Exhibit 99.1
Execution Copy
PURCHASE AND ASSUMPTION AGREEMENT
Between
MILLENNIUM BANK, N.A.
(“Seller”)
and
EVB
(“Purchaser”)
PURCHASE AND ASSUMPTION
AGREEMENT
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ARTICLE I TRANSFER OF ASSETS AND
LIABILITIES
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1
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Section 1.1. Transferred Assets
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1
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Section 1.2. Purchase Price
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2
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Section 1.3. Deposit Liabilities
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3
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Section 1.4. Loans Transferred
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6
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Section 1.5. Safe Deposit Business
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9
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Section 1.6. Employee Matters
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9
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Section 1.7. Records and Data Processing
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10
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Section 1.9. Taxes and Fees; Proration of Certain
Expenses
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11
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Section 1.10. Real Property
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11
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Section 1.11. Purchase Price Allocation
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15
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ARTICLE II CLOSING AND EFFECTIVE
TIME
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15
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Section 2.1. Effective Time
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15
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Section 2.3. Post-Closing Adjustments
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18
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ARTICLE III INDEMNIFICATION
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19
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Section 3.1. Seller’s Indemnification of
Purchaser
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19
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Section 3.2. Purchaser’s Indemnification of
Seller
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19
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Section 3.3. Claims for Indemnity
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19
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Section 3.4. Limitations on
Indemnification.
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20
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Section 3.5. Exclusive Remedy.
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20
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
SELLER
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21
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Section 4.1. Corporate Organization
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21
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Section 4.2. No Violation
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21
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Section 4.3. Corporate Authority
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21
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Section 4.4. Enforceable Agreement
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21
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Section 4.5. No Brokers
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21
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Section 4.6. Personal Property
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22
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Section 4.7. Real Property
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22
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Section 4.8. Condition of Property
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22
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Section 4.10. Compliance with Certain
Laws
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23
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Section 4.11. Community Reinvestment Act
Representation
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23
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Section 4.12. Limitation of Representations and
Warranties
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23
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF
PURCHASER
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23
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Section 5.1. Corporate Organization
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23
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Section 5.2. No Violation
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24
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Section 5.3. Corporate Authority
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24
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Section 5.4. Enforceable Agreement
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24
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Section 5.5. No Brokers
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24
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ARTICLE VI OBLIGATIONS OF PARTIES PRIOR TO AND
AFTER
EFFECTIVE
TIME
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24
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Section 6.1. Access to Information
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24
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Section 6.2. Delivery of Magnetic Media
Records
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25
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Section 6.3. Application for Approval to Effect
Purchase of Assets and
Assumption
of Liabilities
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25
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Section 6.4. Conduct of Business; Maintenance of
Properties
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25
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Section 6.5. No Solicitation by Seller
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26
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Section 6.6. Further Actions
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27
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Section 6.7. Fees and Expenses
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27
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Section 6.8. Breaches with Third Parties
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27
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Section 6.9. Insurance
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27
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Section 6.10. Public Announcements
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27
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Section 6.11. Tax Reporting
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27
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Section 6.12. Use of Seller’s Name and
Documents
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28
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ARTICLE VII CONDITIONS TO PURCHASER'S
OBLIGATIONS
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28
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Section 7.1. Representations and Warranties
True
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28
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Section 7.2. Obligations Performed
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28
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Section 7.3. No Adverse Litigation
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28
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Section 7.4. Regulatory Approval
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28
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ARTICLE VIII CONDITIONS TO SELLER'S
OBLIGATIONS
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29
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Section 8.1. Representations and Warranties
True
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29
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Section 8.2. Obligations Performed
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29
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Section 8.3. No Adverse Litigation
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29
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Section 8.4. Regulatory Approval
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29
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ARTICLE IX TERMINATION
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29
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Section 9.1. Methods of Termination
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29
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Section 9.2. Procedure Upon Termination
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30
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Section 9.3. Payment of Expenses
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31
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ARTICLE X MISCELLANEOUS PROVISIONS
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31
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Section 10.1. Amendment and Modification
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31
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Section 10.2. Waiver or Extension
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31
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ii
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Section 10.3. Assignment
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31
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Section 10.4. Confidentiality
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32
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Section 10.5. Knowledge of Seller
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32
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Section 10.6. Retention of Documents
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32
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Section 10.7. Addresses for Notices, Etc.
