EXHIBIT 2.5
PURCHASE AND ASSUMPTION AGREEMENT
BY AND BETWEEN
COMMUNITY FIRST FINANCIAL GROUP, INC.
AND
▇▇▇▇▇▇▇▇▇▇ BANK, FSB
MAY 30, 2001
TABLE OF CONTENTS
PAGE
ARTICLE 1 - DEFINITIONS 1
ARTICLE 2 - TERMS OF PURCHASE 4
2.1 Assets 4
2.2 Liabilities and Premium 5
2.3 Names and Marks 6
2.4 Prorations 6
ARTICLE 3 - TRANSFER OF ASSETS 6
3.1 Personal Property 6
3.2 Destruction of Property 7
3.3 Cash on Hand 7
3.4 Allocation 7
ARTICLE 4 - CLOSING 8
4.1 Closing Date 8
4.2 Closing Payment 8
4.3 Deliveries by Seller 8
4.4 Deliveries by Buyer 8
4.5 Post-Closing Adjustments 8
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
AND THE BUYER 9
5.1 Organization and Authority 9
5.2 Litigation 9
5.3 Governmental Notices 9
5.4 Regulatory Approvals 9
5.5 Regulatory Approvals; Performance of Agreement 10
5.6 Community Reinvestment Act 10
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF SELLER 10
6.1 Organization and Authority 10
6.2 Litigation 10
6.3 Title to Assets Other Than Realty 11
6.4 Ownership 11
6.5 Deposits 11
6.6 Governmental Notices 12
6.7 Taxes 12
6.8 Records and Documents 12
6.9 Community Reinvestment Act 12
6.10 Regulatory Approvals 12
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6.11 Employees 13
6.12 Account Loans 13
6.13 Insurance 13
6.14 Operation; Compliance with Law 13
6.15 Environmental 14
6.16 Schedules 14
6.17 No Defaults 14
6.18 Related Party Transactions 14
6.19 Disclosure 14
6.20 Service Contracts 15
6.21 Documents 15
ARTICLE 7 - COVENANTS OF BUYER 15
7.1 Fiduciary Relationship 15
7.2 Payment of Checks 15
7.3 Account Loans 16
7.4 Confidentiality of Records 16
7.5 Assistance in Obtaining Regulatory Approval 16
7.6 Further Assurances 16
7.7 Consents 16
7.8 Interference 16
7.9 Conduct of Business 17
7.10 Formation of Buyer 17
7.11 Intention of the Parties 17
7.12 Regulatory Matters 17
ARTICLE 8 - COVENANTS OF SELLER 17
8.1 Access to Records and Information: Personnel: Customers 17
8.2 Operation in Ordinary Course 17
8.3 Assistance in Obtaining Regulatory Approvals 20
8.4 No Encumbrances 20
8.5 Consents 20
8.6 Solicitation of Accounts 20
8.7 Maintenance of Accounts 20
8.8 Books and Records 20
8.9 Insurance Policies 21
8.10 Further Assurances 21
8.11 Close of Business on Closing Date 22
8.12 Supplemental Information; Disclosure Supplements 22
8.13 Regulatory Matters 22
ARTICLE 9 - CONDITIONS TO CLOSING 23
9.1 Conditions to the Obligations of Seller 23
9.2 Conditions to the Obligations of Buyer 24
9.3 Condition to the Obligations of Seller and Buyer 26
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ARTICLE 10 - TERMINATION 26
10.1 Termination 26
ARTICLE 11 - EMPLOYEES 27
11.1 Employees 27
11.2 Employee Matters 27
11.3 Employee Benefits 28
11.4 Employee Documents 28
11.5 Compliance with COBRA 29
ARTICLE 12 - OTHER AGREEMENTS 29
12.1 Returned Items 29
12.2 Holds and Stop Payment Orders 29
12.3 ACH Items 30
12.4 Checking Accounts 30
12.5 Withholding 31
12.6 Retirement Accounts 31
12.7 Interest Reporting 31
12.8 Notices to Depositors 32
12.9 Card Processing and Overdraft Coverage 32
12.10 Reimbursements 33
12.11 Taxpayer Information 33
ARTICLE 13 - GENERAL PROVISIONS 33
13.1 Survival 33
13.2 Broker's Fees 33
13.3 Publicity and Notices 34
13.4 Attorneys' Fees 34
13.5 Regulatory Fees 34
13.6 No Third Party Beneficiaries 34
13.7 Notices 34
13.8 Assignment 35
13.9 Successors and Assigns 35
13.10 Governing Law 35
13.11 Entire Agreement 35
13.12 Headings 35
13.13 Severability 35
13.14 Waiver 36
13.15 Counterparts 36
13.16 Force Majeure 36
13.17 Schedules 36
13.18 Knowledge 36
EXHIBIT A ASSIGNMENT AND ASSUMPTION AGREEMENT 38
EXHIBIT B ▇▇▇▇ OF SALE AND ASSIGNMENT 40
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EXHIBIT C RETIREMENT ACCOUNT TRANSFER AGREEMENT 41
EXHIBIT D ASSIGNMENT AND ASSUMPTION OF LEASE 44
EXHIBIT E LANDLORD ESTOPPEL CERTIFICATE 46
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PURCHASE AND ASSUMPTION AGREEMENT
This Purchase and Assumption Agreement ("Agreement") is made and entered
into as of this 30th day of May, 2001, by and between ▇▇▇▇▇▇▇▇▇▇ Bank, FSB
("Seller"), a federal savings bank organized under the laws of the United States
of America and having its home office in Richmond, Indiana, and Community First
Financial Group, Inc., an Indiana corporation with its principal office in
English, Indiana (the "Corporation").
RECITALS
WHEREAS, the Corporation intends to organize a chartered depository
institution or use one of its existing bank subsidiaries (the "Buyer") to
acquire certain assets and assume certain liabilities of Seller and Seller
desires to transfer to Buyer such assets and liabilities relating to Seller's
branch office located in Chapel Hill, North Carolina, all as described in more
detail below (the "Transaction");
WHEREAS, Buyer will operate the Branch Office (as defined below) of Seller
as a branch of Buyer;
NOW THEREFORE, for and in consideration of the premises and the mutual
agreements, representations, warranties and covenants herein contained, the
parties, intending to be bound, hereby agree as follows:
ARTICLE 1 - DEFINITIONS
1.1 DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement, as used herein, the following terms have the definitions indicated:
"ACH ITEMS" means automated clearing house debits and credits including
social security payments, federal recurring payments, and other payments debited
and/or credited to or from Deposit accounts pursuant to arrangements between the
owner of the account and third party initiating the credits or debits.
"APY" means Annual Percentage Yield as defined in Regulation DD, i.e., the
total interest earned on a deposit, based on the interest rate and the frequency
of compounding for a 365 day period, and expressed as a percentage.
"APYE" means Annual Percentage Yield Earned as defined in Regulation DD.
"ACCOUNT LOANS" are those savings account loans and NOW, checking and
other transaction account lines of credit associated with Deposits domiciled at
the Branch Office set forth on SCHEDULE 6.12 hereto and which loans are
authorized in writing and consist of (i) all savings account loans secured by
Deposits, together with all Accrued Interest, if any, and (ii) any overdraft
checking balances or checking account line of credit loan balances, if any.
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"ACCRUED INTEREST" on any Account Loans means interest that is accrued but
not received through the Closing Date and on Deposits means interest that is
accrued but unposted through the Closing Date.
"AFFILIATE" of a party means any person, partnership, corporation,
association or other legal entity directly or indirectly controlling, controlled
by, or under common control with that party.
"ASSETS" means the Assigned Lease, Fixed Assets, any Account Loans, the
Cash on Hand at the Branch Office and the Records.
"ASSIGNED LEASE" means all rights of Seller under that certain lease
pursuant to which Seller holds a leasehold interest as tenant in the Branch
Office which lease is set forth on SCHEDULE 6.4 attached hereto.
"BRANCH OFFICE" means the branch office of Seller known as the "Chapel
Hill Branch," located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
"BUSINESS DAY" shall mean any Monday, Tuesday, Wednesday, Thursday, or
Friday that is not a federal or North Carolina or Indiana state holiday
generally recognized by banks or savings associations.
"CASH ON HAND" means all ▇▇▇▇▇ cash, vault cash, and teller cash located
at the Branch Office.
"CLOSING" and "CLOSING DATE" shall have the meanings assigned to them in
Article 4.1 of the Agreement.
"COLLECTION ACCOUNT" means any account domiciled at the Branch Office
through which Seller accepts payments or deposits for credit or deposit to
another account domiciled at the Branch Office.
"DEPOSITS" means a deposit as defined in Section 3(l)(1) of the Federal
Deposit Insurance Act ("FDIA") as amended, 12 U.S.C. Section 1813(l)(1),
including without limitation the aggregate balances of all savings accounts with
positive balances domiciled at the Branch Office, including accounts accessible
by negotiable orders of withdrawal ("NOW" accounts), other demand instruments,
Retirement Accounts, and all other accounts and deposits, together with Accrued
Interest thereon, if any.
"ENCUMBRANCES" means all mortgages, claims, charges, liens, encumbrances,
easements, restrictions, options, pledges, calls, commitments, security
interests, conditional agreements, title retention agreements, leases, and other
restrictions of any kind whatsoever.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"FDIC" means the Federal Deposit Insurance Corporation.
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"FED FUNDS RATE" means the rate for that day set forth opposite the
caption "Federal Fund (Effective)" in the daily statistical release designated
as "Composite 3:30 p.m. Quotations for U.S. Government Securities," or any
successor publication's published by the Federal Reserve Bank of New York.
"FIXED ASSETS" means all furniture, equipment, trade fixtures, and other
tangible personal property owned or leased by Seller, located in or upon the
Branch Office, and described on SCHEDULE 3.1 hereto.
"HAZARDOUS SUBSTANCE" shall mean chemicals, pollutants, contaminants,
wastes, and substances that have been defined as toxic or hazardous by any
applicable federal, state, county or local law or regulation.
"▇▇▇" means Individual Retirement Account.
"IRS" means Internal Revenue Service.
"LICENSE AGREEMENT" is defined in Section 2.3.
"LOAN PURCHASE AGREEMENT" means the Loan Purchase Agreement entered into
concurrently herewith pursuant to which Seller shall sell and Purchaser shall
buy all loans attributable to the Seller's North Carolina operations, except for
Account Loans (which shall be purchased and sold hereunder).
"LOAN PURCHASE PRICE" means the purchase price to be paid at Closing for
the loans sold under the Loan Purchase Agreement.
"NET BOOK VALUE" means the net book value of an asset as shown on the
books and records of Seller determined in accordance with generally accepted
accounting principles.
"OTS" means the Office of Thrift Supervision.
"REALTY" means the tenancy interest of Seller under the Assigned Lease.
"RECORDS" means (i) all open records and original documents, located at
the Branch Office or in centralized servicing areas pertaining to the Account
Loans, Collection Accounts, Safe Deposit Boxes, or Deposits, all of which shall
comply with all applicable laws, regulations, rules, and business practices with
respect to Account Loans, Collection Accounts or Deposits acquired from Seller
pursuant to this Agreement; and (ii) an account history of all accounts related
to Deposits and Account Loans for a period including the current year. Records
includes but is not limited to signature cards, customer cards, customer
statements, legal files, pending files, all open account agreements, Account
Loan agreements, Retirement Account agreements, Safe Deposit Box records, and
computer records.
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"RECURRING DEBIT" means payments made directly from a Deposit account to a
third party on a regularly scheduled basis pursuant to arrangements between the
owner of the account and the third party receiving the payments directly.
"RETIREMENT ACCOUNTS" means any Deposit account, generally known as IRAs,
Keoghs or SEPs, maintained by a customer for the stated purpose of the
accumulation of funds to be drawn upon at retirement.
"SAIF" means the Savings Association Insurance Fund of the Federal Deposit
Insurance Corporation.
"SERVICE CONTRACTS" means service and maintenance agreements, equipment
leases and any other agreements, licenses and permits affecting the Branch
Office, all of which are listed on SCHEDULE 6.20 hereto.
"SETTLEMENT DATE" has the meaning assigned to it in Article 4.2(a) of this
Agreement.
"TIN" means Taxpayer Identification Number.
ARTICLE 2 - TERMS OF PURCHASE
2.1 ASSETS.
(a) PURCHASE AND SALE. At the Closing and subject to the terms and
conditions set forth in this Agreement, Seller shall sell, convey, assign, and
transfer to Buyer and Buyer shall purchase and acquire from Seller all of
Seller's right, title, and interest in and to the Assets.
(b) PURCHASE PRICE. In consideration for the Assets acquired by
and liabilities assumed by Buyer under this Agreement, Seller shall pay to Buyer
an amount equal to the aggregate amount of the Deposits plus Accrued Interest
thereon less:
(i) the Net Book Value as of the Closing Date of the Fixed
Assets, as shown in SCHEDULE 3.1.
(ii) the Net Book Value as of the Closing Date of any Account
Loans;
(iii) the Loan Purchase Price;
(iv) the amount of all Cash on Hand at the Branch Office as of
the close of business on the Closing Date; and
(v) the amount of the Premium defined in Section 2.2(b) of
this Agreement.
2.2 LIABILITIES AND PREMIUM.
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(a) DEPOSITS. On the Closing Date, subject to the terms and
conditions set forth in this Agreement, Buyer shall, pursuant to the form of
Assignment and Assumption of Deposit Liabilities attached to this Agreement as
EXHIBIT A, assume liability for the payment and performance of Seller's
obligations after the Closing Date on the Deposits in accordance with the terms
of such Deposits in effect on the Closing Date.
