EXHIBIT 2.1
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PURCHASE AND ASSUMPTION AGREEMENT
DATED AS OF JULY 9, 2003
BY AND BETWEEN
MICHIGAN COMMUNITY BANCORP, LIMITED,
NORTH OAKLAND COMMUNITY BANK
AND
COMMUNITY CENTRAL BANK
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1 Definitions. ........................................................... 5
ARTICLE II
PURCHASE OF ACQUIRED ASSETS
AND ASSUMPTION OF ASSUMED LIABILITIES
2.1 Acquired Assets........................................................ 11
2.2 Assumed Liabilities.................................................... 11
2.3 Excluded Liabilities................................................... 11
ARTICLE III
PURCHASE PRICE; ADJUSTMENT; CLOSING; DELIVERIES
3.1 Purchase Price, Tax Allocation of Purchase Price; Payment.............. 11
3.2 Determination of Purchase Price, Payment Adjustment.................... 12
3.3 The Closing............................................................ 13
3.4 Documents and Certificates............................................. 13
ARTICLE IV
ACTIONS PENDING TRANSACTION
4.1 Forbearances of Seller and its Subsidiaries............................ 13
4.2 Forbearances of Parent and Purchaser................................... 17
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT
5.1 Organization, Standing and Authority................................... 18
5.2 Authorization.......................................................... 18
5.3 Non-contravention...................................................... 18
5.5 Litigation............................................................. 19
5.6 Compliance with Laws; Regulatory Filings and Approvals................. 19
5.7 Financial Statements................................................... 21
5.8 Material Adverse Change................................................ 21
5.9 Environmental Matters.................................................. 21
5.10 Taxes.................................................................. 22
5.11 Labor Matters.......................................................... 22
5.12 Employee Benefits...................................................... 22
5.13 Certain Arrangements................................................... 23
5.14 Contracts and Excluded Contracts....................................... 23
5.15 Insurance.............................................................. 23
5.16 Properties............................................................. 23
5.17 Allowance for Loan Losses.............................................. 24
5.18 Loan Portfolio......................................................... 24
5.19 Investment Portfolio................................................... 24
5.20 Interests of Certain Persons........................................... 24
5.21 Fairness Opinion....................................................... 25
5.22 No Undisclosed Liabilities............................................. 25
5.23 Indemnification........................................................ 25
5.24 Subsidiaries........................................................... 25
5.25 Intellectual Property.................................................. 25
5.26 Brokers and Finders.................................................... 25
5.27 Employees; Consultants................................................. 26
5.28 Reasonably Equivalent Value; Solvency.................................. 26
5.29 Full Disclosure........................................................ 26
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
6.1 Organization, Standing and Authority................................... 26
6.3 Non-contravention...................................................... 27
6.4 Litigation............................................................. 27
6.5 Compliance with Laws; Regulatory Filings and Approvals................. 27
6.6 Brokers and Finders.................................................... 28
6.7 Full Disclosure........................................................ 28
6.8 Deposit Insurance...................................................... 28
ARTICLE VII
COVENANTS
7.1 Reasonable Best Efforts................................................ 28
7.2 Regulatory Matters..................................................... 28
7.3 Third Party Consents................................................... 29
7.4 Investigation and Confidentiality...................................... 29
7.5 Press Releases......................................................... 30
7.6 Current Information.................................................... 31
7.7 Environmental Reports.................................................. 31
7.8 Exclusivity............................................................ 31
7.9 Integration of Policies................................................ 32
7.10 Post-Closing Access, Record Retention and Confidentiality.............. 32
7.11 Tax Reporting.......................................................... 32
7.12 Post Closing Tax Covenants............................................. 32
7.13 Restrictive Covenants.................................................. 34
7.14 Employees.............................................................. 35
7.15 Transfer Taxes......................................................... 35
7.16 Assignment and Recording Charges....................................... 35
7.17 Notice to Depositors................................................... 36
7.18 Deposit Agreements..................................................... 36
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7.19 Loan Agreements........................................................ 37
7.20 Post-Closing Operations................................................ 37
ARTICLE VIII
CONDITIONS PRECEDENT
8.1 Conditions to Each Party's Obligation to Close......................... 38
8.2 Conditions to Obligation of Purchaser.................................. 38
8.3 Conditions to Obligations of Seller.................................... 39
ARTICLE IX
PRE-CLOSING AND CLOSING DELIVERIES
9.1 Pre-Closing Deliveries by Seller....................................... 39
9.2 Closing Deliveries by Seller........................................... 40
9.3 Closing Deliveries by Purchaser........................................ 41
ARTICLE X
SURVIVAL AND INDEMNIFICATION
10.1 Survival............................................................... 41
10.2 Indemnification by Seller and Parent................................... 42
10.3 Indemnification by Purchaser........................................... 42
10.4 Survival of Indemnification............................................ 42
ARTICLE XI
TERMINATION AND AMENDMENT
11.1 Termination............................................................ 43
11.2 Effect of Termination.................................................. 43
11.3 Specific Performance and Other Remedies................................ 43
11.4 Amendment.............................................................. 43
11.5 Extension; Waiver...................................................... 44
11.6 Lease Assignment and Assumption........................................ 44
ARTICLE XII
MISCELLANEOUS
12.1 Notices................................................................ 44
12.2 Entire Agreement....................................................... 45
12.3 No Waiver.............................................................. 45
12.4 Governing Law.......................................................... 46
12.5 Severability........................................................... 46
12.6 Interpretation......................................................... 46
12.7 Headings and Captions.................................................. 46
12.8 Reliance............................................................... 46
12.9 Expenses............................................................... 46
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12.10 Gender................................................................. 46
12.11 Counterparts........................................................... 46
12.12 Bulk Sales Act......................................................... 46
EXHIBITS
Exhibit A ▇▇▇▇ of Sale, Assignment and Assumption Agreement
Exhibit B Specified Loans
Exhibit C Tax Allocation of Purchase Price
Exhibit D Material Terms of New Real Estate Lease
Exhibit E Dual Customers
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PURCHASE AND ASSUMPTION AGREEMENT
This Purchase and Assumption Agreement (the "Agreement") is made and
entered into as of this 9th day of July, 2003, by and between MICHIGAN COMMUNITY
BANCORP, LIMITED., a bank holding company organized and existing under the laws
of the State of Michigan ("Parent"), NORTH OAKLAND COMMUNITY BANK, a commercial
bank organized and existing under the laws of the State of Michigan ("Seller")
and COMMUNITY CENTRAL BANK, a commercial bank organized and existing under the
laws of the State of Michigan ("Purchaser").
WITNESSETH
WHEREAS, Parent is the sole owner of all of the issued and outstanding
capital stock of Seller; and
WHEREAS, Parent and Seller desire to sell, transfer and assign to
Purchaser, and Purchaser desires to acquire from Seller, substantially all of
the assets of Seller and certain liabilities of Seller in accordance with the
terms and provisions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants, agreements, representations, warranties and indemnities of the
parties hereinafter set forth and for other good and valuable consideration,
both the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
(a) Except as otherwise specifically indicated, each of
the following terms shall have the following meanings:
"Affiliate" shall mean, with respect to any Person, any other
Person, directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such other Person. For purposes of this
definition, "control" (including, with correlative meaning, the terms
"controlling", "controlled by" and "under common control with"), as applied to
any Person, shall mean the ownership directly or indirectly of fifty percent
(50%) or more of the outstanding voting securities of such Person or other
ownership interest having ordinary voting power to elect a majority of the board
of directors of such Person or other entity performing similar functions.
"Assignment Agreement" shall mean the ▇▇▇▇ of Sale, Assignment
and Assumption Agreement, by and between Seller and Purchaser, dated as of the
Closing Date, a form of which is attached hereto as Exhibit A.
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"Benefit Plan" means any employment agreement, pension, profit
sharing, retirement, deferred compensation, multi-employer (as defined under
ERISA), stock purchase, stock option, incentive, bonus, vacation, severance,
disability, hospitalization, medical insurance, life insurance, fringe benefit,
welfare and other benefit plans, programs or arrangements pursuant to which
Seller provides (directly or indirectly, individually or jointly through others)
benefits or compensation to or on behalf of directors, employees or independent
contractors or former directors, employees or former independent contractors of
the Seller, whether formal or informal, whether or not written.
"Books and Records" shall mean all the books, records,
information, files and agreements of Seller and its affiliates which relate to
the Business, the Acquired Assets or the Assumed Liabilities whether such books,
records, information, files and agreements are in documentary form or on
microfilm, microfiche, magnetic tape, computer disk, CD-ROM or in any other
form.
"Business" shall mean the financial institution business of
Seller.
"Business Day" shall mean each day other than a Saturday,
Sunday or bank holiday in the State of Michigan.
"Closing Date" shall mean the date on which the Closing
occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Core Deposits" means the outstanding balance (excluding
interest payable thereon) of the demand deposit accounts, money market accounts,
savings accounts, NOW accounts and certificates of deposits of Seller to be
transferred to Purchaser, but specifically excluding the outstanding balance of
(a) each certificate of deposit in excess of $100,000 and (b) each brokered
certificate of deposit.
"CRA" means the Community Reinvestment Act.
"Cut-off Time" shall mean 11:59 p.m. (Detroit, Michigan Time)
on the day next preceding the Closing Date.
"Environmental Claim" means any written notice from any
governmental entity including any regulatory authority or third party alleging
potential liability (including potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resources damages, property
damages, personal injuries or penalties) arising out of, based on, or resulting
from the presence, or release into the environment, of any Materials of
Environmental Concern.
"Environmental Laws" means any federal, state or local law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or agreement with any
governmental entity including any regulatory authority relating to (a) the
protection, preservation or restoration of the
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environment (including air, water vapor, surface water, groundwater, drinking
water supply, surface soil, subsurface soil, plant and animal life or any other
natural resource), and/or (b) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production, release
or disposal of Materials of Environmental Concern. The term Environmental Law
includes (i) the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C. Section 9601, et seq; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901, et seq; the
Clean Air Act, as amended, 42 U.S.C. Section 7401, et seq; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251, et seq; the Toxic
Substances Control Act, as amended, 15 U.S.C. Section 9601, et seq; the
Emergency Planning and Community Right to Know Act, 42 U.S.C. Section 1101, et
seq; the Safe Drinking Water Act, 42 U.S.C. Section 300f, et seq; and all
comparable state and local laws, and (ii) any common law (including common law
that may impose strict liability) that may impose liability or obligations for
injuries or damages due to, or threatened as a result of, the presence of or
exposure to any Materials of Environmental Concern.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Estimated Net Asset Value" means the written good faith
estimate of the Net Asset Value (including supporting detailed documentation)
provided by Seller to Purchaser prior to Closing.
"Estimated Premium" means the written good faith estimate of
the Premium (including supporting detailed documentation) provided by Seller to
Purchaser prior to Closing.
"Excluded Assets" means all Tax receivables, deferred Tax
assets, Specified Loans, other real estate owned, Insider Loans, loan
participation interests held by Seller where Seller is not the lead lender, all
liabilities of Seller Affiliates to Seller, each asset acquired after the date
of this Agreement by Seller which has not been pre-approved in writing by
Purchaser (other than loan originations which do not require prior approval
pursuant to Section 4.1(l)) and each prepaid expense of Seller designated in
writing by Purchaser prior to Closing based upon such prepaid expense not having
post-Closing equivalent value to Purchaser.
"Excluded Contracts" means each agreement, lease or license of
Seller relating to the Acquired Assets or the Business (i) which (a) by its
terms cannot be assumed by Purchaser without penalty, premium or other charges
unless the written consent of the other party is obtained, (b) such written
consent has not been obtained by Seller prior to Closing without cost to
Purchaser or change in terms, and (c) is designated in writing for exclusion by
Purchaser at Closing; (ii) which involves any director or employee of Seller or
any of its Affiliates or any Person providing consulting or similar services to
Seller including any agreement to lease or sub-contract employees; (iii) which
relates to any of the Excluded Assets; or (iv) which is entered into by Seller
after the date of this Agreement without the prior written approval of Purchaser
and is designated in
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writing for exclusion by Purchaser at Closing, other than agreements entered
into after the date of this Agreement relating to deposit liabilities which do
not violate the provisions of Section 4.1(i).
