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EXHIBIT (2)-2
Branch Purchase and Assumption Agreement
between
THE BANK
and
TRUSTMARK NATIONAL BANK
Dated as of June 18, 2003
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TABLE OF CONTENTS
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ARTICLE I
PURCHASE AND ASSUMPTION
1.01 Purchase and Sale of
Assets......................................... 1
1.02 Transfer of
Assets..................................................
1
1.03 Acceptance and
Assumption........................................... 3
1.04 Payment of
Funds....................................................
5
ARTICLE II
CONDUCT OF THE PARTIES PRIOR TO CLOSING
2.01 Covenants of
Seller.................................................
7
2.02 Covenants of
Buyer..................................................
12
2.03 Covenants of All
Parties............................................ 13
ARTICLE III
PRESENTATION AND WARRANTIES
3.01 Representations and
Warranties of Seller............................ 13
3.02 Representations and
Warranties of Buyer............................. 17
3.03 Disclosure
Schedules................................................
18
3.04
Standard............................................................
18
ARTICLE IV
ACTIONS RESPECTING EMPLOYEES AND EMPLOYEE BENEFIT PLANS
4.01 Employment of
Employees............................................. 19
4.02 Terms and Conditions
of Employment.................................. 19
4.03 Actions to be Taken by
Seller....................................... 21
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
5.01 Conditions to Seller's
Obligations.................................. 22
5.02 Conditions to Buyer's
Obligations................................... 23
5.03 Non-Satisfaction of
Conditions Precedent............................ 24
ARTICLE VI
CLOSING
6.01 Closing and Closing
Date............................................ 25
6.02 Seller's Actions at
Closing......................................... 25
6.03 Buyer's Actions at
Closing.......................................... 26
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6.04 Methods of
Payment..................................................
27
6.05 Effectiveness of
Closing............................................ 28
ARTICLE VII
CERTAIN TRANSITIONAL MATTERS
7.01 Transitional Action by
Buyer........................................ 28
7.02 Transitional Actions
by Seller...................................... 30
7.03 Overdrafts and
Transitional Action.................................. 32
7.04 ATMs and Debit
Cards................................................ 32
7.05 Environmental
Matters............................................... 33
7.06 Effect of Transitional
Action....................................... 35
ARTICLE VIII
GENERAL CONVENANTS AND IDEMNIFICATION
8.01 Confidentiality
Obligations of Buyer................................ 35
8.02 Confidentiality
Obligations of Seller............................... 35
8.03 Indemnification by
Seller........................................... 36
8.04 Indemnification by
Buyer............................................ 36
8.05
Non-Competition.....................................................
37
8.06 No
Shop.............................................................
38
8.07 Further
Assurances..................................................
39
8.08 Operation of the
Branches........................................... 40
8.09 Information After
Closing........................................... 40
8.10 Additional
Loans....................................................
40
8.11 Advisory
Directors..................................................
40
ARTICLE IX
TERMINATION
9.01 Termination by Mutual
Agreement..................................... 41
9.02 Termination by
Seller............................................... 41
9.03 Termination by
Buyer................................................ 41
9.04 Effect of
Termination...............................................
42
9.05 Termination
Fee.....................................................
42
ARTICLE X
MISCELLANEOUS PROVISIONS
10.01
Expenses............................................................
42
10.02
Certificates........................................................
42
10.03 Termination of
Representations and Warranties....................... 42
10.04
Waivers.............................................................
43
10.05
Notices.............................................................
43
10.06 Parties in Interest,
Assignment, Amendment.......................... 44
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10.07
Headings............................................................
44
10.08
Terminology.........................................................
44
10.09 Flexible
Structure..................................................
45
10.10 Press
Releases......................................................
45
10.11 Entire
Agreement....................................................
45
10.12 Governing
Law.......................................................
46
10.13
Counterparts........................................................
46
10.14 Allocation
Schedule.................................................
46
10.15
Severability........................................................
46
10.16 Enforcement of
Agreement............................................ 46
10.17
Interpretation......................................................
46
10.18 No Rule of
Construction.............................................
47
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BRANCH PURCHASE AND ASSUMPTION AGREEMENT
This
Branch Purchase and Assumption Agreement ("Agreement") is
entered
into this the 18th day of June, 2003 (the
"Effective Date"), by and between
Trustmark National Bank ("Buyer") and The
Bank ("Seller").
RECITALS
A. Buyer.
Buyer is a national banking association having its principal
place of business in Jackson,
Mississippi.
B. Seller.
Seller is an Alabama state-chartered banking corporation having
its principal place of business in
Birmingham, Alabama.
C.
Proposed Transaction. Pursuant to the terms of this Agreement,
Buyer
will purchase the Assets (as hereinafter
defined) and assume certain Liabilities
(as hereinafter defined) from Seller in
exchange for the Consideration (as
hereinafter defined) (the
"Acquisition").
D. Board
Action. The respective Boards of Directors of each of Buyer and
Seller have each determined that the
transaction contemplated hereby is
consistent with, and in furtherance of,
their respective business strategies and
goals, and have approved such transaction
and believe it to be in the best
interests of their respective companies and
their shareholders.
NOW,
THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties, and
agreements contained herein, Buyer
and Seller agree as follows:
ARTICLE I
PURCHASE AND ASSUMPTION
1.01
Purchase and Sale of Assets. At the Closing, as defined in
Section
6.01 (the "Closing"), Buyer shall purchase
and acquire, and Seller shall sell
and assign, the real estate and other
assets described in Section 1.02
(collectively, the "Assets") all of which
are used in and/or relate to business
conducted by Seller at its branch offices
known as "The Emerald Coast Bank," a
division of Seller, and located at the
sites described in Schedules A and B,
pursuant to the terms and conditions set
forth herein and subject to the
exceptions, if any, set forth herein. The
foregoing branch offices are
hereinafter sometimes collectively referred
to as the "Branches" and each,
individually, sometimes as a "Branch."
