Exhibit 10.m
PURCHASE AND ASSUMPTION AGREEMENT
This Agreement, dated as of JUNE 18, 1997, is by
and between First Bank, a commercial bank organized under the
laws of the state of North Carolina and having its principal
place of business in Troy, North Carolina ("Buyer"), and First
Union National Bank of North Carolina, a national banking
association having its principal place of business in Charlotte,
North Carolina ("Seller").
I. DEFINITIONS
1.1 Certain Defined Terms.
Some of the capitalized terms appearing in this
Agreement are defined below. The definition of a term expressed
in the singular also applies to that term as used in the plural
and vice versa.
"Affiliate" means a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by,
or is under common control with, a specified Person, except in
those cases where the controlling Person exercises control solely
in a fiduciary capacity.
"Amount of Premium" has the meaning set forth in
Section 3.1 of this Agreement.
"Assets" has the meaning set forth in Section 2.1 of
this Agreement.
"Benefit Plan" means any pension, profit-sharing, or
other employee benefit, fringe benefit, severance or welfare plan
maintained by or with respect to which contributions are made by,
Seller or any of its Affiliates with respect to Seller's
employees.
"Branch" means the branch office of Seller listed on
Schedule 1.1 to this Agreement.
"Business Day" means any Monday, Tuesday, Wednesday,
Thursday or Friday on which Seller is open for business.
"Cash Reserve Lines of Credit" means those consumer
lines of credit made available to customers of the Branch as a
protection against overdrafts on Deposit Accounts.
"Cash Reserve Loans" means those loans outstanding on
the Closing Date pursuant to Cash Reserve Lines of Credit.
"Closing" means the purchase of the Assets by Buyer and
the assumption of the Liabilities by Buyer on the Closing Date.
"Closing Date" has the meaning set forth in Section 9.1
of this Agreement.
"Conversion Expenses" has the meaning set forth in
Section 3.3 of this Agreement.
"Deposit Accounts" means the deposit accounts at the
Branch, the balances of which are included in the Deposits or
would be so included if the Deposit Account had a positive
balance.
"Deposits" means all deposits (as defined in 12 U.S.C.
Section 1813(l)) which are booked at the Branch on the Closing
Date, including in each case accrued but unpaid interest and both
collected and uncollected funds, but excluding (i) deposits held
in accounts for which Seller acts as fiduciary (other than
deposits held by Retirement Plans), and (ii) deposits
constituting official checks, travelers checks, money orders or
certified checks.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA Affiliate" means any entity that is considered
one employer with Seller under Section 4001 of ERISA or Section
414 of the Internal Revenue Code of 1986, as amended.
"Federal Funds Rate" means, for any day, the rate per
annum (expressed on a basis of calculation of actual days in a
year) equal to the "near closing bid" federal funds rate
published in The Wall Street Journal on the Business Day
following the Closing Date.
"Fixed Assets" means all fixtures (including signage
poles), leasehold improvements, furnishings (excluding artwork
owned by Seller), vaults, safe deposit boxes, equipment
(including, for example, all ATM machines, but excluding any
computer or telecommunications equipment), supplies (other than
forms and other supplies which bear Seller's name or logo), and
other personal property, which are owned or (to the extent of
Seller's interest as lessee) leased by Seller, which are located
at the Branch on the Closing Date.
"Governmental Entity" means any government or any
agency, bureau, board, commission, court, department, official,
political subdivision, tribunal or other instrumentality of any
government having authority in the United States, whether
federal, state or local.
"Liabilities" has the meaning set forth in Section 2.2
of this Agreement.
"Mediator" means the firm of KPMG Peat Marwick LLP or
if such firm declines to perform the functions of the Mediator
specified in this Agreement, then another firm of certified
public accountants mutually agreeable to Seller and Buyer.
"Overdrafts" means those overdrafts of the book balance
of any Deposit Accounts which are not subject to Cash Reserve
Lines of Credit.
"Person" means an association, a corporation, an
individual, a partnership, a trust or any other entity or
organization, including a Governmental Entity.
"Real Property" means the land (including the
improvements thereon) owned by Seller on which any Branch is
located.
"Retirement Plans" means those non-discretionary individual
retirement accounts and qualified retirement plan accounts
relating to the Deposits for which Seller acts as custodian or
trustee.
"Training Expenses" means the overtime and out-of-
pocket expenses (meals and mileage) incurred by Seller as a
result of Buyer's training schedule prior to Closing.
"Welfare Benefit Plans" means those Benefit Plans which
are "welfare benefit plans" as defined by ERISA.
II. PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES
2.1 Purchase of Assets.
Subject to the terms and conditions of this Agreement,
Seller agrees to sell, assign and transfer possession of and all
right, title and interest of Seller in and to the following assets
to Buyer (the "Assets") and Buyer agrees to purchase the same from
Seller, as of the close of business on the Closing Date:
(a) the Real Property;
(b) the Fixed Assets;
(c) cash on hand in the Branch;
(d) the Cash Reserve Loans;
(e) the Overdrafts; and
(f) Seller's rights under the Cash Reserve Lines of
Credit and any safe deposit box rental agreements relating
to safe deposit boxes located at the Branch.
