(a)                                   The real estate (whether owned in fee by the Seller or leased by Seller) and buildings described in Schedule 1 (the “Premises”);

 

(b)                                  The furniture, fixtures and equipment described in Schedule 2 (the “Personal Property”);

 

(c)                                   All teller cash and coin on hand and amounts due from depository institutions and similar cash items on hand at the Branches (the “Teller Cash”);

 

(d)                                  All (i) Branch utility, water and sewage charges and related expenses, real property taxes, special assessments (to the extent such special assessments are due and payable at the Closing Date), ad valorem taxes, IRA custodian or trustee fees, deposit insurance premiums (if any), prepaid service contracts to the extent they inure to the benefit of or are otherwise assigned to Buyer after the Closing and are listed/described on Schedule 3 , and (ii) other prepaid or subsequently paid expenses that Seller incurs between the date hereof and the Closing and inure to the benefit of Buyer after the Closing, which the parties agree to add to Schedule 3 ((i) and (ii) shall be collectively referred to as “Prepaid Expenses”).  All of the Prepaid Expenses shall be pro rated such that Buyer will deliver to Seller at Closing as part of the Purchase Price the amount, on a dollar-for-dollar basis, of the Prepaid Expenses that Buyer will receive the benefit of as of and after the Closing (“Prepaid Expense Payment”).  The Prepaid Expense Payment by Buyer to Seller due at Closing shall be included in the Draft Closing Statement to the extent determinable as of the date such statement is to be delivered pursuant to Section 3, and to the extent not then determinable by such time, then such amounts shall be reflected on the Final Closing Statement;

 

(e)                                   The consumer loans, including, without limitation, all of the interest receivable and fees receivable on such loans, and all servicing rights on such loans, described in Schedule 4(a)(i)  (the “Consumer Loans”), the consumer loans included on Schedule 4(a)(ii)  pursuant to Section 16(e) hereof, including, without limitation, all of the interest receivable and fees receivable on such loans and all servicing rights on such loans (the “Additional Consumer Loans”), and the commercial loans, including, without limitation, all of the interest receivable and fees receivable on such loans and all servicing rights on all loans, described in Schedule 4(b)  (the “Commercial Loans,” together with the Consumer Loans and Additional Consumer Loans (if any), collectively, the “Loans”), except that the Loans shall not include (i) those loans listed on Schedule 4(c) ; (ii) any loans greater than sixty (60) consecutive days past due as of the Closing Date or that become Classified between March 31, 2008 and the Closing Date; and (iii) any Unresolved Consumer Loans pursuant to Section 16(e) (collectively, the “Excepted Loans”);

 

(f)                                     The investment securities of Seller as set forth in Schedule 6 and other investment securities purchased by Seller in the ordinary course of business and consistent with past practice between the date hereof and the Closing Date subject to the limitation set forth in Section 13(i) of this Agreement (the “Securities”);

 

(g)                                  The Intellectual Property described in Schedule 7 (the “Transferred IP”);

 

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(h)                                  All non-ledger assets;

 

(i)                                      All miscellaneous assets described in Schedule 8 ;

 

(j)                                      The non-real property leases, licenses and other contracts identified on Schedule 12 , if such leases and other contracts are assignable in accordance with their terms;

 

(k)                                   All right, title and interest of Seller in and to the safe deposit business (subject to the allocation of safe deposit rental payments as provided in Section 3(d) below) of Seller, including, without limitation the agreements related thereto, as of the close of business on the Closing Date;

 

(l)                                      All original notes, instruments, guaranties and pledges associated with the Loans and all other original (or duplicates to the extent not available) records and documents related to the Assets transferred or Liabilities (defined below) assumed by Buyer which are maintained by Seller and available for delivery to Buyer in whatever form presently maintained by Seller;

 

(the foregoing assets will be referred to collectively as the “Assets”).  Seller will not sell, assign, transfer or encumber and Buyer will not purchase any assets of Seller other than the Assets, including without limitation, any of Seller’s goodwill and other intangible assets (other than the intellectual property rights described in Section 1(g) above).

 

No later than two Business Days prior to the Closing Date, Seller may agree to sell, convey, assign, transfer and deliver to Buyer, and Buyer may agree to purchase and accept from Seller, such additional assets of Seller as the parties may mutually agree, on such terms and conditions (including, without limitation, the valuation thereof and appropriate representations and warranties with respect thereto) as may be mutually agreed upon by the parties. Such additional consideration will be added to the Purchase Price.

 

2.                                       Assumption of Liabilities .   Subject to satisfaction of the terms and conditions hereof, including the transfer of the Assets to Buyer, as of the Closing, Buyer and Buyer Parent (as it relates to (f) below) will pay, perform, and assume the following liabilities of Seller and Seller Parent (as it relates to (f) below) and will perform all of the following duties, responsibilities and obligations of Seller and Seller Parent (as it relates to (f) below):

 

(a)                                   All of the Seller’s obligations relating to Deposit Liabilities;

 

(b)                                  To the extent the Federal Home Loan Bank consents to such assumption, all of Seller’s obligations under those certain loans made from the Federal Home Loan Bank described on Schedule 10 , including all Accrued Interest as of the Closing Date (the “FHLB Advances”), it being understood and agreed that Seller and Buyer will each employ commercially reasonable efforts to obtain consent of the Federal Home Loan Bank to such assumption;

 

(c)                                   All of the accounts payable related to the Assets, which accounts payable are described in Schedule 11 (the “Accounts Payable on Account of Assets”);

 

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(d)                                  All of Seller’s obligations relating to the leases, licenses and other contracts identified on Schedules 1 and 12 , if such leases or other contracts are assignable in accordance with their terms;

 

(e)                                   The safe deposit business of Seller, including, but not limited to, the obligations under the agreements related thereto and the maintenance of all necessary facilities for the use of safe deposit boxes by the renters thereof; and

 

(f)                                     Any and all liabilities and obligations relating to, or arising out of the obligations of Seller Parent under each of the trust preferred issuances described on Schedule 14 , including any and all accrued and/or deferred interest (the “Trust Preferred Obligations”), pursuant to a supplemental indenture in form mutually acceptable to the Buyer Parent, Seller Parent and the trustee thereof (the “Supplemental Indenture”) and the guaranty agreement and such other documents as may be required pursuant to the documents governing such Trust Preferred Obligations; provided, however, that Buyer Parent shall only be obligated to assume the Trust Preferred Obligations if and to the extent that (i) all applicable regulatory approval in respect of the assumption of the Trust Preferred Obligations by Buyer Parent is granted and confirmation is received that the Trust Preferred Obligations will receive that same capital treatment if assumed by Buyer Parent as the Trust Preferred Obligations received prior to such assumption, and (ii) Seller Parent possesses the requisite capital and committed financial capability to fully perform all obligations contemplated hereunder;

 

(the foregoing liabilities will be referred to collectively as the “Liabilities”).  Buyer will not assume and will not discharge nor be liable for debts, liabilities or obligations of Seller except those Liabilities expressly assumed by Buyer pursuant to the transactions contemplated by this Agreement. After the Closing, all Liabilities shall be the sole obligation of Buyer and Buyer Parent.