(b) PREMIUM. In consideration for the liabilities assumed by it
under this Agreement, Buyer shall pay to Seller, as set forth in Article 4.2 of
this Agreement, a premium equal to $2,000,000 (the "Premium").
(c) ASSUMPTION OF ASSIGNED LEASE AND SERVICE CONTRACTS. Subject to
the terms and conditions hereof, Buyer shall assume the duties and obligations
of Seller as tenant under the Assigned Lease and under the assigned Service
Contracts from and after the Closing Date.
(d) RELATED ASSETS AND OBLIGATIONS. On the Closing Date, Buyer will
assume all obligations of Seller relating to the Deposits.
(e) NO OTHER DEBT OBLIGATIONS OR LIABILITIES ASSUMED. It is
understood agreed that, except as expressly set forth in this Article 2, neither
Buyer nor the Corporation shall assume or be liable for any of the debts,
obligations, or liabilities of Seller of any kind and nature whatsoever with
respect to any period prior to the Closing Date, including, but not limited to,
any losses or liabilities due to or arising from forgery, fraud, defalcation, or
any other improper act or omission, any tax or debt, any liability for unfair
labor practices (such as wrongful termination or employment discrimination), any
liability or obligation of Seller arising out of any threatened or pending
litigation, or any liability with respect to personal injury or property damage
claims. Notwithstanding the preceding sentence, Buyer will assume Seller's
obligations to any Collection Account customers, ACH items, and to any Account
Loan customers pursuant to the terms of the Records and other documents
establishing such customer relationships, and Buyer will be responsible for
modifying the terms and conditions of such customer relationships following the
Closing Date as necessary to conform to Buyer's practices; provided that such
modification shall not constitute a breach of the underlying agreement with the
customer as it existed on the Closing Date. Except as set forth in this
Agreement, Buyer shall not assume any liability of Seller which relates to any
act or omission of Seller prior to the Closing.
(f) INDEMNIFICATION. Buyer agrees to indemnify, defend and hold
harmless Seller, any successor in interest of Seller, and any officer, director,
shareholder or employee of any of the foregoing from and against any claim,
debt, charge, encumbrance, loss or liability asserted by any third party arising
from the failure of Buyer to assume any obligation required to be assumed by
Buyer under this Section 2.2.
2.3 NAMES AND MARKS. On or before Closing, Seller shall cause Los Padres
Bank, FSB to execute and deliver to Buyer a royalty-free license agreement
covering the use by Buyer of the name "▇▇▇▇▇▇▇▇▇▇ Bank" and the associated logos
and marks in North Carolina and such other states or markets as are designated
therein in the form attached as Exhibit F hereto (the "License Agreement").
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2.4 PRORATIONS . All payments under or pursuant to the Service Contracts
and Assigned Lease, all personal property taxes with respect to the Fixed Assets
and all ordinary operating expenses of the Branch Office (including amounts
payable under maintenance contracts and for utilities, but excluding insurance)
shall be prorated between the parties on the basis of a 365-day year and actual
days elapsed as of the Closing Date. In calculating the Closing Payment, as
outlined in Article 4.2 of this Agreement, Seller will receive a credit for the
amount of all security deposits it has paid to the landlord under the Assigned
Lease, as indicated in an estoppel certificate signed by the landlord.
In addition, in calculating the payment due at the Closing, Buyer will
reimburse Seller for any deposit insurance assessment that Seller has paid to
the Federal Deposit Insurance Corporation (the "FDIC") with respect to the
semi-annual assessment period (as defined in 12 C.F.R. ss. 327.8) in which the
Closing Date occurs which covers periods following the Closing Date. Such
reimbursement will be prorated and will be calculated using the Seller's
assessment rate as determined by the FDIC pursuant to 12 C.F.R. ss. 327.3
effective for the semi-annual assessment period in which the Closing Date
occurs.
In calculating the payment due at the Closing, Buyer also will receive a
credit for (1) all advance payments received by Seller for obligations relating
to the Assets and Deposits transferred to Buyer hereunder, which payments shall
be prorated between the parties as of the Closing Date and (2) accrued vacation
time compensation payable to Transferred Employees (as defined in Section 11.3
hereof), which will be prorated as of the Closing Date on the basis of a 365-day
year.
ARTICLE 3 - TRANSFER OF ASSETS
3.1 PERSONAL PROPERTY.
(a) Seller is the lawful owner or lessee of the Fixed Assets, and on
the Closing Date, Seller will assign to Buyer all right, title, and interest in
and to the Fixed Assets located at the Branch Office free and clear of all
Encumbrances. Seller shall cause a ▇▇▇▇ of sale and inventory of such property
in the form of EXHIBIT B to be delivered to Buyer on the Closing Date to effect
such transfer.
(b) Attached hereto as SCHEDULE 3.1 is a schedule of the Fixed
Assets, including the tangible personal property situated at the Branch Office
including furniture, fixtures, equipment, and ATMs, which schedule identifies
each item of such personal property with reasonable particularity, giving the
net book value of such item on Seller's books and describing any Encumbrances
thereon. Seller hereby agrees that the personal property to be delivered on the
Closing Date shall be substantially the same as the personal property set forth
on SCHEDULE 3.1, ordinary wear and tear excepted; provided, that in the event of
material damage to the Fixed Assets, Seller shall have the option to repair or
replace such Fixed Assets at Seller's sole cost and expense. Buyer hereby agrees
that the Fixed Assets shall be delivered by Seller to Buyer in "as is"
condition, without representation and warranty of any kind except as otherwise
specifically set forth in this Agreement, and taking into account ordinary wear
and tear from the
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date of this Agreement through the Closing Date. Seller shall assign to Buyer
any manufacturer or supplier warranty covering such Fixed Assets.
3.2 DESTRUCTION OF PROPERTY. Seller will give Buyer prompt written notice
of (a) any material fire or casualty on any of the Assets, and (b) any actual or
threatened condemnation of all or any part of the Branch Office. Upon receipt of
such notice, Buyer may, in its sole and exclusive discretion, within fourteen
(14) days of receipt of such notice, elect either to: (x) terminate this
contract, in which event neither party shall have any further liability or
obligation to the other; or (y) elect to close this transaction, excluding
herefrom the personal property in question and deducting from the purchase price
an amount mutually agreeable to the parties, provided that if no such agreement
can be reached, Buyer may elect to terminate this Agreement; or (z) elect to
close this transaction, including therein the personal property or real property
in question, in which event Seller shall (i) assign, transfer and set over unto
Buyer all right, title and interest Seller has in and to any condemnation award,
casualty award, insurance policy, insurance payment, or any manner of payment
whatever in any way related to the condemnation or casualty, and (ii) in the
event of a casualty, extend Buyer a credit against the purchase price in the
amount of any deductible carried under any policy of insurance. For purposes
hereof a "material fire or casualty" is one which is reasonably estimated by
Buyer to cost more than fifty thousand dollars ($50,000) to repair.
3.3 CASH ON HAND. At the Closing, Seller agrees to execute an assignment
to Buyer effecting the transfer to Buyer of the Cash on Hand which shall specify
the amount of Cash on Hand at the Branch Office as of the Closing Date.
3.4 ALLOCATION. The Buyer and Seller agree that the allocation of the
purchase price will be made in writing at Closing, based on the relative fair
market value of the assets and liabilities acquired, as required by Section 1060
of the Internal Revenue Code of 1986, as amended, and agree to utilize such
allocation for federal income tax purposes. Such allocation will be consistently
reflected by each party on their federal income tax returns and similar
documents, including, but not limited to, Internal Revenue Service Form 8594.
Neither party shall file any document or assert any position that conflicts or
is inconsistent with such allocation, and each party agrees to inform the other
promptly upon receipt of any communication from (or forwarding any communication
to) the Internal Revenue Service relating to Form 8594. Each party shall
cooperate fully with the other in filing Form 8594.
ARTICLE 4 - CLOSING
4.1 CLOSING DATE. The closing ("Closing") under this Agreement shall be
held at such time and place as shall be mutually agreeable to the parties, as
promptly as practicable after the fulfillment or waiver of all the terms and
conditions contained in Article 9 of this Agreement.
The date on which the Closing is to be held is herein called the "Closing
Date." The Closing shall be deemed to occur at 11:59 p.m. Eastern Standard time
on the Closing Date and the Branch Office will close for business at 3:00 p.m.
Eastern Standard Time on the Closing Date.
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4.2 CLOSING PAYMENT. The amount owed to Seller by Buyer pursuant to
Article 2.1(b) of this Agreement will be netted against the amount owed to Buyer
by Seller pursuant to Article 2.2 of this Agreement and netted with the amount
due the appropriate party under Article 2.4 of this Agreement to determine the
closing payment due Buyer from Seller as of the Closing Date (the "Closing
Payment"). Because the parties acknowledge that certain amounts to be paid may
not be finally determinable until after the Closing Date, the Closing Payment
will be paid in the following manner:
(a) Seller will pay Buyer the amount of the Closing Payment as is
then determinable on the first Business Day after the Closing Date (the
"Settlement Date").
(b) All payments shall be made by wire transfer in immediately
available funds no later than 1:00 p.m. Eastern Standard Time on the Settlement
Date. Any amounts received after 1:00 p.m. Eastern Standard Time on the
Settlement Date shall accrue interest at the Fed Funds Rate for that day.
4.3 DELIVERIES BY SELLER. At or prior to the Closing, Seller shall
deliver to Buyer the documents set forth in Article 9.2(e) of this Agreement.
4.4 DELIVERIES BY BUYER. At or prior to the Closing, Buyer shall
deliver to Seller the documents set forth in Article 9.1(c) of this Agreement.
4.5 POST-CLOSING ADJUSTMENTS. The parties to this Agreement acknowledge
that certain amounts referred to herein may not be finally determinable until
after the Closing Date. The parties shall cooperate in the prompt determination
of such amounts and within fifteen (15) days after the Closing Date shall settle
amounts in a manner consistent with the express terms of this Agreement.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF
THE CORPORATION AND THE BUYER
Buyer and the Corporation represent and warrant to Seller, as of the date
hereof and as of the Closing Date, unless another date is specifically mentioned
below, as follows:
5.1 ORGANIZATION AND AUTHORITY . The Corporation is an Indiana
corporation validly existing under Indiana law. Buyer is or will be a depository
institution duly organized, validly existing, and in good standing under the
laws of its place of organization with full power and authority to carry on its
business as now being conducted and to own and operate the properties which it
now owns and operates. The execution, delivery, and performance by the
Corporation or the Buyer of this Agreement are within or will be within the
Corporation's or the Buyer's respective corporate power, have been or will be
duly authorized by all necessary corporate action, and do not or will not
contravene or constitute a default under or conflict with any provision of
applicable law or regulation or of the Corporation's or the Buyer's charter or
by-laws or any judgment, injunction, order, decree, material agreement, or
material instrument binding upon the Corporation or the Buyer. This Agreement
has been duly executed and delivered by the Corporation and will be duly
executed and delivered by the Buyer and, upon
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execution thereof, constitutes or will constitute the valid and legally binding
obligation of the Corporation and the Buyer, enforceable against each of them in
accordance with its terms, subject to bankruptcy, receivership, insolvency,
reorganization, moratorium or similar laws affecting or relating to creditors'
rights generally and subject to general principles of equity.
5.2 LITIGATION. There is no action, suit, proceeding or investigation
pending against the Corporation or the Buyer or, to the knowledge of the
Corporation or the Buyer, threatened against or affecting the Corporation or the
Buyer, before any court or arbitrator or any governmental body, agency or
official which alone or in the aggregate would, if adversely determined,
adversely affect the ability of the Corporation or the Buyer to perform its
obligations under this Agreement or which in any manner questions the validity
of this Agreement. The Corporation and the Buyer are not aware of any facts that
would reasonably afford a basis for any such action, suit, proceeding or
investigation.
5.3 GOVERNMENTAL NOTICES. The Corporation and the Buyer have received no
notice from any federal, state, or other governmental agency indicating that
such agency would oppose or not grant or issue its consent or approval, if
required, with respect to the transactions contemplated hereby.
5.4 REGULATORY APPROVALS. The information furnished or to be furnished by
the Corporation or the Buyer to Seller for the purpose of enabling the
Corporation and the Buyer to complete and file applications with any regulatory
body is or will be true and complete as of the date so furnished. There are no
facts known to the Corporation, which the Corporation has not disclosed to the
Seller in writing, which, insofar as the Corporation can now reasonably foresee,
may have a material adverse effect on the ability of the Corporation or the
Buyer to obtain all requisite regulatory approvals or to perform its obligations
pursuant to this Agreement.
5.5 REGULATORY APPROVALS; PERFORMANCE OF AGREEMENT. Other than the
required bank regulatory approvals for the organization of the Buyer and for the
acquisition of the Branch Office, as well as any applicable approval or consent
of the FDIC, and subject to the expiration of any applicable waiting period, no
regulatory approvals are required for the execution, delivery and performance by
Buyer of this Agreement and the consummation by it of the transactions
contemplated hereby.
5.6 COMMUNITY REINVESTMENT ACT. Buyer has not been advised of any
supervisory concerns regarding its compliance with the Community Reinvestment
Act. To Buyer's knowledge, there are no threatened or pending actions,
proceedings, or allegations by any person or regulatory agency which may cause
the bank regulatory agencies to deny or fail to issue any regulatory approval.