1.02
Transfer of Assets. Subject to the terms and conditions of this
Agreement, Seller shall assign, transfer,
convey, and deliver to Buyer on the
Closing Date, as defined in Section 6.01
hereof, the Assets, which shall include
the following:
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(a) Owned Real Estate. All of Seller's right, title, and interest
in
and to the
real estate described in Schedule A on which a Branch is
situated
or which was being held by Seller for future branch expansion
and
located in
Okaloosa, Walton, or Bay Counties, Florida, together with all
of
Seller's rights in and to all improvements thereon, and all
easements
rights,
privileges, and appurtenances associated therewith (the "Owned
Real
Estate"). Schedule A shall specifically identify the Owned Real
Estate by
street address, legal description, and tax parcel number;
(b) Leased Real Estate. All of Seller's transferable right,
title,
and
interest in and to the leasehold estate in the real estate
described
in Schedule B and
created by certain lease agreement(s) (individually and
collectively the "Third Party Lease") relating to the referenced
Branches
(the
"Leased Real Estate"), specifically identified by lease,
parties,
term,
street address, legal description, and tax parcel numbers in
Schedule
B;
(c) Furniture and Equipment. All of Seller's right, title, and
interest
in and to the furniture, fixtures, supplies, and equipment
located
and used at the Branches as of the Effective Date (the "Fixed
Assets"),
a listing of which is contained in Schedule C, specifically
excluding,
among other items, signs and stands, printed supplies and
documents
and other materials solely bearing Seller's name and/or logo
(but not
excluding signs and stands, printed supplies, and documents,
and
other
materials bearing the name "The Emerald Coast Bank", its logo or
any
derivation
thereof), and proprietary software;
(d) Safe Deposit Business. All of Seller's right, title and
interest
in and to
the safe deposit business (subject to the allocation of safe
deposit
rental payments as provided in Section 1.03(c)(ii) hereof)
conducted
at the Branches as of the close of business on the Closing
Date;
(e) Cash on Hand. All cash on hand at the Branches as of the
close
of
business on the Closing Date including vault cash, petty cash, ATM
cash
and
tellers' cash;
(f) Other Assets. Any other assets (including, but not limited
to,
any
prepaid expenses), excluding other real estate owned ("ORE"),
recorded
or
otherwise reflected on the books of Seller as being attributable to
the
Branches
as of the close of business on the day immediately preceding
the
Closing
Date, a listing of which is contained in Schedule D but only to
the extent
attributable to the Assets sold, assigned or transferred to
Buyer by
Seller pursuant to this Agreement and only to the extent
arising
by reason
of Buyer's use or ownership of such Assets after the close of
business
on the Closing Date;
(g) Branch Loans. Except for the loans listed in Schedule E and
any
loans
refused or rejected by Buyer at Closing (the "Non-Branch
Loans"),
all of
Seller's right, title and interest in and to all those loans
which,
as of the
close of business on the Closing Date, are (i) secured in whole
or in part
by Deposit Accounts (as hereinafter defined) attributable or
assigned
to a Branch (the "Deposit Account Loans"), (ii) commercial or
other
loans attributable to a Branch and including the REIT loans (as
defined in
Section 2.01(i)) (the "Other Loans"), or (iii) automatically
created as
the result of an overdraft of
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a Deposit
Account pursuant to a pre-applied overdraft protection program
offered by
Seller (the "Overdraft Loans"). The Deposit Account Loans,
Other
Loans, and Overdraft Loans sold and assigned to Buyer hereunder
will
be listed
in Schedule F which will be updated as of the Closing Date
(hereinafter referred to individually and collectively as the
"Branch
Loans").
Except as otherwise expressly provided herein, the transfer of
the Branch
Loans will be made without recourse, without any
representation, warranty, or guarantee of any kind, express or
implied,
and
without the allowance or reserve for loan losses reserved by Seller
as
of the Effective
Date;
(h) Records of the Branches. All records, paper or electronic
media,
files,
correspondence, and collateral documents related to the
Transferred
Employees
(as hereinafter defined), Assets transferred, or liabilities
assumed by
Buyer as may exist and are available and maintained by the
Seller (in
whatever form or medium then maintained by Seller) including,
notes,
documents, and instruments evidencing the liens relating to the
Branch
Loans;
(i) Contracts or Agreements. All of Seller's right, title and
interest
in and to the maintenance and service agreements, including
software
licenses or other rights of use, related to the Branches, as
listed on
Schedule G (the "Assumed Contracts");
(j) Intellectual Property. All of Seller's right, title, and
interest
in and to the names "The Emerald Coast Bank," "Emerald Coast
Bank," and
"Emerald Coast," or any derivative thereof;
(k) Insurance Services. All of Seller's right, title, and
interest
in and to
Seller's insurance services business conducted at the Branches,
including
all records, documents, supplies, contracts, customer lists and
records,
and other items relating to the insurance customers residing in
Okaloosa,
Walton, and Bay Counties, Florida, except for insurance
customers
of Seller's Mexico Beach branch and residing in the area set
forth in
Section 8.05(a); and
(l) Other Branch Services. All of Seller's right, title, and
interest
in and to all of Seller's other services or businesses provided
by, or
related to, the Branches, which services are listed on Schedule
H.
1.03
Acceptance and Assumption. Subject to the terms and conditions
of
this
Agreement, on the Closing Date Buyer shall:
(a) Assets. Receive and accept all of the Assets assigned,
transferred, conveyed and delivered to Buyer by Seller pursuant to
this
Agreement,
including those identified in Section 1.02 above.
(b) Deposit Liabilities. Assume and thereafter discharge, pay
in
full and
perform all of Seller's obligations and duties relating to the
"Deposit
Liabilities" (as hereinafter defined). The term "Deposit
Liabilities" is defined herein as all of Seller's obligations,
duties and
liabilities of every type and character relating to all deposit
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accounts
which, as reflected on the books of Seller as of the close of
business
on the Closing Date, are attributable to the Branches, other
than
deposit
accounts securing any loan of Seller which is not a Branch
Loan,
for which
Buyer assumes no liability. The deposit accounts referred to in
the
immediately preceding sentence (herein the "Deposit Accounts")
include,
without limitation, savings, checking, money market, and NOW
accounts,
individual retirement accounts ("IRA's"), and certificates of
deposit.
The "obligations, duties and liabilities" referred to in the
immediately preceding sentence include, without limitation, the
obligation
to pay and
otherwise process all Deposit Accounts in accordance with
applicable
law and their respective contractual terms and the duty to
supply all
applicable reporting forms for periods following the Closing
Date and
to be filed or reported after the Closing Date including,
without
limitation, IRS reporting, reports relating to the Deposit Accounts
and
interest
accrued after the Closing Date. With regard to each IRA
included
within the
Deposit Accounts, Buyer shall also assume the appropriate plan
pertaining
thereto and the trustee or custodial arrangement in connection
therewith.