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32
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Section 10.8. Counterparts
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34
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Section 10.9. Headings
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34
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Section 10.10. Governing Law
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34
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Section 10.11. Sole Agreement
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34
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Section 10.12. Severability
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34
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Section 10.13. Parties In Interest
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34
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iii
PURCHASE AND ASSUMPTION
AGREEMENT
THIS PURCHASE AND ASSUMPTION AGREEMENT
(this “Agreement”) is entered into as of
November 30, 2007 between MILLENNIUM BANK, N.A., a national banking
association having its principal offices in Reston, Virginia
(“Seller”), and EVB, a Virginia banking corporation
having its principal offices in Tappahannock, Virginia
(“Purchaser”):
W I T N E S S E T H
:
WHEREAS , Seller wishes
to transfer, upon the terms and conditions set forth herein,
certain assets and certain deposit and other liabilities of the
offices at the locations set forth in Exhibit 1 (collectively the
“Banking Centers”); and
WHEREAS , Purchaser
wishes to buy such assets and assume such liabilities upon the
terms and conditions set forth herein;
NOW, THEREFORE , in
consideration of the premises and mutual agreements hereinafter set
forth, Seller and Purchaser agree as follows:
ARTICLE I
TRANSFER OF ASSETS AND
LIABILITIES
Section 1.1 .
Transferred Assets .
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(a)
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As of the Effective Time (as defined in Section 2.1)
and upon the terms and conditions set forth herein, Seller will
sell, assign, transfer, convey and deliver to Purchaser, and
Purchaser will purchase from Seller, all of the rights, title and
interests of Seller in the following assets associated with the
Banking Centers and identified in this Agreement and the Exhibits
hereto, and not otherwise excluded from sale pursuant to the
provisions of Subsection 1.1(b):
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(1)
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subject to Section 1.10, the leases (the “Real
Property Leases”) as to the real property, and the
improvements thereon (the “Real Property”), at the
Banking Centers, together with all rights and appurtenances
pertaining thereto; all of which leases are listed on
Exhibit 1.1(a)(1) ;
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(2)
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except as provided in Section 1.1(b), the furniture,
fixtures, leasehold improvements, equipment and other tangible
personal property owned by Seller and located at each Banking
Center or used in conducting Seller’s business at each
Banking Center (the “Personal Property”);
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(3)
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[OMITTED INTENTIONALLY]
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(4)
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all safe deposit contracts and leases for the safe
deposit boxes located at the Banking Centers as of the Effective
Time (the “Safe Deposit Contracts”);
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(5)
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all Loans (as defined in Section 1.4(a)) transferred
pursuant to Section 1.4;
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(6)
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all coins and currency located at the Banking
Centers as of the Effective Time (the “Coins and
Currency”);
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(7)
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all merchant services accounts associated with
Deposit Liabilities (as defined in Section 1.3(a)) located at the
Banking Centers; and
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(8)
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all night depository contracts.
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(b)
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Excluded from the assets, properties and rights
being transferred, conveyed and assigned to Purchaser under this
Agreement are the assets listed on Exhibit
1.1(b) hereto, Seller’s rights in
and to the names “Millennium Bank,”
“Millennium,” and any variant thereof, and any of
Seller’s corporate logos, trademarks, trade names, signs,
paper stock, forms and other supplies containing any such logos,
trademarks or trade names, and trade names and logos of third
parties with whom Seller has contracted to provide services to its
customers (together, the “Excluded Assets”). Seller
shall coordinate with Purchaser to remove the Excluded Assets from
the Banking Centers on or prior to the Effective Time. Seller shall
remove the Excluded Assets at its own cost, and, apart from making
any reasonable repairs necessitated by removing the Excluded
Assets, Seller shall be under no obligation to restore the Banking
Centers premises to their original condition, which shall be the
responsibility of Purchaser.
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Section 1.2 .
Purchase Price .
