Exhibit 10.7
PURCHASE AND ASSUMPTION
AGREEMENT
This
Purchase and Assumption Agreement (this “Agreement”) is
made and entered into this 1st day of September, 2009, by and
between HeritageBank of the South, a Georgia-chartered savings bank
(the “Purchaser”), and Atlantic Coast Federal Bank, a
federally chartered stock savings bank (the
“Seller”).
WHEREAS, Seller owns and operates a branch facility
located at 463 West Duval Street, Lake City, Florida 32055 (the
“Branch”); and
WHEREAS, Seller desires to sell and Purchaser agrees to
acquire the Branch and, in that regard, Seller desires to sell and
Purchaser desires to acquire certain assets relating to the Branch,
all as set forth in this Agreement; and
WHEREAS, Seller desires to assign to Purchaser and
Purchaser desires to assume from Seller certain liabilities
relating to the Branch, all as set forth in this
Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
promises, Seller and Purchaser agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS AND
ASSIGNMENT AND ASSUMPTION OF LIABILITIES
1.1
Purchase and Sale of Assets . Upon the terms and subject to the
conditions set forth in this Agreement, Seller shall sell, convey,
assign, transfer and deliver to Purchaser, and Purchaser shall
purchase and accept from Seller, the following assets relating to
the Branch (the “Assets”):
A.
Personal Property . The personal property, including furniture,
fixtures, equipment and fixed assets contained in and used
primarily for the operation of the Branch as described in
Schedule 1.1A hereto (the “Personal
Property”).
B.
Loans .
1. All
whole loans carried on the books and records of the Branch as of
the close of business on June 30, 2009, relating to customer
relationships at the Branch as listed on Schedule 1.1B.1(a)
as prepared and delivered by Seller (the “Existing
Loans”), including all related escrow accounts and
excluding: (i) loans that are restructured, changed or
modified after June 30, 2009, without Purchaser’s written
consent; (ii) loans that are 30 days or more delinquent as of the
third business day prior to the Closing Date (as defined in Section
1.7); and (iii) loans listed on Schedule 1.1B.1(b)
(“Excluded Loans”) as prepared and delivered by
Purchaser within 15 business days of the date of this
Agreement. Schedule 1.1B.1(a) shall provide the
following information for each loan: loan number and
type, the borrower and outstanding principal balance on June 30,
2009. Schedule 1.1B.1(b) shall identify the
Excluded Loans by loan number and borrower. Within five
business days of receiving Schedule 1.1B.1(b) , Seller shall
prepare and provide to Purchaser a revised list of Existing Loans
on Schedule 1.1B.1(a) that excludes the Excluded
Loans.
2. All
additional loans originated and entered on the books and records of
the Branch relating to customer relationships at the Branch from
June 30, 2009, to the close of business on the day immediately
before the Closing Date, but excluding loans that are 30 days or
more delinquent as of the third business day prior to the Closing
Date (the “Interim Loans”).
3. For
purposes of this Agreement, the Existing Loans and Interim Loans
are collectively referred to as the “Purchased
Loans.” The Purchased Loans, together with
interest accrued thereon but unpaid as of the close of business on
the day immediately before the Closing Date (the “Accrued
Loan Interest”), shall be purchased by Purchaser, subject to
the 60-day put-back option described in Section
7.5G. Seller will prepare for Closing Schedule
1.1B.3 , which will provide the following information for the
Purchased Loans: loan number and type, the borrower, outstanding
principal balance and Accrued Loan Interest as of the close of
business the day immediately before the Closing Date, which
Schedule shall be current and made a part hereof as of the Closing
Date.
C.
Real Property . The real property, and all
improvements thereon, owned by Seller on which the Branch is
located (the “Real Property”), which shall be sold and
purchased at a price determined by an independent appraisal of the
Real Property (“Appraised Value of Real Property”)
pursuant to the terms detailed in Section 7.3 and Schedule
1.1C .
D.
Cash on Hand . The cash on hand maintained at the
Branch at the start of business on the Closing Date (the
“Cash on Hand”).
E.
Records, Etc. All records, files, books of accounts
and other original documents and instruments pertaining to the
Assets being transferred and the Assumed Liabilities, as defined
below.
