EXHIBIT (2)-2
Branch Purchase and Assumption Agreement
between
THE BANK
and
TRUSTMARK NATIONAL BANK
Dated as of June 18, 2003
TABLE OF CONTENTS
ARTICLE I
PURCHASE AND ASSUMPTION
1.01 Purchase and Sale of Assets......................................... 1
1.02 Transfer of Assets.................................................. 1
1.03 Acceptance and Assumption........................................... 3
1.04 Payment of Funds.................................................... 5
ARTICLE II
CONDUCT OF THE PARTIES PRIOR TO CLOSING
2.01 Covenants of Seller................................................. 7
2.02 Covenants of Buyer.................................................. 12
2.03 Covenants of All Parties............................................ 13
ARTICLE III
PRESENTATION AND WARRANTIES
3.01 Representations and Warranties of Seller............................ 13
3.02 Representations and Warranties of Buyer............................. 17
3.03 Disclosure Schedules................................................ 18
3.04 Standard............................................................ 18
ARTICLE IV
ACTIONS RESPECTING EMPLOYEES AND EMPLOYEE BENEFIT PLANS
4.01 Employment of Employees............................................. 19
4.02 Terms and Conditions of Employment.................................. 19
4.03 Actions to be Taken by Seller....................................... 21
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
5.01 Conditions to Seller's Obligations.................................. 22
5.02 Conditions to Buyer's Obligations................................... 23
5.03 Non-Satisfaction of Conditions Precedent............................ 24
ARTICLE VI
CLOSING
6.01 Closing and Closing Date............................................ 25
6.02 Seller's Actions at Closing......................................... 25
6.03 Buyer's Actions at Closing.......................................... 26
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6.04 Methods of Payment.................................................. 27
6.05 Effectiveness of Closing............................................ 28
ARTICLE VII
CERTAIN TRANSITIONAL MATTERS
7.01 Transitional Action by Buyer........................................ 28
7.02 Transitional Actions by Seller...................................... 30
7.03 Overdrafts and Transitional Action.................................. 32
7.04 ATMs and Debit Cards................................................ 32
7.05 Environmental Matters............................................... 33
7.06 Effect of Transitional Action....................................... 35
ARTICLE VIII
GENERAL CONVENANTS AND IDEMNIFICATION
8.01 Confidentiality Obligations of Buyer................................ 35
8.02 Confidentiality Obligations of Seller............................... 35
8.03 Indemnification by Seller........................................... 36
8.04 Indemnification by Buyer............................................ 36
8.05 Non-Competition..................................................... 37
8.06 No Shop............................................................. 38
8.07 Further Assurances.................................................. 39
8.08 Operation of the Branches........................................... 40
8.09 Information After Closing........................................... 40
8.10 Additional Loans.................................................... 40
8.11 Advisory Directors.................................................. 40
ARTICLE IX
TERMINATION
9.01 Termination by Mutual Agreement..................................... 41
9.02 Termination by Seller............................................... 41
9.03 Termination by Buyer................................................ 41
9.04 Effect of Termination............................................... 42
9.05 Termination Fee..................................................... 42
ARTICLE X
MISCELLANEOUS PROVISIONS
10.01 Expenses............................................................ 42
10.02 Certificates........................................................ 42
10.03 Termination of Representations and Warranties....................... 42
10.04 Waivers............................................................. 43
10.05 Notices............................................................. 43
10.06 Parties in Interest, Assignment, Amendment.......................... 44
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10.07 Headings............................................................ 44
10.08 Terminology......................................................... 44
10.09 Flexible Structure.................................................. 45
10.10 Press Releases...................................................... 45
10.11 Entire Agreement.................................................... 45
10.12 Governing Law....................................................... 46
10.13 Counterparts........................................................ 46
10.14 Allocation Schedule................................................. 46
10.15 Severability........................................................ 46
10.16 Enforcement of Agreement............................................ 46
10.17 Interpretation...................................................... 46
10.18 No Rule of Construction............................................. 47
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BRANCH PURCHASE AND ASSUMPTION AGREEMENT
This Branch Purchase and Assumption Agreement ("Agreement") is entered
into this the 18th day of June, 2003 (the "Effective Date"), by and between
Trustmark National Bank ("Buyer") and The Bank ("Seller").
RECITALS
A. Buyer. Buyer is a national banking association having its principal
place of business in Jackson, Mississippi.
B. Seller. Seller is an Alabama state-chartered banking corporation having
its principal place of business in Birmingham, Alabama.
C. Proposed Transaction. Pursuant to the terms of this Agreement, Buyer
will purchase the Assets (as hereinafter defined) and assume certain Liabilities
(as hereinafter defined) from Seller in exchange for the Consideration (as
hereinafter defined) (the "Acquisition").
D. Board Action. The respective Boards of Directors of each of Buyer and
Seller have each determined that the transaction contemplated hereby is
consistent with, and in furtherance of, their respective business strategies and
goals, and have approved such transaction and believe it to be in the best
interests of their respective companies and their shareholders.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties, and agreements contained herein, Buyer
and Seller agree as follows:
ARTICLE I
PURCHASE AND ASSUMPTION
1.01 Purchase and Sale of Assets. At the Closing, as defined in Section
6.01 (the "Closing"), Buyer shall purchase and acquire, and Seller shall sell
and assign, the real estate and other assets described in Section 1.02
(collectively, the "Assets") all of which are used in and/or relate to business
conducted by Seller at its branch offices known as "The Emerald Coast Bank," a
division of Seller, and located at the sites described in Schedules A and B,
pursuant to the terms and conditions set forth herein and subject to the
exceptions, if any, set forth herein. The foregoing branch offices are
hereinafter sometimes collectively referred to as the "Branches" and each,
individually, sometimes as a "Branch."
1.02 Transfer of Assets. Subject to the terms and conditions of this
Agreement, Seller shall assign, transfer, convey, and deliver to Buyer on the
Closing Date, as defined in Section 6.01 hereof, the Assets, which shall include
the following:
(a) Owned Real Estate. All of Seller's right, title, and interest in
and to the real estate described in Schedule A on which a Branch is
situated or which was being held by Seller for future branch expansion and
located in Okaloosa, ▇▇▇▇▇▇, or Bay Counties, Florida, together with all
of Seller's rights in and to all improvements thereon, and all easements
rights, privileges, and appurtenances associated therewith (the "Owned
Real Estate"). Schedule A shall specifically identify the Owned Real
Estate by street address, legal description, and tax parcel number;
(b) Leased Real Estate. All of Seller's transferable right, title,
and interest in and to the leasehold estate in the real estate described
in Schedule B and created by certain lease agreement(s) (individually and
collectively the "Third Party Lease") relating to the referenced Branches
(the "Leased Real Estate"), specifically identified by lease, parties,
term, street address, legal description, and tax parcel numbers in
Schedule B;
(c) Furniture and Equipment. All of Seller's right, title, and
interest in and to the furniture, fixtures, supplies, and equipment
located and used at the Branches as of the Effective Date (the "Fixed
Assets"), a listing of which is contained in Schedule C, specifically
excluding, among other items, signs and stands, printed supplies and
documents and other materials solely bearing Seller's name and/or logo
(but not excluding signs and stands, printed supplies, and documents, and
other materials bearing the name "The Emerald Coast Bank", its logo or any
derivation thereof), and proprietary software;
(d) Safe Deposit Business. All of Seller's right, title and interest
in and to the safe deposit business (subject to the allocation of safe
deposit rental payments as provided in Section 1.03(c)(ii) hereof)
conducted at the Branches as of the close of business on the Closing Date;
(e) Cash on Hand. All cash on hand at the Branches as of the close
of business on the Closing Date including vault cash, ▇▇▇▇▇ cash, ATM cash
and tellers' cash;
(f) Other Assets. Any other assets (including, but not limited to,
any prepaid expenses), excluding other real estate owned ("ORE"), recorded
or otherwise reflected on the books of Seller as being attributable to the
Branches as of the close of business on the day immediately preceding the
Closing Date, a listing of which is contained in Schedule D but only to
the extent attributable to the Assets sold, assigned or transferred to
Buyer by Seller pursuant to this Agreement and only to the extent arising
by reason of Buyer's use or ownership of such Assets after the close of
business on the Closing Date;
(g) Branch Loans. Except for the loans listed in Schedule E and any
loans refused or rejected by Buyer at Closing (the "Non-Branch Loans"),
all of Seller's right, title and interest in and to all those loans which,
as of the close of business on the Closing Date, are (i) secured in whole
or in part by Deposit Accounts (as hereinafter defined) attributable or
assigned to a Branch (the "Deposit Account Loans"), (ii) commercial or
other loans attributable to a Branch and including the REIT loans (as
defined in Section 2.01(i)) (the "Other Loans"), or (iii) automatically
created as the result of an overdraft of
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a Deposit Account pursuant to a pre-applied overdraft protection program
offered by Seller (the "Overdraft Loans"). The Deposit Account Loans,
Other Loans, and Overdraft Loans sold and assigned to Buyer hereunder will
be listed in Schedule F which will be updated as of the Closing Date
(hereinafter referred to individually and collectively as the "Branch
Loans"). Except as otherwise expressly provided herein, the transfer of
the Branch Loans will be made without recourse, without any
representation, warranty, or guarantee of any kind, express or implied,
and without the allowance or reserve for loan losses reserved by Seller as
of the Effective Date;
(h) Records of the Branches. All records, paper or electronic media,
files, correspondence, and collateral documents related to the Transferred
Employees (as hereinafter defined), Assets transferred, or liabilities
assumed by Buyer as may exist and are available and maintained by the
Seller (in whatever form or medium then maintained by Seller) including,
notes, documents, and instruments evidencing the liens relating to the
Branch Loans;
(i) Contracts or Agreements. All of Seller's right, title and
interest in and to the maintenance and service agreements, including
software licenses or other rights of use, related to the Branches, as
listed on Schedule G (the "Assumed Contracts");
(j) Intellectual Property. All of Seller's right, title, and
interest in and to the names "The Emerald Coast Bank," "Emerald Coast
Bank," and "Emerald Coast," or any derivative thereof;
(k) Insurance Services. All of Seller's right, title, and interest
in and to Seller's insurance services business conducted at the Branches,
including all records, documents, supplies, contracts, customer lists and
records, and other items relating to the insurance customers residing in
Okaloosa, ▇▇▇▇▇▇, and Bay Counties, Florida, except for insurance
customers of Seller's Mexico Beach branch and residing in the area set
forth in Section 8.05(a); and
(l) Other Branch Services. All of Seller's right, title, and
interest in and to all of Seller's other services or businesses provided
by, or related to, the Branches, which services are listed on Schedule H.
1.03 Acceptance and Assumption. Subject to the terms and conditions of
this Agreement, on the Closing Date Buyer shall:
(a) Assets. Receive and accept all of the Assets assigned,
transferred, conveyed and delivered to Buyer by Seller pursuant to this
Agreement, including those identified in Section 1.02 above.
(b) Deposit Liabilities. Assume and thereafter discharge, pay in
full and perform all of Seller's obligations and duties relating to the
"Deposit Liabilities" (as hereinafter defined). The term "Deposit
Liabilities" is defined herein as all of Seller's obligations, duties and
liabilities of every type and character relating to all deposit
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accounts which, as reflected on the books of Seller as of the close of
business on the Closing Date, are attributable to the Branches, other than
deposit accounts securing any loan of Seller which is not a Branch Loan,
for which Buyer assumes no liability. The deposit accounts referred to in
the immediately preceding sentence (herein the "Deposit Accounts")
include, without limitation, savings, checking, money market, and NOW
accounts, individual retirement accounts ("IRA's"), and certificates of
deposit. The "obligations, duties and liabilities" referred to in the
immediately preceding sentence include, without limitation, the obligation
to pay and otherwise process all Deposit Accounts in accordance with
applicable law and their respective contractual terms and the duty to
supply all applicable reporting forms for periods following the Closing
Date and to be filed or reported after the Closing Date including, without
limitation, IRS reporting, reports relating to the Deposit Accounts and
interest accrued after the Closing Date. With regard to each ▇▇▇ included
within the Deposit Accounts, Buyer shall also assume the appropriate plan
pertaining thereto and the trustee or custodial arrangement in connection
therewith.
(c) Liabilities Under Leases/Safe Deposit Business. Assume and
thereafter fully and timely perform and discharge, in accordance with
their respective terms, all of the liabilities and obligations of Seller
arising after the Closing Date with respect to:
(i) all leases listed on Schedules B and I (including safe
deposit leases if any) and sold, assigned or transferred to Buyer by
Seller pursuant to this Agreement;
(ii) the safe deposit business of the Branches, subject to the
allocation of the prepaid rents, which allocation shall be satisfied
in full by Seller paying to Buyer, in the manner specified in
Section 6.04 hereof, the amount of rental payment received by Seller
for each such safe deposit box attributable to and prorated to
reflect the period from and after the Closing Date, subject to the
provisions of the applicable leases or other agreements relating to
the safe deposit boxes; and
(iii) all safekeeping items and agreements listed on Schedule
I and delivered to Buyer by Seller pursuant to this Agreement,
including, but not limited to, all applicable safekeeping
agreements, memoranda, or receipts so delivered to Buyer by Seller
hereunder.
(d) Other Liabilities. Fully and timely perform and discharge, as
the same may be or become due, the Assumed Contracts, the Third Party
Leases for the Leased Real Estate, and all additional liabilities,
obligations (including any letters of credit), and accrued expenses of
Seller as of the date of this Agreement, which are reflected on the books
of Seller as being attributable to a Branch as of the close of business on
the Closing Date but only to the extent attributable to the Assets sold,
assigned, or transferred to Buyer by Seller pursuant to this Agreement and
only to the extent arising by reason of Buyer's use or ownership of such
Assets after the close of business on the Closing Date. The parties
acknowledge and agree that Buyer shall not assume any of such liabilities
that
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are not accrued and reflected on the books of Seller on the Closing Date.
No additional material liabilities and obligations of Seller incurred
subsequent to the date of this Agreement shall be assumed by Buyer unless
the prior written consent of Buyer has been obtained prior to the
incursion of the material liability or obligation by Seller.
(e) Other Obligations. Fully and timely perform its obligations
relative to employees of the Branches as set forth hereinafter.
(f) Liabilities. The Deposit Liabilities, Liabilities Under
Leases/Safe Deposit Business, and Other Liabilities are sometimes
hereinafter referred to collectively as the "Liabilities."