"Include" means "include but not be limited to"; and
"including" shall mean "including, without limitation."
"Insider Loans" means loans from Seller to any officer,
director or managerial employee of Seller or any of its Affiliates or any
associate or related interest of any such Person.
"Intellectual Property" means (i) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, (ii)
all copyrightable works, all copyrights, and all applications, registrations,
and renewals in connection therewith, (iii) all mask works and all applications,
registrations, and renewals in connection therewith, (iv) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, processes and techniques, technical data,
designs, drawings, specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals), (v) all computer
software (including data and related documentation), (vi) all other proprietary
rights, excluding trademarks, service marks, trade dress, logos, trade names and
corporate and all goodwill associated therewith, and (vii) all copies and
tangible embodiments thereof (in whatever form or medium), used by Seller.
"Lien" shall mean, with respect to any Acquired Asset or the
Business, any mortgage, lien (including any tax lien), pledge, charge, claim,
restriction, security interest, encumbrance or rights of third parties of any
kind in respect of any Acquired Asset or the Business.
"Materials of Environmental Concern" means pollutants,
contaminants, wastes, toxic substances, petroleum and petroleum products and any
other materials regulated under Environmental Laws.
"Net Asset Value" means the net book value of the Acquired
Assets for financial reporting purposes on the financial Books and Records of
Seller as of the Cut-off Time calculated in accordance with generally accepted
accounting principles and applicable regulatory requirements less the amount of
the Assumed Liabilities under Section 2.2(a) hereof; provided (i) no value will
be assigned to any intangible assets or off-balance sheet assets, and (ii) the
general loan loss reserve shall not be less than $478,000 plus 1 1/2 % of the
gross amount (net of charge-offs) of the loans originated after the date hereof
(including lease loans), in each case relating only to loans being acquired from
Seller by Purchaser pursuant to this Agreement.
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"Other Instruments" shall mean such other instruments of
transfer as are necessary to vest good and marketable title in Purchaser to the
Acquired Assets free and clear of any and all Liens other than Permitted Liens
and such other instruments as are necessary to enable Purchaser to assume and
receive the benefits of and under the Assumed Liabilities.
"Permitted Lien" means a Lien that relates exclusively to an
Assumed Liability under Section 2.2(b) hereof.
"Person" shall mean an individual, corporation, partnership,
limited liability company, association, trust or other entity or organization,
including a government or political subdivision or any agency or instrumentality
thereof.
"Premium" means 4.5% of the amount of the deposit liabilities
(excluding interest payable and municipal deposits (public funds) in excess of
$6.0 million and brokered certificates of deposit in excess of $1.6 million) of
Seller as of the Cut-off Time less 6.5% of the amount (if any) that Core
Deposits at Closing are less than $19,000,000. In no event shall the "Premium"
exceed $1,300,000.
"Previously Disclosed" means disclosed in a written disclosure
schedule delivered on or prior to the date hereof by Seller to Purchaser
specifically referring to the appropriate section of this Agreement and
describing in reasonable detail the matters contained therein.
"Seller Accountant" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, independent
certified public accountants with respect to Seller.
"Seller Financial Statements" means (a) the audited balance
sheets (including related notes and schedules, if any) of Seller as of December
31, 2002 and 2001 and the audited statements of income, changes in stockholders'
equity and cash flows (including related notes and schedules, if any) of Seller
for each of the three years ended December 31, 2002, 2001 and 2000, and (b) the
unaudited balance sheet of Seller (including related notes and schedules, if
any) as of March 31, 2003 and the unaudited statements of income, changes in
stockholders' equity and cash flow (including related notes and schedules, if
any) of Seller for the three month period ending on such date.
"Specified Loans" means all loans with the borrower
relationships listed in Exhibit B together with any other loans of Seller that
have been charged-off in full prior to the Cut-Off Time.
"Subsidiary" means any entity which is required to be
consolidated with Seller for financial reporting purposes.
"Tax" or, collectively, "Taxes," means (i) any and all
federal, state, local and foreign taxes, assessments and other governmental
charges, duties, impositions and liabilities, including taxes based upon or
measured by gross receipts, income, profits,
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sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes, together
with all interest, penalties and additions imposed with respect to such amounts;
(ii) any liability for the payment of any amounts of the type described in
clause (i) as a result of being or ceasing to be a member of an affiliated,
consolidated, combined or unitary group for any period (including, without
limitation, any liability under Treas. Reg. Section 1.1502-6 or any comparable
provision of foreign, state or local law); and (iii) any liability for the
payment of any amounts of the type described in clause (i) or (ii) as a result
of any express or implied obligation to indemnify any other person or as a
result of any obligations under any agreements or arrangements with any other
person with respect to such amounts and including any liability for taxes of a
predecessor entity.
(b) Each of the following terms is defined in the Section
hereof set forth opposite such term:
Term Section
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Acquired Assets 2.1
Agreement Introduction
Assumed Liabilities 2.2
Binding Determination 3.2(a)
Closing 3.3
Competitive Market Area 7.13(a)
Contracts 2.2(b)
Damages 10.2
Employee Claims 7.14(c)
Excluded Liabilities 2.3
Injunction 8.1(b)
Loan Agreements 7.19
New Lease 8.3(d)
New Real Estate Lease 7.3
Objection Notice 3.2(a)
Parent Introduction
Permits 5.6
Purchaser Introduction
Purchaser Closing Payment 3.1(c)
Purchase Price 3.1(a)
Returns 5.10
Seller Introduction
Seller Closing Payment 3.1(c)
Seller's Determination 3.2(a)
Third Party Determination 3.2(a)
WARN 5.11
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ARTICLE II
PURCHASE OF ACQUIRED ASSETS
AND ASSUMPTION OF ASSUMED LIABILITIES
2.1 Acquired Assets. Subject to the terms and conditions of this
Agreement, at Closing, Purchaser shall purchase from Seller, and Seller shall
sell, convey, assign, transfer and deliver to Purchaser, good and marketable
title to all of the assets and properties owned by it or used by it in the
operation of the Business, whether tangible or intangible, including the Books
and Records, the Intellectual Property, telephone numbers, all goodwill
associated with the Business, all rights, claims and causes of action of Seller
against others, and all rights of Seller under the Contracts, but specifically
excluding the Excluded Assets (collectively, the "Acquired Assets").
2.2 Assumed Liabilities. Subject to the terms and conditions of
this Agreement, Purchaser shall, at the Closing, assume the following
liabilities and obligations of Seller (collectively, the "Assumed Liabilities"):
(a) the aggregate dollar amount of the balance sheet
liabilities of Seller as of the Cut-off Time including all deposit liabilities
(other than those arising after the date hereof in violation of Section 4.1(i))
but specifically excluding Taxes including Tax deferred liabilities, liabilities
of Seller to Seller Affiliates, liabilities relating to the Excluded Assets,
liabilities relating to Excluded Contracts, and liabilities to directors and
employees of Seller; and
(b) all prospective obligations of Seller, but subject to
all of the rights of Seller, relating to the period after the Cut-off Time under
the agreements, leases and licenses of Seller which relate to the liabilities
set forth in Section 2.2(a), the Acquired Assets or the Business other than
Excluded Contracts (the "Contracts").
2.3 Excluded Liabilities. Except as expressly provided in Section
2.2 hereof, none of Purchaser or its Affiliates is assuming or acquiring any of
the Acquired Assets subject to, and none of them shall be deemed to have
assumed, any liabilities or obligations of Seller or its Affiliates (the
"Excluded Liabilities"). It is understood and agreed by the parties that the
only liabilities being assumed by Purchaser under Section 2.2(a) are the actual
amount of the stated balance sheet liabilities of Seller that are taken into
account in the determination of Net Asset Value. All Excluded Liabilities shall
be retained by and remain the direct or indirect obligations and liabilities of
Seller or its Affiliates.
ARTICLE III
PURCHASE PRICE; ADJUSTMENT; CLOSING; DELIVERIES
3.1 Purchase Price, Tax Allocation of Purchase Price; Payment.
(a) Purchase Price. The purchase price ("Purchase Price")
for the Acquired Assets shall be the aggregate of the Net Asset Value and the
Premium. The parties acknowledge that the Purchase Price could result in an
obligation of Seller to pay
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cash to Purchaser by virtue of the Net Asset Value being a negative amount in
excess of the Premium. Parent does hereby unconditionally guarantee, in a
primary capacity, all payment obligations of Seller under this Article III.
(b) Tax Allocation. For tax purposes, the Purchase Price
shall be allocated as set forth on Exhibit C, which shall be completed by
Purchaser (with the approval of Seller, which approval shall not be unreasonably
withheld or delayed) not less than two business days prior to the Binding
Determination. Neither Seller or Parent, on the one hand, nor Purchaser, on the
other hand, shall file any income tax return or take a position with a taxing
authority that is inconsistent with the allocation of the Purchase Price under
Exhibit C. Each of Seller and Parent, on the one hand, and Purchaser, on the
other hand, agree to cooperate with the other in preparing IRS Form 8594 for
filing by each and to furnish the other with a copy of such Form prepared in
draft form within a reasonable period before its filing date.
(c) Closing Payment. If the sum of the Estimated Net
Asset Value and Estimated Premium equals a positive amount, Purchaser shall
tender to Seller at Closing, cash, in immediately available funds by wire
transfer, equal to 95% of the amount thereof (the "Purchaser Closing Payment").
If the sum of the Estimated Net Asset Value and Estimated Premium results in a
negative amount, Seller shall tender to Purchaser at Closing, cash, in
immediately available funds by wire transfer, equal to 105% of the amount
thereof (the "Seller Closing Payment"). Seller and Purchaser, to the extent
applicable, shall make a cash adjustment pursuant to Section 3.2(b) based upon
the determination of the Purchase Price under Section 3.2(a).
3.2 Determination of Purchase Price, Payment Adjustment.
(a) Determination of Purchase Price. Within 30 days after
the Closing Date, Seller shall deliver to Purchaser its written calculation
("Seller's Determination") of the Purchase Price (with supporting detailed
documentation relating to its determination of the Net Asset Value and the
Premium) certified as to accuracy by the Principal Financial Officer of Seller.
If Purchaser believes that any of the calculations set forth in Seller's
Determination are inaccurate, then Purchaser must notify Seller in writing (an
"Objection Notice") within 15 days after Purchaser's receipt of Seller's
Determination, setting forth in detail the disputed items and reasons therefor.
If Purchaser does not timely deliver an Objection Notice to Seller, then
Seller's Determination shall be deemed accepted by Purchaser and shall be
binding upon the parties. If Purchaser timely delivers an Objection Notice to
Seller, Seller and Purchaser shall attempt to resolve any dispute within 10 days
after Seller's receipt of the Objection Notice. If they are unable to resolve
the dispute within such 10 day period, then the parties shall promptly, but not
later than 10 days thereafter, mutually select and engage an independent public
accounting firm (the "Third Party Accountant") to resolve such dispute and such
firm shall notify the parties of its calculation (the "Third Party
Determination") of any items in dispute within 20 days after its engagement by
Seller and Purchaser. The Third Party Determination shall be final and binding
upon the parties. The cost of services provided by the Third Party Accountant
shall be borne equally by Seller and Purchaser. Seller's Determination if deemed
accepted by Purchaser, a written statement of resolution executed by Seller and
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Purchaser, or the Third Party Determination, whichever is applicable, shall be
hereinafter referred to as the "Binding Determination."
(b) Payment Adjustment. Within 5 Business Days after a
Binding Determination, Purchaser shall pay to Seller, or Seller shall pay to
Purchaser, in immediately available funds by wire transfer, an amount by which
the Purchase Price set forth in the Binding Determination is greater or less
than the sum of the Estimated Net Asset Value and Estimated Premium adjusted to
take into account that the Purchaser Closing Payment or Seller Closing Payment,
as applicable, was less than the positive amount of the Estimated Net Asset
Value and Estimated Premium or greater than the negative amount of the Estimated
Net Asset Value and Estimated Premium, plus interest on the amount of the cash
adjustment at 3% per annum from and including the Closing Date through the day
next preceding the payment date. In the event full payment is not timely made as
provided herein, then default interest shall thereafter apply at the rate of 9%
per annum on the unpaid amount thereof.