F.
Rights Relating to Assets . Any statutory or common law right,
title and interest in and related to the Assets that Seller may
have and assign, including, without limitation, claims, causes of
action, rights of recovery or set-offs, and credit of any kind or
nature relating to the Assets (the
“Rights”).
1.2
Assignment and Assumptions of Liabilities .
Upon the terms and subject to the
conditions set forth in this Agreement, Seller shall assign to
Purchaser, and Purchaser shall accept and assume from Seller, the
following liabilities relating to the Branch, which liabilities
Purchaser agrees to perform and discharge (the “Assumed
Liabilities”), as follows:
A.
Deposit Liabilities . All liabilities for payment of
deposits given an account number maintained at the Branch
including, without limitation, all savings accounts, certificates
of deposit, money market deposit accounts, checking and NOW
accounts and IRA accounts, and all other deposit accounts given an
account number maintained at the Branch or assigned to the Branch
in the ordinary course pursuant to the Seller's accounting system
(except to the extent of deposit liabilities transferred at the
request of a depositor as provided in Section 4.2(A), in each case
as of the close of business on June 30, 2009 (the “Cut-Off
Date Deposits”), all of which shall be listed in full on
Schedule 1.2A.1 hereto (the “Deposit Balance”),
together with any changes in the Cut-Off Date Deposits and all new
deposits from June 30, 2009 through the close of business on the
day immediately before the Closing Date (the “Interim
Deposits”) (the Cut-Off Date Deposits and Interim Deposits,
in each case as of the close of business on the day immediately
before the Closing Date are hereinafter collectively referred to as
the “Deposits” or the “Deposit
Liabilities”), in accordance with the terms of the agreements
pertaining to such Deposits, together with interest accrued thereon
but unpaid as of the close of business on the day immediately
before the Closing Date (the “Accrued Deposit
Interest”). Said Deposit Liabilities and Accrued
Deposit Interest shall be specified in Schedule 1.2A.2 to be
prepared by Seller and be attached hereto and made a part hereof as
of the Closing Date.
B.
Contracts . All obligations of the Seller
relating to the period on and after the Closing Date under any and
all contracts relating to the operation of the Branch that are
assignable by Seller to Purchaser and are all listed on Schedule
1.2B to this Agreement (the
“Contracts”).
1.3
Purchase Price . The purchase price to be paid by the
Purchaser to Seller for the Assets acquired under this Agreement
(the “Purchase Price”) shall be equal to the Book Value
of the Personal Property, the Appraised Value of the Real Property,
the unpaid principal and Accrued Loan Interest on the Purchased
Loans and the amount of Cash on Hand. The Purchaser also
shall assume the Deposit Liabilities, Accrued Deposit Interest and
Contracts and shall pay a 1% premium on the Deposit Liabilities
(“Deposit Premium”). For purposes of this
Agreement, “Book Value” means the net book value on the
books and records of the Seller in accordance with GAAP as of the
month-end prior to the Closing Date.
1.4
Transfer of Funds . In connection with the acquisition by
Purchaser of the Assets and the assumption by Purchaser of the
Assumed Liabilities of Seller, Seller shall transfer to the
Purchaser by wire transfer of immediately available funds on the
Closing Date (or the business day immediately before the Closing
Date, if the Closing Date occurs on a day when the funds cannot be
wired for same day reinvestment) in accordance with Section 1.7
(the “Transfer Payment”) an amount equal to:
A. the
estimated amount of the Deposit Liabilities; plus
B. the
estimated amount of the Accrued Deposit Interest;
minus
C. the
Book Value of the Personal Property; minus
D. the
Appraised Value of the Real Property; minus
E. the
estimated unpaid principal amount of the Purchased Loans;
minus
F. the
estimated amount of the Accrued Loan Interest;
minus
G. the
amount of Cash on Hand; minus
H. the
Deposit Premium; plus or minus and
I. the
estimated amount of prorations, as provided for in Section 1.6
hereof.
