PURCHASE AND ASSUMPTION AGREEMENT
by and between
FIRST BANK
and
BANK OF DAVIE
Dated as of
August 22, 2000
TABLE OF CONTENTS
Page
ARTICLE I
TRANSFER OF ASSETS AND LIABILITIES
Section 1.1 Transferred Assets.............................................1
Section 1.2 Purchase Price.................................................2
Section 1.3 Deposit Liabilities............................................3
Section 1.4 Loans Transferred..............................................7
Section 1.5 Safe Deposit Box Business......................................8
Section 1.6 Employee Matters...............................................9
Section 1.7 Records and Data Processing...................................10
Section 1.8 Security and Insurance........................................11
Section 1.9 Taxes and Fees; Proration of Certain Expenses.................11
Section 1.10 Property Matters..............................................11
ARTICLE II
CLOSING AND EFFECTIVE TIME
Section 2.1 Effective Time................................................14
Section 2.2 Closing.......................................................15
Section 2.3 Post-Closing Adjustments......................................17
ARTICLE III
INDEMNIFICATION
Section 3.1 Seller's Indemnification of Purchaser.........................17
Section 3.2 Purchaser's Indemnification of Seller.........................18
Section 3.3 Claims for Indemnity..........................................18
Section 3.4 Limitations on Indemnification................................18
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 4.1 Corporate Organization........................................19
Section 4.2 No Violation..................................................19
Section 4.3 Corporate Authority...........................................19
Section 4.4 Enforceable Agreement.........................................19
Section 4.5 No Brokers....................................................19
Section 4.6 Personal Property.............................................19
Section 4.7 Real Property.................................................20
Section 4.8 Condition of Property.........................................20
Section 4.9 Loans 20
Section 4.10 Limitation of Representations and Warranties..................20
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 5.1 Corporate Organization........................................21
Section 5.2 No Violation..................................................21
Section 5.3 Corporate Authority...........................................21
Section 5.4 Enforceable Agreement.........................................21
Section 5.5 No Brokers....................................................21
ARTICLE VI
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME
Section 6.1 Full Access...................................................21
Section 6.2 Delivery of Magnetic Media Records............................22
Section 6.3 Application for Approval to Effect Purchase of Assets and
Assumption of Liabilities.....................................22
Section 6.4 Conduct of Business; Maintenance of Properties................22
Section 6.5 No Solicitation by Seller.....................................23
Section 6.6 Further Actions...............................................23
Section 6.7 Fees and Expenses.............................................23
Section 6.8 Breaches with Third Parties...................................23
Section 6.9 Insurance.....................................................23
Section 6.10 Public Announcements..........................................23
Section 6.11 Tax Reporting.................................................24
ARTICLE VII
CONDITIONS TO PURCHASER'S OBLIGATIONS
Section 7.1 Representations and Warranties True...........................24
Section 7.2 Obligations Performed.........................................24
Section 7.3 No Adverse Litigation.........................................24
Section 7.4 Regulatory Approval...........................................24
Section 7.5 Absence of Certain Events or Conditions.......................24
ARTICLE VIII
CONDITIONS TO SELLER'S OBLIGATIONS
Section 8.1 Representations and Warranties True...........................25
Section 8.2 Obligations Performed.........................................25
Section 8.3 No Adverse Litigation.........................................25
Section 8.4 Regulatory Approval...........................................25
Section 8.5 Consummation of Mergers.......................................25
ARTICLE IX
TERMINATION
Section 9.1 Methods of Termination........................................26
Section 9.2 Procedure Upon Termination....................................26
Section 9.3 Payment of Expenses...........................................27
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 Amendment and Modification....................................27
Section 10.2 Waiver or Extension...........................................27
Section 10.3 Assignment....................................................27
Section 10.4 Addresses for Notices, Etc....................................27
Section 10.5 Counterparts..................................................28
Section 10.6 Headings......................................................28
Section 10.7 Governing Law.................................................28
Section 10.8 Sole Agreement................................................28
Section 10.9 Severability..................................................28
Section 10.10 Parties in Interest...........................................29
Schedules
Schedule 1.1(a)(1) - Description of Real Property
Schedule 1.1(a)(3) - Equipment Leases
Schedule 1.1(b) - Excluded Assets
Schedule 1.3(b)(7) - Certain Excluded Deposit Accounts
Schedule 1.4 - Loans
Schedule 4.7 - Real Property Matters
Exhibits
Exhibit A - Form of Power of Attorney
Exhibit B - Form of ▇▇▇▇ of Sale
Exhibit C - Form of Assignment and Assumption Agreement
Exhibit D - Form of Closing Statement
PURCHASE AND ASSUMPTION AGREEMENT
THIS PURCHASE AND ASSUMPTION AGREEMENT, dated as of August 23,
2000 (this "Agreement") is by and between FIRST BANK, a North Carolina bank
having its principal offices in Troy, North Carolina ("Seller"), and BANK OF
DAVIE, a North Carolina bank having its principal offices in Mocksville, Davie
County, North Carolina ("Purchaser").
W I T N E S S E T H:
WHEREAS, First Bancorp, the holding company of Seller has entered
into a Merger Agreement dated December 15, 1999 (the "Merger Agreement") with
First Savings Bancorp, Inc. ("First Savings"), which provides for the merger of
First Savings into First Bancorp and for the merger of their banking
subsidiaries, First Savings Bank of ▇▇▇▇▇ County ("First Savings Bank") and
Seller;
WHEREAS, in connection with the transactions contemplated by the
Merger Agreement, Seller wishes to divest, upon the terms and conditions set
forth herein, substantially all of the assets and certain deposits and other
liabilities of its office located in Carthage, North Carolina at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Banking Center"); and
WHEREAS, Purchaser wishes to buy such assets and assume such
liabilities upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual
agreements hereinafter set forth, Seller and Purchaser agree as follows:
ARTICLE I
TRANSFER OF ASSETS AND LIABILITIES
Section 1.1 Transferred Assets.
------------------
(a) As of the Effective Time (as defined in Section 2.1 below)
and upon the terms and conditions set forth herein, Seller will sell, assign,
transfer, convey and deliver to Purchaser, and Purchaser will purchase from
Seller, all of the following assets associated with the Banking Center and
identified in this Agreement and the Exhibits hereto, and not otherwise excluded
from sale pursuant to the provisions of Section 1.1(b) below (the "Assets"):
(1) the real estate and improvements thereon at the
Banking Center as described in Schedule 1.1(a)(1) to this
Agreement (the "Real Property"), together with all rights and
appurtenances pertaining thereto;
(2) except as provided in Section 1.1(b), the
furniture, fixtures, leasehold improvements, equipment and other
tangible personal property located on or affixed to the Real
Property (collectively, the "Personal Property");
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(3) those certain equipment leases for equipment
located at the Banking Center listed on Schedule 1.1(a)(3) (the
"Equipment Leases");
(4) all safe deposit contracts and leases for the
safe deposit boxes located at the Banking Center as of the
Effective Time (the "Safe Deposit Contracts");
(5) all Loans as defined herein and transferred
pursuant to Section 1.4;
(6) all coins and currency located at the Banking
Center as of the Effective Time (the "Coins and Currency");
(7) all records of Seller pertaining to the Loans,
all deposit accounts, and any other customer relationships
transferred to Purchaser;
(8) Seller's rights in and to the use of the
current telephone number of the Banking Center ((▇▇▇) ▇▇▇-▇▇▇▇);
and
(9) Seller's rights under any and all maintenance
contracts and warranties and any other contractual rights
pertaining to the Personal Property (the "Contracts").
(b) Excluded from the assets, properties and rights being
transferred, conveyed and assigned to Purchaser under this Agreement are the
assets listed on Schedule 1.1(b) hereto, debit and credit card merchant services
agreements related to customers of the Banking Center, Seller's rights in and to
the name "First Bank", "First Savings Bank of ▇▇▇▇▇ County, SSB" and any of
Seller's corporate logos, trademarks and trade names, and signs, paper stock,
forms and other supplies containing such name and any such logos, trademarks or
trade names (collectively, the "Excluded Assets"). Seller shall remove the
Excluded Assets from the Banking Center on or prior to the Effective Time.
Seller shall remove the Excluded Assets at its own cost and, apart from making
any repairs necessitated by Seller's negligence in removing the Excluded Assets,
Seller shall be under no obligation to restore the Banking Center's premises to
their original condition, which shall be the responsibility of Purchaser.
Section 1.2 Purchase Price.
--------------
(a) As consideration for the purchase of the Banking Center,
Purchaser shall pay Seller a purchase price equal to the sum of the following
(the "Purchase Price"):
(1) Forty Thousand Dollars ($40,000) for the
Personal Property and One Hundred Eighty Thousand Dollars
($180,000) for the Real Property;
(2) a premium for the outstanding principal balance
of the Deposit Liabilities (as defined in Section 1.3(a) hereof)
and franchise value related to the Banking Center equal to five
percent (5%) of the average outstanding principal balance of the
Deposit Liabilities for the 30 calendar days immediately
preceding the Closing; provided, however, that in calculating
such average, deposits relating to any public funds deposit
accounts opened by Seller after the date of this Agreement and
all brokered deposits shall be excluded;
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(3) the outstanding principal balance, plus any
accrued interest (excluding the amounts of any unpaid late
charges) all as of the Effective Time, for the Loans as defined
in Section 1.4 hereof; and
(4) the face amount of the Coins and Currency.
(b) In addition, Purchaser shall assume, as of the Effective
Time, all of the duties, obligations and liabilities of Seller relating to the
Equipment Leases, the Safe Deposit Contracts, the Deposit Liabilities as defined
in Section 1.3 (including all accrued interest relating thereto) and all
assignable operating contracts of the Banking Center (excluding any master
contracts); provided, that any cash items paid by Seller and not cleared prior
to the Effective Time shall be the responsibility of Seller, subject to the
terms of Section 1.3 below.
(c) Seller shall prepare a balance sheet (the "Pre-Closing
Balance Sheet") in accordance with Seller's customary practices and procedures
as of a date not earlier than thirty (30) calendar days prior to the Effective
Time anticipated by the parties (the "Pre-Closing Balance Sheet Date"),
reflecting the assets to be sold and assigned hereunder and the liabilities to
be transferred and assumed hereunder. Seller agrees to pay to Purchaser at the
Closing (as defined in Section 2.1 hereof), in immediately available funds, the
excess amount, if any, of the amount of Deposit Liabilities assumed by Purchaser
pursuant to subsection (b) above, as reflected by the Pre-Closing Balance Sheet
over the Purchase Price, as reflected by the Pre-Closing Balance Sheet.
