EXHIBIT 10.29
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ACQUISITION AGREEMENT BETWEEN
FIRST SOUTHERN NATIONAL BANK AND
COMMUNITY BANK
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ACQUISITION AGREEMENT
This Acquisition Agreement (the "Agreement") is made and entered into as of the
25th day of February, 2002, by and between First Southern National Bank, a
national banking association (the "Purchaser") and Community Bank, an Alabama
banking corporation (the "Seller").
W 1 T N E S S E T H:
The Seller has offered for sale its branch offices located at (i) 000
Xxxx Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx, and (ii) 0000 Xxxx Xxxxxxxxx, Xxxxxxxxx,
Xx. Xxxxx, Xxxxxxx (the "Branches") together with substantially all of the
deposit and Loan business of such Branches.
Purchaser has received summary information regarding the Branches and
has offered to purchase substantially all of the assets and liabilities of the
Branches on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which is acknowledged, the parties,
intending to be legally bound, agree as follows:
ARTICLE I
DEFINED TERMS
1.01 Definitions. The following terms used in this Agreement shall
have the meanings specified below:
(a) "Available Core Deposit Base" means the daily average
total Core Deposit balances, as indicated by the general ledger books of account
of the Branches for the approximately 30-day period immediately preceding the
Closing Date, except that for the calculation of the Available Core Deposit Base
for the Initial Settlement Statement such time period shall be the 25-day period
prior to the date upon which the Initial Settlement Statement is provided to
Purchaser as required by Section 5.01.
(b) "Banking Day" means any day on which the main offices
of Purchaser and Seller are open for business but shall not include any
Saturday, Sunday, or any day established as a legal banking holiday by the Board
of Governors of the Federal Reserve or the Alabama Superintendent of Banks (the
"Superintendent").
(c) "Closing" means the closing of the purchase of the
assets and the assumption of the liabilities of the Branches as provided herein.
(d) "Closing Date" shall have the meaning set forth in
Section 14.01.
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(e) "Core Deposits" means all deposits maintained at the
Branches, exclusive of (i) public funds time deposits including deposits of the
State of Alabama and its political subdivisions, authorities and agencies,
including time deposit accounts or TDOAs , and (ii) deposits represented by
certificates of deposit representing at Closing a liability of $100,000 or more
and (iii) any accounts designated by Seller or Purchaser on Exhibit 1.01(e)
attached hereto as not expected to transfer to Purchaser ("NETT Deposits").
(f) "Litigation" shall mean any action, arbitration,
cause of action, claim, complaint, criminal prosecution, governmental or other
examination or investigation, hearing, administrative or other proceeding
relating to or affecting a party, its business, its assets (including contracts
related to it), or the transactions contemplated by this Agreement, but shall
not include regular, periodic examinations of depository institutions and their
affiliates by regulatory authorities.
(g) "Loan" means each loan agreement, note or borrowing
arrangement (including all collateral relating thereto) to which Seller is a
party and which are properly booked on the Branches' books and records at the
Closing Date, including, without limitation, all overdraft lines of credit.
ARTICLE II
SALE OF ASSETS
2.01 Assets Sold. On the terms and subject to the conditions of
this Agreement, at the effective date and time of the acquisition contemplated
hereby (the "Effective Time"), the Seller shall transfer, convey, assign and
deliver to Purchaser and Purchaser shall purchase and receive from the Seller,
the following assets, properties and rights (the "Purchased Assets") free and
clear of all liens:
(a) all Loans properly booked on the Branches' books at
the Closing Date at their respective then outstanding principal amounts,
together with accrued interest thereon, including the FOLLOWING;
(1) Loans in which the collateral securing same has been
repossessed ("Other Real Estate") or in which collection
efforts have been instituted or, claim and delivery or
foreclosure proceedings have been filed);
(2) Loans 60 days or more past due, including non accrual status;
(3) Loans upon which insurance has been force-placed;
(4) Loans in connection with which the borrower has filed a
petition for relief or is the subject of a proceeding under
the United State Bankruptcy Code ("Bankruptcy Code") prior to
the Closing Date;
(5) Loans that do not meet the credit standards of Purchaser;
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(6) Loans otherwise identified by Purchaser as uncollectible; and
(7) Loans classified or classifiable as special mention,
substandard, doubtful or loss.
All Loans that fit the criteria of (1) - (7) above shall hereinafter be referred
to as "Discounted Loans" and shall be purchased by Purchaser at mutually agreed
amounts to be shown on Exhibit 2.01(a)(1), which amounts shall appropriately
reflect the risks, collectibility or realization and costs of collection and
realization. All other Loans to be purchased shall be purchased at the value
thereof shown on Seller's books (the "Regular Loans"). Purchaser shall not be
required to take any Loans which are to any employee of the Seller (other than
to employees of the Branches) nor any Loans to any affiliates of Seller or its
related entities. All Discounted Loans and the purchase price to be paid
therefor are set forth on Exhibit 2.01(a)(1) and the Regular Loans and the
purchase price to be paid therefor are set forth on Exhibit 2.01(a)(2).
(b) all of the Seller's rights and title to the real
property and improvements located at the Branches, whether owned or leased by
the Seller, with any owned real property and improvements to be purchased at the
fully depreciated net book value thereof (set forth on Exhibit 8.03) and any
leased real property and improvements being transferred to Purchaser by a valid
assignment of such lease(s) and an assumption by Purchaser of the obligations
thereunder ("Real Property");
(c) all cash on hand at the Branches at the Closing Date;
(d) all furniture, fixtures and equipment and any
replacements thereof or repairs thereto (together with any manufacturer's
warranties or maintenance or service agreements thereon which are in effect and
are assignable) located in the Branches (exclusive of those items referred to in
Section 2.03 of this Agreement), whether leased or owned as identified on
Exhibit 8.04, with owned property being purchased at the fully depreciated net
book value thereof (set forth in Exhibit 8.04) and any leased property being
transferred to Purchaser by a valid assignment of such lease(s) and an
assumption by Purchaser of the obligations thereunder, to the extent assignable
("Personal Property");
(e) all rights to the extent assignable in, to and under
any vendor single interest insurance or other insurance on collateral
transferred to Purchaser with the Loans, and any payments received by Seller
before Closing, with such payments to be prorated based on the term of the Loan,
and after Closing with respect to such insurance;
(f) all unearned credit insurance under the control of
the Seller with respect to Loans sold to Purchaser hereunder to the extent the
credit insurance coverage is assignable;
(g) all agreements, contracts, instruments, files
(written or electronic), credit analyses and reports, ledgers, or other
documents relating to any of the foregoing; and
(h) Other Real Estate as set forth on Exhibit 2.01(h)
hereto at a mutually agreeable price to be negotiated by Seller and Purchaser
following the completion of Seller's due diligence review of the Branches based
upon the risks, fair market value and costs of realization on such Other Real
Estate; provided Seller shall have no obligation to purchase any Other Real
Estate or Discount
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Loans as to which any violation of, or liabilities under, any Environmental Laws
exist or are pending or threatened, or as to which there is any existing,
pending, or threatened Litigation.
2.02 Value of Equipment and Additions. The Seller represents and
warrants that the fully depreciated, net book value of the Real Property and the
Personal Property of the Branches on Seller's books (excluding the items listed
in Section 2.03 of this Agreement) is as set forth in Exhibits 8.03 and 8.04 as
of the date of this Agreement, and which exhibits shall be updated to the
Closing Date.
2.03 Assets Not Sold. The following are expressly excluded from the
Purchased Assets:
(a) the Seller's signs and logos provided all sign poles
and time and temperature signs will remain and become Purchaser's property;
(b) the Seller's proprietarily marked stationery, forms,
labels, shipping material, brochures, advertising material and similar property;
provided, however, it is the intention of the parties, that Personal Property
not bearing proprietary marks and which is necessary or useful in operating the
Branches after the Closing Date not be removed;
(c) any Loans to any Seller Affiliate (as defined in
Section 7.01), except for Loans made in the ordinary course of business, on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and did
not involve more than the normal risk of collectibility or unfavorable features
to persons employed and performing services at the Branches; and
(d) any Loans or participation or other interests in any
Loan originated and transferred from another financial institution to Sellers as
part of a loan sale, sale of participations, or interests, including syndicated
or agented credits or otherwise.
2.04 Purchase Price. As full consideration for the purchase of the
Branches and the Purchased Assets, Purchaser shall pay Seller a purchase price
(the "Purchase Price") equal to the sum of the following:
(a) fully depreciated net book value for the owned Real
Property and owned Personal Property.
(b) a premium for the Core Deposits equal to 8.00% of the
Available Core Deposit Base;
(c) the book value for the Regular Loans;
(d) the mutually agreed upon purchase price for the
Discounted Loans;
(e) the face amount of the cash on hand at the Branches
at Closing;
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(f) with respect to the Other Real Estate, a mutually
agreeable price to be negotiated by the Seller and Purchaser prior to the
Closing Date; and
(g) with respect to all other Purchased Assets listed in
Section 2.01, the aggregate sum of one dollar ($1.00).