2.2 Assumption of Liabilities.
Buyer agrees to assume, pay, perform and discharge the
following liabilities of Seller (the "Liabilities") as of the
close of business on the Closing Date:
(a) the Deposits and all terms and agreements relating
to the Deposit Accounts;
(b) Seller's duties and responsibilities relating to
the Deposits with respect to: (i) the abandoned property
laws of any state, (ii) any legal process which is served on
Seller on or before the Closing Date with respect to claims
against or for the Deposits that is not against Seller over
and above the amount of the Deposits; or (iii) any other
applicable law;
(c) Seller's duties and responsibilities with respect
to the Cash Reserve Lines of Credit;
(d) Seller's duties and responsibilities with respect
to the safe deposit boxes located at the Branch; and
(e) Seller's duties and responsibilities with respect
to the Retirement Plans.
Buyer shall not assume any other liabilities of Seller
which relate to or arise out of the operation of the Branch
before the Closing Date.
2.3 Transfer of Records.
(a) At the Closing, Seller also shall transfer to
Buyer possession and all right, title and interest of Seller
in and to all books and records relating to the Assets and
the Liabilities which are maintained at the Branch.
(b) All books and records relating to the Assets and
the Liabilities held by either Seller or Buyer after the
Closing Date shall be maintained in accordance with (and for
the period provided in) that party's standard recordkeeping
policies and procedures. Throughout such period, the party
holding such books and records shall comply with the
reasonable request of the other party to provide copies of
specified documents, at the expense of the requesting party.
The requesting party shall give reasonable notice of any
such request.
2.4 Tax Matters.
(a) Notwithstanding Section 2.5, Buyer shall pay to
Seller or the relevant taxing jurisdiction (as appropriate
under the circumstances), or reimburse Seller if Seller
shall have paid, any sales and use taxes and any interest
and penalties thereon which are payable or arise as a result
of this Agreement or the consummation of any of the
transactions contemplated by this Agreement.
(b) Notwithstanding Section 2.5, Buyer shall pay to
Seller or the relevant taxing jurisdiction (as appropriate
under the circumstances), or reimburse Seller if Seller
shall have paid, any real property transfer, recording and
similar documentary taxes arising out of the transfer of the
Real Property and the Fixed Assets.
2.5 Proration of Certain Expenses.
Subject to the provisions of Section 2.4, all rentals,
real estate taxes, personal property taxes (tangible or
intangible), and utility, water and sewer charges and
assessments, as well as semiannual assessments paid to the Bank
Insurance Fund or the Savings Association Insurance Fund with
respect to the Deposits, shall be prorated between Buyer and
Seller as of the close of business on the Closing Date.
2.6 Back Office Conversion.
Seller and Buyer shall cooperate with each other and
shall use their reasonable best efforts (consistent with their
internal day-to-day operations) in order to cause the timely
transfer of information concerning the Assets and the Liabilities
which is maintained on Seller's data processing systems so that
Buyer can incorporate such information into Buyer's data
processing systems no later than the opening of business on the
Business Day following the Closing Date.
2.7 Processing of Certain Items After Closing.
A draft of the written practices and procedures under
which Buyer and Seller shall handle all items (including, for
example, automated clearing house and electronic funds transfer
items) relating to the Assets and the Liabilities, which are
presented or returned following the Closing Date, and any claims
relating to such items are attached to this Agreement as Exhibit
A, including certain other matters relating to consummation of
the transactions contemplated hereby (the "Working Agreement").
As promptly as practicable following the execution of this
Agreement, the parties agree to finalize the Working Agreement.
2.8 Information Returns.
Buyer shall file all required information returns with
the Internal Revenue Service with respect to interest paid on the
Deposits after the Closing Date, interest received on the Cash
Reserve Loans after the Closing Date, and any other information
returns required with respect to the Assets and the Liabilities
for the periods beginning after the Closing Date. Seller will
file all required information returns with the Internal Revenue
Service and any information returns required by state or local
tax authorities with respect to interest paid on the Deposits on
or before the Closing Date, interest received on the Cash Reserve
Loans on or before the Closing Date, and any other information
returns required with respect to the Assets and the Liabilities
for periods ending on or before the Closing Date.
III. CONSIDERATION
3.1 Calculation.
In consideration of Buyer's purchase of the Assets and
its assumption of the Liabilities, Seller agrees to pay to Buyer
an amount equal to the Deposits, plus accrued interest thereon,
less the sum of the following, in each case calculated as of the
close of business on the Closing Date:
(a) $6,158.00, representing the purchase price of the
Fixed Assets;
(b) $235,666, representing the purchase price of the
Real Property and the Building;
(c) the principal amount of the Cash Reserve Loans,
plus accrued interest thereon;
(d) the amount of cash on hand at the Branch;
(e) the principal amount of the Overdrafts;
(f) the net amount (which may be a negative amount) of
taxes payable by Buyer and Seller under Section 2.4 (i.e.,
the amount payable by Buyer less the amount payable by
Seller);
(g) the net amount (which may be a negative amount) of
any adjustments under Section 2.5 (i.e., the amount payable
by Buyer less the amount payable by Seller);
(h) an amount equal to 10.1 percent of the average of
the Deposits for the last 30 days preceding Closing Date;
(the "Amount of Premium")
(i) the Training Expenses; and
(j) the Conversion Expenses (which are payable under
Section 3.3 rather than by way of the Settlement payment or
the Adjustment Payment).