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer, as of the date of this Agreement
and as of the Closing Date, unless another date is specifically mentioned below,
as follows:
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6.1 ORGANIZATION AND AUTHORITY. Seller is a savings association duly
organized, validly existing, and in good standing under the laws of the United
States of America with full power and authority to carry on its business as now
being conducted and to own and operate the properties which it owns and
operates, including the Branch Office. The execution, delivery, and performance
by Seller of this Agreement are within Seller's corporate power, have been duly
authorized by all necessary corporate action and do not contravene or constitute
a default under or conflict with any provision of applicable law or regulation
or of the charter or by-laws of Seller or any judgment, injunction, order,
decree, material agreement, or material instrument binding upon Seller or to
which any of the assets to be transferred hereby are subject or which could
result in the creation or imposition of any lien or encumbrance on such
property. This Agreement has been duly executed and delivered by Seller and
constitutes the valid and legally binding obligation of Seller, enforceable
against it in accordance with its terms, subject to bankruptcy, receivership,
insolvency, reorganization, moratorium or similar laws affecting or relating to
creditors' rights generally and subject to general principles of equity.
6.2 LITIGATION. There is no action, suit, proceeding or investigation
pending against Seller, or to the best knowledge of Seller threatened against or
affecting Seller, before any court or arbitrator or any governmental body,
agency, or official which alone or in the aggregate that, if adversely
determined, could adversely affect (i) the value of the Deposits or the Assets,
(ii) the operations of the Branch Office, or (iii) the ability of Seller to
perform its obligations under this Agreement, or which in any manner questions
the validity of this Agreement. Seller is not aware of any facts that would
reasonably afford a basis for any such action, suit, proceeding or
investigation. Except for the rights of the applicable customer or counterparty,
none of the Deposits are subject to any Encumbrances or any legal restraint or
other legal process, other than customary court orders, levies, and garnishments
affecting the depositors, and all of which Encumbrances are described on
SCHEDULE 6.2.
6.3 TITLE TO ASSETS OTHER THAN REALTY. Seller is the lawful owner of and
has good and marketable title to any Account Loans, the Fixed Assets and all
Records, free and clear of all Encumbrances. Delivery to Buyer of the
instruments of transfer of ownership contemplated by this Agreement will vest in
Buyer good and marketable title to any Account Loans, the Fixed Assets and all
Records, free and clear of all Encumbrances, except to the extent applicable law
provides to a customer a right of offset against Seller.
6.4 OWNERSHIP.
(a) SCHEDULE 6.4 lists each of the leases and subleases pursuant to
which Seller holds a leasehold interest in the Branch Office, and Seller is the
current lessee under the Assigned Lease.
(b) The Assigned Lease is the legal, valid and binding obligation of
the Seller. Seller's leasehold interest is not subject to any Encumbrances, and
there does not exist with respect to the Seller's obligations under the Assigned
Lease, or to Seller's knowledge with respect to the lessor's obligations under
the Assigned Lease, any material default or any event or condition which, after
notice or lapse of time or both, could constitute such a material default.
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6.5 DEPOSITS.
(a) Seller has delivered to Buyer a true and complete copy of the
account forms for all Deposits offered by Seller at the Branch Office. Except as
identified to Buyer by Seller in writing pursuant to Article 12.5 of this
Agreement, all the accounts related to the Deposits at the Branch Office are in
material compliance with all applicable laws, orders and regulations, and to the
knowledge of Seller, were originated in material compliance with all applicable
laws, orders and regulations.
(b) SCHEDULE 6.5 is a true and correct schedule of the Deposits
prepared as of the date indicated thereon (which shall be updated through the
Closing Date), listing by category the amount of such deposits, together with
the amount of accrued but unpaid interest thereon. All Deposits are insured to
the fullest extent permissible by the FDIC. Subject to the receipt of all
required regulatory approvals, Seller has and will have at the Closing Date all
rights and full authority to transfer and assign the Deposits without
restriction. As of the date hereof, with respect to the Deposits:
(i) subject to items returned without payment in full ("Return
Items") and immaterial bookkeeping errors, all interest accrued or accruing on
the Deposits has been properly credited thereto, and properly reflected on
Seller's books of account, and Seller is not in default in the payment of any
thereof;
(ii) subject to Return Items and immaterial bookkeeping
errors, Seller has timely paid and performed all of its obligations and
liabilities relating to the Deposits as and when the same have become due and
payable, and the Deposits include none which is in default or exists by virtue
of a default by Seller; and
(iii) subject to immaterial bookkeeping errors, Seller has
administered all of the Deposits in accordance with applicable fiduciary duties
and good and sound financial practices and procedures, and has properly made all
appropriate credits and debits thereto.
6.6 GOVERNMENTAL NOTICES. Seller has received no notice from any
federal, state, or other governmental agency indicating that such agency would
oppose or not grant or issue its consent or approval, if required, with respect
to the transactions contemplated hereby.
6.7 TAXES. Except as set forth in SCHEDULE 6.7, Seller has filed all
required tax returns and reports (including payroll withholding, sales, use,
transfer, excise and property taxes) relating to the Branch Office or the Assets
and any business conducted with respect to the Assets. For all periods up to and
including the Closing Date, Seller is not delinquent in the payment of any taxes
(including additions to tax, penalties, and interest), withholdings and other
governmental charges the nonpayment of which could adversely affect the Branch
Office, the Assets or the use thereof or which could cause Buyer to incur any
liability. Seller has not received any notice indicating that any taxing
authority has asserted any claim for the assessment of any such tax liability
(including additions to tax, penalties, and interest), withholding or other
governmental charges.
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6.8 RECORDS AND DOCUMENTS. The Records to be delivered to Buyer under
Article 2.1 (a) of this Agreement are and shall be sufficient to enable Buyer to
conduct a banking business with respect thereto under the same standards as
Seller has heretofore conducted such business.
6.9 COMMUNITY REINVESTMENT ACT. Seller received a rating of
"Satisfactory" in its most recent examination or interim review with respect to
the Community Reinvestment Act. Seller has not been advised of any supervisory
concerns regarding its compliance with the Community Reinvestment Act. To
Seller's knowledge, there are no threatened or pending actions, proceedings, or
allegations by any person or regulatory agency which may cause the bank
regulatory agencies to deny or fail to issue any regulatory approval.
6.10 REGULATORY APPROVALS. The information furnished or to be furnished
by Seller to Buyer pursuant to Articles 8.1 and 8.3 of this Agreement and for
the purpose of enabling Buyer to complete and file all requisite regulatory
applications is or will be true and complete as of the date so furnished. There
are no facts known to the Seller, which Seller has not disclosed to the Buyer in
writing, which, insofar as Seller can now reasonably foresee, may have a
material adverse effect on the ability of the Seller to obtain all requisite
regulatory approvals or to perform its obligations pursuant to this Agreement.
Other than the required approval of the bank regulatory agencies of the
formation of the Buyer and/or the acquisition of the Branch Office, as well as
any applicable approval or consent of the FDIC, and subject to the expiration of
any applicable waiting period, no regulatory approvals are required for the
execution, delivery and performance by Seller of this Agreement and the
consummation by it of the transactions contemplated hereby.
6.11 EMPLOYEES. There is no action, suit, or proceeding pending against
Seller, or to the best knowledge of Seller threatened against or affecting
Seller, before any court or arbitrator or any governmental body, agency, or
official that has been brought (or threatened to be brought) by or on behalf of
any employee at the Branch Office.
6.12 ACCOUNT LOANS.
(a) SCHEDULE 6.12 is a true and correct schedule of all Account
Loans, including the aggregate outstanding principal balance shown thereon, of
the Seller as of the date indicated thereon (which shall be updated through the
Closing Date) to be transferred to Buyer hereunder.
(b) Any and all Account Loans extended by the Seller and any
extensions, renewals or continuations of such Account Loans were made in
accordance with customary lending standards of the Seller in the ordinary course
of business, and are secured by deposit accounts which constitute Deposits
hereunder. Any Account Loans are evidenced by appropriate and sufficient
documentation based upon customary and ordinary past practices of the Seller.
(c) All Account Loans have been made, in all material respects, in
accordance with all applicable statutes and regulatory requirements.
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6.13 INSURANCE. All of the assets and properties of Seller at the Branch
Office are covered by effective insurance in amounts, types and forms as are
customary and appropriate for its business, operations, properties and assets.
All amounts due and payable under such insurance policies are fully paid, and
all such insurance policies are in full force and effect.
6.14 OPERATION; COMPLIANCE WITH LAW. Seller holds all licenses,
franchises, permits and authorizations necessary for the lawful conduct of its
business at the Branch Office. Seller has complied with all laws, regulations,
opinions, orders, ordinances, judgments or degrees of all governmental bodies,
agencies or subdivisions (federal, state, local, foreign or otherwise)
applicable to the Branch Office or any part of its operations, including without
limitation, the FDIC and the OTS, except where the failure to have so complied
would not, individually or in the aggregate, have a material adverse effect on
the assets, properties, business, financial condition or results of operations
of the Branch Office. The Seller has not received any written notification of
any outstanding asserted failure by it to comply with any of such laws. Without
limiting the generality of the foregoing, to the best knowledge of Seller, after
due inquiry, the Branch Office is in compliance with applicable requirements of
the Americans with Disabilities Act ("ADA") and Seller agrees that between the
date hereof and the Closing Date the cost of any repairs or replacements
necessary to bring the Branch Office or any part thereof into compliance with
the ADA shall be the obligation of Seller. The Branch Office (including
improvements) and the current use and operation thereof by Seller is in
compliance with and authorized by applicable zoning and other land use
regulations, including without limitation, building, fire, health, safety,
hazardous waste and environmental codes and all private covenants, restrictions
and easements as they apply to Seller's current use and operations, except where
the failure to be in compliance would not, individually or in the aggregate,
have a material adverse effect on the assets, prospects, business, financial
condition or results of operations of the Branch Office. There are no facts or
circumstances existing or, to the best knowledge of Seller threatened, which
could have a material adverse effect on the present use of the Branch Office.
Seller has not received notice that any governmental authority considers the
Branch Office to violate or to have violated any fire, zoning, health, building,
hazardous waste or environmental code or other ordinance, law or regulation or
order of any government or any agency, body or subdivision thereof and no such
violations exist. Except for (i) agreements previously delivered to Buyer, and
(ii) agreements necessary or desirable to consummate the transaction
contemplated hereby, Seller is not a party to any other agreement relating to
the Branch Office nor is there any other agreement by which the Branch Office is
bound.
6.15 ENVIRONMENTAL.
(a) To the best of Seller's knowledge, no Hazardous Substances have
been stored, disposed of or released upon or below the Branch Office by Seller
in violation of any environmental law.
(b) To the best of Seller's knowledge, Seller has not received any
written communication from any governmental authority alleging the violation of
any environmental law with respect to the Branch Office.
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(c) To the best of Seller's knowledge, no person or entity has
asserted any claim against Seller arising out of, based upon, or resulting from
(i) the presence or release into the environment of any Hazardous Substance upon
or below the Branch Office in violation of any environmental law, or (ii) the
violation or alleged violation of any environmental law with respect to the
Branch Office.
6.16 SCHEDULES. The information set forth in the Schedules hereto is
true, correct and complete as of the date indicated on that Schedule and will be
true, correct and complete as updated through the Closing Date.
6.17 NO DEFAULTS. There are no defaults by Seller, or any unresolved
disputes, under the Service Contracts or any other Assets to be transferred
hereunder, nor, to the best knowledge of Seller, any defaults with respect to
the obligations of any other party thereto.
6.18 RELATED PARTY TRANSACTIONS. No director, officer or Affiliate of
Seller is party to the Assigned Lease or Service Contracts.
6.19 DISCLOSURE. No representation or warranty of Seller and no statement
or information relating to Seller or the Branch Office or Assets contained in
(i) this Agreement (including the Schedules hereto), or (ii) in any certificate
or document furnished or to be furnished by or on behalf of Seller to Buyer
pursuant to this Agreement, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements made herein or therein, in light of the circumstances in which
they were made, not misleading.
6.20 SERVICE CONTRACTS. SCHEDULE 6.20 lists all of the contracts,
licenses, permits, service and maintenance agreements and other agreements
entered into in connection with the operation of the Branch Office.
6.21 DOCUMENTS. Seller has delivered to Buyer true, correct and complete
copies of the following:
(a) any and all real and personal property leases, including the
Assigned Lease, certificates of occupancy, Service Contracts, and all other
agreements relating to the operation of the Branch Office or to the Fixed
Assets;
(b) any plans and specifications for the improvements constructed on
the Branch Office and as-built plans and surveys;
(c) all notices received by Seller during the past three (3) years
regarding the Branch Office with respect to violation of any statutes, rules or
regulations of government agencies or violation of any easements, covenants,
conditions or restrictions affecting the Realty; and
(d) copies of any environmental site assessment reports or surveys
on the Realty.
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ARTICLE 7 - COVENANTS OF BUYER
7.1 FIDUCIARY RELATIONSHIP. Pursuant to the terms of the Transfer
Agreement attached hereto as EXHIBIT C, Buyer agrees to assume all of the
fiduciary relationships of Seller arising out of any Retirement Accounts assumed
by Buyer under Article 2.2 hereof, and with respect to such accounts, Buyer
shall assume all of the obligations and duties of Seller as fiduciary and
succeed to all such fiduciary relationships of Seller as fully and to the same
extent as if Buyer had originally acquired, incurred, or entered into such
fiduciary relationships. Notwithstanding anything in this Agreement to the
contrary, however, Buyer will not assume or be responsible for any act or
failure to act of Seller in connection with such Retirement Accounts on or prior
to the Closing Date.
