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Exhibit
99.2
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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5 |
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Section 1.5. Safe Deposit Business
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7 |
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Section 1.6. Employee Matters
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7 |
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Section 1.7. Records and Data Processing
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8 |
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Section 1.8. Security
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8 |
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Section 1.9. Taxes and Fees; Proration of Certain
Expenses
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8 |
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Section 1.10. Real Property
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8 |
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Section 1.11. Purchase Price Allocation
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11 |
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| ARTICLE
II CLOSING AND EFFECTIVE TIME |
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11 |
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Section 2.1. Effective Time
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11 |
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Section 2.2. Closing
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12 |
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Section 2.3. Post-Closing Adjustments
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14 |
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| ARTICLE
III INDEMNIFICATION |
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14 |
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Section 3.1. Seller’s Indemnification of
Purchaser
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14 |
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Section 3.2. Purchaser’s Indemnification of
Seller
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15 |
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Section 3.3. Claims for Indemnity
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15 |
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Section 3.4. Limitations on Indemnification
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15 |
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Section 3.5. Exclusive Remedy
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16 |
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| ARTICLE
IV REPRESENTATIONS AND WARRANTIES OF SELLER |
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16 |
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Section 4.1. Corporate Organization
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16 |
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Section 4.2. No Violation
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16 |
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Section 4.3. Corporate Authority
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16 |
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Section 4.4. Enforceable Agreement
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16 |
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Section 4.5. No Brokers
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16 |
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Section 4.6. Personal Property
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16 |
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Section 4.7. Real Property
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17 |
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Section 4.8. Condition of Property
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17 |
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Section 4.9. Loans
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17 |
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Section 4.10. Compliance with Certain Laws
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17 |
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Section 4.11. Community Reinvestment Act
Representation
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17 |
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Section 4.12. Limitation of Representations and
Warranties
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18 |
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| ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER |
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18 |
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Section 5.1. Corporate Organization
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18 |
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Section 5.2. No Violation
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18 |
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Section 5.3. Corporate Authority
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18 |
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Section 5.4. Enforceable Agreement
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18 |
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Section 5.5. No Brokers
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18 |
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| ARTICLE
VI OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE
TIME |
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19 |
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Section 6.1. Access to Information
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19 |
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Section 6.2. Delivery of Magnetic Media Records
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19 |
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Section 6.3. Application for Approval to Effect Purchase
of Assets and Assumption of Liabilities
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19 |
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Section 6.4. Conduct of Business; Maintenance of
Properties
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19 |
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Section 6.5. No Solicitation by Seller
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20 |
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Section 6.6. Further Actions
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20 |
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Section 6.7. Fees and Expenses
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20 |
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Section 6.8. Breaches with Third Parties
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20 |
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Section 6.9. Insurance
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21 |
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Section 6.10. Public Announcements
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21 |
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Section 6.11. Tax Reporting
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21 |
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Section 6.12. Use of Seller’s Name and
Documents
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21 |
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| ARTICLE
VII CONDITIONS TO PURCHASER’S OBLIGATIONS |
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21 |
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Section 7.1. Representations and Warranties
True
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21 |
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Section 7.2. Obligations Performed
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21 |
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Section 7.3. No Adverse Litigation
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21 |
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Section 7.4. Regulatory Approval
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22 |
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| ARTICLE
VIII CONDITIONS TO SELLER’S OBLIGATIONS |
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22 |
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Section 8.1. Representations and Warranties
True
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22 |
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Section 8.2. Obligations Performed
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22 |
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Section 8.3. No Adverse Litigation
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22 |
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Section 8.4. Regulatory Approval
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22 |
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| ARTICLE
IX TERMINATION |
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22 |
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Section 9.1. Methods of Termination
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22 |
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Section 9.2. Procedure Upon Termination
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23 |
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Section 9.3. Payment of Expenses
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23 |
ii
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| ARTICLE X
MISCELLANEOUS PROVISIONS |
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24 |
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Section 10.1. Amendment and Modification
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24 |
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Section 10.2. Waiver or Extension
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24 |
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Section 10.3. Assignment
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24 |
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Section 10.4. Confidentiality
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24 |
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Section 10.5. Knowledge of Seller
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24 |
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Section 10.6. Retention of Documents
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24 |
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Section 10.7. Addresses for Notices, Etc.
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25 |
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Section 10.8. Counterparts
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26 |
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Section 10.9. Headings
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26 |
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Section 10.10. Governing Law
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26 |
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Section 10.11. Sole Agreement
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26 |
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Section 10.12. Severability
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26 |
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Section 10.13. Parties In Interest
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26 |
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”):
WITNESSETH
:
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) |
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) |
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) |
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) |
[OMITTED INTENTIONALLY] |
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(4) |
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) |
all Loans (as defined in Section 1.4(a)) transferred
pursuant to Section 1.4; |
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(6) |
all coins and currency located at the Banking Centers as of the
Effective Time (the “Coins and Currency”); |
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(7) |
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) |
all night depository contracts. |
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(b) |
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. |
Section 1.2 . Purchase
Price .
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(a) |
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) |
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) |
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) |
The Net Book Value (as defined in Section 1.2(d)) of the
Personal Property; and |
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(4) |
The face amount of the Coins and Currency. |
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(b) |
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) |
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) |
“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) |
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) |
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) |
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) |
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) |
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) |
Seller’s obligations for or under any data processing
contracts. |
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(6) |
Deposit accounts associated with Seller’s national or
regional account relationships, if any. |
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(7) |
Closed accounts of any kind or listings or descriptions of such
accounts. |
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(c) |
Seller does not represent or warrant that any deposit customers
whose accounts are assumed by Purchaser will become or continue to
be customers of Purchaser after the Effective Time. |
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(d) |
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. |
3
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(e) |
If, after the Effective Time, any depositor, instead of
accepting the obligation of Purchaser to pay the Deposit
Liabilities assumed, demands payment from Seller 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) |
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) |
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) |
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) |
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) |
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 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) |
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) |
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
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4
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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) |
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. |
Section 1.4 . Loans
Transferred .
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(a) |
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 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) |
Notwithstanding the provisions of subsection (a) above,
the Loans shall not include: |
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(1) |
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) |
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) |
loans upon which insurance has been force-placed; |
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(4) |
loans in connection with which the borrower has filed a
petition for relief under the United States Bankruptcy Code prior
to the Effective Time; |
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(5) |
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) |
any other loans identified on Exhibit 1.4(b)
; |
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(7) |
loan loss reserves; or |
| |
(8) |
loans paid in full prior to the Effective Time. |
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(c) |
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 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) |
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. |
| |
(e) |
All Loans transferred to Purchaser shall be valued at their Net
Book Value, such value to include accrued but unpaid
interest. |
| |
(f) |
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) |
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) |
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. |
| |
(i) |
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. |
| |
(j) |
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
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) |
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”). |
Section 1.5 . Safe
Deposit Business .
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(a) |
As of the Effective Time, Purchaser will assume and discharge
Seller’s obligations with respect to the safe deposit box
business at the Banking 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) |
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) |
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. |
Section 1.6 . Employee
Matters .
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(a) |
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 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) |
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
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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) |
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.) |
Section 1.7 . Records and
Data Processing .
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(a) |
As of the Effective Time, Purchaser shall become responsible
for maintaining the files, documents and records referred to in
this Agreement. Purchaser will preserve and safekeep such 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) |
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 regarding the assets
and liabilities transferred under this Agreement as Purchaser
reasonably deems necessary. |
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(c) |
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. |
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) |
Title and Leasehold Matters . |
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(i) |
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
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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) |
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 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) |
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 Ti |
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