3.3 The Closing. Subject to the satisfaction or waiver of all
conditions set forth in Article VIII hereof, the closing of the transactions
contemplated hereby ("Closing") shall be held at 7:00 a.m. (Detroit, Michigan
Time) at the offices of Seller on the fifth Business Day after satisfaction or
waiver of the conditions set forth in Article VIII hereof, or at such place or
such other time as may be mutually agreed upon by the parties hereto.
3.4 Documents and Certificates. At Closing, Seller shall execute
and deliver to Purchaser, and Purchaser shall execute and deliver to Seller, the
Assignment Agreement that conveys to Purchaser good and marketable title to the
Acquired Assets free and clear of any and all Liens other than Permitted Liens,
and under which Purchaser shall accept such Acquired Assets and assume the
Assumed Liabilities. Such Assignment Agreement shall be dated the Closing Date,
appropriately completed and duly executed by Seller and Purchaser. Seller and/or
Parent shall, at, prior or after Closing, execute and deliver to Purchaser all
such Other Instruments requested by Purchaser as may be reasonably necessary to
effectuate the transactions contemplated by this Agreement.
ARTICLE IV
ACTIONS PENDING TRANSACTION
4.1 Forbearances of Seller and its Subsidiaries. From the date
hereof until the Closing, except as expressly contemplated by this Agreement,
without the prior written consent of Purchaser, Seller will not:
(a) Ordinary Course. Conduct its business other than in
the ordinary and usual course consistent with past practice or fail to use
reasonable best efforts to (i) preserve intact in any material respect its
business organizations and assets and (ii) maintain its rights, franchises and
existing relations with customers, suppliers, employees and business associates,
or take any action reasonably likely to impair Seller's ability to perform any
of its obligations under this Agreement.
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(b) Dispositions. Except as provided in Section 4.1(d)
below, sell, transfer, mortgage, lease, encumber or otherwise dispose of or
discontinue any of its tangible assets or properties except for sales in the
ordinary course of business for fair value consistent with past practice; sell
or transfer any of its deposit liabilities; or sell, transfer, lease, license,
encumber or otherwise dispose of any of its Intellectual Property.
(c) Acquisitions. Acquire (other than by way of
foreclosures or acquisitions of control in a bona fide fiduciary capacity or in
satisfaction of debts contracted prior to the date hereof in good faith, in each
case in the ordinary and usual course of business consistent with past practice)
all or any portion of the assets, business, deposit liabilities or properties of
any Person.
(d) Loans, Loan Participations and Servicing Rights.
Acquire, whether or not in the ordinary course of business, any loans, any loan
participations or servicing rights; or sell any loans (excluding loan
participations) or servicing rights.
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(e) Accounting Methods. Implement or adopt any change in
its accounting principles, practices or methods, other than as may be required
by generally accepted accounting principles or other applicable regulatory
requirements.
(f) Contracts. Except to satisfy Previously Disclosed
written commitments outstanding on the date hereof or as otherwise expressly
permitted by this Agreement, enter into or terminate any agreement, lease or
license, or amend or modify in any material respect or renew any of its existing
agreements, leases or licenses.
(g) Claims. Settle any claim, action or proceeding if it
involves a precedent for other similar claims which could affect the Business in
the hands of Purchaser after the Closing.
(h) Foreclose. Foreclose upon or otherwise take title to
or possession or control of any real property other than real property which
becomes an Excluded Asset.
(i) Deposit Taking and Other Bank Activities. Voluntarily
make any material changes in or to its deposit mix; increase or decrease the
rate of interest paid on time deposits or on certificates of deposit, except to
prevent run-off based upon changes in the rate of interest paid on like kind
deposits by other commercial banks in its market area consistent with past
practice; incur any liability or obligation relating to marketing or advertising
activities and initiatives other than in the ordinary and usual course
consistent with past practice which expire in full at or prior to the Cut-Off
Time; open any new branch or deposit taking facility; or close or relocate any
existing branch or other facility.
(j) Investments. Enter into any securities transaction
for its own account or purchase or otherwise acquire any investment security for
its own account other than investments with maturities of less than one year and
consistent with past practices; enter into or acquire any derivatives contract
or structured note; enter into any new, or modify, amend or extend the terms of
any existing agreements relating to the purchase or sale of financial or other
futures, or any put or call option relating to cash, securities or commodities
or any interest rate swap agreements or other agreements relating to the hedging
of interest rate risk.
(k) Fixed Assets. Purchase or lease any fixed assets,
except for emergency repairs or replacements; provided Purchaser's consent to
the purchase by Seller of non-material fixed assets in the ordinary course on
as-needed basis shall not be unreasonably withheld or delayed.
(l) Lending. (i) Make any material changes in its
policies concerning loan underwriting or which Persons may approve loans or fail
to comply with such policies as Previously Disclosed; or (ii) make or commit to
make any new loan or letter of credit, or any new or additional discretionary
advance under any existing loan or line of credit, or renew or restructure any
existing loan or line of credit; provided, however,
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Seller need not obtain Purchaser's prior written consent to the following (A) in
the case of a consumer loan or extension of credit with full personal recourse
to the borrower in a principal amount not in excess of $10,000, (B) in the case
of a loan secured by a first mortgage on an owner occupied one-to four-family
principal residence which provides full personal recourse to the borrower in a
principal amount not in excess of $75,000, (C) in the case of a loan secured by
a first mortgage on commercial real property in a principal amount not in excess
of $100,000, (D) in the case of a commercial loan secured by a first lien on
accounts receivable, inventory or other tangible assets which also provides full
personal recourse to the borrower in a principal amount not in excess of
$100,000, or (E) in the case of loans (other than commercial construction loans)
outstanding on the date hereof to one borrower (or group of affiliated
borrowers) the restructuring of loans with an aggregate principal balance not in
excess of $100,000; provided in the case of subparts (A)-(D) the loan exposure
to one borrower (or group of affiliated borrowers) shall not exceed $175,000.
Purchaser shall not unreasonably withhold any consent required under this
subsection and any required consent or rejection shall be given by Purchaser
within three Business Days after delivery by Seller to Purchaser of the complete
loan package.
(m) Joint Ventures and Real Estate Development
Operations. Engage in any joint venture, partnership or similar activity; make
any investment in any existing joint venture or partnership except for
Previously Disclosed written commitments outstanding on the date hereof; or
engage in any new real estate development or construction activity.
(n) Adverse Actions. Knowingly take any action or fail to
take any action that is intended or is reasonably likely to result in (i) any
representations and warranties set forth in Article V of this Agreement being or
becoming untrue at any time at or prior to Closing; (ii) any of the conditions
to Closing set forth in Article VIII not being satisfied except as expressly
permitted by this Agreement; or (iii) a violation of any provision of this
Agreement.
(o) Risk Management. Except as required by applicable law
or regulation, (i) implement or adopt any material change in its interest rate
and other risk management policies, procedures or practices; (ii) fail to follow
its existing policies or practices with respect to managing its exposure to
interest rate and other risk; or (iii) fail to use commercially reasonable means
to avoid any material increase in its aggregate exposure to interest rate risk.
(p) Indebtedness. Incur any indebtedness for borrowed
money.
(q) Commitments. Agree or commit to do any of the
foregoing.
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4.2 Forbearances of Parent and Purchaser. From the date hereof
until Closing, except as expressly contemplated by this Agreement, without the
prior written consent of the other party, neither Parent nor Purchaser will
knowingly take any action or fail to take any action that is intended or is
reasonably likely to result in (a) any of the representations and warranties set
forth in Article V (as to Parent) or Article VI (as to Purchaser) in this
Agreement being or becoming untrue at any time at or prior to the Closing, (b)
any of the conditions to Closing set forth in Article VIII not being satisfied
except as expressly permitted by this Agreement or (c) a violation of any
provision of this Agreement.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT
Seller and Parent hereby jointly and severally represent and warrant to
Purchaser as follows:
5.1 Organization, Standing and Authority. Each of Seller and
Parent is duly organized, validly existing and in good standing under the laws
of the State of Michigan, with full corporate power and authority to own and
lease all of its properties and assets and to carry on its business as now
conducted. Seller is duly licensed or qualified to do business and is in good
standing in each jurisdiction in which its ownership or leasing of property or
the conduct of the Business requires such licensing or qualification. Parent is
a bank holding company registered under the Bank Holding Company Act of 1956, as
amended.
5.2 Authorization. The execution, delivery and performance of this
Agreement, the Assignment Agreement and the Other Instruments by Seller and
Parent, as applicable, and (subject to the receipt of all necessary approvals
from regulatory authorities) the consummation of the transactions contemplated
by this Agreement by Seller and Parent, as applicable, are within the power and
authority (corporate or otherwise) of Seller and Parent and have been duly and
validly authorized by all necessary action (corporate or otherwise) on the part
of each of Seller and Parent. This Agreement constitutes, and at the time of the
execution and delivery by Seller and/or Parent of the Assignment Agreement and
the Other Instruments, each of them shall constitute, a valid and binding
agreement of Seller and Parent, as applicable, enforceable against Seller and
Parent, as applicable, in accordance with its terms, except as enforcement may
be limited by general principles of equity whether applied in a court of law or
a court of equity and by bankruptcy, receivership, insolvency, moratorium and
similar laws affecting creditors' rights and remedies generally.
5.3 Non-contravention. The execution, delivery and performance of
this Agreement, the Assignment Agreement and the Other Instruments by Seller and
Parent, as applicable, and the consummation of the transactions contemplated by
this Agreement do not and shall not (a) contravene or conflict with the articles
of incorporation or bylaws of Seller or Parent, (b) subject to the receipt of
all necessary approvals from regulatory authorities, contravene or conflict with
or constitute a violation of any applicable law, rule, regulation, written
agreement with any regulatory authority, memorandum of understanding with any
regulatory authority or other regulatory directive, or require any consent or
approval of any governmental or regulatory authority, or under any judgment,
injunction, order, writ or decree applicable to Seller or Parent, (c) result in
the creation of any Lien upon any of the Acquired Assets or (d) conflict with,
result in the breach of, constitute a default under, or give rise to any right
of termination, cancellation or acceleration under, or loss of any benefit to
which Seller is entitled under, any agreement, lease, license, note, bond,
mortgage, indenture, deed of trust or instrument or obligation to which Seller
is a party, or by which any of the Acquired Assets or Assumed Liabilities may be
affected.
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5.4 Title to Acquired Assets. Upon consummation of the
transactions contemplated by this Agreement, including the execution and
delivery by Seller and Parent, as applicable, of the Assignment Agreement and
any Other Instruments, (a) Purchaser shall have acquired good and marketable
title to the Acquired Assets, free and clear of all Liens other than Permitted
Liens; (b) the Assignment Agreement and Other Instruments to be delivered by
Seller and Parent, as applicable, shall be in appropriate form and sufficient to
validly convey, transfer and assign to Purchaser good and marketable title to
the Acquired Assets; and (c) none of Seller or any of its Affiliates shall have
any interest in the Acquired Assets or the Assumed Liabilities.
5.5 Litigation.
(a) Except as Previously Disclosed, there is no action,
suit, claim, litigation, proceeding, arbitration or controversy (or, to Seller's
knowledge, any reasonable basis therefor) pending against or affecting, or to
Seller's knowledge, contemplated or threatened against, Seller relating to the
Business, any Acquired Asset or any Assumed Liability before any court or
arbitrator or any governmental body, agency or official, or which challenges or
seeks to prevent, enjoin, alter or delay the transactions contemplated by this
Agreement.
(b) Except as Previously Disclosed, there are no
outstanding judgments or orders of any arbitrator or governmental entity
including any regulatory authority with jurisdiction over Seller or any of its
Affiliates which specifically relate to the Business, any of the Acquired Assets
or any Assumed Liability, other than requirements imposed by any report of
examination issued by a regulatory authority, which requirements have been
satisfied in all material respects or are in the process of being satisfied in
all material respects.
