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EXHIBIT 2.2
PURCHASE AND ASSUMPTION AGREEMENT DATED APRIL 12, 2007
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PURCHASE AND ASSUMPTION AGREEMENT
by and between
Greater Atlantic Bank
and
Bay-Vanguard Federal Savings Bank
April 12, 2007
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TABLE OF CONTENTS
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ARTICLE I....................................................................1
DEFINITIONS..................................................................1
Section 1.1. Defined Terms...........................................1
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Section 1.2. Accounting Terms........................................4
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ARTICLE II...................................................................4
PURCHASE AND SALE OF PURCHASED ASSETS AND ASSIGNMENT AND ASSUMPTION OF ASSUMED
LIABILITIES..................................................................4
Section 2.1. Purchase and Sale of Assets; No Other Assets Purchased..4
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Section 2.2. Assumed Liabilities.....................................5
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ARTICLE III..................................................................6
PURCHASE PRICE; PRORATIONS;ALLOCATION OF PURCHASE PRICE; ADJUSTMENT OF
PAYMENT AMOUNT..........................................6
Section 3.1. Purchase Price..........................................6
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Section 3.2. Prorations..............................................7
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Section 3.3. Allocation of Purchase Price............................7
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Section 3.4 Adjustment of Payment Amount............................8
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ARTICLE IV...................................................................9
TAXES 9
Section 4.1. Sales, Transfer and Use Taxes...........................9
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ARTICLE V....................................................................9
CLOSING......................................................................9
Section 5.1. Closing Date............................................9
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Section 5.2. Seller's Deliveries.....................................9
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Section 5.3. Purchaser's Deliveries..................................10
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ARTICLE VI...................................................................11
REPRESENTATIONS AND WARRANTIES OF SELLER.....................................11
Section 6.1. Organization............................................11
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Section 6.2. Authority...............................................11
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Section 6.3 Non-Contravention.......................................11
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Section 6.4. Compliance with Law.....................................11
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Section 6.5. Legal Proceedings.......................................12
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Section 6.6. Title to Purchased Assets...............................12
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Section 6.7. No Broker...............................................12
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Section 6.8. Deposit Liabilities.....................................12
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Section 6.9. Limitations on and Disclaimer of Representations and
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Warranties and Purchaser's Release in Connection
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Therewith...............................................12
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Section 6.10. Assumed Liabilities.....................................12
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Section 6.11. Regulatory Matters......................................12
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Section 6.12 Accuracy of Books and Records...........................13
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ARTICLE VII..................................................................13
REPRESENTATIONS AND WARRANTIES OF PURCHASER..................................13
Section 7.1. Organization......................................13
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Section 7.2. Authority.........................................13
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Section 7.3. Non-Contravention.................................13
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Section 7.4. Legal Proceedings.................................14
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Section 7.5. Regulatory Matters................................14
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Section 7.6. Capital Available.................................15
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ARTICLE VIII.................................................................15
COVENANTS OF SELLER..........................................................15
Section 8.1. Conduct of the Seller's Business..................15
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Section 8.2. Regulatory Approvals..............................16
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Section 8.3. Transfer of Data..................................16
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Section 8.4. Forms.............................................16
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Section 8.5 Interest Information..............................16
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Section 8.6 Non-Solicitation..................................16
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ARTICLE IX...................................................................17
COVENANTS OF PURCHASER.......................................................17
Section 9.1. Regulatory Approvals and Standards................17
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Section 9.2. Solicitation of Accounts..........................17
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Section 9.3. Recording of Instruments of Assignment............17
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Section 9.4. Other Transactions................................18
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ARTICLE X....................................................................18
ACCESS; EMPLOYEE AND CUSTOMER COMMUNICATIONS.................................18
Section 10.1. Access by Purchaser...............................18
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Section 10.2. Communications with Customers.....................18
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ARTICLE XI...................................................................19
TRANSITIONAL MATTERS.........................................................19
Section 11.1. Payment of Deposit Liabilities....................19
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Section 11.2. Delivery of Purchaser's Check Forms...............20
