PURCHASE AND ASSUMPTION AGREEMENT

Exhibit 10.1

PURCHASE AND ASSUMPTION AGREEMENT

dated as of

December 17, 2006

among

CITIZENS BANKING CORPORATION

and

REPUBLIC BANK

and

FIRST PLACE BANK

TABLE OF CONTENTS

 

 

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List of Schedules

 

 

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This PURCHASE AND ASSUMPTION AGREEMENT , dated as of December 17, 2006 (“Agreement”), among Citizens Banking Corporation (“Citizens”) and, together with Republic Bank and its successors (“Republic Bank” and together with Citizens, “Seller”) and First Place Bank (“Purchaser”). First Place Financial Corp., a Delaware corporation and parent of Purchaser (“Parent”), is executing this Agreement solely for purposes of Section 12.6.

RECITALS

A. Seller . Citizens is a Michigan corporation with its principal office located in Flint, Michigan, and Republic Bank is a Michigan banking corporation with its principal office located in Ann Arbor, Michigan.

B. Purchaser . Purchaser is a federal savings association with its principal office located in Warren, Ohio.

C. The Merger . Citizens and Republic Bancorp Inc., a Michigan corporation (“Republic”), have proposed to merge (the “Merger”) pursuant to the terms of an Agreement and Plan of Merger, dated as of June 26, 2006 and as amended on October 19, 2006 (the “Merger Agreement”), by and between Citizens and Republic. As a result of the Merger, Republic will merge with and into Citizens, and the subsidiaries of Republic, including Republic Bank, will become subsidiaries of Citizens.

In connection with the consummation of the Merger, Purchaser desires to acquire from Seller, and Seller desires to sell to Purchaser, certain banking operations of Republic Bank in the State of Michigan, in accordance with and subject to the terms and conditions of this Agreement.

Purchaser understands and acknowledges that if the P&A Transaction (as defined below) shall not be consummated on or before the one hundred eightieth (180 ^th ) calendar day following the Merger, such banking operations will be transferred to an independent trustee for disposition.

D. Continuation of Service . Purchaser and Seller each intend to continue providing retail and business banking services in the geographic regions served by the Branches (as defined below) to be acquired by Purchaser under this Agreement, subject to certain restrictions agreed to by Seller and set forth herein.

NOW, THEREFORE , in consideration of the premises and the mutual promises and obligations set forth herein, the parties agree as follows:

ARTICLE 1

CERTAIN DEFINITIONS

1.1 Certain Definitions . The terms set forth below are used in this Agreement with the following meanings:

“ Accrued Interest ” means, as of any date, (a) with respect to a Deposit, interest which is accrued on such Deposit to but excluding such date and not yet posted to the relevant deposit account and (b) with respect to a Loan, interest which is accrued on such Loan to but excluding such date and not yet paid.

“ ACH Direct Deposit Cut-Off Date ” has the meaning set forth in Section 4.3.

“ Additional Loans ” means the Loans originated at the Branches after the date hereof through the fifth Business Day prior to the Closing Date that Purchaser, in its sole discretion, shall have the exclusive right and option to purchase from Seller and thereby added to Schedule 1.1(c) at Closing pursuant to Section 3.11.

“ Additional Loan Information ” has the meaning set forth in Section 3.11.

“ Adjusted Payment Amount ” has the meaning set forth in Section 3.3.

“ Adjustment Date ” has the meaning set forth in Section 3.3.

“ Affiliate ” means any person that directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person. As used in this definition, the term “person” shall be broadly interpreted to include, without limitation, any corporation, company, partnership, trust, association, individual, group or other entity or organization.

“ Affiliated Group ” means any affiliated group within the meaning of Code § 1504(a) or any similar group defined under a similar provision of state, local, or foreign law.

“ Agreement ” means this Purchase and Assumption Agreement, including all schedules, exhibits and addenda, each as amended from time to time in accordance with Section 12.9(b).

“ Allocation ” has the meaning set forth in Section 3.10(a).

“ Assets ” has the meaning set forth in Section 2.1(a).

“ Assignment and Assumption Agreement ” has the meaning set forth in Section 3.5(c).

“ BHC Act ” means the Bank Holding Company Act of 1956, as amended together with the rules and regulations promulgated thereunder.

“ Branch Employees ” means the employees of Republic Bank working at the Branches at the Closing Date, subject to any transfers permitted pursuant to Section 7.1, any new hires and any replacement in the ordinary course of business of employees who may leave Republic Bank’s employ between the date hereof and the Closing Date.

“ Branch Leases ” means the leases under which Republic Bank leases land and/or buildings used as Branches, including without limitation ground leases which are listed on Schedule 1.1(a) hereto.

“ Branches ” means each of the banking offices of Republic Bank at the locations identified on Schedule 1.1(b) hereto.

“ Business Day ” means a day on which banks are generally open for business in Michigan and which is not a Saturday or Sunday.

“ Cash on Hand ” means, as of any date, all petty cash, vault cash, teller cash, on-premise ATM cash, prepaid postage and cash equivalents held at a Branch.

“ Citizens ” has the meaning set forth in the first paragraph of the Agreement.

“ Closing ” and “ Closing Date ” refer to the closing of the P&A Transaction, which is to be held at such time and date as provided in Article 3 hereof.

“ Code ” means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder.

“ Consumer Loan ” shall mean home equity loans secured by 1-4 family residential real property and auto loans secured by a first lien on an automobile, but excluding any nonperforming home equity or auto loans that are ninety (90) days or more delinquent.

“ Davison Branch Lease ” has the meaning set forth in Section 7.4.

“ Davison Consent ” has the meaning set forth in Section 5.5.

“ Davison Replacement ” has the meaning set forth in Section 7.4.

“ Deposit-Related Loans ” means all loans secured by a Deposit as of the close of business on the Closing Date that are linked to an open account and are not sixty (60) or more calendar days delinquent as of the Closing Date.

“ Deposit(s) ” means deposit liabilities with respect to deposit accounts booked by Republic Bank at the Branches or allocated by Republic Bank to the Branches, as of the close of business on the

 

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Closing Date, which constitute “deposits” for purposes of the Federal Deposit Insurance Act, 12 U.S.C. § 1813, including collected and uncollected deposits and Accrued Interest, but excluding (a) deposit liabilities with respect to accounts booked by Republic Bank at any Branch and under or pursuant to any judgment, decree or order of any court; (b) deposit liabilities with respect to accounts registered in the name of a trust for which Republic Bank serves as trustee, including all Keogh Accounts (other than IRA Account deposit liabilities); (c) deposit liabilities with respect to accounts booked by Republic Bank at any Branch for which Republic Bank serves as guardian or custodian, including all Keogh Accounts (other than IRA Account deposit liabilities); and (d) Excluded IRA Account Deposits.