 

3.                                       Calculation and Allocation of Purchase Price .

 

(a)                                   Purchase Price .  The purchase price of the Assets and the Deposit Liabilities (the “Purchase Price”), which shall be offset against the amount owed to Buyer by Seller for the assumption of the Liabilities as provided in Section 4, will be an amount equal to the sum of the following:

 

(1)                           The aggregate amount of the Net Book Value of the Premises on the Closing Date (as determined in accordance with GAAP);

 

(2)                           The aggregate amount of the Net Book Value of the Personal Property as of the Closing Date (as determined in accordance with GAAP);

 

(3)                           The aggregate amount of the Teller Cash on the Closing Date;

 

(4)                           The aggregate amount of the Prepaid Expense Payment as of the Closing Date;

 

(5)                           The aggregate Net Book Value of the Securities on the Closing Date;

 

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(6)                           The aggregate principal amount of the Loans, plus accrued and unpaid interest thereon on the Closing Date;

 

(7)                           The aggregate amount of the Net Book Value of the miscellaneous assets described in Schedule 8 on the Closing Date;

 

(8)                           The sum of (i) 5.5% of the daily average of all checking and savings Deposit Liabilities (excluding (a) Premium Ineligible Deposits, and (b) certificates of deposit, which are covered in subsection (ii)) during the 30-day period ending ten (10) business days preceding the Closing Date, plus (ii) 5.5% of the lesser of the aggregate amount of the Deposit Liabilities that are certificates of deposit (excluding Premium Ineligible Deposits and certificates of deposit that are subject to a repurchase agreement or otherwise secured by collateral) as of June 30, 2008 or as of the Closing Date (the “Premium”); plus

 

(9)                           Payment of any amounts required for any additional Assets not reflected on the Draft Closing Statement.

 

(b)                                  Calculations .

 

(1)                           Solely for purposes of facilitating the calculation of the cash due Buyer on the Closing Date, Seller shall provide to Buyer and Buyer Parent, five (5) business days before the Closing Date, a preliminary calculation in the form attached hereto as Exhibit A , based on the Assets and Liabilities on that date as reflected on the books of Seller and Seller Parent, and the cash due at the Closing shall be based upon such preliminary calculation (the “Draft Closing Statement”).

 

(2)                           On or before 12:00 noon on the 30th day following the Closing Date, Seller shall deliver to Buyer and Buyer Parent a statement setting forth (i) the Purchase Price (including all adjustments and prorations thereto) and each component thereof and (ii) the amount of Liabilities assumed by Buyer and Buyer Parent as of the close of business on the Closing Date (the “Final Closing Statement”).  Seller shall make available to Buyer and/or its representatives such work papers, schedules and other supporting data as may be requested by Buyer to enable Buyer to verify such determinations. Such statement shall also set forth the amount by which the aggregate balance of the Liabilities transferred to Buyer and Buyer Parent exceeded the Purchase Price (including all adjustments and prorations thereto) or the Purchase Price exceeded the aggregate balance of the Deposit Liabilities transferred to Buyer, as the case may be, in each case calculated as of the close of business on the Closing Date (the “Adjusted Payment Amount”).

 

(3)                           If, within 20 days following the date of receipt of the Final Closing Statement, Buyer does not dispute any items contained in the Final Closing Statement, then the Final Closing Statement shall be final and binding upon the parties. In the event that Buyer disputes any items contained in the Final Closing Statement, such disputes shall be resolved in the following manner:

 

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(A)                               Buyer shall notify Seller in writing (the “Notice of Disagreement”) of such dispute within twenty (20) days after Buyer’s receipt of the Final Closing Statement, which notice shall specify in reasonable detail the nature of the dispute, indicating those specific items that are in dispute (the “Disputed Items”).  To the extent that Buyer provides a Notice of Disagreement within such 20-day period, all items that are not Disputed Items shall be final, binding and conclusive for all purposes hereunder.

 

(B)                                 During the 30-day period following Seller’s receipt of a Notice of Disagreement, Seller and Buyer shall use commercially reasonable efforts to resolve any Disputed Items.  If, at the end of such 30-day period, the parties have reached written agreement with respect to all matters covered by a Notice of Disagreement, the Final Closing Statement shall be adjusted to reflect such written agreement and shall become final and binding upon the parties hereto.

 

(C)                                 If, at the end of the 30-day period specified in subsection (b)(3)(B) above, Buyer and Seller shall have failed to reach a written agreement with respect to all or a portion of such Disputed Items (those Disputed Items that remain in dispute at the end of such period are the “Unresolved Changes”), then Buyer and Seller shall promptly refer only those Unresolved Changes to a mutually agreeable nationally recognized independent certified public accounting firm (the “Firm”) to make a determination as to the subject matter of the Unresolved Changes.  If Buyer and Seller fail to agree on a Firm within thirty (30) days after the end of the 30-day period specified in subsection (b)(3)(B) above, the Firm shall be selected by the American Arbitration Association.  The Firm shall issue its written decision as promptly as practicable and in any event within thirty (30) days following the submission of the Unresolved Changes to the Firm for resolution, and such decision shall be final, binding and conclusive on the parties (the “Firm Determination”).  In the event Unresolved Changes are submitted to the Firm for resolution as provided herein, the fees, charges and expenses of the Firm (the “Firm Expenses”) shall be paid by Buyer and Seller based on the percentages which (x) the difference between the Disputed Amount and the Firm Determination bears to (y) the Disputed Amount (with the smaller percentage being paid by the party whose calculation of the Unresolved Changes was nearer in amount to the Firm Determination).  For example, if Buyer’s calculation of the Unresolved Changes is $1,000 and Seller’s calculation of the Unresolved Changes is $2,000 (resulting in a Disputed Amount of $1,000) and the Firm Determination is $1,700, then 70% of the Firm Expenses shall be paid by Buyer and 30% of the of the Firm Expenses shall be paid by Seller.  As used in this subsection (C), “Disputed Amount” means the difference between Buyer’s and Seller’s respective calculations of the Unresolved Changes and “Firm Determination” means the amount with respect to the Unresolved Changes determined by the Firm in accordance with this subsection (C).