3.2 Settlement.
(a) Not later than the Saturday following the Closing
Date, Seller shall deliver to Buyer the Closing Statement
prepared in accordance with Seller's customary practices and
procedures used in preparing financial statements,
substantially in the form of Exhibit B to this Agreement,
which shall be completed as of the close of business on the
Friday before the Closing Date and be the basis of the
payment to be made to Buyer's account on the Monday
following the Closing Date (the "Settlement Payment").
(b) The parties shall cooperate in the preparation of
the Adjusted Closing Statement within 30 days after the
Closing Date which shall be prepared in accordance with
Seller's customary practices and procedures used in
preparing financial statements, substantially in the form of
Exhibit C to this Agreement, which shall be completed as of
the close of business on the Closing Date. On the Business
Day after Buyer and Seller agree to the Adjusted Closing
Statement, or Buyer and Seller receive notice of any
determination of the Adjusted Closing Statement under
subsection (c) (the "Adjusted Settlement Date"), Seller
shall pay to Buyer (or Buyer shall pay to Seller, as the
case may be) an amount (the "Adjustment Payment") equal to
the amount due stated on the Adjusted Closing Statement,
plus interest from the day after the Closing Date until the
calendar day before the Adjustment Payment is made at a
rate per annum (calculated daily based on a 360-day year)
equal to the Federal Funds Rate.
(c) If the parties are unable to agree on the Adjusted
Closing Statement within 30 days after the Closing Date,
either party may submit the matter to the Mediator, which
shall determine all disputed portions of the Adjusted
Closing Statement in accordance with the terms and
conditions of this Agreement within 30 days after the
submission. The parties shall each pay half of the fees and
expenses of the Mediator, except that the Mediator may
assess the full amount of its fees and expenses against
either party if it determines that party negotiated the
Adjusted Closing Statement in bad faith. The Adjusted
Closing Statement, as agreed upon by the parties and/or
determined under this subsection, shall be final and binding
upon the parties.
(d) The Settlement Payment and the Adjustment Payment
shall each be made by wire transfer of immediately available
funds to the account of the party receiving the payment,
which account shall be identified by the party receiving the
funds to the other party not less than two Business Days
prior to such payment.
3.3 Payment of Conversion Expenses.
(a) Buyer hereby agrees to pay to Seller a
nonrefundable fee (except as provided below) in the amount
of $50,000 for each Branch to be acquired hereunder in
consideration of Seller's expenses relating to the
conversion of Seller's back office system to that of Buyer
(the "Conversion Expenses"). The Conversion Expenses shall
be payable by wire transfer of immediately available funds
by the close of business on the Friday preceding the 30th
calendar day before the Closing Date.
(b) Any Conversion Expenses paid by Buyer shall be
refundable to Buyer only upon the termination of this
Agreement by Buyer pursuant to Section 10.1(a).
IV. SELLER'S REPRESENTATIONS AND WARRANTIES
Seller makes the following representations and warranties
to Buyer.
4.1 Power and Authority.
(a) Seller has the corporate power and authority to
enter into and perform this Agreement. The execution and
delivery of this Agreement has been duly authorized by all
necessary corporate action by Seller. Upon execution and
delivery by both parties, this Agreement will constitute a
valid and binding obligation of Seller, enforceable in
accordance with its terms, subject to conservatorship,
receivership, and a court's right under general principles
of equity to refuse to direct specific performance.
(b) The performance of this Agreement by Seller will
not violate any provision of the Articles of Association or
Bylaws of Seller, or any applicable law, rule, regulation,
or order or any contract or instrument by which Seller is
bound, except for such violations which alone, or taken in
the aggregate, would not reasonably be expected to have a
material adverse effect on the financial condition, business
or operations of the Branch, or the consummation of the
transactions contemplated by this Agreement (a "Seller
Material Adverse Effect").
4.2 Litigation and Regulatory Proceedings.
There are no actions, complaints, petitions, suits or
other proceedings, or any decree, injunction, judgment, order or
ruling, entered, promulgated or pending or (to Seller's
knowledge) threatened against Seller or any of the Assets or the
Liabilities, which alone, or taken in the aggregate, reasonably
would be expected to have a Seller Material Adverse Effect. No
governmental agency has notified Seller that it would oppose or
not approve or consent to the transactions contemplated by this
Agreement and Seller knows of no reason for any such opposition,
disapproval or nonconsent.
4.3 Consents and Approvals.
Except for required regulatory approvals, no consents,
approvals, filings or registrations with any third party or any
public body, agency or authority are required in connection with
Seller's consummation of the transactions contemplated by this
Agreement, other than any required lessor consents to the
assignment of the Real Property Leases and as may be required as
a result of any facts or circumstances relating solely to Buyer.
4.4 Real Property.
(a) Schedule 4.4 contains a list of all the Real
Property.
(b) Seller owns and has and will convey to Buyer at
Closing good and marketable and insurable fee simple title
to the Real Property, free and clear of all liens, claims,
options, leases, charges, assessments, covenants,
restrictions, easements, encroachments and other title
defects and encumbrances, except for easements and
restrictions of record, applicable zoning laws, and liens
for taxes and assessments not delinquent.