“ Draft Closing Statement ” means a draft closing statement, prepared by Seller, as of the close of business on the third (3 ^rd ) Business Day preceding the Closing Date setting forth an estimated calculation of both the Purchase Price and the Estimated Payment Amount.

“ Encumbrances ” means all mortgages, claims, charges, liens, encumbrances, easements, limitations, restrictions, commitments and security interests, except for statutory liens securing tax or assessments that are not yet due and that were incurred in the ordinary course of business and do not secure indebtedness for borrowed money, including without limitation liens in favor of mechanics or materialmen, which do not materially detract from the value or materially and adversely affect the current use of the properties or assets subject thereto or affected thereby and except for obligations pursuant to applicable escheat and unclaimed property laws relating to the Escheat Deposits.

“ Environmental Hazard ” means the presence of any Hazardous Substance, Petroleum, or friable Asbestos-Containing Material (ACM) constituting either a “Recognized Environmental Condition” as defined in ASTM Standard 1527-05, including section 3.2.74, or a material violation of applicable Environmental Laws, or a material hazard to the health or safety of employees or customers regulated by applicable Environmental Law.

“ Environmental Law ” means any Federal, state, or local law, statute, rule, regulation, code, rule of common law, order, judgment, decree, injunction or agreement with any Federal, state, or local governmental authority, (a) relating to the protection, preservation or restoration of the environment (including, without limitation, air, water vapor, surface water, groundwater, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource) or to human health or safety, including worker safety or (b) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of petroleum or hazardous substances, in each case as amended and now in effect. Environmental Laws include, without limitation, the Clean Air Act (42 U.S.C. §7401 et seq .); the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. §9601 et seq .); the Superfund Amendment and Reauthorization Act; the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq .); the Solid Waste Disposal Act; the Toxic Substances Control Act; the Insecticide Fungicide and Rodenticide Act; the Federal Water Pollution Control Act (33 U.S.C. §1251 et seq .); and the Occupational Safety and Health Act (29 U.S.C. §651 et seq .).

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

“ Escheat Deposits ” means, as of any date, Deposits and safe deposit box contents, in each case held on such date at the Branches which become subject to escheat, in the calendar year in which the Closing occurs, to any governmental authority pursuant to applicable escheat and unclaimed property laws.

“ Estimated Payment Amount ” has the meaning set forth in Section 3.2(a).

 

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“ Estimated Purchase Price ” means the Purchase Price as set forth on the Draft Closing Statement.

“ Excluded IRA Account Deposits ” has the meaning set forth in Schedule 2.4(b).

“ Excluded Liabilities ” has the meaning set forth in Section 2.2(b).

“ FDIA ” means the Federal Deposit Insurance Act, as amended.

“ FDIC ” means the Federal Deposit Insurance Corporation.

“ Federal Funds Rate ” on any day means the per annum rate of interest (rounded upward to the nearest 1/100 of 1%) which is the weighted average of the rates on overnight federal funds transactions arranged on such day or, if such day is not a Business Day, the previous Business Day, by federal funds brokers computed and released by the Federal Reserve Bank of New York (or any successor) in substantially the same manner as such Federal Reserve Bank currently computes and releases the weighted average it refers to as the “Federal Funds Effective Rate” at the date of this Agreement.

“ Federal Reserve Board ” means the Board of Governors of the Federal Reserve System.

“ FedWire Direct Deposit Cut-off Date ” has the meaning set forth in Section 4.3.

“ Final Closing Statement ” means a final closing statement, prepared by Seller, on or before the thirtieth (30 ^th ) calendar day following the Closing Date setting forth both the Purchase Price and the Adjusted Payment Amount.

“ Flushing Replacement ” has the meaning set forth in Section 4.2

“ GAAP ” has the meaning set forth in Section 1.2.

“ Hazardous Substance ” means any substance, whether liquid, solid or gas (a) listed, identified, designated or classified as hazardous, toxic, radioactive or dangerous or otherwise regulated under Environmental Law; (b) which, applying criteria specified in any Environmental Law, is hazardous or toxic; or (c) the use or disposal, or any manner or aspect of management or handling, of which is regulated under Environmental Law. Such definition shall include Asbestos Containing Material (greater than one percent asbestos) and petroleum and petroleum products.

“ Indemnity Threshold ” has the meaning set forth in Section 11.1(e).

“ IRA ” means an “individual retirement account” or similar account created by a trust for the exclusive benefit of any individual or his beneficiaries in accordance with the provisions of Section 408 of the Code.

“ IRS ” means the Internal Revenue Service.

“ Keogh Account ” means a trust account created for the benefit of employees (some or all of whom are owner-employees) and that complies with the provisions of Section 401 of the Code.

“ Lease Assignment ” has the meaning set forth in Section 3.5(d).

“ Liabilities ” has the meaning set forth in Section 2.2.

“ Loan Documents ” means the Loan files and all documents included in Republic Bank’s file or imaging system with respect to a Loan including, without limitation, loan applications, notes, security agreements, deeds of trust, collectors notes, appraisals, credit reports, disclosures, titles to collateral (titles to cars, boats, etc.), all verifications (including employment verification, deposit verification, etc.), loan agreements including building and loan agreements, guarantees, pledge agreements, financing statements, intercreditor agreements, participation agreements, sureties and insurance policies (including title insurance policies) and all written modifications, waivers and consents relating to any of the foregoing.

“ Loans ” means, collectively, the Consumer Loans, Deposit-Related Loans, Overdraft Loans and Other Loans listed and described on Schedule 1.1(d), plus any Additional Loans as may be added

 

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to Schedule 1.1(d) pursuant to Section 3.11, if any; provided, however, that “Loans” do not include the interest of any participants in such Loans or Loans that have been the subject of securitizations.

“ Loss ” means the amount of losses, liabilities, damages (including forgiveness or cancellation of obligations) and reasonable expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding not involving the parties hereto or their affiliates) incurred or suffered by the indemnified party or its Affiliates in connection with the matters described in Section 11.1, reduced by (A) any amounts actually recovered by the indemnified party under third party insurance policies or third party indemnification obligations or other rights of recovery with respect to such Losses, net of any deductible or any other expense incurred by the party entitled to indemnification for the applicable in obtaining such recovery, and (B) the amount of any net Tax benefit actually realized resulting from the incurrence or payment of such Losses, and increased by the amount of any net Tax cost incurred as a result of the receipt of such indemnity payments (grossed up for such increase).