2.05 Documents of Transfer. The sale, transfer, assignment and
delivery of the Purchased Assets pursuant to this Article II shall be effected
by general warranty deeds, bills of sale, endorsements, assignments and other
instruments of transfer and conveyance sufficient to convey all of Seller's
right, title, and interest as agreed hereunder and satisfactory in form and
substance to counsel for the Seller and Purchaser, including without limitation,
the making of all filings and the recordation of the assignment of all mortgages
and other Loans in the respective county courthouses where such mortgages and
other Loans relate. At the Closing Date, the Seller will give Purchaser
possession and control of the Purchased Assets and assumed liabilities and will
deliver to Purchaser all keys, combinations, codes and other necessary access
devices relating to the Branches, the Purchased Assets and the assumed
liabilities. At the Closing Date, the Seller will deliver to Purchaser originals
of the promissory notes, security agreements, and related agreements, documents,
and interests or information relating to or evidencing all Loans purchased, to
the extent these exist, and otherwise will deliver the best copies available.
2.06 Removal of Assets Not Sold. As soon as reasonably possible
following the Closing Date, the Seller will remove all of its Personal Property
referred to in Section 2.03 of this Agreement; provided, however, the Seller
shall coordinate with Purchaser to have the Seller's removable signs and logos
(excluding all sign poles and time and temperature signs which shall be
transferred to and held by Purchaser) removed from the Branches on the Closing
Date; provided further, that Seller shall not remove any personal property not
bearing Seller's proprietary marks and which are necessary or useful in
operating the Branches. The Seller shall remove all such Personal Property,
signs, logos and equipment at its own cost and in a manner that will not damage
the premises or improvements or unduly disturb operations.
2.07 Title to Real Property and Leases. The Seller shall provide
Purchaser with originals (or copies if originals are not available) of all deeds
and leases with respect to the Branches' real property and improvements, and all
real estate records to the extent held by the Seller relating to the Branches.
2.08 Breaches with Third Parties. Nothing in this Agreement shall
constitute an agreement to assign any claim, contract, license, lease,
commitment, sales order or purchase order or any claim or right or any benefit
arising thereunder or resulting therefrom if an attempted assignment thereof,
without the consent of a third party thereto, would constitute a breach thereof
or would in any way affect the rights of the Seller thereunder so that Purchaser
would not in fact receive all such rights, and all such items are listed in
Exhibit 2.08 hereto. The Seller will cooperate with Purchaser in any arrangement
desired to provide Purchaser with the benefits under any such claims, contracts,
licenses, leases, commitments, sales or purchase orders. Seller shall obtain at
its sole cost and expense evidence satisfactory to Purchaser of transfer or
assignment to Purchaser of any such property or property rights or any contract
or agreement which shall require the consent or approval of any third party.
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2.09 Payments and Information Received After the Closing Date. The
Seller agrees to forward promptly to Purchaser:
(a) any payments (properly endorsed as necessary) which
are received by the Seller on or after the Closing Date that relate in any way
to the Loans being purchased by Purchaser hereunder, together with sufficient
information so that any such payments may be properly applied to the extent such
information is available to the Seller; and
(b) any notices or other correspondence received on or
after the Closing Date that relate in any way to the Loans purchased or to other
Purchased Assets.
ARTICLE III
ASSUMPTION OF LIABILITIES
3.01 Liabilities Assumed. At the Effective Time, Purchaser shall
assume and agree to pay and discharge only those specific existing liabilities
of the Branches described in Exhibit 3.01 hereto (the "Assumed Liabilities") and
accrued interest and at Closing, Seller agrees to transfer to Purchaser all of
the Assumed Liabilities and accrued interest. No assurance is given by the
Seller that the Branches' present deposit customers will become or continue to
be customers of Purchaser, the same being at the sole discretion of such
customers.
3.02 Liabilities Not Assumed. Except for those Assumed Liabilities
specifically assumed by Purchaser under Section 3.01 above, Purchaser is not
assuming any other liabilities or obligations of the Seller, including, but not
limited to the following:
(a) cashier's checks, traveler's checks, money orders,
interest checks, official checks, letters of credit, consignments of U.S.
Savings bonds, drafts and expense checks issued by the Seller prior to the
Effective Time;
(b) all liabilities and obligations of any nature arising
from or connected with the Branches and their operation, including circumstances
or events arising or existing prior to the Effective Time, including, but not
limited to, liabilities or obligations with respect to any Litigation, or
governmental proceedings arising, commenced or made known to Seller prior to the
Effective Time and related to the Branches, or which thereafter arise with
respect to matters occurring prior to the Effective Time;
(c) all liabilities and obligations of the Seller for
fees, commissions, costs and expenses incurred by the Seller in connection with
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, legal,
consulting, accounting and appraisal fees and expenses; and
(d) all liabilities and obligations of Seller under any
debt cancellation or credit insurance contracts or similar arrangements.
3.03 Documentation of Assumption. At the Closing Date Purchaser
shall deliver to the Seller an undertaking, reasonably satisfactory in form and
substance to counsel for the Seller, under
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which Purchaser will assume and agree to perform, discharge and pay the
obligations and liabilities assumed by Purchaser pursuant to this Agreement. An
acceptable form of such undertaking is attached as Exhibit 3.03 hereto and made
a part hereof.
3.04 Assumption Subject to Certain Terms. The liabilities being
assumed by Purchaser pursuant to this Article shall be assumed subject to the
terms and conditions of the contracts of deposit and other written agreements
relating thereto provided by Seller to Purchaser and the laws, rules and
regulations applicable thereto.
3.05 Payment of Items by Seller After the Closing Date. If,
subsequent to the assumption of liabilities pursuant to this Article III, the
Seller shall properly honor any valid check or withdrawal on a deposit assumed
by Purchaser ("Transferred Account"), Purchaser shall pay the Seller any monies
so paid by the Seller to or for the benefit of such Transferred Account;
provided, there are sufficient available collected funds in such Transferred
Account to fully pay such check or item.
3.06 Payment of Items by Purchaser After the Closing Date.
Purchaser agrees that after the Closing Date it will pay, in accordance with
applicable law and customary banking practices, all properly payable checks,
drafts and withdrawal orders drawn by the parties to the Transferred Accounts if
the available collected balance of each Transferred Account is sufficient to
permit the payment thereof.
3.07 Transfer of Credits by Seller; Information Received After the
Closing Date.
(a) The Seller agrees to transfer to Purchaser any
deposits received by it after the Closing Date for credit to Transferred
Accounts, however the Seller, after the passage of 60 days from the Effective
Time, shall be under no obligation to accept such deposits or for any claims
resulting from such procedure.
(b) Any notices or correspondence received by the Seller
on or after the Closing Date with respect to any liabilities assumed or assets
and Loans purchased by Purchaser hereunder will be sent promptly to Purchaser.
3.08 Final Statements. Seller will render a final statement to each
depositor of a Transferred Account as to transactions occurring through the
Effective Time. Seller will be entitled to impose normal fees and service
charges on a per item basis through Closing, but Seller will not impose periodic
fees or blanket charges in connection with such final statements.
3.09 ACH. The Purchaser, at its expense, will timely notify all
Automated Clearing House ("ACH") originators of the transfers and assumptions to
be made pursuant to the Agreement as of the Closing Date, and the Seller will
cooperate with Purchaser, and provides at its expense, all tapes and data
reasonably requested by Purchaser for such purpose. For a period of 60 days
beginning on the Closing Date, Seller will honor all ACH items related to
accounts assumed under this Agreement which are mistakenly routed or presented
to Seller. Seller will make no charge to Purchaser for honoring such items, and
will electronically transmit such ACH data to Purchaser. If Purchaser cannot
receive an electronic transmission, Seller will make available to Purchaser at
Seller's
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operations center receiving items from the ACH tapes containing such ACH data.
Items mistakenly routed or presented after the 60-day period will be returned to
the presenting party.
3.10 Debit Card Transactions. After the Closing Date, Purchaser
agrees to use its reasonable efforts to collect from Purchaser's customers
amounts equal to any debit card connected with a deposit account transferred to
Purchaser and any Visa or MasterCard chargebacks under the MasterCard and Visa
Merchant Agreements between Seller and its customers or amounts equal to any
deposit items on accounts transferred hereunder and that are returned to Seller
after the Closing Date which were honored by Seller prior to the Closing Date
and remit such amounts so collected to Seller. Purchaser agrees to immediately
remit to Seller any funds held in the customer's transferred deposit account
related to such debit card when the Purchaser receives such notice from the
Seller, up to the amount of the charged back or returned item that had been
previously credited by Seller, if such funds are available in such customer
account at the time of notification by Seller to Purchaser of the charged back
or returned item. Notwithstanding the foregoing, Purchaser shall have no duty to
remit funds for any item or charge that has been improperly returned or charged
to Seller.
3.11 Safe Deposit Boxes. The keys, contracts, signature cards and
other material or equipment related to safe deposit boxes located in the
Branches, together with such boxes which shall contain all contents thereof,
shall be delivered by the Seller to Purchaser at the Closing Date. Safe deposit
box rentals collected by the Seller prior to the Closing Date shall be prorated
between the Seller and Purchaser at the Closing Date.
3.12 Seller Not Liable to Pay. In the event any deposit customer
holding a Transferred Account shall demand payment from the Seller for all or
any part of any deposit liabilities assumed by Purchaser with respect to the
Transferred Account, the Seller shall not be liable or responsible for making
such payment. If Seller does make any such payment to a deposit customer
relating to a Transferred Account, Purchaser shall promptly reimburse Seller for
the amount thereof, provided there are sufficient available collected funds in
such Transferred Account to fully pay such reimbursement.
