against or
affecting Seller or the Assets or Liabilities, and no basis therefor, which, if
decided adversely to Seller would have a material adverse effect on the Assets
or Liabilities or which would have the effect of enjoining or impairing the
ability of Seller effectively to consummate the transactions contemplated by
this Agreement.
2.05. Agreements with Governmental Authorities. Other than as
previously disclosed in writing to Purchaser in the Schedule of Exceptions,
Seller is not a party to any agreement, understanding, consent decree or other
arrangement with any federal or state regulatory or other agency charged with
supervising any portion of the banking industry. Seller has not received
notice from any federal or state governmental agency indicating that it would
oppose or not grant or issue its consent or approval, if required, with respect
to the transaction contemplated by this Agreement.
2.06. No Brokers or Agents. Seller has not retained or otherwise
engaged any broker, finder or other person or agent or agreed to pay any fee or
commission to any agent, broker or other person for or on account of this
Agreement or the transactions contemplated hereby, other than ▇▇▇▇▇▇▇▇ &
Company, which will receive a fee paid by Seller at Closing.
2.07. Taxes. With respect to all interest bearing accounts assigned
to Purchaser, the records of Seller transferred to Purchaser contain or will
contain all information and documents (including without limitation properly
completed Forms W-9) necessary to comply with all information reporting and tax
withholding requirements under federal and state laws, rules and regulations,
and such records identify with specificity all accounts subject to backup
withholding under the Internal Revenue Code.
All federal, state and local payroll, withholding, property, sales,
use and transfer taxes, if any, which are due and payable by Seller relating to
the operation of the Branch on or prior to the Closing Date shall be paid in
full as of the Closing Date or Seller 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 Seller shall remain the property of
Seller.
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2.08. ▇▇▇ Account Documentation. The form of Individual Retirement
Custodial Account Agreement for IRAs, and the related Individual Retirement
Account Disclosure Statement attached hereto as Exhibit 2.08, constitute the
form of the documents establishing the trustee or custodial arrangement in
connection with all IRAs maintained at the Branch.
2.09. Labor Relations. No employee at the Branch is represented,
for purposes of collective bargaining, by a labor organization of any type.
Seller is unaware of any efforts during the past three years to unionize or
organize any employees at the Branch and no claim related to employees at the
Branch under the Fair Labor Standards Act, National Labor Relations Act, Civil
Rights of 1964, ▇▇▇▇▇-▇▇▇▇▇ Act, ▇▇▇▇▇ ▇▇▇▇▇ 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, Family
Medical Leave Act, or any other federal, state or local employment related law,
order, ordinance or regulation, no unfair labor practice, discrimination or
wage-and-hour claim is pending or, to the best of Seller's knowledge,
threatened against or with respect to Seller.
2.10. Environmental. (i) The Branch is in material compliance with
all applicable Environmental Laws (as defined in this Section) and has obtained
and is in compliance with all permits, licenses and other authorizations
(individually a "Permit", and collectively "Permits") required under any
Environmental Law. To the knowledge of Seller, there is no past or present
event, condition or circumstance relating to compliance with Environmental Laws
that could (1) materially interfere with the conduct of the business of the
Branch in the manner now conducted, (2) constitute a violation of any
Environmental Law or (3) which could have a material adverse effect upon the
Branch, the Assets (as hereinafter defined for purposes of this Section 2.10)
or the Liabilities; (ii) Seller does not currently lease, operate, own or
exercise managerial functions at, nor has it formerly leased, operated, owned
or exercised managerial functions at, any facility or real property in
connection with its operation of the Branch that is subject to any actual, or
to the knowledge of Seller, threatened proceeding under any Environmental Law;
(iii) there are no proceedings pending or, to the knowledge of Seller,
threatened against Seller with respect to the Branch or the Assets under any
Environmental Law or relating to the release, threatened release, management,
treatment, storage or disposal of, or exposure to Hazardous Substances, and
Seller has not received any notice (whether from any regulatory body or private
person) of any claim under or violation of, or potential or threatened
violation of, any Environmental Law; (iv) there are no actions or proceedings
pending or, to the knowledge of Seller, threatened under any Environmental Law
involving the release or threat of release of any Hazardous Substances (as
defined in this Section) at or on any property constituting the Branch or the
Assets; (v) there is no Controlled Property for which Seller is or was required
to obtain or have any Permit under an Environmental Law to construct, demolish,
renovate, occupy, operate or use such Controlled Property or any portion of it;
(vi) Seller has not generated any Hazardous Substances at the Branch for which
it was required under an Environmental Law to execute any waste disposal
manifest or receipt, nor has Seller disposed, treated or arranged for the
disposal of any Hazardous Substances; (vii) there has been no release of
Hazardous Substances in, under or on any Controlled Property, or to the
knowledge of Seller on any Collateral Property, in violation of any
Environmental Laws or which would require remediation or any report or
notification to any governmental or regulatory authority; (viii) there are no
underground or above ground storage tanks on or under any Controlled Property,
or to the knowledge of Seller on any
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Collateral Property), which are not in compliance with Environmental Laws or
will not achieve compliance with the December 1998 deadline to upgrade, replace
or close tanks that do not meet EPA's technical standards for protection
against spills, overfills and corrosion, and any Controlled Property, or to the
knowledge of Seller on any Collateral Property, previously containing such
tanks has been remediated in compliance with all Environmental Laws; (ix) there
is no asbestos containing material or polychlorinated biphenyls on any
Controlled Property (as defined below) or, to the knowledge of Seller, any
Collateral Property (as defined below); and (x) Seller is in material
compliance with the directives of any governmental authority with jurisdiction
over Seller, that directs financial institutions to implement programs to
reduce the potential for financial institutions to incur liability under, or to
assess the compliance of borrowers or Collateral Property with, Environmental
Laws.