“ Material Adverse Effect ” means event, development, change or event (a) with respect to Seller, which is materially adverse to the business, financial condition or results of operations of the business represented by the Branches, the Assets and Liabilities, taken as a whole (excluding any effect arising out of or resulting from (i) changes, after the date hereof, in generally accepted accounting principles or regulatory accounting requirements applicable to banks or savings associations and their holding companies generally, (ii) changes, after the date hereof, in laws, rules or regulations of general applicability or interpretations thereof by courts or governmental agencies or authorities, (iii) changes, after the date hereof, in global, local or national political conditions or in general global, local or national economic or market conditions affecting banks or their holding companies generally (including changes in interest or exchange rates) except to the extent that any such changes have a disproportionate adverse effect such business and operations, (iv) public disclosure or consummation of the transactions contemplated hereby, including the impact thereof on customers, suppliers, licensors and employees, or (v) the commencement, occurrence, continuation or intensification of any war, sabotage, armed hostilities or acts of terrorism not directly involving the Assets), or which would prevent, impair or delay the ability of Seller to timely consummate the P&A Transaction as contemplated by this Agreement or to perform its obligations hereunder, and (b) with respect to Purchaser, which would have a material adverse effect on the ability of Purchaser to perform any of its financial or other obligations under this Agreement, including the ability of Purchaser to timely consummate the P&A Transaction as contemplated by this Agreement or to perform its obligations hereunder.

“ Material Defect ” has the meaning set forth in Section 7.10(a).

“ Obligor ” has the meaning set forth in Section 5.9(a)(i).

“ Order ” has the meaning set forth in Section 9.1(b).

“ Other Loans ” means the loans to the borrowers described on Schedule 1.1(c) to be attached hereto (including loan commitments referred to thereon).

“ Overdraft Loans ” means unsecured overdraft loans, including negotiable order of withdrawal line of credit accounts, relating to the Deposits, as of the close of business on the Closing Date, plus Accrued Interest, which do not exceed the applicable credit limit and are linked to any open account.

“ Owned Real Property ” means Real Property where Republic Bank owns both the real property and improvements thereon that are used for Branches.

 

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“ P&A Transaction ” means the purchase and sale of Assets and the assumption of Liabilities described in Sections 2.1 and 2.2.

“ Parent ” has the meaning set forth in the first paragraph of the Agreement.

“ Personal Property ” means all of the personal property of Republic Bank located in the Branches consisting of the trade fixtures, shelving, other leasehold improvements, furnishings (including furniture), on-premises ATMs (excluding Seller licensed software), equipment, security systems, safe deposit boxes (exclusive of contents), vaults, sign structures (exclusive of signage containing any trade name, trademark or service mark, if any, of Seller, Citizens, Republic or any of their respective Affiliates), supplies and other personal property which are owned by Seller and located at the Branches, excluding any items consumed or disposed of in the ordinary course of business consistent with past practice, but including new items acquired or obtained, in the ordinary course of the operation of the Branches through the Closing Date; provided, however, that the foregoing shall not include any such property subject to a Personal Property Lease.

“ Personal Property Leases ” means the leases under which Republic Bank leases certain property in the Branches that would be “Personal Property” but for the proviso to such defined term, and which lease agreement relates only to one or more of the Branches and not to any other facilities of Republic Bank or its Affiliates and are listed on Schedule 1.1(d).

“ POS ” has the meaning set forth in Section 4.9.

“ Prepaid Expenses ” means any operating costs or other expenses relating to the operation of the Branches after the Closing Date which were paid by Seller on or prior to the Closing Date, except as otherwise provided herein.

“ Property Taxes ” has the meaning set forth in Section 8.2.

“ Purchase Price ” has the meaning set forth in Section 2.3.

“ Purchaser ” has the meaning set forth in the first paragraph of the Agreement.

“ Real Property ” means the parcels of real property on which the Branches listed on Schedule 1.1(b) are located, including any improvements thereon, which Schedule 1.1(b) indicates whether or not such real property is Owned Real Property or a Branch Lease.

“ Records ” means all records and original documents, or where reasonable and appropriate copies thereof, in Republic Bank’s possession that pertain to and are used by Republic Bank to administer, reflect, monitor, evidence or record information respecting the business or conduct of the Branches (including transaction tickets through the Closing Date and all records for closed accounts located in Branches and excluding any other transaction tickets and records for closed accounts) and all such records and original documents, or where reasonable and appropriate copies thereof, regarding the Assets, or the Deposits, including all such records maintained on electronic or magnetic media in the electronic database system of Republic Bank reasonably accessible by Branch, or to comply with the applicable laws and governmental regulations to which the Deposits are subject, including but not limited to applicable unclaimed property and escheat laws.

“ Regulatory Approvals ” means all material approvals, authorizations, waivers or consents of, or notices to, any governmental agencies or authorities required to consummate the P&A Transaction, including the following: (i) approvals under Section 18(c) and 18(d) of the FDIA; (ii) any required approvals of and/or notices to the Michigan Office of Financial and Insurance Services; and (iii) expiration of the waiting period provided for in Section 18(c) of the FDIA.

“ Republic Bank ” has the meaning set forth in the first paragraph of the Agreement.

“ Returned Items ” has the meaning set forth in Section 4.10(e).

 

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“ Safe Deposit Agreements ” means the agreements relating to safe deposit boxes located in the Branches.

“ Seller’s Knowledge ” or other similar phrases means information that is (a) actually known to any executive officer of Seller (after reasonable inquiry) with respect to the Branches, the Assets, Liabilities and the Seller Employees or (b) as to a particular Branch, actually known to the on-site manager of the Branch in question or (c) contained in environmental reports that were obtained by Seller.

“ Seller Severance Plan ” has the meaning set forth in Section 8.4(d).

“ Straddle Period ” has the meaning set forth in Section 8.1.

“ Tax Returns ” means any return or other report required to be filed with a taxing authority with respect to any Tax, including any declaration of estimated Tax and information returns.

“ Taxes ” means any federal, state, local, or foreign taxes, including but not limited to taxes on or measured by income, estimated income, franchise, capital stock, employee’s withholding, non-resident alien withholding, backup withholding, social security, occupation, unemployment, disability, value added taxes, taxes on services, real property, personal property, sales, use, excise, transfer, gross receipts, inventory and merchandise, business privilege, and other taxes imposed by any taxing authority, including any interest, penalties, or additions to tax imposed with respect thereto.

“ Termination Fee ” has the meaning set forth in Section 10.2(a).

“ Transaction Account ” means any account at a Branch in respect of which deposits therein are withdrawable in practice upon demand or upon which third party drafts may be drawn by the depositor, including checking accounts, negotiable order of withdrawal accounts and money market deposit accounts.