(c) Liabilities Under Leases/Safe Deposit Business. Assume and
thereafter
fully and timely perform and discharge, in accordance with
their
respective terms, all of the liabilities and obligations of
Seller
arising
after the Closing Date with respect to:
(i) all leases listed on Schedules B and I (including safe
deposit leases if any) and sold, assigned or transferred to Buyer
by
Seller pursuant to this Agreement;
(ii) the safe deposit business of the Branches, subject to the
allocation of the prepaid rents, which allocation shall be
satisfied
in full by Seller paying to Buyer, in the manner specified in
Section 6.04 hereof, the amount of rental payment received by
Seller
for each such safe deposit box attributable to and prorated to
reflect the period from and after the Closing Date, subject to
the
provisions of the applicable leases or other agreements relating
to
the safe deposit boxes; and
(iii) all safekeeping items and agreements listed on Schedule
I and delivered to Buyer by Seller pursuant to this Agreement,
including,
but not limited to, all applicable safekeeping
agreements, memoranda, or receipts so delivered to Buyer by
Seller
hereunder.
(d) Other Liabilities. Fully and timely perform and discharge,
as
the same
may be or become due, the Assumed Contracts, the Third Party
Leases for
the Leased Real Estate, and all additional liabilities,
obligations (including any letters of credit), and accrued expenses
of
Seller as
of the date of this Agreement, which are reflected on the books
of Seller
as being attributable to a Branch as of the close of business
on
the
Closing Date but only to the extent attributable to the Assets
sold,
assigned,
or transferred to Buyer by Seller pursuant to this Agreement
and
only to
the extent arising by reason of Buyer's use or ownership of
such
Assets
after the close of business on the Closing Date. The parties
acknowledge and agree that Buyer shall not assume any of such
liabilities
that
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are not
accrued and reflected on the books of Seller on the Closing
Date.
No
additional material liabilities and obligations of Seller
incurred
subsequent
to the date of this Agreement shall be assumed by Buyer unless
the prior
written consent of Buyer has been obtained prior to the
incursion
of the material liability or obligation by Seller.
(e) Other Obligations. Fully and timely perform its obligations
relative
to employees of the Branches as set forth hereinafter.
(f) Liabilities. The Deposit Liabilities, Liabilities Under
Leases/Safe Deposit Business, and Other Liabilities are
sometimes
hereinafter referred to collectively as the "Liabilities."
1.04
Payment of Funds. Subject to the terms and conditions hereof, at
the
Closing:
(a) Consideration. In consideration of Buyer's assumption of
the
Deposit
Liabilities and its other agreements herein, Seller shall make
available
and transfer to Buyer, in the manner specified in Section 6.04
hereof,
funds equal to the aggregate balance of all Deposit Accounts
(including
interest posted or accrued to such accounts as of the close of
business
on the day immediately preceding the Closing Date) plus the
accrued
expenses identified in Section 1.03(d) hereof prorated as of
the
close of
business on the day preceding the Closing Date, less an amount
equal to
the sum of:
(i) the amount of cash on hand at the Branches transferred to
Buyer as of the close of business on the Closing Date; and
(ii) the net aggregate book value of the Branches, valued as
of the last day of the month ending immediately prior to the
month
in which the Closing Date occurs; and
(iii) the net aggregate book value of the furniture, fixtures
and equipment being transferred to Buyer, valued as of the last
day
of the month ending immediately prior to the month in which the
Closing Date occurs; and
(iv) a premium of $46.8 million in cash over the aggregate
balance of the Deposit Liabilities at the close of business on
the
Closing Date and is hereinafter called the ("Acquisition
Consideration") and
(v) the amount of other assets described in Section 1.02(f) of
this Agreement, prorated as of the close of business on the day
immediately preceding the Closing Date; and
(vi) the net aggregate book value of the Branch Loans together
with accrued and unpaid interest thereon computed as of the close
of
business on the Closing Date. For the purposes of this
Agreement,
"net aggregate book value of the Branch Loans" shall be deemed
to
mean the book value of the Branch Loans
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on the Closing Date less a discount for such Branch Loans in
the
aggregate amount of $9,159.00.
If the sum of items (i) through (vi) above exceeds the
aggregate amount to be transferred by Seller pursuant to the
first
paragraph of this Section 1.04(a), the full amount of such
excess
shall constitute an amount due from Buyer to Seller, and shall
be
paid to Seller at the Closing in the manner specified in
Section
6.04
hereof. The parties shall execute a preliminary settlement
statement at the Closing and a final settlement statement
post-Closing in accordance with Section 6.04 herein.
(b) Reimbursement and Proration of Certain Expenses. All other
expenses
(i) due and payable at times after the Closing Date for periods
prior to
the close of business on the Closing Date, or (ii) paid prior
to
the close
of business on the Closing Date for periods following the
Closing
Date, including the prepaid expenses described in Section
1.02(f)
hereof and
accrued expenses described in Section 1.03(d) hereof, including
without
limitation, real estate taxes and assessments which are a lien
but
not yet
due and payable, utility payments, payments due on leases
assigned,
payments due on assigned service and maintenance contracts, and
similar
expenses relating to the Branches shall be prorated between
Seller
and Buyer
as of the close of business on the day immediately preceding
the
Closing
Date, provided, however, that all real estate taxes and
assessments, and to the extent payable by Seller and/or Buyer,
shall be
prorated
at the Closing on the basis of the most recently certified real
estate
taxes and assessments, and all utility payments and lease
payments
shall be
prorated on the basis of the best information available at
Closing.
Any security deposits relating to the Leased Real Estate shall
be
credited to the Seller at Closing.
With respect to premiums paid to the
FDIC for
deposit insurance for the Deposit Liabilities, the proration of
FDIC
deposit insurance premiums will be based on the amount of the
Deposit
Liabilities as of the close of business on the Closing Date and the
number
of days
during any period for which Seller has prepaid premiums to the
FDIC but
during which Buyer has held or will hold the Deposit
Liabilities.
For
prorations, if any, which cannot be reasonably calculated as of
the
Closing, a
post-Closing adjustment shall be made in the manner specified
in Section
6.04 hereof.
(c) Expenses Relating to Real Property and Other Assets. The
costs,
fees and
expenses relating to the premiums, including any endorsements
for
extended
coverage, for all title insurance policies, recording costs,
and
other
similar costs, fees and expenses, if any, relating to the sale
and
transfer
of the Owned Real Estate or the transfer of Seller's interest
in
the Leased
Real Estate including, but not limited to, any conveyance fees,
taxes,
recording costs, and other similar fees and expenses relating
to
the sale
and transfer of any other Assets, shall be allocated to, and
shall be
borne, solely and exclusively, by Buyer.