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(a)
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As consideration for the purchase of the Banking
Centers, Purchaser shall pay Seller a purchase price (the
“Purchase Price”) equal to the sum of the
following:
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(1)
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A premium for the Deposit Liabilities (as defined in
Section 1.3(a)) and franchise value related to the Banking Centers
equal to 9.25% of the Deposit Liabilities;
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(2)
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The Net Book Value (as defined in Section 1.2(d)),
including accrued interest, for the Loans as set forth in Section
1.4;
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(3)
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The Net Book Value (as defined in Section 1.2(d)) of
the Personal Property; and
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(4)
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The face amount of the Coins and
Currency.
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2
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(b)
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In addition, Purchaser shall assume, as of the
Effective Time, all of the duties, obligations and liabilities of
Seller arising on or after the Effective Time relating to the Real
Property Leases, the Safe Deposit Contracts, and the Deposit
Liabilities (including all accrued interest relating thereto)
(collectively, the “Assumed Liabilities”); provided,
that any cash items paid by Seller and not cleared prior to the
Effective Time shall be the responsibility of Seller, subject to
the terms of Section 1.3.
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(c)
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Seller shall prepare a balance sheet (the
“Pre-Closing Balance Sheet”) in accordance with
customary banking practices as of a date two business days prior to
the Effective Time anticipated by the parties (the
“Pre-Closing Balance Sheet Date”) reflecting the assets
to be sold and assigned and the liabilities to be transferred and
assumed hereunder, all based on the estimated book value of such
assets and liabilities as of the Effective Time; Seller agrees to
pay to Purchaser at the Closing (as defined in Section 2.1), in
immediately available funds, the excess amount, if any, of the
amount of Deposit Liabilities assumed by Purchaser pursuant to
subsection (b) above as reflected by the Pre-Closing Balance Sheet
over the aggregate Purchase Price computed in accordance with
subsection (a) above, as reflected by the Pre-Closing Balance
Sheet. Purchaser agrees to pay Seller at the Closing by wire
transfer, in immediately available funds, the excess, if any, of
the aggregate Purchase Price computed in accordance with subsection
(a) above, as reflected by the Pre-Closing Balance Sheet, over the
amount of Deposit Liabilities assumed by Purchaser pursuant to
subsection (b) above as reflected by the Pre-Closing Balance Sheet.
Amounts paid at Closing shall be subject to subsequent adjustment
based on the Post-Closing Balance Sheet (as defined in Section
2.3).
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(d)
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For purposes of this Agreement, “Net Book
Value” means the value determined from the Post-Closing
Balance Sheet; provided, however, that such value shall not include
the loan loss reserve attributable to any Loan or any general
reserve, and provided further that, if the Closing occurs on any
day other than the first (1 st ) day of a calendar
month, then, with respect to the depreciable assets to be
transferred hereunder, the depreciation thereon shall be prorated
based on the number of days elapsed during the month of Closing
from through the date of Closing and the total number of days in
such month.
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Section 1.3 .
Deposit Liabilities .
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(a)
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“Deposit Liabilities” shall mean all of
Seller’s duties, obligations and liabilities relating to the
deposit accounts (except as set forth in Section 1.3(b)) located at
and attributable to the Banking Centers as of the Effective Time
(including accrued but unpaid or uncredited interest thereon),
including, but not limited to, demand deposit accounts, savings
accounts, certificates of deposit and deposits held in Individual
Retirement Accounts. A projected list of the Deposit Liabilities is
attached hereto as Exhibit
1.3(a) and shall be updated as soon as
practicable after Closing.
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(b)
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Except for those liabilities and obligations
specifically assumed by Purchaser under Section 1.2(b) and except
as otherwise provided in Section 1.6(a), Purchaser is not assuming
any other liabilities or obligations of Seller or otherwise.
Subject to the limitations on indemnification set forth in Section
3.4, liabilities not assumed include, but are not limited to, the
following:
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(1)
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Seller’s official checks, cashier checks,
letters of credit, money orders, interest checks and expense checks
issued prior to Closing, consignments of U.S. Government
“E” and “EE” bonds and any and all
traveler’s checks.
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(2)
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Liabilities or obligations of Seller with respect to
any litigation, suits, claims, demands or governmental proceedings
arising, commenced or made known to Seller prior to Closing or
arising from events occurring prior to Closing.
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(3)
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Accounts overdrawn or without sufficient funds on
the Pre-Closing Balance Sheet, except that at Closing Purchaser may
elect to purchase any one or more of such accounts.