1.04 Payment of Funds. Subject to the terms and conditions hereof, at the
Closing:
(a) Consideration. In consideration of Buyer's assumption of the
Deposit Liabilities and its other agreements herein, Seller shall make
available and transfer to Buyer, in the manner specified in Section 6.04
hereof, funds equal to the aggregate balance of all Deposit Accounts
(including interest posted or accrued to such accounts as of the close of
business on the day immediately preceding the Closing Date) plus the
accrued expenses identified in Section 1.03(d) hereof prorated as of the
close of business on the day preceding the Closing Date, less an amount
equal to the sum of:
(i) the amount of cash on hand at the Branches transferred to
Buyer as of the close of business on the Closing Date; and
(ii) the net aggregate book value of the Branches, valued as
of the last day of the month ending immediately prior to the month
in which the Closing Date occurs; and
(iii) the net aggregate book value of the furniture, fixtures
and equipment being transferred to Buyer, valued as of the last day
of the month ending immediately prior to the month in which the
Closing Date occurs; and
(iv) a premium of $46.8 million in cash over the aggregate
balance of the Deposit Liabilities at the close of business on the
Closing Date and is hereinafter called the ("Acquisition
Consideration") and
(v) the amount of other assets described in Section 1.02(f) of
this Agreement, prorated as of the close of business on the day
immediately preceding the Closing Date; and
(vi) the net aggregate book value of the Branch Loans together
with accrued and unpaid interest thereon computed as of the close of
business on the Closing Date. For the purposes of this Agreement,
"net aggregate book value of the Branch Loans" shall be deemed to
mean the book value of the Branch Loans
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on the Closing Date less a discount for such Branch Loans in the
aggregate amount of $9,159.00.
If the sum of items (i) through (vi) above exceeds the
aggregate amount to be transferred by Seller pursuant to the first
paragraph of this Section 1.04(a), the full amount of such excess
shall constitute an amount due from Buyer to Seller, and shall be
paid to Seller at the Closing in the manner specified in Section
6.04 hereof. The parties shall execute a preliminary settlement
statement at the Closing and a final settlement statement
post-Closing in accordance with Section 6.04 herein.
(b) Reimbursement and Proration of Certain Expenses. All other
expenses (i) due and payable at times after the Closing Date for periods
prior to the close of business on the Closing Date, or (ii) paid prior to
the close of business on the Closing Date for periods following the
Closing Date, including the prepaid expenses described in Section 1.02(f)
hereof and accrued expenses described in Section 1.03(d) hereof, including
without limitation, real estate taxes and assessments which are a lien but
not yet due and payable, utility payments, payments due on leases
assigned, payments due on assigned service and maintenance contracts, and
similar expenses relating to the Branches shall be prorated between Seller
and Buyer as of the close of business on the day immediately preceding the
Closing Date, provided, however, that all real estate taxes and
assessments, and to the extent payable by Seller and/or Buyer, shall be
prorated at the Closing on the basis of the most recently certified real
estate taxes and assessments, and all utility payments and lease payments
shall be prorated on the basis of the best information available at
Closing. Any security deposits relating to the Leased Real Estate shall be
credited to the Seller at Closing. With respect to premiums paid to the
FDIC for deposit insurance for the Deposit Liabilities, the proration of
FDIC deposit insurance premiums will be based on the amount of the Deposit
Liabilities as of the close of business on the Closing Date and the number
of days during any period for which Seller has prepaid premiums to the
FDIC but during which Buyer has held or will hold the Deposit Liabilities.
For prorations, if any, which cannot be reasonably calculated as of the
Closing, a post-Closing adjustment shall be made in the manner specified
in Section 6.04 hereof.
(c) Expenses Relating to Real Property and Other Assets. The costs,
fees and expenses relating to the premiums, including any endorsements for
extended coverage, for all title insurance policies, recording costs, and
other similar costs, fees and expenses, if any, relating to the sale and
transfer of the Owned Real Estate or the transfer of Seller's interest in
the Leased Real Estate including, but not limited to, any conveyance fees,
taxes, recording costs, and other similar fees and expenses relating to
the sale and transfer of any other Assets, shall be allocated to, and
shall be borne, solely and exclusively, by Buyer.
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ARTICLE II
CONDUCT OF THE PARTIES PRIOR TO CLOSING
2.01 Covenants of Seller. Seller hereby covenants to Buyer that, from the
date hereof until the Closing, it will do or cause the following to occur:
(a) Operation of the Branches. Seller shall continue to operate the
Branches in a manner substantially equivalent to that manner and system of
operation employed immediately prior to the Effective Date; provided,
however, as set forth in Section 7.02(e) herein, it is contemplated by the
parties that, prior to Closing, Seller will terminate certain programs
which are currently in effect which allow depositors to access Deposit
Accounts through electronic means.
Notwithstanding the foregoing and except as may be required to
obtain the required authorizations referred to in Section 2.03 of this
Agreement, between the Effective Date of this Agreement and the Closing
Date, and except as may be otherwise required by a regulatory authority,
Seller shall not, without the prior written consent of Buyer:
(i) cause any Branch to engage or participate in any
transaction or incur or sustain any obligation which, in the
aggregate, is material to its business, condition, or operations
except in the ordinary course of business;
(ii) cause any Branch to transfer to Seller's other operations
or to any third party any material amount of Assets, except for (a)
supplies, if any, which have unique function in the business of
Seller and its affiliates and ordinarily would not be useful to
Buyer, (b) cash and other normal intrabank transfers which may be
transferred in the ordinary course of business in accordance with
normal banking practices, and (c) signs, or those parts thereof
bearing the Seller's name and/or logo;
(iii) cause any Branch to transfer to Seller's other
operations any deposits other than deposits securing loans made by
Seller which are not Branch Loans, except in the ordinary course of
business at the unsolicited request of depositors; or cause any of
Seller's other operations to transfer to any Branch any deposits,
except in the ordinary course of business at the unsolicited request
of depositors; provided, however, that Seller shall be permitted to
make such transfers of any deposits to or from any Branch as are in
the normal course of business and do not violate the foregoing
restrictions;
(iv) invest in any Fixed Assets on behalf of any Branch,
except for commitments made on or before the Effective Date of this
Agreement which (a)
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are disclosed to Buyer on Schedule C and Schedule G, and (b) for
replacements of furniture, furnishings and equipment and normal
maintenance and refurbishing purchased or made in the ordinary
course of Branch business in an aggregate amount not to exceed
$25,000;
(v) enter into or amend any continuing contract (other than
Deposit Liabilities, Branch Loans, and Safe Deposit agreements)
relating to any Branch, which cannot be terminated without cause and
without payment of any amounts as a penalty, bonus, premium, or
other compensation for termination, or which is not made in the
ordinary course of Branch business;
(vi) hire, transfer, reassign, or terminate (except for cause)
any employee of any Branch, increase the compensation of any
employee of any Branch, or promote any of the employees of any
Branch; or
(vii) offer any promotional rates on deposits at any Branch.
(b) Title Commitments for Real Estate. Seller shall deliver to
Buyer, at Seller's sole expense, with respect to the Owned Real Estate and
Leased Real Estate, no later than thirty (30) days after the Effective
Date, a commitment or commitments (the "Title Commitments") having an
effective date as near as feasible to the date of delivery of such Title
Commitments from a title insurance company authorized to do business in
Florida, designated by Seller, and reasonably satisfactory to Buyer, to
issue to Buyer as soon as practicable after the Closing Date, as
applicable, American Land Title Association (ALTA) owners (Form B, August
1993 Rev) and/or leasehold title insurance (October 1992 Form) policies
having an effective date as of the Closing Date in amounts reasonably
satisfactory to Buyer, all subject to the exceptions specified in the
Title Commitments (the "Permitted Exceptions"). If title to all or part of
the Owned Real Estate or Leased Real Estate is unmarketable or is subject
to any defect, lien, encumbrance, easement, condition, restriction, or
encroachment other than the Permitted Exceptions as defined in Section
10.08(d) herein, then Buyer shall provide written notice thereof to Seller
within ten (10) days of receipt of the Title Commitments. Seller shall
have thirty (30) days after written notice thereof from Buyer, to remedy
or remove any such defect, lien, encumbrance, easement, condition,
restriction, or encroachment. If such defect or encumbrance or other
matter is not cured, then, in addition to any other rights which Buyer may
have hereunder, Buyer shall have the right with respect to the relevant
Branch (but not as to any other Branch): at Buyer's option, (i) to lease
the Branch from Seller on the same basis described in Section 7.05(c)
herein; (ii) negotiate, at Seller's sole cost and expense, with the title
company for certain endorsements to the standard insurance coverage to
address any such defects or encumbrances; or (iii) to waive any objection
to such defect or encumbrance or other matter in which event such defect,
encumbrance, or other matter shall be deemed to be a Permitted Exception.
The Owned Real Estate will be sold by Seller to Buyer free and clear of
all liens, claims, encumbrances and rights of tenants in possession
created by Seller, except for the Permitted Exceptions, with statutory
warranty of title (a "Warranty Deed"), and subject to the Permitted
Exceptions. Seller also shall execute and deliver to Buyer at the time of
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Closing such affidavits and other instruments, if any, as the title
insurance company issuing the Title Commitments may reasonably require to
delete the standard exceptions appearing as "Schedule B" items in a
standard ALTA owners or leasehold owners title insurance policy. Seller
shall also execute and deliver a FIRPTA affidavit at Closing. Within
thirty (30) days after the Effective Date Seller shall obtain duly
certified surveys for the Owned and Leased Real Estate with a metes and
bounds legal description, depicting all easements, rights-of-way, set-back
lines, and any encumbrances appearing on the Title Commitment. The cost of
such surveys shall be borne by Seller. The legal descriptions contained in
the surveys shall be used in the Warranty Deeds to convey the Owned Real
Estate and for title insurance for both the Owned and Leased Real Estate.
Seller shall promptly furnish copies of the surveys to Buyer and the title
companies.
(c) Required Authorizations. Seller shall obtain and procure all
necessary internal corporate approvals and authorizations, if any,
required by Seller to enable it to fully perform all obligations imposed
on it hereunder which must be performed by it at or prior to the Closing.
(d) Creation of Liens and Encumbrances. With respect to the Owned
Real Estate, Seller shall not create or allow any liens, imperfections in
title, charges, easements, restrictions or encumbrances other than the
Permitted Exceptions.
(e) Condemnation. If prior to Closing all or any portion of the
Owned Real Estate or Leased Real Estate is taken or is made subject to
eminent domain or other governmental acquisition proceedings, then Seller
shall promptly notify Buyer thereof, and Buyer may either complete the
Closing and receive the proceeds paid or payable on account of such
acquisition proceedings, or terminate this Agreement as to such parcel of
Owned Real Estate or Leased Real Estate. If Buyer terminates this
Agreement as to a particular Branch location, Buyer shall still purchase
the Assets (except for the Fixed Assets) and assume the Liabilities
related to such Branch, and Seller shall be entitled to receive the
proceeds paid or payable on account of such taking.
(f) Insurance Proceeds. Seller shall maintain adequate insurance on
all the Assets consisting of Owned Real Estate, Leased Real Estate, and
Fixed Assets. In the event of any damage, destruction or condemnation
affecting such Assets between the Effective Date and the time of the
Closing, Seller shall deliver to Buyer any insurance proceeds and other
payments, to the extent of the applicable amount set forth in Section
l.04(a)(ii) or (iii) hereof with respect to Owned Real Estate and the
replacement cost with respect to the Fixed Assets, as the case may be,
received (or with respect to insurance proceeds, which would be received
assuming Seller's insurance policy had no deductible) by Seller as a
result thereof unless, in the case of damage or destruction, Seller has
repaired or replaced the damaged or destroyed property.
(g) ▇▇▇ Accounts. Not later than thirty (30) days prior to the
expected Closing Date, Seller shall, at Seller's expense, mail notice of
Seller's resignation as custodian and the appointment of Buyer as the
successor custodian, effective upon Closing, of each ▇▇▇ maintained at the
Branches. The notice shall include such other
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information that is mutually agreed upon by Seller and Buyer. In the event
Seller and Buyer agree that the aforementioned notice to Seller's ▇▇▇
customers shall be a joint notice of Seller and Buyer, then Seller and
Buyer shall share the expenses of mailing the joint notice.
(h) Assignment of Leases. Seller shall use its commercially
reasonable efforts to obtain any written consent of any such landlord as
shall be necessary for the effective assignment of the Third Party Lease
and assumption thereof by Buyer as of the Closing Date. If such necessary
consent to assignment is not obtained or other arrangements satisfactory
to Buyer made by the Closing Date, Buyer may, at its sole option,
terminate its duties and obligations under this Agreement as to such
Branch and purchase the Assets (excluding the Fixed Assets) and
Liabilities of the Branch.
(i) REIT Loans. Approximately $50.8 million of the Branch Loans are
loans of the Seller's affiliate, TBC Real Estate Investment Company (the
"REIT Loans"). At the Closing Seller shall cause the REIT Loans to be
transferred and endorsed directly to Buyer.
(j) Current Information. During the period from the Effective Date
to the Closing Date, Seller will cause one or more of its designated
representatives to confer on a regular and frequent basis with
representatives of Buyer and to report the general status of the ongoing
operations of the Branches. In addition, separate reporting on matters
involving the loan portfolio of the Branches will occur monthly and will
include, but not be limited to: (i) all Emerald Coast board reports; (ii)
new and renewed loan reports; (iii) month-end delinquency/past due
reports; (iv) month-end loan extensions; (v) loan policy exceptions, loan
documentation/collateral exceptions, and financial statement exceptions;
(vi) watch list reports (all special mention, substandard, doubtful and
loss loans); (vii) all written communications/officer memoranda concerning
problem loan accounts greater than $100,000; (viii) notification and
written details involving new loan products and/or loan programs; (ix)
loan presentations/approval packages for new and/or renewed loans, lines
of credit or commitments of $250,000 or more; (x) all loan review
statistical/analysis reports and any loan review reports; (xi)
reconciliation of allowance for loan and lease losses to include gross
chargeoffs, recoveries and net chargeoffs; (xii) written explanation of
any gross chargeoffs greater than $50,000; (xiii) written analysis of
adequacy of allowance for loan and lease losses; and (xiv) such other
information regarding specific loans, the loan portfolio, and management
of the loan portfolio as may be requested. Seller will promptly notify
Buyer of any material change in the normal course of its business or in
the operation of its properties at the Branches.
(k) Governmental Communications. Seller shall promptly notify Buyer
of the receipt by Seller, and to the extent permitted by law and this
Agreement provide Buyer with, a copy of any communication, document,
report or supervisory action received from or imposed by any governmental
or regulatory body, agency or official having jurisdiction over the Seller
that may adversely affect the transactions contemplated by this Agreement
or may cause a material adverse change on the business or operations of
the Branches.