4.5 Fixed Assets.
Seller has good and marketable title to the Fixed
Assets, free and clear of all encumbrances, claims, charges,
security interests, or liens, if any, which do not materially
detract from the value of or interfere with the use of the Fixed
Assets.
4.6 Ownership of Cash Reserve Loans.
Seller has full power and authority to hold each Cash
Reserve Loan, and has good title to the Cash Reserve Loans free
and clear of all liens and encumbrances. Seller is authorized to
sell and assign the Cash Reserve Loans to Buyer and, upon such
assignment, Buyer will have the rights of Seller with respect to
the Cash Reserve Loans in accordance with the terms and
conditions thereof.
4.7 Validity of and Compliance with Real Property Leases.
The Real Property Leases are valid and existing leases
under which Seller, as lessee, is entitled to possession of the
leased premises. To Seller's knowledge, no event has occurred
and is continuing, which constitutes a default under any of the
Real Property Leases. Subject to Seller obtaining any necessary
landlord consents, the assignment of such leases will transfer to
Buyer all of Seller's rights under the Real Property Leases.
4.8 Compliance with Certain Laws.
The Deposit Accounts and the Cash Reserve Lines of
Credit were opened, extended or made, and have been maintained,
in accordance with all applicable federal and state laws,
regulations, rules and orders, and the Branch has been operated
in compliance with Seller's policies and procedures and all
applicable federal and state laws, regulations, rules and orders,
except for such instances of noncompliance which do not have, and
are not reasonably likely to have, a Seller Material Adverse
Effect.
4.9 FDIC Insurance.
The Deposits are insured by the Federal Deposit
Insurance Corporation through the Bank Insurance Fund and the
Savings Association Insurance Fund to the extent permitted by
law, and all premiums and assessments required to be paid in
connection therewith have been paid when due by Seller.
V.BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer makes the following representations and warranties
to Seller.
5.1 Power and Authority.
(a) Buyer has the corporate power and authority to
enter into and perform this Agreement. The execution and
delivery of this Agreement has been duly authorized by all
necessary corporate action by Buyer. Upon execution and
delivery by both parties, this Agreement will constitute a
valid and binding obligation of Buyer, enforceable in
accordance with its terms subject to conservatorship,
receivership, and a court's right under general principles
of equity to refuse to direct specific performance.
(b) The performance of this Agreement by Buyer will
not violate any provision of the Articles of Association,
Bylaws or similar governing documents of Buyer, or any
applicable law, rule, regulation, or order or any contract
or instrument by which Buyer is bound except for such
violations which alone, or taken in the aggregate, would not
reasonably be expected to have a material adverse effect on
the consummation of the transactions contemplated by this
Agreement (a "Buyer Material Adverse Effect").
5.2 Litigation and Regulatory Proceedings.
There are no actions, complaints, petitions, suits or
other proceedings, or any decree, injunction, judgment, order or
ruling, entered, promulgated or pending or (to Buyer's knowledge)
threatened against Buyer or any of its properties or assets which
alone, or taken in the aggregate, reasonably would be expected to
have a Buyer Material Adverse Effect. No governmental agency has
notified Buyer that it would oppose or not approve or consent to
the transactions contemplated by this Agreement, and Buyer knows
of no reason for any such opposition, disapproval or nonconsent.
5.3 Consents and Approvals.
Except for required regulatory approvals, no consents,
approvals, filings or registrations with any third party or any
public body, agency or authority are required in connection with
Buyer's consummation of the transactions contemplated by this
Agreement other than what may be required as a result of any
facts or circumstances relating solely to Seller.
VI. ADDITIONAL AGREEMENTS OF SELLER
6.1 Access to Seller's Premises, Records and Personnel.
(a) Upon execution of this Agreement, Seller shall
give Buyer and its representatives such access to the Branch
as Buyer may reasonably request, provided that Buyer does
not unreasonably interfere with the Branch's business
operations. Seller shall not be required to provide access
to or to disclose information where such access or
disclosure might violate or prejudice the rights of any
customer or employee or would be contrary to law, rule,
regulation or any legal or regulatory order or process or
any fiduciary duty or binding agreement entered into prior
to the date of this Agreement.
(b) Anything contained in this Agreement to the
contrary notwithstanding, Seller shall not be required to
disclose, or to cause the disclosure to Buyer or its
representatives (or provide access to any offices,
properties, books or records of Seller, that could result in
the disclosure to such Persons or others), of any tax
returns and/or any work papers relating thereto or any other
confidential information relating to income or franchise
taxes or other taxes of Seller, or trade secrets, patent or
trademark applications, or product research and development
belonging to or performed by or for Seller, nor shall Seller
be required to permit or to cause others to permit Buyer or
its representatives to copy or remove from the offices or
properties of Seller any documents, drawings or other
materials that might reveal any such confidential
information; provided, however, Buyer shall have access to
tax returns to the extent that liability for the taxes at
issue could be imposed on Buyer.