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ARTICLE II
CONDUCT OF THE PARTIES PRIOR TO CLOSING
2.01
Covenants of Seller. Seller hereby covenants to Buyer that, from
the
date hereof until the Closing, it will do
or cause the following to occur:
(a) Operation of the Branches. Seller shall continue to operate
the
Branches
in a manner substantially equivalent to that manner and system
of
operation
employed immediately prior to the Effective Date; provided,
however,
as set forth in Section 7.02(e) herein, it is contemplated by
the
parties
that, prior to Closing, Seller will terminate certain programs
which are
currently in effect which allow depositors to access Deposit
Accounts
through electronic means.
Notwithstanding the foregoing and except as may be required to
obtain the
required authorizations referred to in Section 2.03 of this
Agreement,
between the Effective Date of this Agreement and the Closing
Date, and
except as may be otherwise required by a regulatory authority,
Seller
shall not, without the prior written consent of Buyer:
(i) cause any Branch to engage or participate in any
transaction or incur or sustain any obligation which, in the
aggregate, is material to its business, condition, or
operations
except in the ordinary course of business;
(ii) cause any Branch to transfer to Seller's other operations
or to any third party any material amount of Assets, except for
(a)
supplies, if any, which have unique function in the business of
Seller and its affiliates and ordinarily would not be useful to
Buyer, (b) cash and other normal intrabank transfers which may
be
transferred in the ordinary course of business in accordance
with
normal banking practices, and (c) signs, or those parts thereof
bearing the Seller's name and/or logo;
(iii) cause any Branch to transfer to Seller's other
operations any deposits other than deposits securing loans made
by
Seller which are not Branch Loans, except in the ordinary course
of
business at the unsolicited request of depositors; or cause any
of
Seller's other operations to transfer to any Branch any
deposits,
except in the ordinary course of business at the unsolicited
request
of depositors; provided, however, that Seller shall be permitted
to
make such transfers of any deposits to or from any Branch as are
in
the normal course of business and do not violate the foregoing
restrictions;
(iv) invest in any Fixed Assets on behalf of any Branch,
except for commitments made on or before the Effective Date of
this
Agreement which (a)
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are disclosed to Buyer on Schedule C and Schedule G, and (b)
for
replacements of furniture, furnishings and equipment and normal
maintenance and refurbishing purchased or made in the ordinary
course of Branch business in an aggregate amount not to exceed
$25,000;
(v) enter into or amend any continuing contract (other than
Deposit Liabilities, Branch Loans, and Safe Deposit agreements)
relating to any Branch, which cannot be terminated without cause
and
without payment of any amounts as a penalty, bonus, premium, or
other compensation for termination, or which is not made in the
ordinary course of Branch business;
(vi) hire, transfer, reassign, or terminate (except for cause)
any employee of any Branch, increase the compensation of any
employee of any Branch, or promote any of the employees of any
Branch; or
(vii) offer any promotional rates on deposits at any Branch.
(b) Title Commitments for Real Estate. Seller shall deliver to
Buyer, at
Seller's sole expense, with respect to the Owned Real Estate
and
Leased
Real Estate, no later than thirty (30) days after the Effective
Date, a
commitment or commitments (the "Title Commitments") having an
effective
date as near as feasible to the date of delivery of such Title
Commitments from
a title insurance company authorized to do business in
Florida,
designated by Seller, and reasonably satisfactory to Buyer, to
issue to
Buyer as soon as practicable after the Closing Date, as
applicable, American Land Title Association (ALTA) owners (Form B,
August
1993 Rev)
and/or leasehold title insurance (October 1992 Form) policies
having an
effective date as of the Closing Date in amounts reasonably
satisfactory to Buyer, all subject to the exceptions specified in
the
Title
Commitments (the "Permitted Exceptions"). If title to all or part
of
the Owned
Real Estate or Leased Real Estate is unmarketable or is subject
to any
defect, lien, encumbrance, easement, condition, restriction, or
encroachment other than the Permitted Exceptions as defined in
Section
10.08(d)
herein, then Buyer shall provide written notice thereof to
Seller
within ten
(10) days of receipt of the Title Commitments. Seller shall
have
thirty (30) days after written notice thereof from Buyer, to
remedy
or remove
any such defect, lien, encumbrance, easement, condition,
restriction, or encroachment. If such defect or encumbrance or
other
matter is
not cured, then, in addition to any other rights which Buyer
may
have
hereunder, Buyer shall have the right with respect to the
relevant
Branch
(but not as to any other Branch): at Buyer's option, (i) to
lease
the Branch
from Seller on the same basis described in Section 7.05(c)
herein;
(ii) negotiate, at Seller's sole cost and expense, with the
title
company
for certain endorsements to the standard insurance coverage to
address
any such defects or encumbrances; or (iii) to waive any
objection
to such defect or encumbrance or
other matter in which event such defect,
encumbrance, or other matter shall be deemed to be a Permitted
Exception.
The Owned
Real Estate will be sold by Seller to Buyer free and clear of
all liens,
claims, encumbrances and rights of tenants in possession
created by
Seller, except for the Permitted Exceptions, with statutory
warranty
of title (a "Warranty Deed"), and subject to the Permitted
Exceptions. Seller also shall execute and deliver to Buyer at the
time of
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Closing
such affidavits and other instruments, if any, as the title
insurance
company issuing the Title Commitments may reasonably require to
delete the
standard exceptions appearing as "Schedule B" items in a
standard
ALTA owners or leasehold owners title insurance policy. Seller
shall also
execute and deliver a FIRPTA affidavit at Closing. Within
thirty
(30) days after the Effective Date Seller shall obtain duly
certified
surveys for the Owned and Leased Real Estate with a metes and
bounds
legal description, depicting all easements, rights-of-way,
set-back
lines, and
any encumbrances appearing on the Title Commitment. The cost of
such
surveys shall be borne by Seller. The legal descriptions contained
in
the
surveys shall be used in the Warranty Deeds to convey the Owned
Real
Estate and
for title insurance for both the Owned and Leased Real Estate.
Seller
shall promptly furnish copies of the surveys to Buyer and the
title
companies.