“ Transfer Taxes ” has the meaning set forth in Section 8.2.

“ Transferred Employees ” means Branch Employees who accept offers of employment from Purchaser or an Affiliate of Purchaser as contemplated in Section 8.4.

1.2  Accounting Terms . All accounting terms not otherwise defined herein shall have the respective meanings assigned to them in accordance with consistently applied generally accepted accounting principles as in effect from time to time in the United States of America (“GAAP”).

1.3  Interpretation . All references in this Agreement to Articles or Sections are references to Articles or Sections of this Agreement, unless some other reference is clearly indicated. The definition of a term expressed in the singular also applies to that term as used in the plural and vice versa. The word “including” as used herein shall mean “including without limitation.” The rule of construction against the draftsman shall not be applied in interpreting and construing this Agreement.

ARTICLE 2

THE P&A TRANSACTION

2.1  Purchase and Sale of Assets . (a) Subject to the terms and conditions set forth in this Agreement, at the Closing, Seller shall cause Republic Bank to grant, sell, convey, assign, transfer and deliver to Purchaser, and Purchaser shall purchase and accept from Republic Bank, all of Republic Bank’s right, title and interest, as of the Closing Date, in and to the following (collectively, the “ Assets ”):

(i) Cash on Hand;

 

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(ii) the Owned Real Property;

(iii) the Personal Property set forth on Schedule 2.1(a)(iii) and the Personal Property Leases set forth on Schedule 1.1(d);

(iv) the Loans, the collateral for the Loans, the Loan Documents and servicing rights related to the Loans pursuant to Section 2.5;

(v) the Branch Leases;

(vi) the Safe Deposit Agreements;

(vii) 50% of the FDIC insurance premium refund relating to the Deposits, up to a maximum of $125,000 (with a corresponding dollar-for-dollar reduction in the Purchase Price if and to the extent such refund is not legally transferable by Seller);

(viii) the Records; and

(ix) the rights of action and claims related to the Assets, except to the extent relating to Excluded Liabilities.

(b) Purchaser understands and agrees that it is purchasing only the Assets (and assuming only the Liabilities) specified in this Agreement and, except as expressly provided in this Agreement, Purchaser has no interest in or right to any other business relationship which Seller or their Affiliates may have with any customer of the Branches. No credit card relationships are being sold. No right to the use of any sign, trade name, trademark or service mark, if any, of Seller, Citizens, Republic or any of their respective Affiliates is being sold.

2.2 Assumption of Liabilities . (a) Subject to the terms and conditions set forth in this Agreement, at the Closing, Purchaser agrees to assume and thereafter pay, perform and discharge the duties and responsibilities of Republic Bank (whether accrued, contingent or otherwise) that are incurred after the Closing, only with respect to the following (collectively, the “ Liabilities ”):

(i) the Deposits, including IRA Accounts to the extent contemplated by Section 2.4;

 

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(ii) the Branch Leases, except for environmental work undertaken by Seller pursuant to Section 7.11;

(iii) the Personal Property Leases;

(iv) the Safe Deposit Agreements;

(v) the Loans, and the servicing of the Loans pursuant to Section 2.5;

(vi) the fees for which Purchaser is responsible under Sections 3.9 and 8.2, and any Taxes with respect to the Assets or the Branches for any taxable period (or portion thereof) that begins after the Closing Date; and

(vii) the obligations assumed by Purchaser under Section 8.4 of this Agreement, which under no circumstance shall include any liability for any employment, change-in-control or other severance agreement or any payments under any Seller bonus or incentive program.

(b) Notwithstanding anything to the contrary in this Agreement, Purchaser shall not assume or be bound by any duties, responsibilities, obligations or liabilities of Seller, Republic or of any of their Affiliates, of any kind or nature, known, unknown, contingent or otherwise, including, without limitation, those (i) that do not relate to the Assets or the Liabilities; (ii) attributable to any acts or omissions to act taken or omitted to be taken by Seller (or any of its Affiliates) prior to the Closing Date in violation of any applicable laws, contracts or fiduciary duties; (iii) attributable to any causes of action, claims, suits or proceedings or violations of law or regulation attributable to any acts or omissions to act taken or omitted to be taken by Seller (or any of its Affiliates) prior to the Closing Date; (iv) for any Liability of Seller for Taxes other than the items set forth in Section 2.2(a)(vi); (v) for any Transfer Taxes or other costs and expenses arising in connection with the consummation of the transactions contemplated hereby for which Seller is responsible, including Sections 3.9 and 8.2; (vi) for any Liability of Seller for income Taxes arising in connection with the consummation of the transactions contemplated hereby (including any income Taxes arising because Seller is transferring the Assets); (vii) for any Liability of Seller for the unpaid Taxes of any Person under Treasury Regulation §1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise; (viii) any obligation of Seller to indemnify any person or entity by reason of the fact that such person or entity was a

 

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director, officer, employee, or agent of Seller or any of its Affiliates or was serving at the request of any such entity as a partner, trustee, director, officer, employee, or agent of another entity (whether such indemnification is for judgments, damages, penalties, fines, costs, amounts paid in settlement, losses, expenses, or otherwise and whether such indemnification is pursuant to any statute, charter document, bylaw, agreement, or otherwise); (ix) for any Liability of Seller or any Affiliate for costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby; (x) for any Liability or obligation of Seller under this Agreement; (xi) any matters excluded pursuant to Section 7.11; (xii) relating or arising out of any deposit excluded under the definition of Deposit, including Keogh Account deposits; or (xiii) arising from circumstances, events or conditions prior to the Closing Date and not expressly assumed hereunder (collectively the “Excluded Liabilities”).

2.3  Purchase Price . Subject to Sections 2.1(a)(vii) and 7.11(b), the purchase price (“ Purchase Price ”) for the Assets shall be the sum of:

(a) An amount equal to 5% (8.5% in the case of the Flushing Replacement, if any, and 10.0% in the case of the Davison Replacement, if any, as provided in Section 7.4) of the average daily balance of the Deposits for the period commencing fourteen (14) calendar days prior to and inclusive of the day prior to the Closing Date and ending on the day prior to the Closing Date;

(b) The aggregate amount of Cash on Hand as of the Closing Date;

(c) The aggregate net book value of the Personal Property, as reflected on the books of Republic Bank as of the close of business of the month-end day most recently preceding the Closing Date;

(d) The aggregate net book value of Owned Real Property as reflected on the books of Republic Bank as of the close of business of the month-end day most recently preceding the Closing Date

(e) The amount of the unpaid principal balance of the Loans (excluding all Additional Loans) as of the close of business on the Closing Date, multiplied by 0.9660, plus the amount of Accrued Interest as of the Closing Date on Loans that are not thirty (30) or more days past due; and

 

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(f) If acquired by Purchaser, the amount of the unpaid principal balance of the Additional Loans as of the close of business on the Closing Date, plus the amount of Accrued Interest as of the Closing Date on Loans that are not thirty (30) or more days past due.