For purposes of this Section 2.10, Property means (1) the premises
associated with the Branch and any property (whether real or personal) forming
part of the Assets other than any property held as security for a loan, which
is expressly excluded from the definition of Assets for purposes of this
Section 2.10 ("Controlled Property") and (2) property now held as security for
a Loan or currently proposed as security for a Loan ("Collateral Property").
"Hazardous Substances" means any pollutant, contaminant, petroleum or
petroleum product, dangerous or toxic substance, hazardous or
extremely hazardous substance or chemical, solid or hazardous waste,
special, liquid, industrial or other waste, hazardous material, or
other material, substance or agent (whether in solid, liquid or
gaseous form) that is regulated in connection with the protection of
the Environment or that is alleged by third parties or found to pose a
threat to the safety or health of humans.
"Environmental Laws" shall mean any federal, state, or local law
(including common law), rule, regulation, order, ordinance, writ,
judgment, injunction, decree, or determination having the force of law
(including, without limitation, the Clean Air Act, the Toxic Substance
Control Act, the Clean Water Act, the Comprehensive Environmental
Response, Compensation and Liability Act, and the Resource
Conservation and Recovery Act, all as amended, or their state
counterparts or analogues) relating to (i) pollution, contamination or
destruction of, or loss of or injury to, or any adverse effect upon,
the air, drinking water supply, surface water, ground water, land or
other natural resource (collectively, the "Environment"); (ii) the
protection, cleanup or restoration of, or removal, remediation or
mitigation of conditions affecting, the Environment; (iii) the
release, discharge, emission, generation, handling, transportation,
use, processing, treatment, storage, disposal or other management of,
or exposure to, any Hazardous Substance; (iv) the regulation of the
manufacture, processing, distribution or use of chemical substances
for commercial purposes; (v) noise, electromagnetic forces,
non-ionizing radiation or radioactive materials, by-products or waste;
(vi) the protection of the safety or health of humans, including, but
not limited to, exposure to Hazardous Substances.
2.11. Deposits. Attached hereto as Exhibit 1.02(a) is a true and
accurate schedule of all Deposits (including IRAs), and related information,
which are domiciled at the Branch, prepared as of
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a date within 10 days prior to the date of this Agreement (which Exhibit shall
be updated at and as of the Closing Date and, as updated, shall be true and
accurate as of such date). The Deposits are insured by the Federal Deposit
Insurance Corporation ("FDIC") Savings Association Insurance Fund to applicable
legal limits. The Deposits were solicited and currently exist in material
compliance with all applicable requirements of federal, state and local laws
and regulations promulgated thereunder (for purposes of this clause, a Deposit
would not be in material compliance if the noncompliance subjects the
depository institution to any penalty or liability).
2.12. Branch Lease.
(a) The Lease is valid, binding and enforceable in accordance with
its terms subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium, laws governing fraudulent conveyance or equitable subordination
principles and other laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity. Neither
Seller nor the lessor under the Lease is in default under, and no event has
occurred which, with notice of the lapse of time or both would constitute a
default under the Lease. Seller has not previously been given notice of any
event of default, or event or condition which, with the giving of notice or the
lapse of time, or both, would constitute a default under the Lease. Seller has
delivered a true and correct copy of the Lease to Purchaser. Except for the
loan by Seller to the lessor under the Lease, which loan is secured by the
Security Deposit, the Lease is the only agreement between the Seller and the
landlord thereunder relating to the Real Estate Interest. The Lease represents
the entire agreement between the landlord thereunder and the Seller with
respect to the Branch. All payments of rent or other monies required to be
paid by Seller pursuant to the Lease have been paid. The terms of the Lease
permit Seller to use the premises subject to the Lease as an office of a
federal savings bank.
(b) Seller is not entitled to, and has made no agreements with the
landlord under the Lease, or landlord's agents, employees or representatives,
concerning free rent, partial rent, rebates of rent payments, credit, offset or
reduction of rent, or other type of rental concession including, without
limitation, Lease support payments or Lease buyouts, except for the loan to the
lessor described in Section 2.12(a) above or as previously disclosed to
Purchaser in writing.
2.13. Loans. Attached hereto as Exhibits 1.01(c) and 1.01(d) are
true and accurate schedules of all Loans and Overdraft Protection Loans,
respectively, including accrued and unpaid interest thereon, computed as of a
date within 10 days prior to the date of this Agreement (which exhibits shall
be updated at and as of the Closing Date and, as updated, shall be true and
accurate as of such date).
(a) Each Loan and Overdraft Protection Loan included in the
Assets was made or acquired by Seller in the ordinary course of business at the
time such Loan or Overdraft Protection Loan was made or acquired.