(c) Required Authorizations. Seller shall obtain and procure
all
necessary
internal corporate approvals and authorizations, if any,
required
by Seller to enable it to fully perform all obligations imposed
on it
hereunder which must be performed by it at or prior to the
Closing.
(d) Creation of Liens and Encumbrances. With respect to the
Owned
Real
Estate, Seller shall not create or allow any liens, imperfections
in
title,
charges, easements, restrictions or encumbrances other than the
Permitted
Exceptions.
(e) Condemnation. If prior to Closing all or any portion of the
Owned Real
Estate or Leased Real Estate is taken or is made subject to
eminent
domain or other governmental acquisition proceedings, then
Seller
shall
promptly notify Buyer thereof, and Buyer may either complete
the
Closing
and receive the proceeds paid or payable on account of such
acquisition proceedings, or terminate this Agreement as to such
parcel of
Owned Real
Estate or Leased Real Estate. If Buyer terminates this
Agreement
as to a particular Branch location, Buyer shall still purchase
the Assets (except for
the Fixed Assets) and assume the Liabilities
related to
such Branch, and Seller shall be entitled to receive the
proceeds
paid or payable on account of such taking.
(f) Insurance Proceeds. Seller shall maintain adequate insurance
on
all the
Assets consisting of Owned Real Estate, Leased Real Estate, and
Fixed
Assets. In the event of any damage, destruction or condemnation
affecting
such Assets between the Effective Date and the time of the
Closing,
Seller shall deliver to Buyer any insurance proceeds and other
payments,
to the extent of the applicable amount set forth in Section
l.04(a)(ii) or (iii) hereof with respect to Owned Real Estate and
the
replacement cost with respect to the Fixed Assets, as the case may
be,
received
(or with respect to insurance proceeds, which would be received
assuming
Seller's insurance policy had no deductible) by Seller as a
result
thereof unless, in the case of damage or destruction, Seller
has
repaired
or replaced the damaged or destroyed property.
(g) IRA Accounts. Not later than thirty (30) days prior to the
expected
Closing Date, Seller shall, at Seller's expense, mail notice of
Seller's
resignation as custodian and the appointment of Buyer as the
successor
custodian, effective upon Closing, of each IRA maintained at
the
Branches.
The notice shall include such other
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information that is mutually
agreed upon by Seller and Buyer. In the event
Seller and
Buyer agree that the aforementioned notice to Seller's IRA
customers
shall be a joint notice of Seller and Buyer, then Seller and
Buyer
shall share the expenses of mailing the joint notice.
(h) Assignment of Leases. Seller shall use its commercially
reasonable
efforts to obtain any written consent of any such landlord as
shall be
necessary for the effective assignment of the Third Party Lease
and
assumption thereof by Buyer as of the Closing Date. If such
necessary
consent to
assignment is not obtained or other arrangements satisfactory
to Buyer
made by the Closing Date, Buyer may, at its sole option,
terminate
its duties and obligations under this Agreement as to such
Branch and
purchase the Assets (excluding the Fixed Assets) and
Liabilities of the Branch.
(i) REIT Loans. Approximately $50.8 million of the Branch Loans
are
loans of
the Seller's affiliate, TBC Real Estate Investment Company (the
"REIT
Loans"). At the Closing Seller shall cause the REIT Loans to be
transferred and endorsed directly to Buyer.
(j) Current Information. During the period from the Effective
Date
to the
Closing Date, Seller will cause one or more of its designated
representatives to confer on a regular and frequent basis with
representatives of Buyer and to report the general status of the
ongoing
operations
of the Branches. In addition, separate reporting on matters
involving
the loan portfolio of the Branches will occur monthly and will
include,
but not be limited to: (i) all Emerald Coast board reports;
(ii)
new and
renewed loan reports; (iii) month-end delinquency/past due
reports;
(iv) month-end loan extensions; (v) loan policy exceptions,
loan
documentation/collateral exceptions, and financial statement
exceptions;
(vi) watch
list reports (all special mention, substandard, doubtful and
loss
loans); (vii) all written communications/officer memoranda
concerning
problem
loan accounts greater than $100,000; (viii) notification and
written
details involving new loan products and/or loan programs; (ix)
loan
presentations/approval packages for new and/or renewed loans,
lines
of credit
or commitments of $250,000 or more; (x) all loan review
statistical/analysis reports and any loan review reports; (xi)
reconciliation of allowance for loan and lease losses to include
gross
chargeoffs, recoveries and net chargeoffs; (xii) written
explanation of
any gross
chargeoffs greater than $50,000; (xiii) written analysis of
adequacy
of allowance for loan and lease losses; and (xiv) such other
information regarding specific loans, the loan portfolio, and
management
of the
loan portfolio as may be requested. Seller will promptly notify
Buyer of
any material change in the normal course of its business or in
the
operation of its properties at the Branches.
(k) Governmental Communications. Seller shall promptly notify
Buyer
of the
receipt by Seller, and to the extent permitted by law and this
Agreement
provide Buyer with, a copy of any communication, document,
report or
supervisory action received from or imposed by any governmental
or
regulatory body, agency or official having jurisdiction over the
Seller
that may
adversely affect the transactions contemplated by this
Agreement
or may
cause a material adverse change on the business or operations
of
the
Branches.
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<PAGE>
(l) Emerald Coast Financial Management, Inc. Seller agrees that,
(i)
at or
prior to the Closing, Seller shall change the name of Seller's
financial
management services subsidiary known as "Emerald Coast
Financial
Management, Inc." to a name that does not include the name
"Emerald
Coast,"
and (ii) following the Closing Date the business activities of
such
entity shall be subject to the terms and provisions of Section
8.05
herein;
(m) Branch Construction Contract. Seller agrees that, upon the
request of
the Buyer, it will cause to be amended, at the sole cost and
expense of
Buyer, that certain agreement for the construction of a new
branch
facility at Jenks Avenue and 19th Street in Panama City,
Florida,
which
agreement is dated May 9, 2003, between Seller and Edgewater
General
Contractors, Inc.
(n) Sumrall Agreement. Seller agrees that on or before the
Closing
Date it
shall, at no cost or expense to Buyer, cause that certain
agreement
dated July 25, 2001, between Seller and John D. Sumrall to be
terminated
in writing and Buyer expressly released from any liability
therefrom.
(o) Access to Properties and Records. Seller shall provide Buyer
and
its
authorized representatives full access to perform due diligence
reviews during
normal business hours and under reasonable circumstances to
any and
all of its premises, properties, contracts, commitments, books,
records,
documents of title, and other information relating to the
Branches,
and shall cause its officers to furnish any and all financial,
technical,
and operating data and other information pertaining to its
business
at the Branches as Buyer shall from time to time reasonably
request.