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(l) Emerald Coast Financial Management, Inc. Seller agrees that, (i)
at or prior to the Closing, Seller shall change the name of Seller's
financial management services subsidiary known as "Emerald Coast Financial
Management, Inc." to a name that does not include the name "Emerald
Coast," and (ii) following the Closing Date the business activities of
such entity shall be subject to the terms and provisions of Section 8.05
herein;
(m) Branch Construction Contract. Seller agrees that, upon the
request of the Buyer, it will cause to be amended, at the sole cost and
expense of Buyer, that certain agreement for the construction of a new
branch facility at ▇▇▇▇▇ Avenue and 19th Street in Panama City, Florida,
which agreement is dated May 9, 2003, between Seller and Edgewater General
Contractors, Inc.
(n) ▇▇▇▇▇▇▇ Agreement. Seller agrees that on or before the Closing
Date it shall, at no cost or expense to Buyer, cause that certain
agreement dated July 25, 2001, between Seller and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ to be
terminated in writing and Buyer expressly released from any liability
therefrom.
(o) Access to Properties and Records. Seller shall provide Buyer and
its authorized representatives full access to perform due diligence
reviews during normal business hours and under reasonable circumstances to
any and all of its premises, properties, contracts, commitments, books,
records, documents of title, and other information relating to the
Branches, and shall cause its officers to furnish any and all financial,
technical, and operating data and other information pertaining to its
business at the Branches as Buyer shall from time to time reasonably
request. No investigation by Buyer shall affect the representations and
warranties of Seller.
(p) Mediation Settlement Agreement. Seller is a party to a certain
Mediation Settlement Agreement dated April 29, 2003 with the State of
Florida Department of Transportation (the "Settlement Agreement").
Pursuant to the terms of the Settlement Agreement, as settlement for the
DOT's taking on Seller's Parcels 100 and 711, Seller will either (i)
receive all of the DOT's interest in Parcel 101 or (ii) receive $401,200
in cash. In connection with the Settlement Agreement Seller agrees that:
(i) Seller hereby assigns to Buyer as of the Effective Date the Settlement
Agreement and all of Seller's rights thereunder, and Seller will take any
and all actions necessary to perfect such assignment; (ii) Buyer shall
have the sole discretion to determine the suitability of the remainder of
Parcels 100 and 101 for a branch location, and Seller shall cooperate and
assist Buyer in securing this location; (iii) in the event Buyer
determines that the remainder of Parcels 100 and 101 is not suitable for a
branch and the property is completely condemned by DOT, Seller shall
receive the appraised value of the Parcels in accordance with the terms of
the Settlement Agreement; and (iv) in the event this Agreement is
terminated by either party for a reason set forth in Sections 9.02 or
9.03, then Buyer will reassign the Settlement Agreement and all of its
rights thereunder immediately following termination of this Agreement.
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(q) Emerald Coast Bank Status. As of the Effective Date, Emerald
Coast Bank appears as an inactive Florida corporation on the records of
the Florida Secretary of State. Seller covenants that on or prior to
Closing it will take all commercially reasonable steps correct the records
of the Florida Secretary of State to reflect the fact that Emerald Coast
Bank was merged out of existence when it was merged with Seller, and upon
request will provide Buyer with any documents or information necessary for
Buyer to satisfy itself that the aforementioned merger took place in
compliance with all relevant legal requirements.
2.02 Covenants of Buyer. Buyer hereby covenants to Seller that, from the
date hereof until the Closing, it will do or cause the following to occur:
(a) Regulatory Applications. Buyer shall promptly prepare and submit
for filing any and all applications, filings, and registrations with, and
notifications to, all federal and state authorities required on the part
of Buyer or any shareholder or affiliate of Buyer for the Acquisition to
be consummated at the Closing as contemplated in Section 6.01 herein and
for Buyer to operate the Branches following the Closing. Thereafter, Buyer
shall pursue all such applications, filings, registrations, and
notifications diligently and in good faith, and shall file such
supplements, amendments, and additional information in connection
therewith as may be reasonably necessary for the Acquisition to be
consummated at Closing and for Buyer to operate the Branches following the
Closing. Buyer shall deliver to Seller copies of each and all of such
applications, filings, registrations and notifications (except for any
confidential portions thereof), and any supplement, amendment or item of
additional information in connection therewith (except for any
confidential portions thereof). Buyer shall also deliver to Seller a copy
of each material notice, order, opinion and other item of correspondence
received by Buyer from such federal and state authorities (except for any
confidential portions thereof) and shall advise Seller, at Seller's
request, of developments and progress with respect to such matters.
(b) Required Authorizations. Buyer shall obtain and procure all
necessary corporate and other approvals and authorizations, if any,
required on its part to enable it to fully perform all obligations imposed
on it hereunder which must be performed by it at or prior to the Closing.
(c) Satisfaction of Conditions. Buyer shall not voluntarily
undertake any course of action inconsistent with the satisfaction of the
requirements or the conditions applicable to it, or its agreements,
understandings, obligations, or covenants set forth in this Agreement, and
it shall promptly do all such reasonable acts and take all such reasonable
measures as may be appropriate to enable it to perform the agreements,
undertakings, obligations, and covenants herein provided to be performed
by it, and to enable the conditions precedent to Seller's obligations to
consummate the Closing to be fully satisfied.
(d) Cooperation Regarding Leased Real Estate. Buyer shall, at
Seller's request in connection with Seller's obtaining the consents
specified in Section 2.01(h), advise, in
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writing, the lessor of Leased Real Estate, of Buyer's intent to assume and
comply with the terms of the Third Party Lease (as to matters arising from
and after the Closing Date).
(e) Performance. Buyer shall, at Buyer's expense, take such actions
as may be necessary in order for Buyer to perform timely hereunder,
including all necessary data processing and operational actions as may be
appropriate.
2.03 Covenants of All Parties. Seller hereby covenants to Buyer, and Buyer
hereby covenants to Seller that, from the date hereof until the Closing, such
party shall act and deal in good faith, cooperate fully with the other party and
use its commercially reasonable efforts in attempting to obtain all consents,
approvals, permits, or authorizations which are required to be obtained pursuant
to any federal or state law, or any federal or state regulation thereunder, for
or in connection with the transactions described, contemplated, arising from or
related to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows:
(a) Good Standing and Power of Seller. Seller is an Alabama banking
corporation duly organized, validly existing, and in good standing under
the laws of the State of Alabama with corporate power to own its
properties and to carry on its business as presently conducted. Seller is
an insured bank as defined in the Federal Deposit Insurance Act and
applicable regulations thereunder.
(b) Authorization of Agreement. The execution and delivery of this
Agreement, and the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on the part of Seller, and
this Agreement is a valid and binding obligation of Seller.
(c) Effective Agreement. Subject to the receipt of any and all
necessary regulatory approvals and required consents, the execution,
delivery, and performance of this Agreement by Seller and the consummation
of the transactions contemplated hereby, will not conflict with, result in
the breach of, constitute a violation or default, result in the
acceleration of payment or other obligations, or create a lien, charge or
encumbrance, under any of the provisions of the Articles of Incorporation
or Bylaws of Seller, under any judgment, decree or order, under any law,
rule, or regulation of any government or agency thereof, or under any
material contract, material agreement or material instrument to which
Seller is subject, where such conflict, breach, violation, default,
acceleration or lien would have a material adverse effect on the Assets or
Seller's ability to perform its obligations hereunder.
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(d) Title to Real Estate And Other Assets. Except for the Owned Real
Estate and Leased Real Estate, Seller is the sole owner of each of the
Assets free and clear of any mortgage, lien, encumbrance or restrictions
of any kind or nature. As to the Owned Real Estate, Seller is sole owner
of such Owned Real Estate, free and clear of all liens, claims,
encumbrances and rights of tenants in possession except for the Permitted
Exceptions. Seller has a valid leasehold interest in the Leased Real
Estate pursuant, and subject to, the Third Party Lease and has the use of
the Leased Real Estate pursuant to the Third Party Lease.
(e) Zoning Variations. As of the Effective Date, Seller has no
knowledge of the receipt of, or contemplation of any intent to provide,
Seller with any written notice from any governmental authority of any
material uncorrected violations of zoning and/or building codes relating
to the Owned Real Estate or Leased Real Estate.
(f) Condemnation Proceedings. Except for the proceedings relating to
the Owned Real Estate referred to in Section 2.01(p), Seller has received
no written notice of any pending or threatened, nor is it aware of any
contemplated, condemnation proceeding affecting or relating to the Owned
Real Estate or the Branches.
(g) Taxes. 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 Branches prior to the date of Closing 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.
(h) Operations Lawful. To the knowledge of Seller, the conduct of
banking business at the Branches is in compliance in all material respects
with all federal, state, county and municipal laws, ordinances and
regulations applicable to conduct of such business.
(i) Third-Party Claims. There are no actions, suits or proceedings,
pending or, to Seller's knowledge, threatened against or affecting Seller
which, if determined adversely to Seller, could have a material adverse
effect on the aggregate value of the banking business and Assets of the
Branches.
(j) Insurance. Seller maintains such insurance on the Branches and
the Fixed Assets to be purchased by or assigned to Buyer as is customary
in the business of banking.
(k) Labor Relations. No employee located at any of the Branches is
represented, for purposes of collective bargaining, by a labor
organization of any type. Seller has no knowledge of any efforts during
the past three years to unionize or organize any employees at any Branch.
No claim related to, or brought by, any employee at the Branches under any
applicable federal, state, or local employment-related law, order,
ordinance or regulation, no unfair labor practice, discrimination or
wage-and-hour claim
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is pending or, to the best of Seller's knowledge, threatened against or
with respect to Seller.
(l) Employment Contracts. Set forth on Schedule K is a list of all
contracts, written or oral, between Seller, and its employees located at
the Branches. Schedule K shall also contain each Branch employee's name,
date of hire, years of service, current compensation and similar benefits
as of the Effective Date.
(m) Compliance With Laws. Seller:
(i) is in material compliance with all applicable federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders or decrees applicable thereto or to the employees
conducting such businesses, including, without limitation, the Equal
Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment
Act, the Home Mortgage Disclosure Act, the Bank Secrecy Act, and all other
applicable fair lending laws and other laws relating to discriminatory
business practices;
(ii) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Governmental Authorities that are required in order to permit
them to own or lease their properties and to conduct their businesses as
presently conducted; all such permits, licenses, certificates of
authority, orders and approvals are in full force and effect and, to the
Seller's knowledge, no suspension or cancellation of any of them is
threatened; and
(iii) has received, since December 31, 2000, no notification
or communication from any governmental authority (A) asserting that the
Seller is not in compliance with any of the statutes, regulations or
ordinances which such governmental authority enforces; or (B) threatening
to revoke any license, franchise, permit or governmental authorization
(nor, to the Seller's knowledge, do any grounds for any of the foregoing
exist).
(n) Environmental.
(i) Seller is in compliance with all applicable Environmental
Laws (as defined in Section 7.05(g)); (ii) to the best of Seller's
knowledge no real property (including buildings or other structures)
related to the Branches, or any property in which the Seller has held a
security interest for the Branch Loans, ("Seller Loan Property"), has been
contaminated with, or has had any release of, any Hazardous Substance (as
defined in Section 7.05(i)) except in compliance with Environmental Laws;
(iii) to the best of Seller's knowledge, the Seller could not be deemed
the owner or operator of, or be deemed to have participated in the
management of Hazardous Substances of, any Seller Loan Property which has
been contaminated with, or has had any release of, any Hazardous Substance
except in compliance with Environmental Laws; (iv) to the best of Seller's
knowledge, the Seller does not have any liability for any Hazardous
Substance disposal or contamination on any third party property related to
the Branches; (v) the
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Seller has not received any notice, demand letter, claim or request for
information alleging any violation of, or liability under, any
Environmental Law; (vi) the Seller is not subject to any order, decree,
injunction or other agreement with any governmental authority or any third
party relating to any Environmental Law; (vii) to the best of Seller's
knowledge, there are no circumstances or conditions involving the Branches
or any Seller Loan Property, that could reasonably be expected to result
in any claims, liability or investigations against the Seller, result in
any restrictions on the ownership, use, or transfer of the Branches
pursuant to any Environmental Law, or adversely affect the value of any
Seller Loan Property; and (viii) the Seller has disclosed in Section
3.03(n) of the Disclosure Schedule and provided a copy to Buyer of all
environmental reports, studies, sampling data, correspondence and filings
in its possession or reasonably available to it relating to the Branches
and any Seller Loan Property.
(o) Access to Real Estate. To the knowledge of Seller, no fact or
condition exists which would result in the termination or impairment of
access to the Owned Real Estate from adjoining public or private streets
or ways or which could result in discontinuation of necessary sewer,
water, electric, gas, telephone, or other utilities or services and
sewage, sanitation, plumbing, refuse disposal, and all of such utilities
servicing the Owned Real Estate are in full compliance with applicable
governmental regulations.
(p) Mechanic's Liens. Seller has paid or will pay in full all bills
and invoices for labor and material of any kind arising from the
ownership, operation, management, repair, maintenance, or leasing as
tenant of the Owned Real Estate and the Leased Real Estate, and no actual
or potential (other than in the ordinary course of business) mechanic's
lien or other claims are outstanding or available to any party in
connection with the ownership, operation, management, repair, maintenance,
or leasing as tenant of said properties.
(q) Deposits. Attached as Schedule J is a true and accurate schedule
of all Deposit Accounts (including IRAs) of the Branches, prepared as of
May 31, 2003, listing by Branch and by category the account holder,
account number, social security or employer identification number of the
holder, deposit balance and the interest rates and maturity dates
associated with such deposits.
(r) Branch Loans. Attached as Schedule F is a true and accurate
schedule of all Branch Loans, including the REIT Loans, any letters of
credit and loan commitments attributable to the Branches with accrued and
unpaid interest thereon, computed as of May 31, 2003, which schedule shall
identify the loan number, date, borrower name, loan amount, interest rate,
loan balance, social security or employer identification number of the
borrower and type of loan.
(s) Status of Branch Loans. With respect to each Branch Loan
purchased hereunder: the loan is a valid loan, except for existing
participation loans disclosed to Buyer prior to the date hereof; Seller is
the sole owner of each loan; the loan is not pledged or encumbered; the
principal balance of the loan as shown on the Seller's books
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and records is true and correct as of the last date shown thereon; to the
best of Seller's knowledge, all purported signatures on and executions of
any document in connection with such loan are genuine; to the best of
Seller's knowledge all loan documentation has been actually signed or
executed by all necessary parties; Seller has custody of all documents in
either paper or electronic form related to such loan; each loan was made
and has been serviced in compliance with all applicable laws, rules and
regulations and except as provided in Section 3.01(s) of the Disclosure
Schedule, any notes, other evidences of indebtedness or security
agreements associated therewith transferred at Closing by Seller to Buyer
are transferred without recourse and without any warranties or
representations as to the collectibility of any such loans, the value of
the collateral securing same, or the creditworthiness of any of the
makers, guarantors or other obligors thereof; and Seller disclaims any
warranty or representation that it has no knowledge of any insolvency
proceeding instituted with respect to any such party.