2.4  Assumption of IRAs . (a) With respect to Deposits in IRAs, Seller will use reasonable best efforts to cooperate with Purchaser in taking any action reasonably necessary to accomplish either the appointment of Purchaser as successor custodian or the delegation to Purchaser (or to an Affiliate of Purchaser) of Republic Bank’s authority and responsibility as custodian of all such IRA deposits (except self-directed IRA deposits), including, but not limited to, sending to the depositors thereof appropriate notices, cooperating with Purchaser (or such Affiliate) in soliciting consents from such depositors, and filing any appropriate applications with applicable regulatory authorities. If any such delegation is made to Purchaser (or such Affiliate), Purchaser (or such Affiliate) will perform all of the duties so delegated and comply with the terms of Republic Bank’s agreement with the depositor of the IRA deposits affected thereby.

(b) If, notwithstanding the foregoing, as of the Closing Date, Purchaser shall be unable to retain deposit liabilities in respect of an IRA, such deposit liabilities, which shall be set forth on Schedule 2.4(b), shall be excluded from Deposits for purposes of this Agreement and shall constitute “ Excluded IRA Account Deposits .” All Keogh Accounts and deposits related thereto shall remain the obligation of Seller after the Closing.

2.5  Sale and Transfer of Servicing . (a) The Loans shall be sold on a servicing-released basis. As of the Closing Date, all rights, obligations, liabilities and responsibilities with respect to the servicing of the Loans after the Closing Date shall be assumed by Purchaser. Republic Bank shall be discharged and indemnified by Purchaser from all liability with respect to servicing of the Loans after the Closing Date and Purchaser shall not assume and shall be discharged and indemnified by Republic Bank from all liability with respect to servicing of the Loans on or prior to the Closing Date.

 

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ARTICLE 3

CLOSING PROCEDURES; ADJUSTMENTS

3.1  Closing . (a) The Closing will be held at the offices of Seller, at 328 S. Saginaw Street, Flint, Michigan, or such other place as may be agreed to by the parties.

(b) Subject to the satisfaction or, where legally permitted, the waiver of the conditions set forth in Article IX, the Closing Date shall be April 27, 2007 following the receipt of all Regulatory Approvals and the expiration of all related statutory waiting periods, except as otherwise provided in the next sentence of this Section 3.1(b). Unless the parties agree pursuant to Section 4.10(a) that the conversion of the data processing with respect to the Branches and the Assets and Liabilities will be performed other than on the weekend immediately following the Closing Date, the Closing Date shall be a Friday and the conversion will be completed prior to the opening of business on the following Monday.

3.2  Payment at Closing . (a) At Closing, Seller shall pay to Purchaser the amount by which the aggregate balance (including Accrued Interest) of the Deposits exceeds the Estimated Purchase Price (the “ Estimated Payment Amount ”) as set forth on the Draft Closing Statement as reasonably agreed prior to Closing upon between Seller and Purchaser.

(b) All payments to be made hereunder by Seller to Purchaser shall be made by wire transfer of immediately available funds (in all cases to an account specified in writing by Purchaser, as the case may be, to the other not later than the third (3 ^rd ) Business Day prior to the Closing Date) on or before 12:00 noon Flint, Michigan time on the date of payment.

(c) If any instrument of transfer contemplated herein shall be recorded in any public record before the Closing and thereafter the Closing does not occur, then at the request of such transferring party the other party will deliver (or execute and deliver) such instruments and take such other action as such transferring party shall reasonably request to revoke such purported transfer.

3.3  Adjustment of Purchase Price . (a) On or before 12:00 noon Flint, Michigan time on the thirtieth (30 ^th ) calendar day following the Closing Date (the “ Adjustment Date ”), Seller shall deliver to Purchaser the Final Closing Statement and shall make

 

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available such work papers, schedules and other supporting data used to calculate and prepare the Final Closing Statement and as may be reasonably requested by Purchaser to enable it to verify the amounts set forth in the Final Closing Statement. The Final Closing Statement shall also set forth the amount (the “ Adjusted Payment Amount ”) by which the aggregate amount of Deposits (including Accrued Interest) shown on the Final Closing Statement differs from the Estimated Purchase Price.

(b) The determination of the Adjusted Payment Amount shall be final and binding on the parties hereto on the thirtieth (30 ^th ) calendar day after receipt by Purchaser of the Final Closing Statement, unless Purchaser shall notify Seller in writing of its disagreement with any amount included therein or omitted therefrom, in which case, if the parties are unable to resolve the disputed items within ten (10) Business Days of the receipt by Seller of notice of such disagreement, such items shall be determined by a nationally recognized independent accounting firm selected by mutual agreement between Seller and Purchaser; provided, however, that in the event the fees of such firm, as estimated by such firm, would exceed fifty percent (50%) of the net amount in dispute, the parties agree that such firm will not be engaged by either party and that such net amount in dispute will be equally apportioned between Seller and Purchaser. Such accounting firm shall be instructed to resolve the disputed items within ten (10) Business Days of engagement, to the extent reasonably practicable. The determination of such accounting firm shall be final and binding on the parties hereto. The fees of any such accounting firm shall be divided equally between Seller and Purchaser. Seller and Purchaser agree to fully cooperate with and provide any information requested by such accounting firm.

(c) On or before 12:00 noon Flint, Michigan time on the fifth (5 ^th ) Business Day after the Adjusted Payment Amount shall have become final and binding or, in the case of a dispute, the date of the resolution of the dispute pursuant to subsection 3.3(b) above, Seller shall pay to Purchaser an amount equal to the amount by which the Adjusted Payment Amount exceeds the Estimated Payment Amount, plus interest on

 

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such excess amount from the Closing Date to but excluding the payment date, at the Federal Funds Rate or, if the Estimated Payment Amount exceeds the Adjusted Payment Amount, Purchaser shall pay to Seller an amount equal to such excess, plus interest on such excess amount from the Closing Date to but excluding the payment date, at the Federal Funds Rate. Any payments required by Section 3.4 shall be made contemporaneously with the foregoing payment.