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Section 11.3. Uncollected Checks Returned to Seller.............20
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Section 11.4. New ATM/Debit Cards...............................20
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Section 11.5. Deactivation of ATM and ATM/Debit Cards...........21
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Section 11.6. Actions With Respect to XXX Deposit Liabilities...21
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Section 11.7. Bulk Transfer Laws................................22
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Section 11.8 Processing of Electronic Items....................22
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Section 11.9 Account Statements................................22
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ARTICLE XII..................................................................22
CONDITIONS TO CLOSING........................................................22
Section 12.1. Conditions to Obligations of Seller...............22
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Section 12.2. Conditions to Obligations of Purchaser............23
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ARTICLE XIII.................................................................24
DATA PROCESSING..............................................................24
Section 13.1. Conversion........................................24
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ARTICLE XIV..................................................................26
INDEMNITY....................................................................26
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Section 14.1. Seller Indemnity..................................26
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Section 14.2. Purchaser Indemnity...............................27
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Section 14.3. Indemnification Procedure.........................27
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Section 14.4. Limitation on Liability...........................28
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Section 14.5. General...........................................28
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Section 14.6. Survival..........................................29
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ARTICLE XV...................................................................29
POST-CLOSING MATTERS.........................................................29
Section 15.1. Further Assurances................................29
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Section 15.2. Access to and Retention of Books and Records......30
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Section 15.3. Deposit Histories.................................30
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ARTICLE XVI..................................................................30
MISCELLANEOUS................................................................30
Section 16.1. Expenses..........................................30
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Section 16.2. Trade Names and Trademarks........................30
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Section 16.3. Termination: Extension of Closing Date...........31
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Section 16.4. Modification and Waiver...........................31
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Section 16.5. Binding Effect: Assignment........................31
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Section 16.6. Confidentiality...................................32
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Section 16.7. Entire Agreement; Governing Law...................32
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Section 16.8. Consent to Jurisdiction; Waiver of Jury Trial.....32
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Section 16.9. Waiver of Certain Damages.........................33
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Section 16.10. Severability......................................33
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Section 16.11. Counterparts......................................33
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Section 16.12. Notices...........................................33
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Section 16.13. Interpretation....................................34
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Section 16.14. Specific Performance..............................34
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Section 16.15. No Third Party Beneficiaries......................35
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SCHEDULES
Schedule 2.1 Purchased Assets
Schedule 2.2 Assumed Liabilities
Schedule 6.11(a) Regulatory Approvals
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EXHIBITS
Exhibit A Form of Assignment and Assumption Agreement
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PURCHASE AND ASSUMPTION AGREEMENT
This PURCHASE AND ASSUMPTION AGREEMENT (this "Agreement") dated as of
April 12, 2007, by and between Greater Atlantic Bank, a federal savings bank
with its principal office in Reston, Virginia ("Seller"), and Bay-Vanguard
Federal Savings Bank, a federal savings bank with its principal office in
Baltimore, Maryland ("Purchaser").
WHEREAS, Purchaser desires to acquire certain assets and assume certain
Deposit Liabilities of Seller and Seller desires to transfer to Purchaser such
assets and Deposit Liabilities of the Seller as described below in accordance
with the terms and provisions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby subject to the terms and conditions set
forth herein, Seller and Purchaser agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINED TERMS. As used in this Agreement, the
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following terms shall have the following meanings:
"Account" shall have the meaning specified in Section 13.1(a).
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"Account Histories" shall have the meaning specified in Section
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13.1(c).
"Accrued Interest" shall mean, as of any date, the interest, dividends,
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fees, costs and other charges that have been accrued on but not paid, credited,
or charged to the Deposit Liabilities.
"Adjusted Payment Amount" shall have the meaning specified in Section
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3.4(a).
"Affiliate" shall mean, with respect to any Person, any other Person
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that directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person, or a director,
officer, partner, joint venturer or member of such Person and any successors of
such Person.
"Assignment and Assumption Agreement" shall have the meaning specified
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in Section 5.2(a).
"Assumed Contract" shall have the meaning specified in Section 2.1.
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"Assumed Liabilities" shall have the meaning specified in Section 2.2.
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"Branch" shall mean the branch office of Seller located at 8070 Xxxxxxx
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Xxxxxxx, Xxxxxxxx, Xxxxxxxx, 00000.