(b) None of the Loans or Overdraft Protection Loans included in
the Assets is presently serviced by third parties, and there are no
obligations, agreements or understandings whatsoever that could result in any
such Loan or Overdraft Protection Loan becoming subject to any such third party
servicing.
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(c) There are no misrepresentations of material facts made by
officers or employees of Seller in the credit files relating to the Loans and
Overdraft Protection Loans, provided that the term "facts" shall not include
judgments or opinions of such officers or employees which were in good faith or
information which is reflective of information supplied by the borrower.
(d) With respect to each Loan and each Overdraft Protection Loan
originated by Seller and being transferred to Purchaser and to the knowledge of
Seller with respect to each loan purchased by Seller and being transferred to
Purchaser:
(i) Such Loan or Overdraft Protection Loan was solicited,
originated and currently exists in material compliance with
all applicable requirements of federal, state and local laws
and regulations promulgated thereunder (for purposes of this
clause (i), a Loan or Overdraft Protection Loan would not be
in material compliance if the noncompliance adversely affects
the value or collectibility of the Loan or Overdraft
Protection Loan or subjects the lender to any penalty or
liability);
(ii) Each note, agreement or other instrument evidencing a Loan or
Overdraft Protection Loan and any related security agreement
or instrument (including, without limitation, any guaranty or
similar instrument) constitutes a valid, legal and binding
obligation of the obligor thereunder, enforceable in
accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium, laws
governing fraudulent conveyance or equitable subordination
principles and other laws of general applicability relating to
or affecting creditors' rights generally and to general
principles of equity; and all actions necessary to perfect any
related security interest have been duly taken;
(iii) There has been no material modification to or material waiver
of the terms of the applicable loan documents except as
evidenced in documents executed by the parties and included in
such loan documents; and
(iv) To Seller's knowledge (as defined in Section 2.10 hereof),
there is no valid claim or valid defense to the enforcement of
such Loans and Overdraft Protection Loans, and Seller has not
taken or failed to take any action that would entitle any
obligor or other party to assert successfully any claim
against Seller or Purchaser (including without limitation any
right not to repay any such obligation or any part thereof).
2.14. Personal Property. Exhibit 1.01(b) is a true and accurate
schedule of the categories of Personal Property owned by Seller at the Branch,
which exhibit specifies the net book value of all of the items in each such
category as shown on the financial records of Seller, computed as of July 1,
1997 and describing any security interest therein or lien thereon. Seller
represents that the Personal Property is in good condition and repair, ordinary
wear and tear excepted.
2.15. FIRPTA. Seller is not a foreign person within the meaning of
the Internal Revenue Code Section 1445.
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2.16. Books and Records. The books and records of Seller relating
to the Branch, the Liabilities and the Assets are complete and correct in all
material respects and have been maintained in accordance with good business
practice. Such records have been prepared, to the extent applicable, in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved. The records fairly present the financial
position of the Branch as of the date thereof, and the results of operations
for the Branch for the periods referred to therein. Seller does not have any
liabilities (absolute or contingent) which are material to the Branch, the
Assets or the Liabilities that are not reflected or provided for in the
records.
2.17. Absence of Certain Changes and Events. Since July 23, 1997,
Seller has not:
(a) suffered any material adverse change with respect to the
Assets or the Liabilities;
(b) except in the ordinary course of business and consistent with
prudent banking practices, (A) sold, transferred, leased, pledged, mortgaged,
or otherwise encumbered or (except for this Agreement) agreed to sell,
transfer, lease, pledge, mortgage or otherwise encumber, any of the Assets or
rights with respect thereto, or (B) canceled, waived, compromised or agreed to
cancel, waive or compromise any debts, claims or rights with respect to the
Assets or the Liabilities;
(c) made or permitted any amendment, termination or lapse of any
contract, lease, agreement, license or permit, if such amendment, termination
or lapse (individually or in the aggregate) would reasonably be expected to
have a material adverse effect on the Assets or the Liabilities;
(d) made any change in any method of management or operation of
the Branch not in the ordinary course of business or any accounting change;
(e) granted any general increase in the compensation of its
officers or employees of the Branch (including any increase pursuant to any
bonus, pension, profit sharing or other plan or commitment), except for normal
periodic increases made pursuant to established compensation policies of Seller
applied on a basis consistent with that of the prior year, other than increases
and payments necessary, in Seller's reasonable discretion, to maintain and
preserve the operation of the Branch, all of which increases that relate to
employees with respect to the Branch shall be promptly disclosed in writing to
Purchaser by Seller;
(f) caused the Branch to transfer to Seller's other operations any
deposits other than deposits securing loans made by Seller which are not Loans,
except in the ordinary course of business at the unsolicited request of
depositors, or caused any of Seller's other operations to transfer to the
Branch any deposits, except in the ordinary course of business at the
unsolicited request of depositors;
(g) made any change to its customary policies for setting rates on
deposits offered at the Branch, including any increase in interest rates paid
unless (and only to the extent that) there has been a general increase in
market interest rates as reflected by an increase in the market yield of U.S.
Treasury securities of comparable maturity; or
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(h) entered into any other transaction or conducted its affairs,
in either case related to the Assets or the Liabilities, other than in the
ordinary course of business and consistent with prudent banking practices
except as contemplated by this Agreement.