No investigation by Buyer shall affect the representations and
warranties
of Seller.
(p) Mediation Settlement Agreement. Seller is a party to a
certain
Mediation
Settlement Agreement dated April 29, 2003 with the State of
Florida
Department of Transportation (the "Settlement Agreement").
Pursuant
to the terms of the Settlement Agreement, as settlement for the
DOT's
taking on Seller's Parcels 100 and 711, Seller will either (i)
receive
all of the DOT's interest in Parcel 101 or (ii) receive
$401,200
in cash.
In connection with the Settlement Agreement Seller agrees that:
(i) Seller
hereby assigns to Buyer as of the Effective Date the Settlement
Agreement
and all of Seller's rights thereunder, and Seller will take any
and all
actions necessary to perfect such assignment; (ii) Buyer shall
have the
sole discretion to determine the suitability of the remainder
of
Parcels
100 and 101 for a branch location, and Seller shall cooperate
and
assist
Buyer in securing this location; (iii) in the event Buyer
determines
that the remainder of Parcels 100 and 101 is not suitable for a
branch and
the property is completely condemned by DOT, Seller shall
receive
the appraised value of the Parcels in accordance with the terms
of
the
Settlement Agreement; and (iv) in the event this Agreement is
terminated
by either party for a reason set forth in Sections 9.02 or
9.03, then
Buyer will reassign the Settlement Agreement and all of its
rights
thereunder immediately following termination of this Agreement.
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<PAGE>
(q) Emerald Coast Bank Status. As of the Effective Date,
Emerald
Coast Bank
appears as an inactive Florida corporation on the records of
the
Florida Secretary of State. Seller covenants that on or prior
to
Closing it
will take all commercially reasonable steps correct the records
of the
Florida Secretary of State to reflect the fact that Emerald
Coast
Bank was merged
out of existence when it was merged with Seller, and upon
request
will provide Buyer with any documents or information necessary
for
Buyer to
satisfy itself that the aforementioned merger took place in
compliance
with all relevant legal requirements.
2.02
Covenants of Buyer. Buyer hereby covenants to Seller that, from
the
date hereof until the Closing, it will do
or cause the following to occur:
(a) Regulatory Applications. Buyer shall promptly prepare and
submit
for filing
any and all applications, filings, and registrations with, and
notifications to, all federal and state authorities required on the
part
of Buyer
or any shareholder or affiliate of Buyer for the Acquisition to
be consummated at the
Closing as contemplated in Section 6.01 herein and
for Buyer
to operate the Branches following the Closing. Thereafter,
Buyer
shall
pursue all such applications, filings, registrations, and
notifications diligently and in good faith, and shall file such
supplements, amendments, and additional information in
connection
therewith
as may be reasonably necessary for the Acquisition to be
consummated at Closing and for Buyer to operate the Branches
following the
Closing.
Buyer shall deliver to Seller copies of each and all of such
applications, filings, registrations and notifications (except for
any
confidential portions thereof), and any supplement, amendment or
item of
additional
information in connection therewith (except for any
confidential portions thereof). Buyer shall also deliver to Seller
a copy
of each
material notice, order, opinion and other item of
correspondence
received
by Buyer from such federal and state authorities (except for
any
confidential portions thereof) and shall advise Seller, at
Seller's
request,
of developments and progress with respect to such matters.
(b) Required Authorizations. Buyer shall obtain and procure all
necessary
corporate and other approvals and authorizations, if any,
required
on its part to enable it to fully perform all obligations
imposed
on it
hereunder which must be performed by it at or prior to the
Closing.
(c) Satisfaction of Conditions. Buyer shall not voluntarily
undertake
any course of action inconsistent with the satisfaction of the
requirements or the conditions applicable to it, or its
agreements,
understandings, obligations, or covenants set forth in this
Agreement, and
it shall
promptly do all such reasonable acts and take all such
reasonable
measures
as may be appropriate to enable it to perform the agreements,
undertakings, obligations, and covenants herein provided to be
performed
by it, and
to enable the conditions precedent to Seller's obligations to
consummate
the Closing to be fully satisfied.
(d) Cooperation Regarding Leased Real Estate. Buyer shall, at
Seller's
request in connection with Seller's obtaining the consents
specified
in Section 2.01(h), advise, in
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<PAGE>
writing,
the lessor of Leased Real Estate, of Buyer's intent to assume
and
comply
with the terms of the Third Party Lease (as to matters arising
from
and after
the Closing Date).
(e) Performance. Buyer shall, at Buyer's expense, take such
actions
as may be
necessary in order for Buyer to perform timely hereunder,
including
all necessary data processing and operational actions as may be
appropriate.
2.03
Covenants of All Parties. Seller hereby covenants to Buyer, and
Buyer
hereby covenants to Seller that, from the
date hereof until the Closing, such
party shall act and deal in good faith,
cooperate fully with the other party and
use its commercially reasonable efforts in
attempting to obtain all consents,
approvals, permits, or authorizations which
are required to be obtained pursuant
to any federal or state law, or any federal
or state regulation thereunder, for
or in connection with the transactions
described, contemplated, arising from or
related to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01
Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows:
(a) Good Standing and Power of Seller. Seller is an Alabama
banking
corporation duly organized, validly existing, and in good standing
under
the laws
of the State of Alabama with corporate power to own its
properties
and to carry on its business as presently conducted. Seller is
an insured
bank as defined in the Federal Deposit Insurance Act and
applicable
regulations thereunder.
(b) Authorization of Agreement. The execution and delivery of
this
Agreement,
and the transactions contemplated hereby, have been duly
authorized
by all necessary corporate action on the part of Seller, and
this
Agreement is a valid and binding obligation of Seller.
(c) Effective Agreement. Subject to the receipt of any and all
necessary
regulatory approvals and required consents, the execution,
delivery,
and performance of this Agreement by Seller and the
consummation
of the
transactions contemplated hereby, will not conflict with, result
in
the breach
of, constitute a violation or default, result in the
acceleration of payment or other obligations, or create a lien,
charge or
encumbrance, under any of the provisions of the Articles of
Incorporation
or Bylaws
of Seller, under any judgment, decree or order, under any law,
rule, or
regulation of any government or agency thereof, or under any
material contract,
material agreement or material instrument to which
Seller is
subject, where such conflict, breach, violation, default,
acceleration or lien would have a material adverse effect on the
Assets or
Seller's
ability to perform its obligations hereunder.