7.2 PAYMENT OF CHECKS. From and after the Closing Date, Buyer agrees to
pay, to the extent of sufficient available funds on deposit, all properly drawn
checks, drafts, and negotiable orders of withdrawal timely presented to it by
mail, over its counters, or through clearings if such items are drawn by
depositors whose Deposits or accounts on which such items are drawn are
Deposits, whether drawn on the check or draft forms provided by Seller, for at
least one hundred twenty (120) days after the Closing Date, or on those provided
by Buyer. In addition, Buyer shall, in all other respects, discharge the duties,
liabilities and obligations with respect to the Deposits to the extent such
duties, liabilities or obligations occur following the Closing.
7.3 ACCOUNT LOANS. On and after the Closing Date, Buyer shall continue to
honor and provide credit in accordance with the terms and provisions of any
Account Loans transferred under this Agreement until such provisions are
properly modified or canceled by Buyer.
7.4 CONFIDENTIALITY OF RECORDS. Buyer and its authorized agents and
representatives shall receive and treat all Records and other documents and
customer information obtained pursuant to any provision of this Agreement as
confidential, until the transactions contemplated by this Agreement have been
consummated, and if not consummated, shall, upon request of Seller, return to
Seller all originals and copies of such documents or other materials containing
such information or Records. Thereafter, Buyer shall treat such information
consistent with law. Until the Closing Date, Buyer shall use all such
information only for purposes of effectuating this Agreement. Buyer acknowledges
that Buyer may in certain instances receive from Seller customer information
respecting assets and deposits of Seller not being transferred to Buyer, and
Buyer agrees not to use any such information unrelated to Assets or Deposits
transferred hereby except as reasonably necessary to service transferred Assets
or Deposits.
7.5 ASSISTANCE IN OBTAINING REGULATORY APPROVAL. Buyer agrees to use all
reasonable efforts to assist Seller in obtaining all regulatory approvals, if
any, necessary for Seller to sell the Branch Office, and Buyer will provide at
the earliest practicable time to Seller or the appropriate regulatory
authorities all information reasonably required to be submitted by Seller in
connection with such approvals.
7.6 FURTHER ASSURANCES. On and after the Closing Date, Buyer shall give
such further assurances to Seller and upon Seller's request shall execute,
acknowledge, and deliver all such acknowledgments and other instruments and take
such further action as may be necessary and appropriate to effectively relieve
and discharge Seller from any obligations remaining under the
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Assets, Deposits, and other obligations assumed by Buyer hereunder; provided,
however, that Buyer need not incur any material costs or expenses in connection
with the undertakings contained in this Article 7.6 unless such costs or
expenses are paid by Seller.
7.7 CONSENTS. Buyer will use its reasonable best efforts to obtain prior
to the Closing Date all consents, approvals, or authorizations of all
governmental authorities or agencies required for the execution, delivery, and
performance by Buyer of this Agreement and the consummation by it of any
transactions contemplated hereby.
7.8 INTERFERENCE. Between the date hereof and the Closing Date, and
subject to the obligations of Seller pursuant to Section 8.1, Buyer shall not
interfere with Seller's normal operations or its customers or employee
relations; PROVIDED, HOWEVER, that it is understood and agreed that with
reasonable notice, Buyer may engage in training of Branch Office employees on
terms mutually agreed to by Buyer and Seller.
7.9 CONDUCT OF BUSINESS. Between the date hereof and the Closing Date,
Buyer and its Affiliates shall not undertake any marketing or advertising
efforts specifically directed to Seller's customers which are intended to reduce
the amount of the Deposits as of the Closing Date.
7.10 FORMATION OF BUYER. If the Corporation elects to acquire the Branch
Office through a newly-formed depository institution, the Corporation shall
promptly after the execution of this Agreement, take all the required steps to
organize the Buyer, file necessary applications relating to such organization
with the appropriate bank regulatory agency, and use its best efforts to obtain
bank regulatory approvals of such organization. Promptly following the
organization of any such Buyer, the Corporation shall cause the Buyer to execute
this Agreement.
7.11 INTENTION OF THE PARTIES. It is the intention of the parties that all
of the assets (under generally accepted accounting principles ("GAAP")) of the
Branch Office, including, but not limited to, any and all leases, contracts,
agreements, other real estate owned, customer accounts, loans, cash on hand and
records are being purchased by the Buyer pursuant to this Agreement and that all
of the liabilities (under GAAP) of the Branch Office, including, but not limited
to, any deposits, leases, contractual obligations and all other obligations
related to such assets are being assumed by the Buyer pursuant to this
Agreement.
7.12 REGULATORY MATTERS. Buyer shall, from the date hereof through the
Closing Date, keep the Seller advised with respect to any and all regulatory
matters or proceedings affecting the Branch Office and shall promptly forward to
the Seller copies of all correspondence, notices, orders, memoranda or other
written material from any regulatory agency relating to the Branch Office and
shall provide the Seller full access to its regulatory files to the extent
permitted by law.
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ARTICLE 8 - COVENANTS OF SELLER
8.1 ACCESS TO RECORDS AND INFORMATION: PERSONNEL: CUSTOMERS. Upon
reasonable notice, Seller shall afford to the officers and authorized
representatives of Buyer free and full access during regular business hours to
the offices, properties, books, contracts, commitments and records of Seller in
order that Buyer may have full opportunity to make such investigations as it
shall desire of the Deposits, Assets, Account Loans and the operations of the
Branch Office. The officers of Seller shall furnish Buyer with such additional
financial and operating data and other information relating to the assets,
properties and business of the Branch Office as Buyer shall from time to time
reasonably request. Seller shall consent, upon reasonable notice, to the review
by the officers and authorized representatives of Buyer of the reports and
working papers of Seller's independent auditors (upon reasonable advance notice)
and to discussions by the officers and authorized representatives of Buyer with
parties with which Seller has business relationships so long as such
investigation is limited to the Branch Office.
8.2 OPERATION IN ORDINARY COURSE. From the date hereof to the Closing
Date, Seller shall: (a) not engage in any transaction affecting the Branch
Office, the Deposits or the Assets except in the ordinary course of business,
and shall operate and manage the business of the Branch Office in the ordinary
course consistent with past practices; (b) maintain the Branch Office in a
condition substantially the same as on the date of this Agreement, reasonable
wear and use excepted; (c) maintain its books of accounts and records in the
usual, regular and ordinary manner; and (d) duly maintain compliance with all
laws, regulatory requirements and agreements to which the Branch Office is
subject or by which any of them is bound. Without limiting the generality of the
foregoing, prior to the Closing Date, Seller shall not, without the prior
written consent of Buyer, which consent shall not be unreasonably withheld:
(a) fail to maintain the Assets in their present state of repair,
order and condition, reasonable wear and tear excepted;
(b) fail to maintain its books, accounts and records in accordance
with generally accepted accounting principles consistently applied;
(c) fail to comply in all material respects with all applicable laws
and regulations relating to or affecting the operation of the Branch Office;
(d) authorize or enter into any contract or amend, modify or
supplement any material contract relating to or affecting the operation of the
Branch Office;
(e) take any action, or enter into or authorize any transaction,
other than in the ordinary course of business and consistent with past practice,
relating to or affecting the operation of the Branch Office;
(f) do any act which, or omit to do any act the omission of which,
could cause a breach of any contract, commitment or obligation relating to or
affecting the operation of the Branch Office;
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(g) make any changes in its accounting systems, policies, principles
or practices relating to or affecting the operation of the Branch Office;
(h) enter into or renew any data processing service contract
relating to or affecting the operation of the Branch Office;
(i) make any change in any lease relating to the Branch Office;
(j) cause the Branch Office to engage or participate in any material
transaction or incur or sustain any material obligation except in the ordinary
course of business;
(k) cause the Branch Office to transfer to Seller's other operations
or branches any (i) Account Loans, (ii) Fixed Assets, (iii) employees or (iv)
Records, except upon the unsolicited request of a depositor in the ordinary
course of business;
(l) cause the Branch Office to transfer to Seller's other operations
any Deposits, except upon the unsolicited request of a depositor in the ordinary
course of business;
(m) make any loan or commitment for any loan for the account of the
Branch Office which will constitute an Asset to be acquired by Buyer, except for
loans and commitments which Seller legally is able to make and which are made in
the ordinary course of business and which are not in excess of $250,000 for
single family residential first loan mortgage loans and $100,000 for all other
loans, unless Buyer shall have consented thereto, such consent to be presumed in
the event the written credit recap shall have been provided to Buyer and Buyer
shall have failed to object on or before the expiration of five Business Days
thereafter;
(n) undertake any actions which are inconsistent with a program to
use all reasonable efforts to maintain good relations with employees employed at
or customers of the Branch Office;
(o) transfer, assign, encumber, or otherwise dispose of, or enter
into any contract, agreement, or understanding to transfer, assign, encumber, or
otherwise dispose of any of the Assets, except in the ordinary course of
business;
(p) invest in any Fixed Assets or improvements in excess of $2,500
at the Branch Office, except for commitments previously disclosed to Buyer in
writing made on or before the date of this Agreement for replacements of
furniture, furnishings and equipment, and for normal maintenance and
refurbishing purchased or made in the ordinary course of business;
(q) increase or agree to increase the salary, remuneration, or
compensation of persons employed at the Branch Office other than in accordance
with Seller's customary policies and past practices and/or any bank-wide
changes, or pay or agree to pay any uncommitted bonus to any such employees
other than regular bonuses granted based on historical practice; provided,
however, Seller may, at its option (and without in any way assuming an
obligation to do so), (i) make payments to or for employees in lieu of or as
partial compensation for savings incentives or
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other employee benefits, and (ii) pay incentive compensation to such employees
for purposes of retaining their services or maintaining Deposit levels through
the Closing Date. Seller hereby agrees that no annual salary adjustments will be
made without the prior written approval of Buyer;
(r) fail to use its best efforts to preserve the present operations
of the Branch Office intact, keep available the services of its present officers
and employees or to preserve its present relationships with persons having
business dealings with the Branch Office;
(s) amend or modify any of its promotional, deposit account or
account loan practices with respect to the Branch Office, other than amendments
or modifications in the ordinary course of business or otherwise consistent with
the provisions of this Agreement;
(t) fail to maintain deposit rates at the Branch Office
substantially in accord with past standards and practices; or
(u) change or amend its schedules or policies relating to service
charges or service fees at the Branch Office.
8.3 ASSISTANCE IN OBTAINING REGULATORY APPROVALS. Seller agrees to use
all reasonable efforts to assist Buyer in obtaining all regulatory approvals
necessary to complete the transactions contemplated hereby, and Seller will
provide at the earliest practicable time to Buyer or to the appropriate
regulatory authorities all information reasonably required to be submitted by
Buyer in connection with such approvals.
8.4 NO ENCUMBRANCES. Between the date of this Agreement and the Closing
Date, Seller will not create or suffer to exist any new Encumbrance on any of
the Assets, or otherwise enter into any material transaction or make any
material commitment relating to any of the Assets, without the prior written
consent of Buyer, which consent shall not be unreasonably withheld.
8.5 CONSENTS. Seller shall secure all necessary corporate consents and
all consents and releases required of third parties (except those involving
Buyer) and shall comply with all applicable laws, regulations, and rulings in
connection with this Agreement and the consummation of the transactions
contemplated hereby.
8.6 SOLICITATION OF ACCOUNTS. Prior to the Closing, Seller will not
knowingly solicit Deposits or other financial products from persons who have any
account or accounts with the Branch Office; provided, however, that the
foregoing provision shall not limit the right of Seller to advertise for banking
business from the public generally or at other offices of Seller.
8.7 MAINTENANCE OF ACCOUNTS. Seller shall use its best efforts to retain
at the Branch Office the Deposits which are domiciled at the Branch Office as of
the date of this Agreement.
8.8 BOOKS AND RECORDS. Seller shall retain all books and records
relating to the Branch Office which due to the nature and format of the records
of Seller for its branch offices
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cannot be segregated from records relating to offices other than the Branch
Office, but, in connection with the Closing, Buyer shall receive possession of,
and right, title and interest to and in, all such books and records which can be
segregated from records relating to offices other than the Branch Office and are
ordinarily maintained at or may be transferred to the Branch Office. In each
case the books and records directly relating to Branch Office operations,
assets, and liabilities prior to the Closing Date which are retained by one
party shall be open for inspection by the other party and its authorized agents,
representatives, and regulators during regular business hours after the Closing
Date and the party with the right of inspection may, at its own expense, make
such copies of and excerpts from such books and records as it may deem
desirable. All books and records relating to Branch Office operations, assets,
and liabilities prior to the Closing Date shall be maintained for a period which
is at least the longer of the period required by law or the normal retention
period under Seller's records management program unless the parties shall,
applicable law permitting, agree upon a shorter period. Should one party's audit
or inspection of records in another party's possession result in the second
party's employees or agents having to devote any substantial amount of time or
such party having to allocate facilities or equipment or having to incur any
substantial costs, then the second party shall be entitled to reasonable
reimbursement for all such costs incurred.
8.9 INSURANCE POLICIES. Seller will maintain in effect through and until
the Closing Date all current insurance policies set forth in SCHEDULE 8.9 of
this Agreement or comparable policies of insurance as reasonably agreed to by
Buyer and Seller.