 

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(4)                           Following the final determination of the Final Closing Statement, Seller shall pay to Buyer or Buyer shall pay to Seller, as the case may be, by wire transfer of immediately available funds to Payee’s Account, an amount equal to the difference between the Adjusted Payment Amount and the Estimated Payment Amount, plus interest calculated using the Federal Funds Rate on such amount from the Closing Date to, but excluding, the payment date. Any payment pursuant to Section 3.3(c) shall be treated, for all purposes, as an adjustment to the Purchase Price.

 

(c)                                   Allocation of the Purchase Price .

 

(1)                           Buyer shall prepare a proposed allocation of the Purchase Price (and all other capitalized costs) among the Assets in accordance with Section 1060 of the Code, which proposed allocation shall be delivered to Seller for review and comment within sixty days following the Closing Date (“Proposed Allocation Statement”).  Seller shall provide to Buyer in writing within ten (10) days of the receipt of such Proposed Allocation Statement any objections thereto.

 

(2)                           If, within ten (10) days following the receipt of the Proposed Allocation Statement, Seller does not dispute any items contained in the Proposed Allocation Statement, then the Proposed Allocation Statement shall be final and binding upon the parties (“Final Allocation Determination”).  In the event that Seller disputes any items contained in the Proposed Allocation Statement, such disputes shall be resolved in the following manner:

 

(A)                                 Seller shall notify Buyer in writing (the “Notice of Allocation Disagreement”) of such dispute within ten (10) days following Seller’s receipt of the Proposed Allocation Statement, which notice shall specify in reasonable detail the nature of the dispute, indicating those specific items that are in dispute (the “Seller Disputed Items”).  To the extent that Seller provides a Notice of Allocation Disagreement within such 10-day period, all items that are not Seller Disputed Items shall be final, binding and conclusive for all purposes hereunder.

 

(B)                                   During the 15-day period following Buyer’s receipt of a Notice of Allocation Disagreement, Seller and Buyer shall use commercially reasonable efforts to resolve any Seller Disputed Items. If, at the end of such 15-day period, the parties have reached written agreement with respect to all matters covered by a Notice of Allocation Disagreement, the Proposed Allocation Statement shall be adjusted to reflect such written agreement and shall become final and binding upon the parties hereto.

 

(C)                                   If, at the end of the 15-day period specified in subsection (c)(2)(B) above, Buyer and Seller shall have failed to reach a written agreement with respect to all or a portion of such Seller Disputed Items (those Seller Disputed Items that remain in dispute at the end of such

 

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period are the “Unresolved Allocation Changes”), then Buyer and Seller shall promptly refer only those Unresolved Allocation Changes to a mutually agreeable Firm to make a determination as to the subject matter of the Unresolved Allocation Changes.  If Buyer and Seller fail to agree on a Firm within 15 days after the end of the 15-day period specified in subsection (c)(2)(B) above, the Firm shall be selected by the American Arbitration Association.  The Firm shall issue its written decision as promptly as practicable and in any event within 15 days following the submission of the Unresolved Allocation Changes to the Firm for resolution, and such decision shall be final, binding and conclusive on the parties and become the Final Allocation Determination.  In the event Unresolved Allocation Changes are submitted to the Firm for resolution as provided herein, the costs of engaging the Firm shall be paid by Buyer and Seller equally.

 

(3)                  Buyer and Seller and their Affiliates shall file all tax returns (including, but not limited to, Internal Revenue Service Form 8594) in all respects and for all purposes consistent with such Final Allocation Determination. Seller shall use commercially reasonably efforts to deliver to Buyer all such documents and other information as Buyer may reasonably request in order to prepare the Proposed Allocation Statement contemplated by Section 3(c)(1) above.  No party shall take any position (whether in audits, tax returns or otherwise) which is inconsistent with such Final Allocation Determination unless required to do so by applicable law or regulation.

 

4.                                       Payment of the Purchase Price and Assumption of Liabilities .   The Purchase Price will be paid as follows:

 

(a)                                   Assumption of Liabilities .  Buyer will assume all of the Liabilities for the Deposit Liabilities and Buyer and Buyer Parent will assume the other Liabilities as provided in Section 2 and no other liabilities.  Thus, by way of illustration and without limiting the generality of the foregoing, Buyer does NOT assume any liabilities for past agreements or acts of officers or directors of Seller or Seller Parent or liability of Seller under any prior agreement for the sale of loans.

 

(b)                                  Cash Payment at the Closing .  On the Closing Date, Seller and Seller Parent shall pay to Buyer and Buyer Parent or Buyer and Buyer Parent shall pay to Seller and Seller Parent, as the case may be, by wire transfer of immediately available funds to such account as the appropriate party shall advise no later than one (1) Business Day prior to the Closing Date, the amount by which (i) the aggregate balance of the Liabilities (exclusive of the Liabilities described in Sections 2(d) and 2(e)) as of the close of business on the fifth Business Day immediately preceding the Closing Date exceeds the Estimated Purchase Price or (ii) the amount by which the Estimated Purchase Price exceeds the aggregate balance of the Liabilities as of the close of business on the fifth Business Day immediately preceding the Closing Date, as the case may be.

 

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5.              Repurchase Obligation; Escrow Account and Pledge of Commercial Loans .

 

(a)            If, at any time from and after the Closing until the second anniversary of the Closing Date, (i) a Consumer Loan set forth on Schedule 5(a)(i)  or Schedule 5(a)(ii)  becomes more than sixty (60) consecutive days delinquent or more than sixty (60) days past maturity, or pursuant to GAAP applied by Buyer in good faith is otherwise deemed impaired, or (ii) a Consumer Loan set forth on Schedule 5(a)(ii)  becomes subject to a required downgrade of classification by the Buyer’s bank regulator, then Buyer shall have the right, for a period of forty-five (45) days following the date on which such loan became sixty (60) consecutive days delinquent, sixty (60) days past maturity or impaired or such loan became subject to a regulatory downgrade, but not the obligation, to require Seller Parent to repurchase such Consumer Loan at a repurchase price equal to the outstanding principal balance of such Consumer Loan at the time of repurchase plus accrued but unpaid interest thereon for a period of sixty (60) days and the actual reasonable collection costs incurred by Buyer, if any, in respect thereof (a “Repurchase Obligation”) by sending written notice to Seller attaching evidence of such delinquency, impairment or regulatory downgrade and an itemized invoice with supporting documents of the actual collection costs, if applicable; provided , that such loan continues to be at least sixty (60) consecutive days delinquent or past maturity on the date of such notice, continues to be impaired or continues to have the regulatory downgrade and provided further, that there has been no modification to the terms of the Consumer Loan or release or subordination of the collateral security therefore from and after the Closing.  Seller shall remit in immediately available funds the repurchase price of such Repurchase Obligation within ten (10) days after receiving written notice from Buyer of the Repurchase Obligation.  To the extent Seller fails to remit the repurchase price of such Repurchase Obligation within such ten (10) day period, a Repurchase Obligation shall be funded from proceeds of the Escrow Account in accordance with the terms of the Escrow Agreement.  Upon receiving the repurchase price for a Repurchase Obligation, all right, title and interest in and to the Consumer Loan subject to such Repurchase Obligation shall automatically revert to Seller Parent, pursuant to documentation identical to that pursuant to which Seller conveyed such Consumer Loan to Buyer, and Buyer shall deliver to Seller within two (2) Business Days the Loan File and all Loan Documents held by Buyer relating to such Consumer Loan and execute and deliver to Seller assignments of all collateral security for such Consumer Loan.