5.6 Compliance with Laws; Regulatory Filings and Approvals.
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(a) Except as Previously Disclosed, (i) Seller is not in
violation in any material respect of, and since January 1, 2000 has not violated
in any material respect, any law, rule, ordinance, regulation, judgment,
injunction, order or decree entered by any court, arbitrator or governmental or
regulatory authority, applicable to the Business, the Acquired Assets or the
Assumed Liabilities; (ii) Seller is not a party to any written agreement or
memorandum of understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, or has adopted any board resolutions
at the request of any regulatory authority, federal or state, charged with the
supervision or regulation of banks or bank holding companies or engaged in the
insurance of bank deposits, nor has either of them been advised by such
regulatory authority that it is contemplating issuing or requesting any of the
foregoing; or (iii) to the knowledge of Seller, Seller is not under
investigation with respect to and has not been threatened to be charged with or
given notice of any violation of any law, rule, ordinance or regulation
applicable to the Business, the Acquired Assets or the Assumed Liabilities, in
each case other than requirements imposed by any report of examination issued by
a regulatory authority that is in the process of being complied with.
(b) Seller has Previously Disclosed each material
license, franchise, permit, certificate, approval or other similar authorization
possessed by Seller affecting, or relating in any way to, the Business, the
Acquired Assets or the Assumed Liabilities (the "Permits"), together with the
name of the government agency or entity issuing such Permit. Except as
Previously Disclosed (i) the Permits are valid and in full force and effect and
(ii) Seller is not in default, and no condition exists that with notice or lapse
of time or otherwise would reasonably constitute a default, under the Permits.
The Permits include all licenses, franchises, permits or other similar
authorizations necessary for the conduct of the Business as conducted on the
date of this Agreement.
(c) Seller and Parent have duly and timely filed with all
applicable regulatory authorities the reports and securities documents required
to be filed by them under applicable laws and regulations and such reports and
securities documents were in all material respects complete and accurate and in
compliance with the requirements of applicable laws and regulations.
(d) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental entity including any regulatory authority is
required by or with respect to Seller or Parent relating to the consummation of
the transactions contemplated hereby, except for (i) the filing of an
application and/or notice with the Board of Governors of the Federal Reserve
System, and approval of same, (ii) the filing of an application and/or notice
with the State of Michigan Office of Financial and Insurance Services and
approval of same, and (iii) the filing of an application and/or notice with the
Federal Deposit Insurance Corporation to the extent required by Section 32 of
the Federal Deposit Insurance Act and applicable regulations, and approval of
same.
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(e) As of the date hereof, neither Parent nor Seller is
aware of any reasons relating to Seller or any of its Affiliates (including CRA
compliance) why all consents and approvals shall not be procured from all
regulatory authorities having jurisdiction over the transactions contemplated by
this Agreement without the imposition of any condition or restriction of the
type described in Section 8.1(c).
5.7 Financial Statements.
(a) Seller has Previously Disclosed the Seller Financial
Statements, which, in the case of the audited Seller Financial Statements, are
accompanied by the audit reports of Seller Accountant. The Seller Financial
Statements, as well as the Seller financial statements to be delivered pursuant
to Section 7.6 hereof, fairly present or will fairly present, as the case may
be, the financial condition of Seller as of the respective dates set forth
therein, and the income, changes in stockholders' equity and cash flows of
Seller for the respective periods set forth therein.
(b) Each of the Seller Financial Statements referred to
in Section 5.7(a) has been and the Seller financial statements to be delivered
pursuant to Section 7.6 will be, as the case may be, prepared in accordance with
generally accepted accounting principles, except as stated therein, and except
in the case of interim statements for the absence of footnotes and normal year
end adjustments. The audits of Seller have been conducted in accordance with
generally accepted auditing standards. The accounting Books and Records of
Seller are being maintained in compliance with applicable legal and accounting
requirements, and such Books and Records accurately reflect, in all material
respects, all dealings and transactions in respect of the Business, assets,
liabilities and affairs of Seller.
5.8 Material Adverse Change. Except as Previously Disclosed, since
December 31, 2002, (a) Seller has conducted the Business only in the ordinary
and usual course (excluding the entering into of this Agreement and the
incurrence of expenses in connection with this Agreement and the transactions
contemplated hereby) and (b) no event has occurred or circumstance arisen that,
individually or in the aggregate, has had or is reasonably likely to have a
material adverse affect on the Business, any of the Acquired Assets, or the
financial condition or results of operation of Seller.
5.9 Environmental Matters.
(a) Seller is in compliance in all material respects with
all Environmental Laws. Seller has not received any communication alleging that
it is not in such compliance and there are no present circumstances that would
prevent or interfere with the continuation of such compliance.
(b) To the knowledge of Seller, none of the properties
currently owned or operated by Seller, or any property previously owned or
operated or currently leased by Seller, or securing any loan held by Seller, has
been or is in violation of or liable under any Environmental Law.
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(c) To the knowledge of Seller, there are no past or
present actions, activities, circumstances, conditions, events or incidents that
could reasonably form the basis of any Environmental Claim or other claim or
action or governmental investigation that could result in the imposition of any
liability against or obligation on the part of Seller or any Person whose
liability or obligation for any Environmental Claim Seller has or may have
retained or assumed either contractually or by operation of law.
(d) Except as Previously Disclosed, Seller has not
conducted any environmental studies during the past 5 years with respect to any
properties owned by it or leased by it.
5.10 Taxes. All federal, state, local and foreign tax returns, tax
reports and all required forms and extensions ("Returns") required to be filed
by Seller on or before the date hereof have been timely filed with the
appropriate governmental agencies in all jurisdictions in which such Returns are
required to be filed, all amounts shown as owing thereon have been paid, and
such Returns were true and accurate and were completed in accordance with
applicable law when filed. All Taxes of Seller which have become (or will
become) due or payable by Seller on or before the Closing Date, have been paid
or will be paid in full by Seller or Parent on or before the Closing Date. All
deposits required by law to be made by Seller with respect to employees'
withholding Taxes have been duly made, and as of the Closing Date all such
deposits due will have been made. There are no, and immediately after the
Closing there will not be any, Liens on the Acquired Assets relating to or
attributable to Taxes. Except as Previously Disclosed, neither Parent nor Seller
has any knowledge of any basis for the assertion of any claims for Taxes which,
if adversely determined, would result in a Lien on any of the Acquired Assets or
otherwise adversely effect any of the Acquired Assets.
5.11 Labor Matters. Seller is not a party to or bound by any
collective bargaining agreement with any labor organization, group or
association covering any of its employees. There are no pending or, to the
knowledge of Seller, threatened charges (by employees, their representatives or
governmental authorities) of unfair labor practices or of employment
discrimination or of any other wrongful action with respect to any aspect of
employment of any Person employed or formerly employed by Seller. Seller has
complied with all material laws and regulations relating to the employment of
labor, including any provisions thereof relating to wages, hours, employment
practices, terms and conditions of employment, collective bargaining, equal
opportunity or similar laws and the payment of social security and similar
Taxes, and is not liable for any arrears of wages or any Taxes or penalties for
failure to comply with any of the foregoing. Seller currently has no liabilities
under the Workers Adjustment and Retraining Notification Act ("WARN") or any
similar state law or regulation and the consummation of the transactions
contemplated by this Agreement will not result in any liability under WARN or
any similar state law or regulation.
5.12 Employee Benefits. Neither Purchaser nor any of its Affiliates
shall have any obligation or liability of any kind or nature for any
compensation or benefits of any kind or nature to any of the directors,
employees or independent contractors of Seller under the Benefit Plans or
otherwise. Nothing herein is intended to relate to liability of
22
Purchaser after the Closing to any former employee of Seller who is hired by
Purchaser relating to such Person's post-Closing employment with Purchaser as a
newly hired employee.
5.13 Certain Arrangements. Except as Previously Disclosed, Seller
is not a party to, bound or affected by, or obligated under (a) any agreement,
indenture or other instrument relating to the borrowing of money (other than in
the case of Federal Home Loan Bank advances and federal funds purchased) or the
guarantee of any obligation by it, (b) any agreement, arrangement or commitment
relating to the employment of any Person, (c) any agreement, arrangement or
understanding pursuant to which any payment (whether of severance pay or
otherwise) will or may become due to any Person as a result of Seller entering
into this Agreement or the consummation of any of the transactions contemplated
by this Agreement (assuming for purposes hereof that such Person's employment is
involuntarily terminated without cause in connection with the transactions
contemplated by this Agreement); (d) any agreement, arrangement or understanding
which limits the freedom of Seller to compete in any line of business or with
any Person; (e) any agreement pursuant to which loans have been sold by Seller
which imposes any potential recourse obligations (by representation, warranty,
covenant or other contractual terms) upon Seller; or (f) any subservicing
agreement.
5.14 Contracts and Excluded Contracts. Seller has Previously
Disclosed a list and true and complete copies of all of the existing Contracts,
including all agreements, leases and licenses which may be subject to exclusion
as Excluded Contracts. All of the foregoing are in full force and effect, and
there is no material default under any of the foregoing by Seller or any other
Person. All of the Contracts to be assumed by Purchaser pursuant to this
Agreement shall, at Closing, be in full force and effect and no material default
by any of the parties thereto shall exist at such time.
5.15 Insurance. Seller maintains all insurance required by contract
and applicable laws and regulations. Except as Previously Disclosed, Seller has
not, during the past five years, had an insurance policy canceled or non-renewed
or been denied any insurance coverage for which it has applied. All material
insurance policies maintained by Seller are Previously Disclosed.
5.16 Properties. All real and personal property owned by Seller or
presently used in the Business are sufficient to carry on the Businesses in the
ordinary course of business consistent with past practices. Seller has good and
marketable title free and clear of all Liens (other than equitable rights of
redemption under applicable foreclosure laws) to all its properties and assets,
real and personal, except (a) Liens for current Taxes not yet due or payable,
(b) pledges to secure deposits, (c) such imperfections of title, easements and
non-monetary encumbrances affecting real property, if any, which do not
adversely affect the value or use of such real property, and (d) monetary Liens,
if any, reflected in the Seller Financial Statements as of March 31, 2003.
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5.17 Allowance for Loan Losses. The allowance for loan losses
reflected on Seller's balance sheet included in the Seller Financial Statements
is, and will be in the case of subsequently delivered Seller financial
statements and the calculation of the Estimated Net Asset Value and Seller's
Determination, adequate as of their respective dates or as of the Cut-off Time,
as applicable, under the requirements of generally accepted accounting
principles and all applicable regulatory authorities.
5.18 Loan Portfolio. Each loan reflected as an asset on the Seller
Financial Statements as of March 31, 2003, and each loan originated or acquired
by Seller thereafter is (or will be) evidenced by appropriate and sufficient
documentation and constitutes (or will constitute), the legal, valid and binding
obligation of the obligor named therein, enforceable in accordance with its
terms, except to the extent that the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable
principles or doctrines. Except as Previously Disclosed, all such loans are, and
the loans held will be, free and clear of any Lien (other than the Lien of the
Federal Home Loan Bank of Chicago to secure Federal Home Loan Bank advances).
Except as Previously Disclosed, there is no loan or other asset of Seller that
as of the date hereof has been classified by examiners, management, internal
auditors or outside auditors as "Other Loans of Concern," "Substandard,"
"Doubtful", "Loss," or in any other similar category. Expect as Previously
Disclosed, no borrower or other Person has asserted or threatened to assert any
lender liability claim against Seller or set-off to any liability under any
loan, in each case which has not been fully resolved.
5.19 Investment Portfolio. All investment securities held by
Seller, as reflected in the balance sheets of Seller included in the Seller
Financial Statements, are carried in accordance with generally accepted
accounting principles, specifically including Statement of Financial Accounting
Standards No. 115. Except as Previously Disclosed and except for pledges to
secure public deposits, none of the investments reflected in the Seller
Financial Statements as of March 31, 2003 and none of the investments since made
by Seller is subject to any restriction, whether contractual or statutory, which
impairs the ability of Seller to freely dispose of such investment at any time,
other than those restrictions imposed on securities held to maturity under
generally accepted accounting principles.
5.20 Interests of Certain Persons.
(a) Except as Previously Disclosed, no goods or services
are provided by Seller to its Affiliates and no goods or services are provided
by Affiliates of Seller to Seller.
(b) Except as Previously Disclosed, no officer, director
or employee of Seller or any of its Affiliates or any "associate" (as such term
is defined in Rule 14a-1 under the Securities Exchange Act of 1934, as amended)
or related interest of any such Person has any interest in any contract or
property (real or personal, tangible or intangible), used in, or pertaining to,
the Business.