The parties agree that if the sum
of subsections A through I is less than zero, the Purchaser will
transfer to the Seller, in accordance with Section 1.7, by wire
transfer on the Closing Date (or the business day immediately
before the Closing Date, if the Closing Date occurs on a day when
funds cannot be wired for same day reinvestment), immediately
available funds in the amount by which such sum is less than
zero.
The
Seller shall prepare and deliver to Purchaser on and as of the
third business day before the Closing Date a provisional closing
statement to be executed by the parties for the calculation for the
Transfer Payment on the form in Exhibit 1.
1.5
Adjustment Payment Date .
A. On
the 15th day after the Closing Date or such earlier date as may be
agreed to in writing by the parties (the “Adjustment Payment
Date”), Seller shall deliver the following documents to
Purchaser in order to determine the amount of any necessary
adjustment to the Transfer Payment (“Adjusted
Payment”):
1. A
statement setting forth (a) the aggregate amount of Deposit
Liabilities and the Accrued Deposit Interest thereon transferred to
and assumed by Purchaser, calculated as of the close of business on
the day immediately before the Closing Date; and (b) any
corrections to the information contained in the Schedule 1.2A.2
delivered to the Purchaser on the Closing Date;
2. A
statement setting forth the Purchased Loans as of the close of
business on the day immediately before the Closing Date, setting
forth (a) the aggregate unpaid principal amount of such Purchased
Loans and the Accrued Loan Interest and listing, for each such
Purchased Loans, the name and address of the borrower, the unpaid
principal amount thereof, interest rate thereon and the amount of
the Accrued Loan Interest; and (b) any corrections to the
information contained in the Schedule 1.1B.3 delivered to the
Purchaser on the Closing Date.
3. A
statement of the actual proration amounts to be paid in accordance
with Section 1.6 hereof as of the start of business on the Closing
Date;
4. A
final closing statement of any other required adjustments to
determine the Adjusted Payment for execution by the parties on the
form in Exhibit 2.
B. If
the final closing statement requires an Adjusted Payment, Seller or
Purchaser, as the case may be, shall make the Adjusted Payment to
the other party to correct any discrepancy between the amount of
the Transfer paid under Section 1.4 and the amount of the Adjusted
Payment determined under this Section 1.5. Seller shall
provide Purchaser with the worksheets it used to calculate the
Adjustment Payment. Any Adjustment Payment due to either party on
the Adjustment Payment Date pursuant to this provision shall be
paid to such party on the Adjustment Payment Date by the other
party by wire transfer on the first business day immediately
following the execution of the final closing statement by Purchaser
and Seller and shall bear interest from and including the Closing
Date to the date of payment at the effective federal funds rate as
published daily by the Federal Reserve Bank of Atlanta for the
dates involved.
1.6
Prorations . It is the intention of the parties
hereto that Seller shall operate for its own account the business
being transferred pursuant to this Agreement until the close of
business on the day immediately before the Closing Date, and that
Purchaser shall operate for its own account the business being
transferred pursuant to this Agreement from and after the Closing
Date. Thus, except as otherwise specifically provided in
this Agreement, items of income and expense allocable to the Assets
and Assumed Liabilities shall be prorated as of the close of
business on the day immediately before the Closing Date using the
accrual method of accounting, whether or not such adjustment would
normally be made as of such time. For purposes of this
Agreement, items of proration and other adjustments shall include,
but not be limited to; (i) personal property taxes; (ii) FDIC
deposit insurance and FICO assessments (prorated in accordance with
the number of days elapsed during the quarter in which the Closing
Date occurs and applicable FDIC assessment rates for the Seller);
and (iii) other accrued expenses (including but not limited to
those under the Contracts) and prepaid expenses (but only including
prepaids that will inure directly to the benefit of Purchaser and
excluding all others, such as by way of example, prepaid
advertising) for the Branch. Seller shall deliver to
Purchaser a preliminary proration schedule as of the end of the
month preceding the Closing Date to enable the parties to agree on
the types of prorations to apply at Closing.
1.7
Closing Date: Closing; Real Estate Transfer .