(t) Personal Property. Attached as Schedule C is a listing of the
Fixed Assets owned by Seller and located at the Branches.
(u) Assumed Contracts and Third Party Lease. Attached as Schedule G
is a true and accurate schedule of all Assumed Contracts related to the
Branches. Each Assumed Contract is valid and subsisting and in full force
and effect in accordance with its terms.
(v) Other Branch Services. Attached as Schedule H is a true and
accurate schedule of all of Seller's other services or businesses provided
by, or related to, the Branches.
(w) FIRPTA. Seller is not a "foreign person" within the meaning of
the Internal Revenue Code Section 1445.
(x) Broker. Seller has utilized Sandler ▇'▇▇▇▇▇ & Partners, L.P. in
this transaction. Seller agrees and acknowledges that Seller is fully
responsible for all of the fees, expenses, and commissions of Sandler
▇'▇▇▇▇▇ & Partners, L.P. and agrees to indemnify Buyer from and against
any liability therefrom.
(y) Knowledge. For purposes of this section 3.01, the "knowledge" of
Seller shall mean the actual knowledge of the officers of Seller.
3.02 Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
(a) Good Standing and Power of Buyer. Buyer is a national banking
association duly organized, validly existing and in good standing under
the laws of the United States with corporate power to own its properties
and to carry on its business as presently conducted. Buyer is an insured
bank, as defined in the Federal Deposit Insurance Act and applicable
regulations thereunder.
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(b) Authorization of Agreement. The execution and delivery of this
Agreement, and the transactions contemplated hereby, have been duly
authorized, by all necessary corporate action on the part of Buyer, and
this Agreement is a valid and binding obligation of Buyer.
(c) Effective Agreement. Subject to the receipt of any and all
necessary regulatory approvals (including approval of the Merger (as
hereinafter defined)), the execution, delivery, and performance of this
Agreement by Buyer, and the consummation of the transactions contemplated
hereby, will not conflict with, result in the breach of, constitute a
violation or default, result in the acceleration of payment or other
obligations, or create a lien, charge or encumbrance, under any of the
provisions of the Articles of Association or Bylaws of Buyer, under any
judgment, decree or order, under any law, rule or regulation of any
government or agency thereof, or under any material agreement, material
contract or material instrument to which Buyer is subject, where such
conflict, breach, violation, default, acceleration or lien would have a
material adverse effect on Buyer's ability to perform its obligations
hereunder.
3.03. Disclosure Schedule. On or prior to the date hereof, the Seller has
delivered to Buyer a schedule (its "Disclosure Schedule") setting forth, among
other things, items the disclosure of which is necessary or appropriate either
in response to an express disclosure requirement contained in a provision hereof
or as an exception to one or more representations or warranties contained in
Section 3.01 or to one or more of its covenants contained in Article II;
provided, however, that (a) no such item is required to be set forth in a
Disclosure Schedule as an exception to a representation or warranty if its
absence would not be reasonably likely to result in the related representation
or warranty being deemed untrue or incorrect under the standard established by
Section 3.04, and (b) the mere inclusion of an item in a Disclosure Schedule as
an exception to a representation or warranty shall not be deemed an admission by
a party that such item represents a material exception or fact, event or
circumstance or that, absent such inclusion in the Disclosure Schedule, such
item is or would be reasonably likely to result in a material adverse effect.
3.04. Standard. No representation or warranty of the Seller or Buyer
contained in Sections 3.01 or 3.02, respectively, shall be deemed untrue or
incorrect, and no party hereto shall be deemed to have breached a representation
or warranty, as a consequence of the existence of any fact, event or
circumstance unless such fact, event or circumstance, individually or taken
together with all other facts, events or circumstances inconsistent with any
representation or warranty contained in Sections 3.01 or 3.02, has had or is
reasonably likely to have a material adverse effect on the party making such
representation or warranty.
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ARTICLE IV
ACTIONS RESPECTING EMPLOYEES
AND
EMPLOYEE BENEFIT PLANS
4.01 Employment of Employees
(a) Buyer shall extend offers of employment, as of the Closing Date,
to all employees listed in Schedule K as are actively employed by Seller
at the Branches as of the Closing Date (including, without limitation,
those employees who on the Closing Date are on family and medical leave,
military leave, personal leave or short-term disability and who within
ninety (90) days after twelve weeks have elapsed reapply to return to
work; individually and collectively the "Leave Employees" herein) for
positions entailing responsibilities in effect at the Branches as of the
Closing Date, and for a base salary not less than that paid by Seller as
of the Closing Date. Employees accepting employment with Buyer, including
but not limited to the Leave Employees, are referred to herein
individually and collectively as the "Transferred Employees."
(b) Seller will cooperate with Buyer, to the extent reasonably
requested, to provide Buyer with a means to meet with the subject
employees prior to Closing.
(c) Seller agrees that it will cooperate with Buyer to the extent
reasonably requested to make the subject employees available for training
from time to time by Buyer prior to the Closing; provided, however, such
training shall be scheduled by Buyer and coordinated with Seller in such a
manner that does not significantly interfere with the normal business
activities, operations and job responsibilities of the subject employees
at the Branches.
(d) Buyer agrees that it will reimburse Seller for any and all
overtime expense incurred by Seller arising out of or as a result of the
training of the non-exempt Transferred Employees by Buyer prior to the
Closing.
(e) Buyer shall assume no liability of any kind arising out of the
operation of any employee benefit plan maintained by Seller for the
Transferred Employees, and Seller shall indemnify Buyer against any such
liability. Specifically, as of the Closing Date, the Transferred Employees
will be terminated from participation in Seller's employee benefit plans
and become eligible to participate in Buyer's employee benefit plans on
the terms and conditions set forth in Section 4.02 herein.
4.02 Terms and Conditions of Employment. Except as otherwise provided
explicitly in this Agreement, the terms of employment for each Transferred
Employee shall be determined solely by Buyer's policies, procedures, and
programs; provided, however, that each Transferred Employee shall be provided
employment subject to the following terms and conditions:
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(a) Base salary shall be at least equivalent to the rate of base
salary paid by Seller to such Transferred Employee as of the close of
business on the day prior to the Closing Date;
(b) For the remainder of calendar year 2003, Buyer shall provide
such Transferred Employees with the proportionate vacation benefits to
which such employee is entitled under Buyer's existing vacation policy.
Thereafter, the Transferred Employees shall be provided the same employee
benefits as those provided to similarly situated employees of Buyer;
(c) Following the Closing Date, all Transferred Employees of Seller
who are employed by Seller as of June 30, 2003 will be eligible to enroll
in Buyer's 401(k) plan on the next available quarterly enrollment date of
Buyer. Such Transferred Employee will receive credit for years of service
from the most recent hire date for purposes of vesting and eligibility
under Buyer's 401(k) plan, but not for benefit accrual;
(d) Following the Closing Date, the Transferred Employees will be
entitled to participate in Buyer's pension plan that is presently being
provided to similarly situated employees of Trustmark. Such Transferred
Employees will not receive credit for years of service with Seller for
purposes of enrollment in Buyer's pension plan. Seller shall be
responsible for notifying its employees at the Branches of the terms of
this Agreement as it relates to them and for complying with any applicable
laws regarding such notices. Buyer shall have no responsibility for
funding of accrued pension or profit sharing plans for such Transferred
Employees with respect to any period prior to the Closing Date;
(e) Each Transferred Employee shall be eligible to participate in
the medical, dental, or other welfare plans of Buyer, as such plans may
exist, on and after the Closing Date, and any pre-existing conditions
provisions of such plans shall be waived with respect to any such
Transferred Employees;
(f) With respect to any Transferred Employee who is also a Leave
Employee, upon conclusion of his or her short-term disability or temporary
leave of absence, subject to the terms and conditions of the Buyer's plans
and policies and applicable law, each Transferred Employee on such leave
shall receive the salary in effect when he or she went on leave, shall
otherwise be treated as a Transferred Employee, and, to the extent
practicable, shall be offered by the Buyer the same or a substantially
equivalent position to his or her position with Seller prior to having
gone on leave;
(g) Except as provided herein, Seller shall pay, discharge, and be
responsible for (i) all salary and wages arising out of employment of the
Transferred Employees through the Closing Date, (ii) the amount of all
earned time off to which the Transferred Employee is entitled to receive,
which shall be paid in the final payroll check issued by Seller, and (iii)
any employee benefits arising under Seller's employee benefit plans and
employee programs (including any and all paid vacation) prior to the
Closing Date, including benefits with respect to claims incurred prior to
the Closing Date but reported
- 20 -
after the Closing Date, and benefits inuring to Leave Employees prior to
any election by such Leave Employees to return to work with Buyer, and
(iv) all federal and state tax reporting and filing related to items (i),
(ii), and (iii) above. From and after the Closing Date, Buyer shall pay,
discharge, and be responsible for all salary, wages, and benefits arising
out of or relating to the employment of the Transferred Employees by Buyer
from and after the Closing Date, including, without limitation, all claims
for welfare benefits plans incurred on or after the Closing Date. Claims
are incurred as of the date services are provided notwithstanding when the
injury or illness may have occurred.
4.03 Actions to be Taken by Seller. Seller covenants to Buyer that it will
do or cause the following to occur:
(a) Solicitation of Transferred Employees. For a period of two (2)
years following the Closing Date, Seller will not directly or indirectly
initiate or cause to be initiated any communication with any Transferred
Employee for the purpose of inducing such employee to leave Buyer's
employment or solicit or cause to be solicited the employment of any
Transferred Employees as prospective officers or employees of Seller or
employ any Transferred Employees.
(b) Employee Benefit Programs. Seller's obligations to employees of
the Branches, including Transferred Employees, will be as set forth in
established policies of Seller, and Seller shall continue all of its
employee benefit programs in full force and effect and be solely
responsible for funding such benefit programs for Transferred Employees
through the Closing Date. After the Closing, Seller shall retain the
responsibility and liability for the funding and payment of all claims
incurred under such employee benefit programs through the Closing Date.
Buyer shall have no obligation or liability to compensate Transferred
Employees for benefits of any kind earned, accrued, promised and/or
provided to Transferred Employees as employees of Seller, except as set
forth in Section 4.02 above.
(c) Employees of the Branches. Seller shall not, without Buyer's
prior written consent (i) increase the aggregate full-time equivalent size
of the work force at the Branches above the aggregate staffing levels
designated by Seller for the Branches on the Effective Date, (ii)
terminate any Transferred Employee prior to the Closing Date, unless such
person is terminated for cause as determined in the sole discretion of
Seller, or otherwise pursuant to existing Seller policies or procedures,
or (iii) increase the compensation of any Transferred Employee.
(d) Employee Records. Subject to any applicable legal requirements,
Seller shall, at least forty-five (45) days prior to the Closing Date,
provide Buyer with copies of all of Seller's files and records which
relate to all of the Seller employees listed in Schedule K, and Seller
shall, in any event, deliver such records to Buyer at Closing to the
maximum extent permitted by law.
The obligations of Seller pursuant to this Section 4.03 shall survive the
Closing.
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ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
5.01 Conditions to Seller's Obligations. The obligations of Seller to
consummate this transaction are subject to the satisfaction, or the waiver in
writing by Seller to the extent permitted by applicable law, of the following
conditions at or prior to the Closing:
(a) Prior Regulatory Approval. All filings and registrations with,
and notifications to, all federal and state authorities required for
consummation of the Acquisition shall have been made, all approvals and
authorizations of all federal and state authorities required for
consummation of the Acquisition including, but not limited to, approval of
the Office of the Comptroller of the Currency ("OCC"), shall have been
received and shall be in full force and effect, and all applicable waiting
periods shall have passed, if any.
(b) Corporate Action. The Board of Directors of Buyer shall have
taken all corporate action necessary to effectuate this Agreement and
Buyer shall have furnished Seller with a certified copy of each such
resolution adopted by the Board of Directors of Buyer evidencing the same.
(c) Representations and Warranties. The representations and
warranties of Buyer set forth in this Agreement shall be true and correct
in all material respects on the Closing Date with the same effect as
though all such representations and warranties had been made on and as of
such date, and Buyer shall have delivered to Seller a Certificate (as
hereinafter defined) to that effect dated as of the Closing Date.
(d) Covenants. Each and all of the covenants and agreements of Buyer
to be performed or complied with at or prior to Closing pursuant to this
Agreement shall have been duly performed or complied with in all material
respects by Buyer, or waived by Seller, and Buyer shall have delivered to
Seller a Certificate to that effect dated as of the Closing Date.
(e) No Proceeding or Prohibition. At the time of the Closing, there
shall not be any litigation, investigation, inquiry, or proceeding pending
or threatened in or by any court or agency of any government or by any
third party which in the judgment of the executive officers of Seller,
with the advice of counsel, presents a bona fide claim to restrain,
enjoin, or prohibit consummation of the transaction contemplated by this
Agreement or which might result in rescission in connection with such
transactions, and Seller shall have been furnished with a Certificate
dated as of the Closing Date and signed by the Chairman, President, or an
Executive Vice President and Secretary or Assistant Secretary of Buyer, to
the effect that no such litigation, investigation, inquiry, or proceeding
is pending or, to the best of their knowledge, threatened.
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(f) Opinion of Counsel. Buyer shall have delivered to Seller an
opinion of Brunini, Grantham, Grower & ▇▇▇▇▇, PLLC, dated as of the
Closing Date, in form and substance reasonably satisfactory to Seller and
its counsel, to the effect that: (i) the Acquisition has been approved by
all applicable regulatory authorities, and (ii) the execution, delivery,
and performance of this Agreement by Buyer has been approved by all
necessary corporate and shareholder action of Buyer. In rendering such
opinions, Brunini, Grantham, Grower & ▇▇▇▇▇, PLLC may rely without
independent verification, to the extent customary for third party opinions
in transactions of the kind contemplated by this Agreement, upon a
certificate provided by the Chairman or Secretary of Buyer as to certain
factual matters including the representations, warranties, and covenants
contained in this Agreement and applicable to Buyer.
(g) Receipt of Consents of Third Parties. Seller shall have
received, in form and substance satisfactory to Seller, any and all
consents, approvals or waivers of third parties as Seller, in its sole
discretion, may deem necessary or appropriate to enable it to consummate
the transactions contemplated by this Agreement without any material
additional cost, expense, or liability to Seller or its affiliates.