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(4)
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Deposit accounts associated with lines of credit
where the line of credit is excluded in accordance with Section 1.4
(b).
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(5)
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Seller’s obligations for or under any data
processing contracts.
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(6)
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Deposit accounts associated with Seller’s
national or regional account relationships, if any.
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(7)
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Closed accounts of any kind or listings or
descriptions of such accounts.
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(c)
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Seller does not represent or warrant that any
deposit customers whose accounts are assumed by Purchaser will
become or continue to be customers of Purchaser after the Effective
Time.
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(d)
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Purchaser agrees to pay in accordance with law and
customary banking practices all properly drawn and presented
checks, drafts and withdrawal orders presented to Purchaser by
mail, over the counter or through the check clearing system of the
banking industry, by depositors of the accounts assumed, whether
drawn on the checks, withdrawal or draft forms provided by Seller
or by Purchaser, and in all other respects to discharge, in the
usual course of the banking business, the duties and obligations of
Seller with respect to the balances due and owing to the depositors
whose accounts are assumed by Purchaser.
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(e)
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If, after the Effective Time, any depositor, instead
of accepting the obligation of Purchaser to pay the Deposit
Liabilities assumed, demands payment from Seller
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for all or any part of any such assumed Deposit
Liabilities, Seller shall not be liable or responsible for making
any such payment; provided, that if Seller shall pay the same,
Purchaser agrees to reimburse Seller for any payments, and Seller
shall not be deemed to have made any representations or warranties
to Purchaser with respect to any checks, drafts or withdrawal
orders processed after the Effective Time drawn on such Deposit
Liabilities, and any such representations or warranties implied by
law are hereby expressly disclaimed. Seller and Purchaser shall
make arrangements to provide for the daily settlement by Purchaser
with immediately available funds of checks, drafts, withdrawal
orders, returns and other items presented to and paid by Seller
within 120 calendar days after the Effective Time and drawn on or
chargeable to accounts that have been assumed by Purchaser;
provided, however, that Seller shall be held harmless and
indemnified by Purchaser for acting in accordance with such
arrangements.
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(f)
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Purchaser agrees, at its cost and expense, (1) to
notify the depositors of assumed accounts, on or before the
Effective Time, in a form and mailed on a date mutually acceptable
to Seller and Purchaser, of Purchaser’s assumption of Deposit
Liabilities, and (2) to furnish such depositors with checks on the
forms of Purchaser and with instructions to utilize
Purchaser’s checks and to destroy unused check, draft and
withdrawal order forms of Seller. (If Purchaser so elects,
Purchaser may offer to buy from such depositors their unused
Seller's check, draft and withdrawal order forms.) In addition,
Seller will notify its affected customers by letter of the pending
assignment of the Deposit Liabilities to Purchaser, which notice
shall be at Seller’s cost and expense and shall be in a form
and mailed on a date mutually agreeable to Seller and
Purchaser.
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(g)
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Purchaser agrees to pay promptly to Seller an amount
equivalent to the amount of any checks, drafts or withdrawal orders
credited to an assumed account as of the Effective Time that are
properly returned to Seller after the Effective Time.
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(h)
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On and after the Effective Time, Purchaser will
assume and discharge Seller’s duties and obligations in
accordance with the terms and conditions and laws, rules and
regulations that apply to the Assumed Liabilities.
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(i)
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On and after the Effective Time, Purchaser will
maintain and safeguard in accordance with applicable law and sound
banking practices all account documents, deposit contracts,
signature cards, deposit slips, canceled items and other records
related to the Deposit Liabilities assumed under this Agreement,
subject to Seller’s right of access to such records as
provided in this Agreement.
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(j)
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Seller will render a final statement to each
depositor of an account assumed under this Agreement as to
transactions occurring through the Effective Time; provided, that
Seller shall not be obligated to render a final statement on any
account not ordinarily receiving periodic statements in the
ordinary course of Seller’s business. Seller will be entitled
to impose normal fees and service charges on a
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per item basis at Closing, but
Seller will not impose periodic fees or blanket charges in
connection with such final statements.
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(k)
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Seller will timely provide to Purchaser the 1099
data required for Purchaser to comply with all laws, rules and
regulations regarding 2007 and 2008 tax reporting of transactions
of such accounts through the Effective Time.