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<PAGE>
(d) Title to Real Estate And Other Assets. Except for the Owned
Real
Estate and
Leased Real Estate, Seller is the sole owner of each of the
Assets
free and clear of any mortgage, lien, encumbrance or
restrictions
of any
kind or nature. As to the Owned Real Estate, Seller is sole
owner
of such
Owned Real Estate, free and clear of all liens, claims,
encumbrances and rights of tenants in possession except for the
Permitted
Exceptions. Seller has a valid leasehold interest in the Leased
Real
Estate
pursuant, and subject to, the Third Party Lease and has the use
of
the Leased
Real Estate pursuant to the Third Party Lease.
(e) Zoning Variations. As of the Effective Date, Seller has no
knowledge
of the receipt of, or contemplation of any intent to provide,
Seller
with any written notice from any governmental authority of any
material
uncorrected violations of zoning and/or building codes relating
to the
Owned Real Estate or Leased Real Estate.
(f) Condemnation Proceedings. Except for the proceedings relating
to
the Owned
Real Estate referred to in Section 2.01(p), Seller has received
no written
notice of any pending or threatened, nor is it aware of any
contemplated, condemnation proceeding affecting or relating to the
Owned
Real
Estate or the Branches.
(g) Taxes. All federal, state and local payroll, withholding,
property,
sales, use and transfer taxes, if any, which are due and
payable
by Seller
relating to the Branches prior to the date of Closing shall be
paid in
full as of the Closing Date or Seller shall have made
appropriate
provision
for such payment in accordance with ordinary business
practices.
Any claims
for refunds of taxes which have been paid by Seller shall
remain the
property of Seller.
(h) Operations Lawful. To the knowledge of Seller, the conduct
of
banking
business at the Branches is in compliance in all material
respects
with all
federal, state, county and municipal laws, ordinances and
regulations applicable to conduct of such business.
(i) Third-Party Claims. There are no actions, suits or
proceedings,
pending
or, to Seller's knowledge, threatened against or affecting
Seller
which, if
determined adversely to Seller, could have a material adverse
effect on
the aggregate value of the banking business and Assets of the
Branches.
(j) Insurance. Seller maintains such insurance on the Branches
and
the Fixed
Assets to be purchased by or assigned to Buyer as is customary
in the
business of banking.
(k) Labor Relations. No employee located at any of the Branches
is
represented, for purposes of collective bargaining, by a labor
organization of any type. Seller has no knowledge of any efforts
during
the past
three years to unionize or organize any employees at any
Branch.
No claim
related to, or brought by, any employee at the Branches under
any
applicable
federal, state, or local employment-related law, order,
ordinance
or regulation, no unfair labor practice, discrimination or
wage-and-hour claim
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<PAGE>
is pending
or, to the best of Seller's knowledge, threatened against or
with
respect to Seller.
(l) Employment Contracts. Set forth on Schedule K is a list of
all
contracts,
written or oral, between Seller, and its employees located at
the
Branches. Schedule K shall also contain each Branch employee's
name,
date of
hire, years of service, current compensation and similar
benefits
as of the
Effective Date.
(m) Compliance With Laws. Seller:
(i) is in material compliance with all applicable federal,
state,
local and foreign statutes, laws, regulations, ordinances,
rules,
judgments,
orders or decrees applicable thereto or to the employees
conducting
such businesses, including, without limitation, the Equal
Credit
Opportunity Act, the Fair Housing Act, the Community
Reinvestment
Act, the
Home Mortgage Disclosure Act, the Bank Secrecy Act, and all
other
applicable
fair lending laws and other laws relating to discriminatory
business
practices;
(ii) has all permits, licenses, authorizations, orders and
approvals
of, and has made all filings, applications and registrations
with, all
Governmental Authorities that are required in order to permit
them to
own or lease their properties and to conduct their businesses
as
presently
conducted; all such permits, licenses, certificates of
authority,
orders and approvals are in full force and effect and, to the
Seller's
knowledge, no suspension or cancellation of any of them is
threatened; and
(iii) has received, since December 31, 2000, no notification
or
communication from any governmental authority (A) asserting that
the
Seller is
not in compliance with any of the statutes, regulations or
ordinances
which such governmental authority enforces; or (B) threatening
to revoke any license,
franchise, permit or governmental authorization
(nor, to
the Seller's knowledge, do any grounds for any of the foregoing
exist).
(n) Environmental.
(i) Seller is in compliance with all applicable Environmental
Laws (as
defined in Section 7.05(g)); (ii) to the best of Seller's
knowledge
no real property (including buildings or other structures)
related to
the Branches, or any property in which the Seller has held a
security
interest for the Branch Loans, ("Seller Loan Property"), has
been
contaminated with, or has had any release of, any Hazardous
Substance (as
defined in
Section 7.05(i)) except in compliance with Environmental Laws;
(iii) to
the best of Seller's knowledge, the Seller could not be deemed
the owner
or operator of, or be deemed to have participated in the
management
of Hazardous Substances of, any Seller Loan Property which has
been
contaminated with, or has had any release of, any Hazardous
Substance
except in
compliance with Environmental Laws; (iv) to the best of
Seller's
knowledge,
the Seller does not have any liability for any Hazardous
Substance
disposal or contamination on any third party property related
to
the
Branches; (v) the
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<PAGE>
Seller has
not received any notice, demand letter, claim or request for
information alleging any violation of, or liability under, any
Environmental Law; (vi) the Seller is not subject to any order,
decree,
injunction
or other agreement with any governmental authority or any third
party
relating to any Environmental Law; (vii) to the best of
Seller's
knowledge,
there are no circumstances or conditions involving the Branches
or any
Seller Loan Property, that could reasonably be expected to
result
in any
claims, liability or investigations against the Seller, result
in
any
restrictions on the ownership, use, or transfer of the Branches
pursuant
to any Environmental Law, or adversely affect the value of any
Seller
Loan Property; and (viii) the Seller has disclosed in Section
3.03(n) of
the Disclosure Schedule and provided a copy to Buyer of all
environmental reports,
studies, sampling data, correspondence and filings
in its
possession or reasonably available to it relating to the
Branches
and any
Seller Loan Property.