Purchaser agrees to pay Seller at the Closing, in immediately available funds,
the excess, if any, of the Purchase Price, as reflected by the Pre-Closing
Balance Sheet, over the amount of Deposit Liabilities assumed by Purchaser
pursuant to subsection (b) above, as reflected by the Pre-Closing Balance Sheet.
Amounts paid at Closing shall be subject to subsequent adjustment based on the
Post-Closing Balance Sheet (as defined in Section 2.3 hereof).
Section 1.3 Deposit Liabilities.
-------------------
(a) "Deposit Liabilities," shall mean all of Seller's duties,
obligations and liabilities relating to the deposit accounts assigned to the
Banking Center as of the Effective Time as reflected in the Post-Closing Balance
Sheet (including accrued but unpaid or uncredited interest thereon), except as
set forth in Section 1.3(b) below. The aggregate amount of the Deposit
Liabilities shall be calculated exclusive of the amount of any negative account
balances or any overdrafts or cash items paid against insufficient funds with
respect to any deposit account. Purchaser shall make a good faith effort to
collect any such items for Seller and remit such amounts collected within one
banking day to Seller. Purchaser's good faith effort to recover on any such item
shall include collection efforts consistent with Purchaser's procedures then in
effect for the collection of similar items, provided, however, that Purchaser
shall have no obligation to institute any legal action or proceeding with
respect to any such item.
(b) Except for those liabilities and obligations specifically
assumed by Purchaser under Section 1.2(b) above, Purchaser is not assuming any
other liabilities or obligations of Seller. Liabilities not assumed include, but
are not limited to, the following:
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(1) Seller's cashier checks, letters of credit,
money orders, interest checks and expense checks issued prior to
the Closing, consignments of U.S. Government "E" and "EE" bonds
and any and all traveler's checks;
(2) liabilities or obligations with respect to any
litigation, suits, claims, demands or governmental proceedings
arising out of or related to any fact, circumstance or event
occurring prior to the Closing and related to the Banking Center;
(3) deposit accounts associated with lines of
credit where the line of credit is excluded from the Loans in
accordance with Section 1.4(b);
(4) deposit accounts associated with qualified
retirement plans where Seller is the trustee of such plan or the
sponsor of a prototype plan used by such plan;
(5) deposit accounts associated with officers or
directors of Seller or First Savings (or any of their parent
corporations or subsidiaries);
(6) any deposits related to public funds deposit
accounts opened following the date of this Agreement and all
brokered deposits; and
(7) those deposit accounts set forth on Schedule
1.3(b)(7).
(c) Seller does not represent or warrant that any deposit
customers whose accounts are assumed by Purchaser will become or continue to be
customers of Purchaser after the Effective Time.
(d) After the Effective Time, Purchaser agrees to pay in
accordance with law and customary banking practices all properly payable checks,
drafts and withdrawal orders drawn or authorized by depositors against accounts
being assumed that are properly presented to Purchaser by mail, over the counter
or through the check clearing system of the banking industry, whether drawn on
the checks, withdrawal or draft forms provided by Seller or by Purchaser, and in
all other respects to discharge, in the usual course of the banking business,
the duties and obligations of Seller with respect to the Deposit Liabilities
assumed by Purchaser.
(e) For a period ninety (90) calendar days after the Effective
Time, Seller agrees to act as Purchaser's collecting bank for the receipt of
checks, drafts or negotiable orders of withdrawal drawn on forms provided by
Seller against any Deposit Liabilities assumed by Purchaser or any Loan account
transferred to Purchaser hereunder which is accessible by check or draft. Seller
shall: (i) maintain a mechanism to receive such items on a daily basis; and (ii)
provide to Purchaser on the banking day following the date of receipt of such
items a listing of all such items received by it, together with the items
themselves. Seller and Purchaser shall make arrangements to provide for the
daily settlement with immediately available funds by Purchaser of all such items
received by Seller.
In executing its duties under this Section 1.3(e), Seller shall
be acting only as agent for the collection of items drawn on Purchaser and shall
not be deemed to have made any representations or warranties to Purchaser with
respect to any such checks, drafts or withdrawal orders, and any such
representations or warranties implied by law are hereby expressly disclaimed.
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Purchaser will be solely responsible for the timely return for any reason of any
such items that Purchaser will not pay and, unless resulting from the negligence
or bad faith of Seller, any risk of loss related to the late return of any items
received by Seller on Purchaser's behalf shall be the responsibility of
Purchaser.
(f) Purchaser agrees, at its cost and expense, (i) to assign new
account numbers to depositors of assumed accounts, (ii) to notify such
depositors, on or before the Effective Time, in a form and on a date mutually
acceptable to Seller and Purchaser, of Purchaser's assumption of Deposit
Liabilities, and (iii) to furnish such depositors with an initial supply of
checks on the forms of Purchaser and with instructions to utilize Purchaser's
checks and to destroy unused check, draft and withdrawal order forms of Seller.
In addition, subsequent to regulatory approval, but at least 30 days prior to
the anticipated Closing, Seller will notify its affected customers by letter of
the pending assignment of Seller's deposit accounts to Purchaser, which notice
shall be at Seller's cost and expense and shall be in a form mutually agreeable
to Seller and Purchaser.
(g) In the event that, following the Effective Time, any check,
draft or withdrawal order credited by Seller prior to the Effective Time to a
deposit account assumed by Purchaser is returned to Seller, Seller may notify
Purchaser of such return and forward such item to Purchaser. Purchaser shall
make a good faith effort to collect any such items for Seller and, with respect
to any such item collected by Purchaser, Purchaser shall reimburse Seller for
the amount of that item upon the assignment of the item by Seller to Purchaser.
Purchaser's good faith effort to recover on any such item shall include
collection efforts consistent with Purchaser's procedures then in effect for the
collection of similar items, provided, however, that Purchaser shall have no
obligation to institute any legal action or proceeding with respect to any such
item.
(h) As of and following the Effective Time, Purchaser shall
assume and discharge Seller's duties and obligations with respect to the Deposit
Liabilities assumed by Purchaser under this Agreement, all in accordance with
the terms and conditions of, and laws, rules and regulations that apply to, the
Deposit Liabilities.
At the Effective Time, Seller shall provide to Purchaser a
written listing of each stop payment order, tax lien, levy, garnishment, pledge,
guardianship agreement, or other hold or restriction then in effect with respect
to any of the Deposit Liabilities (the "Holds"), and Purchaser shall honor and
comply with the terms of all valid Holds described in the above list. If,
following receipt of such list, Purchaser makes any payment in violation of any
such Hold, then it shall be solely liable for such payment and shall indemnify,
hold harmless, and defend Seller from and against all claims, losses and
liabilities, including reasonable attorneys' fees and expenses, arising out of
any such payment. In the event that Purchaser shall make any payment in
violation of a Hold initiated prior to the Effective Time but not reflected in
the above list, then Seller shall be solely liable for such payment and shall
indemnify, hold harmless and defend Purchaser from and against all claims,
losses, and liabilities, including reasonable attorneys' fees and expenses,
arising out of any such payment.
(i) As of the Effective Time, Seller will transfer and assign to
Purchaser, and Purchaser will maintain and safeguard in accordance with
applicable law and sound banking practices, all account documents, deposit
contracts, signature cards, deposit slips, canceled items and other records
related to the Deposit Liabilities assumed under this Agreement, subject to
Seller's right of access to such records as provided in this Agreement.
5
(j) Seller will render a final statement to each depositor of an
account assumed under this Agreement as to transactions occurring through the
Effective Time and will comply with all laws, rules and regulations regarding
tax reporting of transactions of such accounts through the Effective Time;
provided, however, that Seller shall not be obligated to render a final
statement on any account not ordinarily receiving periodic statements in the
ordinary course of Seller's business. Seller will be entitled to impose normal
fees and service charges on a per-item basis, but Seller will not impose
periodic fees or blanket charges in connection with such final statements.
(k) Three business days prior to the Closing, Seller will deliver
to Purchaser a listing of all deposit accounts being assumed by Purchaser at the
Banking Center that are then currently subject to periodic debits or credits
through the Automated Clearing House (the "ACH"), together with all applicable
originator information with respect to such recurring transactions. As of the
Effective Time, Purchaser, at its expense, will notify all ACH originators of
the transfers and assumptions made pursuant to the Agreement. For a period of
ninety (90) calendar days beginning on the Effective Time, Seller will accept
all ACH items related to accounts assumed under this Agreement that are routed
or presented to Seller. Seller will make no charge to Purchaser for accepting
such items and will electronically transmit such ACH data to Purchaser. If
Purchaser cannot receive such electronic transmissions, Seller will make
available to Purchaser, at Seller's operations center, tapes containing such ACH
data. Items routed or presented after the ninety (90) day period may be returned
to the presenting party. Seller and Purchaser shall make arrangements to provide
for the daily settlement by Purchaser with respect to debit items, and by Seller
with respect to credit items, in each case with immediately available funds, of
any ACH items accepted by Seller.
(l) In the event that, following the Effective Time, any Visa or
MasterCard sales or credit transaction processed for one of Seller's merchant
customers pursuant to Seller's Visa or MasterCard Merchant Agreement with that
merchant is charged back to Seller, Seller will notify Purchaser of such return.
To the extent that Seller's merchant Agreement with that merchant customer would
have permitted Seller to collect such item by charging or offsetting it against
the merchant customer's deposit account with Seller had the item been charged
back to Seller prior to the Effective Time, then Seller will assign such item to
Purchaser and Purchaser will charge or offset such item against the merchant's
deposit account with Purchaser up to the amount of available collected funds
credited to such account at the time such item is assigned to Purchaser, and
Purchaser will pay to Seller the amount of any such items, or portion thereof,
so collected by Purchaser. Purchaser otherwise shall have no obligation or
liability for any such charged-back items or any obligation to institute any
legal action or proceeding against a merchant customer with respect to any such
item. Notwithstanding the foregoing, Purchaser shall have no duty to take any
action, or to pay any funds to Seller, for any such item that has been
improperly returned or charged back to Seller. In the event that any merchant
customer disputes its responsibility or liability for any such charged back item
or the charging of such item to its deposit account, Seller agrees to indemnify
Purchaser and to hold it harmless from and against any all claims, losses,
liabilities, demands and obligations, including reasonable attorney's fees,
incurred by Purchaser arising out of such charged-back item. Solely for the
purposes of this Section 1.3(l), all references to Seller shall be deemed to
include Seller and its assignees.
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Section 1.4 Loans Transferred.