The consummation of the
purchase and assumption transactions provided for in this Agreement
(the “Closing”), shall occur (i) no later than 15
calendar days after receipt by the parties of all required
regulatory approvals and all other approvals required by law or
contract for consummation of the transactions provided for herein
and lapse of all required waiting periods associated therewith
(such date referred to hereinafter as the “Closing
Date”), with a target date of October 31, 2009 or (ii) such
other date as is mutually agreed upon in writing by the parties
hereto. In any event, the Closing Date may be extended to December
31, 2009, if regulatory approvals and waiting periods
necessitate. Delivery of the documents and instruments
to be delivered by Seller and Purchaser, payment of the Transfer
Payment by Seller or Purchaser, closing of the sale of the Real
Property, and other transactions herein contemplated to take place
concurrently with such deliveries, assumptions and payments, shall
take place on the Closing Date at 8:00 a.m. (local time) at the
offices of Seller in the State of Georgia (or at such other time
and place as are agreed to by both parties), and all such
transactions shall be deemed effective as of the close of business
on the day immediately before the Closing Date; provided, however,
that any payment to be made by either party to the other by wire
transfer of immediately available funds on the Closing Date shall
be made by wire transfer initiated prior to 10:00 a.m. (local time)
on the Closing Date (or on the business day immediately before the
Closing Date, if the Closing Date occurs on a day when funds cannot
be wired for same day reinvestment). Any deliveries,
conveyances, assignments or transfers required under this
Agreement, other than the foregoing, shall be made at the time and
date specified in this Agreement (and where no time is specified,
on or before the start of business on the date specified) and in
the manner and place specified in this Agreement (where not
specified, in the manner and place as reasonably requested in
writing by the party that is to receive such delivery, conveyances,
assignment or transfer).
1.8
Limitations On Assumption of Liabilities .
The parties agree that
Purchaser shall assume only the Assumed
Liabilities. Purchaser assumes no other liabilities of
the Seller or Seller's banking operations.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller
hereby makes the following representations and warranties to
Purchaser:
2.1
Corporate Organization . Seller is a federally chartered stock
savings bank duly organized and existing under the laws of the
United States and possesses full corporate power and all necessary
approvals to own and operate the Branch and to carry on its
business as presently owned, operated, and conducted by
it. Seller’s deposit liabilities are insured by
the FDIC to the fullest extent permitted under federal law. No
proceedings for the termination or revocation of such insurance are
pending or to Seller's knowledge threatened, and Seller is not
currently under any cease and desist order by any regulatory
agency, nor to Seller's knowledge is any such action threatened
that would preclude Seller from entering into or consummating this
Agreement.
2.2
Corporate Authority and Action . Seller has full right, power and
authority to sell, convey, assign, transfer and deliver the Assets
and the Assumed Liabilities to Purchaser and to otherwise fully
perform Seller's obligations under this Agreement, subject however
to (i) Seller’s receipt of all required regulatory approvals
and (ii) compliance by Purchaser with all of its obligations under
this Agreement. Seller has full right, power and
authority to execute and deliver this Agreement and each of the
documents and instruments contemplated hereby. This
Agreement, and each such other document and instrument, constitutes
a valid and binding obligation of Seller enforceable in accordance
with its terms except as the same may be limited by bankruptcy,
insolvency, reorganization, or other laws relating to or affecting
the enforcement of creditors' rights including, without limitation,
the avoidance powers of the FDIC pursuant to the Federal Deposit
Insurance Act and except as courts of equity may limit certain
remedies such as specific performance. This Agreement
and the transactions contemplated hereby have been approved by the
Board of Directors of Seller and no other corporate or member
action is required on the part of Seller relating to this Agreement
and the transactions contemplated hereby.
2.3
No Default Effected . The execution and delivery of this
Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby, subject to the fulfillment of the
terms and compliance with the provisions hereof and all regulatory
approvals, will not conflict with, or result in the material breach
of, or a material default (or an occurrence which, with the lapse
of time or action by a third party, could result in a breach or
default) with respect to (i) any of the terms, conditions, or
provisions of any laws applicable to Seller, or of the charter or
bylaws of Seller; (ii) any agreement or other instrument to which
Seller is a party or is subject, or by which Seller or any of its
properties or assets are bound; or (iii) any order, judgment,
injunction, decree, directive, or award of any court, arbitrator,
government agency, or public official by which Seller is
bound.