"Business Day" shall mean any day that the Federal Reserve Bank of New
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York is open.
"Closing" shall have the meaning specified in Section 5.1(a).
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"Closing Date" shall have the meaning specified in Section 5.1(a).
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"Code" shall mean the Internal Revenue Code of 1986, as amended, and
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the regulations promulgated thereunder.
"Confidentiality Agreement" shall mean that certain letter agreement
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between Purchaser and Seller dated as of April 7, 2006.
"Customers" shall mean, individually and collectively, the Persons
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named as the owners of the accounts relating to the Deposit Liabilities.
"Customer Notices" shall have the meaning specified in Section 10.2.
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"Damages" shall have the meaning specified in Section 14.1.
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"Deposit Liabilities" shall mean all of Seller's obligations and
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liabilities relating to (a) the deposit accounts listed on Schedule 2.2 hereto,
and (b) deposit accounts which are opened at the Branch between the close of
business of Seller on the Business Day set forth on Schedule 2.2 and the close
of business on the Closing Date, including, without limitation, all passbook
accounts, all statement savings accounts, checking, Money Market and NOW
accounts, and savings and certificate XXX accounts and corporate sweep accounts,
together with Accrued Interest thereon, all as exist at the close of business on
the Closing Date, but excluding any deposit account excluded as Deposit
Liabilities under Section 2.2 (e) and any claim or other liability relating to
the origination of any such deposit account or the administration of any such
deposit account prior to the close of business on the Closing Date.
"Draft Closing Statement" shall mean a draft closing statement as of
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the close of business of the fifth Business Day immediately preceding the
Closing Date setting forth the Cash Payment Amount (including all estimated
adjustments and prorations thereto).
"Electronic Records" shall have the meaning specified in Section 8.3.
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"Estimated Payment Amount" shall mean the estimate of the Purchase
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Price set forth on the Draft Closing Statement.
"Excluded XXX Deposits" shall have the meaning specified in Section
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11.6(a).
"FDIA" shall mean the Federal Deposit Insurance Act, as amended (12
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U.S.C. sections 1811 et seq.).
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"FDIC" shall mean the Federal Deposit Insurance Corporation.
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"Federal Funds Rate" shall mean, for the period involved, the average
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of the interest rates for each day of the period set forth in H.15(519) opposite
the caption "Federal Funds (Effective)." H.15(519) means the weekly statistical
release designated as such, or any successor publication, published by the Board
of Governors of the Federal Reserve System.
"Final" shall mean, as applied to any governmental order or action,
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that such order or action has not been stayed, vacated or otherwise rendered
ineffective and either (a) the time period for taking an appeal therefrom shall
have passed without an appeal therefrom having been taken, or (b) if any such
appeal shall have been dismissed or resolved, all applicable periods for further
appeal of such order or action shall have passed.
"Final Approval Date" shall mean, with respect to the transactions
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contemplated hereby, the date upon which the last of the following has occurred:
(a) all Regulatory Approvals have been obtained; (b) all applicable regulatory
notices which are required to be published or given prior to consummation of the
transactions contemplated hereby have been published or given; (c) the filing of
all applicable regulatory reports; and (d) the expiration of all applicable
regulatory comment and waiting periods.
"GAAP" shall have the meaning specified in Section 1.2.
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"Indemnified Party" shall have the meaning specified in Section 14.3.
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"Indemnitor" shall have the meaning specified in Section 14.3.
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"XXX" shall mean an individual retirement account as specified in
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Section 408 and 408A of the Code.
"XXX Deposit Liability" shall mean a Deposit Liability in an account
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which is an XXX.
"IRS" shall mean the Internal Revenue Service of the United States.
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"Items" shall mean transfers of funds by wire or through the Automated
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Clearing House, checks, drafts, negotiable orders of withdrawal and items of a
like kind which are drawn on or deposited and credited to the Deposit
Liabilities.
"Knowledge" shall mean, with respect to Seller, the actual knowledge as
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of the date hereof, without further investigation, of any of Seller's executive
officers, and with respect to Purchaser, the actual knowledge as of the date
hereof, without further investigation, of any of Purchaser's executive officers.