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5.21 Fairness Opinion. Seller has received an opinion from Austin
Associates, LLC to the effect that, as of the date hereof, the Purchase Price to
be received by Seller pursuant to this Agreement is fair, from a financial point
of view, to Seller and Parent, as the sole stockholder of Seller.
5.22 No Undisclosed Liabilities. To the knowledge of Seller, Seller
has no liability or obligation, whether asserted or unasserted, whether absolute
or contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for Taxes (and there
is no past or present fact, situation, circumstance, condition or other basis
for any present or future action, suit or proceeding, hearing, charge,
complaint, claim or demand against Seller giving rise to any such liability or
obligation) required in accordance with generally accepted accounting principles
to be reflected in an audited balance sheet of Seller or the notes thereto,
except (i) for liabilities set forth or reserved against in the Seller Financial
Statements as of December 31, 2002 or the notes thereto, and (ii) liabilities
occurring in the ordinary course of business since December 31, 2002 or relating
to expenses in connection with the transactions contemplated by this Agreement.
5.23 Indemnification. Except as Previously Disclosed to knowledge
of Seller, no action or failure to take action by any present or former
director, advisory director, officer, employee or agent of Seller has occurred
which would give rise to a claim or a potential claim by any such Person for
indemnification from Seller.
5.24 Subsidiaries. Seller has no Subsidiaries. Except for the
ownership of readily marketable securities and Federal Home Loan Bank stock,
Seller does not own any equity or profit and loss interest in any other Person.
5.25 Intellectual Property. Seller has Previously Disclosed a
complete list of the Intellectual Property. No claims, suits, actions or
proceedings are pending, and to the knowledge of Seller, no Person has
threatened to commence any suit, action or proceeding, alleging that Seller is
infringing on the rights of any Person with regard to any Intellectual Property.
To the knowledge of Seller, none of the Intellectual Property infringes on the
rights of any other Person, and no Person is infringing on the rights of Seller
with respect to any Intellectual Property. Except as Previously Disclosed,
Seller is not a licensor or licensee of, or otherwise has any contractual
arrangement with a third party with respect to, any Intellectual Property. The
Intellectual Property will not be limited or otherwise adversely affected by
virtue of its sale and transfer by Seller to Purchaser pursuant to this
Agreement.
5.26 Brokers and Finders. Except for the retention by Seller of
Austin Associates, LLC, neither Seller nor any of its Affiliates has employed
any broker or finder or incurred any liability for any financial advisory fees,
brokerage fees, commissions or similar payments in connection with the
transactions contemplated by this Agreement. Seller is solely responsible for
the fees and expenses of Austin Associates, LLC.
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5.27 Employees; Consultants. Seller has Previously Disclosed the
name, place of employment, the annual salary rates, bonuses, deferred or
contingent compensation, pension, accrued vacation and sick days and other
benefits paid or payable (in cash or otherwise) in 2001, 2002 and 2003, the date
of employment and a description of the position and job function of each current
salaried or commissioned employee, officer, consultant or agent of Seller. All
employees of Seller are leased to it by Employees Only, a professional employer
organization pursuant to an agreement which has been Previously Disclosed.
5.28 Reasonably Equivalent Value; Solvency. Seller has freely and
independently bargained for this Agreement and is receiving equivalent value and
fair consideration. After giving effect to the transactions contemplated by this
Agreement, Seller shall be able to pay its debts as and when they become due and
shall own assets which have a fair saleable value greater than the amounts
required to pay its debts (including a reasonable estimate of the amount of all
contingent liabilities). No transfer of property is being made and no obligation
is being incurred in connection with the transactions contemplated by this
Agreement with the intent to hinder, delay or defraud either present or future
creditors of Seller or any of its Affiliates.
5.29 Full Disclosure. No representation or warranty of Seller and
Parent in this Agreement, nor any statement or certificate furnished or to be
furnished by Seller or Parent to Purchaser pursuant to this Agreement, or in
connection with the transactions contemplated by this Agreement, contains or
will contain any untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make the statements contained herein or
therein not misleading.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
6.1 Organization, Standing and Authority. Purchaser is duly
organized, validly existing and in good standing under the laws of the State of
Michigan, with full corporate power and authority to own and lease all of its
properties and assets and to carry on its business as now conducted. Purchaser
is duly licensed or qualified to do business and is in good standing in each
jurisdiction in which its ownership or leasing of property or the conduct of its
business requires such licensing or qualification.
6.2 Authorization. The execution, delivery and performance of this
Agreement and the Assignment Agreement by Purchaser, and (subject to the receipt
of all necessary approvals from regulatory authorities) the consummation of the
transactions contemplated by this Agreement by Purchaser, are within the power
and authority (corporate or otherwise) of Purchaser and have been duly and
validly authorized by all necessary action (corporate or otherwise) on the part
of Purchaser. This Agreement constitutes, and at the time of the execution and
delivery by Purchaser of the Assignment Agreement, it shall constitute, a valid
and binding agreement of Purchaser, enforceable against it in accordance with
its terms, except as enforcement may be limited by general
26
principles of equity whether applied in a court of law or a court of equity and
by bankruptcy, receivership, insolvency, moratorium and similar laws affecting
creditors' rights and remedies generally.
6.3 Non-contravention. The execution, delivery and performance of
this Agreement and the Assignment Agreement by Purchaser, and the consummation
of the transactions contemplated by this Agreement do not and shall not (a)
contravene or conflict with the articles of incorporation or bylaws of
Purchaser, (b) subject to the receipt of all necessary approvals from regulatory
authorities, contravene or conflict with or constitute a violation of any
applicable law, rule or regulation or require any consent or approval of any
governmental entity including any regulatory authority, or under any judgment,
injunction, order, writ or decree applicable to Purchaser, (c) result in the
creation of any Lien upon any of the assets of Purchaser or (d) conflict with,
result in the breach of, constitute a default under, or give rise to any right
of termination, cancellation or acceleration under, or loss of any benefit to
which Purchaser is entitled under, any agreement, lease, license, note, bond,
mortgage, indenture, deed of trust or instrument or obligation to which
Purchaser is a party, or by which any of its assets may be affected.
6.4 Litigation. There is no action, suit, claim, litigation,
proceeding, arbitration or controversy (or, to Purchaser's knowledge, any
reasonable basis therefor) pending against or affecting, or to Purchaser's
knowledge, contemplated or threatened against, Purchaser before any court or
arbitrator or any governmental body, agency or official, which could adversely
affect the ability of Purchaser to consummate the transaction contemplated by
this Agreement or which challenges or seeks to prevent, enjoin, alter or delay
the transactions contemplated by this Agreement.
6.5 Compliance with Laws; Regulatory Filings and Approvals.
(a) Purchaser is not a party to any written agreement or
memorandum of understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, or has adopted any board resolutions
at the request of any regulatory authority, federal or state, charged with the
supervision or regulation of banks or bank holding companies or engaged in the
insurance of bank deposits, nor has it been advised by any regulatory authority
that it is contemplating issuing or requesting any of the foregoing.
(b) Purchaser and its holding company have duly and
timely filed with all applicable regulatory authorities the reports and
securities documents required to be filed by them under applicable laws and
regulations and such reports and securities documents were in all material
respects complete and accurate and in compliance with the requirements of
applicable laws and regulations.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental entity including any regulatory authority is
required by or with respect to Purchaser relating to the consummation of the
transactions contemplated hereby, except
27
for (i) the filing of an application and/or notice with the Board of Governors
of the Federal Reserve System, and approval of same, (ii) the filing of an
application and/or notice with the State of Michigan Office of Financial and
Insurance Services and approval of same, and (iii) the filing of an application
and/or notice with the Federal Deposit Insurance Corporation to the extent
required by Section 32 of the Federal Deposit Insurance Act and applicable
regulations, and approval of same.
(d) As of the date hereof, Purchaser is not aware of any
reasons relating to Purchaser or any of its Affiliates (including CRA
compliance) why all consents and approvals shall not be procured from all
governmental entities including regulatory authorities having jurisdiction over
the transactions contemplated by this Agreement without the imposition of any
condition or restriction of the type referred to in Section 8.1(c).
6.6 Brokers and Finders. Except for the retention by Purchaser of
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇, Inc., neither Purchaser nor any of its Affiliates has
employed any broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions or similar payments in connection
with the transactions contemplated by this Agreement. Purchaser is solely
responsible for the fees and expenses of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇, Inc.
6.7 Full Disclosure. No representation or warranty of Purchaser in
this Agreement, nor any statement or certificate furnished or to be furnished by
Purchaser to Seller pursuant to this Agreement, or in connection with the
transactions contemplated by this Agreement, contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading.
6.8 Deposit Insurance. Purchaser is an "insured depository
institution" as defined in the Federal Deposit Insurance Act, as amended, whose
deposit accounts are insured through the Bank Insurance Fund administered by the
FDIC. Purchaser's deposit insurance is in full force and effect.
ARTICLE VII
COVENANTS
7.1 Reasonable Best Efforts. Subject to the terms and conditions
of this Agreement, each of Seller, Parent and Purchaser (a) shall use its
reasonable best efforts in good faith to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary or advisable so as
to permit and otherwise enable completion of the transaction contemplated by
this Agreement as promptly as reasonably practicable and (b) shall cooperate
fully with each other to that end.
7.2 Regulatory Matters.
(a) Purchaser shall promptly prepare and file within 15
days after the date hereof or as soon thereafter as is reasonably practicable,
all necessary
28
documentation, to effect all applications, notices, petitions and filings, and
to obtain as promptly as practicable all permits, consents, approvals and
authorizations of all governmental entities including regulatory authorities
which are necessary to consummate the transactions contemplated by this
Agreement. Seller shall use its reasonable best efforts to cooperate with
Purchaser in connection with the preparation of all such applications, notices,
petitions and filings. Seller and Parent, on the one hand, and Purchaser, on the
other hand, shall have the right to review in advance, and to the extent
practicable each will consult with the other on, in each case subject to
applicable laws relating to the exchange of information, all the information
which appears in any filing made by the other or written materials submitted by
the other to any governmental entity including any regulatory authority in
connection with the transactions contemplated by this Agreement. In exercising
the foregoing right, each party shall act reasonably and as promptly as
practicable. Each of Seller and Parent, on the one hand, and Purchaser, on the
other hand, agree to consult with each other with respect to the obtaining of
all permits, consents, approvals and authorizations of all governmental entities
including regulatory authorities necessary to consummate the transactions
contemplated by this Agreement and each will keep the other apprised of the
status of matters relating to completion of the transactions contemplated
herein.
(b) Seller and Parent, on the one hand, and Purchaser, on
the other hand, shall promptly furnish each other with copies of written
communications received from, or delivered to, any governmental entity including
any regulatory authority in respect of the transactions contemplated hereby.
(c) Seller and Purchaser shall timely give all
pre-Closing and post-Closing notices to all borrowers and deposit holders of
Seller, to the extent required by applicable laws, regulations or other
regulatory requirements, relating to the transactions contemplated by this
Agreement. All notices to be given by Seller shall be pre-approved in writing by
Purchaser, which approval shall not be unreasonably withheld or delayed.
7.3 Third Party Consents. Seller shall use its best efforts to
obtain from the other parties to the Contracts, and from other parties with any
interest in the Acquired Assets or Assumed Liabilities, if any, consents
necessary to the assignment of the Contracts to Purchaser without any amendment,
modification or change in the terms thereof, and consents necessary to the
transfer of the Acquired Assets to Purchaser and for the assumption by Purchaser
of the Assumed Liabilities. In furtherance hereof, Seller shall use its
reasonable best efforts to enter into a new lease for premises located at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (the "New Real Estate Lease") on
the terms set forth on Exhibit D hereto, with Purchaser having the right to
assume the New Real Estate Lease without obtaining the consent of the landlord
or any other third party.