-----------------
(a) Seller will sell, transfer and assign to Purchaser as of the
Effective Time, subject to the terms and conditions of this Agreement, all of
Seller's right, title and interest in (including collateral relating thereto)
the loans listed on Schedule 1.4 hereto, together with all promissory notes,
loan agreements, security agreements, deeds of trust, assignment or pledge
agreements and other documentation pertaining thereto and all Seller's rights
thereunder (collectively, the "Loans"); provided, however, the Loans shall not
include any loans described in subsection (b) below. Such Loans (as well as any
security interest related thereto) shall be transferred by means of a blanket
assignment and not individually (except as may be otherwise required by law).
Purchaser shall inform Seller not less than forty-five (45) calendar days prior
to the Effective Time of any case in which individual assignments will be
required by law.
(b) Notwithstanding the provisions of subsection (a) above, the
Loans shall not include:
(1) nonaccruals (which term shall include loans in
which the collateral securing same has been repossessed or in
which collection efforts have been instituted or, claim and
delivery or foreclosure proceedings have been filed);
(2) loans ninety (90) calendar days or more past
due;
(3) loans upon which insurance has been
force-placed;
(4) loans in connection with which the borrower has
filed a petition for relief under the United States Bankruptcy
Code prior to the Effective Time; or
(5) loans identified by Purchaser in writing thirty
(30) calendar days or more prior to the Effective Time as not
being purchased because of failure to meet the credit standards
of Purchaser.
Following the execution of this Agreement, Purchaser shall have
an opportunity to examine, to the extent it deems necessary, each of the loans
at the Banking Center, together with all files, documentation or other
information related to such loans that is maintained or held by Seller.
Purchaser may conduct such examination on more than one occasion, at reasonable
intervals, prior to the Closing, and Seller will, upon Purchaser's request at
reasonable intervals, provide a listing of new loans made by Seller since each
previous occasion of examination by Purchaser.
(c) Seller and Purchaser agree that Purchaser will become the
beneficiary of credit life insurance written on direct consumer installment
loans, and coverage will continue to be the obligation of the current insurer
after the Effective Time and for the duration of such insurance as provided
under the terms of the applicable policy or certificate. Seller and Purchaser
agree to cooperate in good faith to develop a mutually satisfactory method by
which the current insurer will make rebate payments to and satisfy claims of the
holders of such certificates of insurance after the Effective Time. The parties'
obligations in this Section are subject to any restrictions contained in
existing insurance contracts as well as applicable laws and regulations.
(d) In connection with the transfer of any Loans requiring notice
to the borrower, Purchaser and Seller agree to comply with all notice and
reporting requirements of the loan documents or of any law or regulation.
7
(e) All Loans transferred to Purchaser shall be valued at their
outstanding principal balance, plus any accrued interest (excluding the amount
of any unpaid late charges), all as of the Effective Time.
(f) Purchaser will, at its expense, issue new coupon books for
payment of Loans for which Seller provides coupon books, with instructions to
utilize Purchaser's coupons and to destroy coupons furnished by Seller.
(g) For a period of ninety (90) calendar days after the Effective
Time, Seller will forward to Purchaser loan payments received by Seller.
Purchaser shall reimburse Seller upon demand for checks returned on payments
forwarded to Purchaser; however, to the extent possible, Seller will deduct the
amount of such returned checks from payments received and shall settle with
Purchaser by an official check.
(h) As of the Effective Time, Seller shall transfer and assign
all files, documents and records related to the Loans to Purchaser, and
Purchaser will be responsible for maintaining and safeguarding all such
materials in accordance with applicable law and sound banking practices.
(i) If the balance due on any Loan purchased pursuant to this
Section 1.4 has been reduced by Seller as a result of a payment by check
received prior to the Effective Time, which item is returned after the Effective
Time, then Seller shall assign that check to Purchaser, the asset value
represented by the Loan transferred shall be correspondingly increased, and an
amount in cash equal to such increase shall be paid by Purchaser to Seller
promptly upon demand; provided, however, that if, before Purchaser's receipt of
notice of such returned check, the obligor of such Loan shall have paid
Purchaser in full the outstanding balance of such Loan showing on Purchaser's
books and records and Purchaser shall have canceled the Loan documents and
returned the same to the obligor, then Purchaser shall have no obligation to
make any such payment to Seller.
(j) Seller shall grant to Purchaser as of the Effective Time a
limited power of attorney, in substantially the form attached hereto as Exhibit
A (the "Power of Attorney").
Section 1.5 Safe Deposit Box Business.
-------------------------
(a) As of the Effective Time, Purchaser will assume and discharge
Seller's obligations with respect to the safe deposit box business at the
Banking Center in accordance with the terms and conditions of contracts or
rental agreements related to such business, and Purchaser will maintain all
facilities necessary for the use of such safe deposit boxes by persons entitled
to use them.
(b) As of the Effective Time, Seller shall transfer and assign
the records related to such safe deposit box business to Purchaser, and
Purchaser shall maintain and safeguard all such records and be responsible for
granting access to and protecting the contents of safe deposit boxes at the
Banking Center.
(c) Safe deposit box rental payments (not including late payment
fees) collected by Seller before the Effective Time shall be prorated as of the
Effective Time.
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Section 1.6 Employee Matters.
----------------
(a) Provided that they are eligible for employment with Purchaser
under applicable law, Purchaser shall offer employment to all employees employed
by Seller at the Banking Center as of the Effective Time (the "Employees"), in
their then current functional positions with remuneration not less than the
levels being paid immediately prior to the Effective Time and with the same
benefits as those available to Purchaser's comparable employees. In the case of
any Employee who is employed by Purchaser, such person's employment with
Purchaser shall be on an "at-will" basis, and nothing in this Agreement shall be
deemed to constitute an employment agreement with any such person or to obligate
Purchaser to continue to employ any such person for any specific period of time
or in any specific position or to restrict Purchaser's right to terminate the
employment of any such person at any time and for any reason satisfactory to it
(subject to Section 1.6(c) below). Except for Purchaser's pension plan (if any),
Employees shall receive full credit for their prior service with Seller under
Purchaser's benefit plans and policies, including its vacation and sick leave
policies. As of the Effective Time, the Employees and their dependents, if any,
previously covered under Seller's health insurance plans shall be covered under
Purchaser's health insurance plan without being subject to any pre-existing
condition limitations or exclusions except those excluded under Seller's health
insurance plan. However, notwithstanding anything contained herein to the
contrary, Seller shall be responsible for any medical, dental, life, or other
insurance claim by an Employee which would have been payable under the terms of
Seller's insurance or other welfare plan sponsored by Seller if the date of
service on which the claim is based occurs on or prior to the Closing Date.
Purchaser shall be responsible for any such claims which are based on a date of
service that occurs after the Closing Date and which are payable under the terms
of Purchaser's benefit plans applicable to the Employees. Employees shall not be
required to satisfy the deductible and employee payments required by Purchaser's
comprehensive medical and/or dental plans for the calendar year of the Effective
Time to the extent of amounts previously credited during such calendar year
under comparable plans maintained by Seller. Employees shall receive full credit
for their prior service with Seller for purposes of determining their
participation eligibility and vesting rights under Purchaser's employee benefit
plans. Benefits under Purchaser's employee benefit plans shall accrue from the
first day of service with Purchaser and shall be based on the number of years of
service with Purchaser.
Seller shall take reasonable steps designed to fully (100%) vest
the accrued benefits under the employee benefit plans in which the Employees
participate at the Effective Time ("the Benefit Plans") of all Employees who
have become participants in such plans by that time and who terminate their
employment with the Seller as a result of the transactions contemplated by this
Agreement (the "Affected Participants"). Seller shall cause the Benefit Plans to
pay the Affected Participants their accrued benefits under such plans when and
as provided in such plans, and for purposes of determining when such benefits
become payable, the Affected Participants shall be deemed to have separated from
service on the date of Closing.
(b) Seller makes no representations or warranties about whether
any of the Employees will remain employed at the Banking Center after the
Effective Time. Seller will use reasonable best efforts to maintain the
Employees as employees of Seller at the Banking Center until the Effective Time.
Any Employee whose employment will be terminated for any reason prior to the
9
Effective Time or who elects not to be an employee of Purchaser shall be dealt
with by Seller in its sole and absolute discretion. Seller agrees that, prior to
the Effective Time, it will not transfer any person (except for ▇▇▇▇▇▇ ▇▇▇▇▇▇,
the current branch manager) who is an employee at the Banking Center as of the
date of this Agreement to any of its other branch offices, and, for a period of
twelve (12) months after the Effective Time, it will not solicit for employment
any Employee who becomes employed by Purchaser as of the Effective Time (a
"Transferred Employee").
(c) Purchaser agrees that for a period of twelve (12) months
after the Effective Time, it will not terminate a Transferred Employee without
cause without paying to such Transferred Employee a severance benefit equal to
the greater of (i) two weeks salary for each year of credited service (including
prior years of service to First Savings or any of its subsidiaries) and (ii) his
or her salary for four months.
(d) Prior to the Effective Time, Seller will not grant any
increase in the salary or wages of any of its employees at the Banking Center
other than normal increases at times and in amounts consistent with Seller's
past practices and customary salary review policies and procedures, and except
for a one time increase to compensate for increased health benefit costs, as
described in the merger agreement between First Bank and First Savings Bank.
(e) Seller shall permit Purchaser to provide training with regard
to Purchaser's operations, policies, and procedures before the Effective Time at
Purchaser's sole cost and expense. Such training may, at Purchaser's option,
take place at the Banking Center, but, except with Seller's prior consent, shall
take place outside of Seller's normal business hours.
Section 1.7 Records and Data Processing.
---------------------------
(a) As of the Effective Time, Purchaser shall become responsible
for maintaining the files, documents and records referred to in this Agreement.
Purchaser will preserve and safekeep such documents as required by applicable
law and sound banking practice for the joint benefit of Seller and Purchaser.
After the Effective Time, Purchaser will permit Seller and its representatives,
at reasonable times and upon reasonable notice and at Seller's expense, to
examine, inspect, copy and reproduce any such files, documents or records as
Seller deems reasonably necessary.
(b) After the Effective Time, Seller will permit Purchaser and
its representatives, for reasonable cause, at reasonable times and upon
reasonable notice and at Purchaser's expense, to examine, inspect, copy and
reproduce files, documents or records retained by Seller, regarding the assets
and liabilities transferred under this Agreement; provided, however, that upon
the occurrence following the Effective Time of any dispute, inquiry or request
regarding a deposit account or Loan assumed by or transferred to Purchaser
pursuant to this Agreement and which relates to the status of, transactions
occurring in, or the servicing of, such account or Loan prior to the Effective
Time, then, upon Purchaser's request, Seller will make a good faith effort to
provide Purchaser with any and all information in its records pertinent to such
dispute, inquiry or request, together with copies of pertinent documents or
instruments reasonably requested by Purchaser, in order to respond to such
10
dispute, inquiry or request within a period of time and in a manner consistent
with standard banking practices and customs and applicable law. Seller shall
provide such information to Purchaser at no charge for the first six (6) months
after Closing, and thereafter may impose a reasonable charge for such
information at its standard research rates.