3.4  Proration; Other Closing Date Adjustments . Except as otherwise specifically provided in this Agreement, it is the intention of the parties that Seller will operate the Branches for its own account until 11:59 p.m., Eastern Standard Time, on the Closing Date, and that Purchaser shall operate the Branches, hold the Assets and assume the Liabilities for its own account after the Closing Date. For purposes of this Agreement, certain items of income and credits will be prorated between the parties as provided below. The items that will be prorated at Closing include, without limitation: (i) rental payments and security deposits under the Branch Leases; (ii) Property Taxes; (iii) FDIC deposit insurance assessments; (iv) trustee or custodian fees on IRA Accounts; (v) pre-paid expenses and items and accrued but unpaid liabilities and expenses, as of the close of business on the Closing Date; (vi) safe deposit rental payments previously received by Seller; and (vii) utility, water and sewer charges, assessments and maintenance, shall be prorated between Purchaser and Seller as of the close of business on the Closing Date such that as of 11:59 p.m., Eastern Standard Time, on the Closing Date all such items related to the operation of the Branches on and prior to the Closing Date shall be paid by Seller and all such items related to the operation of the Branches after the Closing Date shall be paid by Purchaser to be settled by such parties on the Closing Date. Items of proration will be handled by the parties at Closing as an adjustment to the Purchase Price, unless otherwise agreed to by the parties.

3.5  Seller Deliveries . At the Closing (or, in the case of the documents referenced in clauses (j) and (i) below, within twenty-four (24) hours of the Closing Date), Seller shall or shall cause Republic Bank to, as applicable, deliver to Purchaser:

(a) The deeds and all other instruments of conveyance as may be necessary to sell, transfer and convey all right, title and interest in and to the Owned Real Property to Purchaser free and clear of all Encumbrances;

(b) A bill of sale in substantially the form of Schedule 3.5(b) pursuant to which the Personal Property shall be transferred to Purchaser;

 

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(c) An assignment and assumption agreement in substantially the form of Schedule 3.5(c), with respect to the Liabilities (the “ Assignment and Assumption Agreement ”);

(d) Subject to Section 7.4, lease assignment and assumption agreements in substantially the form of Schedule 3.5(d), with respect to each of the Branch Leases (the “ Lease Assignments ”);

(e) An Officer’s Certificate in substantially the form of Schedule 3.5(e);

(f) Subject to Section 7.4, copies of the consents of the landlords/lessors to the assignment of the Branch Leases by Seller to Purchaser;

(g) The Draft Closing Statement;

(h) Republic Bank’s resignation as trustee or custodian, as applicable, with respect to each IRA included in the Deposits and designation of Purchaser as successor trustee or custodian with respect thereto, as contemplated by Section 2.4;

(i) A certification of non-foreign status meeting the requirements of Treasury Regulation 1.1445-2(b)(2), duly executed and acknowledged, substantially in the form of the sample certificates set forth in Treasury Regulation Section 1.1445-2(b)(2)(iv);

(j) Seller’s keys to the safe deposit boxes and all other records as exist and are in Seller’s possession or control related to the safe deposit box business at the Branches;

(k) Seller’s files and records related to the Loans, the Loan Documents and the collateral for the Loans as exist and are in the possession or control of Seller as provided in Section 3.7;

 

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(l) Seller’s records related to the Deposits assumed by Purchaser as exist and are in the possession or control of Seller;

(m) The contract, agreements, leases and other documentation related to the Assets and Liabilities;

(n) The Cash on Hand;

(o) Such other Assets to be purchased as shall be capable of physical delivery;

(p) A certified copy of the resolutions of the boards of directors of Seller approving the transactions contemplated by this Agreement; and

(q) Such other documents as the parties determine are reasonably necessary to consummate the P&A Transaction as contemplated hereby.

3.6  Purchaser Deliveries . At the Closing, Purchaser shall deliver to Citizens or Republic Bank, as applicable:

(a) The Assignment and Assumption Agreement;

(b) Purchaser’s acceptance of its appointment as successor trustee or custodian, as applicable, of the IRAs included in the Deposits and assumption of the fiduciary obligations of the trustee or custodian with respect thereto, as contemplated by Section 2.4;

(c) The Lease Assignments and such other instruments and documents as any landlord under a Branch Lease may reasonably require as necessary or desirable for providing for the assumption by Purchaser of a Branch Lease, each such instrument and document in form and substance reasonably satisfactory to the parties and dated as of the Closing Date;

(d) An Officer’s Certificate in substantially the form of Schedule 3.6(d);

 

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(e) A certified copy of a resolution of the board of directors of Purchaser approving the transactions contemplated by this Agreement; and

(f) Such other documents as the parties determine are reasonably necessary to consummate the P&A Transaction as contemplated hereby.

3.7  Delivery of the Loan Documents . (a) Not later than 24 hours following the Closing Date, Republic Bank shall deliver to Purchaser or its designee the Loan Documents (reasonably organized and cataloged), in the medium (including imaged documents) then maintained by Republic Bank. Seller shall have no responsibility or liability for the Loan Documents from and after the time such files are delivered by Republic Bank to Purchaser or to an independent third party designated by Purchaser for shipment to Purchaser, the cost of which shall be the sole responsibility of Seller.

(b) Promptly upon execution of this Agreement, Purchaser shall provide Seller with the exact name to which the Loans are to be endorsed, or whether any Loans should be endorsed in blank. Seller will use its reasonable best efforts to complete such endorsements and deliver the Loan Documents, along with appropriate assignments of real property security instruments in recordable form and assignments of financing statements, at the Closing.

3.8  Collateral Assignments and Filing . Seller shall take all such reasonable actions as requested by Purchaser to assist Purchaser in obtaining the valid perfection of a lien or security interest in the collateral, if any, securing each Loan sold on the Closing Date in favor of Purchaser or its designated assignee as secured party. Any such action shall be at the sole expense of Purchaser, and Purchaser shall reimburse Seller for all reasonable third party costs incurred in connection therewith.

3.9  Owned Real Property Filings . On or prior to the Closing Date, Seller and Purchaser shall file or record, or cause to be filed or recorded, any and all documents necessary in order that the legal and equitable title to Owned Real Property as provided herein be duly vested in Purchaser. Any Transfer Taxes shall be paid as provided in Section 8.2 and all escrow closing costs shall be borne one-half by Seller and one-half by Purchaser.

 

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3.10  Allocation of Purchase Price .