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(l)
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As of the Effective Time, Purchaser, at its expense,
will notify all Automated Clearing House (“ACH”)
originators of the transfers and assumptions made pursuant to this
Agreement; provided, that Seller may, at its option, notify all
such originators itself (on behalf of Purchaser) also at the
expense of Purchaser. For a period of 120 calendar days beginning
on the Effective Time, Seller will honor all ACH items related to
accounts assumed under this Agreement that are routed or presented
to Seller. Seller will make no charge to Purchaser for honoring
such items, and will electronically transmit such ACH data to
Purchaser. If Purchaser cannot receive an electronic transmission,
Seller will make available to Purchaser at Seller’s
operations center receiving items from the Automated Clearing House
tapes containing such ACH data. Items routed or presented after the
120 day period shall be returned to the presenting party. Seller
and Purchaser shall make arrangements to provide for the daily
settlement with immediately available funds by Purchaser of any ACH
items honored by Seller, and Seller shall be held harmless and
indemnified by Purchaser for acting in accordance with this
arrangement to accept ACH items.
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(m)
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After the Effective Time, Purchaser agrees to use
commercially reasonable efforts to collect from Purchaser’s
customers amounts equal to any Visa or MasterCard charge backs
under the MasterCard and Visa Merchant Agreements between Seller
and its customers, or amounts equal to any deposit items returned
to Seller after the Effective Time that were honored by Seller
prior to the Effective Time, and remit such amounts so collected to
Seller. Purchaser agrees to immediately freeze and remit to Seller
any funds, up to the amount of the charged back or returned item
that had been previously credited by Seller, if such funds are
available at the time of notification by Seller to Purchaser of the
charged back or returned item and such charge back is permitted.
Notwithstanding the foregoing, Purchaser shall have no duty to
remit funds for any item or charge that has been improperly
returned or charged to Seller. Solely for the purposes of this
Section 1.3(m), all references to Seller shall be deemed to include
Seller and its assignees.
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Section 1.4 .
Loans Transferred .
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(a)
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Seller will transfer to Purchaser as of the
Effective Time, subject to the terms and conditions of this
Agreement, all of Seller’s right, title and interest in
(including collateral relating thereto) loans maintained, serviced
and listed in Seller’s records as loans of the Banking
Centers (collectively, the “Loans”); provided, however,
the Loans shall not include any loans described in subsection (b)
below. Such Loans (as well as any security interest related
thereto) shall be transferred by
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means of a blanket (collective) assignment and not
individually (except as may be otherwise required by law).
Purchaser shall inform Seller not less than 45 calendar days prior
to the proposed Closing of any case in which filing information
relating to any collateral for the Loans will be required for
preparation of any assignments of liens. A projected list of the
Loans is attached hereto as Exhibit
1.4(a) that shall be updated as soon as
practicable after Closing.
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(b)
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Notwithstanding the provisions of subsection (a)
above, the Loans shall not include:
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(1)
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nonaccruals (which term shall mean loans in which
the collateral securing same has been repossessed, or in which
collection efforts have been instituted, or claim and delivery or
foreclosure proceedings have been filed) and classified
loans;
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(2)
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loans 60 calendar days or more past due, which are
classified, or that have been charged off; provided further that if
any Loans, subsequent to the execution of this Agreement and prior
to the Effective Time, are classified by the applicable bank
examiners or Seller, as "doubtful'" "substandard," "loss," or
"special mention," or the equivalent on Seller’s loan grading
system, then such Loans, at the option of Purchaser, may be
excluded;
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(3)
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loans upon which insurance has been
force-placed;
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(4)
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loans in connection with which the borrower has
filed a petition for relief under the United States Bankruptcy Code
prior to the Effective Time;
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(5)
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loans identified by Purchaser in writing within 30
calendar days after Purchaser’s due diligence review of the
Banking Centers’ loans which ended November 9, 2007 (the
“Due Diligence Review”) as not being purchased because
of failure to meet the credit or aggregate loan exposure standards
of Purchaser; and (b) loans closed by Seller on or after November
6, 2007 up to and including the Effective Time, identified in
writing by Purchaser within 30 calendar days after the Effective
Time as not being purchased because of failure to meet the credit
or aggregate loan exposure standards of Purchaser;
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(6)
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any other loans identified on Exhibit 1.4(b) ;
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(7)
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loan loss reserves; or
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(8)
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loans paid in full prior to the Effective
Time.