7.4 Investigation and Confidentiality.
(a) Seller shall permit Purchaser and its representatives
reasonable access to the properties and personnel of Seller, and shall disclose
and make available to Purchaser, upon its reasonable request, all books, papers
and records relating to the Business, the Acquired Assets, the Assumed
Liabilities, and the Excluded Contracts,
29
including all books of account (including the general ledger), Tax records,
filings with any governmental entity including any regulatory authority,
accountants' work papers, litigation files, loan files, Benefit Plans, and any
other business activities or prospects in which Purchaser may have a reasonable
interest, provided that such access and any such reasonable request shall be
reasonably related to the transactions contemplated hereby and shall not unduly
interfere with normal operations of Seller. Seller shall make its directors,
officers, employees and agents and authorized representatives (including counsel
and independent public accountants) available to confer with Purchaser and its
representatives, provided that such access shall be reasonably related to the
transactions contemplated hereby and shall not unduly interfere with normal
operations of Seller.
(b) All information previously furnished by Seller or
Parent to Purchaser in connection with the transactions contemplated by this
Agreement or hereinafter provided pursuant hereto shall be treated as the sole
property of Seller or Parent, as applicable, until Closing, and if Closing does
not occur, Purchaser shall either destroy or return to Seller or Parent all
documents or other materials containing, reflecting or referring to such
information, shall use its best efforts to keep confidential all such
information, and shall not directly or indirectly use such information for any
competitive or other commercial purposes. The obligation to keep such
information confidential shall continue at all times after the termination of
this Agreement but shall not apply to (i) any information which (x) Purchaser
can establish was already in its possession prior to the disclosure thereof by
Seller or Parent; (y) was then generally known to the public; or (z) becomes
known to the public through no fault of Purchaser; or (ii) disclosures pursuant
to a legal requirement or in accordance with an order of a court of competent
jurisdiction, provided that Purchaser shall use its best efforts to give Seller
at least ten Business Days' prior notice thereof.
7.5 Press Releases. Seller and Purchaser shall agree with each
other as to the form, substance and timing of any press release related to this
Agreement or the transactions contemplated hereby, and consult with each other
as to the form, substance and timing of other public disclosures which may
relate to the transactions contemplated by this Agreement, provided, however,
that nothing contained herein shall prohibit Parent and/or Seller, on the one
hand, or Purchaser, on the other hand, following notification to the other, from
making any disclosure which it believes is required by law or regulation.
30
7.6 Current Information. During the period from the date hereof to
Closing, Seller shall, upon the request of Purchaser, cause one or more of its
designated representatives to confer on a monthly or more frequent basis with
representatives of Purchaser regarding the Business and the financial condition
and operations of Seller and matters relating to the completion of the
transactions contemplated hereby. As soon as reasonably available, but in no
event more than five Business Days after filing, Seller will deliver to
Purchaser all reports filed by it or by Parent on its behalf with any regulatory
authority subsequent to the date hereof, provided, however, that nothing
contained herein shall require Seller or Parent to deliver any reports, the
disclosure of which would violate any law, regulation, rule or order of any
regulatory authority. Seller will also deliver to Purchaser as soon as
practicable all quarterly and annual Seller financial statements prepared with
respect to periods ending subsequent to March 31, 2003. As soon as practicable
after the end of each month, Seller will deliver to Purchaser (a) its monthly
deposit and loan trial balances, (b) its monthly investment portfolio analysis,
and (c) its monthly balance sheet and income statement.
7.7 Environmental Reports. If requested by Purchaser within 15
days after the date hereof, Seller shall provide to Purchaser, as soon as
reasonably practical, but not later than 30 days from the receipt by Seller of
the request of Purchaser therefor, a report of a phase one environmental
investigation on real property owned or leased by Seller or securing any loan
held by Seller (but excluding space in office or retail and similar
establishments leased by Seller for automatic teller machines or bank branch
facilities or other office uses where the space leased comprises less than 20%
of the total space leased to all tenants of such property). If required by the
phase one environmental investigation in Purchaser's reasonable opinion, Seller
shall provide to Purchaser, within 30 days of the receipt by Seller of the
request of Purchaser therefor, a report of a phase two environmental
investigation on properties requiring such additional study. The costs of the
phase one and phase two environmental investigations, if any, shall be borne by
Purchaser.
7.8 Exclusivity. Seller and Parent agree that they shall not, and
none of their Affiliates, agents, representatives, directors, officers or
employees shall, either directly or indirectly (through agents, affiliates or
otherwise) sell, transfer or otherwise encumber or solicit, discuss, accept or
take any other action with respect to an offer from any other potential
purchaser to acquire any of the material assets or liabilities of the Business,
whether by asset purchase, stock purchase or otherwise.
31
7.9 Integration of Policies. During the period from the date
hereof to Closing, Seller shall cause its directors, officers and employees to,
and shall make all reasonable efforts to cause its data processing service
providers to, cooperate and assist Purchaser in connection with an electronic
and systematic conversion of all applicable data regarding the Business, the
Acquired Assets and the Assumed Liabilities. In furtherance of the foregoing,
after all required regulatory applications have been filed by Purchaser pursuant
to Section 7.2, Seller shall make reasonable arrangements during normal business
hours to permit representatives of Purchaser to train Seller employees in
Purchaser's system of electronic data processing. Each party shall bear the
costs of the services of their own employees in connection with the data
processing conversion. The costs of services of any third party provider in
connection with such conversion shall be borne by Purchaser.
7.10 Post-Closing Access, Record Retention and Confidentiality.
(a) Each of Seller and Parent, on the one hand, and
Purchaser, on the other hand, agree that after Closing it will permit the other
party and its representatives (including counsel and auditors) during normal
business hours to have reasonable access to and examine and make copies of all
books and records of the other party which pertain to the Business, the Acquired
Assets or the Assumed Liabilities prior to Closing (including correspondence,
memoranda, books of account, payroll records, audit work papers and the like).
(b) For a period of three years after Closing, each of
Parent and Seller, on the one hand, and Purchaser, on the other hand, agree that
prior to the destruction or disposition by it of any books or records pertaining
to the Business, the Acquired Assets or the Assumed Liabilities it shall provide
not less than 30 nor more than 60 days prior written notice to the other party
of any such proposed destruction or disposal. If the recipient of such notice
desires to obtain any of such documents, it may do so by notifying the other
party in writing at any time prior to the scheduled date for such destruction or
disposal. Such notice must specify the documents which the requesting party
wishes to obtain. The parties shall then promptly arrange for the delivery of
such documents. All out-of-pocket costs associated with the delivery of the
requested documents shall be paid by the requesting party.
(c) After Closing, Seller, Parent and their respective
Affiliates shall at all times hold, and shall cause their respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of applicable law, rule or regulation, all
documents and information concerning the Acquired Assets and Assumed
Liabilities, and shall not directly or indirectly use such documentation or
information for any competitive or other commercial purposes.
(d) After the Closing, Seller, Parent and their
respective Affiliates shall cease and shall not thereafter use any of the
Intellectual Property.
7.11 Tax Reporting.
32
(a) For the period ending through the Cut-off Time,
Seller shall perform all reporting requirements under applicable Tax laws which
relate to the loans that are Acquired Assets and deposit liabilities that are
Assumed Liabilities.
(b) Seller shall timely provide to Purchaser position and
transaction extracts from its data processing system to allow Purchaser to map
tax information to Purchaser's tax reporting database, as such information is
reasonably necessary for purposes of satisfying the reporting requirements under
applicable Tax laws for the period ending after the Cut-off Time. Purchaser
shall perform all reporting requirements under applicable Tax laws after the
Cut-off Time relating to the loans that are Acquired Assets and deposit
liabilities that are Assumed Liabilities.
7.12 Post Closing Tax Covenants.
(a) Subject to Section 7.12(c) below, Seller and/or
Parent will be responsible for the preparation and filing of all Returns of
Seller or relating to the Business, the Acquired Assets and the Assumed
Liabilities (including Returns required to be filed after the Closing Date) to
the extent such Returns include or relate to the period through the Closing.
Such Returns shall be true, complete and correct and prepared in accordance with
applicable law in all respects. Seller will be responsible for and make all
payments of Taxes shown to be due on such Returns or otherwise relating to the
period through the Closing.
(b) Purchaser will be responsible for the preparation and
filing of all Returns it is required to file with respect to Purchaser's
ownership or use of the Acquired Assets or its operation of the Business
attributable to the period after Closing. Purchaser's Returns shall be true,
complete and correct and prepared in accordance with applicable law in all
respects. Purchaser will make all payments of Taxes shown to be due on such
Returns or otherwise relating to the Acquired Assets and its operation of the
Business after Closing.
(c) In the case of any Returns relating to real or
personal property Taxes (or other similar Taxes) attributable to the Acquired
Assets, which Returns cover a taxable period commencing before the Closing Date
and ending thereafter, Purchaser shall prepare such Returns, and such Taxes
shall be prorated on a per diem basis to such taxable period. In the case of any
real or personal property Taxes (or other similar Taxes) attributable to the
Acquired Assets which are paid by Seller but relate to the period after Closing,
Purchaser shall promptly reimburse Seller for such Taxes following receipt by
Purchaser of documentation from Seller evidencing that such Taxes relate to the
period after Closing and that such Taxes have been paid by Seller. In the case
of any personal or real property Taxes (or other similar Taxes) attributable to
the Acquired Assets which are paid by Purchaser but relate to the period prior
to Closing, Seller shall promptly reimburse Purchaser for such Taxes following
receipt by Seller of documentation from Purchaser evidencing that such Taxes
relate to the period prior to Closing and that such Taxes have been paid by
Purchaser.
(d) To the extent relevant to the Business or the
Acquired Assets, each
33
of Seller and Parent, on the one hand, and Purchaser on the other hand, shall
(i) provide the other with such assistance as may reasonably be required in
connection with the preparation of any Return and the conduct of any audit or
other examination by any taxing authority or in connection with judicial or
administrative proceedings relating to any liability for Taxes and (ii) retain
and provide the other with all records or other information that may be relevant
to the preparation of any Returns, or the conduct of any audit or examination,
or other proceeding relating to Taxes. Seller shall retain all documents,
including prior years' Returns, supporting work schedules and other records or
information with respect to all sales, use and employment Tax returns and,
absent the receipt by Seller of the relevant tax clearance certificates, shall
not destroy or otherwise dispose of any such records for four (4) years after
Closing without the prior written consent of Purchaser.
7.13 Restrictive Covenants.
(a) For a period of two (2) years from and after the
Closing Date, neither Parent, Seller nor any of their respective Affiliates
shall, directly or indirectly, (i) open any deposit taking facility including
any ATM machine, loan origination or processing office, or any facility for the
rendering or provision of investment, brokerage or investment advisory services,
investment products, insurance or estate planning services or products or
financial planning services, within a two mile radius of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (the "Competitive Market Area"); (ii) engage in
targeted marketing of any products or services to Persons within the Competitive
Market Area; provided, however, advertisements of general circulation or
distribution which are not targeted to Persons within the Competitive Market
Area shall not be deemed targeted marketing; (iii) solicit business from any
customers of the Business including depositors and borrowers, except through
media advertisements of general circulation or distribution which are not
targeted to such customers, but excluding depositors and borrowers who are
customers of any Affiliate of Seller as of the Cut-off Time that are listed on
Exhibit E; provided, however, nothing herein shall preclude an Affiliate of
Seller from conducting business with customers of the Business on an unsolicited
basis; or (iv) encourage any Person to cease its relationship or cease doing
business with Purchaser or its Affiliates including employees and vendors of
Purchaser and its Affiliates.
(b) For a period of 5 years from and after the Closing
Date, neither Seller nor any of its Affiliates shall use, directly or
indirectly, any of the trademarks, service marks, trade dress, logos, trade
names, or corporate name of Seller, or any translations, adaptations or
derivations thereof, for any commercial or business purpose whatsoever, or sell
or transfer any rights therein, to any third party.
(c) Seller and Parent agree and acknowledge that the
restrictive covenants set forth in Section 7.13(a) and (b) above are reasonable,
appropriate and necessary to induce Purchaser to enter into this Agreement and
to consummate the transactions contemplated hereby. Seller and Parent do further
acknowledge that Purchaser's remedy at law for any breach of Section 7.13(a) or
(b) above would be inadequate, and therefore, Seller and Parent agree that
Purchaser shall be entitled to
34
injunctive relief together with monetary damages in the event of any breach of
the provisions of Section 7.13(a) or (b) above. In connection with any
injunction proceeding, Seller and Parent waive the requirement for any bond to
be posted by Purchaser, and if a bond is nevertheless required, they agree it
should be in a nominal amount.