8.10 FURTHER ASSURANCES. On and after the Closing Date, Seller shall (i)
give such further assistance to Buyer and shall execute, acknowledge, and
deliver all such instruments and take such further action as may be necessary
and appropriate effectively to vest in Buyer full, legal, and equitable title to
the Assets, and (ii) use its best efforts to assist Buyer in the orderly
transfer of the Assets and Deposits being acquired by Buyer; provided, however,
that Seller need not incur any material costs or expenses in connection with the
undertakings contained in this Article 8.10 unless such costs or expenses are
paid by Buyer. In particular, and without limiting the generality of the
foregoing:
(a) As an accommodation to Seller and without assuming any liability
to Seller, Seller will, for a period of one hundred twenty (120) days after the
Closing Date, remit to Buyer, at the cost and expense of Buyer, promptly after
receipt by Seller after the Closing Date at any of its other office all payments
relating to any Account Loans or amounts intended for deposit to the accounts
which are part of the Deposits or otherwise relating to the Deposits or any
Account Loans and after such one hundred twenty (120) day period Seller may
return such items marked "Refer to Maker" with instruction on making payment to
Buyer.
(b) With respect to checks or drafts drawn against accounts which
are Deposits, Seller will for a period of one hundred twenty (120) days after
the Closing Date cooperate with Buyer and take all reasonable steps requested by
Buyer in writing, at the cost and expense of Buyer, to ensure that, on and after
the Closing Date, each such item which is coded for presentment to Seller or to
any bank for the account of Seller is delivered to Buyer in a timely manner and
in accordance with applicable law and clearing house rules or agreements. After
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such one hundred twenty (120) day period Seller may return such items marked
"Refer to Maker."
(c) As of the Closing Date all (i) ATM access cards issued by Seller
to customers of the Branch Office who will not have ATM-accessible accounts with
Seller after the Closing Date, and (ii) check guarantee cards issued by Seller
to customers of the Branch Office who will not have checking accounts with
Seller after the Closing Date, will be void. In connection with the notices to
depositors described in Article 12.8 of this Agreement, Seller will notify
customers in writing at least fifteen (15) Business Days prior to the Closing
Date of such cancellation of the ATM access cards and check guarantee cards.
Seller will take any other actions necessary or appropriate to limit, except as
set forth in this Agreement or through Buyer's proper channels, customers'
access after the Closing Date to funds transferred to Buyer pursuant to this
Agreement.
(d) Buyer and Seller agree to ensure an orderly transfer of all data
tapes and processing information and to facilitate an electronic and systematic
conversion of all applicable data regarding Account Loans, ATM Cards, Collection
Accounts, and Deposits. Seller agrees to provide, at Seller's cost: (i) within
five (5) business days after the date of this Agreement, (a) all information
necessary to complete such conversion processing, (b) the initial data
processing pre-conversion file layout on paper, and (c) product definitions;
(ii) within ten (10) business days of the date of this Agreement, all data
necessary to enable Buyer to calculate APY and APYE for the Deposits and
otherwise to comply with Regulation DD, including rate history, back items, no
books and interest calculation; (iii) no later than thirty (30) days prior to
the Closing Date, provide the final data processing pre-conversion file
packages; (iv) on a day-to-day basis subsequent to the preparation of the final
pre-conversion tapes, provide information on any data processing system changes
or additions; (v) as part of the data processing conversion, pay off all accrued
interest on checking and money market accounts (but not CD's or passbooks), send
statements on all accounts as required by Regulation DD, and book all savings
account no-book items; and (vi) by 3:00 p.m. on the Business Date immediately
succeeding the Closing Date, provide two sets of final data processing
conversion file packages.
(e) Seller will remove any supply of money orders, association
checks, traveler's checks, and Seller's negotiable items located at the Branch
Office on the Closing Date.
8.11 CLOSE OF BUSINESS ON CLOSING DATE. On the Closing Date, Seller shall
close the Branch Office for business not later than 3:00 p.m. Eastern Standard
Time, whereupon representatives of Buyer shall have access to the Branch Office,
under the supervision of representatives of Seller, to verify Seller's provision
to Buyer of the documents, files and records relating to the Branch Office,
including the Records. Thereafter, Buyer shall continue to have access to such
information and materials as set forth in Articles 8.1 (a) and 8.8 of this
Agreement.
8.12 SUPPLEMENTAL INFORMATION; DISCLOSURE SUPPLEMENTS. From time to time
prior to the Closing, Seller will promptly disclose in writing to Buyer any
matter hereafter arising which, if existing, occurring or known at the date of
this Agreement would have been required to be
21
disclosed or which would render inaccurate any of the representations,
warranties or statements set forth in this Agreement. From time to time prior to
the Closing, Seller will promptly supplement or amend the Schedules delivered in
connection with the execution of this Agreement to reflect any matter which, if
existing, occurring or known at the date of this Agreement, would have been
required to be set forth or described in such Schedule or which is necessary to
correct any information in such Schedule that has been rendered inaccurate
thereby.
8.13 REGULATORY MATTERS. Seller shall, from the date hereof through the
Closing Date, keep the Buyer advised with respect to any and all regulatory
matters or proceedings affecting the Branch Office and shall promptly forward to
the Buyer copies of all correspondence, notices, orders, memoranda or other
written material received from any regulatory agency relating to the Branch
Office and shall provide the Buyer full access to its regulatory files to the
extent permitted by law.
ARTICLE 9 - CONDITIONS TO CLOSING
9.1 CONDITIONS TO THE OBLIGATIONS OF SELLER. Unless waived in writing by
Seller, the obligations of Seller to consummate the transactions contemplated by
this Agreement are subject to the satisfaction at or prior to the Closing Date
of the following conditions:
(a) PERFORMANCE. Each of the acts and undertakings and covenants
of Buyer to be performed at or before the Closing pursuant to this Agreement
shall have been duly performed in all material respects.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer contained in Article 5 of this Agreement shall be true,
correct and complete on and as of the Closing Date with the same effect as
though made on and as of the Closing Date, provided, however, that
notwithstanding anything herein to the contrary, this Section 9.1(b) shall be
deemed to have been satisfied even if the representations and warranties are not
true and correct unless the failure of any of the representations and warranties
to be so true and correct would have a material adverse effect upon the
transactions contemplated by this Agreement.
(c) FAIRNESS OPINION. Seller shall have received a written opinion
from its financial advisor, acceptable to Seller and its counsel, that the
consideration to be paid in connection with the transactions described herein is
fair to the Seller from a financial point of view.
(d) DOCUMENTS. Seller shall have received the following documents
from Buyer:
(i) An executed copy of the Assignment and Assumption of
Deposit Liabilities substantially in the form of EXHIBIT A hereto;
(ii) Resolutions of Buyer's Board of Directors, certified by
its Secretary or Assistant Secretary, authorizing the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby;
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(iii) A certificate of the Secretary or Assistant Secretary of
Buyer as to the incumbency and signatures of officers;
(iv) A certificate signed by a duly authorized officer of
Buyer stating that the conditions set forth in Articles 9.1(a) and (b) of this
Agreement have been fulfilled;
(v) An executed copy of the Transfer Agreement attached hereto
as EXHIBIT C;
(vi) As to the Assigned Lease, an executed Assignment and
Assumption Agreement in the form of EXHIBIT D; and
(vii) Such other instruments and documents as counsel for
Seller may reasonably require as necessary or desirable for transferring to
Buyer the obligation to pay the Deposit liabilities and otherwise perform
Seller's obligations that are being transferred to Buyer pursuant to this
Agreement, all in form and substance reasonably satisfactory to counsel for
Seller.
9.2 CONDITIONS TO THE OBLIGATIONS OF BUYER . Unless waived in writing by
Buyer, the obligations of Buyer to consummate the transactions contemplated by
this Agreement are subject to the satisfaction at or prior to the Closing of the
following conditions:
(a) PERFORMANCE. Each of the acts and undertakings and covenants of
Seller to be performed at or before the Closing pursuant to this Agreement shall
have been duly performed in all material respects.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller contained in Article 6 of this Agreement shall be true,
correct and complete on and as of the Closing Date with the same effect as
though made on and as of the Closing Date, provided, however, that
notwithstanding anything herein to the contrary, this Section 9.2(b) shall be
deemed to have been satisfied even if such representations and warranties are
not true and correct unless the failure of any of the representations and
warranties to be so true and correct would have a material adverse effect upon
the transactions contemplated by this Agreement.
(c) NO MATERIAL ADVERSE CHANGE. Between the date of this Agreement
and the Closing, no material adverse change shall have occurred with respect to
the Branch Office, the Deposits, the Service Contracts, the Assigned Lease, the
Loans to be acquired under the Loan Purchase Agreement, or the Assets to be
acquired hereunder. An increase in the allowance for loan and lease losses
requested or required by the OTS or otherwise with respect to the Loans to be
acquired under the Loan Purchase Agreement shall not be deemed a material
adverse change for purposes of this Article 9.2(c).
(d) FAIRNESS OPINION. Buyer shall have received a written opinion
from its financial advisor, acceptable to Buyer and its counsel, that the
consideration to be paid in
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connection with the transactions described herein is fair to the Buyer from a
financial point of view.
(e) DOCUMENTS. In addition to the documents described elsewhere in
this Article 9.2, Buyer shall have received the following documents from Seller:
(i) Resolutions of Seller's Board of Directors, certified by
its Secretary or Assistant Secretary, authorizing the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby;
(ii) A certificate from the Secretary or Assistant Secretary
of Seller as to the incumbency and signatures of officers;
(iii) A certificate signed by a duly authorized officer of
Seller stating that the conditions set forth in Articles 9.2(a), (b) and (c) of
this Agreement have been satisfied;
(iv) An executed Assignment and Assumption of Deposit
Liabilities and an executed ▇▇▇▇ of Sale and Assignment in the forms of EXHIBITS
A and B hereto;
(v) A final customer list as set forth in Article 12.8(a) of
this Agreement;
(vi) An affidavit of non-foreign status as required by Section
1445 of the Internal Revenue Code of 1986, as amended;
(vii) The holds and stop payment information described in
Article 12.2 of this Agreement;
(viii) An executed copy of the Transfer Agreement attached
hereto as EXHIBIT C;
(ix) As to the Assigned Lease, an executed Assignment and
Assumption Agreement in the form of EXHIBIT D;
(x) All consents required for the transaction, including
consents to the transfer of the Assigned Lease and Service Contracts;
(xi) SCHEDULES 6.5 and 6.13, (Deposits and Account Loans),
updated through the Closing Date and acceptable to Buyer and a Schedule of the
Cash on Hand as of the Closing;
(xii) A Landlord Estoppel Certificate for the Assigned Lease
in the form attached hereto as EXHIBIT E;
(xiii) The License Agreement, executed by Los Padres Bank,
FSB, in the form of EXHIBIT F;
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(xiv) All data files and records relating to the Assets and
the Deposits provided, however, that (i) Seller shall not be required to provide
to Buyer records maintained at the Branch which relate solely to non-Branch
matters and (ii) Seller may retain copies of records relating both to the
Deposits and to non-Branch matters; and
(xv) Such other documents or instruments as counsel for Buyer
may reasonably require as necessary or desirable for transferring, assigning and
conveying to Buyer, the Assigned Lease, Service Contracts, Deposits and good,
marketable and insurable title to the Assets to be transferred to Buyer pursuant
to this Agreement, all in form and substance reasonably satisfactory to counsel
of Buyer.
(f) SCHEDULES. The Schedules and information delivered to Buyer
pursuant to Article 8 hereof shall be acceptable to Buyer in its reasonable
discretion.
9.3 CONDITION TO THE OBLIGATIONS OF SELLER AND BUYER .
(a) REGULATORY APPROVALS. All required licenses, approvals, and
consents of any relevant federal, state, or other regulatory agency (including
any required to organize the Buyer) shall have been obtained without any
conditions or other requirements reasonably deemed materially burdensome by
either Seller or Buyer, and all necessary conditions of those licenses,
approvals, and consents shall have been fully satisfied, all in form and
substance satisfactory to Buyer.
(b) ABSENCE OF PROCEEDINGS AND LITIGATION. No order shall have
been entered and remain in force at the Closing Date restraining or prohibiting
any of the transactions contemplated by this Agreement in any legal,
administrative or other proceeding, and no action or proceeding shall have been
instituted or threatened on or before the Closing Date seeking to restrain or
prohibit the transactions contemplated by this Agreement.
(c) CLOSING OF LOAN SALE AGREEMENT. All conditions to the closing
of the transactions contemplated under the Loan Sale Agreement shall have been
satisfied and the transactions contemplated thereunder shall have closed or
shall close concurrently with the Closing hereunder.