(c) It is understood that certain of Seller's documents and
records may be available only in the form of photocopies, film copies or other
non-original and non-paper media.
Section 1.8 Security and Insurance.
-----------------------
As of the Effective Time, Purchaser shall be solely responsible for the security
of and insurance on all persons and property located in or about the Banking
Center.
Section 1.9 Taxes and Fees; Proration of Certain Expenses.
Purchaser shall be responsible for the payment of all fees and taxes related to
the transactions contemplated by this Agreement; provided, that Purchaser shall
not be responsible for, or have any liability with respect to, taxes on any
income to Seller arising out of this transaction, and Seller agrees that it
shall pay, or represents that it has paid, in a timely manner any and all such
income taxes. Purchaser shall not be responsible for any income tax liability of
Seller arising from the business or operations of the Banking Center before the
Effective Time, and Seller shall not be responsible for any tax liabilities of
Purchaser arising from the business or operations of the Banking Center after
the Effective Time. Utility payments, telephone charges, real property taxes,
personal property taxes, rent, salaries, deposit insurance premiums, other
ordinary operating expenses of the Banking Center and other expenses related to
the liabilities assumed or assets purchased hereunder shall be prorated between
the parties as of the Effective Time. To the extent any such item has been
prepaid by Seller for a period extending beyond the Effective Time, there shall
be a proportionate monetary adjustment in favor of Seller.
Section 1.10 Property Matters.
----------------
(a) Seller agrees to deliver to Purchaser, as soon as reasonably
possible after the execution of this Agreement, copies of all (i) title
information in possession of Seller, including, but not limited to, title
insurance policies, attorneys' opinions on title, surveys, covenants, deeds,
notes and mortgages and easements relating to the Real Property, and (ii) copies
of reports, surveys, notices, correspondence or other information known to
Seller and relating to the environmental condition of the Real Property or
violations of laws or regulations relating to the environment. Such delivery
shall constitute no warranty by Seller as to the accuracy or completeness
thereof or that Purchaser is entitled to rely thereon.
(b) At its option and expense, Purchaser may cause to be
conducted (i) a title examination, physical survey, zoning compliance review,
and structural inspection of the Real Property and improvements thereon (the
"Property Examination") and (ii) site inspections, historic reviews, regulatory
analyses, and Phase 1 environmental assessments of the Real Property, together
with such other studies, testing and intrusive sampling and analyses as
Purchaser shall deem necessary or desirable (collectively, the "Environmental
Survey"); provided, however, that, without prior written consent of Seller,
Purchaser will not conduct any ground water monitoring or install any test well
or undertake any investigation that requires a permit or license from, or the
reporting of the investigation or the results thereof to, a local or state
11
environmental regulatory authority or the U.S. Environmental Protection Agency
("Intrusive Testing"). Purchaser may update any such Property Examination and/or
Environmental Survey to a date immediately prior to the Closing.
(c) If in the course of the Property Examination or Environmental
Survey Purchaser discovers a "Material Defect" (as defined in Subsection (d)
below with respect to the Real Property, Purchaser will give prompt written
notice thereof to Seller (but in any event prior to 5:00 p.m. on the 60th
calendar day following the date of this Agreement) describing the facts or
conditions constituting the Material Defect and the measures which Purchaser
reasonably believes are necessary to correct such Material Defect. Seller and
Purchaser shall discuss and agree upon what measures are necessary to remedy
such defect and thereafter Seller shall respond to Purchaser's notice before
5:00 p.m. on the 20th business day after its receipt advising Purchaser whether
Seller elects to cure the Material Defect. Absent such a response, Seller shall
be deemed to have declined to cure such Material Defect. If Seller elects to
cure, then Seller shall proceed with such cure and shall complete such cure
within 45 days thereafter or within such additional period as shall be agreed
upon by Seller and Purchaser, provided that completion of the cure of such
defect shall be a condition to Purchaser's obligation to close.
If in the course of any updating of the Property Examination
and/or Environmental Survey Purchaser discovers a Material Defect with respect
to the Real Property, Purchaser will give written notice thereof to Seller
within five banking days following its discovery thereof (but in any event prior
to the Closing) describing the facts or conditions constituting the Material
Defect and the measures which Purchaser reasonably believes are necessary to
correct such Material Defect. Seller and Purchaser shall discuss and agree on
what measures are necessary to remedy such defect and Seller shall respond to
Purchaser's notice before 5:00 p.m. on the tenth business day after its receipt
advising Purchaser whether Seller elects to cure the Material Defect. Absent
such a response, Seller shall be deemed to have declined to cure such Material
Defect. If Seller elects to cure, then Seller shall proceed with such cure and
shall complete such cure within 45 days thereafter or within such additional
period as shall be agreed upon by Seller and Purchaser, provided that completion
of the cure of such defect shall be a condition to Purchaser's obligation to
close. The Closing shall be delayed for such period as shall be necessary to
accommodate Seller's ten-business day period within which to respond to
Purchaser's notice and, in the event Seller elects to cure the Material Defect,
to accommodate the above 45-day (or longer, if agreed upon by Purchaser and
Seller) cure period (or such shorter period as is required for Seller to cure
the Material Defect).
If Seller elects not to cure or is not able to cure, or if
Purchaser and Seller are not able to agree on the steps necessary to cure, a
Material Defect (whether discovered during the initial or updated Property
Examination or Environmental Survey), or if Seller does not consent to Intrusive
Testing proposed to be conducted by Purchaser, then Purchaser shall have the
option exercisable upon written notice to Seller to (i) waive the Material
Defect; (ii) purchase the Assets (other than the Real Property) and assume the
Deposit Liabilities associated with the Banking Center, but lease such Real
Property "as is" without any representation or warranty or any liability for
environmental damage, maintenance, taxes or insurance for a period of twelve
(12) months, at a reasonable cost to be agreed upon by Seller and Purchaser, in
order to allow for relocation of the business of the Banking Center to another
facility; or (iii) terminate this Agreement.
(d) For purposes of this Agreement, a "Material Defect" shall
include:
(i) the existence of any lien (other than the lien
of real property taxes not yet due and payable), encumbrance,
easement, covenant, or other restriction, title imperfection or
title irregularity, or the existence of any facts or condition
that constitutes a breach of Seller's representations and
warranties contained in Section 4.7 below, in any such case that
Purchaser reasonably believes will affect its use of the Real
12
Property for the purpose of the operation of a branch bank or
materially affects the value or marketability of the Real
Property;
(ii) the encroachment by an improvement on the Real
Property onto other property or onto any easement, a violation of
any setback requirement, the encroachment of an improvement on
any other property onto the Real Property, or the existence of a
zoning restriction that does not permit use of the Real Property
as a branch banking facility without grandfathering or variance
and without site plan review or the construction of any
additional improvements;
(iii) the existence of any structural defect or
state of disrepair in the improvements on the Real Property
(including any equipment, fixtures or other components related
thereto) that Purchaser reasonably believes would cost as much as
$10,000 or more to repair or correct; or
(iv) the existence of facts or circumstances
relating to the Banking Center reflecting that:
(A) there likely has been a
discharge, disposal, release, threatened release,
or emission by any person of any "Hazardous
Substance" (as defined below) on, from, under, at,
or relating to the Real Property, or
(B) that any action has been taken
or not taken, or a condition or event likely has
occurred or exists, with respect to the Real
Property associated with that Branch which
constitutes or would constitute a material
violation of any "Environmental Law" (as defined
below),
as to which Purchaser reasonably believes, based on
the advice of legal counsel or other consultants,
that Purchaser could become responsible or liable
for assessment, removal, remediation, monetary
damages, or civil, criminal or administrative
penalties or other corrective action and in
connection with which the amount of expense or
liability which it could incur or for which it
could become responsible or liable following
consummation of the transactions contemplated by
this Agreement at any time or over any period of
time could equal or exceed $10,000.
(e) For purposes of this Agreement, "Environmental Laws" shall
include, without limitation:
(i) all federal, state, and local statutes,
regulations, ordinances, orders, decrees, and similar provisions
having the force or effect of law (including without limitation
the Comprehensive Environmental Response, Compensation and
Liability Act; the Superfund Amendment and Reauthorization Act;
the Federal Insecticide, Fungicide and Rodenticide Act; the
Hazardous Materials Transportation Act; the Resource Conservation
and Recovery Act; the Clean Water Act; the Clean Air Act; the
Toxic Substances Control Act; the Oil Pollution Act; the Coastal
Zone Management Act; any "Superfund" or "Superlien" law; the
North Carolina Oil Pollution and Hazardous Substances Control
Act; the North Carolina Water and Air Resources Act; and the
North Carolina Occupational Safety and Health Act, including any
amendments thereto from time to time).
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(ii) all contractual agreements, and
(iii) all common law concerning public health and
safety, worker health and safety, and pollution or protection of
the environment, including without limitation all standards of
conduct and bases of obligations relating to the presence, use,
production, generation, handling, transportation, treatment,
storage, disposal, distribution, labeling, reporting, testing,
processing, discharge, release, threatened release, control, or
clean-up of any Hazardous Substances.
"Hazardous Substance" means any materials,
substances, wastes, chemical substances, or mixtures presently
listed, defined, designated, or classified as hazardous, toxic,
or dangerous, or otherwise regulated, under any Environmental
Law, whether by type or quantity, including without limitation
pesticides, pollutants, contaminants, toxic chemicals, oil, or
other petroleum products or byproducts, asbestos or materials
containing (or presumed to contain) asbestos, polychlorinated
biphenyls, urea formaldehyde foam insulation, lead, radon, or
radioactive material.
ARTICLE II
CLOSING AND EFFECTIVE TIME
Section 2.1 Effective Time. The purchase of assets and assumption
of liabilities provided for in this Agreement shall occur at a closing (the
"Closing") to be held at the offices of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, at 10:00 a.m., local
time, within thirty-one (31) calendar days following the date of all approvals
by regulatory agencies and after all statutory waiting periods have expired, or
at such other place, time or date on which the parties shall mutually agree. The
effective time (the "Effective Time") shall be 2:00 p.m., local time, on the day
on which the Closing occurs.
Section 2.2 Closing.
-------
(a) All actions taken and documents delivered at the Closing
shall be deemed to have been taken and executed simultaneously, and no action
shall be deemed taken nor any document delivered until all have been taken and
delivered.