3.13 Purchaser Responsible for Returned Items. Purchaser agrees to
pay promptly to the Seller an amount equal to the amount of any checks, drafts
or withdrawal orders credited to a Transferred Account as of the Closing Date
and reflected in the Settlement Statements, but which items are returned to the
Seller after the Closing Date.
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ARTICLE IV
ASSUMPTION OF RISKS
4.01 Insurance Policies. Effective immediately upon the Effective
Time, the Seller will discontinue any casualty and public liability insurance
coverage maintained with respect to the premises of the Branches. Purchaser
shall be solely responsible for all casualty losses and liability claims arising
from the premises of the Branches after the Effective Time. Nothing in this
Section 4.01 shall be construed or deemed to require Purchaser to insure the
furniture, fixtures or equipment of the Seller which may not be removed from the
Branches at the Closing Date, and the Seller shall solely bear all risk of loss
to such property following the Closing Date.
4.02 Safe Deposit Boxes. Immediately upon the Effective Time,
Purchaser shall assume all risks arising after the Effective Time with respect
to granting access to and protecting the contents of the safe deposit boxes
located at the Branches.
4.03 Security of Persons and Property. Immediately upon the
Effective Time, the Seller will discontinue providing any security for persons
and property provided by the Seller prior to the Effective Time. Nothing
contained herein shall be construed to require the Seller to remove any of its
security equipment not being sold to Purchaser until such time as the Seller can
reasonably remove or arrange for the removal of such security equipment without
interrupting Purchaser's business or the security of the premises of the
Branches . The risk of loss of such equipment shall be borne solely by the
Seller.
ARTICLE V
SETTLEMENT
5.01 Settlement.
(a) The amount of cash to be received or paid by
Purchaser at Closing shall be calculated in accordance with the formula set
forth in the settlement statement attached hereto as Exhibit 5.01 and
incorporated herein by reference ("Initial Settlement Statement"). The Purchased
Assets to be transferred at Closing shall be valued as provided in Article II of
this Agreement.
(b) Five (5) days prior to the Closing Date, the Seller
shall deliver to Purchaser a copy, certified by a duly authorized officer of the
Seller, of the Initial Settlement Statement, which sets forth the computation of
the cash payable to or due from Purchaser at Closing, and upon acceptance by
Purchaser, the Seller or Purchaser, as the case may be, shall pay said amount to
the other at Closing.
5.02 Post-Closing Adjustments to Purchase Price. As soon as
possible, but within five (5) Banking Days following the Closing Date, the
Seller shall, based upon its general ledger and other books and records relating
to the Branches, recalculate the amount of cash to be received or paid by
Purchaser as of the Closing Date using the Final Settlement Statement attached
hereto as Exhibit 5.02 and incorporated herein by reference, and the amount of
cash to be received or paid by Purchaser shall be agreed upon by the Purchaser
and Seller and shall be adjusted and paid, by the Seller or Purchaser, as the
case may be as provided in such Exhibit 5.02.
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5.03 Casualty and Other Losses Prior to the Effective Time. If the
buildings in which the Branches are located or any other Real Property,
improvements, or Personal Property with respect to the Branches or which are
included in or are securing any Purchased Assets, shall be damaged by fire or
other casualty, whether insured or uninsured, and shall not be repaired or
restored to its original condition prior to the Closing Date, Seller shall
promptly assign and pay over to Purchaser any insurance proceeds with respect to
such assets.
5.04 Pro Rata Adjustments of Expenses. All property taxes, rents
and utility payments, salaries, similar expenses, and other expenses and taxes
related to the liabilities assumed or assets purchased hereunder itemized in a
writing and delivered by the Seller to Purchaser at least five (5) days prior to
the Closing Date relating to the ownership and operation of the Branches, and
the Federal Deposit Insurance Corporation ("FDIC") insurance premiums relating
to Transferred Accounts, shall be prorated between the parties as of the Closing
Date.
ARTICLE VI
EMPLOYEES
6.01 Transfer of Certain Employees. Seller, except as mutually
agreed by Purchaser and Seller, will use its reasonable efforts to maintain the
employees as employees of Seller at the Branches until the Closing Date. Any
employee whose employment shall be terminated for any reason prior to the
Closing Date or who shall elect not to be an employee of Purchaser shall be
dealt with by Seller in its sole and absolute discretion, and Purchaser shall
have no liability therefor. At the Effective Time, the Seller will terminate the
employment of all employees assigned to the Branches, and such employees will
become "at will" employees of Purchaser under such terms as may be established
by Purchaser in its sole discretion, except as otherwise expressly provided in
Section 6.03 below. The Seller and Purchaser shall mutually agree upon any
additions to or replacements of staff after the date of this Agreement through
the Closing Date, and Seller shall not employ any employees at the Branches
during such time other than on an "at will" basis.
6.02 Re-Employment Restriction. The Seller agrees that for a period
of one year following the Closing Date it shall not solicit the employment of
any of its former employees who transfer to Purchaser at the Closing Date.
6.03 Benefits. Each employee of Seller who transfers to Purchaser
will receive pension, profit sharing, insurance, vacation, sick leave and other
benefits that are substantially similar to comparable employees of Purchaser.
Purchaser shall give each of Seller's employees who transfer to Purchaser credit
for service with Seller for purposes of any vacation or sick leave policy, and
for purposes of determining eligibility and vesting (but not benefit accrual)
under Purchaser's qualified benefit plans.
6.04 Responsibility for Employees Transferring. With respect to all
employees of the Branches transferring to Purchaser, the Seller will be
responsible for all salaries, wages and benefits payable to such employees
during employment by the Seller up to and including the Closing Date, and all
benefits under Seller's 401(k), employee stock ownership plan, and other
employee benefit plans or options shall be paid as soon as practicable in
accordance with the plan.
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6.05 Employee Information. The Seller shall provide Purchaser, at
times Purchaser may deem necessary, such records and information regarding such
transferred employees' service with the Seller as Purchaser may reasonably need
for purposes of Purchaser's employment and benefits program records, including
the complete personnel file on each transferring employee. Purchaser and the
Seller agree to assist each other by providing the employee information needed
to open and close employee files on those employees transferred. To the extent
required by applicable law, the Seller reserves the right to obtain the
employee's prior consent to release information which the Seller reasonably
believes (upon advice of counsel) cannot be released to Purchaser without the
employee's prior consent. Should information be withheld, the Seller must advise
Purchaser of such prior to the Closing Date, and Purchaser will have no
obligation to hire such employee.
ARTICLE VII
ACCESS TO PROPERTIES AND RECORDS
7.01 Access and Confidential Treatment. From and after the date of
this Agreement, the Seller shall permit Purchaser, its agents and
representatives, full access, during normal business hours and upon reasonable
notice, to all assets, properties, books, records (except employee records and
information excluded by Section 6.05 hereof), agreements and commitments of the
Seller relating to the Branches, and the Seller shall furnish representatives of
Purchaser during such period with all such information concerning the affairs of
the Branches as Purchaser may reasonably request. Purchaser will hold in strict
confidence all documents and information concerning the Seller so furnished that
is not in the public domain and will not publicly disclose such documents or
information except to its attorneys, accountants, or other advisers and
representatives, to regulatory and self-regulatory authorities, or as required
by law or pursuant to legal process. If the transactions contemplated by this
Agreement are not consummated, all such documents and information shall promptly
be returned to the Seller. Nothing in this Section 7.01 shall be deemed to
require Seller to reveal any proprietary information, trade secrets or marketing
or strategic plans, and if such information is the subject of a confidentiality
agreement between the Seller and a third party, any disclosure will be subject
also to the provisions of such confidentiality agreement, which shall be
provided to the Purchaser. The Seller shall provide the Purchaser, on a
confidential basis, the names and addresses of all directors, officers,
affiliates (as defined in Securities and Exchange Commission Rule 405), and
their relatives and the business interests, related to each of the foregoing
(individually, and collectively, "Seller Affiliates").
7.02 Recordkeeping and Access Following the Closing Date. Purchaser
and Seller will preserve and safely keep, for as long as may be required by
applicable law, all of the files, books of account and records, or copies
thereof, delivered to Purchaser through the Closing Date related to the Branches
for the joint benefit of itself and the Seller. Either party shall permit the
other party or its representatives, at such party's expense, to inspect and make
extracts from or copies of any files, books of account or records as may be
necessary for the requesting party to satisfy any auditing or regulatory, or
litigation requirements placed upon such party. The Seller will not use such
documents or information for the purpose of competing with Purchaser.
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ARTICLE VIII
SELLER'S REPRESENTATIONS AND WARRANTIES
The Seller represents and warrants to Purchaser as follows:
8.01 Corporate Organization. The Seller is a banking corporation
duly organized, validly existing and in good standing under the laws of the
State of Alabama.
8.02 Corporate Authority. Except as disclosed on Exhibit 8.02(a),
the Seller has full corporate right, power, capacity and authority validly to
enter into and to perform this Agreement and the transactions contemplated by
this Agreement, and to sell, transfer, assign and deliver the Purchased Assets
referred to in Article II, and to assign the assets and to carry on its business
as currently conducted. The execution, delivery and performance of this
Agreement, and the transactions contemplated by this Agreement have been duly
and validly authorized by all requisite corporate action, and this Agreement is
binding and enforceable against the Seller in accordance with its terms. No
further corporate authorization or applications or notices to ("Applications")
any governmental or regulatory authority, agency or entity ("Governmental
Authorities"), or any consents, waivers, approvals or orders ("Consents") from
any Governmental Authority or any other person or entity is necessary for Seller
to execute and deliver this Agreement or to consummate the transactions
contemplated hereunder or perform its obligations hereunder. At the Closing,
Seller shall provide Purchaser with a certificate of the secretary of the
Seller, dated as of the Closing Date certifying the resolution of the Seller's
Board of Directors, or its Executive Committee and its sole shareholder,
approving the sale of the assets and the assumption of the liabilities
contemplated by this Agreement and also certifying and attaching the Bylaws and
Charter of the Seller to the same. A form of such certificate, which is
acceptable to Seller and Purchaser, is attached hereto as Exhibit 8.02(b).