(c) At Buyer's request, Seller shall authorize and
permit certain of its officers and members of management to
engage in discussions with Buyer for the purposes of
discussing the Branch's business and negotiating and
concluding management employment contracts, employee benefit
plans, and new incentive plans and Buyer shall maintain the
confidentiality of any information furnished by such
officers or members of management of Seller pursuant to such
discussions with Buyer.
6.2 Matters Relating to Branch Closing.
In the event that Buyer intends to close the Branch on
the Closing Date or before ninety (90) days thereafter, Buyer and
Seller agree to the following:
(a) Subject to subsection (b), Seller and Buyer shall
prepare Branch closing notices to Seller's customers, to be
mailed by Seller at Buyer's request and expense, at such
time as shall be mutually agreed upon between Buyer and
Seller. Seller and Buyer also shall prepare another notice
to Seller's customers, to be mailed by Seller at Buyer's
request and expense, of Buyer's impending acquisition of the
Branch within ten Business Days following Seller's receipt
of notice that Buyer has obtained any and all required
regulatory approvals for the transactions contemplated by
this Agreement or such earlier date as Seller and Buyer may
mutually agree upon. After Seller mails this notice, Buyer
shall be permitted to provide to Seller material to be sent,
at Buyer's expense, to the depositors, borrowers and other
customers of the Branch concerning the proposed acquisition
and Buyer's products. Each party's communication shall be
subject to the approval of the other party, which approval
shall not be unreasonably withheld.
(b) Unless Buyer shall certify in writing at the time
that (x) Buyer is not aware of the occurrence of any event
or condition, which, if not corrected, would be reasonably
expected to result in the failure of any condition to
Closing under Sections 9.3 or 9.4; (y) Buyer has no reason
to believe that any regulatory approval required under
Section 9.3(a) will not be forthcoming, and (z) no challenge
has been threatened or filed and is pending with respect to
any such regulatory approval:
(i) Buyer shall not take any action with respect
to the Branch which would require that notices be
posted or provided to customers or regulators, as
required by 12 U.S.C. Section 1831r-1, on or prior to
the Closing Date; and
(ii) Seller shall not be required to participate
in the closing of any Branch or in any notice to
customers relating to such a closing.
6.3 Regulatory Approvals.
Seller agrees to use its reasonable best efforts to
obtain promptly any regulatory approval on which its consummation
of the transactions contemplated by this Agreement is
conditioned. Seller also agrees to cooperate with Buyer in
obtaining any regulatory approval which Buyer must obtain before
the Closing. Seller shall notify Buyer promptly of any
significant development with respect to any application it files
under this Section. Seller also shall provide Buyer with a copy
of any regulatory approval it receives under this Section,
promptly after Seller's receipt of the same.
6.4 Conduct of Business.
Except as provided in this Agreement or as may
otherwise be agreed upon by Buyer, Seller will continue to carry
on the business at the Branch until the Closing in the ordinary
course of business, consistent with prudent business practices.
Seller shall not terminate the operation of any Branch, unless
those operations cease due to events beyond Seller's control.
Seller will notify Buyer of any event of which Seller obtains
knowledge which would make any of Seller's representations under
Article IV of this Agreement false in any material respect.
VII. ADDITIONAL AGREEMENTS OF BUYER
7.1 Regulatory Approvals.
Buyer agrees to use its reasonable best efforts to
obtain promptly any regulatory approval on which its consummation
of the transactions contemplated by this Agreement is
conditioned. Buyer also agrees to cooperate with Seller in
obtaining any regulatory approval which Seller must obtain before
the Closing. Buyer shall notify Seller promptly of any
significant development with respect to any application it files
under this Section. Buyer also shall provide Seller with a copy
of any regulatory approval it receives under this Section,
promptly after Buyer's receipt of the same.
7.2 Change of Name, Etc.
Immediately after the Closing, Buyer will (a) change
the name and logo on all documents and facilities relating to the
Assets and the Liabilities to Buyer's name and logo, (b) notify
all persons whose Cash Reserve Loans or Deposits are transferred
under this Agreement of the consummation of the transactions
contemplated by this Agreement, and (c) provide all appropriate
notices to the Federal Deposit Insurance Corporation and any
other regulatory authorities required as a result of the
consummation of such transactions. Buyer agrees not to use any
forms or other documents bearing Seller's name or logo after the
Closing without the prior written consent of Seller, and, if such
consent is given, Buyer agrees that all such forms or other
documents to which such consent relates will be stamped or
otherwise marked in such a way that identifies Buyer as the party
using the form or other document. As soon as practicable and, in
any event, within seven calendar days after the Closing Date,
Buyer will issue new checks reflecting its transit and routing
number to customers of the Branch with check writing privileges.
Buyer shall use its best efforts to encourage these customers to
begin using such checks and cease using checks bearing Seller's
name.