"Laws" shall have the meaning set forth in Section 6.4.
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"Person" shall mean any individual, partnership, joint venture,
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corporation, trust, limited liability company, unincorporated organization,
government or other entity.
"Purchased Assets" shall have the meaning specified in Section 2.1.
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"Purchase Price" shall have the meaning specified in Section 3.4.
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"Purchaser" shall have the meaning specified in the Preamble.
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"Regulatory Approvals" shall have the meaning specified in Section
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6.11(a).
"Returned Item" shall have the meaning given in Section 13.1(g).
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"Safe Deposit Boxes" means the safe deposit boxes of the Seller
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including the removable safe deposit boxes and safe deposit stacks in the
Seller's vault, all rights and benefits (other than fees due and collected prior
to the Closing Date) under rental agreements with respect to such safe deposit
boxes, and all keys and combinations thereto.
"Settlement Date" shall have the meaning specified in Section 3.4(b).
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"Transfer Date" shall mean the first Business Day following the Closing
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Date.
SECTION 1.2. ACCOUNTING TERMS. All accounting terms not otherwise
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defined herein shall have the respective meanings assigned to them in accordance
with generally accepted accounting principles as in effect from time to time in
the United States of America ("GAAP").
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ARTICLE II
PURCHASE AND SALE OF PURCHASED ASSETS AND ASSIGNMENT AND
ASSUMPTION OF ASSUMED LIABILITIES
SECTION 2.1. PURCHASE AND SALE OF ASSETS; NO OTHER ASSETS PURCHASED
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The Seller agrees, subject to the other terms and conditions
of this Agreement, to sell, transfer, convey, assign and deliver to Purchaser,
and Purchaser agrees to purchase, accept and receive from Seller, on the Closing
Date, the following assets, properties and rights free and clear of all
encumbrances, except such encumbrances that arise under applicable law
(collectively, the "Purchased Assets"):
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(a) all overdrafts associated with all Deposit Liabilities assumed
by Purchaser under Section 2.2 hereof;
(b) all of Seller's right, title and interest in and to all
personal property, furniture, fixtures and equipment located
at the Branch and owned by Seller, as listed on Schedule 2.1
hereto, together with any manufacturer's warranties and
maintenance or service agreements thereon which are in effect
on the Closing Date and are assignable to Purchaser;
(c) all cash on hand maintained at the Branch as of the close of
business on the Closing Date;
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(d) Seller's rights under, or created by, the contracts relating
to the operation or maintenance of the Branch that are
assignable by Seller to Purchaser, which contracts are
identified on Schedule 2.1(d) hereto (the "Assumed
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Contracts");
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(e) The Safe Deposit Boxes; and
(f) The Lease on the Branch.
All assets, properties and rights of Seller not expressly
included in the Purchased Assets are excluded from the transactions contemplated
by this Agreement, including, without limitation, the following items:
(f) all trademarks, tradenames, copyrights, medallion program
stamps, signs, logos, proprietary information, stationery,
forms, labels, shipping materials, brochures, advertising and
marketing materials and similar property of Seller and its
Affiliates;
(g) all loans attributed to the Branch as of the close of business
on the Closing Date;
(h) all assets, properties and rights of Seller and its Affiliates
used, relating to, located at or attributed to all operations,
branches and facilities of Seller and its Affiliates other
than the Branch or the Purchased Assets;
(i) all computer software and related documentation owned or
licensed by Seller and used at the Branch; and
(j) all other assets listed on Schedule 2.1(j) hereto.
SECTION 2.2. ASSUMED LIABILITIES.
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Subject to the terms and conditions of this Agreement, on the Closing
Date Purchaser shall assume, and thereafter honor and fully and timely, pay,
perform and discharge when due, the following liabilities of Seller and shall
perform all duties, responsibilities, and obligations of Seller under the
following, to the extent that such liabilities, duties, responsibilities and
obligations arise or accrue after the close of business on the Closing Date
(collectively, the "Assumed Liabilities"):
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(a) the Deposit Liabilities;
(i) All of Seller's duties and responsibilities relating
to the Deposit Liabilities, including without
limitation, with respect to (x) the abandoned
property laws of any state or (y) any other
applicable law;
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(ii) Any of Seller's accrued and unpaid expenses related
to the Deposit Liabilities to the extent a proration
or adjustment is made with respect thereto pursuant
to Section 3.2; and
(iii) Any and all other liabilities and obligations
relating to or arising out of the Purchased Assets or
Assumed Deposit Liabilities to be performed after the
Closing, and as set forth in Schedule 2.2, but only
to the extent that such liabilities or obligations
arise or accrue after the close of business on the
Closing Date.