8.03 Title to or Right to Occupy Real Estate. Exhibit 8.03
describes all real estate, improvements, and any related rights owned, leased,
or otherwise held by Seller with respect to the Branches and the property, and
with respect to owned Real Property, the fully depreciated net book value
thereof. Seller (a) has and at the Closing Date will have indefeasible fee
simple title to, and owns and at the Closing Date will be the sole owner of all
the Real Property to be purchased by Purchaser pursuant to Article II, subject
to no mortgage, indenture, pledge, lien, adverse claim, security interest,
tenant leases, participation, charge, encumbrance or conditional sale of other
title retention agreement (each, a "Lien") except for real estate taxes not yet
due and payable, and restrictions, easements and rights of way of record that do
not affect the current use of such property or materially and adversely affect
its value, and (b) is and at the Closing Date will be the sole lessee with
respect to the leases to be assigned to Purchaser pursuant to said Article II,
with the right to convey to Purchaser the leasehold interest therein so as to
assure that Purchaser shall have the full, exclusive and peaceful possession of
such leasehold interest. All Real Property and improvements thereon will at the
Closing Date be in good operating condition and repair, subject only to ordinary
wear and tear, and will otherwise be received in "AS IS" condition with no other
warranties by Seller as to their condition or future performance, except as
those warranties related to title. All Real Property held under leases or
subleases by the Seller, are held under valid contracts enforceable in
accordance with their respective terms, and each such contract is in full force
and effect, and no event has occurred which would be a breach or default under
such lease or contract whether with notice, the passage of time, or both. All
improvements on the Real Property leased to, or used by, the Seller
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conform to all applicable state and local laws, regulations, zoning and building
ordinances and health and safety ordinances, and the Real Property is zoned for
the various purposes for which the real estate and improvements thereon are
presently being used. No condemnation proceedings or proceedings for the taking
of any Real Property by eminent domain by any governmental authority are pending
or, to the Seller's knowledge, are threatened. Seller has not entered into any
agreement regarding the Real Property and neither Seller nor the Real Property
is subject to any claim, demand, suit, unfiled lien, proceeding or Litigation of
any kind, pending or outstanding, or to the knowledge of Seller, threatened or
likely to be made or instituted, which would in any way be binding upon
Purchaser or its successors or assigns or materially affect or limit Purchaser's
or its successors' or assigns' use and enjoyment of the Real Property, the value
of such Real Property or any leasehold interest, or which would limit or
restrict Seller's right or ability to enter into this Agreement and consummate
the sale and purchase contemplated hereby.
8.04 Condition of Personal Property. Exhibit 8.04 sets forth by
category or item all of the tangible personal property owned or leased
(identified as such) which is used or useful in connection with the operation of
the Branches, with the fully depreciated net book value of owned property being
also set forth on Exhibit 8.04. The tangible personal property included in the
Purchased Assets is, and at the Closing Date will be, in good operating
condition and repair, subject only to ordinary wear and tear and will be usable
in the ordinary course of business consistent with the Seller's past practices.
All Personal Property held under leases or subleases by the Seller, are held
under valid contracts enforceable in accordance with their respective terms, and
each such contract is in full force and effect and assignable to Purchaser.
Seller has not entered into any agreement regarding the Personal Property and
neither Seller nor the Personal Property is subject to any claim, demand, suit,
unfiled Lien, or Litigation of any kind, pending or outstanding, or to the
knowledge of Seller, threatened or likely to be made or instituted, which would
in any way be binding upon Purchaser or its successors or assigns or materially
affect or limit Purchaser's or its successors' or assigns' use and enjoyment of
the Personal Property or which would materially limit or restrict Seller's right
or ability to enter into this Agreement and consummate the sale and purchase
contemplated hereby.
8.05 Loans. With respect to each Loan within the Purchased Assets:
the Loan complies in all material respects with all applicable laws and
regulations and is a valid loan enforceable in accordance with its terms; the
Seller is the sole owner thereof, no participation or other interest therein
having been sold, granted or transferred; the Loan is not pledged or encumbered
except as set forth on Exhibit 8.05 and all of such Liens on such Loans shall
have been satisfied and released prior to the Closing; the principal balance of
the Loan as shown on either Exhibit 2.01(a)(1) or Exhibit 2.01(a)(2) is true and
correct as of the last date shown thereon; all purported signatures on and
executions of any document in connection with such Loan are genuine and
authorized; all Loan documentation has been actually signed or executed by all
necessary parties; the Seller has and will transfer to Purchaser, custody of all
original executed documents, and microfilm or photocopy records thereof related
to such Loan and there are no other written or unwritten agreements,
understandings, or other arrangements with respect to such Loan; provided,
however, that all Loans (and any notes, other evidences of indebtedness or
security agreements associated therewith) transferred at Closing by the Seller
to Purchaser are transferred and without any other warranties or representations
as to the collectibility of any such Loans, the value of the collateral securing
same or the creditworthiness of any of the makers, guarantors or other obligors
thereof except as set forth in Section 10.10 hereof. None of the Loans is to or
for the benefit of a Seller Affiliate.
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8.06 No Violations. The Branches have been operated, in all
material respects, in accordance with all applicable laws, rules and
regulations, including the provision of the Code and related regulations
pertaining to back-up withholding and tax reporting. Subject to receipt of all
necessary corporate, regulatory and other third party approvals or consents, the
execution, delivery and performance of this Agreement and the transactions
contemplated herein do not and will not violate or conflict with the Seller's
Articles of Incorporation, Bylaws or other governing documents or any provisions
of law or regulations to which the Seller is subject and do not and will not
conflict with or result in the violation or breach of any material condition or
provision of, or constitute a material default under, any material contract,
right, lease, Lien, instrument, agreement, order, writ, injunction, decree or
judgment to which the Seller is a party or which is binding on Seller or to
which any of the property or assets of Seller is subject, or create or result in
any Lien upon the Assets or Assumed Liabilities. Except as disclosed on Exhibit
8.06, no consent, license, approval or authorization of or designation,
declaration or filing with any Governmental Authority or other person or entity
is required on the part of Seller. The Seller is not in default under any lease,
agreement, contract, commitment, Assumed Liability or other obligation or Asset
which Purchaser is assuming or which affects the property rights or obligations
being transferred hereunder to Purchaser.
8.07 Limitations of Warranties. Except as may be expressly
represented or warranted in this Agreement or in any document of transfer, the
Seller makes no representations or warranties whatsoever with regard to any
Purchased Asset being transferred to Purchaser, any liability or obligation
being assumed by Purchaser.
8.08. Legal Proceedings.
(a) Except as set forth in Exhibit 8.08, Seller is not a
party to any, and there are no pending or, to Seller's knowledge, threatened,
legal, administrative, arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against Seller relating
in any way to the Branches, the Loans, the other Purchased Assets and Assumed
Liabilities, or seeking to enjoin, restrain, or challenge the validity,
enforceability, or propriety of this Agreement or the transactions contemplated
by this Agreement. There are no employee disputes or labor relations problems
with respect to any employees of the Branches.
(b) Except as set forth in Exhibit 8.08, there is no
injunction, order, judgment, decree, or regulatory or Governmental Authority
restriction imposed upon Seller or the assets or the liabilities of Seller,
including the Assets and the Assumed Liabilities.
8.09. Environmental Matters. Except as set forth in Exhibit 8.09:
(a) Seller, and to the knowledge of Seller, each of the
Seller's Other Real Estate, Real Property, Participation Facilities and Loan
Properties (each as hereinafter defined), are in compliance with all applicable
federal, state and local laws, including common law, regulations and ordinances,
and with all applicable decrees, orders and contractual obligations relating to
pollution or the protection of human health or the environment or the emission
or release or threatened release, discharge of, or exposure to, Hazardous
Materials (as hereinafter defined) in the environment or workplace or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of any Hazardous Material ("Environmental
Laws");
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(b) There is no suit, claim, action or proceeding,
pending or, to the knowledge of Seller, threatened, before any governmental
entity or other forum in which Seller, any Other Real Estate, Real Property,
Participation Facility or any Loan Property, has been or, with respect to
threatened proceedings, may be, named as a defendant (x) for alleged
noncompliance (including by any predecessor) with any Environmental Laws, or (y)
relating to the release, threatened release or exposure to any Hazardous
Material whether or not occurring at or on a site owned, leased or operated by
Seller, any Participation Facility or any Loan Property;
(c) During the period of (x) Seller's ownership or
operation of any of their respective current or former properties, including the
Real Property and Other Real Estate, (y) Seller's participation in the
management of any Participation Facility, or (z) Seller's interest in a Loan
Property, there has been no release of Hazardous Materials in, on, under or
affecting any such property. To the knowledge of Seller, prior to the period of
(x) Seller's ownership or operation of current or former properties, (y)
Seller's participation in the management of any Participation Facility, or (z)
Seller's interest in a Loan Property, there has been no release of Hazardous
Materials in, on, under or affecting any such property, Participation Facility
or Loan Property; and
(d) The following definitions apply for purposes of this
Section: (x) "Hazardous Materials" means any hazardous substance, hazardous
material, hazardous waste, regulated substance, or toxic substance (as those
terms are defined by any applicable Environmental Laws) and (ii) any chemicals,
pollutants, contaminants, petroleum, petroleum products, or oil (and
specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of Governmental Authorities and any
polychlorinated biphenyls)., (y) "Loan Property" means any property in which
Seller holds a security interest or other Lien which security interest will be
transferred to Purchaser pursuant to this Agreement, and, where required by the
context, said term means the owner or operator of such property; and (z)
"Participation Facility" means any facility in which Seller participates in the
management and, where required by the context, said term means the owner or
operator of such property.