5.02 Conditions to Buyer's Obligations. The obligations of Buyer to
consummate this Agreement are subject to the satisfaction, or the waiver in
writing by Buyer to the extent permitted by applicable law, of the following
conditions at or prior to the Closing:
(a) Prior Regulatory Approval. All filings and registrations with,
and notifications to, all federal and state authorities required for
consummation of this Agreement and the Acquisition, including the filings
related to Buyer's merger with Southern Community Bank, Atlantic, a
Florida state-chartered banking institution (the "Merger"), shall have
been made, all approvals and authorizations of all federal and state
authorities required for consummation of the Merger, this Agreement, and
the Acquisition including, but not limited to, approval of the OCC, shall
have been received and shall be in full force and effect, all applicable
waiting periods shall have passed, if any, and the Merger shall have been
consummated.
(b) Corporate Action. The Board of Directors and shareholders of
Seller shall have taken all corporate action necessary to effectuate this
Agreement and the Acquisition, and Seller shall have furnished Buyer with
a certified copy of each such resolution adopted by the Board of Directors
and shareholders of Seller evidencing the same.
(c) Representations and Warranties. The representations and
warranties of Seller set forth in this Agreement shall be true and correct
in all material respects on the Closing Date with the same effect as
though all such representations and warranties had been made on and as of
such date (unless a different date is specifically indicated in such
representations and warranties), and Seller shall have delivered to Buyer
a Certificate to that effect dated as of the Closing Date.
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(d) Covenants. Each and all of the covenants and agreements of
Seller to be performed or complied with pursuant to this Agreement shall
have been duly performed or complied with in all material respects by
Seller, or waived by Buyer, and Seller shall have delivered to Buyer a
Certificate to that effect dated as of the Closing Date.
(e) No Proceedings or Prohibitions. At the time of the Closing,
there shall not be any litigation, investigation, inquiry, or proceeding
pending or threatened in or by any court or agency of any government or by
any third party which in the judgment of the executive officers of Buyer,
with the advice of counsel, presents a bona fide claim to restrain,
enjoin, or prohibit consummation of the transactions contemplated by this
Agreement; and Buyer shall have been furnished with a Certificate dated as
of the Closing Date and signed by the Chairman, President, or Vice
President, and the Secretary or Assistant Secretary of Seller, to the
effect that no such litigation, investigation, inquiry, or proceeding is
pending, or to the best of their knowledge, threatened.
(f) Opinion of Counsel. Seller shall have delivered to Buyer an
opinion, dated as of the Closing Date, of legal counsel reasonably
satisfactory to Buyer and in form and substance reasonably satisfactory to
Buyer and its counsel, to the effect that: (i) the Acquisition has been
approved by all applicable regulatory authorities, and (ii) the execution,
delivery, and performance of this Agreement by Seller has been approved by
all necessary corporate and shareholder action of Seller. In rendering
such opinions, such legal counsel may rely without independent
verification, to the extent customary for third party opinions in
transactions of the kind contemplated by this Agreement, upon a
certificate provided by the Chairman or Secretary of Seller as to certain
factual matters including the representations, warranties, and covenants
contained in this Agreement and applicable to Seller.
(g) Real Property. The Title Commitments (as defined in Section
2.01(b) herein) shall have been updated to or as close as practicable to
(but in no event more than five (5) business days prior to) the Closing
Date, and such updated Title Commitments shall not include any exceptions
other than those set forth in the original Title Commitments and any other
Permitted Exceptions.
(h) Fixed Assets. There shall have been no material alteration in or
material adjustment to the Fixed Assets. For purposes of this subsection
(h), it will not be considered to be a material alteration or material
adjustment to the Fixed Assets if (i) there is damage or destruction to
the Fixed Assets as contemplated by Section 2.01(f) herein and Seller
complies with said Section 2.01(f), or (ii) Seller makes additions to the
Fixed Assets without Buyer's consent in order to correct emergency
situations which are threatening to impair Seller's operations at a
Branch.
5.03 Non-Satisfaction of Conditions Precedent. The non-occurrence or delay
of the Closing by reason of the failure to timely satisfy of all conditions
precedent to the obligations of any party hereto shall in no way relieve such
party of any liability to the other party hereto, nor be deemed a release or
waiver of any claims the other party hereto may have against such party,
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if and to the extent the failure of timely satisfaction of such conditions
precedent is attributable to the actions or inactions of such party.
ARTICLE VI
CLOSING
6.01 Closing and Closing Date. The Acquisition contemplated by this
Agreement shall be consummated and closed (the "Closing") at such location and
time as shall be mutually agreed upon by Buyer and Seller, on a date to be
mutually agreed upon by Buyer and Seller after all required regulatory approvals
have been obtained, all applicable regulatory waiting periods associated
therewith have expired, and all conditions to Closing have been satisfied (the
"Closing Date").
6.02 Seller's Actions at Closing. At the Closing (unless another time is
specifically stated in Section 6.04 hereof), Seller shall, with respect to the
Branches:
(a) deliver to Buyer at the Branches such of the Assets purchased
hereunder as shall be capable of physical delivery, including, without
limitation, all Assets comprising the safe deposit box business, if any,
of the Branches;
(b) execute, acknowledge and deliver to Buyer all such Warranty
Deeds, endorsements, assignments, bills of sale, and other instruments of
conveyance, assignment, and transfer as shall reasonably be necessary or
advisable and reasonably acceptable to Buyer to consummate the sale,
assignment, and transfer of the Assets sold or assigned to Buyer
hereunder, and such other documents as the title company and Buyer's
counsel may reasonably require; the originals of all blueprints,
construction plans, specifications, and plats relating to the Owned Real
Estate, which are now in Seller's possession or which Seller has
reasonable access to; and such other documents or instruments as may be
reasonably required by Buyer, required by other provisions of this
Agreement, or reasonably necessary to effectuate the Closing;
(c) execute, acknowledge and deliver to Buyer a duly executed and
recordable assignment to Buyer of the Third Party Lease and a consent to
assignment from the landlord of the Third Party Lease in a form reasonably
acceptable to Buyer;
(d) assign, transfer, and make available to Buyer such of the
following records as exist and are available and maintained at the
Branches (in whatever form or medium then maintained by Seller) pertaining
to the Deposit Liabilities and Branch Loans:
(i) originals or copies of signature cards, orders, contracts,
and agreements between Seller and depositors of the Branches and
borrowers with respect to Branch Loans, and all records of a similar
character; and
(ii) a trial balance listing of records of account; and
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(iii) all other miscellaneous records, statements and other
data and materials maintained by Seller relative to any Deposit
Liabilities being assumed by Buyer and Branch Loans being acquired
by Buyer;
(e) assign, transfer, and deliver to Buyer such safe deposit and
safekeeping files and records (in whatever form or medium then maintained
by Seller) pertaining to the safe deposit business of the Branches
transferred to Buyer hereunder as exist and are available, together with
the contents of the safe deposit boxes maintained at the Branches, as the
same exist as of the close of business on the day immediately preceding
the Closing Date (subject to the terms and conditions of the leases or
other agreements relating to the same) and all securities and other
records, if any, held by the Branches for their customers as of the close
of business on the day immediately preceding the Closing Date (subject to
the terms and conditions of the agreements or receipts relating to the
same);
(f) make available and transfer to Buyer on the Closing Date and
prior to the conclusion of the Closing any funds required to be paid to
Buyer pursuant to the terms of this Agreement;
(g) execute, acknowledge, and deliver to Buyer all Certificates and
other documents required to be delivered to Buyer by Seller at the Closing
pursuant to the terms of this Agreement;
(h) assign by endorsement, in a form reasonably acceptable to Buyer,
transfer and deliver to Buyer the contract, promissory note, or other
evidence of indebtedness related to the Branch Loans together with the
loan files and records and all evidence of collateral security of any
nature whatsoever held by Seller as collateral (in whatever form or medium
then maintained by Seller), and pertaining to such Branch Loans
transferred to Buyer pursuant to this Agreement;
(i) assign to Buyer all Seller's rights in and to the Assumed
Contracts which are assignable and which constitute part of the Assets;
(j) assign, transfer, and deliver to Buyer such files and records
(in whatever form or medium maintained by Seller) pertaining to the Other
Branch Services listed in Schedule G; and
(k) deliver those advisory director resignations contemplated by
Section 8.11.
6.03 Buyer's Actions at Closing. At the Closing (unless another time is
specifically stated in Section 6.04 hereof), Buyer shall, with respect to the
Branches:
(a) execute, acknowledge, and deliver to Seller, to evidence the
assumption of the liabilities and obligations of Seller by Buyer
hereunder, an instrument of assumption in a form reasonably acceptable to
Seller, and Seller shall then accept, execute, and acknowledge such
instrument. Copies of such instrument may be recorded in the public
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records at the option of either party hereto. The execution and
acknowledgment of such instrument shall not be deemed to be a waiver of
any rights or obligations of any party to this Agreement;
(b) receive, accept, and acknowledge delivery of all Assets, and all
records and documentation relating thereto, sold, assigned, transferred,
conveyed or delivered to Buyer by Seller hereunder, and Buyer shall be
responsible for coordinating with the title companies to effectuate the
recording of Warranty Deeds on or after Closing and securing gap title
insurance coverage in the event the Warranty Deeds are recorded
post-Closing;
(c) execute and deliver to Seller such written receipts for the
Assets, properties, records, and other materials assigned, transferred,
conveyed, or delivered to Buyer hereunder as Seller may reasonably have
requested at or before the Closing;
(d) pay to Seller on the Closing Date and prior to the conclusion of
the Closing any funds required to be paid to Seller at the Closing
pursuant to the terms of this Agreement;
(e) execute, acknowledge, and deliver to Seller all Certificates and
other documents required to be delivered to Seller by Buyer at the Closing
pursuant to the terms hereof; and
(f) execute, acknowledge, and deliver to Seller an agreement wherein
Buyer assumes obligations with respect to the Third Party Lease, the
Assumed Contracts, and the IRA's for all periods following the Closing
Date with respect thereto.
6.04 Methods of Payment. Subject to the adjustment procedures set forth in
this Section 6.04, the transfer of the funds, if any, due to Buyer or to Seller,
as the case may be, as set forth pursuant to the terms of Section 1.04(a)
hereof, shall be made on the Closing Date in immediately available funds. At
least two (2) business days prior to the Closing, Seller and Buyer 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(a) hereof, shall be computed based upon (a) the aggregate net book
value, as previously defined, plus accrued interest of the Branch Loans as of
the close of business on a day to be agreed between the parties, not more than
three (3) business days preceding the Closing Date, (b) cash on hand at the
Branches as of the close of business on a day to be agreed between the parties,
not more than three (3) business days preceding the Closing Date, and (c) the
aggregate balance of all Deposit Accounts (including interest posted or accrued
to such accounts) as of the close of business on a day to be agreed between the
parties, not more than three (3) business days preceding the Closing Date, and
(d) the parties shall execute a preliminary closing statement. Furthermore,
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 Deposit Accounts as of the Closing Date, Branch
Loans as of the Closing Date, and cash transactions which took place on the
Closing Date or which took place prior to the Closing Date but which
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were not reflected in the preliminary closing statement, and shall execute the
final settlement statement. In addition, prorations of prepaid and accrued
income and expenses that cannot be reasonably calculated at the Closing shall be
settled and paid based on actual amounts and calculations as soon as possible
after the Closing.
6.05 Effectiveness of Closing. Upon the satisfactory completion of the
Closing, which does not include and shall not require completion of the
adjustment and proration arrangements set forth in Section 6.04, the
transactions shall be deemed to be effective and the Closing shall be deemed to
have occurred.
ARTICLE VII
CERTAIN TRANSITIONAL MATTERS
7.01 Transitional Action by Buyer. After the Closing, unless another time
is otherwise indicated:
(a) Buyer shall: (i) pay in accordance with the law and customary
banking practices and applicable Deposit Account contract terms, all
properly drawn and presented checks, negotiable orders of withdrawal,
drafts, debits, and withdrawal orders presented to Buyer by mail, over the
counter, through electronic media, or through the check clearing system of
the banking industry, by depositors of the Deposit Accounts assumed by
Buyer hereunder, whether drawn on checks, negotiable orders of withdrawal,
drafts, or withdrawal order forms provided by Buyer or Seller; and (ii) in
all other respects 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 whose Deposit Accounts are assumed by Buyer
hereunder; provided, however, that any obligations of Buyer pursuant to
this Section 7.01 to honor checks, negotiable orders of withdrawal,
drafts, or withdrawal orders on forms provided by Seller and carrying its
imprint (including its name and transit routing number) shall not apply to
any checks, drafts, withdrawal orders, or returned items (i) presented to
Buyer more than one hundred eighty (180) days following the Closing Date,
or (ii) on which a stop payment has been requested by the deposit
customer. Buyer shall submit and file any required IRS reporting with
respect to interest accrued and on Deposit Liabilities and Branch Loans
after the Closing Date. The provisions of this subsection 7.01(a) shall in
no way limit Buyer's duties or obligations arising under Section 1.03(b)
hereof.
(b) Buyer shall not later than thirty (30) days prior to the Closing
Date, notify all depositors of the Branches by letter, produced in, if
appropriate, several similar, but different forms calculated to provide
necessary and specific information to the owners of particular types of
accounts, of Buyer's pending assumption of the Deposit Liabilities
hereunder, and, in appropriate instances, notify depositors that on and
after the Closing Date certain Seller deposit-related services and/or
Seller's debit card and automatic teller machine services impacted by the
transactions contemplated by this Agreement, will be terminated. As an
enclosure to such notices Buyer may, and no later than the Closing Date
furnish appropriate depositors with brochures, forms and other written
materials
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related or necessary to the assumption of the Deposit Accounts by Buyer
and the conversion of said accounts to Buyer accounts, including the
provision of checks to appropriate depositors using the forms of Buyer
with instructions to such depositors to utilize such Buyer checks after
the Closing Date and thereafter to destroy any unused checks on Seller's
forms. The expenses of the printing, processing and mailing of such letter
notices and providing new Buyer checks and other forms and written
materials to appropriate customers shall be borne by Buyer. Before
Closing, except as provided in this paragraph, Buyer will not contact
customers of the Branches except as may occur in connection with
advertising or solicitations directed to the public generally or in the
course of obtaining the requisite regulatory approvals of the transaction.
Anything to the contrary herein notwithstanding, Buyer shall provide, at
no cost to Seller, any and all notices, communications, and filings which
may be required by law, regulation, or otherwise, relating to any changes
in terms and other matters relating to the Deposit Accounts and the Branch
Loans occurring subsequent to the Closing Date.
(c) Seller shall warrant that to the best of its knowledge all
customer and account information related to the Branches that is provided
to the Buyer for the purpose of a data conversion to the Buyer's data
processing systems is accurate and without defect. If the Seller has
knowledge of any irregularities in data associated with customer
relationships or account ownership, Seller, at its expense, will correct
irregularities no later than thirty (30) days prior to the Closing Date.