(d) 20% of the Premium shall be allocable for Tax
purposes to the restrictive covenants under Section 7.13(a) above and 5% of the
Premium shall be allocable for Tax purposes to the restrictive covenants
contained in Section 7.13(b), as provided in Exhibit C.
7.14 Employees.
(a) As soon as reasonably practicable after the date of
this Agreement, Purchaser shall identify to Seller the names of those employees
of Seller that Purchaser intends to offer employment at Closing as newly-hired
at-will employees of Purchaser. Seller shall use reasonable best efforts to
continue the employment of such employees prior to Closing and to assist
Purchaser in hiring such Persons as newly hired at-will employees of Purchaser.
(b) All employees of Seller who are hired at Closing by
Purchaser as newly-hired at-will employees shall not be entitled to carryover
any benefits to which they are entitled, or which they have earned, from Seller
including accrued vacation and sick pay. Seller shall pay such employees their
accrued vacation, sick pay and other benefits to which they are entitled, or
which have been earned by them, within three Business Days after Closing.
(c) Purchaser shall not be liable, as successor employer
or otherwise, for any claims, demands or entitlements of the employees of Seller
relating to their employment or service with Seller or their entitlements to
compensation, severance, or other benefits from Seller, including claims under
WARN or similar state laws (collectively, "Employee Claims"), and Parent and
Seller shall, jointly and severally, indemnify and hold Purchaser harmless from
and against any and all Employee Claims.
7.15 Transfer Taxes. All excise, sales, use, value added,
registration stamp, recording, documentary, conveyancing, franchise, property,
transfer and similar Taxes, levies, charges and fees incurred in connection with
the transactions contemplated by this Agreement shall be borne by and paid for
by Seller.
7.16 Assignment and Recording Charges. Seller shall be responsible
for preparing and where applicable, recording in the government office where any
lien or security interest with respect to such loan is filed or recorded, at its
sole expense, all documents relating to the assignment in favor of Purchaser of
all loans that are Acquired Assets. To the extent permitted by applicable state
law, jurisdictional assignments will be done by blanket assignment.
35
7.17 Notice to Depositors.
(a) Preliminary Notice. Purchaser and Seller shall notify
all depositors and all safety deposit box customers of the Seller by a mailing
containing text mutually acceptable to Seller and Purchaser, calculated to
provide necessary and specific information to the owners of particular types of
accounts, of Purchaser's pending assumption of the assumed deposits. The notice
shall be sent at a mutually agreeable time, which in no event shall be earlier
than the time of procurement of all regulatory approval required for
consummation of the transaction contemplated by this Agreement nor later than
thirty (30) days prior to the Closing. The mailing shall include specific
information about procedures for the delivery of necessary forms and checks of
Purchaser. Purchaser shall bear the costs for the design, printing and postage
of the materials included in such mailing. Seller shall have the responsibility
for placing such mailing into the mail.
(b) Checks, Forms, and Brochures. Prior to the Closing,
Purchaser will furnish appropriate depositors by mail with brochures, forms and
other written materials related or necessary to the assumption of the assumed
deposits by Purchaser and the conversion of these accounts to Purchaser
accounts. The mailing shall provide checks to appropriate depositors using
Purchaser's forms with instructions to use Purchaser's checks on and after the
Closing and, thereafter, to destroy any unused checks on Seller's forms. This
mailing shall be sent at a mutually agreeable time, which in no event shall be
earlier than the time of procurement of all regulatory approval required for
consummation of the transaction contemplated by this Agreement nor later than
ten (10) days prior to the Closing. Check forms of Purchaser shall not be
provided to depositors prior thereto. The expenses of the printing, processing
and mailing of such information of Purchaser shall be borne by Purchaser.
Purchaser shall pay the expenses of providing new Purchaser checks and other
forms and written materials to appropriate customers. Before Closing, except as
provided in this Section 7.17, Purchaser will not contact Seller's customers
except as may occur in connection with advertising or solicitations directed to
the public generally or except as mutually agreed to accomplish an orderly
transition of the assumed deposits to Purchaser.(1)
7.18 Deposit Agreements. After the consummation of this transaction
and with respect to the deposit liabilities assumed by Purchaser:
(a) Checks, Drafts, and Orders. Purchaser shall pay all
checks, drafts, and withdrawal orders properly drawn on assumed deposits and
properly presented to it by mail, over its counters, or through clearing houses
to the extent that the account balances to the credit of the respective makers
or drawers are sufficient to permit the payment thereof in accordance with the
applicable deposit agreements.
(b) Interest. Purchaser shall pay or credit interest on
the assumed deposits in accordance with the applicable deposit agreements as or
until they may be
----------------
(1) Might need to transfer Seller ABA # to Purchaser (if it can be done) to
permit processing of Seller checks by Purchaser.
36
legally modified or terminated in accordance with their respective terms.
Purchaser shall after termination of any deposit agreement be free to enter into
new deposit agreements with such customers on such terms and conditions as
Purchaser may, in its discretion, offer to such customers.
(c) Usual Course. Purchaser shall satisfy and discharge
the duties and obligations of Seller under the deposit agreements in the usual
course of conducting a banking business in accordance with and subject to
applicable laws and regulations.
7.19 Loan Agreements. After the consummation of this transaction,
Purchaser shall satisfy and discharge the post-Closing contractual duties of
Seller under all loan agreements, mortgages, security agreements, promissory
notes and other documents evidencing or relating to the loans acquired by
Purchaser pursuant to this Agreement (the "Loan Agreements") in accordance with
their respective terms. Purchaser shall not, however, be obligated to extend
additional credit or to modify the terms and conditions of any Loan Agreement
except as provided therein or as Purchaser may, in its discretion, agree to do
so directly with any customer.
7.20 Post-Closing Operations. After the Closing and in accordance
with the procedures established by the parties for such matters:
(a) Overdrafts. If at the Cut-off Time there exists a
negative balance in an assumed deposit account (e.g., an overdraft), that
account will be transferred to Purchaser and that negative balance will be
netted against other positive balances in aggregating total assumed deposits for
all transferred accounts. If by the date of the Seller's Determination pursuant
to Section 3.2(a) the customer has not deposited sufficient money to cover that
negative balance, then, upon Purchaser's request prior to the final
determination of the Purchase Price, Seller shall reimburse Purchaser for that
amount in exchange for Purchaser's assignment to Seller of Purchaser's claim
against the customer. Seller's reimbursement shall be limited to the amount of
the negative balance in the account at the Cut-off Time less any deposits to the
account after the Cut-off Time and prior to the final determination of the
Purchase Price.
(b) Transitional Credits. If before the Cut-off Time any
check, draft, or other negotiable instrument drawn on another financial
institution for collection and payment is deposited to an assumed deposit
account or is cashed by Seller for a customer with an assumed deposit account,
and after the Cut-off Time that instrument is dishonored by the drawee
institution, then:
(i) If there existed a sufficient credit balance
in an assumed deposit account against which that dishonored instrument may be
properly charged in accordance with applicable laws, regulations, and account
agreements, then (1) the amount of that dishonored instrument shall be charged
by Purchaser against that assumed deposit account; and (2) Purchaser shall then
remit to Seller the amount of that dishonored instrument.
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(ii) If there did not exist a sufficient credit
balance in an assumed deposit account against which that dishonored instrument
may be properly charged, then Seller shall bear the loss, if any, with respect
to that dishonored instrument.
ARTICLE VIII
CONDITIONS PRECEDENT
8.1 Conditions to Each Party's Obligation to Close. The respective
obligation of each of Seller and Parent, on the one hand, and Purchaser, on the
other hand, to consummate this Agreement shall be subject to the satisfaction
prior to Closing of the following conditions:
(a) The obtaining of all required consents, orders or
approvals of, and the making of all required declarations or filings with, all
governmental entities relating to the consummation of the transactions
contemplated by this Agreement including the filings and approvals referred to
in Sections 5.6(d) and 6.5(c), and the expiration of all applicable regulatory
waiting periods.
(b) No order, injunction or decree issued by any court or
agency of competent jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the transactions contemplated by
this Agreement shall be in effect, nor shall any proceeding by any governmental
entity seeking any such Injunction be pending. No statute, rule, regulation,
order, injunction or decree shall have been enacted, entered, or enforced by any
governmental entity which prohibits, restricts or makes illegal consummation of
the transaction contemplated by this Agreement.
(c) There shall not be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to
this Agreement or any of the transactions contemplated hereby, by any
governmental entity which, in connection with the grant of a requisite
regulatory approval, imposes any condition or restriction upon Seller or
Purchaser which would so materially adversely impact the economic or business
benefits of the transactions contemplated by this Agreement as to render
inadvisable, in the reasonable judgment of the Board of Directors of either
Seller or Purchaser, the consummation of this Agreement.
8.2 Conditions to Obligation of Purchaser. The obligation of
Purchaser to consummate this Agreement shall also be subject to the satisfaction
or written waiver by Purchaser prior to Closing of the following conditions:
(a) The representations and warranties of Seller and
Parent set forth in this Agreement shall be true and correct as of the date of
this Agreement and (except to the extent such representations and warranties
speak only to an earlier date) in all material respects as of Closing as though
made anew at Closing.
(b) Seller and Parent shall have performed in all
material respects all of their respective covenants, agreements and obligations
required to be performed by them under this Agreement at or prior to Closing.
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(c) Seller shall have obtained all required consents or
approvals from the other parties to the Contracts to permit the lawful transfer
and assignment of the Contracts to Purchaser without cost, penalty, premium or
change in terms thereof.
(d) Seller shall not have experienced or suffered after
the date of this Agreement any material loss to or interference with the
Business or to any of its material assets from any civil disturbance or any
fire, explosion, flood or other calamity, whether or not covered by insurance.
(e) The New Real Estate Lease shall have been entered
into on the terms set forth on Exhibit D hereto and shall be in full force and
effect.
(f) The Chief Executive Officer of each of Parent and
Seller shall have executed and delivered a closing certificate to Purchaser
certifying that the conditions set forth in Sections 8.2(a) - (e) above have
been satisfied.
8.3 Conditions to Obligations of Seller. The obligation of Seller
and Parent to consummate this Agreement shall also be subject to the
satisfaction or written waiver by Seller prior to Closing of the following
conditions:
(a) The representations and warranties of Purchaser set
forth in this Agreement shall be true and correct as of the date of this
Agreement and (except to the extent such representations and warranties speak
only to an earlier date) in all material respects as of Closing as though made
anew at Closing.
(b) Purchaser shall have performed in all material
respects all of its covenants, agreements and obligations required to be
performed by it under this Agreement at or prior to Closing.
(c) The Chief Executive Officer of Purchaser shall have
executed and delivered a closing certificate to Seller certifying that the
conditions set forth in Sections 8.3(a) and (b) above have been satisfied.
(d) Purchaser shall have entered into a lease agreement
for the occupancy of the banking office currently occupied by Seller (the "New
Lease") which shall, among other things, grant Seller the option, exercisable
for a period of one year following the date of any termination of this
Agreement, to assume all the rights and obligations of Purchaser under the New
Lease as provided in Section 11.6 below.
ARTICLE IX
PRE-CLOSING AND CLOSING DELIVERIES
9.1 Pre-Closing Deliveries by Seller. On the Business Day next
preceding the Closing Date, Seller will deliver to Purchaser the following:
(a) The Estimated Net Asset Value;
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(b) The Estimated Premium;
(c) A list of all Contracts entered into by Seller after
the date of this Agreement together with a true and complete copy of each such
Contract; and
(d) A list of all agreements, leases and licenses that
are Excluded Contracts or may be designated as Excluded Contracts by Purchaser
(together with true and complete copies of those which have not been Previously
Disclosed).