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8.10 ERISA Matters. The Seller is in compliance in all material
respect with the provisions of ERISA. No steps have been taken by the Seller to
terminate any employee benefit plan (as defined in Section 3(3) of ERISA) the
assets of which are not sufficient to satisfy all of its benefit liabilities (as
determined under Title IV of ERISA), no contribution failure has occurred with
respect to any employee benefit plan sufficient to give rise to a lien under
Section 302(f) of ERISA, and each of Seller's employee benefit plans has been
administered in all material respects in compliance with its terms and
applicable provision of ERISA and the Internal Revenue Code of 1986, as amended
and all regulations thereunder (the "Code"). To Seller's knowledge, no
prohibited transaction (as defined in Section 406 of ERISA or Section 4975 of
the Code) has occurred under any employee benefit plan of Seller. "ERISA" means
the Retirement Income Security Act of 1974, as amended and all related
regulations of the Department of the Treasury and the Department of Labor
thereunder.
8.11 Employees; Labor Matters.
(a) No employee of the Branches is bound by any agreement
that purports to limit his or her ability to engage in or continue or perform
any conduct, activity, duties or practice relating to the business conducted by
the Branches or by Seller;
(b) Seller has operated the Branches in compliance in all
material respects with all Laws and regulations relating to the employment of
labor, and has made all withholdings and other payments with respect to such
employment and employment taxes and charges; and
(c) there is no collective bargaining agreement to which
Seller is a party and no collective bargaining agreement is currently being
negotiated or proposed.
8.12 Books and Records. The books of account and other records of
Seller, to the extent they relate to the Branches, the Assets and the Assumed
Liabilities, all of which have been made available to Buyer, are complete and
correct in all material respects and represent actual, bona fide transactions
and have been maintained in accordance with customary business practices and
generally accepted accounting practices consistently applied ("GAAP").
8.13 Consents of Third Parties. Seller shall use all commercially
reasonable efforts to obtain and preserve any consents or approvals to third
parties, whether of regulatory or Governmental Authorities or third parties or
persons necessary, appropriate or expedient to the consummation of the
transactions contemplated by this Agreement, including, but not limited to, the
consents of lenders to the Seller or to Community Bancshares, Inc. or any
subsidiary of Community Bancshares, Inc. and shall cooperate with Purchaser in
seeking and obtaining any consents or approvals it may require from any
Governmental Authorities or third parties in connection with this Agreement and
the transactions contemplated hereby.
8.14 USA PATRIOT Act Compliance. The Seller is in compliance in all
material respects with the provisions of the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001 (the "USA Patriot Act") and all regulations promulgated thereunder
including, but not limited to, those provisions of the USA Patriot Act that
address money-laundering, know-your customer, account maintenance and customer
verification.
ARTICLE IX
PURCHASER'S REPRESENTATIONS AND WARRANTIES
Purchaser represents and warrants to the Seller as follows:
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9.01 Corporate Organization. Purchaser is a national banking
association duly organized, validly existing and in good standing under the laws
of the United States.
9.02 Corporate Authority. Subject to regulatory approval, Purchaser
has full right, power, capacity and authority as a national banking association
to validly enter into and to perform this Agreement and the transactions
contemplated by this Agreement. The execution, delivery and performance of this
Agreement by Purchaser have been, or will be prior to the Closing Date, duly and
validly authorized by all requisite corporate action and this Agreement is
binding and enforceable against Purchaser in accordance with its terms.
9.03 No Violations. Subject to the conditions set forth in Article
XII below, the execution, delivery and performance of this Agreement and the
transactions contemplated herein do not and will not violate or conflict with
the Purchaser's Articles of Incorporation, Bylaws, or other governing documents,
or any provisions of law or regulations to which Purchaser is subject and do not
and will not conflict with or result in the violation or breach of any material
condition or provision of, or constitute a material default under, any material
contract, right, lease, pledge, lien, security interest, instrument, indenture,
mortgage, charge, encumbrance, agreement, order, writ, injunction, decree or
judgment to which Purchaser is a party or which is binding on Purchaser or to
which any of the property or assets of Purchaser is subject. Except as set forth
in Article XII, no consent, license, approval or authorization of or
designation, declaration or filing with any governmental authority or other
person or entity is required on the part of Purchaser in connection with the
execution, delivery or performance of this Agreement or the consummation of the
transactions contemplated herein.
9.04 Regulatory Approvals. Purchaser will promptly apply for,
within 10 Banking Days of execution of this Agreement by both parties, and in
good faith diligently pursue all required regulatory approvals that it needs to
consummate the transactions contemplated hereby.
9.05 Consents of Third Parties. In addition to obtaining the
requisite regulatory approvals, Purchaser shall use all commercially reasonable
best efforts to obtain and preserve any consents or approvals of third parties
necessary, appropriate or expedient to the consummation of the purchase of the
Branches, including, but not limited to, the consents of lenders to the
Purchaser or its parent holding company.
9.06. Legal Proceedings. Except as set forth in Exhibit 9.06,
Purchaser is not a party to any, and there are no pending or, to Purchaser's
knowledge, threatened, legal, administrative, arbitral or other proceedings,
claims, actions or governmental or regulatory investigations of any nature
challenging the validity or propriety of the transactions contemplated by this
Agreement.
ARTICLE X
ADDITIONAL UNDERTAKINGS OF SELLER
10.01 Conduct of Business Pending the Closing Date. The Seller
agrees that from the date of this Agreement to the Closing Date, it will:
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(a) maintain the operations of the Branches as presently
conducted, and avoid any act that would materially and adversely affect the
amount or value of the Purchased Assets or the Assumed Liabilities;
(b) carry on the business of the Branches substantially
in the same manner as conducted on the date hereof, operate the business of the
Branches only in the ordinary and usual manner including interest rates and
terms on Loans and Deposits, provide the same services and hours of operation as
is now being provided by such Branches, and use all reasonable efforts to
preserve intact its present business organization, to keep available the
services of its present employees and to preserve its relations with customers
having business dealings with the Branches;
(c) maintain fire, casualty, and extended coverage
insurance for the benefit of the Seller and Purchaser, as their interests may
appear, on the Branches and the Purchased Assets in an amount reasonably
adequate to cover the replacement costs of the Branches and the Purchased
Assets, and continue all credit insurance and debt cancellation protection for
the benefit of the Purchaser with respect to Loans purchased hereby;
(d) maintain the Real Property, Personal Property, and
the other Purchased Assets in their respective current conditions, and not waive
or modify any rights or agreements with respect to any Assets;
(e) maintain its books of account and records concerning
the Branches in the ordinary and usual manner, in accordance with generally
accepted accounting principles applied on a basis consistent with prior years
and Seller shall prepare and provide Purchaser with monthly internal financial
reports of the Branches in the form currently prepared for each monthly period
subsequent to the execution of this Agreement and prior to the Closing Date; and
(f) not take any action which would cause any
representation or warranty made herein to be untrue at the Closing Date.
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10.02 Documentation Delivered at the Closing Date and Further
Assurances. At the Closing Date, the Seller shall transfer, assign and deliver
to Purchaser all original (to the extent these exist and are held by the Seller)
and other records, books, papers, documents, instruments, collateral in its
possession and agreements of Seller relating to the Purchased Assets and the
Assumed Liabilities being assumed by Purchaser hereunder, including but not
limited to, signature cards, stop payment orders, contracts, deposit slips,
canceled checks, withdrawal orders and records of accounts which may be
requested by Purchaser prior to the Closing Date. The Seller agrees that it
will, at the Closing Date and at any time and from time to time after the
Closing Date, upon Purchaser's request do, execute, acknowledge and deliver, or
cause to be done, executed, acknowledged and delivered, all such further acts,
deeds, assignments, transfers, conveyances and assurances as may be required to
complete the process of assigning, transferring, granting, conveying, assuring
and confirming to Purchaser, any and all of the Purchased Assets and the Assumed
Liabilities purchased and assumed by Purchaser hereunder and the performance of
any or all obligations of the Seller hereunder; including, without limitation,
the making of all filings and recordations of the assignment at all applicable
county courthouses or other locations as may be necessary to transfer and assign
the Loans.