 

(b)            To secure the Repurchase Obligations, the parties agree to establish and maintain an escrow account (the “Escrow Account”) at Escrow Agent pursuant to the Escrow Agreement attached hereto as Exhibit B (the “Escrow Agreement”).  As of the Closing Date, the Escrow Account shall be funded by Seller with $2,000,000 in cash.  To further secure the Repurchase Obligations, Seller agrees to pledge the loans identified on Schedule 5(b)  attached hereto (the “Pledged Loans”) pursuant to that certain Pledge Agreement attached hereto as Exhibit C .  Payments received on Pledged Loans shall be deposited into the Escrow Account until such time as the Escrow Account has a balance of $5,000,000, and thereafter the Pledge Agreement shall be terminated and all Pledged Loans released from the pledge.  The Escrow Account shall continue to be maintained until the second anniversary of the Closing Date, at which time the actual Repurchase Obligations and related loss experience on the Consumer Loans will be analyzed by Buyer and applied against the remaining estimated life of the pool of Consumer Loans to determine Buyer’s residual loss exposure all in accordance with the procedure set forth in

 

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the Escrow Agreement.  After such determination, amounts attributable to the residual loss exposure shall be paid out of the Escrow Account to Buyer, and any funds remaining in the Escrow Account thereafter shall be paid to Seller Parent or its assignee.  Seller shall not transfer, assign, encumber, amend, modify, extend or renew any of the Pledged Loans without the prior written consent of Buyer, which consent shall not be unreasonably withheld or delayed.

 

(c)            Buyer agrees to purchase a fifty percent (50%) participation interest in the Commercial Loans identified on Schedule 5(c)  pursuant to the Participation Agreement attached hereto as Exhibit D (the “Participation Agreement”).  Such participation interest shall be senior in right of payment to Seller’s right to payment under each such Commercial Loan until Buyer’s participation interest is paid in full.  Seller shall not transfer, assign, encumber, amend, modify, extend or renew the Commercial Loans identified on Schedule 5(c)  without the prior written consent of Buyer, which consent shall not be unreasonably withheld or delayed.

 

6.              Closing and Closing Date .   The consummation of the transactions contemplated under this Agreement (the “Closing”) will take place on or before December 31, 2008, or at such time and place as may be mutually agreed on by Seller and Buyer, following the receipt by Buyer of all necessary regulatory approvals and expiration of applicable statutory waiting periods (the “Closing Date”).

 

7.              Obligations at Closing .

 

(a)            At Closing, Seller shall deliver to Buyer (and in the case of item (1) below, Seller Parent shall deliver to Buyer Parent) the following:

 

(1)          The cash payments (if any) required to be made by Seller and Seller Parent pursuant to Section 4(b);

 

(2)          Bills of sale, assignments, special warranty deeds (as to those fee owned portions of the Premises and assignments of leases as to the leased portion of the Premises) and such other instruments of transfer; and documents, satisfactory to Buyer’s counsel, as may be necessary or appropriate to transfer, convey and assign to Buyer to all of Seller’s right, title, and interest in and to all of the Assets and allow Buyer to accomplish all necessary filings with official recording offices;

 

(3)          All contracts, licenses, leases, or other written agreements relating to the Assets and Liabilities and all leases and agreements with respect to Seller’s safe deposit boxes ;

 

(4)          All collateral security of any nature whatever held by Seller as security for any Loan; and powers of attorney or other instrument satisfactory to Buyer’s counsel authorizing Buyer and its representatives to file or record assignments of such collateral security and endorse in Seller’s name any checks, drafts, notes or other documents received in payment of the Loans;

 

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(5)          Certified copies of resolutions of Seller’s directors and shareholders and the resolutions of the directors and shareholders of Seller Parent authorizing the execution and delivery of this Agreement and the transactions set forth in this Agreement;

 

(6)          Copies of all of the books and records relating to the Assets and the Liabilities;

 

(7)          From time to time at Buyer’s request (whether at or after Closing and without further consideration) such further instruments of conveyance and transfer as may reasonably be required to vest in Buyer all of Seller’s right, title, and interest in and to the Assets including, but not limited to, assignments of mortgages, contracts and financing statements; and Seller will take such other action as Buyer reasonably may request to convey and transfer more effectively to Buyer any of the Assets;

 

(8)          The Escrow Agreement in the form set forth on Exhibit B attached hereto duly executed by Seller and evidence of the funding of the Escrow Account in accordance with Section 5(b) .

 

(9)          The Pledge Agreement in the form set forth on Exhibit C attached hereto duly executed by Seller;

 

(10)        The Participation Agreement in the form set forth on Exhibit D attached hereto duly executed by Seller;

 

(11)        Noncompetition Agreements in the form set forth on Exhibit E attached hereto duly executed by each of Jerry D. Williams and Thomas J. Noe;

 

(12)        If the Trust Preferred Obligations are assumed pursuant Section 2(f) hereof, the Supplemental Indenture in the form set forth on Exhibit F attached hereto (subject to any changes requested by the trustee with respect to the Trust Preferred Obligations) duly executed by Seller Parent and such other executed documents and agreements as may be required by the terms of the Trust Preferred Obligations or the trustee thereof;

 

(13)        The Servicing Agreement in the form set forth on Exhibit G attached hereto duly executed by Seller;

 

(14)        Such instruments of assumption of Liabilities as are required to effectively transfer the obligations for the Liabilities to the Buyer including, without limitation, an assignment and assumption agreement in substantially the form set forth on Exhibit H attached hereto with respect to the Liabilities, duly executed by Seller (the “Assignment and Assumption Agreement”);

 

(15)        The lease agreement in the form set forth on Exhibit I attached hereto, duly executed by Seller (the “Lease Agreement”);

 

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(16)        A bring-down of the Schedules of Assets and Liabilities and Seller Disclosure Schedule, if necessary; and

 

(17)        Seller’s resignation as trustee or custodian, as applicable, with respect to each IRA, which is part of the Deposit Liabilities and designation of Buyer as successor trustee or custodian with respect thereto, as contemplated by Sections 2(a) and 17(j).