2.18. Closing Date. Each representation, warranty, covenant and
agreement of Seller set forth in this Agreement shall be deemed to be made on
and as of the date hereof and as of the Closing Date.
2.19. Representations Not Misleading. No representation or warranty
by the Seller contained in this Agreement, nor in any statement, exhibit or
schedule furnished to the Purchaser by the Seller under and pursuant to, or in
anticipation of or in connection with, this Agreement contains or will contain
on the Closing Date any untrue statement of a material fact or omits or will
omit to state a material fact necessary to make the statements contained herein
or therein, in light of the circumstances under which it was or will be made,
not misleading.
2.20. Survival of Representations and Warranties. The
representations and warranties of Seller hereunder shall survive the Closing
for a period of two years.
SECTION 3.
Representations and Warranties of Purchaser
Purchaser hereby represents and warrants to Seller as follows:
3.01. Corporate Organization and Related Matters. Purchaser is a
nationally chartered commercial bank duly organized, validly existing and in
good standing under the laws of the United States, with the corporate power and
authority to exercise commercial banking powers and to engage in all other
businesses in which it engages and to acquire the Assets and assume the
Liabilities subject to regulatory approval. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
violate, conflict with or constitute a breach of any provision of the articles
of association or bylaws of Purchaser or any agreement or instrument to which
it is a party or by which its assets are bound, or (subject to any consent
required to be obtained hereunder) any law, rule or regulation or any order or
decree applicable by its terms specifically to Purchaser or its assets.
3.02. Execution of Agreement; Enforceability. The execution and
delivery of this Agreement and each of the documents and instruments
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Purchaser. This Agreement constitutes, and such documents and
instruments will constitute, legal, valid and binding obligations of Purchaser,
enforceable in accordance with their respective terms, subject to bankruptcy,
solvency, reorganization, moratorium and similar laws relating to the rights
and remedies of creditors, as well as to general principles of equity.
3.03. Actions, Suits and Proceedings. There are no actions, suits
or proceedings pending or, to the knowledge of Purchaser, threatened against or
affecting Purchaser, and to the knowledge of
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Purchaser, no basis therefor, which if decided adversely to Purchaser would
have a material adverse effect on the ability or authority of Purchaser to
consummate the transactions contemplated by this Agreement.
3.04. Agreements with Governmental Authorities. Purchaser is not a
party to any agreement, understanding, consent decree or other arrangement with
any federal or state regulatory or other agency charged with supervising any
portion of the banking industry which would prohibit, or otherwise have a
material adverse effect on Purchaser's authority or ability to consummate, the
transactions contemplated by this Agreement. Purchaser has not received notice
from any federal or state governmental agency indicating that it would oppose
or not grant or issue its consent or approval, if required, with respect to the
transaction contemplated by this Agreement.
3.05. No Brokers or Agents. Except as otherwise disclosed in
Exhibit 3.05, Purchaser has not retained or otherwise engaged any broker,
finder or other person or agent or agreed to pay any fee or commission to any
agent, broker or other person for or on account of this Agreement or the
transactions contemplated hereby.
3.06. Closing Date. Each representation, warranty, covenant and
agreement of Purchaser set forth in this Agreement shall be deemed to be made
on and as of the date hereof and as of the Closing Date.
3.07. Representations Not Misleading. No representation or warranty
by the Purchaser contained in this Agreement, nor in any statement, exhibit or
schedule furnished to the Seller by the Purchaser under and pursuant to, or in
anticipation of or in connection with, this Agreement contains or will contain
on the Closing Date any untrue statement of a material fact or omits or will
omit to state a material fact necessary to make the statements contained herein
or therein, in light of the circumstances under which it was or will be made,
not misleading.
3.08. Survival of Representations and Warranties. The
representations and warranties of Purchaser hereunder shall survive the Closing
for a period of two years.
SECTION 4.
Conduct of Business Pending Closing Date
4.01. Ordinary Course of Business. Seller shall carry on its
business in a manner consistent with past practices and shall not, with respect
to its business and operations at the Branch or in connection with the Assets
or Liabilities, engage in any activities or transactions outside the ordinary
course of business, except with the consent of Purchaser or in connection with
the transactions contemplated hereby.
4.02. Preservation of Business. Seller shall exercise all
reasonable efforts to preserve its business operations as conducted in its
Branch, to preserve for Purchaser the good will of its customers and others
doing business with Seller whose deposits constitute portions of the
Liabilities, and to
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exercise reasonable efforts to cooperate with and assist Purchaser in assuring
the orderly transition of such business from Seller to Purchaser.
4.03. Indebtedness and Collateral Obligations. Seller shall not
incur any indebtedness secured by any of the Assets or otherwise encumber any
of the Assets, and Seller shall not enter into or assume any material contract
or obligation affecting the Assets and Liabilities without first obtaining
Purchaser's written consent.
4.04. Certain Actions. Seller shall not take any action or omit to
take any action which would make any representation or warranty contained in
Section 2 hereof untrue in any material respect.
SECTION 5.