10.03 Non-Solicitation of Business. The Seller will not, for a
period of two years after the Closing Date, (i) own or operate any commercial
bank branch within DeKalb County, Alabama, or (ii) directly compete for or
solicit any Transferred Accounts or any Loans sold hereunder, but the Seller
shall be entitled to conduct mass mailings, statement stuffers and mailings
generally to persons holding accounts with the Seller outside the Branches or
having other relations with the Seller's other offices without limiting such
materials to any former Branch customers, and newspaper, radio, television,
billboard and other advertisements of a general nature. This subsection shall
not apply to those deposits and Loans not transferred to Purchaser at the
Closing Date and the restrictions on the Seller contained in this section are
intended to apply only to the deposits and loan business that the Seller's
customers would normally be expected to conduct at the Branches.
10.04 Notice to Customers of Sale of Branches. To the extent
required by law or otherwise agreed upon by the parties, the Seller and
Purchaser shall jointly notify the customers of the Branches affected by the
transaction of the pending transfer of their deposit accounts, Loans or safe
deposit boxes to Purchaser.
10.05 Conversion of Transferred Accounts. The Seller agrees to
cooperate with the conversion of the customer asset and liability accounts in an
orderly and expeditious fashion, and to provide reasonable, appropriate support
to Purchaser for the timely conversion of such accounts, and related data
processing, computer, customer research and information conversions.
10.06 Post-Conversion Processing. After conversion of all accounts
to Purchaser's processing systems, as between Seller and Purchaser, the Seller
shall be and have the rights and obligations of a "Collecting Bank" or
"Intermediary Bank" under Article 4 of the Uniform Commercial Code, as adopted
in Alabama (Code of Alabama, 1975, Sections 7-4-101 et. seq.), with respect to
items drawn on Transferred Accounts received by it for processing after the
Closing Date. Items received for processing against the Transferred Accounts
shall be grouped and delivered to Purchaser within the time limits provided by
the Alabama Uniform Commercial Code in a special cash letter separately
identified as "Transferred Accounts Cash Letter". Purchaser shall indemnify the
Seller against all
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claims, suits, damages or losses and expenses (including reasonable attorneys'
fees) arising after the Closing Date out of any claim by an owner of a
Transferred Account that the Seller is the "Payor Bank" with respect to such
items.
10.07 Diligence and Good Faith. The Seller will diligently and
expeditiously:
(a) proceed in good faith in seeking the satisfaction of
all conditions set forth in Article XII below (except the conditions set forth
in Section 12.06); and
(b) cooperate in good faith with Purchaser in its seeking
the satisfaction of all conditions set forth in Article XIII below.
10.08 Indemnity. Seller agrees to indemnify and hold harmless
Purchaser and its officers, directors, employees, affiliates, representatives,
successors, and assigns (each a "Purchaser Indemnitee") against, from and in
respect of:
(i) Any damage, expense (including reasonable attorneys'
fees) or deficiency resulting from any default, misrepresentation, breach of
representation or warranty, or nonfulfillment of any agreement on the part of
Seller under this Agreement, or from any material misrepresentation in or
omission from any certificate or other instrument furnished or to be furnished
to Purchaser pursuant to this Agreement;
(ii) Any liability of Seller except the Assumed
Liabilities including all liabilities under the Seller's credit insurance
policies and debt cancellation agreements;
(iii) Any and all expenses (including reasonable attorneys'
fees and disbursements), obligations, assessments, suits, actions, proceedings,
claims or demands resulting from or in connection with any claim, liability, or
obligation asserted against any Purchaser Indemnitee arising out of Seller's
operations or arising out of Seller's ownership of the Branches including any
suit, action, proceeding, claim, demand or Litigation arising out of the
Discounted Loans. Seller agrees promptly to advance to any Purchaser Indemnitee,
on demand, any expenses, attorney's fees and disbursements incurred by any
Purchaser Indemnitee, in respect of any liability, obligation, or claim to which
the foregoing indemnity by Seller relates;
Notwithstanding any other provision of this Agreement to the contrary,
Purchaser and Seller will cooperate with respect to any environmental cleanup
and any related proceeding with respect to which indemnity may be sought under
this Section.
10.09 Indemnity Claims. If any Purchaser Indemnitee desires to make
a claim under Section 10.08 hereof which does not involve a claim by any person
other than Purchaser Indemnitee, then such Purchaser Indemnitee shall make such
claim by promptly delivering written notice to the Seller. If any Purchaser
Indemnitee desires to make a claim against Seller under Section 10.08 hereof
which involves a claim by a person other than Purchaser Indemnitee, then
Purchaser Indemnitee, upon receipt of written notice of any claim or the service
of a summons, or other initial legal process upon it in any action instituted
against it, in respect of which indemnity may be sought on account of any
indemnity agreement contained in Section 10.08 (an "Asserted Liability"), shall
promptly give notice
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(a "Claims Notice") of such claim or the commencement of such action, or threat
thereof, to the Seller. If a Claims Notice is not provided promptly as required
by this Section 10.09, Purchaser Indemnitee nonetheless shall be entitled to
indemnification by the Seller to the extent that the Seller has not established
that it has been materially prejudiced by such late receipt of the Claims
Notice. The Seller shall be entitled at its own expense to participate in the
defense of such claim or action, or, if it shall so elect, to assume the defense
of such claim or action, in which case the defense shall be conducted by counsel
reasonably acceptable to Purchaser Indemnitee and such assumption shall
constitute an acknowledgement by the Seller of its obligations to indemnify
Purchaser Indemnitee with respect to such Asserted Liability, and such Purchaser
Indemnitee shall bear the fees and expenses of any additional counsel retained
by it; but if the Seller shall elect not to assume the defense of such claim or
action, the Seller shall reimburse each Purchaser Indemnitee for the reasonable
fees and expenses of any counsel retained by it. Notwithstanding the above,
should Purchaser Indemnitee reasonably conclude that there may be defenses
available to it which are different from or additional to those available to the
Seller or that conflicts of interest exist that are objected to by the Purchaser
Indemnitees, the Seller shall not have the right to direct the defense of such
action on behalf of Purchaser Indemnitee and all such fees and expenses of
Purchaser Indemnitee shall be borne by the Seller. The Claims Notice may be
amended on one or more occasions with respect to the amount of the Asserted
Liability at any time prior to final resolution of the obligation to indemnify
relating to the Asserted Liability. The Seller shall not, without the written
consent of Purchaser Indemnitee, settle or compromise any such claim or consent
to the entry of any judgment which does not include any unconditional term
releasing the Indemnified Party from all liability in respect of such Asserted
Liability.
ARTICLE XI
ADDITIONAL UNDERTAKINGS OF PURCHASER
11.01 Purchaser's Contact with Customers. Purchaser and the Seller,
as and to the extent provided in Section 10.04, may jointly notify the customers
of the Branches of the pending transfer of their deposit accounts, Loans or safe
deposit boxes to Purchaser. Purchaser and Seller agree that any notices, letters
or other material which Purchaser or Seller wish to send or give to customers of
the Branches prior to the Closing Date shall be approved by both parties in
advance, which approval shall not be unreasonably withheld. Purchaser shall also
provide all customers holding Transferred Accounts with all necessary
checkbooks, check order forms, passbooks, loan coupon books and other materials
bearing the name of Purchaser which shall be available for use by customers of
the Branches promptly after the Effective Time. Purchaser shall also direct each
transferring customer that, as of the Effective Time, such customers should no
longer use and should destroy all checkbooks and check order forms of the Seller
pertaining to accounts at the Branches transferred to the Seller. Except, and
only to the extent and manner specifically permitted hereby, Purchaser shall not
contact, or solicit the Loan and deposit business of any customers of the
Branches prior to the Effective Time.
11.02 Safe Deposit Box and Night Depository Business. Purchaser
shall assume and discharge from and after the Effective Time, the duties and
obligations of the Seller with respect to the Branches' safe deposit box and
night depository business. Purchaser shall maintain all necessary facilities for
the use of such boxes by the renters thereof, and night deposit facilities by
the users thereof, during the period for which such persons have paid rent
therefor in advance to the Seller,
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subject to the provisions of the written rental and night depository agreements
between the Seller and the respective renters of such boxes or users of such
night depository facilities delivered to Purchaser.
11.03 Use of Names, Trademarks, Etc. Purchaser will not, upon and
after the Closing Date, use the name "Community Bank" or any of the Seller's
trade names, trademarks or service marks.
11.04 Diligence and Good Faith. Purchaser will diligently and
expeditiously:
(a) proceed in good faith in seeking the satisfaction of
all conditions set forth in Section 12.06 and in Article XIII below; and
(b) cooperate in good faith with the Seller in its
seeking the satisfaction of all conditions set forth in Article XII below
(except those conditions set forth in Section 12.06).
11.05 Indemnity. Purchaser agrees to indemnify and hold harmless
Seller and its officers, directors, employees, affiliates, representatives,
successors and assigns (each a "Seller Indemnitee") against, from and in respect
of:
(i) Any damage, expense or deficiency resulting
from any default, misrepresentation, breach of warranty, or
nonfulfillment of any agreement on the part of Purchaser under this
Agreement or from any material misrepresentation in or omission from
any certificate or other instrument furnished or to be furnished to
Seller pursuant to this Agreement.
(ii) Any and all expenses (including reasonable
attorneys' fees and disbursements), obligations, assessments, suits,
actions, proceedings, claims or demands resulting from or in connection
with any claim, liability, or obligation asserted against any Seller
Indemnitee arising out of Purchaser's operations or arising out of
Purchaser's ownership of the Branches after the Effective Time.