(b) the Lease on the Branch;
(c) the Assumed Contracts;
(d) the operation of the Branch in the ordinary course of business,
including, without limitation, the payment of salary,
compensation and employee benefits earned by employees of the
Seller employed at the Branch after the Closing Date; and
(e) All liabilities and obligations of Seller not expressly included
in the Assumed Liabilities are excluded from the transactions
contemplated in the Agreement, including, without limitation,
the following items:
(i) all liabilities associated with cashier's checks or
other official bank checks and traveler's checks
issued by Seller;
(ii) all liabilities associated with accounts of Seller's
employees, officers and directors, other than
accounts of those employees of the Seller employed at
the Branch;
(iii) certificate of deposit accounts and XXX certificate
accounts that (a) are subject to any order, agreement
or encumbrance that in any way restricts the payment
of funds representing such account on the order of
the depositor, or (b) are "brokered deposits" (as
that term is defined in 12 C.F.R. section 337.6(a)
(2)); and
(iv) all liabilities and obligations of Seller relating to
the Branch that are not expressly included in the
Assumed Liabilities.
ARTICLE III
PURCHASE PRICE; PRORATIONS;
ALLOCATION OF PURCHASE PRICE;
ADJUSTMENT OF ESTIMATED PAYMENT AMOUNT
SECTION 3.1 PURCHASE PRICE.
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(a) In consideration of the assumption by Purchaser of the Assumed
Liabilities, Seller shall transfer the Assets to Purchaser and shall pay
Purchaser, by wire transfer of immediately available funds on the Closing Date,
an amount equal to the Deposit Liabilities, determined in accordance with
Section 2.2(a) hereof reduced by the sum of:
(i) the net book value of the Purchased Assets, not including cash
on hand on the Closing Date;
(ii) the face amount of cash on hand maintained at the Branch on
the Closing Date; and
(iii) 8.50% of the Deposit Liabilities.
The amount determined by such payment formula is herein
referred to as the "Cash Payment Amount" and shall be further adjusted on the
Closing Date in accordance with Section 3.2 hereof. The Purchase Price shall be
determined in accordance with Section 3.4. The payment formula referred to above
is for the sole purpose of determining the amount of cash transferable by the
Seller to the Purchaser at the Closing Date and shall not constitute an
allocation of the Purchase Price to any particular asset being transferred or
liability being assumed pursuant hereto.
SECTION 3.2 PRORATIONS.
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It is the intention of the parties hereto that Seller shall operate the
Branch and maintain the Deposit Liabilities for its own account until the close
of business on the Closing Date and that Purchaser shall operate the Branch and
maintain the Deposit Liabilities for its own account from and after the close of
business on the Closing Date. Thus, except as otherwise specifically provided in
this Agreement, items of expense directly attributable to the operation of the
Branch (which shall not include any general overhead expenses of Seller) shall
be prorated as of the close of business on the Closing Date, whether or not such
adjustment would normally be made as of such time, including, without
limitation, (i) telephone, electric, gas, water, and other utility services (to
the extent it is not possible to transfer such services into the name of
Purchaser as of the Closing Date), (ii) taxes associated with the Real Property
and the Fixed Assets, (iii) assessments (including, without limitation,
assessments attributable to FDIC deposit insurance, provided that Purchaser's
portion of the prepaid FDIC deposit insurance assessment shall be based on the
assessment rate charged Purchaser for the relevant period), (iv) payments due on
Leases and Assumed Contracts, and (v) similar expenses related to the Assets
transferred hereunder, except that any penalties or excess charges resulting
solely from Seller's inaction shall be borne entirely by Seller. To the extent
any such item has been prepaid by Seller for a period extending beyond the
Closing Date, there shall be a proportionate adjustment in favor of Seller
SECTION 3.3 ALLOCATION OF PURCHASE PRICE.