7.3 Real Property.
Except as expressly set forth herein, Buyer hereby
acknowledges and agrees that: (i) Buyer is expressly purchasing
the Real Property in its existing condition "AS IS, WHERE IS, AND
WITH ALL FAULTS" with respect to any facts, circumstances,
conditions and defects; (ii) Seller has no obligation to repair
or correct any such facts, circumstances, conditions or defects
or to compensate Buyer for same; (iii) Seller has specifically
bargained for the assumption by Buyer of all responsibility to
inspect and investigate the Real Property and of all risk of
adverse conditions; and (iv) Buyer has or will have prior to the
Closing undertaken all such physical inspections and examinations
of the Real Property as Buyer deems necessary or appropriate as
to the condition of the Real Property. Except as expressly set
forth herein, Buyer acknowledges that Seller has made no
representations or warranties and shall have no liability to
Buyer (and Buyer hereby waives any right to recourse against
Seller) with respect to the conditions of the soil, the existence
or nonexistence of hazardous substances, any past use of the Real
Property, the economic feasibility of the Real Property, or the
Real Property's compliance or noncompliance with all laws, rules
or regulations affecting the Real Property.
VIII. SELLER'S EMPLOYEES
8.1 Transferred Employees.
(a) Buyer will offer to employ all of Seller's
employees who are employed at the Branch on the Closing
Date. From and after the Closing Date, Buyer shall provide
the employees of Seller who are offered employment with
Buyer, and who accept such employment with a salary or
hourly wage comparable to that earned by them at the time of
the Closing. (Such employees who become employees of Buyer
after the Closing shall be referred to as "Transferred
employees.")
(b) Seller is responsible for the filing of Forms W-2
with the Internal Revenue Service and any required filing
with state tax authorities, with respect to wages and
benefits paid to each Transferred Employee for periods
ending on or prior to the Closing Date.
8.2 Employee Benefits.
(a) (i) Following the Closing, Buyer shall not have any
liability or obligation under any Benefit Plans or any other
program or arrangement of Seller or an ERISA Affiliate
thereof under which any current or former employee of Seller
or any of its Affiliates has any right to any benefits;
(ii) Upon the Closing, the participation of
Transferred Employees in the Benefit Plans shall cease in
accordance with the terms of such plans; and
(iii) With respect to the Transferred Employees,
Seller shall be responsible for any welfare benefits or
claims which, by reason of events which take place on or
prior to the Closing Date, become payable under the terms of
any Welfare Benefit Plan. With respect to Transferred
Employees, Buyer shall be responsible for any welfare
benefits or claims which become payable by reason of events
that take place after the Closing Date.
(b) (i) From and after the Closing Date, Buyer shall
provide the Transferred Employees with the employee
benefits, if any, provided to employees of Buyer and its
Affiliates, subject to the terms of Buyer's benefit plans;
(ii) Buyer will grant for purposes of vacation
benefits, severance pay and all welfare benefit plans (as
defined in ERISA) past service credit to all Transferred
Employees for periods of time credited to such Transferred
Employees under the Welfare Benefit Plans. To the extent
that any Transferred Employee has satisfied in whole or in
part any annual deductible under a Welfare Benefit Plan, or
has paid any out-of-pocket expenses pursuant to any Welfare
Benefit Plan co-insurance provision, such amount shall be
counted toward the satisfaction of any applicable deductible
or out-of-pocket expense maximum, respectively, under the
benefit plans and programs provided to Transferred Employees
by Buyer, and such plans and programs shall be applied
without regard to any limitations relating to preexisting
conditions or required physical examinations that would not
otherwise apply under the respective Welfare Benefit Plans
to the extent that such Transferred Employees are covered by
the Welfare Benefit Plans on the Closing Date;
(iii) Buyer shall take whatever action is necessary,
including amendment of its defined contribution pension
plan, to grant to each Transferred Employee past service
credit for all purposes (including any waiting period) under
Buyer's defined contribution pension plan for all periods of
service credited to each such Transferred Employee under the
Seller's defined contribution pension plan. Within 45 days
after the Closing Date, Seller shall provide to Buyer such
information as Buyer reasonably requires to establish the
service for the Transferred Employees credited under the
Seller's defined contribution pension plan; and
(iv) Buyer will grant to each Transferred Employee
past service credit for service which has been granted under
Seller's defined benefit pension plan, for all purposes,
other than benefit accrual, under Buyer's defined benefit
pension plan.
8.3 Training.
Seller shall permit Buyer to train the Transferred
Employees before Closing with regard to Buyer's operations,
policies and procedures at Buyer's sole cost and expense. This
training shall take place outside of business hours and may, at
Seller's option, take place at the Branch.
IX. CLOSING AND CONDITIONS TO CLOSING
9.1 Time and Place of Closing.
The Closing shall be on a date mutually agreed upon by
the parties (the "Closing Date") which shall be on a Friday and
shall be no more than 60 days after the last regulatory approval
necessary for the Closing has been obtained (without regard to
any statutory waiting periods following such approval). The
Closing shall take place at Seller's offices located at One First
Union Center, Charlotte, North Carolina, at 10:00 a.m. on the
Closing Date, or at a time and place otherwise determined by
mutual agreement of the parties.
9.2 Exchange of Closing Documents.
The parties shall exchange drafts of all documents to
be delivered at the Closing (other than the Closing Statement) at
least ten Business Days prior to the Closing Date.