Covenants
5.01. No Offers or Negotiations. Neither Seller nor its respective
subsidiaries and affiliates will, directly or indirectly, through any officer,
director, stockholder, agent or other person, negotiate, solicit, initiate or
encourage submission of proposals or offers from any other persons (including
without limitation any of its or their officers, directors, employees or
significant stockholders) relating to any acquisition or purchase of any
portion of the Assets or Liabilities, or any equity interest in Seller or any
business interest in Seller or any subsidiary which would impair or otherwise
interfere with the consummation of the transactions contemplated hereby.
Seller shall promptly cease and cause to be terminated any current negotiations
conducted with any parties other than Purchaser with respect to the acquisition
or purchase of any portion of the Assets or Liabilities, or any equity interest
in Seller or any business interest in Seller or any subsidiary which would
impair or otherwise interfere with the consummation of the transactions
contemplated hereby, and shall request the immediate return of any and all
information supplied to any such party in connection therewith. Any consent
heretofore granted by Seller or its affiliates to permit persons to make any
such proposal (other than consents given to Purchaser) shall immediately be
withdrawn and no further consents, waivers or amendments shall be granted by
Seller.
5.02. Access to Books and Records. Seller shall furnish Purchaser
with such additional financial and other data and information regarding the
Assets and Liabilities as Purchaser reasonably may request from time to time,
including without limitation any information required for inclusion in all
governmental applications necessary to effect the transactions contemplated
hereby. Upon reasonable notice, Seller shall permit officers and authorized
representatives of Purchaser access to inspect the Branch during normal
business hours or at such other time mutually agreed by both parties and permit
Purchaser to make or cause to be made such reasonable investigation of
information and materials relating to the financial condition of the Branch,
including, if any, general and subsidiary ledgers, deposit records and any
other information concerning the business, property and legal questions
concerning the Branch as Purchaser reasonably deems necessary or advisable.
5.03. Confidentiality. Purchaser will, and will cause its officers,
directors, employees and agents to, hold in strictest confidence and not
disclose to any other person or entity without the prior
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written consent of Seller, all information received by Purchaser from or with
respect to Seller in connection with this Agreement and the transaction
contemplated hereby, except such information as may otherwise be publicly
available or except such information as may be required to be disclosed by
applicable law in connection with governmental applications or otherwise.
Likewise, the Seller will, and will cause its officers, directors, employees
and agents to, hold information concerning the Purchaser in strict confidence.
These confidentiality obligations shall survive the termination of this
Agreement. Notwithstanding the foregoing, Purchaser and Seller agree that
Purchaser shall prepare and issue a press release announcing that Purchaser
will be acquiring the Assets and assuming the Deposits pursuant to this
Agreement and that Seller may also issue a press release regarding the
transaction. Purchaser and Seller agree that each shall provide a copy of any
such press release to the other prior to the issuance of any such press
release.
5.04. Applications, Consents and Approvals.
(a) Purchaser shall prepare and file all applications, as required
by law, with the appropriate federal and state banking regulatory authorities
for approval to purchase the Assets and to assume the Liabilities of and to
establish a branch at the location of the Branch of Seller not later than ten
(10) days following the execution of this Agreement and to effect in all other
respects the transaction contemplated hereby.
(b) Seller shall use its best efforts (i) to assist Purchaser in
preparing and filing all applications as required by law, to the appropriate
federal and state regulatory authorities; and (ii) to obtain any further
consents or authorizations to consummate in all other respects the transactions
contemplated hereby.
(c) Purchaser and Seller shall comply with the normal and usual
requirements imposed by regulatory authorities applicable to effectuate
transactions such as the transaction contemplated hereby, shall use their
respective good faith efforts to obtain any required permission of such
regulatory authorities and to provide to each other any additional assistance
that would expedite preparations for the sale of the Assets and the assumption
of Liabilities to Purchaser. Purchaser shall make draft copies of its
applications and filings available to Seller and its counsel on request
(excluding confidential Purchaser information), shall process all applications
in a diligent manner and on a priority basis, and shall provide Seller with
copies of all materials filed with regulatory authorities or other third
parties in connection with the transactions contemplated hereby (excluding
confidential Purchaser information). Purchaser and Seller shall promptly
notify each other of the scheduling of any meeting with federal or state
regulatory authorities concerning the subject matter hereof and shall use their
best efforts to permit representatives of the other or their respective counsel
to attend any such meetings. In addition, Purchaser shall use reasonable good
faith efforts to achieve the condition set forth in Section 6.06 hereof of
being "well capitalized" on or before the Closing Date. Purchaser shall
furnish Seller with all material information on a timely basis relating to
Purchaser's efforts to meet the requirements described in Section 6.06 and
8.01(i).
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(d) Seller will use its best efforts to obtain promptly and
diligently all consents and approvals of third parties to the transactions
contemplated hereby, including, but not limited to the consent of the landlord
under the Lease to the assignment of the Lease to Purchaser.
5.05. Reports to Purchaser. Until the earliest to occur of the
Closing Date or the termination of this Agreement, Seller shall provide to
Purchaser a monthly Branch deposit summary involving the Deposits and such
other reports and information as Purchaser reasonably may request from time to
time concerning the Assets and Liabilities and the business and operations of
Seller at its Branch, provided that Seller shall not be required to take any
action which would be unduly disruptive of its business and activities.