(b) At the Closing, subject to all the terms and conditions of
this Agreement, Seller shall deliver to Purchaser or, in the case of items
(b)(5), (6), (7), (9) and (10), make reasonably available to Purchaser:
(1) with respect to the Real Property, a limited
warranty deed with documentary stamps affixed transferring title
to the Real Property to Purchaser;
(2) a ▇▇▇▇ of Sale, in substantially the form
attached hereto as Exhibit B (the "▇▇▇▇ of Sale"), transferring
to Purchaser all of Seller's interest in the Personal Property
and in the Loans;
(3) an Assignment and Assumption Agreement, in
substantially the form attached hereto as Exhibit C (the
"Assignment and Assumption Agreement"), assigning Seller's
14
interest in the Contracts, the Equipment Leases, the Safe Deposit
Contracts, and the Deposit Liabilities;
(4) consents in form reasonably satisfactory to
Purchaser from third persons that are required to effect the
assignments set forth in the Assignment and Assumption Agreement,
including, but not limited to, the lessors under the Equipment
Leases (to the extent required by such leases);
(5) Seller's keys to the safe deposit boxes and
Seller's records related to the safe deposit box business at the
Banking Center;
(6) Seller's records related to the Loans;
(7) Seller's records related to the deposit
accounts assumed by Purchaser;
(8) Seller's records related to the Safe deposit
box business at the Banking Center.
(9) immediately available funds in the net amount
shown as owing to Purchaser by Seller on the Closing Statement,
if any;
(10) the Coins and Currency;
(11) such of the other Assets to be purchased as
shall be capable of physical delivery;
(12) a certificate of a proper officer of Seller,
dated as of the date of Closing, certifying to the fulfillment of
all conditions that are the obligation of Seller and that all of
the representations and warranties of Seller set forth in this
Agreement remain true and correct in all respects as of the
Effective Time;
(13) certified copies of (A) the Articles of
Incorporation and Bylaws of Seller and (B) a resolution of the
Board of Directors of Seller approving the sale of the Banking
Center contemplated hereby;
(14) such certificates and other documents as
Purchaser may reasonably require to evidence (i) the receipt by
Seller of all necessary corporate and regulatory authorizations
and approvals for the consummation of the transactions provided
for in this Agreement and (ii) transfer and sale to Purchaser of
the Assets;
(15) a Closing Statement, substantially in the form
attached hereto as Exhibit D (the "Closing Statement");
(16) an affidavit of Seller certifying that Seller
is not a "foreign person" as defined in the federal Foreign
Investment in Real Property Tax Act of 1980; and
(17) the Power of Attorney.
15
It is understood that the items listed in subsections (b)(5) and
(9) shall be transferred after the Banking Center has closed for business on the
date of Closing and that the records listed in subsections (b)(5) and (6) will
be transferred as soon as possible after the Closing, but in no event more than
five (5) business days after the Closing.
(c) At the Closing, subject to all the terms and conditions of
this Agreement, Purchaser shall deliver to Seller:
(1) the Assignment and Assumption Agreement;
(2) a certificate and receipt acknowledging the
delivery and receipt of possession of the property and records
referred to in this Agreement;
(3) immediately available funds in the net amount
shown as owing to Seller by Purchaser on the Closing Statement,
if any;
(4) a certificate of a proper officer of Purchaser,
dated as of the date of Closing, certifying to the fulfillment of
all conditions that are the obligation of Purchaser and that all
of the representations and warranties of Purchaser set forth in
this Agreement remain true and correct in all respects as of the
Effective Time;
(5) certified copies of (A) the Articles of
Incorporation and Bylaws of the Purchaser and (B) a resolution of
the Board of Directors of Purchaser approving the purchase of the
Banking Center contemplated hereby;
(6) such certificates and other documents as Seller
may reasonably require to evidence the receipt of Purchaser of
all necessary corporate and regulatory authorizations and
approvals for the consummation of the transactions provided for
in this Agreement; and
(7) the Closing Statement.
Section 2.3 Post-Closing Adjustments.
------------------------
(a) Not later than fifteen (15) business days after the Effective
Time (the "Post-Closing Balance Sheet Delivery Date"), Seller shall deliver to
Purchaser a balance sheet dated as of the Effective Time and prepared in
accordance with Seller's customary practices and procedures reflecting the
assets sold and assigned and the liabilities transferred and assumed hereunder
(the "Post-Closing Balance Sheet"). Additionally, Seller shall deliver to
Purchaser a list of the Loans, individually identified by account number, which
list shall be appended to the ▇▇▇▇ of Sale. Seller shall afford Purchaser and
its accountants and attorneys the opportunity to review all work papers and
documentation used by Seller in preparing the Post-Closing Balance Sheet. Within
fifteen (15) business days following the Post-Closing Balance Sheet Delivery
Date (the "Adjustment Payment Date"), Seller and Purchaser shall meet at the
offices of Seller in Troy, North Carolina to effect the transfer of any funds as
may be necessary to reflect changes in such assets and liabilities between the
Pre-Closing Balance Sheet, and the Post-Closing Balance Sheet, together with
16
interest thereon computed from the Effective Time to the Adjustment Payment Date
at the applicable Federal Funds Rate (as hereinafter defined).
(b) In the event that a dispute arises as to the appropriate
amounts to be paid to either party on the Adjustment Payment Date, each party
shall pay to the other on such Adjustment Payment Date all amounts other than
those as to which a dispute exists. Any disputed amounts retained by a party
that are later found to be due to the other party shall be paid to such other
party promptly upon resolution with interest thereon from the Adjustment Payment
Date to the date paid at the applicable Federal Funds Rate.
(c) The Federal Funds Rate shall be the mean of the high and low
rates quoted for Federal Funds in the Money Rates Column of the Wall Street
Journal adjusted as such mean may increase or decrease during the period between
the Effective Time and the Adjustment Payment Date.
ARTICLE III
INDEMNIFICATION
Section 3.1 Seller's Indemnification of Purchaser. Seller shall
indemnify, hold harmless and defend Purchaser from and against any breach by
Seller of any representation or warranty contained herein and all claims,
losses, liabilities, demands and obligations, including reasonable attorneys'
fees and expenses, arising out of any actions, suits or proceedings commenced
prior to the Effective Time (other than proceedings to prevent or limit the
consummation of the transactions contemplated hereby) relating to operations at
the Banking Center; and, except as otherwise provided in this Agreement, Seller
shall further indemnify, hold harmless and defend Purchaser from and against all
claims, losses, liabilities, demands and obligations, including reasonable
attorneys' fees and expenses, and all real estate taxes, intangibles and
franchise taxes, sales and use taxes, social security and unemployment taxes,
all accounts payable and operating expenses (including salaries, rents and
utility charges) incurred by Seller prior to the Effective Time and which are
claimed or demanded on or after the Effective Time, or that arise out of any
actions, suits or proceedings commenced on or after the Effective Time and that
relate to operations at the Banking Center prior to the Effective Time.
Section 3.2 Purchaser's Indemnification of Seller. Purchaser
shall indemnify, hold harmless and defend Seller from and against any breach by
Purchaser of any representation or warranty contained herein and all claims,
losses, liabilities, demands and obligations, including reasonable attorneys'
fees and expenses, and all real estate taxes, intangibles and franchise taxes,
sales and use taxes, social security and unemployment taxes, all accounts
payable and operating expenses (including salaries, rents and utility charges),
that Seller may receive, suffer or incur in connection with operations and
transactions occurring after the Effective Time and that involve the Banking
Center, the assets transferred or the liabilities assumed pursuant to this
Agreement.
17
Section 3.3 Claims for Indemnity.
--------------------
(a) A claim for indemnity under Sections 3.1 or 3.2 of this
Agreement may be made by the claiming party at any time prior to twelve (12)
months after the Effective Time by the giving of written notice thereof to the
other party. Such written notice shall set forth in reasonable detail the basis
upon which such claim for indemnity is made. In the event that any such claim is
made within such prescribed twelve (12) month period, the indemnity relating to
such claim shall survive until such claim is resolved. Claims not made within
such twelve (12) month period shall cease, and no indemnity shall be made
therefor.
(b) In the event that any person or entity not a party to this
Agreement shall make any demand or claim or file or threaten to file any
lawsuit, which demand, claim or lawsuit may result in any liability, damage or
loss to one party hereto of the kind for which such party is entitled to
indemnification pursuant to Section 3.1 or 3.2 hereof, then, after written
notice is provided by the indemnified party to the indemnifying party of such
demand, claim or lawsuit, the indemnifying party shall have the option, at its
cost and expense, to retain counsel for the indemnified party to defend any such
demand, claim or lawsuit. In the event that the indemnifying party shall fail to
respond within five (5) calendar days after receipt of such notice of any such
demand, claim or lawsuit, then the indemnified party shall retain counsel and
conduct the defense of such demand, claim or lawsuit as it may in its discretion
deem proper, at the cost and expense of the indemnifying party. In effecting the
settlement of any such demand, claim or lawsuit, an indemnified party shall act
in good faith, shall consult with the indemnifying party and shall enter into
only such settlement as the indemnifying party shall approve (the indemnifying
party's approval will not be unreasonably withheld and will be implied if it
does not respond within ten (10) calendar days of its receipt of the notice of
such settlement offer).
Section 3.4 Limitations on Indemnification. Notwithstanding
anything to the contrary contained in this Article III, no indemnification shall
be required to be made by either party until the aggregate amount of all such
claims by a party exceeds $15,000. Once such aggregate amount exceeds $15,000,
such party shall thereupon be entitled to indemnification for all amounts in
excess of such $15,000. IN ADDITION, THE PARTIES SHALL HAVE NO OBLIGATIONS UNDER
THIS ARTICLE III FOR ANY CONSEQUENTIAL LIABILITY, DAMAGE OR LOSS THE INDEMNIFIED
PARTY MAY SUFFER AS THE RESULT OF ANY DEMAND, CLAIM OR LAWSUIT.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
In addition to Seller's other representations and warranties
contained elsewhere in this Agreement, Seller hereby represents and warrants to
Purchaser as follows, which representations and warranties shall survive the
Effective Time for a period of twelve (12) months:
Section 4.1 Corporate Organization. Seller is a bank duly
organized, validly existing and in good standing under the laws of the State of
North Carolina. Seller has the corporate power and authority to own its
18
properties, to carry on its business as currently conducted and to effect the
transactions contemplated herein.
Section 4.2 No Violation. The Banking Center has been operated in
all material respects in accordance with applicable laws, rules and regulations.