9.2 Closing Deliveries by Seller. At Closing, Seller and/or
Parent, as applicable, will deliver to Purchaser the following:
(a) A certificate of the Secretary of Seller certifying
as of the Closing Date (i) a true, correct and complete copy of the resolutions
approved and adopted by Seller's board of directors authorizing and approving
the execution, performance and delivery of this Agreement, the Assignment
Agreement, the Other Instruments, and the transactions contemplated by this
Agreement; and (ii) the incumbency of the duly authorized officers of Seller;
(b) A certificate of the Secretary of Parent certifying
as of the Closing Date (i) a true, correct and complete copy of the resolutions
approved and adopted by Parent's board of directors authorizing and approving
the execution, performance and delivery of this Agreement, the Assignment
Agreement, the Other Instruments, and the transactions contemplated by this
Agreement; and (ii) the incumbency of the duly authorized officers of Seller;
(c) the Assignment Agreement duly executed by Seller;
(d) the Seller Closing Payment by wire transfer, if
applicable;
(e) Other Instruments duly executed and/or endorsed by
Seller transferring, assigning, and conveying the loans that are Acquired Assets
to Purchaser in recordable form;
(f) The Books and Records;
(g) The consents required by Section 8.2(c) duly executed
by the Persons required to execute such consents and, as necessary, by Seller;
(h) The duly executed certificates required by Section
8.2(g);
(i) All Other Instruments to be delivered by Seller or Parent at
or prior to the Closing at the request of Purchaser; and
(j) Exhibit E.
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9.3 Closing Deliveries by Purchaser. At Closing, Purchaser will
deliver the following to Seller:
(a) A certificate of the Secretary of Purchaser
certifying as of the Closing Date (i) a true, correct and complete copy of the
resolutions approved and adopted by Purchaser board of directors and the board
of directors of Purchaser's holding company, as sole stockholder of Purchaser,
authorizing and approving the execution, performance and delivery of this
Agreement and the Assignment Agreement by Purchaser and the transactions
contemplated by this Agreement; and (ii) the incumbency of the duly authorized
officers of Purchaser;
(b) The Assignment Agreement duly executed by Purchaser;
(c) THE PURCHASER CLOSING PAYMENT BY WIRE TRANSFER, IF
APPLICABLE;
(d) The duly executed certificate required by Section
8.3(c); and
(e) A list of Excluded Contracts designated by Purchaser.
ARTICLE X
SURVIVAL AND INDEMNIFICATION
10.1 Survival. All representations, warranties, agreements and
covenants in this Agreement shall survive Closing and the consummation of the
transactions contemplated hereby and any investigation at anytime made by or on
behalf of any party for a period of two years and all such representations and
warranties, agreements and covenants shall expire on the second anniversary of
the Closing Date, except that (a) claims, if any, asserted in writing prior to
such second anniversary identified as a claim for indemnification pursuant to
this Article X shall survive until finally resolved and satisfied in full; (b)
claims arising from a breach of a representation or warranty relating to Tax or
environmental matters shall survive for the full period of the applicable
statute of limitations, and until finally resolved and satisfied in full if
asserted on or prior to the expiration of any such period; (c) any covenant or
agreement which by its terms contemplates performance after Closing shall
survive for one year after the specified performance period; and (d)
indemnification for Employee Claims shall survive for the full period of the
applicable statute of limitations. The representations and warranties shall not
be affected or otherwise diminished by any investigation at any time by or on
behalf of the party for whose benefit such representations and warranties were
made.
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10.2 Indemnification by Seller and Parent. Subject to the terms
herein, Seller and Parent shall, jointly and severally, indemnify, defend and
hold Purchaser and its successors harmless from, against and with respect to any
losses, damages, liabilities, costs and expenses including reasonable attorneys
fees and court costs ("Damages") incurred by Purchaser or its successors arising
out of or in any manner incident, relating or attributable to any of the
following:
(a) Any inaccuracy in any representation or breach of any
warranty of Seller and/or Parent contained in this Agreement;
(b) Any failure by Seller or Parent to perform or
observe, or to have performed or observed, in full, any covenant or agreement to
be performed or observed by it under this Agreement, the Assignment Agreement or
the Other Instruments;
(c) Any liabilities or obligations of Seller other than
the Assumed Liabilities;
(d) Any Employee Claims;
(e) any acts or omissions of Seller occurring prior to
Closing relating to the Business, the Acquired Assets or the Assumed
Liabilities; and
(f) Any failure by the parties to comply with the Bulk
Sales Act or comparable statutory provisions of any applicable jurisdiction
relating to the transactions contemplated by this Agreement.
10.3 Indemnification by Purchaser. Subject to the terms herein,
Purchaser shall indemnify and hold Seller and its successors harmless from,
against and with respect to any Damages incurred by Seller or its successors
arising out of or in any manner incident, relating or attributable to any of the
following:
(a) Any inaccuracy in any representation or breach of
warranty of Purchaser contained in this Agreement;
(b) Any failure by Purchaser to perform or observe, or to
have performed or observed, in full, any covenant or agreement to be performed
or observed by it under this Agreement or the Assignment Agreement; and
(c) The Assumed Liabilities.
10.4 Survival of Indemnification. The obligations to indemnify and
hold harmless pursuant to this Article X shall survive Closing and the
consummation of the transactions contemplated by this Agreement.
ARTICLE XI
TERMINATION AND AMENDMENT
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11.1 Termination. This Agreement may be terminated in writing at
any time prior to Closing only in the following circumstances:
(a) a mutual consent of Seller and Purchaser in a written
instrument, if the Board of Directors of each so determines by a vote of a
majority of the members of its entire Board;
(b) by either Seller or Purchaser if (i) any requisite
regulatory approval shall have been denied or (ii) any governmental entity of
competent jurisdiction shall have issued a final nonappealable order enjoining
or otherwise prohibiting the consummation of the transactions contemplated by
this Agreement;
(c) by either Seller or Purchaser if the Closing shall
not have occurred by December 31, 2003; provided the terminating party (which in
the case of Seller shall include Parent) is not then in material breach of any
of its representations, warranties, covenants or agreements contained in this
Agreement;
(d) by either Seller or Purchaser if there shall have
been a material breach of any of the representations or warranties set forth in
this Agreement on the part of the other party (which in the case of Seller shall
include Parent), which breach by its nature cannot be cured prior to Closing; or
(e) by either Seller or Purchaser if there shall have
been a material breach of any of the covenants or agreements set forth in this
Agreement on the part of the other party (which in the case of Seller shall
include Parent), which breach shall not have been cured before Closing or within
twenty Business Days following receipt by the breaching party of written notice
of such breach from the other party, whichever comes first.
11.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 11.1, this Agreement shall forthwith become
void and have no effect except (a) with respect to Section 7.14(b), this Section
11.2 and Section 11.6 and (b) no party shall be relieved or released from any
liabilities or damages arising out of the willful breach by the other party of
any provision of this Agreement.
11.3 Specific Performance and Other Remedies. The parties
acknowledge that their respective rights to consummate the transactions
contemplated hereby are special, unique and of extraordinary character. Each
party agrees, therefore, that if it violates or fails and/or refuses to perform
any covenant or agreement made by it herein, the other party may institute and
prosecute an action to enforce specific performance of such covenant or
agreement or seek any other equitable relief.
11.4 Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
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11.5 Extension; Waiver. At any time prior to the Closing, the
parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other party hereto,
(b) waive any inaccuracies in the representations and warranties of the other
party contained herein or in any document delivered pursuant hereto and (c)
waive compliance by the other party with any of the agreements or conditions
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in a written instrument
signed on behalf of such party.
11.6 Lease Assignment and Assumption.
In the event of a termination of this Agreement as provided in Section 11.1,
Purchaser hereby grants Seller the option, exercisable for a period of one year
following the date of such termination, to assume all the rights and obligations
of Purchaser under the New Lease and any amendments or modifications thereof.
The exercise of such option by Seller shall be accomplished and be effective
upon written notice thereof from Seller to Purchaser and to the landlord and the
delivery to landlord of an executed assignment in recordable form which contains
a covenant of assumption by Seller, and release of Purchaser, for the payment of
rent and for the performance of all the terms, covenants, conditions and
agreements otherwise to be performed by Purchaser under the New Lease. Purchaser
hereby agrees to execute and deliver to Seller any such assignment and to
provide any other documents reasonably requested by Seller to accomplish such
assignment.
ARTICLE XII
MISCELLANEOUS
12.1 Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (a) delivered by hand,
(b) sent by recognized overnight courier, (c) made by telecopy or facsimile
transmission, (d) sent by registered or certified mail, return receipt
requested, postage prepaid or (e) sent via acknowledged email.
If to Seller or Parent:
Michigan Community Bancorp, Ltd.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
Community Central Bank Corporation
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇
▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Silver, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
All notices, requests, consents and other communications hereunder shall be
deemed to have been given (i) if by hand, at the time of the delivery thereof to
the receiving party at the address of such party set forth above, (ii) if sent
by overnight courier, on the next Business Day following the day such notice is
delivered to the courier service, (iii) if made by telecopy or facsimile
transmission, at the time that receipt thereof has been acknowledged by
electronic confirmation or otherwise, (iv) if sent by registered or certified
mail, on the fifth Business Day following the day such mailing is sent or (v) if
sent by email, upon receipt by the sender of an acknowledgement by the recipient
that the email has been received. The address of any party herein may be changed
at any time by written notice to the parties.
12.2 Entire Agreement. This Agreement, the Assignment Agreement and
the Other Instruments embody the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersede all prior
oral or written agreements and understandings relating to the subject matter
hereof. No statements, representation, warranty, covenant or agreement of any
kind not expressly set forth herein or therein shall affect, or be used to
interpret, change or restrict, the express terms and provisions of this
Agreement, the Assignment Agreement or the Other Instruments.
12.3 No Waiver. No failure to exercise and no delay in exercising
any right, power or privilege shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege preclude the
exercise of any other right, power or privilege. No waiver of any breach of any
covenant or agreement hereunder shall be deemed a waiver of any preceding or
subsequent breach of the same or any other covenant or agreement.
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12.4 Governing Law. This Agreement and the rights and obligations
of the parties hereunder shall be construed in accordance with and governed by
the internal laws of the State of Michigan without giving effect to the conflict
of law principles thereof.
12.5 Severability. In the event that any court of competent
jurisdiction shall finally determine that any provision, or any portion thereof,
contained in this Agreement shall be void or unenforceable in any respect, then
such provision shall be deemed limited to the extent that such court determines
it enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall determine any such provision, or portion thereof,
wholly unenforceable, the remaining provisions of this Agreement shall
nevertheless remain in full force and effect.
12.6 Interpretation. The parties hereto acknowledge and agree that:
(a) the rule of construction to the effect that ambiguities are resolved against
the drafting party shall not be employed in the interpretation of this
Agreement, and (b) the terms and provisions of this Agreement shall be construed
fairly as to all parties hereto and not in favor of or against any party,
regardless of which party was generally responsible for the preparation of this
Agreement.
12.7 Headings and Captions. The headings and captions of the
various subdivisions of this Agreement are for convenience of reference only and
shall in no way modify, or affect, or be considered in construing or
interpreting the meaning or construction of any of the terms or provisions
hereof.
12.8 Reliance. The parties hereto agree that, notwithstanding any
right of any party to this Agreement to investigate the affairs of any other
party to this Agreement, the party having such right to investigate shall have
the right to rely fully upon the representations and warranties of the other
party expressly contained herein. Notwithstanding the above, any breach which is
waived in writing by the non-breaching party shall not be deemed a breach of
this Agreement.
12.9 Expenses. Each party shall pay its own fees and expenses
(including the fees of any attorneys, accountants or others engaged by such
party) incurred in connection with this Agreement and the transactions
contemplated hereby whether or not the transactions contemplated hereby are
consummated.
12.10 Gender. All pronouns and any variation thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural as the identity
of the Person or the context may require.
12.11 Counterparts. This Agreement may be executed in one or more
counterparts, and by the parties hereto on separate counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
12.12 Bulk Sales Act. The parties hereby waive compliance with the
bulk sales act or comparable statutory provisions of each applicable
jurisdiction, if any.
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[Signature Page to Follow]
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Each of Parent, Seller and Purchaser has caused this Agreement to be
executed by its duly authorized officer as of the day and year first above
written.
MICHIGAN COMMUNITY BANCORP, LIMITED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Title: President and Chief Executive Officer
NORTH OAKLAND COMMUNITY BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Title: President and Chief Executive Officer
COMMUNITY CENTRAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Title: Vice Chairman of the Bank
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