Purchaser agrees promptly to advance to any Seller Indemnitee, on
demand, any expenses, attorneys' fees and disbursements incurred by any
Seller Indemnitee, in respect of any liability, obligation, or claim to
which the foregoing indemnity by Purchaser relates.
11.06 Indemnity Claims. If any Seller Indemnitee desires to make a
claim under Section 11.05 hereof which does not involve a claim by any person
other than Seller Indemnitee, then such Seller Indemnitee shall make such claim
by promptly delivering written notice to the Purchaser. If any Seller Indemnitee
desires to make a claim against Purchaser under Section 11.05 hereof which
involves a claim by a person other than Seller Indemnitee, then Seller
Indemnitee, upon receipt of written notice of any claim or the service of a
summons, or other initial legal process upon it in any action instituted against
it, in respect of which indemnity may be sought on account of any indemnity
agreement contained in Section 11.05 (a "Seller Asserted Liability"), shall
promptly give notice (a "Seller Claims Notice") of such claim or the
commencement of such action, or threat thereof, to the Seller. If a Seller
Claims Notice is not provided promptly as required by this Section 11.05, Seller
Indemnitee nonetheless shall be entitled to indemnification by the Purchaser to
the extent that the Purchaser has not established that it has been materially
prejudiced by such late receipt of the Seller Claims Notice. The Purchaser shall
be entitled at its own expense to participate in the defense of such claim or
action, or, if it shall so elect, to assume the defense of such claim or action,
in which case the defense shall be conducted by counsel reasonably acceptable to
Seller Indemnitee and such
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assumption shall constitute an acknowledgement by the Purchaser of its
obligations to indemnify Seller Indemnitee with respect to such Seller Asserted
Liability, and such Seller Indemnitee shall bear the fees and expenses of any
additional counsel retained by it; but if the Purchaser shall elect not to
assume the defense of such claim or action, the Purchaser shall reimburse each
Seller Indemnitee for the reasonable fees and expenses of any counsel retained
by it. Notwithstanding the above, should Seller Indemnitee reasonably conclude
that there may be defenses available to it which are different from or
additional to those available to the Purchaser or that conflicts of interest
exist that are objected to by the Seller Indemnitees, the Purchaser shall not
have the right to direct the defense of such action on behalf of Seller
Indemnitee and all such fees and expenses of Seller Indemnitee shall be borne by
the Purchaser. The Seller Claims Notice may be amended on one or more occasions
with respect to the amount of the Seller Asserted Liability at any time prior to
final resolution of the obligation to indemnify relating to the Seller Asserted
Liability. The Purchaser shall not, without the written consent of Seller
Indemnitee, settle or compromise any such claim or consent to the entry of any
judgment which does not include any unconditional term releasing the Indemnified
Party from all liability in respect of such Seller Asserted Liability.
ARTICLE XII
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
The obligations of Purchaser to close under this Agreement shall be subject to
the following conditions (all or any of which, except the conditions of Section
12.06, may be waived in whole or in part by Purchaser to the extent permitted by
law):
12.01 Representations and Warranties True. The representations and
warranties made by Seller in this Agreement shall have been true and correct
when made and shall be true and correct on and as of the Closing Date with the
same force and effect as though such representations and warranties had been
made on and as of such date.
12.02 Obligations Performed. The Seller shall have performed all
covenants and obligations and complied with all conditions required by this
Agreement to be performed or complied with by it on or before the Closing Date.
12.03 Certificate of Compliance. The Seller shall have executed and
delivered to Purchaser a certificate substantially in the form and substance as
attached hereto as Exhibit 12.03, dated as of the Closing Date.
12.04 No Adverse Litigation. No action, suit, proceeding or
Litigation shall have been instituted or threatened against the Seller or
Purchaser by or before any court or Governmental Authority to restrain or
prohibit, or to obtain damages in respect of this Agreement or the consummation
of the transactions contemplated hereby which in the opinion of Purchaser makes
it inadvisable to proceed to the Closing Date under this Agreement.
12.05 Opinion of Counsel. Purchaser shall have received an opinion
of counsel for the Seller, dated the Closing Date, in substantially the same
form and substance as the opinion attached hereto as Exhibit 12.05.
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12.06 Regulatory Approvals. Purchaser shall have obtained, at its
expense, from all necessary governmental and regulatory authorities, all
necessary consents to and authorizations and approvals of this Agreement and the
transactions contemplated by this Agreement and the related transfers of
ownership and control of all licenses, permits or other governmental
authorizations necessary to carry on the business of the Branches, and the
Seller shall have obtained any consents and approvals required hereby, including
those set forth on Exhibit 8.06.
12.07 Due Diligence Review. Purchaser shall have completed and be
satisfied, in its sole discretion, with the scope and results of its review of
the business operations, assets, properties, liabilities, and other matters
regarding Seller and the Branches, and shall have reached agreements with Seller
satisfactory to Purchaser in all respects regarding any matter or matters
relating to such investigation, including without limitation, agreements with
respect to the Loans being purchased and the purchase price for Loans pursuant
to Section 2.01.
12.08 Title Insurance. Purchaser shall have obtained at its own cost
and expense such owner's and leasehold policies of title insurance as it shall
desire, free of any exception or other qualification other than standard
exceptions and exclusions.
12.09 Material Adverse Change. From the date of this Agreement until
the Closing Date, no material adverse change shall have occurred or been
threatened with respect to the Branches or the Purchased Assets or the Assumed
Liabilities. A "material adverse change" shall mean a change of ten percent
(10%) or more in the Purchased Assets or Assumed Liabilities from those existing
at January 31, 2002, and any material adverse change in the composition,
maturities, interest rates or other material terms of the Loans or Assumed
Liabilities.
12.10 Seller's Exhibits and Schedules. The Seller shall have
delivered all exhibits and schedules as required by this Agreement and such
exhibits and schedules shall be satisfactory to the Purchaser, in the
Purchaser's sole discretion.
ARTICLE XIII
CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATIONS
The obligations of the Seller to close under this Agreement shall be
subject to the following conditions (all or any of which may be waived, in whole
or in part, by the Seller to the extent permitted by law):
13.01 Representations and Warranties True. The representations and
warranties made by Purchaser in this Agreement shall have been true and correct
when made and shall be true and correct on and as of the Closing Date with the
same force and effect as though such representations and warranties had been
made on and as of such date.
13.02 Obligations Performed. Purchaser shall have performed all
covenants and obligations and complied with all conditions required by this
Agreement to be performed or complied with by Purchaser on or before the Closing
Date.
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13.03 Certificate of Compliance. Purchaser shall have executed and
delivered to the Seller a certificate in substantially the same form and
substance as the one attached hereto as Exhibit 13.03, dated as of the Closing
Date.
13.04 No Adverse Litigation. No action, suit or proceeding shall
have been instituted or threatened against the Seller, or Purchaser by or before
any court or governmental agency to restrain or prohibit, or to obtain damages
in respect of, this Agreement or the consummation of the transactions
contemplated hereby which in the opinion of Seller makes it inadvisable to
proceed to the Closing Date under this Agreement.
13.05 Approvals. Purchaser shall have obtained the approvals
referenced in Section 12.06 and the Seller shall have obtained any consents and
approvals required hereby, including those set forth on Exhibit 8.06.
13.06 Opinion of Counsel. Seller shall have received an opinion of
counsel for the Purchaser, dated the Closing Date, in substantially the same
form and substance as the opinion attached hereto as Exhibit 13.06.
ARTICLE XIV
CLOSING DATE
14.01 Time and Place. The hour, date and location of the Closing
under this Agreement shall be at a location and on a date mutually acceptable to
Purchaser and Seller as soon as practicable after the receipt of all regulatory
and governmental approvals and other consents and the expiration of any required
waiting period (the "Closing Date").
ARTICLE XV
TERMINATION
15.01 Methods of Termination. This Agreement may be terminated as
follows:
(a) at any time by the mutual written consent of
Purchaser and the Seller;
(b) by Purchaser in writing at any time that it
determines in good faith that the conditions set forth in Article XII of this
Agreement will not be met by May 3, 2002;
(c) by the Seller in writing at any time that it
determines in good faith that the conditions set forth in Article XIII of this
Agreement will not be met by May 3, 2002;
(d) by the Seller or Purchaser in writing at any time
after any of the regulatory authorities has denied any application of the other
party for approval of the transactions contemplated herein;
(e) by Purchaser in writing on or before March 10, 2002
if as a result of its due diligence review it discovers a fact or circumstance
or the parties cannot agree on a valuation of
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assets that makes it inadvisable in Purchaser's sole discretion for Purchaser to
proceed with the transaction contemplated hereby;
(f) by Purchaser or the Seller if the Closing Date shall
not have occurred on or prior to May 3, 2002, unless the failure of such
occurrence is due to the failure of the party seeking termination failing to
perform or observe any of its agreements and conditions set forth herein;
(g) any time on or prior to the Closing Date, by
Purchaser or Seller in writing if the other shall have been in breach of any
representation and warranty in any material respect (as if such representation
and warranty had been made on and as of the date hereof and on the date of the
notice of breach referred to below), or in breach of any covenant, undertaking
or obligation contained herein, and such breach has not been cured by the
earlier of 30 days after the giving of notice to the breaching party of such
breach or the Closing Date.