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(c)
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Seller and Purchaser agree that Purchaser will
become the beneficiary of credit life insurance written on direct
consumer installment Loans and debt cancellation and disability
coverage agreements written on any Loans. If Purchaser
becomes
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7
the beneficiary of credit life insurance or debt
cancellation and disability coverage written on any Loans, Seller
and Purchaser agree to cooperate in good faith to develop a
mutually satisfactory method by which the current insurer will make
rebate payments to and satisfy claims of the holders of such
certificates of insurance after the Effective Time. The
parties’ obligations in this section are subject to any
restrictions contained in existing insurance contracts as well as
applicable laws and regulations. The parties shall cooperate to
resolve any issues related to payment of premiums. If the parties
determine that loans subject to debt cancellation and disability
coverage cannot be adequately serviced by Purchaser, the parties
shall exclude such Loans from purchase hereunder.
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(d)
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In connection with the transfer of any Loans
requiring notice to the borrower, Purchaser and Seller agree to
comply with all notice and reporting requirements of the Loan
documents or of any applicable law or regulation.
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(e)
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All Loans transferred to Purchaser shall be valued
at their Net Book Value, such value to include accrued but unpaid
interest.
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(f)
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All Loans will be transferred to Purchaser without
recourse (except as otherwise provided herein) and without any
warranties or representations as to their collectibility or the
creditworthiness of any of the obligors of such Loans, provided
that, if any Loans are found to have any collateral perfection
deficiency within six months after the Effective Time, Seller shall
purchase such Loans from Purchaser in an amount equal to the
principal of, accrued interest on and any fees on such
Loans.
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(g)
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Purchaser will at its expense issue new coupon books
for payment of Loans for which Seller provides coupon books with
instructions to utilize Purchaser’s coupons and to destroy
coupons furnished by Seller.
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(h)
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For a period of 90 calendar days after the Effective
Time, Seller will forward to Purchaser Loan payments received by
Seller. Purchaser shall reimburse Seller upon demand for checks
returned on payments forwarded to Purchaser; provided, however, to
the extent possible, Seller will deduct the amount of such returned
checks from payments received and shall settle with Purchaser by a
mutually agreeable method.
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(i)
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As of the Effective Time, Seller shall transfer and
assign all files, documents and records related to the Loans (the
“Records”) to Purchaser, and, upon receipt from Seller,
Purchaser will be responsible for maintaining and safeguarding all
the Records in accordance with applicable law and sound banking
practices.
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(j)
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If the balance due on any Loan purchased pursuant to
this Section 1.4 has been reduced by Seller as a result of a
payment by check received prior to the Effective Time, which item
is returned after the Effective Time, the asset value
represented
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8
by the Loan transferred shall be correspondingly
increased and an amount in cash equal to such increase shall be
paid by Purchaser to Seller promptly upon demand.
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(k)
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Seller shall grant to Purchaser as of the Effective
Time a limited power of attorney, in substantially the form
attached hereto as Exhibit
1.4(k) (the “Power of
Attorney”).
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Section 1.5 .
Safe Deposit Business .
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(a)
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As of the Effective Time, Purchaser will assume and
discharge Seller’s obligations with respect to the safe
deposit box business at the Banking Centers arising on or after the
Effective Time in accordance with the terms and conditions of
contracts or rental agreements related to such business, and
Purchaser will maintain all facilities necessary for the use of
such safe deposit boxes by persons entitled to use them; provided
that nothing herein shall be deemed to prohibit Purchaser, after
the Effective Time, from discontinuing the safe deposit box
services or facilities at the Banking Centers (all in accordance
with applicable law and any contractual obligations regarding the
same).
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(b)
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As of the Effective Time, Seller shall transfer and
assign the records related to such safe deposit box business to
Purchaser, and Purchaser shall maintain and safeguard all such
records and be responsible for granting access to and protecting
the contents of safe deposit boxes at the Banking
Centers.
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(c)
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Safe deposit box rental payments (not including late
payment fees) collected by either Seller or Purchaser applying to
periods both before and after the Effective Time shall be prorated
as of the Effective Time.