 

(b)            At the Closing, Buyer and Buyer Parent will deliver to Seller the following:

 

(1)          The cash payment (if any) required to be made by Buyer pursuant to Section 4(b);

 

(2)          The cash payment required to be made by Buyer pursuant to the Participation Agreement;

 

(3)          Certified copies of resolutions of Buyer’s and CBSEF’s directors and, if necessary, shareholders authorizing the execution and delivery of this Agreement and the transactions set forth in this Agreement;

 

(4)          Such instruments of assumption of Liabilities as are required to effectively transfer the obligations for the Liabilities to the Buyer including, without limitation, the Assignment and Assumption Agreement in substantially the form set forth on Exhibit H attached hereto with respect to the Liabilities, duly executed by Buyer;

 

(5)          The Escrow Agreement in the form set forth on Exhibit B attached hereto duly executed by Buyer;

 

(6)          The Pledge Agreement in the form set forth on Exhibit C attached hereto duly executed by Buyer;

 

(7)          The Participation Agreement in the form set forth on Exhibit D attached hereto duly executed by Buyer;

 

(8)          Noncompetition Agreements in the form set forth on Exhibit E attached hereto duly executed by Buyer;

 

(9)          If the Trust Preferred Obligations are assumed pursuant to Section 2(f) hereof, the Supplemental Indenture in the form set forth on Exhibit F attached hereto (subject to any changes requested by the trustee with respect to the Trust Preferred Obligations) duly executed by Buyer Parent, the guaranty of the Trust Preferred Obligations entered into by Buyer and Buyer Parent and such other executed documents and agreements as may be required by the terms of the Trust Preferred Obligations or the trustee thereof;

 

(10)        The Servicing Agreement in the form set forth on Exhibit G attached hereto duly executed by Buyer;

 

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(11)        The Lease Agreement in the form set forth on Exhibit I attached hereto duly executed by Buyer;

 

(12)        Evidence of (i) the requisite regulatory approvals of the Reorganization and the transactions contemplated thereby and (ii) the satisfaction of all the required conditions of such regulatory approvals;

 

(13)        Buyer’s acceptance of its appointment as successor trustee or custodian, as applicable, of the IRAs which are part of the Deposit Liabilities and the assumption of the fiduciary obligations of the trustee or custodian with respect thereto, as contemplated by Sections 2(a) and 17(j).

 

8.              Conditions Precedent to Seller’s Obligations .  The obligations of Seller under this Agreement are, at the option of Seller, subject to the following conditions precedent that at or before Closing or at or before such time as expressly set forth below:

 

(a)            There shall have been no breach by Buyer, Buyer Parent or CBSEF in the performance of any of its respective covenants herein and each of the representations and warranties of Buyer, Buyer Parent and CBSEF contained or referred to in this Agreement that are qualified as to materiality shall be true and correct and any such representations and warranties that are not so qualified shall be true and correct in all material respects, in each case, at the Closing as though made at Closing (except to the extent such representations and warranties speak of an earlier date);

 

(b)            The directors and shareholders of Buyer, Buyer Parent and CBSEF shall have taken all corporate action necessary to approve the transactions contemplated in this Agreement and the Reorganization and certified copies of resolutions duly adopted by the directors of Buyer, Buyer Parent and CBSEF in form and substance satisfactory to counsel for Seller in connection with the foregoing shall have been furnished to Seller;

 

(c)            No order, injunction or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition (an “Injunction”) preventing or materially impacting the consummation of the transactions contemplated by this Agreement or the Reorganization shall be in effect;

 

(d)            No statute, rule, regulation, order, Injunction, or decree shall have been enacted, entered, promulgated or enforced by any Governmental Entity which prohibits, restricts or makes illegal consummation of the transactions contemplated by this Agreement or the Reorganization or otherwise materially alters the terms hereof or thereof;

 

(e)            No proceeding initiated by any Governmental Entity seeking an Injunction shall be pending that prevents or materially impacts the consummation of the transactions contemplated by this Agreement or the Reorganization;

 

(f)             This Agreement and the Reorganization, shall have been approved by all necessary state and federal regulatory agencies, all conditions to such approval shall have been satisfied or waived and all statutory waiting periods shall have expired;

 

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(g)            There shall have been delivered to Seller a certificate confirming items (a) and (f) above, dated as of the Closing Date, and signed on behalf of the Buyer, Buyer Parent and CBSEF by its respective Chief Executive Officer and President;

 

(h)            If the Trust Preferred Obligations are assumed pursuant Section 2(f) hereof, Buyer Parent shall be sole guarantor of the Trust Preferred Obligation, Buyer shall have assumed the Trust Preferred Obligations and Seller and Seller Parent shall no longer be obligated in any way for the Trust Preferred Obligation after the Closing;

 

(i)             Buyer and Buyer Parent shall have delivered any other document or instrument reasonably requested by Seller or Seller Parent to complete the transactions contemplated by this Agreement; and

 

(j)             Within thirty (30) days of the date of this Agreement, Buyer and CBSEF will have delivered to Seller’s reasonable satisfaction evidence that they possess the requisite capital and committed financial capability to fully perform their obligations hereunder and to consummate the Reorganization; provided, this thirty (30) day period shall be extended for an additional period of fifteen (15) days, if Buyer is making reasonable progress toward complying with this condition precedent.   After satisfaction of this Section 8(j) as provided in the preceding sentence, Buyer, Buyer Parent, if and when formed, and CBSEF will have the requisite funding at all times from the date thereof through the Closing.