ARTICLE 10 - TERMINATION
10.1 TERMINATION. This Agreement shall terminate and be of no further
force or effect as between the parties, except as to liability for breach of any
duty or obligation arising prior to the date of termination, upon the occurrence
of any of the following conditions:
(a) The expiration of ten (10) Business Days after any governmental
agency shall have denied or refused to grant the approvals or consents required
to be obtained pursuant to this Agreement, unless within said ten (10) Business
Day period Buyer and Seller agree to
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submit or resubmit an application to, or appeal the decision of, the regulatory
authority which denied or refused to grant approval thereof;
(b) The expiration of twenty (20) Business Days from the date that
either party has given notice to the other party of such other party's material
breach or misrepresentation of any obligation, warranty, representation, or
covenant in this Agreement; provided, however, that no such termination shall
take effect if within said twenty (20) Business Day period the party so notified
shall have fully and completely corrected the grounds for termination as
specified in such notice; provided further, however, that no such termination
shall take effect if within twenty (20) Business Days of the failure by the
notified party to make such correction within said twenty (20) day period, the
notifying party delivers to the notified party a written election not to
terminate this Agreement notwithstanding such breach or misrepresentation, and
any such election to proceed shall not waive such party's right to seek damages
or other equitable relief;
(c) The failure to consummate the transactions provided for in this
Agreement by December 31, 2001, unless the date is extended by the mutual
written agreement of the parties;
(d) The mutual written consent of the parties to terminate;
(e) By Seller, if any of the conditions set forth in Section 9.1
hereof have not been satisfied by December 31, 2001 (or such earlier time as it
becomes apparent that such condition will not be met), unless the relevant
condition shall have failed to occur as a result of any material act or omission
by Seller; or
(f) By Buyer, if any of the conditions set forth in Section 9.2
hereof have not been satisfied by December 31, 2001 (or such earlier time as it
becomes apparent that such condition will not be met), unless the relevant
condition shall have failed to occur as a result of any material act or omission
by Buyer.
Notwithstanding anything to the contrary contained in this Agreement,
neither party hereto shall have the right to terminate this Agreement on account
of its own breach or any immaterial breach by the other party.
ARTICLE 11 - EMPLOYEES
11.1 EMPLOYEES. Buyer shall offer employment to Seller's employees
employed at or in connection with the Branch Office; provided that nothing
herein shall be construed as an employment contract or agreement enforceable by
any such employee. All employees of the Branch Office will have their earned
compensation paid in full by Seller through the Closing Date, and employees who
do not become employees of Buyer shall be paid their accrued vacation time
compensation in full by Seller through the Closing Date.
11.2 EMPLOYEE MATTERS. Buyer and Seller shall follow the procedures
outlined below in dealing with employees of the Branch Office regarding
employment after the Closing Date.
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(a) A complete list of all active employees of the Branch Office is
attached hereto as SCHEDULE 11.2.
(b) Nothing in this Article 11 is intended, nor shall it be
construed, to confer any rights or benefits upon any person other than Buyer and
Seller.
(c) If the transactions contemplated by this Agreement are not
consummated for any reason, Buyer shall not solicit for hire any employee listed
in SCHEDULE 11.2 for a period of five years from the date of termination of this
Agreement, provided, however, that nothing herein shall prohibit Buyer from
publishing general advertisements for employment or hiring persons who respond
to such advertisements.
Buyer shall have the right but not the obligation prior to the Closing to
provide training to any Employees that will become employees of Buyer after the
Closing as set forth in this Section 11.2. Such training shall be at the expense
of Buyer and shall be conducted during normal business hours, or, if the
foregoing is not possible, after business hours at a location other than the
Branch Office. At the request of Buyer, Seller shall compensate employees, in
accordance with Seller's customary policies and practices, for the Employee's
time spent being trained by Buyer and the Employees' reasonable reimbursable
expense. Seller shall cooperate with Buyer to make such Employees available for
such training prior to the Closing.
11.3 EMPLOYEE BENEFITS.
(a) Subject to any limitation or restriction imposed by ERISA, as
amended, or any insurance or benefit plan of Buyer, all employees at the Branch
Office who become employees of Buyer ("Transferred Employees") will retain the
initial date of service as calculated by Seller solely for purposes of
determining seniority credit for determination of eligibility for retirement and
vacation benefits.
(b) Buyer is not assuming, nor shall it have responsibility for
the continuation of, any liabilities under or in connection with:
(i) any employment contract, collective bargaining agreement,
plan or arrangement providing for insurance coverage or for deferred
compensation, bonuses, stock options or other forms of incentive compensation or
post-retirement compensation or benefits, written or implied, which is entered
into or maintained, as the case may be, by Seller; or
(ii) any "employee benefit plan" as defined in Section 3(3) of
ERISA as maintained, administered, or contributed to by Seller and covering any
employees.
(c) Transferred Employees shall be entitled to participate in the
benefit plans and arrangements of Buyer subject to all of the terms and
conditions of such plans or arrangements and Buyer agrees, to the extent
permissible, to waive any waiting period for participation in Buyer's health
insurance plan.
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11.4 EMPLOYEE DOCUMENTS. Within 15 Business Days of the date of this
Agreement, Seller will deliver to Buyer copies of its corporate benefit
information. Buyer also will be given access to employees at the Branch Office
and, upon receipt of a written consent and release from an employee, will be
delivered copies of such employee's personnel files including, but not limited
to, copies of each written employment agreement and a written description of the
terms of oral employment agreements for such employee, if any. Upon receipt of a
written consent and release from an employee, Buyer shall have the right to
review all of that employee's personnel file.
11.5 COMPLIANCE WITH COBRA. Notwithstanding anything herein to the
contrary, to the extent required by the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA") or applicable state law, any
employee of Seller terminated by Seller as a result of this transaction shall be
entitled to continued coverage which shall be administered by Seller and the
required notices concerning this coverage will be provided by Seller.
ARTICLE 12 - OTHER AGREEMENTS
12.1 RETURNED ITEMS. Any items that were credited for deposit to an
account at the Branch Office prior to the Closing Date and are returned unpaid
("Returned Items") within ten (10) Business Days after the Closing Date will be
handled in the following manner:
(a) If Buyer's bank account is charged for the Returned Item, Buyer
will use its best efforts to obtain reimbursement from the account to which, or
from the party to whom, the Returned Item was credited. If there are sufficient
funds in the account to which Returned Item was credited or any other accounts
on deposit at the Branch Office or at any other branch office of Buyer standing
in the name of the party liable for such item, Buyer will debit any or all of
such accounts an amount equal in the aggregate to the Returned Item. If those
accounts do not contain funds sufficient to reimburse Buyer fully (for reasons
other than Buyer's breach of Article 12.2 of this Agreement), Seller will, upon
notice from Buyer, immediately repay to Buyer the amount of the Returned Item
and Buyer will assign the Item to Seller for collection.
(b) If Seller's bank account is charged for the Returned Item and if
there are sufficient funds in the account to which such Returned Item was
credited or any other accounts on deposit at the Branch Office or at any other
branch office of Buyer standing in the name of the party liable for such item,
Buyer will debit any or all of such accounts an amount equal in the aggregate to
such Returned Item and shall repay that amount to Seller. If there are not
sufficient funds in the accounts (for reasons other than Buyer's breach of
Article 12.2 of this Agreement), Buyer will have no obligation to repay Seller
an amount in excess of what is in the accounts unless and until Buyer obtains
reimbursement from the party liable for such Returned Item.
(c) If Buyer receives the Returned Item more than ten (10) days from
the date funds were credited, and there are insufficient funds in the account
credited, Buyer shall notify the Seller before 12:00 noon on the day the
Returned Items are received, and Seller, upon notice from the Buyer, immediately
will return the item for late reclamation.
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12.2 HOLDS AND STOP PAYMENT ORDERS. Holds and stop payment orders that
have been placed by Seller on particular accounts or on individual checks,
drafts or other instruments before the Closing Date will be continued by Buyer
under the same terms after the Closing Date. Seller will deliver to Buyer at the
Closing a complete schedule of such holds and stop payment orders and
documentation relating to the placing thereof.
12.3 ACH ITEMS. Seller and Buyer will use their best efforts to transfer
all ACH arrangements to Buyer as soon as possible after the Closing Date. At
least fifteen (15) Business Days prior to the Closing Date, Seller will deliver
to Buyer (i) a listing of account numbers for all accounts being assumed by
Buyer subject to ACH Items and Recurring Debit arrangements, and (ii) all other
records and information necessary for Buyer to administer such arrangements.
Buyer shall continue such ACH arrangements and such Recurring Debit arrangements
as are originated and administered by third parties and for which Buyer need act
only as processor; Buyer shall have no obligation to continue Recurring Debit
arrangements that were originated or administered by Seller, and Seller, if so
directed by Buyer, shall terminate such arrangements on or prior to the Closing
Date. After the Closing Date, Seller will use its best efforts by 11:00 a.m. on
each Business Day, to (1) telecopy or deliver to Buyer, at such address as Buyer
may from time to time designate, a detailed listing of all debits and credits of
ACH Items or Recurring Debit activity affecting the Deposits during the prior
Business Day, and (ii) remit by wire transfer to Buyer all ACH Item funds then
known by Seller that are intended for Deposit accounts being transferred to
Buyer; provided, however, that Seller's obligation to deliver such summaries of
its expenses and to forward such ACH Items shall continue only until one hundred
twenty (120) days after the Closing Date. Thereafter, Seller will return all ACH
Items to the paying party. All amounts due and not paid by 11:00 a.m. on the
date payment is due shall accrue interest at a rate equal to the Fed Funds Rate
as of the date such payment is due.
12.4 CHECKING ACCOUNTS. As soon as possible, but in no case later than
thirty (30) business days following the Closing Date, Buyer, at its sole
expense, will provide holders of accounts which may be accessed by checks, new
checks MICR encoded with Buyer's routing and transit numbers and the Buyer
customer identification number. Seller will pass through to Buyer checks
received by it drawn on accounts transferred to Buyer pursuant to this Agreement
for a period of sixty (60) days following the Closing Date. Buyer accepts full
responsibility to either pay the items or return them in accordance with the
customer agreement and the State Uniform Commercial Code. During the sixty (60)
day period, Seller will give Buyer a daily accounting of debits to its clearing
account. Buyer shall immediately reimburse Seller by wire for such debits.
For a period of sixty (60) days following the Closing Date, Seller, at its
sole expense, will outsort all Branch Office checks (inclearings) and prepare
them to be couriered to Buyer at a location designated by Buyer. Buyer will
arrange and pay for all couriers necessary in regard to check processing
activity during this period. Buyer will settle for the gross dollar amount of
outsorted Branch Office checks by wire transfer on the day that Buyer receives
the daily accounting of debits from Seller and, as long as the information
provided by Seller is accurate and received generally before 11:00 a.m., Buyer
will pay Seller interest on that amount from and including the day that Seller's
bank is debited for such items to and not including the date Seller receives
reimbursement from Buyer at a rate equal to the Fed Funds Rate as of the date
Seller's
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bank is debited. For a period of sixty (60) days after the Closing Date,
Seller's data processing center will prepare a tape of the inclearings for the
Branch Office in a format acceptable to Buyer and courier the tape and cash
letter nightly to Buyer's service bureau and deliver the checks promptly
thereafter. All rejected checks written on accounts transferred to Buyer
pursuant to this Agreement are to be the responsibility of the Buyer. After the
sixty (60) day period, Seller may return such items marked "Refer to Maker."
Buyer shall reimburse Seller for all its reasonable costs incurred in taking any
additional action as provided herein after sixty (60) days at Buyer's request or
with Buyer's consent not to be unreasonably withheld.
12.5 WITHHOLDING. Seller shall deliver to Buyer (i) within three (3)
Business Days after the Closing Date a list of all "B" (TINs do not match) and
"C" (under reporting/IRS imposed withholding) notices from the IRS imposing
withholding restrictions, and (ii) for a period of one hundred twenty (120) days
after the Closing Date, all notices received by Seller from the IRS releasing
withholding restrictions on Deposit accounts transferred to Buyer pursuant to
this Agreement. Any amounts required by any governmental agency to be withheld
from any of the Deposits (the "Withholding Obligations") will be handled in the
following manner:
(a) Any Withholding Obligations required to be remitted to the
appropriate governmental agency prior to the Closing Date will be withheld and
remitted by Seller and any other sums withheld by Seller pursuant to Withholding
Obligations prior to the Closing Date shall also be remitted by Seller to the
appropriate governmental agency on or prior to the time they are due.
(b) Any Withholding Obligations required to be remitted to the
appropriate governmental agency on or after the Closing Date with respect to
Withholding Obligations after the Closing Date and not withheld by Seller as set
forth in Article 12.5(a) above will be remitted by Buyer.
(c) Any penalties described on "B" notices from the IRS or any
similar penalties that relate to Deposit accounts opened by Seller prior to the
Closing Date will be paid by Seller promptly upon receipt of the notice
providing such penalty assessment resulted from Seller's acts, policies or
omissions.
12.6 RETIREMENT ACCOUNTS. Seller will provide Buyer with the proper trust
documents for any Retirement Accounts assumed by Buyer under Article 2.2 of this
Agreement. Seller shall be responsible for all federal and state income tax
reporting of Retirement Accounts for the period of time during the calendar year
2001 or prior to the Closing Date. Buyer shall be responsible for all federal
and state income tax reporting for the period of time during the calendar year
2001 from and after the Closing Date.
12.7 INTEREST REPORTING. Seller shall report from January 1, 2001 through
the Closing Date all interest credited to, interest withheld from, and early
withdrawal penalties charged to the Deposits which are assumed by Buyer under
this Agreement. Buyer shall report from Closing Date through the end of the
calender year all interest credited to, interest withheld from, and early
withdrawal penalties charged to the Deposits assumed by Buyer. Said reports
shall be
30
made to the holders of these accounts and to the applicable federal and state
regulatory agencies. On or before fifteen days after Closing, Seller will send
statements to all customers covering the period from January 1, 2001 through the
Closing Date, which include all no book transactions unless otherwise directed
by the Buyer prior to ten days after Closing. Copies of these statements will be
delivered to Buyer promptly after sending them to the customers.
12.8 NOTICES TO DEPOSITORS.
(a) Seller shall provide Buyer an intermediate customer list of the
accounts to be assumed by Buyer pursuant to this Agreement, together with a tape
thereof, as of month-end prior to the scheduled Seller mailing referred to in
Article 12.8(b) below. Seller shall provide Buyer a final customer list of the
Deposits transferred as of the Closing Date pursuant to this Agreement with the
data processing tapes.