15.02 Procedure Upon Termination. In the event of termination
pursuant to Section 15.01 hereof, written notice thereof shall forthwith be
given to the other party in accordance with Section 17.08 of this Agreement, and
this Agreement shall terminate immediately unless an extension is consented to
by the party having the right to terminate. If this Agreement is terminated as
provided herein:
(a) each party will return all documents, work papers and
other materials and information of the other party relating to this transaction,
whether obtained before or after the execution hereof, to the party furnishing
the same;
(b) all information received by either party hereto with
respect to the business of the other party (other than information which is a
matter of public knowledge or which has heretofore been or hereafter published
in any publication for public distribution or filed as public information with
any governmental authority) shall not at any time be used for any business
purpose by such party or disclosed or delivered by such party to third persons;
and
(c) if the termination is due to a failure or breach on
the part of Purchaser hereunder, Purchaser shall immediately pay the Seller 50%
of the total out of pocket costs expended for notices to customers and joint
mailings as provided in section 10.04, as approved at such time.
ARTICLE XVI
MUTUAL COVENANTS AND AGREEMENTS
16.01 Cooperation. Subject to the terms and conditions hereof, each
party hereto agrees promptly to take, or cause to be taken, all commercially
reasonable actions and to do or cause to be done, all things reasonably
necessary, proper or advisable under applicable laws and regulations, or
otherwise, including, without limitation, attempting to obtain all necessary
consents, waivers and regulatory approvals, to consummate and make effective at
the earliest practicable time, the transactions contemplated by this Agreement.
The officers and employees of each party shall fully cooperate with officers and
employees, accountants, counsel and other representatives of the other in all
matters contemplated by this Agreement.
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16.02 Assignments of Certain Assets. Seller and Purchaser hereby
agree that Purchaser (in its sole discretion) may direct that at Closing Seller
assign the Discount Loans, Other Real Estate and any other low quality assets
directly to a subsidiary or other affiliate of Purchaser; provided, that such
transfer to a subsidiary or other affiliate of Purchaser shall not affect
Purchaser's obligation to pay, or cause the payment of, the Purchase Price for
such assets.
ARTICLE XVII
MISCELLANEOUS
17.01 Modifications and Waivers. This Agreement may not be modified
except by an instrument in writing duly executed by the parties. Any waiver of
any term of this Agreement must be in writing.
17.02 No Brokers or Finders. Purchaser and the Seller each represent
and warrant to each other that no broker or finder has been employed by or has
acted for it in connection with this Agreement or the transactions contemplated
hereby, and each party agrees to indemnify the other against all losses, costs,
damages or expenses arising out of claims for fees or commissions of brokers or
finders alleged to have been employed or engaged by such party.
17.03 Survival of Representations and Warranties. All
representations and warranties contained herein and in any written agreement or
instrument delivered or executed in connection herewith are true at and as of
the times provided herein, and all of which will survive the execution and
delivery of this Agreement, any examination on behalf of any party hereto, and
the consummation of all transactions contemplated herein.
17.04 Binding Effect. All terms of this Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns.
17.05 Counterparts; Electronic Signatures. This Agreement is being
executed simultaneously in two or more identical counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument. To expedite the process of entering into this
Agreement, the parties acknowledge that Transmitted Copies of the Agreement will
be equivalent to original documents until such time as original documents are
completely executed and delivered. "Transmitted Copies" will mean copies that
are reproduced or transmitted via photocopy, facsimile or other process of
complete and accurate reproduction and transmission.
17.06 Expenses. Each party shall bear its own expenses incurred in
connection with this Agreement and all transactions contemplated herein.
17.07 Notices and Primary Contact Personnel. All notices, requests,
demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered by hand, overnight courier or if
mailed, postage prepaid, by United States first class mail, or facsimile
transmission to the other party at its address shown on Exhibit 17.07 hereto.
The parties hereto, as a matter of convenience, are designating primary contact
personnel on Exhibit 17.07, and each party may contact such persons in
day-to-day, routine dealings with the other party leading up to and following
the Closing Date.
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17.08 Publicity. Purchaser and the Seller shall cooperate with each
other as to the content and timing of public and customer filings, publicity,
press releases and announcements concerning this Agreement, and all transactions
contemplated hereby, and prior to releasing any such information each party will
send such material to the other party for its review and consent, which consent
may not be withheld unreasonably.
17.09 Time of the Essence. The parties hereto acknowledge that time
is of the essence with respect to the performance of this Agreement and the
consummation of the transactions contemplated herein in accordance with the
terms hereof.
17.10 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Alabama applicable to
contracts made and to be performed wholly within such state.
17.11 Cover, Index and Headings, Etc. The cover, index and headings
contained in this Agreement are for convenience of reference only and shall not
affect the meaning or interpretation hereof. The use of the singular in this
Agreement shall be deemed to be or include the plural (and vice versa), whenever
appropriate. The words "include," "including," and similar phrases shall mean
including without limitation by enumeration or otherwise.
17.12 Severability. If any provision of this Agreement is determined
by a court of competent jurisdiction to be invalid or unenforceable, the balance
of this Agreement shall remain in full force and effect except to the extent
otherwise agreed by the parties in writing.
17.13 Entire Agreement. This Agreement including any exhibits
hereto, represent the entire agreement of the parties relating to the subject
matter hereof. All prior negotiations and understandings between the parties are
merged into this Agreement and there are no understandings or agreements other
than those incorporated herein.
17.14 Arbitration. All disputes arising or otherwise under this
Agreement shall be resolved by senior executives of each party, and if they
cannot resolve such dispute within 30 days of notice to the other party, then by
each party's chief executive officer, and if the chief executive officers cannot
resolve such dispute within 30 days of referral to them, then by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Arbitration shall be by a single arbitrator experienced in the
matters at issue and selected by Seller and Purchaser in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitration shall be held in Atlanta, Georgia (or any place agreed to by Seller
and Purchaser). The decision of the arbitrator shall be final and binding as to
any matters submitted under this Section 17.14; provided, however, if necessary,
such decision and satisfaction procedure may be enforced by either Seller or
Purchaser in any court of record having jurisdiction over the subject matter or
over any of the parties to this Agreement. All costs and expenses incurred in
connection with any such arbitration proceeding (including reasonable attorney's
fees) shall be borne by the party against which the decision is rendered, or, if
no decision is rendered, such costs and expenses shall be borne equally by the
Seller and Purchaser. If the arbitrator's decision is a compromise, the
determination of which party or parties bears the costs and expenses incurred in
connection with any such arbitration
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proceeding shall be made by the arbitrator on the basis of the arbitrator's
assessment of the relative merits of the parties' positions.
17.15 Conversion. Seller and Purchaser shall cooperate with each
other and shall use their reasonable efforts (as consistent with their internal
day-to-day operations) in order to cause the timely transfer of information
concerning the Deposit Liabilities and the Loans which are maintained on
Seller's data processing systems in accordance with a conversion plan to be
developed by the Purchaser and mutually agreed upon by Purchaser and Seller (the
"Conversion"). Within fifteen (15) after the date of this Agreement, Seller and
Purchaser shall each designate an appropriate officer or officers to be
responsible for the necessary cooperation of the parties and to act as an
initial contact for responding to questions and requests for information. The
parties acknowledge that the goal of such cooperation is to enable Purchaser to
obtain and conform data prior to the Effective Time so that such back office
conversion is completed and Purchaser is processing all data relating to the
operations of the Branches following the Effective Date; and
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IN WITNESS WHEREOF, Purchaser and Seller have caused this Agreement to
be executed by their respective duly authorized officers and their respective
corporate seals to be affixed hereto as of the day and year first above written.
FIRST SOUTHERN NATIONAL BANK
By /s/ Xxxx Xxxxxxxxx
------------------------------------
Its President
------------------------------------
ATTEST:
/s/ Xxxxx X. Xxxxxx
------------------------------------------
Its Executive Vice President and Secretary
--------------------------------------
[CORPORATE SEAL]
COMMUNITY BANK
By /s/ Xxxxxx X. Xxxxxxxxx, Xx.
------------------------------------
Its Chairman and Chief Executive Officer
------------------------------------
ATTEST:
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------
Its Secretary
---------------------------------------
[CORPORATE SEAL]
000
XXXXX XX XXXXXXX )
XXXXXXX COUNTY )
I, Xxxxxx Xxxxxxxx, a Notary Public in and for said county in said state hereby
certify that Xxxx Xxxxxxxxx as President and Xxxxx X. Xxxxxx as Executive Vice
President and Secretary of First Southern National Bank, whose names are signed
to the foregoing agreement, and who are known to me, acknowledged before me on
this day that being informed of the contents of this agreement, they, as such
officers and with full authority, executed the same voluntarily for and as the
act of said corporation.
Given under my hand and seal this 25th day of February, 2002.
/s/ Xxxxxx Xxxxxxxx
--------------------------------
Notary Public
My Commission expires: 1-22-2005
---------
[NOTARIAL SEAL]
STATE OF ALABAMA )
)
XXXXXX COUNTY )
I, Xxxxxx X. Xxxxxx, a Notary Public in and for said county in said state hereby
certify that Xxxxxx X. Xxxxxxxxx, Xx. as Chairman and CEO and Xxxxxxx X.
Xxxxxxxx as Secretary of Community Bank, whose names are signed to the foregoing
agreement, and who are known to me, acknowledged before me on this day that
being informed of the contents of this agreement, they, as such officers and
with full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand and seal this 25th day of February, 2002.
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Notary Public
My Commission expires: August 1, 2005
--------------
[NOTARIAL SEAL]
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