 

9.              Conditions Precedent to Buyer’s Obligations .   The obligations of Buyer under this Agreement are, at the option of Buyer, subject to the following conditions precedent that at or before Closing or at or before such time as expressly set forth below:

 

(a)            This Agreement and the transactions contemplated hereunder, including conversion of Buyer into a federal savings association and organization of Buyer Parent each as more fully described in Section 17(a), shall have been approved by all necessary state and federal regulatory agencies, all conditions to such approval shall have been satisfied or waived and all statutory waiting periods shall have expired;

 

(b)            There shall have been no breach by Seller in the performance of any of its covenants herein, and each of the representations and warranties of Seller contained or referred to in this Agreement that are qualified as to materiality shall be true and correct and any such representations and warranties that are not so qualified shall be true and correct in all material respects, in each case, at the Closing as though made at the Closing (except to the extent such representations and warranties speak of an earlier date);

 

(c)            The directors and shareholders of Seller and the directors and shareholders of Seller Parent shall have taken all corporate action necessary to approve the transactions contemplated in this Agreement, including without limitation the actions described in Section 14 and certified copies of resolutions duly adopted by the directors and shareholders of Seller and the directors and shareholders of Seller Parent in form and substance satisfactory to counsel for Buyer in connection with the foregoing shall have been furnished to Buyer;

 

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(d)            There shall have been, between the date of this Agreement and the Closing Date:

 

(1)          No material adverse change in the business or condition, financial or otherwise, of the Branches (including, but not limited to, a decrease of ten percent (10%) or more in the Deposit Liabilities (net of Premium Ineligible Deposits) from the date of this Agreement until the Closing Date); and

 

(2)          No adverse federal, state or local legislative or regulatory change affecting in any material respect the business of the Branches;

 

(e)            There shall have been delivered to Buyer a certificate confirming items (b) and (d) above, dated as of the Closing Date, and signed on behalf of the Seller by its President;

 

(f)             No Injunction preventing or materially impacting the consummation of the transactions contemplated by this Agreement shall be in effect;

 

(g)            No statute, rule, regulation, order, Injunction, or decree shall have been enacted, entered, promulgated or enforced by any Governmental Entity which prohibits, restricts or makes illegal the consummation of the transactions contemplated by this Agreement or otherwise materially alters the terms hereof;

 

(h)            No proceeding initiated by any Governmental Entity seeking an Injunction shall be pending that prevents or materially impacts the consummation of the transactions contemplated by this Agreement;

 

(i)             Within forty-five (45) days after the date of this Agreement, Seller shall have delivered to Buyer a title insurance commitment or commitments showing marketable title to the Premises (the “Title Commitment”), which shall be at Seller’s expense.  The premiums for any such title insurance policy or policies, recording costs and other similar costs, fees and expenses, if any, relating to the sale and transfer of the Premises, shall be borne by Buyer.  The obligations of Buyer under this Agreement are contingent upon title having been found to be subject to no liens or encumbrances other than the Permitted Liens or been made acceptable as provided herein.  Seller shall also furnish to Buyer copies of any Phase I tests conducted in respect of the Premises, with the costs of any additional Phase I tests to be shared equally by Buyer and Seller.  Buyer shall have the option to conduct Phase II tests in respect of the Premises at Buyer’s expense.  Within thirty (30) days after receiving all of the Title Commitment(s) and any Phase I or Phase II test(s) conducted (whether by Seller or Buyer), Buyer shall make written objections (“Objections”) to the title reflected in the Title Commitment or to the results reflected in the Phase I or Phase II test(s).  Buyer’s failure to make objections within such time period shall constitute waiver of Objections.  Any matter of record as of the date of this Agreement and any matter shown on such Title Commitment and not objected to by Buyer shall be a Permitted Lien hereunder.  Any matter which can be satisfied by the payment of a fixed sum of money to a mortgage or lien holder shall automatically be deemed an Objection with or without written notice from Buyer.  Seller shall within twenty (20) days after receipt of the Objections use reasonable efforts to cure

 

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the Objections, during which period the Closing shall be postponed as necessary.  Seller shall satisfy all Objections which can be satisfied by the payment of money to a mortgage or lien holder or holders at or before Closing.  If Seller shall not have cured or commenced to cure to Buyer’s reasonable satisfaction, the Objections within such 20-day period, Buyer shall have the option of doing any of the following:

 

(1)          terminate this Agreement; or

 

(2)          waive the Objections (in which case the Objections shall be deemed a Permitted Lien) and proceed to Closing.

 

(j)             Within thirty (30) days after the date of this Agreement, Seller shall have provided to Buyer evidence satisfactory to Buyer that Seller will be able to pay any cash amount due to Buyer or Buyer Parent at Closing; provided, this thirty (30) day period shall be extended for an additional period of fifteen (15) days, if Seller is making reasonable progress toward complying with this condition precedent; and

 

(k)            Seller shall have delivered any other document or instrument reasonably requested by Buyer to complete the transactions contemplated by this Agreement.

 

10.           Representations and Warranties of Seller .   Seller represents and warrants to Buyer as follows, subject to the exceptions disclosed in writing in the Seller Disclosure Schedule and delivered as of the date hereof:

 

(a)            Seller is a federal savings association organized and existing in good standing under the laws of the United States, and is entitled to own its properties and to carry on its banking business as and in the places where such properties are now owned and operated and such business is now conducted; Seller is an insured thrift pursuant to the provisions of the Federal Deposit Insurance Act, as amended, and, other than as set forth in the Cease and Desist Order, no act or default on the part of Seller has occurred that might materially and adversely affect the status of Seller as an insured bank.

 

(b)            The Seller has previously made available or, as applicable, will make available, to Buyer true, correct and complete copies of:

 

(1)          The audited consolidated balance sheets of Seller Parent as of December 31, 2007 and the related audited consolidated statements of operations, stockholders’ equity and comprehensive income (loss) and cash flows for the years ended December 31, 2007 and 2006, inclusive, in each case accompanied by the audit report of BKD, LLP (the “Accountants”);

 

(2)          The unaudited consolidated balance sheets of Seller Parent as of June 30, 2008 and the related unaudited consolidated statements of operations, stockholders’ equity and comprehensive income (loss) and cash flows for the period ended June 30, 2008 and the unaudited consolidated balance sheets of Seller Parent and the related unaudited consolidated statements of operations, stockholders’ equity and comprehensive income (loss) and cash flows of the Seller for each calendar quarter end between June 30, 2008 and the Closing Date; and

 

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(3)          The December 31, 2007 Thrift Financial Report of the Seller and the Thrift Financial Report of the Seller for each calendar quarter end between December 31, 2007 and the Closing Date.

 

The financial statements and reports referred to in this Section 10(b) were prepared on a consistent basis and, with respect to 10(b)(1) and (2), in accordance with GAAP (subject, in the case of the unaudited statements, to recurring audit adjustments, normal in nature and not material in amount, and the absence of footnotes).  Each of the aforementioned documents fairly present the financial condition of the Seller in all material respects for their respective fiscal periods or as of their respective dates (subject, in the case of the unaudited statements, to recurring audit adjustments, normal in nature and not material in amount, and the absence of footnotes). The books and records of the Seller have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements.

 

(c)            Except as set forth in Schedule 16 of the Seller Disclosure Schedule, Seller is the lawful owner of, or in the case of leased Assets, has a valid leasehold interest in, each of the Assets, and the Assets are not subject to any Lien of any nature whatsoever other than Permitted Liens. Subject to and upon the execution of the documents of transfer, conveyance and assignment by Seller at Closing and the receipt of the consents and approvals as set forth herein, Seller has the right to sell, convey, transfer assign and deliver to Buyer all of Seller’s right, title and interest in and to the Assets.  Seller has not given access to any of the documents or records, including, without limitation, customer lists relating to the Assets to any Person that was not bound by a confidentiality/non-disclosure and non-solicitation agreement, which is transferable to Buyer.