All tasks and obligations concerning the provision of data processing
services to or for the Branches after the Closing are the sole and
exclusive responsibility of and shall be performed solely and exclusively
by Buyer.
(d) Buyer shall, not later than the close of business on the
business day immediately following the Closing Date, supply suitable
government-backed securities as security for any deposits of governmental
units included among the Deposit Liabilities for which Seller had provided
similar security.
(e) Buyer shall, as soon as practicable but not more than ten (10)
business days after the Closing Date, prepare and transmit at Buyer's
expense to each of the obligors on Branch Loans transferred to Buyer
pursuant to this Agreement a notice to the effect that the loan has been
transferred and directing that payment be made to Buyer at the address
specified by Buyer, with Buyer's name as payee on any checks or other
instruments used to make payments, and, with respect to such loan on which
a payment notice or coupon book has been issued, to issue a new notice or
coupon book reflecting the name and an address of Buyer as the person to
whom and place at which payments are to be made.
(f) If the balance due on any Branch Loan transferred to Buyer
pursuant to this Agreement has been reduced by Seller as a result of a
payment by check or draft received prior to the close of business on the
Closing Date, which item is returned unpaid to Seller after the day
immediately preceding the Closing Date, the asset value represented by the
loan transferred shall be correspondingly increased and an amount in cash
equal to such increase shall be promptly paid by Buyer to Seller.
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(g) Buyer shall use its best efforts to cooperate with Seller in
assuring an orderly transition of ownership of the Assets and
responsibility for the Liabilities assumed by Buyer hereunder.
(h) The duties and obligations of Buyer in this Section 7.01 shall
survive the Closing.
7.02 Transitional Actions by Seller. After the Closing, unless another
time is otherwise indicated:
(a) Seller shall use its best efforts to cooperate with Buyer in
assuring an orderly transition of ownership of the Assets and
responsibility for the Liabilities assumed by Buyer hereunder. Seller
shall provide final statements as of the Closing Date, in conjunction with
appropriate Deposit Liabilities, with interest and service charges
pro-rated to the Closing Date. Seller shall submit and file any required
IRS reporting with respect to interest accrued on Deposit Liabilities and
Branch Loans through the Closing Date.
(b) Upon the execution of this Agreement, Seller shall provide Buyer
with applicable product functions and specifications in a mutually agreed
upon format relating to the data processing support required for the
Deposit Accounts, Branch Loans, and safe deposit business maintained at
the Branches (such Deposit Accounts, Branch Loans, and safe deposit
business, if applicable, hereinafter called the "Accounts"). Upon the
execution of this Agreement, Seller shall provide to Buyer file formats
relating to the Accounts in electronic media in a mutually agreed upon
format and delivered via a secure Virtual Private Network (VPN). By not
later than 3:00 A.M. Central Daylight Standard Time on the day immediately
following the Closing Date, Seller shall provide the Buyer, the previously
agreed upon electronic media to support the conversion requirements of the
Buyer to transfer the Accounts to the Buyer's data processing systems. The
electronic media is to be delivered via a secure Virtual Private Network
(VPN) connection.
(c) Upon the execution of this Agreement, Seller shall cooperate
with Buyer, at no expense to Seller, to make provision for the
installation of equipment in the Branches subject to approval by Seller;
provided, however, that Buyer shall arrange for the installation and
placement of such equipment at such times and in a manner that does not
significantly interfere with the normal business activities and operation
of Seller or the Branches.
(d) Seller shall resign as custodian of each ▇▇▇ account maintained
at the Branches and assign the custodianship of such accounts to Buyer
upon Closing.
(e) Seller shall terminate its ATM/debit card service related to the
Branches at such time as Seller and Buyer may agree. Such terminations
will be preceded by the notice described in Section 7.01(b) herein.
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(f) Deposits and loan payments related to the Accounts sold (i)
received by mail, ATM or other means other than ACH or wire, will be
forwarded to Buyer the next day, and (ii) will not be accepted if
attempted to be made in person.
(g) As of the opening of business on the first business day after
the Closing Date, Seller and Buyer shall provide the appropriate Federal
Reserve Bank (the "FRB") with all information necessary in order to
expedite the clearing and sorting of all checks, drafts, instruments and
other commercial paper relative to the Deposit Liabilities and/or the
Branch Loans (hereinafter collectively referred to as "Paper Items").
Buyer shall bear all charges and costs imposed by the Federal Reserve in
connection with the reassignment of account number ranges for sorting the
Paper Items.
If the Federal Reserve and/or any other regional or local
clearinghouse for negotiable instruments fails, refuses or is unable to
direct sort such Paper Items for delivery to Buyer with the result that
such Paper Items are presented to Seller, on each business day following
the Closing and continuing until one hundred twenty (120) days after the
Closing, Seller will make available to Buyer, all of the Paper Items which
are received by Seller from the Federal Reserve and/or any regional or
local clearinghouse on the prior business day. Seller shall electronically
transmit to Buyer by 5:00 a.m. Central Daylight Standard Time each
business day, information relating to checks received by Seller on the
prior business day. On the same day, Seller will deliver physical custody
of Paper Items to Buyer at a time and method agreed upon by Buyer and
Seller, Seller shall also make available to Buyer information and records,
including but not limited to systems printouts, concerning such Paper
Items and concerning incoming ACH items as well as outstanding Automatic
Teller Machine ("ATM") transactions. Such information and records,
including but not limited to systems printouts, will utilize the most
recent account number designated by Seller for each of the Deposit
Accounts and/or the Branch Loans. Seller shall initiate appropriate
Notification of Change requests relating to appropriate routing matters at
the sole expense of Buyer up to one hundred twenty (120) days following
the Closing Date . Each business day Seller will endeavor to see that the
sum of (a) the actual Paper Items provided to Buyer plus (b) all ACH items
and ATM transactions captured by Seller in its information and records
balance with the sum of (c) the information and records, including but not
limited to systems printouts, provided by Seller relative to the Paper
Items plus (d) the information and records, including but not limited to
systems printouts, provided relative to the ACH items and ATM transactions
affecting the Deposit Accounts and/or the Branch Loans.
Except as otherwise expressly noted, Seller shall provide the
foregoing at no charge to Buyer, except that Buyer shall pay any charges
assessed to Seller by the Federal Reserve, a national or local
clearinghouse, and/or Seller's agent and/or processor to the extent such
assessments relate to the Deposit Accounts.
Seller and Buyer shall arrange for appropriate daily settlement
between the parties in order that the transmission of all monies
associated with the matters set forth in this Section 7.02(g) might be
effected promptly. Buyer shall establish and maintain a settlement account
to facilitate the daily settlements.
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Seller shall not be liable to Buyer for any failure to provide the
data required by this Section 7.02(g) to the extent any such failure
results from causes beyond Seller's control including war, strike or other
labor disputes, acts of God, terrorists, errors or failures of the FRB,
and/or a participating regional or local clearinghouse, or equipment
failure or other emergency wherein Seller and/or its agent processor has
been unable to process in clearings from the FRB or such clearinghouse.
(h) For a period of sixty (60) days after the Closing Date, Seller
will forward to Buyer, within two (2) business days of receipt, loan
payments received by Seller with respect to the Branch Loans. Buyer will
forward, within two (2) business days of receipt payments received by
Buyer with respect to any loans not assigned to Buyer under this
Agreement. Buyer and Seller further agree to refer customers to the
branches of the other when such customers present payments over the
counter to the party not holding their respective loan. Buyer shall
reimburse Seller within thirty (30) days of notice by Seller to Buyer for
any payments tendered by borrowers which were credited to the outstanding
balance of any Branch Loan prior to the Closing Date and which are
subsequently returned or otherwise withdrawn for any reason and Seller
shall assign to Buyer any rights of Seller to recovery of such payments as
against the relevant borrower.
(i) The duties and obligations of the parties in this Section 7.02
shall survive the Closing; provided, however, that Seller shall have no
obligation to take any action or furnish any service for the benefit of,
or in favor of, any third party, unless such third party is a permitted
assignee of Buyer pursuant to Section 10.06 hereof.
7.03 Overdrafts and Transitional Action. Overdrafts paid on the Deposit
Accounts with respect to ledger dates after the Closing Date will be the
responsibility and risk of Buyer. Overdrafts approved with respect to ledger
dates prior to the Closing Date will be the responsibility and risk of Seller.
7.04 ATMs and Debit Cards.
(a) Upon the execution of this Agreement and again prior to the
Closing Date, Seller shall provide electronic media, along with a file
format, containing customer name, card number, withdrawal limits, the
Deposit Accounts activated by, accessible to or committed to such cards,
issue dates and/or open dates, last transaction dates, and expiration
dates as to all ATM and debit cards issued to customers of the Seller for
the Branches. Seller shall cause the deactivation of its debit cards at a
time mutually agreed upon by the Buyer and Seller.
(b) Seller agrees to deactivate the ATMs located at the Branches at
a time mutually agreed upon by the Buyer and Seller. Thereafter, Buyer
shall reconfigure the ATMs to its standards for activation after the
Closing Date.
(c) Buyer and Seller agree to cooperate with each other to assure
that all transactions originated through the ATM or originated with the
ATM Cards prior to or on
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the Closing Date shall be for the account of Seller and all transactions
originated after the Closing Date shall be for the account of Buyer. A
post-closing adjustment shall be made in the manner set forth in Section
6.04 hereof to reflect all such transactions which cannot be reasonably
calculated as of the Closing.
7.05 Environmental Matters.
(a) Seller shall provide to Buyer, within twenty (20) days following
the Effective Date, Phase I environmental site assessments (the "Phase I
Assessments") for all Owned Real Estate.
(b) If such Phase I Assessments reasonably indicate the necessity or
desirability of further investigation to determine whether or not an
Environmental Hazard exists at such Owned Real Estate, Buyer shall notify
Seller in writing, not later than five (5) days after receipt of the Phase
I Assessments, of Buyer's desire to have an environmental consultant
selected by Buyer (the "Environmental Consultant"), to the extent
reasonable and appropriate, conduct Phase II environmental site
assessments (the "Phase II Assessments"). Any such further investigation
or testing shall be conducted in such a manner as not to interfere with
the normal operation of the Branches involved. All such Phase II
Assessments shall be treated as information subject to Section 8.01 of
this Agreement, shall be completed not more than forty (40) days after the
Effective Date, and shall be conducted at no cost or expense to Buyer.
(c) In the event that the Phase II Assessment is conducted and the
Environmental Consultant discovers an Environmental Hazard during any such
Phase II Assessment at any single parcel of Owned Real Estate, the
remediation of which, in the reasonable judgment of the Environmental
Consultant, is or would be the responsibility of Seller, or Buyer should
it acquire such Owned Real Estate, and will result in projected
remediation costs of $50,000 or more for such single parcel of Owned Real
Estate, Buyer may, at Buyer's option, lease from Seller such single parcel
of Owned Real Estate pursuant to a lease agreement which shall provide as
follows:
(i) Such lease agreement shall be for a term of two (2) years
from the Closing Date, with no obligation or right to renew (it
being the intention of Seller that Buyer locate an alternative
branch site during such two year period unless remediation occurs
pursuant to this Section 7.05), at a rental equal to a fair market
rental value;
(ii) Seller may sell such Owned Real Estate to any person at
any time during the term of such lease agreement, subject to such
lease agreement;
(iii) During the term of such lease agreement, in the event
that Seller shall deliver to Buyer a report of a qualified
environmental engineer or consultant certifying that the
Environmental Hazard, at or on any such parcel of Owned Real Estate
which is the subject of the lease agreement, has been remediated to
the extent reasonably required under applicable Environmental Laws,
Buyer shall be
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required to purchase such parcel of Owned Real Estate at the net
book value as of the close of business of the month-end day most
recently preceding the Closing Date; and
(iv) Other terms and conditions of the lease agreement shall
be typical to branch leases in the relevant market of the subject
Owned Real Estate and as negotiated between Seller and Buyer.
If the projected remediation cost is less than $50,000 for any
single parcel of Owned Real Estate, Buyer shall acquire such parcel and
such cost shall be borne by Seller. In such case, Buyer shall be deemed to
have waived any and all claims against Seller and its affiliates and its
and their officers, directors, employees, or arising directly or
indirectly as a result of the Environmental Hazards.
(d) Buyer agrees that it and the Environmental Consultant shall
conduct any Phase II Assessments or other investigations pursuant to this
Section with reasonable care and subject to customary practices among
environmental consultants and engineers, including, without limitation,
following completion thereof, the restoration of any site to the extent
practicable to its condition prior to such site assessment or
investigation and the removal of all monitoring ▇▇▇▇▇.
(e) Any lease of a parcel of Owned Real Estate pursuant to this
Section 7.05 shall in no way affect the transfer of any related assets or
liabilities other than such parcel of Owned Real Estate to the Buyer at
the Closing.
(f) For purposes of this Section 7.05, the term "Environmental Law"
shall mean any Federal or state law, statute, rule, regulation, code,
order, judgment, decree, injunction, or agreement with any Federal or
state governmental authority: (i) relating to the protection,
preservation, or restoration of the environment (including, without
limitation, air, water, vapor, surface water, groundwater, drinking water
supply, surface land, subsurface land, plant and animal life or any other
natural resource) or to human health or safety; or (ii) the exposure to,
or the use, storage, recycling, treatment, generation, transportation,
processing, handling, labeling, production, release or disposal of
Hazardous Substances, in each case as amended and now in effect.
Environmental Laws include, without limitation, the Clean Air Act (42
U.S.C. section 7401 et seq.), the Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. section 9601 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. section 1251 et seq.), and
the Occupational Safety and Health Act (29 U.S.C. section 651 et seq.).
(g) For purposes of this Section 7.05, the term "Environmental
Hazard" shall mean the presence of any Hazardous Substance in violation of
and reasonably likely to require material remediation costs under,
applicable Environmental Laws.
(h) For purposes of this Section 7.05, the term "Hazardous
Substance" shall mean any substance, whether liquid, solid, or gas, (a)
listed, identified or designated as hazardous or toxic to a level which
requires remediation under any Environmental Law;
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(b) which, applying criteria specified in any Environmental Law, is
hazardous or toxic; (c) the use or disposal of which is regulated under
Environmental Law; or (d) toxic mold spores.
7.06 Effect of Transitional Action. Except as and to the extent expressly
set forth in this Article 7, nothing contained in this Article 7 shall be
construed to be an abridgment or nullification of the rights, customs and
established practices under applicable banking laws and regulations as they
affect any of the matters addressed in this Article 7.