2.4
Brokers . All negotiations relative to this
Agreement and the transactions contemplated hereby have been
carried on by Seller without the intervention of any other person
acting on behalf of Seller, other than Stevens & Company, in
such manner as to give rise to any valid claim by any person
against Seller or Purchaser for reimbursement of expenses or a
finder's fee, brokerage commission, or other similar payment, and
Seller shall pay all commissions, fees, costs and expenses,
directly or indirectly, due any such person and indemnify Purchaser
against all commissions, fees, costs, expenses, or other similar
payments in connection therewith.
2.5
Litigation . There are no actions, causes of
action, claims, suits or proceedings, pending or, to Seller's
knowledge, threatened, against Seller affecting the Branch, the
Assets or the Assumed Liabilities whether at law, in equity or
before or by a governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, and to Seller's
knowledge, there are no unresolved disputes under any written or
oral agreement, whether express or implied, to which Seller is a
party or by which it is bound that would adversely affect the
Branch, the Assets, the Assumed Liabilities or the transactions
contemplated hereby, and Seller has no knowledge of any state of
facts or the occurrence of any event which would form the basis for
any claim which would adversely affect the Branch, the Assets, the
Assumed Liabilities or the transactions contemplated
hereby.
2.6
Deposits . The Deposits are insured by the FDIC
to the fullest extent permitted under federal law. The
Deposits (i) are in all respects genuine and enforceable
obligations of Seller and have been acquired and maintained in
material compliance with all applicable laws, including (but not
limited to) the Truth in Savings Act and regulations promulgated
thereunder; (ii) were acquired in the ordinary course of Seller's
business; and (iii) are not subject to any claims that are superior
to the rights of persons shown on the records delivered to
Purchaser indicating the owners of the Deposits, other than claims
against such Deposit owners, such as state and federal tax liens,
garnishments, and other judgment claims, which have matured or may
mature into claims against the respective Deposits.
2.7
Title to Assets . Seller has good and marketable title
to the Assets, and complete and unrestrictive power to sell,
transfer and assign the Assets to Purchaser subject to the receipt
of all required regulatory approvals and free and clear of any and
all claims, liens, encumbrances or rights of third parties, except
as provided in Schedule 1.1C. Without any investigation
or inquiry, Seller has no knowledge of any defects in, or damage
to, any of the Real Property or Personal Property, reasonable wear
and tear excepted, other than such as would be plainly visible upon
a due diligence inspection. However, Seller makes no
other representation relating to the physical condition of the Real
Property or the Personal Property. The Personal Property
and the Real Property, except as otherwise expressly stated herein,
including Section 4.10 and Schedule 1.1C, shall be conveyed in
“AS IS” condition without any representation as to
suitability for any particular purpose.
2.8
Loans . All notes and other evidences of
indebtedness in favor of Seller in connection with the Purchased
Loans, including, without limitation, any and all security
agreements, guarantees, mortgages and other collateral documents
accompanying the same, are correct in amount, genuine as to
signatures of the makers, endorsers or signatories thereof or
thereto, were given for a valid consideration and represent binding
claims against such makers, endorsers or signatories for the full
amount shown on the books and records of Seller. All of
the Purchased Loans have been made by Seller in accordance with
Board of Director-approved loan policies. Seller holds
the Purchased Loans for its own benefit and no other person has any
rights in the Purchased Loans. The secured Purchased
Loans include perfected liens having the priority indicated by
their terms, subject, as of the date of recordation or filing of
applicable security instruments, only to such exceptions as are
discussed in attorneys’ opinions regarding title or in title
insurance policies in the loan files relating to Purchased Loans
secured by real property or are not material as to the
collectability of such loans. All of the Purchased Loans
are with full recourse to the borrowers and guarantors, if any, and
Seller has not taken any action that would result in a waiver or
negation of any rights or remedies available by it against any
borrower or guarantor, if any, on any Purchased
Loan. All applicable remedies against all borrowers and
guarantors are enforceable, except as such enforcement may be
limited by general principles of equity whether applied in a court
of law or a court in equity and by bankruptcy, insolvency,
fraudulent conveyance, and similar laws affecting creditors’
rights and remedies generally. Seller has fulfilled in
all material respects its contractual responsibilities and duties
as servicer of the Purchased Loans and has complied in all material
respects with its duties as required under applicable regulatory
requirements. Seller has properly perfected or caused to
be properly perfected all liens or other interests in any
collateral securing any secured Purchased Loan. The loan
file for each Purchased Loan (i) complies with the recordkeeping
requirements of Seller’s primary bank regulator; (ii) is
maintained in accordance with industry standards and practices and
(iii) contains all documents, instruments and other information
necessary or appropriate to (a) comply with the underwriting
requirements applicable thereto and/or (b) enforce the rights of
Seller under the notes, other evidences of indebtedness, security
agreements, guaranties, mortgages and other collateral documents in
favor of Seller in connection with such Loan.