 

(d)            Other than the Premises, the Assets will not include any ownership interest in real property.  The Premises constitute all of the real estate owned or leased by Seller on which Seller maintains the Branches.  Except as set forth in Schedule 25 of the Seller Disclosure Schedule, the Premises have been operated by Seller in compliance with all applicable federal, state and local environmental laws, ordinances, rules and regulations relating to the handling, storage and disposal of hazardous, toxic or contaminating wastes or substances (except where the failure to do so would not have a Material Adverse Effect on the business or financial condition of the Branches).  Seller’s operation of the Premises is in compliance with all Applicable Environmental Laws (except where the failure to do so would not have a Material Adverse Effect on the business or financial condition of the Branches).  Seller has not used, stored or disposed of Hazardous Substances on the Premises nor has Seller discharged or released any such substances upon the Premises or off-site, including, but not limited to, underground injection of such substances, in violation of any Applicable Environmental Laws (except where the failure to comply with such Applicable Environmental Laws would not have a Material Adverse Effect on the business or financial condition of the Branches).  To Seller’s knowledge, and except as may be set forth in any environmental reports with respect to the Premises delivered to or made available to the Buyer hereunder, no other party has engaged in any such use, storage, disposal, discharge or release of any such Hazardous Substance on the Premises.  The Premises are free of any petroleum products, Hazardous Substances, underground or above-ground storage tanks and wells.  Seller has not “controlled” or

 

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“directed” any borrower such that Seller would be subject to any liability with respect to any environmental matters in connection with any borrower’s operations or any borrower’s property.

 

(e)            There are no legal, administrative, arbitration or other proceedings, claims, actions, causes of action, private environmental investigations or remediation activities or governmental investigations of any nature seeking to impose, or that reasonably could be expected to result in the imposition, on the Seller of any liability or obligation under common law relating to human health or safety or any Applicable Environmental Laws, pending or, to the knowledge of the Seller, threatened against the Seller, which liability or obligation would have or would reasonably be expected to have a Material Adverse Effect on the Branches.  To the knowledge of the Seller, there is no reasonable basis for any such proceeding, claim, action or governmental investigation that would impose any liability or obligation on the Seller, which liability or obligation would have or would reasonably be expected to have a Material Adverse Effect on the Branches.  Neither the Seller nor the Premises is subject to any agreement, order, judgment, decree, letter or memorandum by or with any court, governmental authority, regulatory agency or third party imposing any material liability or obligation pursuant to or under any Applicable Environmental Laws.

 

(f)             Set forth in Schedule 7 is a complete description of the Transferred IP that will be assigned or otherwise transferred by Seller to Buyer at Closing.  Certain of the contracts identified on Schedule 12 contain a license or licenses of Intellectual Property Rights (the “Transferred Intellectual Property Licenses”) that will be assigned or otherwise transferred where the necessary consent is provided by the third-party to such Transferred Intellectual Property License.  The Transferred IP, together with the rights of Seller under the Transferred Intellectual Property Licenses, is sufficient for use in connection with the Liabilities and Assets. The Transferred IP and the rights of Seller under the Transferred Intellectual Property Licenses constitute all of the Intellectual Property used in or necessary with respect to the Liabilities and Assets and ownership of the Assets or assumption of the Liabilities.

 

(g)            Seller owns, free and clear of any liens, all rights, title and interest in and to all Transferred IP and Seller has the license rights granted to it by third-parties under the Transferred Intellectual Property Licenses. To the knowledge of Seller, the Transferred IP and Transferred Intellectual Property Licenses are valid and subsisting, in full force and effect in all material respects, and have not been canceled, expired or abandoned.  Except as set forth in Schedule 7 , no registration or application with respect to any Transferred IP is subject to any maintenance fees or taxes or actions falling due, including without limitation, the filing of an affidavit of use, renewal or response to an official action, within ninety (90) days after the Closing.

 

(h)            To the knowledge of Seller and Seller Parent, the maintenance of the Liabilities or ownership of Assets does not infringe on or otherwise violate the Intellectual Property rights of any Person. To the knowledge of Seller and Seller Parent, no Person is challenging, infringing on or otherwise violating any right of Seller or Seller Parent with respect to any Transferred IP or Transferred Intellectual Property Licenses or rights under a Transferred Intellectual Property License. To the knowledge of Seller and

 

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Seller Parent, in the four years immediately preceding the date of this Agreement, Seller has not received any written notice of any pending, existing or threatened claim, action or proceeding with respect to any Transferred IP or Transferred Intellectual Property Licenses and, to the knowledge of Seller and Seller Parent, no such claim, action or proceeding is pending, existing or threatened, and to the Knowledge of Seller and Seller Parent, no Transferred IP or Transferred Intellectual Property Licenses, nor any right under a Transferred Intellectual Property License, is being used or enforced in a manner that would result in the abandonment, cancellation or unenforceability of such Transferred IP or right.

 

(i)            Seller does not license, sell or offer to sell any Transferred IP or rights under a Transferred Intellectual Property License to third parties except as may be provided for under one or more Transferred Intellectual Property Licenses, and to the knowledge of Seller and Seller Parent, have not engaged in such activities in the past. To the knowledge of Seller and Seller Parent, Seller and its Affiliates have taken commercially reasonable measures, as appropriate, to maintain and protect the proprietary nature of the Transferred IP and rights under a Transferred Intellectual Property License and the confidentiality of their confidential information. To the knowledge of Seller and Seller Parent, no Transferred IP or Transferred Intellectual Property License is subject to any outstanding decree, order, injunction, judgment or ruling restricting the use of such Transferred IP that would impair the validity or enforceability of such Transferred IP or Transferred Intellectual Property License in any material respect regarding the ownership of the Assets or the Liabilities.

 

(j)            To the knowledge of the Seller and Seller Parent, there have not been any failures, errors or breakdowns in the IT Systems used in the servicing and maintenance of the Assets or the Liabilities within the past 12 months which have caused any material disruption or interruption with respect to the Assets or the Liabilities.