9.3 Buyer's Conditions to Closing.
Buyer's obligations to purchase the Assets and assume
the Liabilities is contingent upon and subject to the fulfillment
of the following conditions in all material respects:
(a) the parties obtaining all regulatory approvals
which are required in order for them to proceed with the
transactions contemplated by this Agreement and the
expiration of any required waiting period without the
commencement of adverse proceedings by any governmental
authority with jurisdiction over the transactions
contemplated by this Agreement;
(b) each representation and warranty of Seller in this
Agreement being true and correct in all material respects as
of the Closing Date and all covenants and conditions of
Seller to be performed or met by Seller on or before the
Closing Date having been performed or met in all material
respects;
(c) Seller's delivery to Buyer of the following
documents in form and substance reasonably satisfactory to
Buyer:
(i) special warranty deeds conveying the Real
Property;
(ii) bills of sale, assignments and other
instruments of transfer sufficient to convey to Buyer
all of Seller's right, title, and interest in and to
the remaining Assets;
(iii) a certificate executed by an appropriate
officer of Seller attesting, to the officer's best
knowledge, to Seller's compliance with the conditions
set forth in Section 9.3(b); and
(iv) estoppel certificates executed by the lessors
of the Leased Branch; and
(d) Buyer's agreement to receive the Closing Statement
and the Settlement Payment as provided in Section 3.2.
9.4 Seller's Conditions to Closing.
Seller's obligation to sell the Assets and transfer the
Liabilities to Buyer is contingent upon and subject to the
fulfillment of the following conditions in all material respects:
(a) the parties obtaining all regulatory approvals
which are required in order for them to proceed with the
transactions contemplated by this Agreement and the
expiration of any required waiting period without the
commencement of adverse proceedings by any governmental
authority with jurisdiction over the transactions
contemplated by this Agreement;
(b) each representation and warranty of Buyer in this
Agreement being true and correct in all material respects as
of the Closing Date and all covenants and conditions of
Buyer to be performed or met by Buyer on or before the
Closing Date having been performed or met in all material
respects;
(c) Buyer's delivery to Seller of the following
documents in form and substance reasonably satisfactory to
Seller:
(i) one or more executed assumptions of the Real
Property Leases;
(ii) one or more executed instruments assuming the
remaining Liabilities; and
(iii) a certificate executed by an appropriate
officer of Buyer attesting, to the officer's best
knowledge, to Buyer's compliance with the conditions
set forth in Section 9.4(b); and
(d) Buyer's payment of the Conversion Expenses as
provided in Section 3.3.
9.5 Survival of Representations and Warranties.
Unless provided otherwise in this Agreement, Buyer's
and Seller's representations and warranties under this Agreement
or contained in any certificate or instrument delivered by either
party at the Closing shall survive for a period of one year
following the Closing Date.
X. TERMINATION
10.1 Termination by Either Party.
Either party may terminate this Agreement upon written
notice to the other if:
(a) as a result of any breach of any representation,
warranty or covenant, the party terminating this Agreement
has given the other party written notice of such breach and
such breach is not cured within 30 days thereafter;
(b) the Closing does not occur within two hundred
seventy (270) days after the date of this Agreement; or
(c) the other party so agrees in writing.
The termination of this Agreement under subsection (a)
shall not absolve the breaching party from any liability to the
other party arising out of its breach of this Agreement.
XI.MISCELLANEOUS
11.1 Continuing Cooperation.
(a) On and after the Closing Date, Seller agrees to
execute, acknowledge and deliver such documents and
instruments as Buyer may reasonably request to vest in Buyer
the full legal and equitable title to the Assets and
Liabilities.
(b) On and after the Closing Date, Buyer shall
execute, acknowledge and deliver such documents and
instruments as Seller may reasonably request to relieve and
discharge Seller from its obligations with respect to the
Liabilities.
(c) Seller and Buyer shall cooperate with each other
in connection with any examination conducted by any tax
authority subsequent to the Closing Date by promptly
providing upon request information relating to the tax
liability of any business operated by Seller or Buyer with
respect to the Branch and promptly informing the other of
the institution of, any material developments concerning,
and the outcome of, the same.
(d) Except as provided in Section 7.2, no interest in
or right to use First Union National Bank of North
Carolina's logo or the name "First Union" or any other
similar word, name, symbol or device in which Seller has any
interest by itself or in combination with any other word,
name, symbol or device, or any similar variation of any of
the foregoing (collectively, the "Retained Names and Marks")
is being transferred to Buyer pursuant to the transactions
contemplated hereby. Unless permitted pursuant to Section
7.2, Buyer shall not after the Closing Date in any way
knowingly use any materials or property, whether or not in
existence on the Closing Date, that bear any Retained Name
or ▇▇▇▇. Buyer agrees that Seller shall have no
responsibility for claims by third parties arising out of,
or relating to, the use by the Buyer of any Retained Name or
▇▇▇▇ after the Closing Date, and Buyer agrees to indemnify
and hold harmless Seller from any and all claims (and all
expenses, including reasonable attorneys' fees and
disbursements incurred in connection with any such claim)
that may arise out of the use thereof by Buyer.
11.2 Merger and Amendment.
This Agreement sets out the complete agreement of the
parties with respect to the matters discussed in this Agreement,
and it supersedes all prior agreements between the parties,
whether written or oral, which apply to these matters. No
provision of this Agreement may be changed or waived except as
expressly stated in a document executed by both parties.