ARTICLE VIII
GENERAL COVENANTS AND INDEMNIFICATION
8.01 Confidentiality Obligations of Buyer. From and after the date hereof,
Buyer, its affiliates, and parent company shall treat all information received
from Seller concerning the business, assets, operations, and financial condition
of Seller, and its affiliates, and its customers (including without limitation
the Branches), as confidential (the "Confidential Information"), unless and to
the extent that Buyer can demonstrate that such Confidential Information was
already known to Buyer and its affiliates, or in the public domain, or received
from a third person not known by Buyer to be under any obligation to Seller; and
Buyer shall not use any such Confidential Information for any purpose except in
furtherance of the transactions contemplated hereby. Upon the termination of
this Agreement, Buyer shall, and shall cause its affiliates, if any, to,
promptly return all documents and work papers containing, and all copies of, any
Confidential Information received from or on behalf of Seller in connection with
the transactions contemplated hereby. The covenants of Buyer contained in this
Section 8.01 are of the essence and shall survive any termination of this
Agreement, but shall terminate at the Closing, if it occurs, with respect to any
Confidential Information that is limited solely to the activities and
transactions of the Branches; provided, however, that neither Buyer nor any of
its affiliates shall be deemed to have violated the covenants set forth in this
Section 8.01 if Buyer shall in good faith disclose any of such Confidential
Information in compliance with any legal process, order or decree issued by any
court or agency of government of competent jurisdiction. It is expressly
acknowledged by Seller that all Confidential Information provided to Buyer
related to the Acquisition may be provided to Buyer's affiliates as necessary
for the purpose of consummating the Acquisition subject to compliance with the
foregoing restrictions.
8.02 Confidentiality Obligations of Seller. From and after the date
hereof, Seller, its affiliates, and its parent corporation shall treat all
information received from Buyer concerning Buyer's business, assets, operations,
and financial condition as confidential (the "Confidential Information"), unless
and to the extent Seller can demonstrate that such Confidential Information was
already known to Seller or its affiliates, or in the public domain, or received
from a third person not known by Seller to be under any obligation to Buyer; and
Seller shall not use any such Confidential Information for any purpose except in
furtherance of the transactions contemplated hereby. Upon the termination of
this Agreement, Seller shall, and shall cause its affiliates, if any, to
promptly return all documents and work papers containing, and all copies of, any
such Confidential Information received from or on behalf of Buyer in connection
with the transactions contemplated hereby. The covenants of Seller contained in
this Section 8.02 are of
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the essence and shall survive any termination of this Agreement; provided,
however, that Seller nor any of its affiliates shall be deemed to have violated
the covenants set forth in this Section 8.02 if Seller shall in good faith
disclose any of such Confidential Information in compliance with any legal
process, order or decree issued by any court or agency of government of
competent jurisdiction. It is expressly acknowledged by Buyer that all
Confidential Information provided to Seller related to the Acquisition may be
provided to Seller's affiliates for the purpose of consummating the Acquisition
subject to compliance with the foregoing restrictions. The covenants and
obligations of Seller hereunder shall survive the Closing and any earlier
termination of this Agreement.
8.03 Indemnification by Seller. From and after the Closing Date, Seller
shall indemnify, hold harmless, and defend Buyer from and against all losses and
liabilities, including reasonable attorneys' fees and expenses, arising out of
any actions, suits, or proceedings commenced prior to the Closing (other than
proceedings to prevent or limit the consummation of this Agreement) relating to
operations at the Branches and/or the Deposit Liabilities of the Branches; and
Seller shall further indemnify, hold harmless, and defend Buyer from and against
all losses and liabilities, including reasonable attorneys' fees and expenses,
arising out of any actions, suits, or proceedings commenced on or after the
Closing Date to the extent the same relate to operations at the Branches and/or
the Deposit Liabilities of the Branches conducted prior to the Closing Date. The
obligations of Seller under this Section 8.03 shall be contingent upon Buyer
giving Seller written notice (i) of receipt by Buyer of any process and/or
pleadings in or relating to any actions, suits, or proceedings of the kinds
described in this Section 8.03, including copies thereof, and (ii) of the
assertion of any claim or demand relating to the operation of the Branches
and/or the Deposit Liabilities or Branch Loans prior to the Closing, including,
to the extent known to Buyer, the identity of the person(s) or entity(ies)
asserting such claim or making such demand and the nature thereof, and including
copies of any correspondence or other writings relating thereto. The rights of
Buyer under this Section shall not apply to any suits, judgments, demands,
set-offs, or other claims arising directly or indirectly in conjunction with the
Branch Loans or other Assets transferred in accordance with this Agreement
except claims for personal injury arising from injuries occurring at the
Branches prior to the Closing. All notices required by the preceding sentence
shall be given within fifteen (15) days of the receipt by Buyer of any such
process or pleadings or any oral or written notice of the assertion of any such
claims or demands. Seller shall have the right to take over Buyer's defense in
any such actions, suits, or proceedings through counsel selected by Seller, to
compromise and/or settle the same and to prosecute any available appeals or
reviews of any adverse judgment or ruling that may be entered therein. The
covenants and obligations of Seller hereunder shall survive the Closing.
8.04 Indemnification by Buyer. From and after the Closing Date, Buyer
shall indemnify, hold harmless and defend Seller from and against all claims,
losses, liabilities, demands and obligations, including without limitation
reasonable attorneys' fees and operating expenses, which Seller may receive,
suffer, or incur in connection with (i) any losses incurred by Seller related to
Seller's compliance with instructions from Buyer made pursuant to Section 7.04
of this Agreement and not related to any negligence or malfeasance on the part
of Seller, and (ii) operations and transactions occurring after the Closing and
which involve the Assets transferred, the Deposit Liabilities, or Branch Loans
and the other obligations and liabilities assumed
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pursuant to this Agreement and (iii) any actions, suits, or proceedings
commenced in connection with the Buyer's operation of the Branches after the
Closing Date. The obligations of Buyer under this Section 8.04 shall be
contingent upon Seller giving Buyer written notice (i) of the receipt by Seller
of any process and/or pleadings in or relating to any actions, suits or
proceedings of the kinds described in this Section 8.04, including copies
thereof, and (ii) of the assertion of any claim or demand relating to the Assets
transferred to and/or the Deposit Liabilities or Branch Loans and the other
obligations and liabilities assumed by Buyer on or after the Closing, including,
to the extent known to Seller, the identity of the person(s) or entity(ies)
asserting such claim or making such demand and the nature thereof, and including
copies of any correspondence or other writings relating thereto. All notices
required by the preceding sentence shall be given within fifteen (15) days of
the receipt by Seller of any such process or pleadings or any oral or written
notice of the assertion of any such claims or demands. Buyer shall have the
right to take over Seller's defense in any such actions, suits, or proceedings
through counsel selected by Buyer, to compromise and/or settle the same and to
prosecute any available appeals or review of any adverse judgment or ruling that
may be entered therein. The covenants and obligations of Buyer hereunder shall
survive the Closing.
8.05 Non-Competition. For a period of two (2) years following the Closing
Date, the parties do hereby agree as follows:
(a) Seller. Without the written consent of the Buyer, the Seller and
its subsidiaries and affiliates will not, directly or indirectly (1) open
a banking office, branch office, ATM or loan or deposit production office;
(2) solicit the former customers; (3) sponsor targeted advertisements to
the former customers; (4) directly solicit Deposit Accounts of the type
assumed by Buyer from customers whose Deposit Liabilities are assumed or
acquired by Buyer pursuant to this Agreement; (5) solicit the refinance of
any of Branch Loans from borrowers whose Branch Loans are being acquired
by Buyer hereunder, except as may occur in connection with (i)
solicitations outside the designated market area of the Branches, and (ii)
customers or borrowers with a banking or other relationship with Seller or
its affiliates at branches other than the Branches, including deposit or
loan relationships (including non-Branch loans), or who have or maintain
more than one place of business; or (6) otherwise engage in any form of
competition with the business of Buyer in Okaloosa, ▇▇▇▇▇▇, and Bay
Counties, Florida. Nothing contained in this Section 8.05(a) shall
preclude Seller from continuing to operate its existing branch office
within five (5) miles from the existing municipal boundaries of Mexico
Beach located in Bay County, Florida on the Effective Date. In the event
Seller subsequently agrees to sell any of its other Florida branches
(whether by means of a merger or a purchase and assumption transaction),
then this Section 8.05(a) shall terminate as to such branch or branches
and Buyer's noncompete agreement set forth in Section 8.05(b) shall
terminate as to the County or Counties in which such branch or branches
are located. Notwithstanding the foregoing sentence, in the event Seller
subsequently agrees to sell any of its other Florida branches (whether by
means of a merger or a purchase and assumption transaction) to any entity
controlled by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., or ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, then the provisions of this Section 8.05(a) will continue in full
force and effect as set forth herein. For the purpose of this Section
"control" shall mean ownership of five percent (5%) or more of the voting
stock of the entity or any
- 37 -
affiliate of the entity, or any entity on which any two of the above
persons are members of the board of directors. The covenants and
obligations of Seller hereunder shall survive the Closing.
(b) Buyer. Subject to Section 8.05(a), without the written consent
of the Seller, the Buyer and its subsidiaries and affiliates will not,
directly or indirectly (1) sponsor targeted advertising to customers of
Seller, (2) open a banking office, branch office, ATM or loan or deposit
production office, or (3) otherwise engage in any form of direct
competition with the business of the Buyer within five (5) miles of the
existing municipal boundaries of Mexico Beach located in Bay County,
Florida on the Effective Date or otherwise in Gulf, Franklin, Liberty and
▇▇▇▇▇▇▇ Counties, Florida. The covenants and obligations of the Buyer
shall survive the Closing.
8.06 No Shop.
(a) Certain Definitions. The following terms are used in this
Section 8.06 with the meanings set forth below:
"Acquisition Proposal" means any proposal or offer with respect to
any of the following (other than the transactions contemplated hereunder)
involving the Seller or any of the Branches: (i) any merger,
consolidation, share exchange, business combination or other similar
transaction that includes the Branches; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of the Branches; or (iii)
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.
"Acquisition Transaction" means any of the following (other than the
transaction contemplated hereunder) involving the Seller or any of the
Branches: (i) any merger, consolidation, share exchange, business
combination or other similar transaction that includes the Branches; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of the Branches.
"Superior Proposal" has the meaning set forth in Section 8.06(b).
(b) Acquisition Proposals. Seller agrees that neither it nor any of
its affiliates shall, and that it shall direct and use its reasonable best
efforts to cause its and each such affiliate's directors, officers,
employees, agents and representatives not to, directly or indirectly,
initiate, solicit, knowingly encourage or otherwise facilitate any
inquiries or the making of any proposal or offer with respect to an
Acquisition Proposal. Seller further agrees that neither Seller nor any of
its affiliates shall, and that it shall direct and use its reasonable best
efforts to cause its and each such affiliate's directors, officers,
employees, agents and representatives not to, directly or indirectly,
engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any third party
relating to an Acquisition Proposal, or otherwise knowingly facilitate any
effort or attempt to make or implement an Acquisition Proposal; provided,
however, that nothing contained in this subsection 8.06(b) shall prevent
the
- 38 -
Seller or its Board of Directors from (A) complying with its disclosure
obligations under federal or state law; (B) engaging in any negotiations
or discussions with any third party who has made an unsolicited bona fide
written Acquisition Proposal; or (C) recommending such an Acquisition
Proposal to the shareholder of Seller, if and only to the extent that, in
each such case referred to in clause (B) or (C) above, (i) Seller's Board
of Directors determines in good faith (after consultation with legal
counsel) that such action would be required in order for its directors to
comply with their respective fiduciary duties under applicable law and
(ii) Seller's Board of Directors determines in good faith (after
consultation with its legal counsel and other advisors) that such
Acquisition Proposal, if accepted, is reasonably likely to be consummated,
taking into account all legal, financial and regulatory aspects of the
proposal and the third party making the proposal and would, if
consummated, result in a transaction more favorable to Seller from a
financial point of view than the transaction proposed in this letter of
intent. An Acquisition Proposal which is received and considered by the
Seller in compliance with this subsection 8.06(b) and which meets the
requirements set forth in clause (C) of the preceding sentence is herein
referred to as a "Superior Proposal." Seller agrees that it will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with
respect to any Acquisition Proposals. Seller agrees that it will notify
Buyer immediately if any such inquiries, proposals or offers are received
by, any such information is requested from, or any such discussions or
negotiations are sought to be initiated or continued with, Seller or any
of its representatives.
(c) Fee. If at any time prior to September 30, 2003, Seller enters
into an acquisition agreement or similar agreement (each, an "Acquisition
Agreement") with respect to a Superior Proposal which has been received
and considered by Seller and Seller's Board of Directors in compliance
with subsection 8.06(b) hereof, then Seller shall immediately notify Buyer
and, in recognition of the efforts, expenses and other opportunities
foregone by Buyer while structuring and pursuing the proposed transaction,
the parties hereto agree that Seller shall pay Buyer the termination fee
described in Section 9.05 herein in immediately available funds on the
date Seller enters the Acquisition Agreement.
8.07 Further Assurances. From and after the date hereof, each party hereto
agrees to execute and deliver such instruments and to take such other actions as
the other party hereto may reasonably request in order to carry out and
implement this Agreement. Without limiting the foregoing, Seller agrees to
execute and deliver such deeds, bills of sale, acknowledgments, and other
instruments of conveyance and transfer as, in the judgment of Buyer, shall be
necessary and appropriate to vest in Buyer the legal and equitable title to the
Assets of Seller being conveyed to Buyer hereunder. Further, Buyer, at its sole
cost and expense, shall prepare and shall file, or shall cause to be prepared
and filed, with any appropriate third parties, any and all documents and notices
which are necessary and proper to transfer to Buyer any security interests and
other rights of Seller in and to collateral securing the Branch Loans being
transferred hereunder. Seller shall cooperate with Buyer in executing any
necessary and proper documents and notices as may be appropriate in furtherance
of the foregoing covenant and consistent with the terms of this Agreement
provided, however, that nothing contained herein shall relieve Buyer
- 39 -
of its obligations as set forth herein. The covenants and obligations of the
parties hereunder shall survive the Closing.
8.08 Operation of the Branches. Except as otherwise expressly provided in
this Agreement, after the Closing Date neither Seller, its subsidiaries,
affiliates nor parent corporation shall be obligated to provide for any
managerial, financial, business, or other services to the Branches, including
without limitation any personnel, employee benefit, data processing, accounting,
risk management, or other services or assistance that may have been provided to
the Branches prior to the close of business on the Closing Date, and Buyer shall
take such action as may in its judgment appear to be necessary or advisable to
provide for the ongoing operation and management of, and the provision of
services and assistance to, the Branches after the Closing Date. Preceding the
Closing, Seller shall cooperate with any reasonable requests of Buyer directed
to obtaining specifications for the procurement of new signs of Buyer's choosing
for installation by Buyer of new signs immediately following the close of
business on the Closing Date; provided however that Buyer's receipt of all sign
specifications shall be obtained by Buyer in a manner that does not
significantly interfere with the normal business activities and operations of
the Branches and shall be at the sole and exclusive expense of Buyer. It is
understood by the parties hereto that all mounting facilities for the signs
shall be considered as Fixed Assets for purposes of this Agreement.