(b) After receipt of all regulatory approvals and, with the
concurrence of the appropriate bank regulatory agencies, at least fifteen (15)
Business Days before the Closing Date, Seller shall mail notification to the
holders of the Deposits to be assumed that, subject to closing requirements,
Buyer will be assuming the liability for the Deposits. Such notification(s)
shall include notice that Buyer will not continue services to depositors
provided by Seller but not routinely offered by Buyer. The notification(s) will
be based on the list referred to in Article 12.8(a) above and a listing
maintained at the Branch Office of the new accounts opened since the date of
said list. Seller shall provide Buyer with the documentation of said listing up
to the date of Seller's mailing. Buyer shall send notification(s) to the same
holders either together with Seller's mailing, in which case Buyer and Seller
shall equally share the costs of such mailing and Buyer shall not delay the
timing of such mailing, or within three (3) days after Seller's notification
setting out the details of its administration of the assumed accounts. Each
party shall obtain the approval of the other on its notification letter(s).
Except as otherwise provided herein, each party will be responsible for the cost
of its own mailing.
(c) At least fifteen (15) Business Days before the Closing Date,
Seller will prominently and continuously display a sign in the Branch Office
stating that the Branch Office will be closed at 3:00 p.m. Eastern Standard Time
on the Closing Date.
(d) After the effective date of any mailing regarding account
services by Buyer, Buyer will provide copies of such materials to Seller for
distribution at the Branch Office at the time new services are acquired.
12.9 CARD PROCESSING AND OVERDRAFT COVERAGE.
(a) Seller will provide Buyer with a list of ATM card holders and a
magnetic tape no later than 30 days prior to the Closing Date; provided,
however, Buyer shall not use such list to contact the card holders prior to
regulatory approval of the transactions contemplated by this Agreement.
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(b) All customers at the Branch Office with overdraft coverage shall
be provided similar overdraft coverage, if available, by Buyer after the
Closing. Buyer shall purchase any overdraft balances as of the Closing Date.
12.10 REIMBURSEMENTS.
(a) For a period of one hundred twenty (120) days after the Closing
Date, Seller will promptly reimburse Buyer for (i) any amount Buyer refunds to
customers of the Branch Office in interest adjustments after the Closing Date
arising out of errors occurring prior to the Closing Date, and (ii) any amount
which Buyer is required to refund to customers of the Branch Office after the
Closing Date as a result of the cancellation of services formerly provided by
Seller, in accordance with a schedule of service charges, for which such
customers had prepaid Seller prior to the Closing Date, provided Buyer does not
offer those services as of the date of this Agreement.
(b) For a period of 120 days after the Closing Date, Seller will
promptly reimburse Buyer for any and all amounts paid by Buyer that are in
excess of a customer's deposit balance (including line of credit) that were made
with a debit card or check guarantee card prior to the Closing Date, provided
that Buyer uses its reasonable best efforts to consult Seller before paying any
such items.
12.11 TAXPAYER INFORMATION. Seller shall deliver to Buyer within three
(3) Business Days after the Closing Date: (i) TINs (or record of appropriate
exemption) for all holders of Deposit accounts acquired by Buyer pursuant to
this Agreement; and (ii) all other information in Seller's possession or
reasonably available to Seller required by applicable law to be provided to the
IRS with respect to the Assets and Deposit accounts transferred pursuant to this
Agreement and the holders thereof, except for such information which Seller will
report on pursuant to Articles 12.5 and 12.7 of this Agreement (collectively,
the "Taxpayer Information"). Seller hereby certifies that such information, when
delivered, shall accurately reflect the information provided by Seller's
customers. Seller shall, according to the terms of Article 13.2 of this
Agreement, indemnify, hold harmless and defend Buyer, Buyers subsidiaries and
Buyer's Affiliates from and against any and all damages, losses, liabilities,
costs, claims, obligations, or expenses, including legal fees and expenses and
fines and penalties arising from or incurred or imposed in connection with any
inaccuracy, act, or omission by Seller in connection with the collection,
recording, filing with appropriate governmental agencies, or delivery to Buyer
of the Taxpayer Information.
ARTICLE 13 - GENERAL PROVISIONS
13.1 SURVIVAL. The representations and warranties made by the parties to
this Agreement shall expire on the Closing Date.
13.2 BROKER'S FEES. Each of the parties represents and warrants to the
other that it has dealt with no broker or finder (other than ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇, Inc. ("KBW") with respect to Seller) in connection with any of the
transactions contemplated by this Agreement, and that no action has been taken
that would give rise to any valid claim for brokerage commission, finder's
32
fee or other like commission (other than as to KBW with respect to Seller).
Seller and Buyer each undertake to indemnify and hold harmless the other against
any loss, liability, damage, cost, claim, or expense incurred by reason of any
brokerage commission, or finder's fee alleged to be payable because of any act,
omission or statement of the indemnifying party.
13.3 PUBLICITY AND NOTICES. The form of notice of a proposed transaction
required by banking regulations will be published as prescribed by those
regulations. The cost of such publications will be the shared equally by Seller
and Buyer. The parties shall consult with one another prior to, and provide a
copy to the other after issuance of, any press release or other public
announcements about the transaction contemplated herein.
13.4 ATTORNEYS' FEES. Each party shall bear the cost of its own
attorney's fees incurred in connection with the preparation of this Agreement
and consummation of the transactions described herein. Notwithstanding the
foregoing, in any action between the parties seeking enforcement of any of the
terms and provisions of this Agreement or in connection with any of the property
described herein, the prevailing party in such action shall be awarded, in
addition to damage, injunctive or other relief, its reasonable costs and
expenses, not limited to taxable costs, and reasonable attorney's fees and
expenses as determined by the court.
13.5 REGULATORY FEES. Each party shall bear the cost of its own
regulatory application fees incurred in connection with this Agreement.
13.6 NO THIRD PARTY BENEFICIARIES. This Agreement is not intended nor
should it be construed to create any express or implied rights in any third
parties.
13.7 NOTICES. All notices, requests, demands, and other communication
given or required to be given under this Agreement shall be in writing, duly
addressed to the parties as follows:
To Seller: ▇▇▇▇▇▇▇▇▇▇ Bank, FSB
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇ ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
With a copy to: ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
To Buyer: Community First Financial Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Any such notice sent by registered or certified mail, return receipt
requested, shall be deemed to have been duly given and received forty-eight (48)
hours after the same is so addressed and mailed with postage prepaid. Notice
sent by any other manner shall be effective only upon actual receipt thereof.
13.8 ASSIGNMENT. Subject to the consent of the Seller, which consent
shall not be unreasonably withheld, the Corporation may assign this Agreement to
any of its bank subsidiaries, or to any other depository institution, and any
such assignee shall become the "Buyer" hereunder, and shall execute this
Agreement at the time of such assignment. This Agreement may not be assigned by
Seller without the prior written consent of the Corporation and the Buyer, and
any attempted assignment in violation of this section is void.
13.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
parties hereto and their respective heirs, successors or representatives.
13.10 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Indiana.
13.11 ENTIRE AGREEMENT. This Agreement, together with the Schedules and
Exhibits hereto, contains all of the agreements of the parties to it with
respect to the matters contained herein and no prior or contemporaneous
agreement or understanding, oral or written, pertaining to any such matters
shall be effective for any purpose. No provision of this Agreement may be
amended or added to except by an agreement in writing signed by the parties
hereto or their respective successors in interest and expressly stating that it
is an amendment of this Agreement.
13.12 HEADINGS. The headings of this Agreement are for purposes of
reference only and shall not limit or define the meaning of the provisions of
this Agreement.
13.13 SEVERABILITY. If any paragraph, section, sentence, clause, or
phrase contained in this Agreement shall become illegal, null or void, or
against public policy, for any reason, or shall be held by any court of
competent jurisdiction to be illegal, null or void, or against public policy,
the remaining paragraphs, sections, sentences, clauses, or phrases contained in
this Agreement shall not be affected thereby.
34
13.14 WAIVER. The waiver of any breach of any provision under this
Agreement by any party hereto shall not be deemed to be a waiver of any
preceding or subsequent breach under this Agreement.
13.15 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which shall
constitute one and the same instrument.
13.16 FORCE MAJEURE. No party shall be deemed to have breached this
Agreement solely by reason of delay or failure in performance resulting from a
natural disaster or other act of God. The parties agree to cooperate in an
attempt to overcome such a natural disaster or other act of God and consummate
the transactions contemplated by this Agreement, but if either party reasonably
believes that its interests would be materially and adversely affected by
proceeding, such party shall be excused from any further performance of its
obligations and undertakings under this Agreement.
13.17 SCHEDULES. All information set forth in the Schedules hereto shall
be deemed a representation and warranty of Seller as to the accuracy and
completeness of such information.
13.18 KNOWLEDGE. Whenever any statement in this Agreement or in any list,
certificate or other document delivered to any party pursuant to this Agreement
is made "to the knowledge" or "to the best knowledge" of any party, such
knowledge shall mean facts and other information that an officer of such party
knows or reasonably should know.
35
IN WITNESS WHEREOF, the parties hereto have duly authorized and executed
this Agreement as of the date first above written.
▇▇▇▇▇▇▇▇▇▇ BANK, FSB
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
Title: President
-----------------
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
Title: Chief Financial Officer
------------------------
COMMUNITY FIRST FINANCIAL
GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
Title: President
-----------------
Joined in and executed as of the _____ day of ______________, 2001.
------------------
By:
---------------
Name:
-------------
Title:
------------
36
EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement dated __________________, _____,
is executed pursuant to and subject to the terms and conditions of the Purchase
and Assumption Agreement dated May __, 2001 (the "Agreement") by and between
________________________, an ___________________________ (the "Buyer"), and
▇▇▇▇▇▇▇▇▇▇ Bank, FSB, a federally chartered savings association ("Seller").
Capitalized terms not otherwise defined herein will have the meanings assigned
to them in the Agreement.
For value received, the sufficiency of which is hereby acknowledged, it
hereby is agreed:
1. Seller hereby assigns, transfers and conveys to Buyer all of its rights
and interests in and to the Deposits. The Deposits hereby assumed are described
in Schedule 6.5 to the Agreement, as revised and updated as of the date of this
Assignment and Assumption Agreement. Buyer may administer the Deposit accounts
acquired from Seller pursuant to Buyer's own internal policies and procedures,
and Buyer shall have no liability or obligation to maintain in effect the
policies and procedures of Seller governing administration of the Deposit
accounts after the Closing Date.
2. Seller hereby assigns, transfers and conveys to Buyer all of its rights
and interests under the Service Contracts that are identified on Schedule 6.20
to the Agreement, a copy of which is attached hereto.
3. Seller represents that it has the full right, power and authority to
assign, transfer and convey such Deposits and Service Contracts to Buyer.
4. Buyer hereby accepts the foregoing assignment and assumes and agrees to
perform all of the duties and obligations to be performed by Seller arising
subsequent to the date hereof under the terms of the Service Contracts and the
Deposits, and Buyer further agrees to indemnify and hold Seller harmless from
any liability or claim for performance or non-performance by Buyer of such
duties and obligations as set forth at Section 13.2(b) of the Agreement.
5. Seller represents that it has performed all of its duties and
obligations under the Deposits and Service Contracts existing on or prior to the
date hereof and Seller for itself, and its successors and assigns, expressly
acknowledges its responsibility for all such duties and obligations existing on
or prior to the date hereof and agrees to indemnify and hold Buyer harmless from
any liability or claims for performance or non-performance by Seller of such
duties and obligations.
6. The Deposits and Service Contracts herein transferred and assigned will
be construed to be in addition to any other assignment of property or rights
made by Seller to Buyer
37
on this date, and the effect to be given to this instrument will be cumulative
with and not in limitation of any other rights granted by Seller to Buyer
pursuant to the Agreement or otherwise.
7. Seller hereby constitutes and appoints Buyer, its successors and
assigns, the true and lawful attorney of Seller, with full power of
substitution, in the name and stead of Seller, but on behalf of and for the
benefit of Buyer, its successors and assigns, to demand and receive any and all
of the Deposits which are hereby assigned, transferred, conveyed and delivered
to Buyer, and from time to time to institute and prosecute actions, suits and
demands in the name of Seller, or otherwise, for the benefit of Buyer, its
successors or assigns, which Buyer, its successors or assigns, may deem property
in order to collect or reduce to possession any of such Deposits or to enforce
any claim or right of any kind in respect thereof and to do all acts and things
in relation to such Deposits which Buyer, its successors or assigns, will deem
desirable, Seller hereby declaring that the foregoing powers are coupled with an
interest and are not revocable and will not be revoked by Seller.
8. Seller hereby agrees that it, from time to time, at the reasonable
request of Buyer and without further consideration, will execute and deliver
such further instruments of conveyance, transfer and assignment and will take
such other action as Buyer reasonably may request in order more effectively to
convey and transfer to Buyer the Deposits and Service Contracts transferred
hereunder.
9. This instrument will be binding upon, and inure to the benefit of the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, Seller and Buyer have caused this Assignment Agreement
to be signed on their respective behalfs by their duly authorized offices and
their respective corporate seals to be hereunto affixed, all as of the day and
year first above written.