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Section 1.6 .
Employee Matters .
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(a)
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Purchaser shall offer employment to all employees
(the “Employees”) employed by Seller at the Banking
Centers as of the Effective Time (other than employees whose
function does not relate exclusively to operation of any Banking
Center) in each case in a position similar in most respects to
their respective then current functional positions and locations
with remuneration not less than levels at the Effective Time and
benefits generally equivalent to benefits offered by Purchaser to
similarly situated employees of Purchaser. Except for
Purchaser’s qualified and nonqualified pension plans (if
any), Employees who become employees of Purchaser as of the
Effective Time (“Transferred Employees”) shall receive
full credit for their prior service with Seller under
Purchaser’s benefit plans and policies, including its
vacation and sick leave policies, to the same extent as if such
service had been with Purchaser. As of the Effective Time, the
Transferred Employees and their dependents, if any, covered under
Seller’s health insurance plan preceding the Effective Time
shall be covered under Purchaser’s health insurance plan
without being subject to any pre-existing condition limitations or
exclusions. Transferred Employees shall not be required to satisfy
the deductible
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9
and employee payments required by Purchaser’s
comprehensive medical and/or dental plans for the calendar year of
the Effective Time (i) to the extent of amounts previously credited
during such calendar year under comparable plans maintained by
Seller, or (ii) to the extent the same is waived in its entirety by
the applicable insurer, as determined by the applicable insurer in
its sole discretion. Purchaser will assume all sick and vacation
time accrued, but not used, by the Transferred Employees up to the
date of the Closing. With respect to Purchaser’s qualified
and nonqualified pension plans, Transferred Employees shall receive
full credit for prior service with Seller (and with other entities
to the extent service with any such entity is treated by Seller as
service with it) for purposes of determining their participation
eligibility and vesting rights to the same extent as if such
service had been with Purchaser. Benefits under Purchaser’s
pension plans for Transferred Employees shall be determined solely
with reference to service with Purchaser.
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(b)
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Seller makes no representations or warranties about
whether any of its employees will remain at the Banking Centers and
become and remain employed by Purchaser after the Effective Time.
Seller will use its commercially reasonable best efforts to
maintain the employees as employees of Seller at the Banking
Centers until the Effective Time. Purchaser shall have no
responsibilities or rights with respect to any employee of Seller
whose employment shall be terminated for any reason prior to the
Effective Time or who shall elect not to become an employee of
Purchaser. Seller agrees that, for a period of 12 months after the
Effective Time, it will not solicit for employment any Transferred
Employee who remains employed by Purchaser.
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(c)
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Any Transferred Employee whose employment is
terminated by Purchaser within 12 months after the Effective Time
shall be entitled to receive severance benefits in accordance with
the severance policies of Purchaser to the extent the Transferred
Employee qualifies for such severance benefits (taking into account
the Transferred Employee’s service with Seller.)
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Section 1.7 .
Records and Data Processing
.
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(a)
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As of the Effective Time, Purchaser shall become
responsible for maintaining the files, documents and records
referred to in this Agreement. Purchaser will preserve and safekeep
such files, documents and records as required by applicable law and
sound banking practice. After the Effective Time, Purchaser will
permit Seller and its representatives at reasonable times and upon
reasonable notice, to examine, inspect, copy and reproduce (at
Seller’s expense) any such files, documents or records as
Seller reasonably deems necessary.
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(b)
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As of the Effective Time, Seller will permit
Purchaser and its representatives, at reasonable times and upon
reasonable notice, to examine, inspect, copy and reproduce (at
Purchaser’s expense) files, documents or records retained by
Seller
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10
regarding the assets and liabilities transferred
under this Agreement as Purchaser reasonably deems
necessary.
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(c)
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It is understood that certain of Purchaser's and
Seller’s records may be available only in the form of
photocopies, film copies or other non-original and non-paper
media.
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Section 1.8 .
Security .
As of the Effective Time, Purchaser shall become
solely responsible for the security of and insurance on all persons
and property located in or about the Banking Centers.
Section 1.9 .
Taxes and Fees; Proration of Certain
Expenses .