(a) No later than sixty (60) calendar days after the Closing Date, Purchaser shall deliver to Citizens a statement setting forth an allocation of the Purchase Price paid in respect of the Assets (for federal, state and local Tax purposes) in accordance with the rules under Section 1060 of the Code (the “Allocation”). Citizens shall timely deliver all such documents, forms and other information as Purchaser may reasonably request to prepare such Allocation. Purchaser and Citizens shall comply with all substantive and procedural requirements of Section 1060 and any regulations thereunder, and the allocation shall be adjusted if and to the extent necessary to comply with the requirements of Section 1060. Citizens shall have a period of ten (10) Business Days following receipt of the Allocation in which to review the Allocation and raise any objections that Citizens may have. Unless Citizens timely objects, the Allocation shall become binding on the parties without further adjustment. If Citizens timely objects, Citizens and Purchaser shall negotiate in good faith to resolve the disagreement during the ten-day period following Citizens’ notice. If the disagreement is not resolved during such ten-day period, the dispute shall be referred to an independent accounting firm selected mutually by Purchaser and Citizens and such Allocation shall be modified by any resolution and thereupon such Allocation shall become final and binding. Purchaser and Citizens shall jointly bear the costs of such independent accounting firm.

(b) The parties agree to file their federal income Tax Returns and their other Tax Returns (including any forms or reports required to be filed pursuant to Section 1060 of the Code or any provisions of state and local law) reflecting such allocation and shall take no position contrary thereto unless required to do so pursuant to a determination (as defined in Section 1313(a) of the Code). Purchaser and Seller shall promptly inform each other of any challenge by any governmental authority to the Allocation and

 

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agree to consult with and keep each other reasonably informed with respect to the status of and any material discussion, proposal or submission with respect to, any challenge.

3.11  Additional Loans . Promptly following the date hereof the parties will agree on a schedule and process for providing the relevant information relating to Additional Loans (“Additional Loan Information”) originated at the Branches after the date hereof through the fifth Business Day prior to the Closing Date (with Additional Loan Information provided to Purchaser not less frequently than monthly and not later than the second (2 ^nd ) Business Day prior to the Closing Date) such that Purchaser deems reasonably necessary to enable it to determine whether to designate such Loans as “Additional Loans.” The parties will further agree on a schedule for Purchaser to designate Loans as “Additional Loans,” which shall occur not later than the fifth (5 ^th ) Business Day following the date that the applicable Additional Loan Information was provided to Purchaser and not later than the close of business on the day preceding the Closing Date. Unless the parties otherwise agree, Loans originated after the fifth (5 ^th ) Business Day prior to the Closing Date shall not be Additional Loans. Any Loans originated after the date hereof that Purchaser does not designate as Additional Loans pursuant to the agreed upon process shall not be Loans, Additional Loans, Liabilities or Assets and may, without regard to any other provisions of this Agreement (including Section 7.1), be transferred by Seller to another Seller banking branch, together with any related servicing or other rights or collateral.

ARTICLE 4

TRANSITIONAL MATTERS

4.1  Transitional Arrangements . Seller and Purchaser agree to cooperate and to proceed as follows to effect the transfer of account record responsibility for the Branches:

(a) Not later than thirty (30) calendar days after the date of this Agreement, Seller will meet with Purchaser to investigate, confirm and agree upon mutually acceptable transaction settlement procedures and specifications, files, procedures and schedules, for the transfer of account record responsibility; provided, however, that Seller shall not be obligated under this Agreement to provide Purchaser any information regarding Seller’s relationship with the customers outside of the relevant Branch (e.g., other customer products, householding information).

 

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(b) Not later than twenty (20) calendar days after the date of this Agreement, Seller shall deliver to Purchaser the specifications and conversion sample files.

(c) From time to time prior to the Closing, after Purchaser has tested and confirmed the conversion sample files, Purchaser may request and Seller shall provide standard core system de-conversion files, including, without limitation, complete name and address, account masterfile, ATM account number information, applicable transaction and stop/hold/caution information, account-to-account relationship information and any other related information with respect to the Deposits and the Other Loans.

(d) Upon the reasonable request of Purchaser, Seller will use its reasonable best efforts to cooperate with Purchaser and will make available at Purchaser’s reasonable request prior to the Closing Date a reasonable number of technical personnel for consultation with Purchaser concerning matters other than the matters referred to in this Section 4.1.

4.2  Customers . (a) Not later than thirty (30) calendar days nor earlier than sixty (60) calendar days prior to the Closing Date (except as otherwise required by applicable law):

(i) Republic Bank will notify the holders of Deposits to be transferred on the Closing Date that, subject to the terms and conditions of this Agreement, Purchaser will be assuming liability for such Deposits; and

(ii) each of Republic Bank and Purchaser shall provide, or join in providing where appropriate, all notices to customers of the Branches and other persons that Republic Bank or Purchaser, as the case may be, is required to give under applicable law or the terms of any other agreement between Republic Bank and any customer in connection with the transactions contemplated hereby.

 

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A party proposing to send or publish any notice or communication pursuant to this Section 4.2 shall furnish to the other party a copy of the proposed form of such notice or communication at least five (5) calendar days in advance of the date of the first mailing, posting, or other dissemination thereof to customers, and shall not unreasonably refuse to amend such notice to incorporate any changes that the other such party proposes as necessary to comply with applicable law. All costs and expenses of any notice or communication sent or published by Purchaser or Republic Bank shall be the responsibility of the party sending such notice or communication and all costs and expenses of any joint notice or communication shall be shared equally by Seller and Purchaser. As soon as reasonably practicable and in any event within fifteen (15) calendar days after the date hereof, Seller shall provide to Purchaser a report of the names and addresses of the owners of the Deposits, the borrowers on the Loans and the lessees of the safe deposit boxes as of the date hereof in connection with the mailing of such materials. No communications by Purchaser, and no communications by Seller outside the ordinary course of business, to any such owners, borrowers or lessees shall be made prior to the Closing Date except as provided in this Agreement or otherwise agreed to by the parties in writing.

(b) Following the giving of any notice described in paragraph (a) above, Purchaser and Republic Bank shall deliver to each new customer at any of the Branches such notice or notices as may be reasonably necessary to notify such new customers of Purchaser’s pending assumption of liability for the Deposits and to comply with applicable law. As soon as reasonably practicable after the date of this Agreement, Seller will provide Purchaser with account information, including complete mailing addresses for each of the depositors of the Deposits, as of a recent date, and upon reasonable request shall provide an updated version of such records; provided, however, that Seller shall not be obligated to provide such updated records more than twice.

(c) Notwithstanding the provisions of Section 7.5, neither Purchaser nor Seller shall object to the use by depositors of the Deposits of payment orders issued to or ordered by such depositors on or prior to the Closing Date, which payment orders bear the name, or any logo, trademark, service mark or proprietary mark, of Seller, Citizens, Republic or any of their respective Affiliates.