Notwithstanding the foregoing, Seller shall promptly notify Purchaser of any
material adverse change in the condition of the Assets or Liabilities.
5.06. Operational and Data Processing Conversion Matters. Seller
shall cooperate with Purchaser's reasonable requests in order to accommodate
any and all requirements for Purchaser to convert the operations of the Branch
from a branch of Seller to a branch of Purchaser, including without limitation
any requirements for the conversion of data processing to Purchaser's systems.
Seller covenants that it will assist Purchaser with Purchaser's reasonable
requests following the Closing in the event that Purchaser is unable to
complete its requirements prior thereto. Except as otherwise provided herein,
all costs and expenses of the data processing and other similar conversions to
Purchaser's systems shall be borne by Purchaser.
5.07. Further Assurances. Seller agrees to provide such bills of
sale, acknowledgments and other instruments of conveyance and transfer as in
the reasonable judgment of Purchaser shall be necessary and appropriate to vest
in Purchaser the legal and equitable title to the Assets, free and clear of all
liens and encumbrances. Purchaser shall be responsible for the cost of all
title examinations, titling fees and surveys relating to the Real Estate
Interests.
5.08. Allocation of Purchase Price. The purchase price of the
Assets and Liabilities hereunder shall be allocated on an allocation schedule
to be agreed to by Purchaser and Seller prior to the Closing. Within 60 days
of the Closing, Seller shall prepare an IRS Form 8594 reflecting the allocation
of the purchase price as agreed to by Seller and Purchaser and shall submit
such Form 8594 to Purchaser for review. Purchaser shall inform Seller in
writing of any disagreements with the amounts allocated on Form 8594 within 15
days after receipt. The amounts shown on Form 8594 shall become final should
Purchaser fail to inform Seller within 15 days. Purchaser and Seller agree
that they will not take, nor will they permit any affiliated person to take,
for income tax reporting purposes a position inconsistent with such allocation.
SECTION 6.
Conditions to Obligations of Purchaser
The obligations of Purchaser to complete the transaction provided for
in this Agreement are subject to and conditioned upon the fulfillment, on or
before the Closing Date, of each of the following conditions, unless waived by
Purchaser to the extent permitted by law:
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6.01. Representations and Warranties True. The representations and
warranties of the Seller shall be true and correct in all material respects
when made and shall be true and correct in all material respects at and as of
the Closing Date as though such representations and warranties were made at and
as of such time, except for any changes permitted by the terms hereof or
consented to by Purchaser.
6.02. Obligations Performed by Seller. Seller shall have performed
and complied in all material respects with all obligations and agreements
required by this Agreement to be performed or complied with by it prior to or
at the Closing Date.
6.03. No Adverse Litigation. As of the Closing Date, no action,
suit or proceeding shall be pending or threatened against Seller or Purchaser,
or the Assets and Liabilities, which reasonably could be expected to (a)
materially and adversely affect the business and operations of Seller at its
Branch or the Assets and Liabilities, or (b) materially and adversely affect
the transactions contemplated by this Agreement.
6.04. Compliance Certificate. Seller shall have delivered to
Purchaser a certificate of an authorized officer, dated the Closing Date,
certifying to the fulfillment of each of the foregoing conditions.
6.05. Certain Regulatory Approvals. Purchaser and Seller shall have
received from the appropriate federal and state regulatory authorities all
approvals necessary for the consummation of the transactions contemplated
hereby and to operate a branch office at the location of Seller's Branch, such
approvals shall be in full force and effect and all waiting periods imposed by
law or regulation shall have expired, unless such approval imposes any
condition or requirement which in the judgment of Purchaser would adversely
impact the economic or business benefits of the transactions contemplated by
the Agreement or otherwise would in the judgment of the Purchaser be so
burdensome as to render inadvisable the consummation of the transactions
contemplated by the Agreement.
6.06. Capital. On a pro forma basis giving effect to the
consummation of the purchase and assumption transactions provided for in this
Agreement, the Purchaser will be "well-capitalized" as defined for bank
regulatory purposes and in compliance with all capital requirements, standards
and ratios required by each state or federal bank or holding company regulator
with jurisdiction over the Purchaser, its holding company and affiliates.
6.07. Legal Opinion. Purchaser shall have received an opinion,
dated the Closing Date, of counsel to the Seller, to the effect set forth in
Exhibit 6.07 hereto.
6.08. Deposits. At Closing, Seller shall fully disclose and
identify, through transfer of appropriate records or otherwise, all Deposit
accounts on which holds have been placed which contain uncollected balances,
and stop payment orders, and the amounts thereof.
6.09. Lease Agreement. The consent of the landlord under the Lease
to the assignment by Seller of the Lease to Purchaser, shall have been obtained
without the imposition of conditions Purchaser deems unduly burdensome or
unreasonable. Such consent shall be in form and substance
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satisfactory to Purchaser in the exercise of its sole discretion, and shall
include landlord's representation and warranty to Purchaser that the Lease is a
valid and binding obligation of landlord and landlord's representation,
warranty and/or agreement that the Security Deposit is held in a manner
satisfactory to Purchaser.
SECTION 7.