Purchaser shall be responsible for the payment of
all fees and taxes related to this transaction, including, without
limitation, any real estate transfer and recordation taxes, fees
and costs incurred in connection with any assignment of the Real
Property Leases, except that Purchaser shall not be responsible
for, or have any liability with respect to, taxes on any income to
Seller arising out of the transactions herein. Purchaser shall not
be responsible for any income tax liability of Seller arising from
the business or operations of the Banking Centers before the
Effective Time, and Seller shall not be responsible for any tax
liabilities of Purchaser arising from the business or operations of
the Banking Centers after the Effective Time. Utility payments,
telephone charges, real property taxes, personal property taxes,
rent, salaries, deposit insurance premiums, other ordinary
operating expenses of the Banking Centers and other expenses
related to the liabilities assumed or assets purchased hereunder
shall be prorated between the parties as of the Effective Time. To
the extent that any such item has been prepaid by Seller for a
period extending beyond the Effective Time, there shall be a
proportionate monetary adjustment in favor of Seller.
Section 1.10 .
Real Property .
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(a)
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Title and Leasehold Matters
.
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(i)
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Seller agrees to deliver to Purchaser as soon as
practicable after execution of this Agreement copies of all title
and lease information in the possession of Seller, including, but
not limited to, title insurance policies, surveys, covenants,
deeds, notes and mortgages, subleases and easements relating to the
leasehold estates of Seller under the Real Property Leases (the
“Leasehold Estates”). Such delivery shall not
constitute any warranty by Seller as to the accuracy or
completeness thereof or that Purchaser is entitled to rely
thereon.
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(ii)
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Purchaser agrees to notify Seller in writing within
30 calendar days after the date of this Agreement of any mortgages,
pledges, material liens, encumbrances, reservations, subtenancies,
encroachments, overlaps or other title exceptions or zoning or
similar land use violations (excluding
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11
legal but nonconforming uses) related to the
Leasehold Estates to which Purchaser reasonably objects (the
“Title Defects”). Purchaser agrees that Title Defects
shall not include real property taxes not yet due and payable, or
easements, restrictions, tenancies, and rights of way that do not
materially interfere with the use of the Real Property pursuant to
the Leasehold Estates as a Banking Center or defects that Purchaser
can obtain protection from through purchase of title insurance at
regular rates (or higher rates if the excess over the regular rate
is paid by Seller). Seller shall make a good faith effort to
correct any Title Defect to Purchaser’s reasonable
satisfaction at least 10 calendar days prior to Closing; provided,
that Seller shall not be obligated to bring any lawsuit or make any
payments of money in the aggregate in excess of $5,000 (except to
pay liens that Seller does not dispute in good faith) to cure Title
Defects pursuant to this Section 1.10. If Seller fails to cure any
such Title Defects (to the extent that Purchaser is obligated to do
so under this Section) to Purchaser’s reasonable
satisfaction, Purchaser shall receive title in its then existing
condition with a corresponding Purchase Price adjustment that is
agreeable to both parties. Any such Purchase Price adjustment shall
not exceed $5,000, less the aggregate cost to Seller of correcting
Title Defects pursuant to this Section 1.10. Notwithstanding the
foregoing, in the event that: (i) Seller is unable or unwilling to
cure any such Title Defects to Purchaser’s reasonable
satisfaction; and (ii) the aggregate cost of curing Title Defects
pursuant to this Section 1.10 is in excess of $5,000, Purchaser
shall have the option (upon written notice to Seller, such notice
to be received by Seller no later than 10 calendar days after
Purchaser becomes aware of (i) and (ii), above) to terminate this
Agreement.
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(iii)
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Purchaser shall have the right to update title
matters at Closing for any changes that may have arisen between the
date of Purchaser’s original title search and the Closing
Date. If such update indicates that any Title Defects have been
placed of record since the date of Purchaser’s original title
search, and Purchaser reasonably objects thereto, then Seller may
elect to delay the Closing for up to 30 calendar days while Seller
makes a good faith effort to cure such Title Defects to
Purchaser’s reasonable satisfaction; provided, that Seller
shall not be obligated to bring any lawsuit or make any payments of
money in aggregate in excess of $5,000 (except to pay liens that
Seller does not dispute in good faith) to cure Title Defects
pursuant to this Section 1.10. If Seller is unable to cure any such
Title Defects (to the extent that Purchaser is
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