2.9
Proceedings Relating to Branch and Real Property
. No
proceedings to take all or any part of the Branch premises or the
Real Property by condemnation or right of eminent domain are
pending or, to Seller's knowledge, threatened. Seller's
use of the Branch and Real Property are not (to the best of
Seller’s knowledge without investigation or inquiry), and no
complaints have been received by Seller that Seller is, in
violation of applicable building, zoning, platting, subdivision,
use, safety, building, energy and environmental or similar laws,
ordinances, regulations and restrictions. The Branch and
Real Property are adequately serviced by all utilities necessary
for effective operation as presently used for a financial
institution branch office.
2.10
Contracts and Agreements . A true and complete copy of each
Contract to be assumed by Purchaser is included in Schedule
1.2B. Each Contract is valid and enforceable according
to its terms, Seller is not in default under any Contract and there
has been no event which, with notice or the lapse of time, or both,
would constitute a default under any Contract by Seller including,
but not limited to, the consummation of the transactions
contemplated by this Agreement.
2.11
Compliance with Laws . Insofar as it may affect the transactions
contemplated by this Agreement, to Seller’s knowledge, Seller
is in material compliance with all laws applicable to the operation
of its business as presently conducted at the Branch, specifically
including, without limitation, compliance with all regulations
concerning truth-in-savings, consumer protection, occupational
safety, civil rights, and labor and/or employment laws.
2.12
Governmental Reporting . Seller has timely filed all
applicable reports, returns and filing information data required to
be filed with any and all federal and state banking authorities and
any and all other governmental authorities and regulatory
agencies. For all completed calendar years, Seller has
duly and timely sent to each owner of a Deposit all required Form
1099s.
2.13
Environmental Matters . There is no legal, administrative,
arbitral or other proceeding, claim, action, cause of action or
governmental investigation pending or, to Seller's knowledge,
threatened which seeks to impose on Seller or any predecessor of
Seller in connection with the Real Property any liability arising
under any environmental laws, nor to Seller’s knowledge is
there any basis for any of the foregoing. Seller is not
subject to any agreement, order, judgment, decree or memorandum by
or with any court, governmental authority, regulatory agency or
third party imposing any such liability with respect to the Real
Property. To Seller’s knowledge, without any
investigation or inquiry, there are no environmental conditions
such as above ground or under ground storage tanks, discharges or
emissions or releases of hazardous materials present at, on, under,
or above the Real Property, which constitute a violation of any
environmental laws.
2.14
Taxes . Seller shall be entitled to the tax
deduction (to the extent permitted by applicable law) for the
accrued interest on the Deposit Liabilities prior to the Closing
Date. As of the Closing Date, the Deposit Liabilities
shall not be subject to any tax liens or levies of any kind
relating to obligations of Seller.
2.15 Real
Property . There are no leases, subleases, licenses or
similar agreements permitting any party to lease, use or occupy
space in or on the Real Property, except for easements of
record. There are no outstanding options to purchase or
similar agreements with respect to the Real Property.
2.16
Employees . Schedule 2.16 lists the names of all
employees at the Branch (“Employees”), their full-time
or part-time status (including approximate hours per week), their
job description and/or title, their compensation and benefits, any
written or oral agreements with them, and their hire
dates.
2.17
Appointment of IRA Account Trustee or Custodian .