(o) Access to Real Estate. To the knowledge of Seller, no fact
or
condition
exists which would result in the termination or impairment of
access to
the Owned Real Estate from adjoining public or private streets
or ways or
which could result in discontinuation of necessary sewer,
water,
electric, gas, telephone, or other utilities or services and
sewage,
sanitation, plumbing, refuse disposal, and all of such
utilities
servicing
the Owned Real Estate are in full compliance with applicable
governmental regulations.
(p) Mechanic's Liens. Seller has paid or will pay in full all
bills
and
invoices for labor and material of any kind arising from the
ownership,
operation, management, repair, maintenance, or leasing as
tenant of
the Owned Real Estate and the Leased Real Estate, and no actual
or
potential (other than in the ordinary course of business)
mechanic's
lien or
other claims are outstanding or available to any party in
connection
with the ownership, operation, management, repair, maintenance,
or leasing
as tenant of said properties.
(q) Deposits. Attached as Schedule J is a true and accurate
schedule
of all
Deposit Accounts (including IRAs) of the Branches, prepared as
of
May 31,
2003, listing by Branch and by category the account holder,
account
number, social security or employer identification number of
the
holder,
deposit balance and the interest rates and maturity dates
associated
with such deposits.
(r) Branch Loans. Attached as Schedule F is a true and accurate
schedule
of all Branch Loans, including the REIT Loans, any letters of
credit and
loan commitments attributable to the Branches with accrued and
unpaid
interest thereon, computed as of May 31, 2003, which schedule
shall
identify
the loan number, date, borrower name, loan amount, interest
rate,
loan
balance, social security or employer identification number of
the
borrower
and type of loan.
(s) Status of Branch Loans. With respect to each Branch Loan
purchased
hereunder: the loan is a valid loan, except for existing
participation loans disclosed to Buyer prior to the date hereof;
Seller is
the sole
owner of each loan; the loan is not pledged or encumbered; the
principal
balance of the loan as shown on the Seller's books
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<PAGE>
and
records is true and correct as of the last date shown thereon; to
the
best of
Seller's knowledge, all purported signatures on and executions
of
any
document in connection with such loan are genuine; to the best
of
Seller's
knowledge all loan documentation has been actually signed or
executed
by all necessary parties; Seller has custody of all documents
in
either
paper or electronic form related to such loan; each loan was
made
and has
been serviced in compliance with all applicable laws, rules and
regulations and except as provided in Section 3.01(s) of the
Disclosure
Schedule,
any notes, other evidences of indebtedness or security
agreements
associated therewith transferred at Closing by Seller to Buyer
are
transferred without recourse and without any warranties or
representations as to the collectibility of any such loans, the
value of
the
collateral securing same, or the creditworthiness of any of the
makers,
guarantors or other obligors thereof; and Seller disclaims any
warranty
or representation that it has no knowledge of any insolvency
proceeding
instituted with respect to any such party.
(t) Personal Property. Attached as Schedule C is a listing of
the
Fixed
Assets owned by Seller and located at the Branches.
(u) Assumed Contracts and Third Party Lease. Attached as Schedule
G
is a true
and accurate schedule of all Assumed Contracts related to the
Branches.
Each Assumed Contract is valid and subsisting and in full force
and effect
in accordance with its terms.
(v) Other Branch Services. Attached as Schedule H is a true and
accurate
schedule of all of Seller's other services or businesses
provided
by, or
related to, the Branches.
(w) FIRPTA. Seller is not a "foreign person" within the meaning
of
the
Internal Revenue Code Section 1445.
(x) Broker. Seller has utilized Sandler O'Neill & Partners,
L.P. in
this
transaction. Seller agrees and acknowledges that Seller is
fully
responsible for all of the fees, expenses, and commissions of
Sandler
O'Neill
& Partners, L.P. and agrees to indemnify Buyer from and
against
any
liability therefrom.
(y) Knowledge. For purposes of this section 3.01, the "knowledge"
of
Seller
shall mean the actual knowledge of the officers of Seller.
3.02
Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
(a) Good Standing and Power of Buyer. Buyer is a national
banking
association duly organized, validly existing and in good standing
under
the laws
of the United States with corporate power to own its properties
and to
carry on its business as presently conducted. Buyer is an
insured
bank, as
defined in the Federal Deposit Insurance Act and applicable
regulations thereunder.
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<PAGE>
(b) Authorization of Agreement. The execution and delivery of
this
Agreement,
and the transactions contemplated hereby, have been duly
authorized, by all necessary corporate action on the part of Buyer,
and
this
Agreement is a valid and binding obligation of Buyer.
(c) Effective Agreement. Subject to the receipt of any and all
necessary
regulatory approvals (including approval of the Merger (as
hereinafter defined)), the execution, delivery, and performance of
this
Agreement
by Buyer, and the consummation of the transactions contemplated
hereby,
will not conflict with, result in the breach of, constitute a
violation
or default, result in the acceleration of payment or other
obligations, or create a lien, charge or encumbrance, under any of
the
provisions
of the Articles of Association or Bylaws of Buyer, under any
judgment, decree
or order, under any law, rule or regulation of any
government
or agency thereof, or under any material agreement, material
contract
or material instrument to which Buyer is subject, where such
conflict,
breach, violation, default, acceleration or lien would have a
material
adverse effect on Buyer's ability to perform its obligations
hereunder.
3.03.
Disclosure Schedule. On or prior to the date hereof, the Seller
has
delivered to Buyer a schedule (its
"Disclosure Schedule") setting forth, among
other things, items the disclosure of which
is necessary or appropriate either
in response to an express disclosure
requirement contained in a provision hereof
or as an exception to one or more
representations or warranties contained in
Section 3.01 or to one or more of its
covenants contained in Article II;
provided, however, that (a) no such item is
required to be set forth in a
Disclosure Schedule as an exception to a
representation or warranty if its
absence would not be reasonably likely to
result in the related representation
or warranty being deemed untrue or
incorrect under the standard established by
Section 3.04, and (b) the mere inclusion of
an item in a Disclosure Schedule as
an exception to a representation or
warranty shall not be deemed an admission by
a party that such item represents a
material exception or fact, event or
circumstance or that, absent such inclusion
in the Disclosure Schedule, such
item is or would be reasonably likely to
result in a material adverse effect.
3.04.
Standard. No representation or warranty of the Seller or Buyer
contained in Sections 3.01 or 3.02,
respectively, shall be deemed untrue or
incorrect, and no party hereto shall be
deemed to have breached a representation
or warranty, as a consequence of the
existence of any fact, event or
circumstance