Conditions to Obligations of Seller
The obligations of Seller to complete the transaction provided for in
this Agreement are subject to and conditioned upon the fulfillment, on or
before the Closing Date, of each of the following conditions, unless waived by
Seller to the extent permitted by law:
7.01. Representations and Warranties True. The representations and
warranties of the Purchaser shall be true and correct in all material respects
when made and shall be true and correct in all material respects at and as of
the Closing Date as though such representations and warranties were made at and
as of such time, except for any changes permitted by the terms hereof or
consented to by Seller.
7.02. Obligations Performed by Purchaser. Purchaser shall have
performed and complied in all material respects with all obligations and
agreements required by this Agreement to be performed or complied with by it
prior to or at the Closing Date.
7.03. No Adverse Litigation. As of the Closing Date, no action,
suit or proceeding shall be pending or threatened against Seller or Purchaser,
or the Assets and Liabilities, which reasonably could be expected to (a)
materially and adversely affect the business and operations of Seller at its
Branch or the Assets and Liabilities, or (b) materially and adversely affect
the transaction contemplated by this Agreement.
7.04. Compliance Certificate. Purchaser shall have delivered to
Seller a certificate of an authorized officer, dated the Closing Date,
certifying to the fulfillment of each of the foregoing conditions.
7.05. Regulatory and Other Approvals. Purchaser and Seller shall
have received all governmental approvals (which shall be unconditional except
for such standard conditions as are customarily imposed on such transactions)
necessary for the consummation of the transactions contemplated hereby, and all
waiting periods imposed by law or regulation shall have expired.
7.06. Legal Opinion. Seller shall have received an opinion, dated
the Closing Date, of counsel to Purchaser, to the effect set forth in Exhibit
7.06 hereto.
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SECTION 8.
Termination
8.01. Methods of Termination. This Agreement may be terminated in
any of the following ways:
(a) at any time on or before the Closing Date by the mutual
consent in writing of Seller and Purchaser;
(b) on the Closing Date by Purchaser if the conditions set forth
in Section 6 of this Agreement shall not have been met by Seller or waived in
writing by Purchaser;
(c) on the Closing Date by Seller if the conditions set forth in
Section 7 of this Agreement shall not have been met by Purchaser or waived in
writing by Seller;
(d) at any time on or before the Closing Date by Purchaser if
Seller shall have been in breach of any representation or warranty in any
material respect (as if such representation or warranty had been made on and as
of the date hereof and on the date of the notice of breach referred to below),
or in breach of any covenant, undertaking or obligation contained herein, and
such breach has not been cured by the earlier of thirty days after the giving
of notice to the breaching party or the Closing Date;
(e) at any time on or before the Closing Date by Seller if
Purchaser shall have been in breach of any representation or warranty in any
material respect (as if such representation or warranty had been made on and as
of the date hereof and on the date of the notice of breach referred to below),
or in breach of any covenant, undertaking or obligation contained herein, and
such breach has not been cured by the earlier of thirty days after the giving
of notice to the breaching party or the Closing Date;
(f) by Seller or Purchaser in writing at any time after any of the
regulatory authorities has denied, by final, non-appealable order, any
application by Purchaser for approval of the transactions contemplated hereby;
(g) by Purchaser in writing at any time after 60 days from the
date hereof, if by that date the landlord on the Lease shall not have consented
in writing to the assignment to, and assumption by, Purchaser of the Lease
under the current terms and conditions applicable to Seller;
(h) by Purchaser or Seller in writing if the transactions
contemplated hereby are not consummated on or before October 15, 1997, provided
that if consummation of the transaction is postponed beyond this date solely
due to failure to receive regulatory approvals, Purchaser or Seller may extend
this date to December 1, 1997 by notice to the other;
(i) by Seller if Century Bancshares, Inc., the bank holding
company for Purchaser, shall not have filed on or before August 20, 1997 with
the Securities and Exchange Commission a registration statement covering shares
of its common stock; and
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(j) by Purchaser on or before August 15, 1997 if its review of the
books, records and affairs of the Seller as related to the Branch, the
Liabilities and the Assets is not satisfactory to the Purchaser in its sole
judgment.
8.02. Procedure Upon Termination. In the event of termination
pursuant to Section 8.01 hereof, written notice shall forthwith be given to the
other parties, and this Agreement shall terminate upon receipt of such notice
immediately unless an extension is consented to by the party having the right
to terminate. If this Agreement is terminated as provided herein, each party
will return all documents, work papers and other materials of the other parties
relating to this transaction, whether obtained before or after the execution of
this Agreement, to the parties furnishing the same, and all information
received by any party hereto with respect to the business of another party
(other than information which is a matter of public knowledge or which has
heretofore been or is hereafter published in any publication for public
distribution or filed as public information with any governmental authority)
shall not at any time be used for any business purpose by such party or
disclosed by such party to third persons. Nothing herein shall be deemed to
limit or prejudice in any way any remedy which any party may have against
another party for a breach of this Agreement.
SECTION 9.