4.3  Direct Deposits . Seller will transfer to Purchaser on the Closing Date all of those automated clearing house (“ ACH ”) and FedWire direct deposit arrangements related (by agreement or other standing arrangement) to the Deposits that are in Seller’s ACH

 

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warehouse system and will use its reasonable best efforts to so transfer all other such arrangements. For a period of three (3) months following the Closing Date, in the case of ACH direct deposits to accounts containing Deposits (the final Business Day of such period being the “ ACH Direct Deposit Cut-Off Date ”), Seller shall transfer to Purchaser all received ACH Direct Deposits at 9:00 a.m. Eastern Standard Time each Business Day and ACH warehouse transaction information will be provided to Purchaser no later than 9:00 a.m. Eastern Standard Time on the Business Day following the date of Seller’s receipt of the applicable information. Such transfers shall contain Direct Deposits effective for that Business Day only. On each Business Day, for a period of thirty (30) calendar days following the Closing Date (the final Business Day of such period being the “ FedWire Direct Deposit Cut-Off Date ”), FedWires received by Seller shall be returned (as soon as is practicable after receipt) to the originator with an indication of Purchaser’s correct Wire Room contact information and an instruction that such wire should be sent to Purchaser. Compensation for ACH direct deposits or FedWire direct deposits not forwarded to Purchaser on the same Business Day as that on which Republic Bank has received such deposits will be handled in accordance with the applicable rules established by the United States Council on International Banking. After the respective ACH Direct Deposit Cut-Off Date or FedWire Direct Deposit Cut-Off Date, Seller may discontinue accepting and forwarding ACH and FedWire entries and funds and return such direct deposits to the originators marked “Account Closed.” Seller and its Affiliates shall not be liable for any overdrafts that may thereby be created. Purchaser and Seller shall agree on a reasonable period of time prior to the Closing during which Seller will no longer be obligated to accept new direct deposit arrangements related to the Branches. At the time of the ACH Direct Deposit Cut-Off Date, Purchaser will provide ACH originators with account numbers relating to the Deposits.

4.4  Direct Debits . As soon as practicable after execution of this Agreement and after the notice provided in Section 4.2(a), Purchaser shall send appropriate notice to all customers having accounts constituting Deposits, the terms of which provide for direct debit of such accounts by third parties, instructing such customers concerning the transfer of customer direct debit authorizations from Republic Bank to Purchaser. Such notice shall be in a form reasonably agreed to by the parties hereto. For a period of three (3) months following the Closing, Republic Bank shall transfer to Purchaser all received direct debits on accounts constituting Deposits at 9:00 a.m. Eastern Standard Time each Business Day. Such transfers shall contain Direct Debits effective for that Business Day only. Thereafter, Republic Bank may discontinue forwarding such entries and return them to the originators marked “Account Closed.” Purchaser and Seller shall agree on a reasonable period of time prior to the Closing during which Republic Bank will no longer be obligated to accept new direct debit arrangements related to the Branches. On the Closing Date, Purchaser shall provide ACH originators of such Direct Debits with account numbers relating to the Deposits.

4.5  Escheat Deposits . No currently escheated deposits are being sold. After Closing, Purchaser shall be solely responsible for the proper reporting and transmission to the appropriate governmental authority of Escheat Deposits.

 

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4.6  Access to Records . From and after the Closing Date, each of the parties shall permit the other reasonable access to any applicable Records in its possession relating to matters arising on or before the Closing Date and reasonably necessary in connection with any claim, action, litigation or other proceeding involving the party requesting access to such Records or in connection with any legal obligation owed by such party to any present or former depositor or other customer, subject to confidentiality requirements. All Records, whether held by Purchaser or Republic Bank, shall be maintained for such periods as are required by law, unless the parties shall agree in writing to a longer period.

4.7  Interest Reporting and Withholding . (a) Unless otherwise agreed to by the parties, Republic Bank will report to applicable taxing authorities and holders of Deposits, with respect to the period from January 1 of the year in which the Closing occurs through the Closing Date, all interest (including dividends and other distributions with respect to money market accounts) credited to, withheld from and any early withdrawal penalties imposed upon the Deposits. Purchaser will report to the applicable taxing authorities and holders of Deposits, with respect to all periods from the day after the Closing Date, all such interest credited to, withheld from and any early withdrawal penalties imposed upon the Deposits. Any amounts required by any governmental agencies to be withheld from any of the Deposits through the Closing Date will be withheld by Republic Bank in accordance with applicable law or appropriate notice from any taxing authority and will be remitted by Republic Bank to the appropriate agency on or prior to the applicable due date. Any such withholding required to be made subsequent to the Closing Date will be withheld by Purchaser in accordance with applicable law or appropriate notice from any taxing authority and will be remitted by Purchaser to the appropriate authority on or prior to the applicable due date.

(b) Unless otherwise agreed by the parties, Republic Bank shall be responsible for delivering to payees all IRS notices and forms with respect to information reporting and tax identification numbers required to be delivered through the Closing Date with respect to the Deposits, and Purchaser shall be responsible for delivering to payees all such notices and forms required to be delivered following the Closing Date with respect to the Deposits.

(c) Unless otherwise agreed by the parties, Republic Bank will make all required reports to applicable taxing authorities and to obligors on Loans purchased on the Closing Date, with respect to the period from January 1 of the year in which the Closing occurs through the Closing Date, concerning all interest and points received by Republic Bank. Purchaser will make all required reports to applicable taxing authorities and to obligors on Loans purchased

 

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on the Closing Date, with respect to all periods from the day after the Closing Date, concerning all such interest and points received.

4.8  Negotiable Instruments . Seller will remove any supply of Seller’s money orders, official checks, gift checks, travelers’ checks or any other negotiable instruments located at each of the Branches on the Closing Date.

4.9  ATM/Debit Cards; POS Cards . Seller will provide Purchaser with a list of ATM access/debit cards and Point-of-Sale (“POS”) cards issued by Seller to depositors of any Deposits, and a record thereof in a format reasonably agreed to by the parties containing all addresses therefor, as soon as practicable and in no event later than fifteen (15) calendar days after the date of this Agreement and Seller will provide Purchaser with an updated record forty-five (45) calendar days prior to the Closing Date. At or promptly after the Closing, Seller will provide Purchaser with a revised record through the Closing. In instances where a depositor of a Deposit made an assertion of error regarding an account pursuant to the Electronic Funds Transfer Act and Federal Reserve Board Regulation E, and Republic Bank, prior to the Closing, recredited the disputed amount to the relevant account during the conduct of the error investigation, Purchaser agrees to comply with a written request from Republic Bank to debit such account in a stated amount and remit such amount to Republic Bank, to the extent of the balance of funds available in the acc