Neither the execution and delivery of this Agreement, nor the consummation of
the transactions contemplated herein, will violate or conflict with (a) Seller's
Articles of Incorporation or Bylaws; (b) any material provision of any material
agreement or any other material restriction of any kind to which Seller is a
party or by which Seller is bound; (c) any material statute, law, decree,
regulation or order of any governmental authority; or (d) any material provision
that will result in a default under, or which will cause the acceleration of the
maturity of, any material obligation or loan to which Seller is a party.
Section 4.3 Corporate Authority. The execution and delivery of
this Agreement and the consummation of the transactions contemplated herein have
been duly authorized by Seller's Board of Directors. No further corporate
authorization is necessary for Seller to consummate the transactions
contemplated hereunder.
Section 4.4 Enforceable Agreement.
---------------------
This Agreement has been duly authorized, executed and delivered by Seller and is
the legal, valid and binding agreement of Seller, enforceable in accordance with
its terms.
Section 4.5 No Brokers. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on by
Seller and Purchaser, and there has been no participation or intervention by any
other person, firm or corporation employed or engaged by or on behalf of Seller
in such a manner as to give rise to any valid claim against Seller or Purchaser
for a brokerage commission, finder's fee or like commission.
Section 4.6 Personal Property. Seller owns, and will convey to
Purchaser at the Closing, all of Seller's right, title and interest to all of
the Personal Property and the Loans free and clear of any claims, mortgages,
liens, security interests, pledges or encumbrances of any kind, except as may
otherwise be set forth in this Agreement.
Section 4.7 Real Property. Seller makes the following
representations regarding the Real Property; provided, however, that Purchaser's
sole remedy for a breach of the representations and warranties in this Section
4.7 shall be as provided in Section 1.10(c), and such representations and
warranties shall not survive the Closing:
(a) except as set forth in Schedule 4.7, Seller has no knowledge
of any condemnation proceedings pending against the Real Property;
(b) except as set forth in Schedule 4.7, Seller has not entered
into any agreement regarding the Real Property, and the Real Property is not
subject to any claim, demand, suit, lien, proceeding or litigation of any kind,
pending or outstanding, or to the knowledge of Seller, threatened or likely to
be made or instituted, that would in any way be binding upon Purchaser or its
successors or assigns or materially affect or limit Purchaser's or its
successors' or assigns' use and enjoyment of the Real Property or that would
19
materially limit or restrict Purchaser's right or ability to enter into this
Agreement and consummate the sale and purchase contemplated hereby; and
(c) Seller has or will have at Closing good and marketable fee
simple title to the Real Property and, at Closing, will own the Real Property
outright subject to no mortgage, pledge, lien, security interest, lease, charge,
encumbrance or conditional sales or other title retention agreement except for
real property taxes not yet due and payable, and easements and rights-of-way
that do not materially interfere with the use of the Real Property as a Banking
Center.
(d) No improvement on the Real Property encroaches onto other
property or onto any easement or violates any setback requirement, and no
improvement on any other property encroaches onto the Real Property. The Real
Property is zoned so as to permit its use as a branch banking facility without
site plan review or the construction of any additional improvements.
Section 4.8 Condition of Property. Subject to Section 1.10 above,
the Real Property and the Personal Property to be purchased by Purchaser
hereunder are sold AS IS, WHERE IS, with no warranties or representations
whatsoever, except as may be expressly represented or warranted in this
Agreement.
Section 4.9 Loans. With respect to each Loan sold and transferred
to Purchaser at the Effective Time, Seller represents and warrants to Purchaser
that (i) such Loan is a valid loan that complies in all material respects with
applicable laws and regulations, (ii) the balance of principal and unpaid
interest of such Loan as shown on Seller's books and records as of the Effective
Time is true and correct as of such date, (iii) each signature on documents held
by Seller in connection with such Loan are genuine; (iv) if such Loan purports
to be secured, Seller has a valid and enforceable lien on the collateral
described in the documents relating to such Loan, and such lien has the priority
described in Seller's loan files relating to such Loan, and (v) Seller has no
knowledge that such Loan is subject to any defense, dispute or counterclaim on
the part of any obligor.
Section 4.10 Limitation of Representations and Warranties. Except
as may be expressly represented or warranted in this Agreement by Seller, Seller
makes no representations or warranties whatsoever with regard to any asset being
transferred to Purchaser or any liability or obligation being assumed by
Purchaser or as to any other matter or thing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows,
which representations and warranties shall survive the Effective Time for a
period of twelve (12) months:
Section 5.1 Corporate Organization. Purchaser is a savings bank
duly organized, validly existing and in good standing under the laws of the
State of North Carolina. Purchaser has the corporate power and authority to own
20
the properties being acquired, to assume the liabilities being transferred and
to effect the transactions contemplated herein.
Section 5.2 No Violation. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated herein,
will violate or conflict with (a) the Articles of Incorporation or Bylaws of
Purchaser, any material provision of any material agreement or any other
material restriction of any kind to which Purchaser is a party or by which
Purchaser is bound; (b) any material statute, law, decree, regulation or order
of any governmental authority; or (c) any material provision that will result in
a default under, or cause the acceleration of the maturity of, any material
obligation or loan to which Purchaser is a party.
Section 5.3 Corporate Authority. The execution and delivery of
this Agreement, and the consummation of the transactions contemplated herein,
have been duly authorized by the Board of Directors of Purchaser. No further
corporate authorization on the part of Purchaser is necessary to consummate the
transactions contemplated hereunder.
Section 5.4 Enforceable Agreement. This Agreement has been duly
authorized, executed and delivered by Purchaser and is the legal, valid and
binding agreement of Purchaser enforceable in accordance with its terms.
Section 5.5 No Brokers. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on by
Seller and Purchaser, and there has been no participation or intervention by any
other person, firm or corporation employed or engaged by or on behalf of
Purchaser in such a manner as to give rise to any valid claim against Seller or
Purchaser for a brokerage commission, finder's fee or like commission.
ARTICLE VI
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME
Section 6.1 Full Access. Seller shall afford to the officers and
authorized representatives of Purchaser, upon prior notice and subject to
Seller's normal security requirements, access to the properties, books and
records pertaining to the Banking Center in order that Purchaser may have full
opportunity to make reasonable investigations, at reasonable times, without
interfering with the normal business and operations of the Banking Center or the
affairs of Seller. The officers of Seller shall furnish Purchaser with one
standard set of such additional financial and operating data and other
information as to its business and properties at the Banking Center, or where
otherwise located, as Purchaser may, from time to time, reasonably request and
as shall be available, including, without limitation, information required for
inclusion in all governmental applications necessary to effect this transaction.
Any additional copies of such information shall be produced and provided at
Purchaser's expense. Nothing in this Section 6.1 shall require Seller to breach
any obligation of confidentiality or to reveal any proprietary information,
trade secrets or marketing or strategic plans. Records, including credit
information, relating to the Loans will be made available for review by
21
Purchaser following the execution of this Agreement. It is understood that
certain of Seller's records may be available only in the form of photocopies,
film copies or other non-original and non-paper media.
Section 6.2 Delivery of Magnetic Media Records. Seller shall
prepare at its expense and make available to Purchaser at Seller's data
processing center, magnetic media records in Seller's field format not later
than sixty (60) calendar days after the execution of this Agreement and further
shall make available to Purchaser such records updated as of the Closing Date,
which records shall contain the information related to the items described in
Sections 2.2(b)(6) and (b)(7) above. Such updated records shall be made
available at such time after Closing as agreed to by the parties. At its option,
Seller may provide such reports in paper format instead of magnetic media
format.
Section 6.3 Application for Approval to Effect Purchase of Assets
and Assumption of Liabilities. Within thirty (30) calendar days following the
execution of this Agreement, Purchaser shall prepare and file applications
required by law with the appropriate regulatory authorities for approval to
purchase and assume the aforesaid assets and liabilities, to establish a branch
office at the location of the Banking Center and to effect in all other respects
the transactions contemplated herein. Purchaser agrees to process such
applications in a diligent manner and on a priority basis and to provide Seller
promptly with a copy of such applications as filed (except for any confidential
portions thereof) and all material notices, orders, opinions, correspondence and
other documents with respect thereto, and to use its best efforts to obtain all
necessary regulatory approvals. On the date hereof, Purchaser knows of no reason
why such applications should not receive all such approvals. Purchaser shall
promptly notify Seller upon receipt by Purchaser of notification that any
application provided for hereunder has been denied. Seller shall provide such
assistance and information to Purchaser as shall be reasonably necessary for
Purchaser to comply with the requirements of the applicable regulatory
authorities.
Section 6.4 Conduct of Business; Maintenance of Properties.
----------------------------------------------
From the date hereof until the Effective Time, Seller covenants that it will:
(a) carry on the business of the Banking Center substantially in
the same manner as on the date hereof, use all reasonable efforts to preserve
intact its current business organization and preserve its business relationships
with depositors, customers and others having business relationships with it and
whose accounts will be retained at the Banking Center; provided, however, that
Seller need not, in its sole discretion, advertise or promote new or
substantially new customer services in the principal market area of the Banking
Center;
(b) provide reasonable cooperation with and assist Purchaser in
assuring the orderly transition of the business of the Banking Center to
Purchaser from the Seller; and
(c) maintain the Real Property and the Personal Property in its
current condition, ordinary wear and tear excepted.
Section 6.5 No Solicitation by Seller. Following the date of this
Agreement and through the Effective Time, Seller shall not transfer the deposit
account or loan of any customer of the Banking Center (with the exception of
those deposit accounts described in
22
Section 1.3(b)(3), (4), (5), (6) and (7) above, or those loans described in
Section 1.4(b) above, which will not be assumed by or transferred to Purchaser)
to any of its other banking offices, or solicit any deposit or loan customer of
the Banking Center to transfer his or its deposit account or loan. For a period
of twelve (12) months after the Effective Time, Seller will not specifically
target and solicit customers of the Banking Center; provided, however, these
restrictions shall not restrict general mass mailings, telemarketing calls,
statement stuffers and other similar communications directed to all the current
customers of Seller or Seller's affiliates, or to the public or newspaper, radio
or television advertisements of a general nature or otherwise prevent Seller
from taking such actions as may be required to comply with any applicable
federal or state laws, rules or regulations. In addition, these restrictions
shall not restrict the ability of Seller to install, operate and serve
customers' needs through automated teller machines at any location.
Section 6.6 Further Actions. The parties hereto shall execute and
deliver such instruments and take such other actions as the other party may
reasonably require in order to carry out the intent of this Agreement.
Section 6.7 Fees and Expenses. Purchaser shall be responsible for
the costs of all title examinations, title insurance fees, surveys, its
attorneys' and accountants' fees and expenses, recording costs, and other
expenses related to this transaction. Seller shall be responsible for transfer
fees and documentary stamps related to its sale of the Real Property and for its
attorneys' and accountants' fees and expenses related to this transaction.