8.09 Information After Closing. Until the expiration of applicable legal
requirements for retention of the specific records, upon written request of
Seller to Buyer or Buyer to Seller, as the case may be, such requested party
shall provide the requesting party with reasonable access to, or copies of,
information and records relating to the Branches which are then in the
possession or control of the requested party reasonably necessary to permit the
requesting party or any of its subsidiaries or affiliates to comply with or
contest any applicable legal, tax, banking, accounting, or regulatory, policies
or requirements, or any legal or regulatory proceeding thereunder or requests
related to customer relationships at the Branches prior to Closing. In the event
of any such requests, the requesting party shall reimburse the requested party
for the reasonable costs of the requested party related to such request. After
such requirements have expired, Buyer or Seller, as the case may be, may destroy
such records unless within fifteen (15) days of the expiration of such
requirement, the Buyer or Seller, as the case may be, requests that such records
be delivered at the requesting party's expense, to the requesting party. The
covenants and obligations of the parties hereunder shall survive the Closing.
8.10 Additional Loans. If Seller makes a new extension of credit to a
borrower at the Branches for $250,000 or more (excluding renewals of existing
loans) without prior notice to Buyer, Buyer may, in addition to other reasons
which render such credit unsatisfactory to Buyer, refuse to purchase such loan
at Closing.
8.11 Advisory Directors. Buyer agrees that the current advisory directors
of Seller for the Emerald Coast Bank, except for Messrs. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., shall be asked to serve as the Emerald Coast Community
Advisory Group of Buyer after Closing. Messrs. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇. shall submit their written resignations as advisory directors of the
Emerald Coast Bank at or prior to Closing.
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ARTICLE IX
TERMINATION
9.01 Termination by Mutual Agreement. This Agreement may be terminated and
the transactions contemplated hereby may be abandoned by mutual consent of the
parties authorized by a vote of a majority of the Board of Directors (or by the
vote of the Executive Committee of such Board, if so empowered) of each of
Seller and Buyer.
9.02 Termination by Seller. This Agreement may be terminated and the
transactions contemplated hereby abandoned by a vote of a majority of the Board
of Directors (or by the vote of the Executive Committee of such Board, if so
empowered) of Seller:
(a) in the event of a material breach by Buyer of this Agreement;
(b) in the event any of the conditions precedent specified in
Section 5.01 of this Agreement have not been met as of the date required
by this Agreement and have not been waived by Seller;
(c) in the event any regulatory approval for the consummation of the
Acquisition is denied by the applicable regulatory authority; or
(d) on or after September 30, 2003 if the Closing has not then
occurred unless the failure to consummate by such date is due to a breach
of this Agreement by Seller.
9.03 Termination by Buyer. This Agreement may be terminated and the
transactions contemplated hereby abandoned by a vote of a majority of the Board
of Directors (or by the vote of the Executive Committee of such Board, if so
empowered) of Buyer:
(a) in the event of a material breach by Seller of this Agreement;
(b) in the event any of the conditions precedent specified in
Section 5.02 of this Agreement have not been met as of the date required
by this Agreement and have not been waived by Buyer;
(c) in the event any regulatory approval required for consummation
of the Acquisition or Merger is denied by the applicable regulatory
authority;
(d) on or after September 30, 2003 if the Closing has not then
occurred unless the failure to consummate by such time is due to a breach
of this Agreement by Buyer; or
(e) at the option of Buyer in the event that there is a material
adverse change in the Assets, Liabilities, financial condition or results
of operations of Seller, or pending or threatened litigation or claims
with respect to the transactions contemplated by this Agreement which, in
the opinion of Buyer, may hinder or delay the Seller's ability to
- 41 -
perform its obligations hereunder and to consummate the Acquisition and
which cannot be cured by the Seller prior to September 30, 2003.
9.04 Effect of Termination. The termination of this Agreement pursuant to
Sections 9.02 or 9.03 of this Article 9 shall not release any party hereto from
any liability or obligation to the other party hereto arising from (i) a breach
of any provision of this Agreement occurring prior to the termination hereof, or
(ii) the failure to timely satisfy all conditions precedent to the obligations
of a party to the extent that such failure is attributable to the actions or
inactions of such party.
9.05 Termination Fee. In the event this Agreement is terminated by (i)
Seller pursuant to Section 8.06, or (ii) Buyer for a reason other than as set
forth in Section 9.03, the terminating party shall pay to the non-terminating
party a termination fee in the amount of Five Million Dollars ($5,000,000). The
termination fee shall be payable to the appropriate party in full by the other
party in immediately available funds on, as to the Seller the date Seller enters
an Acquisition Agreement and, as to Buyer, the date of the delivery of the
notice of termination.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.01 Expenses. Except as and to the extent specifically allocated
otherwise herein, each of the parties hereto shall bear its own expenses,
whether or not the transactions contemplated hereby are consummated. The
provision of this Section 10.01 are of the essence and shall survive the
termination of this Agreement.
10.02 Certificates. All statements contained in any certificate
("Certificate') delivered by or on behalf of Seller or Buyer pursuant to this
Agreement or in connection with the transactions contemplated hereby shall be
deemed to be representations and warranties of the party delivering the
Certificate hereunder. Each such Certificate shall be executed on behalf of the
party delivering the Certificate by duly authorized officers of such party.
10.03 Termination of Representations and Warranties. The respective
representations and warranties of Seller and Buyer contained or referred to in
this Agreement or in any Certificate, schedule, or other instrument delivered or
to be delivered pursuant to this Agreement shall terminate at the Closing,
except for:
(a) those representations and warranties contained in the Warranty
Deeds delivered by Seller to Buyer at the Closing;
(b) those representations and warranties contained in any ▇▇▇▇ of
sale relating to the Assets delivered by Seller to Buyer at Closing;
(c) those representations and warranties contained in any instrument
of assumption, or any Third Party Lease delivered by Buyer to Seller at
the Closing; and
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(d) those representations and warranties contained in any
Certificate delivered by the parties at the Closing.
10.04 Waivers. Prior to Closing, any provision of this Agreement may be
waived by the party benefited by the provision by written instrument signed by
duly authorized officers of such party.
10.05 Notices. All notices and other communications hereunder may be made
by mail, hand-delivery or by courier service and notice shall be deemed to have
been given when received; provided, however, if notices and other communications
are made by nationally recognized overnight courier service for overnight
delivery, such notice shall be deemed to have been given one business day after
being forwarded to such a nationally recognized overnight courier service for
overnight delivery.
If to Seller:
The Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
With copies to:
The Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Jr., Esq.
If to Buyer:
Trustmark National Bank
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman
and Chief Executive Officer
With a copy to:
Brunini, Grantham, Grower & ▇▇▇▇▇, PLLC
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇., Esq.
or such other person or address as any such party may designate by notice to the
other parties, and shall be deemed to have been given as of the date received.
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10.06 Parties in Interest; Assignment; Amendment. The rights and
obligations of each party hereto shall be exclusively and individually binding
upon, and shall inure exclusively and individually to the benefit of, that party
and its respective permitted successors and assigns. This Agreement is binding
upon and is for the benefit of the parties hereto and their respective
successors, legal representatives, and permitted assigns, and no person who is
not a party hereto (or a permitted successor or assignee of such party) shall
have any rights or benefits under this Agreement, either as a third party
beneficiary or otherwise. This Agreement cannot be amended or modified, except
by a written agreement executed by the parties hereto and is not assignable.
10.07 Headings. The headings, table of contents, and index to defined
terms (if any) used in this Agreement are inserted for convenience of reference
only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
10.08 Terminology. The specific terms that are defined in various
provisions of this Agreement shall apply throughout this Agreement (including
without limitation each Schedule hereto), unless expressly indicated otherwise.
In addition, the following terms and phrases shall have the meanings set forth
for purposes of this Agreement (including such Schedule):
(a) The term "business day" shall mean any day other than a
Saturday, Sunday, or a day on which either Seller or Buyer is closed in
accordance with applicable law or regulation. Any action, notice, or right
which is to be taken or given or which is to be exercised or lapse on or
by a given date which is not a business day may be taken, given, or
exercised, and shall not lapse, until the next business day following.
(b) The term "affiliate" shall mean, with respect to any person, any
other person directly or indirectly controlling, controlled by or under
common control with such person.
(c) The term "material" shall mean, with respect to the Seller, a
breach of any representation, warranty or covenant contained in this
Agreement which, separately or in the aggregate with any other such
breach, does or could result in a cost, loss, detriment or obligation in
excess of $400,000 or a reduction in the total Branch Loans of $20 million
or Deposit Liabilities of $30 million. Provided, however, with reference
to the representations, warranties, and covenants of Buyer contained in
this Agreement, "material" shall have the meaning normally accorded such
terms considering the relative importance of such representation,
warranty, or covenant in the context of an organization of the type of and
size of Buyers.
(d) The term "Permitted Exceptions" shall mean, with respect to the
Owned Real Estate and the Leased Real Estate: (i) those standard
exceptions appearing as Schedule B items in a standard ALTA owners or
leasehold title insurance policy (other than for matters revealed by a
current survey), and any other exceptions, restrictions, easements, rights
of way, and encumbrances referenced in the Title Commitments delivered by
Seller to Buyer as indicated in Section 2.01(b) of this Agreement; (ii)
statutory liens for current taxes or assessments not yet due, or if due
not yet delinquent, or the validity of which is being contested in good
faith by appropriate proceedings; (iii)
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such other liens, imperfections in title, charges, easements,
restrictions, and encumbrances (but in all cases of Owned Real Estate
excluding those which secure borrowed money) which, individually and in
the aggregate, do not materially detract from the value of, or materially
interfere with the present use of, any property subject thereto or
affected thereby; and (iv) such other exceptions as are approved by Buyer
in writing.
(e) The term "person" shall mean any individual, corporation
partnership, limited liability company, association, trust, or other
entity, whether business, personal, or otherwise.
(f) Unless expressly indicated otherwise in a particular context,
the terms "herein," "hereunder," "hereto," "hereof," and similar
references refer to this Agreement in its entirety and not to specific
articles, sections, schedules, or subsections of this Agreement. Unless
expressly indicated otherwise in a particular context, references in this
Agreement to enumerated articles, sections, and subsections refer to
designated portions of this Agreement (but do not refer to portions of any
Schedule unless such Schedule is specifically referenced) and do not refer
to any other document.
(g) The term "subsidiary" shall mean a corporation, partnership,
limited liability company, joint venture, or other business organization
more than 50% of the voting securities or interests in which are
beneficially owned or controlled by the indicated parent of such entity.
10.09 Flexible Structure. References in this Agreement to federal or state
laws or regulations, jurisdictions, or chartering or regulatory authorities
shall be interpreted broadly to allow maximum flexibility in consummating the
transactions contemplated hereby in light of changing business, economic, and
regulatory conditions. Without limiting the foregoing, in the event Seller and
Buyer agree in writing to alter the legal structure of the transaction
contemplated by this Agreement to such laws, regulations, jurisdictions, and
authorities shall be deemed to be altered to reflect the laws, regulations,
jurisdictions, and authorities that are applicable in light of such change.
10.10 Press Releases. Seller or Buyer, as the case may be, shall approve,
in writing prior to issuance, the form and substance of any press release or
other public disclosure relating to any matters relating to this Agreement
issued by the other. Nothing contained herein shall restrict or prohibit Buyer
or Seller from issuing press releases or public disclosures which, based on the
advice of counsel, are required by applicable law or regulation and limited to
information necessary for compliance with same.
10.11 Entire Agreement. This Agreement supersedes any and all oral or
written agreements and understandings heretofore made relating to the subject
matter hereof and contains the entire agreement of the parties relating to the
subject matter hereof. All schedules, exhibits, and appendices to this Agreement
are incorporated into this Agreement by reference and made a part hereof.
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10.12 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Mississippi applicable to contracts
made and to be performed entirely within such State.
10.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.14 Allocation Schedule. The total purchase price for the Acquisition
shall be allocated in accordance with Schedule L. After the Closing, the parties
shall make consistent use of the allocation, fair market value and useful lives
specified in Schedule L for all tax purposes and in all filings, declarations
and reports with the IRS in respect thereof, including the reports required to
be filed under Section 1060 of the Internal Revenue Code. Buyer shall prepare
and deliver IRS Form 8594 to Seller within forty-five (45) days after the
Closing Date to be filed with the IRS. In any proceeding related to the
determination of any tax, neither Buyer nor Seller shall contend or represent
that such allocation is not a correct allocation.
10.15 Severability. Except to the extent that application of this Section
10.15 would have a Material Adverse Effect on Buyer or Seller, any term or
provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid on unenforceable
the remaining terms of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable. In all such cases, the parties shall use their reasonable best
efforts to substitute the valid, legal and enforceable provision which, insofar
as practicable, implements the original purposes and intents of this Agreement.
10.16 Enforcement of Agreement. Seller hereby agrees that irreparable
damage would occur to Buyer in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that, except upon the occurrence of
an event described in Section 8.06 for which the termination fee set forth in
Section 9.05 will be payable by the Seller to the Buyer, Buyer shall be entitled
to an injunction or injunctions to prevent Seller's breach of this Agreement and
to enforce specifically the terms and provisions hereof in any court of
competent jurisdiction, this being in addition to any other remedy to which it
is entitled at law or in equity. In no event shall Seller be entitled to demand
specific performance of Buyer's obligations under this Agreement.
10.17 Interpretation. When a reference is made in this Agreement to the
Sections, Schedules, or Exhibits, such reference shall be to a Section of,
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and are not part of this Agreement. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation."
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10.18 No Rule of Construction. The parties acknowledge that this Agreement
was initially prepared by Buyer and that all parties have read and negotiated
the language used in this Agreement. The parties agree that, because all parties
participated in negotiating and drafting this Agreement, no rule of construction
shall apply to this Agreement which construes ambiguous language in favor of or
against any party by reason of that party's role in drafting this Agreement.
[Remainder of page intentionally omitted]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized, all as of
the date first above written.
THE BANK
ATTEST:
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------ ------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
(Seal)
TRUSTMARK NATIONAL BANK
ATTEST:
/s/▇.▇▇▇▇▇▇ ▇▇▇▇▇▇▇,III /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------ ------------------------------------
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, III, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman and
Secretary Chief Executive Officer
(Seal)