 

(k)           Each Transferred Intellectual Property License is valid and binding on Seller and, to the knowledge of Seller and Seller Parent, any other party thereto and is in full force and effect, and will continue to be valid, binding and enforceable, and in full force and effect on identical terms following the consummation of the transactions contemplated hereby upon obtaining the necessary consents to the assignment thereof to the extent the Transferred Intellectual Property License can be assigned and/or Seller and Seller Parent are able to obtain any necessary consent or assignment.  To the knowledge of the Seller and Seller Parent, Seller is in compliance in all material respects with each Transferred Intellectual Property License and, to Seller’s and Seller Parent’s knowledge, each other party to each Transferred Intellectual Property License is in compliance in all material respects with the applicable Transferred Intellectual Property License. Seller does not know of, nor has it received notice of, any material violation of default under (nor, to the knowledge of Seller, does there exist any condition which with the passage of time or the giving of notice or both would result in such a material violation or default under) any Transferred Intellectual Property License by any other party thereto, nor of any intention of a party to any Transferred Intellectual Property License to cancel, terminate, change the scope of rights under, or fail to renew any Transferred Intellectual Property License. Prior to the date hereof, Seller has made available to Buyer true and complete copies of all Transferred Intellectual Property Licenses.

 

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(l)            All Loans have been made and maintained (including the risk rating of the Loans) in the ordinary course of business, in accordance with Seller’s customary lending standards and written loan policies and in compliance with all applicable laws and regulations.  Seller’s loan files for the Loans (the “Loan Files”) contain all originally executed notes, leases and other evidences of any indebtedness, including without limitation all originally executed loan agreements, loan participation agreements and certificates, security agreements, mortgages, guarantees, UCC financing statements and similar documents evidencing collateral or other financial accommodations relating to the Loans (the “Loan Documents”).  Except as set forth on Schedule 4(c) , no Loan is contractually past due sixty (60) consecutive days or more in the payment of any required principal or interest, no Loan is on non-accrual status, and no Loan is classified or should be classified consistent with Seller’s past practice regarding loan classifications as “other assets specially mentioned,” “special mention,” “substandard,” “doubtful,” “loss,” “classified,” or “criticized” (collectively, “Classified”).   All Loan Documents are correct in amount, and, to the knowledge of Seller, genuine as to signatures of the parties thereto, including, but not limited to makers and endorsers and of Seller, and were given for valid consideration and are enforceable in accordance with their respective terms (except as such enforceability may be limited by bankruptcy or creditors’ relief laws of general application), and none of the obligations represented by the Loan Documents have been modified, altered, forgiven, discharged or otherwise disposed of except as indicated by the Loan Documents contained among the Loan Files or as a result of bankruptcy or other debtor’s relief laws of general application.  To the knowledge of Seller, no maker, signatory or guarantor on any Loan is in bankruptcy except as set forth in Schedule 4(c)  and none of the Loans are subject to any offsets or claims of offset, or claims of other liability on the part of Seller.  Except for FHA or similar government guaranteed loans, no Loans have been sold subject to an agreement to repurchase.  No borrower, customer or other party in connection with the Loans has notified Seller, or has asserted against Seller, in each case in writing, any “lender liability” or similar claim, and, to the knowledge of Seller, no borrower, customer or other third party in connection with the Loans has given Seller any oral notification of, or orally asserted to or against Seller, any such claim.  Except as set forth in Section 13 hereof or as set forth on Schedule 17 of the Seller Disclosure Schedule, the Seller has made no commitment to make loans or to modify the terms and conditions of any loan other than as set forth in the Loan Files.

 

(m)          All Loans comply in all material respects with all laws, including, but not limited to, applicable usury statutes, underwriting and recordkeeping requirements and the Truth in Lending Act, the Equal Credit Opportunity Act and the Real Estate Settlement Procedures Act, and other applicable consumer protection statutes and the regulations thereunder.

 

(n)           The Seller has properly perfected or caused to be properly perfected all security interests, liens, or other interests in any collateral securing any Loans made by it and such proper perfection continues to be in effect except where the failure to properly perfect or cause to be properly perfected would not materially and adversely affect the rights of the Seller or the enforceability of the Loan.

 

(o)           The Deposit Liabilities are in all material respects genuine and enforceable obligations of Seller and have been originated and administered in all material respects in

 

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compliance with all applicable state and federal laws, regulations and rules, including without limitation, the Truth in Savings Act and regulations promulgated thereunder.  All interest has been properly accrued on the Deposit Liabilities and Seller’s records accurately reflect such accruals of interest in all material respects.

 

(p)           Other than disclosed in Schedule 18 of the Seller Disclosure Schedule, there are no actions, claims, suits, proceedings or investigations pending or, to the knowledge of Seller, threatened against or affecting the Assets or the Liabilities or the business of Seller at law or in equity or otherwise, which involve the likelihood of any judgment or liability that would result in a Material Adverse Effect, and there are no unsatisfied judgments of record against Seller.

 

(q)           Other than the Cease and Desist Order and as set forth on Schedule 19 of the Seller Disclosure Schedule, Seller is not subject to any cease-and-desist or other order issued by, or a party to any written agreement, consent agreement or memorandum of understanding with, or a party to any commitment letter or similar undertaking to, or subject to any order or directive by, or been a recipient of any extraordinary supervisory letter from, or has adopted any board resolutions (each of the foregoing, a “Regulatory Agreement”), at the request of any Governmental Entity that restricts its ability to sell its Assets at the Branches or transfer and assign to Buyer the Liabilities, nor has the Seller been advised by any Governmental Entity that it is considering issuing or requesting any Regulatory Agreement.  Seller has been in compliance with the Cease and Desist Order in all material respects.

 

(r)            Other than disclosed in Schedule 28 of the Seller Disclosure Schedule, Seller’s senior executive officers have no actual knowledge of any loss or potential loss of any material business related to the Loans or the Deposit Liabilities, material customers related to the Loans or the Deposit Liabilities or senior officers of the Branches not otherwise disclosed on the Seller Disclosure Schedule.

 

(s)           The execution and delivery of this Agreement have been, and the execution and delivery by Seller of all documents and agreements to be delivered by Seller at the Closing pursuant to the provisions of this Agreement will be, duly and validly authorized in accordance with the laws of the State of Ohio and the United States and with the charter and bylaws of Seller; and this Agreement is, and all such other documents and agreements when delivered will be, valid and binding upon Seller in accordance with their respective terms.

 

(t)            The execution and performance of this Agreement by Seller, subject to the satisfaction of conditions and approvals set forth herein, will not result in the violation of (i) any provision of Seller’s charter or bylaws or (ii) law to which Seller is subject that would have a Material Adverse Effect.  Seller is not in material default under, nor will the execution or performance by Seller of this Agreement result in a default under, any provision of any agreement or other instrument to which Seller is a party or by which Seller is bound and which relates to any of the Assets and which default would have a Material Adverse Effect.

 

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(u)           Within thirty (30) days of the date of this Agreement,