▇▇▇▇▇▇▇▇▇▇ BANK, FSB
ATTEST:
By: By:
--------------------------------- -----------------------------------
Name: Name:
------------------------------- ---------------------------------
Title: Title:
------------------------------ ------
ATTEST:
By: By:
--------------------------------- -----------------------------------
Name: Name:
------------------------------- ---------------------------------
Title: Title:
------------------------------ --------------------------------
38
EXHIBIT B
▇▇▇▇ OF SALE AND ASSIGNMENT
For good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, ▇▇▇▇▇▇▇▇▇▇ Bank, FSB, a federally chartered savings
association ("SELLER"), does hereby assign, grant, sell, transfer, and deliver
to ______________________________, a _____________________________ ("BUYER"), in
accordance with that certain Purchase and Assumption Agreement dated May __,
2001, by and between SELLER and BUYER (the "Agreement"), all right, title and
interest in and to all Assets, as such capitalized term is defined in the
Agreement.
SELLER hereby represents and warrants to BUYER that SELLER is the absolute
owner of said Assets, that said Assets are free and clear of all liens, charges,
encumbrances, options, agreements or restrictions of any kind and that SELLER
has full right, power and authority to sell said Assets and to make this ▇▇▇▇ of
sale.
SELLER hereby covenants and agrees to execute and deliver to BUYER or its
assigns such other and further agreements, assignments, documents or instruments
of conveyance, assignment and transfer, and to do such other things and to take
such actions, supplemental or confirmatory, as may reasonably be requested by
BUYER or its assigns for the purpose of or in connection with (i) the transfer
to BUYER of such good and marketable title to the assets transferred, assigned
and conveyed hereunder, (ii) otherwise to evidence such transfer, assignment or
conveyance to BUYER, or (iii) otherwise to fulfill and discharge SELLER's
obligations under the Agreement.
SELLER acknowledges that BUYER does not assume and shall have no liability
for any debts, liabilities or obligations of SELLER of any kind whatsoever
except as specifically set forth in the Agreement or in any other writing
executed by BUYER.
This ▇▇▇▇ of Sale and Assignment has been duly executed by SELLER as of
___ ___.m. on the ____________ day of _______________________, _____.
▇▇▇▇▇▇▇▇▇▇ BANK, FSB
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
39
EXHIBIT C
RETIREMENT ACCOUNT TRANSFER AGREEMENT
This Agreement (the "Transfer Agreement") is made between
________________________, a ____________________________ ("Successor Trustee"),
and ▇▇▇▇▇▇▇▇▇▇ Bank, FSB, a federally chartered savings association ("Resigning
Trustee"). Capitalized terms not defined herein shall have the meanings assigned
to them in the Agreement (defined below).
RECITALS
A. Resigning Trustee has served as trustee with respect to certain
retirement accounts (collectively, the "Plans"), included within the Purchase
and Assumption Agreement dated May __, 2001 by and between Resigning Trustee and
Successor Trustee (the "Agreement'), the funds of which are domiciled at the
Branch Office (as defined in the Agreement).
B. Pursuant to the Agreement, Successor Trustee is acquiring from
Resigning Trustee certain Deposits, including Deposits which constitute funds of
the Plans.
C. In connection with the acquisition of such Deposits, Successor Trustee
will succeed to the trusteeship of the Plans and become successor trustee in the
place of Resigning Trustee.
D. The parties deem it necessary and advisable to execute this Transfer
Agreement in order to describe the terms of transfer of the Plans and the duties
and responsibilities of the parties with regard thereto.
E. Execution of this Transfer Agreement is an element of the consideration
for the execution by the parties of the Agreement and a condition to closing
thereunder.
TRANSFER AGREEMENT
Now, therefore, in consideration of premises stated above, the mutual
promises contained herein and in the Agreement, and other good and valuable
consideration, the receipt and sufficiency of which the parties hereby
acknowledge, the parties hereby agree as follows:
1. As of the close of business on the Closing Date, or such other date
and time as the parties may fix (the "Transfer Date"), the Resigning Trustee
shall assign, transfer and deliver to the Successor Trustee as set forth in the
Agreement, funds and Deposits, domiciled in Resigning Trustee's Branch Office.
2. At least five (5) Business Days (as defined in the Agreement) prior
to the Transfer Date, Resigning Trustee will notify participants of its Plans of
its resignation as trustee and appointment of Successor Trustee as Successor
Trustee; Successor Trustee shall follow with a letter to participants of such
Plans accepting the successor trusteeship.
40
3. After the Transfer Date, the Successor Trustee shall not use any
advertising, materials, plan documents, or any other printed matter referring to
the Resigning Trustee, as trustee of any Plans.
4. The Resigning Trustee shall prepare and file all required year-end
reports for all activity under the Plans transferred to Successor Trustee,
including but not limited to IRS form 1099R and IRS form 5498 for the portion of
the calendar year 2001 to and including the Transfer Date. The Successor Trustee
shall prepare and file such reports, where applicable, for the balance of the
calendar year 2001 and thereafter, so long as the Successor Trustee remains as
the trustee. It is further agreed that the Resigning Trustee and Successor
Trustee will each report their portion of withholding for such Plans to the
appropriate state and federal agencies.
5. In the event that the Resigning Trustee receives after the Transfer
Date, any documents, correspondence or other written materials relating to the
Plans transferred to Successor Trustee, the Resigning Trustee will promptly
forward such items to the Successor Trustee with a written explanation of such
items. The Resigning Trustee agrees to answer reasonable inquiries from the
Successor Trustee pertaining to the Plans and any pending transactions or items
received after the Transfer Date.
6. No later than six (6) Business Days following the Transfer Date the
Resigning Trustee shall deliver to the Successor Trustee all original or
certified copies of (i) all documents executed by the depositors of the Plans to
be transferred to Successor Trustee, including but not limited to all adoption
agreements, membership agreements, plan amendments, and beneficiary forms, and
(ii) all other records and information necessary to allow the Successor Trustee
to administer and conduct business with respect to such Plans.
7. No later than the Transfer Date, the Resigning Trustee agrees to
provide the Successor Trustee with a complete and up-to-date listing of.
(a) any and all participants of the Plans transferred to Successor
Trustee that have reached age 70 1/2 by or during 2001, and prior year balances
required for calculations of mandatory distributions;
(b) any and all Plans at Resigning Trustee's Branches receiving
periodic distributions, the method of calculation for arriving at such amounts
distributed, and copies of the approved distribution forms;
(c) any and all Plans on the Resigning Trustee's system on deposit
at the Branch Office;
(d) any and all Plans at the Resigning Trustee's Branch Office
currently not exempted from either federal tax withholding or state withholding,
or both, and current filing status for each participant where withholding may
apply; and
41
(e) any and all Plans at Resigning Trustee's Branch Office where the
Plan participant has died, the date of death (if known) and a legible copy of
the death certificate when available.
8. The Resigning Trustee agrees that, prior to the Transfer Date, it
shall make any and all of the following payments or take any and all of the
following actions, each as required to be made or taken prior to the Transfer
Date:
(a) distribute all scheduled 2001 mandatory minimum distribution
payments;
(b) complete all scheduled or pending transfers; and
(c) distribute all scheduled periodic and non-periodic
distributions.
9. The Successor Trustee agrees to indemnify and hold harmless the
Resigning Trustee from (i) any and all losses, costs (including reasonable
attorney's fees), expenses, damages, liabilities, or penalties of every kind
whatsoever that the Resigning Trustee, its affiliates, successors, directors,
officers, employees, or agents may incur as a result of the Successor Trustee's
failure to perform its obligations under this Transfer Agreement; and (ii) any
penalties, taxes or other liabilities which might arise in the event any act or
omission by the Successor Trustee results in disqualification of any Plan
acquired from the Resigning Trustee.
10. The Resigning Trustee agrees to indemnify and hold harmless the
Successor Trustee, its affiliates and successors from any and all losses, costs
(including reasonable attorney's fees), expenses, damages, liabilities, or
penalties of every kind whatsoever that the Successor Trustee, its affiliates,
successors, directors, officers, employees, or agents may incur as a result of
any act, omission, or breach of fiduciary obligation by the Resigning Trustee
prior to or on the Transfer Date or in fulfillment of its obligations under this
Transfer Agreement.
11. If any action or proceeding is brought by either party against the
other pertaining to or arising out of this Transfer Agreement, the final
prevailing party shall be entitled to recover all costs and expenses, including
reasonable attorney's fees, incurred on account of such action or proceeding.
12. This Transfer Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which constitute one
and the same instrument.
Executed this ___________ day of _______________, 2001.
▇▇▇▇▇▇▇▇▇▇ BANK, FSB, ______________________________________
By: By:
--------------------------------- -----------------------------------
Name: Name:
------------------------------- ---------------------------------
Title: Title:
------------------------------ --------------------------------
42
EXHIBIT D
ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment") is made
__________________, _____, by and between ▇▇▇▇▇▇▇▇▇▇, BANK, FSB, a federally
chartered savings association ("Assignor"), and ___________________________, a
___________________________________ ("Assignee").
RECITALS
A. Assignor is presently tenant under that certain lease (the "Lease")
between ______________________, as landlord and _____________________ as tenant,
dated 199__ covering the premises known as a true, correct and complete copy of
which is attached hereto as EXHIBIT A.
B. Pursuant to the terms of a Purchase and Assumption Agreement between
Assignor, as Seller, and Assignee, as Buyer, made and entered into as of May __,
2001 (the "Agreement"), Assignor is assigning to Assignee and Assignee is
acquiring all of Assignor's interest in, to and under the Lease.
NOW, THEREFORE, for good and valuable consideration, Assignor and Assignee
agree:
AGREEMENT
1. ASSIGNMENT. Assignor hereby assigns, conveys, transfers and sets over unto
Assignee all of Assignor's right, title and interest in, to and under the
Lease and all claims and causes of action thereunder, including but not
limited to its rights in any and all security deposits. Assignor hereby
covenants that it has performed all of its obligations under the Lease
which are to be performed on or prior to the date hereof.
2. ASSUMPTION. Assignee hereby assumes and agrees to perform, fulfill and
comply with all covenants and obligations to be performed, fulfilled or
complied with by the tenant under the Lease arising from and after the
Closing Date (as defined in the Agreement) and to pay the rental in the
Lease provided beginning on the Closing Date.
3. ASSIGNEE'S INDEMNIFICATION OF ASSIGNOR. Assignee shall defend and does
hereby indemnify Assignor against, and agrees to hold Assignor harmless of
and from, all obligations, actions, suits, proceedings or claims, and all
costs and expenses, including but not limited to reasonable attorneys'
fees, incurred in connection with the Lease based upon or arising out of
any breach occurring or alleged to have occurred subsequent to the Closing
Date.
4. ASSIGNOR'S INDEMNIFICATION OF ASSIGNEE. Assignor shall defend and does
hereby indemnify Assignee against, and agrees to hold Assignee harmless of
and from, all
43
liability, obligations, actions, suits, proceedings or claims, and all
costs and expenses, including but not limited to reasonable attorneys'
fees, incurred in connection with the Lease based upon or, arising out of
any breach or alleged breach of the Lease by Assignor occurring or alleged
to have occurred on or prior to the Closing Date.
5. BINDING EFFECT. This Assignment shall inure to the benefit of and shall be
binding upon the parties and their respective successors and assigns.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment.
ASSIGNOR:
▇▇▇▇▇▇▇▇▇▇ BANK, FSB
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
ASSIGNEE:
--------------------------------------
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
44
EXHIBIT E
LANDLORD ESTOPPEL CERTIFICATE
THIS ESTOPPEL CERTIFICATE ("Estoppel Certificate") is made as of the
______ day of ____________, _____, by _____________________________________, the
landlord ("Landlord") under a lease dated as of _______________________________
between Landlord and ▇▇▇▇▇▇▇▇▇▇ Bank, FSB ("Tenant"), as amended or modified
(the "Lease"), under which Landlord leases to Tenant certain real property at
__________________________________ (hereinafter "Premises").
The Landlord hereby consents to the assignment by Tenant to
_____________________, a __________________________, of Tenant's interest in the
Lease. The Landlord hereby certifies to ____________________________, as
follows:
1. A true and correct copy of the Lease (including all amendments, riders
and exhibits thereto, if any) is attached hereto as EXHIBIT A, is in full force
and effect, and has not been modified or amended except by those instruments
described on EXHIBIT A attached hereto.
2. There are no oral or written agreements, understandings or the like
between the undersigned and the Tenant relating to the Premises except for the
Lease.
3. The undersigned confirms that the term of the Lease commenced on
_________________, ________________ and terminates (exclusive of unexercised
renewal options, if any) on ___________________, 200_, in accordance with the
terms of the Lease.
4. Under the Lease, the Tenant presently is obligated to pay base rent in
the amount of $___________ per month. Tenant has no obligation to pay any
additional rent.
5. All rent and other charges, if any, due under the Lease through and
including the date hereof have been paid. Landlord specifically acknowledges
that rent has been paid through ___________________________. There exists no
default nor state of facts which, with notice, lapse of time, or both, could
ripen into a default on the part of either the Landlord or the Tenant under the
Lease. The undersigned has no claim or action against the Tenant under the
Lease, nor has any act occurred which, with notice, lapse of time, or both,
could result in such a claim or action.
6. The address for notices to be sent to the Landlord is as set
forth in the Lease or, if not, the new address is:____________________________.
7. A security deposit under the Lease is held by the Landlord in the
amount of $_________________.
45
IN WITNESS WHEREOF, Landlord duly has executed this Estoppel Certificate
as of the ____ day of , _____________, _____.
LANDLORD:
--------------------------------------
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
46