Miscellaneous Provisions
9.01. Entire Agreement. This Agreement, the documents and
instruments to be executed hereunder and the exhibits and schedules hereto
constitute the entire Agreement among the parties hereto, and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof. No supplement, amendment,
alteration or modification of this Agreement shall be binding unless executed
in writing by the parties hereto. Because of the confidential nature of the
information contained in certain schedules and exhibits hereto, it is agreed
and understood that the schedules and exhibits shall not be filed as a part of
any public filings, except as specifically required by law, rule or regulation,
and that Purchaser and Seller shall (subject to the valid orders of any court
or governmental body and except as may be required in order to obtain legal or
equitable relief for a breach hereof) maintain the information contained in
such exhibits and schedules as confidential.
9.02. Employees.
(a) Purchaser may, but shall be under no obligation to, extend
offers of employment as of the Closing Date to Seller's employees at the
Branch. It is acknowledged that following the execution of this Agreement and
prior to the Closing Date, Seller may reassign the current Branch Manager after
hiring a new Branch Manager acceptable to Purchaser, provided, however, that
the parties hereto agree that Purchaser shall not have any liability for the
actions of such person while employed by Seller. Seller hereby agrees to
transfer to Purchaser, promptly upon receiving a written consent from such
employees, a copy of each such employee's most recent performance review and to
permit Purchaser to review and make notes from each such employee's entire
personnel and employment file.
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(b) Such employees of Seller who accept offers of employment by
Purchaser ("Retained Employees") shall be employed upon terms and conditions of
employment determined solely by Purchaser's policies, procedures and programs;
provided, however, that for purposes of Purchaser's various employee benefit
plans following the Closing Date, time of service with the Seller will be
credited to Retained Employees for purposes of determining and calculating
their eligibility for and vesting to the greatest extent permitted under
Purchaser's plans and all preexisting conditions of Retained Employees will be
waived by Purchaser to the greatest extent permitted under Purchaser's plans.
Each Retained Employee shall be permitted, to the extent permitted by law and
the provisions of Purchaser's plan, to participate in Purchaser's 401(k) plan
and to transfer to Purchaser's plan, amounts due to them under Seller's plan.
(c) Seller agrees that it shall render Purchaser every assistance
in soliciting certain of its Branch employees to accept employment with
Purchaser, including but not limited to permitting Purchaser to immediately
contact and solicit such employees. Purchaser acknowledges that Seller has
made no assurances to Purchaser with respect to such employees' accepting
positions with Purchaser and incurs no liability to Purchaser in rendering the
assistance referred to herein.
(d) Purchaser shall have no liability to any of Seller's current
employees for any accrued wages, sick leave, vacation time, pension obligations
or any other employee benefits. Purchaser will have no liability and will not
assume obligations under any "employee benefit plan" (as such term is defined
in the Employee Retirement Security Act of 1974, as amended) of Seller or any
other obligations (including, without limitation, severance obligations) of
Seller to the employees of the Branch. Seller will be responsible for
fulfilling, and resolving any disputes concerning, its liabilities or
obligations (including, without limitation, severance obligations) to the
employees at the Branch under any such employee benefit plan or otherwise. All
wages and salaries, workers' compensation payments, vacation pay and social
security and unemployment taxes of Branch employees shall be paid by Seller for
the period to and including the Closing Date. The obligation of Seller
pursuant to this Section shall survive the Closing.
9.03. Consents. Whenever the consent of a party is required under
this Agreement, such consent shall not be unreasonably withheld.
9.04. Waiver. No waiver of any provision shall be deemed or shall
constitute a waiver of any other provision hereof nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
9.05. Captions and Headings. The captions and headings contained
herein are for convenience of reference only and shall not be considered a part
of or affect the construction or interpretation of this Agreement.
9.06. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Virginia.
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9.07. Notices. Any notice or communication required by this
Agreement shall be given in writing by certified mail, return receipt
requested, postage prepaid, or by hand delivery, as follows:
If to Seller to: With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and CEO ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Eastern American Bank, FSB ▇▇▇▇▇▇▇ & Baris, L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Purchaser, to: With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President Waverly Vest, Esquire
Century National Bank ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Such notice shall be deemed to have been given on the date of such mailing or
hand delivery, provided that notices of changes of address shall be effective
only upon actual receipt.
9.08. Assignment. This Agreement and all of the provisions thereof
shall be binding upon, and shall inure to the benefit of, the parties hereto
and their respective successors and assigns, provided that neither this
Agreement nor any of the rights or obligations hereunder shall be assigned
prior to the Closing Date by any party hereto without the prior written consent
of the other parties.
9.09. Expenses. Except as otherwise specifically provided herein,
each party hereto shall bear and pay all costs and expenses incurred by it or
on its behalf in connection with this Agreement and the transactions
contemplated hereunder. Notwithstanding the foregoing, if either party files
any regulatory application in connection with this transaction for which an
application fee is required, such party shall be solely liable for payment of
such fee, except as the other party may expressly agree in writing.
9.10. Terminology. For purposes of this Agreement, "knowledge" of a
particular fact or other matter means information actually known to a party's
officers, directors, employees or agents or such information that a prudent
person could be expected to discover after due inquiry appropriate under the
circumstance.
9.11. Counterparts. This Agreement may be executed simultaneously
in multiple counterparts, each of which shall be deemed to be an original but
all of which together shall constitute one and the same instrument.
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32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized officers as of the date first written
above.
EASTERN AMERICAN BANK, FSB
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and CEO
CENTURY NATIONAL BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
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