Seller has sole authority
to appoint a successor trustee or custodian for all IRA Accounts
(including SEP IRA, SIMPLE IRA and other retirement accounts over
which Seller serves as trustee or custodian) included in the
Assumed Liabilities.
2.18
Application Status . Seller knows of no reason why any governmental
agency would not approve or consent to the transactions
contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby makes the following
representations and warranties to Seller:
3.1
Corporate Organization . Purchaser is a state-chartered savings bank duly
organized and existing under the laws of the State of Georgia and
possesses full corporate power and all necessary approvals to own
and operate its properties and to carry on its business as
presently owned, operated and conducted by
it. Purchaser's deposit accounts are insured by the FDIC
to the fullest extent permitted under federal law. No
proceedings for the termination or revocation of such insurance are
pending or to Purchaser's knowledge threatened, and Purchaser is
not currently under any cease and desist order by any regulatory
agency nor to Purchaser's knowledge is any such action threatened
which would preclude Purchaser from entering into or consummating
this Agreement.
3.2
Corporate Authority and Action . Purchaser has full right, power and
authority to acquire the Assets and assume the Assumed Liabilities
from Seller and to otherwise fully perform Purchaser's obligations
under this Agreement, subject however, to (i) Purchaser’s
receipt of all required regulatory approvals and (ii) compliance by
Seller with all of its obligations under this
Agreement. Purchaser has full right, power and authority
to execute and deliver this Agreement and each of the documents and
instruments contemplated hereby. This Agreement, and
each such other document and instrument, constitutes a valid and
binding obligation of Purchaser enforceable in accordance with its
terms except as the same may be limited by bankruptcy, insolvency,
reorganization, or other laws relating to or affecting the
enforcement of creditors' rights including, without limitation, the
avoidance powers of the FDIC pursuant to the Federal Deposit
Insurance Act and except as courts of equity may limit certain
remedies such as specific performance. This Agreement
and the transactions contemplated hereby have been approved by the
Board of Directors of Purchaser and no other corporate or
shareholder action is required on the part of Purchaser relating to
this Agreement and the transactions contemplated hereby.
3.3
No Default Effected . The execution and delivery of this
Agreement by Purchaser and the consummation by Purchaser of the
transactions contemplated hereby, subject to the fulfillment of the
terms and compliance with the provisions hereof and all regulatory
approvals, will not conflict with, or result in the material breach
of, or a material default (or an occurrence which, with the lapse
of time or action by a third party, could result in a breach or
default) with respect to (i) any of the terms, conditions or
provisions of any laws applicable to Purchaser, or of the charter
or bylaws of Purchaser; (ii) any agreement or other instrument to
which Purchaser is a party or is subject or by which Purchaser or
any of its properties or assets are bound; or (iii) any order,
judgment, injunction, decree, directive, or award of any court,
arbitrator, government agency or public official by which Purchaser
is bound.
3.4
Brokers . Negotiations relative to this
Agreement and the transactions contemplated hereby have been
carried on by Purchaser without the assistance of any other person
acting as Purchaser’s broker. Purchaser shall pay
all commissions, fees, costs and expenses, directly or indirectly,
due any such person acting as Purchaser’s broker and
indemnify Seller against all commissions, fees, costs, expenses, or
other similar payments in connection therewith.
3.5
Litigation . There are no actions, causes of
action, claims, suits, or proceedings, pending or, to Purchaser's
knowledge, threatened, against Purchaser which would adversely
affect the transactions contemplated by this Agreement, whether at
law, in equity or before or by a governmental department,
commission, board, bureau, agency, or instrumentality, domestic or
foreign, and to Purchaser's knowledge, there are no unresolved
disputes under any written or oral agreement, whether express or
implied, to which Purchaser is a party or by which it is bound that
would adversely affect the transactions contemplated hereby, and
Purchaser has no knowledge of any state of facts or the occurrence
of any event which could form the basis for any claim which would
adversely affect the transactions contemplated hereby.
3.6
Compliance with Law . Insofar as it may affect the
transactions contemplated by this Agreement, Purchaser is in
material compliance with all laws applicable to the operation of
its business.
3.7
Application Status . Purchaser knows of no reaso