Section 6.8 Breaches with Third Parties. If the assignment of any
material claim, contract, license, lease, commitment, sales order or purchase
order (or any material claim or right or any benefit arising thereunder) without
the consent of a third party would constitute a breach thereof or materially
affect the rights of Purchaser or Seller thereunder, then such assignment is
hereby made subject to such consent or approval being obtained.
Section 6.9 Insurance. As of the Effective Time, Seller will
discontinue its insurance coverage maintained in connection with the Banking
Center and the activities conducted thereon. Purchaser shall be responsible for
all insurance protection for the Banking Center's premises and the activities
conducted thereon immediately following the Effective Time. Pending the Closing,
risk of loss shall be the responsibility of Seller.
Section 6.10 Public Announcements. Seller and Purchaser agree
that, from the date hereof, neither shall make any public announcement or public
comment regarding this Agreement or the transactions contemplated herein without
first consulting with the other party hereto and reaching an agreement upon the
substance and timing of such announcement or comment. Further, Seller and
Purchaser acknowledge the sensitivity of this transaction to the Employees, and
no announcements or communications with the public or the Employees shall be
made without the prior approval of Seller.
Section 6.11 Tax Reporting. Seller shall comply with all tax
reporting obligations with respect to the transferred assets and liabilities on
or before the Effective Time, and Purchaser shall comply with all tax reporting
obligations with respect to the transferred assets and liabilities after the
Effective Time.
23
ARTICLE VII
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of Purchaser to complete the transactions
contemplated in this Agreement are conditioned upon fulfillment, on or before
the Closing, of each of the following conditions:
Section 7.1 Representations and Warranties True. The
representations and warranties made by Seller in this Agreement shall be true in
all material respects on and as of the Effective Time as though such
representations and warranties were made at and as of such time, except for any
changes permitted by the terms hereof or consented to by Purchaser.
Section 7.2 Obligations Performed. Seller shall (a) deliver or
make available to Purchaser those items required by Section 2.2 hereof, and (b)
perform and comply in all material respects with all obligations and agreements
required by this Agreement to be performed or complied with by it prior to or on
the Effective Time.
Section 7.3 No Adverse Litigation. As of the Effective Time, no
action, suit or proceeding shall be pending or threatened against Purchaser or
Seller that is reasonably likely to (a) materially and adversely affect the
business, properties and assets of the Banking Center, or (b) materially and
adversely affect the transactions contemplated herein.
Section 7.4 Regulatory Approval. Purchaser shall have received
all necessary regulatory approvals of the transactions provided in this
Agreement, no such approval shall include any condition which Purchaser
reasonably considers to be materially disadvantageous or burdensome, all notice
and waiting periods required by law to pass shall have passed, no proceeding to
enjoin, restrain, prohibit or invalidate such transactions shall have been
instituted or threatened, and any conditions of any regulatory approval shall
have been met.
Section 7.5 Absence of Certain Events or Conditions.
---------------------------------------
(a) There shall not have occurred any material adverse change in
the business of the Banking Center, and no circumstances shall exist which, with
the passage of time or otherwise, likely will result in any such material
adverse change.
(b) There shall not have been any significant damage to or
destruction of the improvements located on the Real Estate which (i) is not
covered by property insurance in an amount necessary to fully repair such damage
or destruction and the proceeds of which have been either used to repair such
damage or destruction or assigned to Purchaser or (ii) would materially
interfere with its use as a bank branch.
(c) No action or conduct which, if taken or engaged in by Seller,
would constitute or result in a material breach or violation of Seller's
obligations, representations or warranties under this Agreement shall have been
taken or engaged in by First Savings Bank prior to its merger into Seller.
24
(d) In the event that Seller has agreed to cure a Material Defect
as provided in Section 1.10 above, such Material Defect shall have been
corrected in the manner agreed upon by Purchaser and Seller.
ARTICLE VIII
CONDITIONS TO SELLER'S OBLIGATIONS
The obligation of Seller to complete the transactions
contemplated in this Agreement are conditioned upon fulfillment, on or before
the Closing, of each of the following conditions:
Section 8.1 Representations and Warranties True. The
representations and warranties made by Purchaser in this Agreement shall be true
in all material respects at and as of the Effective Time as though such
representations and warranties were made at and as of such time, except for any
changes permitted by the terms hereof or consented to by Seller.
Section 8.2 Obligations Performed. Purchaser shall (a) deliver to
Seller those items required by Section 2.2 hereof, and (b) perform and comply in
all material respects with all obligations and agreements required by this
Agreement to be performed or complied with by it prior to or on the Effective
Time.
Section 8.3 No Adverse Litigation. As of the Effective Time, no
action, suit or proceeding shall be pending or threatened against Purchaser or
Seller that might materially and adversely affect the transactions contemplated
hereunder.
Section 8.4 Regulatory Approval. Purchaser shall have received
from the appropriate regulatory authorities approval of the transactions
contemplated herein, waiting periods required by law to pass shall have passed,
no proceeding to enjoin, restrain, prohibit or invalidate such transactions
shall have been instituted or threatened, and any conditions of any regulatory
approval shall have been met, and such approvals shall not have imposed any
condition that is materially disadvantageous or burdensome to Seller.
Section 8.5 Consummation of Mergers.. Seller, First Bancorp,
First Savings and First Savings Bank shall have completed the transactions
contemplated by the Merger Agreement, specifically, the merger of First Savings
into First Bancorp and the merger of First Savings Bank into Seller, such that
Seller shall own the Banking Center.
ARTICLE IX
TERMINATION
Section 9.1 Methods of Termination. This Agreement may be
terminated in any of the following ways:
25
(a) by either Purchaser or Seller, in writing, five (5) calendar
days in advance of such termination, if the Closing has not occurred by February
28, 2001;
(b) at any time on or prior to the Effective Time by the mutual
consent in writing of Purchaser and Seller;
(c) by Purchaser, in writing, if the conditions set forth in
Article VII of this Agreement shall not have been met by Seller or waived in
writing by Purchaser within thirty-one (31) business days following the date of
all approvals by regulatory agencies and after all statutory waiting periods
have expired;
(d) by Seller, in writing, if the conditions set forth in Article
VIII of this Agreement shall not have been met by Purchaser or waived in writing
by Seller within thirty-one (31) business days following the date of all
approvals by regulatory agencies and after all statutory waiting periods have
expired;
(e) any time prior to the Effective Time, by Purchaser or Seller,
in writing, if the other party shall have been in breach of any representation
and warranty in any material respect (as if such representation and warranty had
been made on and as of the date hereof and on the date of the notice of breach
referred to below), or in breach of any covenant, undertaking or obligation
contained herein, and such breach has not been cured by the earlier of thirty
(30) calendar days after the giving of notice to the breaching party of such
breach or the date specified in (c) and (d) above; provided, however, that there
shall be no cure period in connection with any breach of Section 6.3 hereof, so
long as such breach by Purchaser was not caused by any action or inaction of
Seller, and Seller may terminate this Agreement immediately if regulatory
applications are not filed within thirty (30) calendar days after the date of
this Agreement as provided in that Section;
(f) by Seller or Purchaser in writing at any time after any
applicable regulatory authority has denied approval of any application of
Purchaser for approval of the transactions contemplated herein; or
(g) in accordance with Section 1.10 hereof.
Section 9.2 Procedure Upon Termination. In the event of
termination pursuant to Section 9.1 hereof, and except as otherwise stated
therein, written notice thereof shall be given to the other party, and this
Agreement shall terminate immediately upon receipt of such notice unless an
extension is consented to by the party having the right to terminate.
If this Agreement is terminated as provided herein,
(a) each party will return all documents, work papers and other
materials of the other party, including photocopies or other duplications
thereof, relating to this transaction, whether obtained before or after the
execution hereof, to the party furnishing the same; and
(b) all information received by either party hereto with respect
to the business of the other party (other than information which is a matter of
public knowledge or which has heretofore been published in any publication for
26
public distribution or filed as public information with any governmental
authority) shall not at any time be used for any business purpose by such party
or disclosed by such party to third persons.
Section 9.3 Payment of Expenses. Should the transactions
contemplated herein not be consummated because of a party's breach of this
Agreement, in addition to such damages as may be recoverable in law or equity,
the other party shall be entitled to recover from the breaching party upon
demand, itemization and documentation, its reasonable outside legal, accounting,
consulting and other out-of-pocket expenses.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 Amendment and Modification. The parties hereto, by
mutual consent of their duly authorized officers, may amend, modify and
supplement this Agreement in such manner as may be agreed upon by them in
writing.
Section 10.2 Waiver or Extension. Except with respect to required
approvals of applicable governmental authorities, either party, by written
instrument signed by a duly authorized officer, may extend the time for the
performance of any of the obligations or other acts of the other party and may
waive (a) any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto or (b) compliance with any
of the undertakings, obligations, covenants or other acts contained herein.
Section 10.3 Assignment. This Agreement and all of the provisions
hereof shall be binding upon, and shall inure to the benefit of, the parties
hereto and their permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by either of the
parties hereto without the prior written consent of the other.
Section 10.4 Addresses for Notices, Etc. All notices, requests,
demands, consents and other communications provided for hereunder and under the
related documents shall be effective upon receipt and shall be in writing and
mailed (by registered or certified mail, return receipt requested), telegraphed,
telexed, telecopied or personally delivered (with receipt thereof acknowledged)
to the applicable party at the address indicated below:
If to Seller: First Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
27
if to Purchaser: Bank of Davie
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ and ▇▇▇▇▇, P.A.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section.
Section 10.5 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
Section 10.6 Headings. The headings of the Sections and Articles
of this Agreement are inserted for convenience only and shall not constitute a
part thereof.
Section 10.7 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of North Carolina.
Section 10.8 Sole Agreement. This Agreement and the Exhibits and
Schedules hereto represent the sole agreement between the parties hereto
respecting the transactions contemplated hereby and all prior or contemporaneous
written or oral proposals, agreements in principle, representations, warranties
and understandings between the parties with respect to such matters are
superseded hereby and merged herein.
Section 10.9 Severability. If any provision of this Agreement is
invalid or unenforceable, the balance of this Agreement shall remain in effect.
Section 10.10 Parties in Interest. Nothing in this Agreement,
express or implied, expressly including, without limiting the generality of the
foregoing in any way, the provisions of Section 1.6(a) hereof, is intended or
shall be construed to confer upon or give to any person (other than the parties
hereto, their successors and permitted assigns) any rights or remedies under or
by reason of this Agreement, or any term, provision, condition, undertaking,
warranty, representation, indemnity, covenant or agreement contained herein.