11.3 Dispute Resolution.
(a) Neither Seller nor Buyer shall assert any claim
arising out of or relating to this Agreement (except with
respect to claims to be handled under the Working Agreement
or submitted to the Mediator under Section 3.2(c)), unless:
(i) except for claims arising under or in respect
of Sections 2.4, 2.5 or 11.1(d), the amount in dispute
with respect to any claim exceeds $5,000.00;
(ii) except for claims arising in respect of
Sections 2.4, 2.5 or 11.1(d), the aggregate amount of
all claims by Buyer or Seller (as the case may be)
which satisfy the preceding clause exceeds $25,000.00,
in which case a claim may be asserted only to the
extent that such threshold has been exceeded;
(iii) except for claims arising under Sections
2.4, 2.5, or 11.1(d), the aggregate amount of all
claims by Buyer or Seller (as the case may be) shall
not exceed the Amount of Premium; and
(iv) except for claims arising under Sections 2.4,
2.5 or 11.1(d), the notification required by Section
11.3(b) (if any) is given on or before the first
anniversary of the Closing Date.
(b) The parties shall attempt in good faith to resolve
any dispute arising out of or relating to this Agreement
promptly by negotiations, as provided in this subsection
(b). Either party may give the other party written notice
of any dispute not resolved in the normal course of
business. Executives of both parties at comparable levels
at least one step above the personnel who have previously
been involved in the dispute shall meet at a mutually
acceptable time and place within ten days after delivery of
such notice, and thereafter as often as they reasonably deem
necessary, to exchange relevant information and to attempt
to resolve the dispute. If the matter has not been resolved
by these persons within 30 days of the disputing party's
notice, or if the parties fail to meet within ten days, the
dispute shall be referred to more senior executives of both
parties who have authority to settle the dispute and who
shall likewise meet to attempt to resolve the dispute. All
negotiations under this subsection (b) are confidential and
shall be treated as compromise and settlement negotiations
for purposes of the Federal Rules of Evidence, applicable
state rules of evidence, and common law. The procedures set
forth above will be followed in advance of litigation of any
dispute between the parties; nevertheless, either party may
seek a preliminary injunction or other provisional judicial
relief if in its judgment such an action is necessary to
avoid irreparable damage or to preserve the status quo.
Despite any such action, the parties will continue to
participate in good faith in the procedures set forth in
this subsection (b).
(c) Neither party shall have any liability for lost
profits or punitive damages with respect to any claim
arising out of or relating to this Agreement. The sole
recourse and remedy of a party hereto for breach of this
Agreement by the other party hereto shall be against such
other party and its assets, and no officer, director,
employee, stockholder or affiliate of any party shall be
liable at law or in equity for the breach by such party of
any of its obligations under this Agreement.
11.4 Counterparts.
This Agreement may be executed in any number of
counterparts, each of which will constitute an original, but all
of which taken together shall constitute one and the same
instrument.
11.5 Exhibits and Schedules.
All exhibits and schedules referred to in this
Agreement shall constitute a part of this Agreement.
11.6 Assignment.
This Agreement is not assignable by either party
without the written consent of the other party, which shall not
be unreasonably withheld.
11.7 Headings.
The headings contained in this Agreement are inserted
for convenience only and shall not affect the meaning of this
Agreement or any of its provisions.
11.8 Notices.
Any notice under this Agreement shall be made in
writing and shall be deemed given when delivered in person, when
delivered by first class mail postage prepaid (in which case the
notice shall be deemed given on the third Business Day following
the date on which the notice is postmarked), or when delivered by
facsimile transmission, which transmission also shall be sent by
first class mail, postage prepaid before the second Business Day
following the transmission (in which case the notice shall be
deemed given on the day transmitted if transmitted before or
during normal business hours or, otherwise, on the next
succeeding Business Day) to the parties at the respective
addresses set forth below or at such other addresses as each
party shall inform the other in writing.
If to Seller to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Financial Officer
First Union National Bank of
North Carolina
One First Union Center, NC-0159
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Senior Vice President
and Deputy General Counsel
First Union Corporation
One First Union Center, ▇▇▇-▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
If to Buyer to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
First Bank
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
11.9 Expenses.
Unless specifically stated to the contrary in this
Agreement, each party will assume and pay for the expenses it
incurs with respect to the purchase and sale of the Assets and
assumption of the Liabilities under this Agreement; provided,
however, that Buyer shall pay all fees and expenses associated
with the regulatory application process. Each party shall be
responsible for any fee payable to any agent, broker or finder
acting on its behalf in this transaction.
11.10 Public Announcements.
Each party shall consult with the other before making
any announcement or other public communication with respect to
the transactions contemplated by this Agreement and shall furnish
a copy of the text to the other party of the announcement or
other communication.
11.11 Governing Law; Jurisdiction.
This Agreement and the legal relations between the
parties shall be governed by and construed in accordance with the
laws of the State of North Carolina applicable to contracts made
and to be performed entirely within the State of North Carolina.
11.12 No Third Party Beneficiaries.
The parties intend that this Agreement shall not
benefit or create any right or cause of action in or on behalf of
any Person other than Seller and Buyer.
IN WITNESS WHEREOF, each of the parties to this Agreement
has caused this Agreement to be executed by a duly authorized
officer as of the date written on page one of this Agreement.
FIRST BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President & CEO
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Vice President