[Signatures on following page]
28
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their duly authorized officers as of the date first
written above.
ATTEST: FIRST BANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------- --------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VP Asst. Secretary Title: Pres. CEO
BANK OF DAVIE
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------- ----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary Title: President and CEO
<
29
SCHEDULE 1.1(a)(1)
All that certain tract or parcel of land situate in the Town of Carthage,
Carthage Township, ▇▇▇▇▇ County, North Carolina, and beginning at a stake where
the western edge of ▇▇▇▇▇▇▇ Street intersects with the northern edge of Monroe
Street in the Town of Carthage, and running thence from said beginning corner as
the northern edge of Monroe Street. North 51(degree) 00' West 92.00 feet to the
corner of a brick wall (C. T. ▇▇▇▇▇▇▇▇'▇ building); thence as ▇▇▇▇▇▇▇▇'▇ line
and beyond, North 39(degree) 10' East 104.10 feet to an iron pin beside a 4"
iron pipe; thence South 51(degree) 00' East 92.06 feet to an iron pin in the
western edge of ▇▇▇▇▇▇▇ Street; thence with the western edge of ▇▇▇▇▇▇▇ Street,
South 39(degree) 12' West 104.10 feet to the point of beginning, and being the
same and identical property described as the First Tract in Deed dated August
12, 1983, from ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee, to The Carolina Bank, recorded in
the ▇▇▇▇▇ County, North Carolina, Registry, Deed Book 505, page 430.
The above description taken from survey made by C. H. Blue and Associates,
Southern Pines, North Carolina, and shown on plat entitled, "Survey for First
Federal Savings & Loan of ▇▇▇▇▇ County, N. C., Carthage, ▇▇▇▇▇ County, North
Carolina", dated June 19, 1984.
A-2
EXHIBIT A
POWER OF ATTORNEY
THIS POWER OF ATTORNEY is dated this the _____ day of
_____________, 2000, by FIRST BANK, a North Carolina bank ("First Bank"), to be
effective as of 2:00 p.m. on ______________, 2000.
W I T N E S S E T H:
WHEREAS, First Bank and Bank of Davie ("Purchaser") have entered
into a Purchase and Assumption Agreement dated as of ______________, 2000 (the
"Agreement"), which provides for the sale by First Bank to Purchaser of certain
Assets (as defined in the ▇▇▇▇ of Sale); and
WHEREAS, in a ▇▇▇▇ of Sale to Purchaser dated ______________,
2000 (the "▇▇▇▇ of Sale"), First Bank has agreed, from time to time, at the
request of Purchaser, to execute, acknowledge and deliver to Purchaser any and
all instruments, documents, endorsements, assignments, information, materials
and other papers that may be reasonably required to (i) transfer to Purchaser
certain Assets being acquired by Purchaser pursuant to the Agreement, including
loans and the collateral therefor to the extent of First Bank's interest in such
collateral and files and records relating to such loans, (ii) enable Purchaser
to ▇▇▇▇, collect, service and administer the loans transferred thereby and (iii)
give full force and effect to the intent and purpose of the ▇▇▇▇ of Sale.
NOW, THEREFORE, for good and valuable consideration, receipt of
which is hereby acknowledged, First Bank hereby irrevocably appoints and
authorizes the President or any Vice President, or the Secretary or any
Assistant Secretary, of Purchaser as its attorney-in-fact solely for the purpose
of endorsing and recording, pursuant to the ▇▇▇▇ of Sale, certificates of title
for vehicles and similar documents, provided such power of attorney is not
intended to and does not convey to Purchaser any right to endorse or record any
documents of title relating to collateral other than collateral transferred
pursuant to the ▇▇▇▇ of Sale as described in the preceding paragraph.
IN WITNESS WHEREOF, First Bank has caused this Power of Attorney
to be duly executed by its duly authorized officer as of the day and year first
above written.
FIRST BANK
By: ______________________________
Name: _________________________
Title: _________________________
A-1
STATE OF ____________________ )
) PROBATE
COUNTY OF __________________ )
PERSONALLY APPEARED before me the undersigned witness and made
oath that s/he saw the within named FIRST BANK, by ______________________, its
______________, sign, and as its act and deed deliver the within Power of
Attorney and that s/he with the other witness whose name is subscribed above
witnessed the execution thereof.
WITNESS
_________________________________________
Sworn to before me this _______ day of _______________, 2000.
__________________________________
Notary Public for ______________________
My Commission Expires: ________________________
[NOTARIAL SEAL]
▇-▇
▇-▇
EXHIBIT B
▇▇▇▇ OF SALE
THIS ▇▇▇▇ OF SALE is dated this _____ day of ____________, 2000,
by FIRST BANK, a North Carolina bank ("Seller").
W I T N E S S E T H:
WHEREAS, Seller and Bank of Davie ("Purchaser"), a North Carolina
savings bank, have entered into a Purchase and Assumption Agreement dated as of
______________, 2000 (the "Agreement"), which provides for the sale by Seller to
Purchaser of certain personal property and loans related to Seller's office
located in Carthage, North Carolina (the "Banking Center"), all as set forth in
the Agreement;
NOW, THEREFORE, Seller, for good and valuable consideration,
receipt of which is hereby acknowledged, does hereby grant, bargain, sell,
assign, set over, convey and transfer to Purchaser all of its right, title and
interest in and to the following assets (the "Assets"):
(a) all furniture, fixtures, leasehold improvements, equipment and other
tangible personal property located on or affixed to the Real Property (as
defined in the Agreement), except for those items listed in Schedule 1.1(b) of
the Agreement;
(b) all of the loans maintained, serviced and listed in Seller's general ledger
as loans of the Banking Center (except for those loans described in Section
1.4(b) of the Agreement), a list of such specific loans to be attached hereto on
the Post-Closing Balance Sheet Delivery Date (the "Loans"); and
(c) all of Seller's records related to the Loans, the Equipment
Leases, the Deposit Liabilities and other liabilities (as such terms are defined
or described in the Agreement).
Seller, for itself and its successors and assigns, does hereby
covenant and agree to and with Purchaser and its successors and assigns that it
(i) is seized of, and has the right to convey to Purchaser, such title to the
Assets as is provided in the Agreement, (ii) will warrant and defend said title
to the Assets in the manner provided in the Agreement, and (iii) shall, from
time to time, at the request of Purchaser, execute, acknowledge and deliver to
Purchaser any and all further instruments, documents, endorsements, assignments,
information, materials and other papers that may be reasonably required to
transfer the Assets to Purchaser, to enable Purchaser to ▇▇▇▇, collect, service
and administer the Loans and to give full force and effect to the full intent
and purposes of this ▇▇▇▇ of Sale.
B-1
IN WITNESS WHEREOF, Seller has caused this ▇▇▇▇ of Sale to be
duly executed by its duly authorized officers and its corporate seal to be
affixed hereto, all as of the day and year first above written.
FIRST BANK
[CORPORATE SEAL] By: ______________________________
Name: ______________________________
Title: ______________________________
ATTEST:
_________________________
______________ Secretary
EXHIBIT C
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into this
_____ day of ________________, 2000, by and between First Bank, a North Carolina
bank ("Seller"), and BANK OF DAVIE, a North Carolina bank ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller and Purchaser have entered into a Purchase and
Assumption Agreement dated as of _________________, 2000 (the "Agreement"),
which provides for the assignment by Seller of all of its rights and interests
in and to certain leases, contracts, deposit accounts and other liabilities
related to Seller's offices located in Carthage, North Carolina (the "Banking
Center"), and the assumption by Purchaser of all of Seller's liabilities and
obligations thereunder, all as set forth in the Agreement;
NOW, THEREFORE, in consideration of the foregoing, and for other
good and valuable consideration, receipt of which is hereby acknowledged by
Seller and Purchaser, Seller hereby assigns, transfers and sets over to
Purchaser all of Seller's rights and interest to, and Purchaser does hereby
assume all of Seller's liabilities and obligations in connection with, the
following assets (the "Assets");
(a) all equipment leases, except for leases listed on Schedule
1.1(b) of the Agreement, for equipment located at the Banking Center (the
"Equipment Leases");
(b) all deposit accounts located at the Banking Center, except
for those deposit accounts and liabilities described in Section 1.3(b) of the
Agreement (the "Deposit Liabilities"); and
(c) the Safe Deposit Contracts (as defined in the Agreement).
This Assignment and Assumption Agreement shall be binding upon,
and shall inure to the benefit of Seller and Purchaser and each of their
respective successors and assigns and shall be subject to the terms and
conditions of the Agreement. In the event of a conflict between any of the terms
and provisions hereof and the Agreement, the Agreement shall be deemed to
control.
This Assignment and Assumption Agreement, and the rights and
obligations of the parties hereunder, shall be governed by and construed in
accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption Agreement to be executed by their duly authorized
officers and their corporate seals to be affixed hereto, all as of the day and
year first above written.
FIRST BANK
[CORPORATE SEAL] By: ________________________________
Name: ___________________________
Title: ___________________________
ATTEST:
________________________
______________ Secretary
C-1
BANK OF DAVIE
[CORPORATE SEAL] By: ________________________________
Name: ___________________________
Title: ___________________________
ATTEST:
_________________________
______________ Secretary
EXHIBIT D
CLOSING STATEMENT
(Pre-Closing Balance Sheet as of _____________)
(Pre-Closing Balance Sheet as of _____________)
Cash due Purchaser for:
Deposit Liabilities (including accrued interest)
Pro rata Safe Deposit Contracts ___________
Pro rata Real Property taxes ___________
Deed stamps ___________
Total Cash due Purchaser: ___________
Cash due Seller for:
Real and Personal Property ___________
Coins and currency ___________
Premium on deposits ___________
Loans and other assets (including accrued interest) ___________
Pro rata FDIC insurance ___________
Total Cash due Seller:
Net Cash due (Purchaser) (Seller) ___________
C-2
Seller hereby approves the Closing Statement and acknowledges
receipt of the cash due Seller. Purchaser hereby approves the Closing Statement,
acknowledges receipt of the cash due Purchaser and assumes liability for payment
of all taxes and other expenses as provided for in the Purchase and Assumption
Agreement between Seller and Purchaser dated as of _____________, 2000 (the
"Agreement"). Seller and Purchaser agree to make subsequent adjustments to the
extent necessary in accordance with Section 2.3 of the Agreement.
FIRST BANK
By: ______________________________
Name: ______________________________
Title: ______________________________
Date: ______________________________
BANK OF DAVIE
By: ______________________________
Name: ______________________________
Title: ______________________________
Date: ______________________________