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The purchase price for the assets being purchased and the Deposit
Liabilities being assumed by Purchaser pursuant to this Agreement shall be
allocated on an allocation schedule to
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be agreed upon by Purchaser and Seller within thirty (30) days after the Closing
Date. This allocation is intended to comply with the allocation method required
by Section 1060 of the Internal Revenue Code of 1986, as amended. Purchaser and
Seller shall cooperate to comply with all substantive and procedural
requirements of Section 1060 and any regulations thereunder, and the allocation
shall be adjusted if and to the extent necessary to comply with the requirements
of Section 1060. The parties shall: (i) each report the federal, state and local
and other tax consequences of the purchase and assumption contemplated hereby
(including the filing of Internal Revenue Service Form 8594) in a manner
consistent with such allocation schedule; and (ii) take no position in any tax
filing, return, proceeding, audit or otherwise which is inconsistent with such
allocation.
SECTION 3.4 ADJUSTMENT OF PAYMENT AMOUNT.
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(a) On or before 12:00 noon on the fifth (5th) day following the
Closing Date, Seller shall deliver to Purchaser a statement setting forth (i)
the Purchase Price (including all adjustments and prorations thereto) and each
component thereof and (ii) the amount of Deposit Liabilities (including Accrued
Interest thereon) transferred to Purchaser as of the close of business on the
Closing Date. Seller shall make available to Purchaser and its representatives
such work papers, schedules and other supporting data as may be reasonably
requested by Purchaser to enable Purchaser to verify such determinations. Such
statement shall also set forth the amount (the "Adjusted Payment Amount") by
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which the Cash Payment Amount, as so calculated, exceeds the Purchase Price or
the Purchase Price exceeds such Cash Payment Amount. In the event Purchaser
disagrees with or disputes the calculation of the Adjusted Payment Amount, it
shall notify Seller in writing not later than five (5) Business Days after
receipt of the statement. In the event the disagreement or dispute cannot be
resolved through discussions among the parties within the next five (5) Business
Days following sending of the notice, Purchaser or Seller may pursue any legal
remedies available to it to contest the Adjusted Payment Amount.
(b) On or before 12:00 noon on the tenth (10th) day following the
Closing Date ("Settlement Date"), Seller shall pay to Purchaser by wire transfer
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of immediately available funds to Purchaser's Account, an amount equal to the
excess of the Cash Payment Amount over the Purchase Price, plus interest
calculated using the Federal Funds Rate on such excess amount from the Closing
Date to but excluding the Settlement Date; or, if the Purchase Price exceeds the
Cash Payment Amount, Purchaser shall pay to Seller by wire transfer of
immediately available funds to such account as Seller shall advise Purchaser, an
amount equal to such excess, plus interest thereon calculated using the Federal
Funds Rate from the Closing Date to but excluding the Settlement Date. Any
payment by Purchaser to Seller or Seller to Purchaser pursuant to this Section
3.4(b) shall be treated, for all purposes, as an adjustment to the Purchase
Price.
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ARTICLE IV
TAXES
SECTION 4.1 SALES, TRANSFER AND USE TAXES.
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Except as otherwise provided in this Agreement, any sales,
use, transfer, filing, recordation or similar taxes (collectively, "Taxes")
which are payable or arise as a result of this Agreement or the consummation of
the transactions contemplated hereby, shall be paid by Purchaser on the Closing
Date. Purchaser shall indemnify and hold harmless Seller from and against such
taxes, including those arising upon subsequent audit by any taxing authority,
including interest and penalties. If such Taxes are treated as a proration
pursuant to Section 3.2, Seller agrees to remit such Taxes to the proper
authority on or before the date the same shall become due, accompanied by such
tax returns as may be required to be filed with such payment. Purchaser and
Seller will cooperate in the preparation of any filings or returns.
ARTICLE V
CLOSING
SECTION 5.1. CLOSING DATE.
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(a) Upon the terms and subject to the conditions of this Agreement, the
purchase and sale of the Purchased Assets and the assumption of the Assumed
Liabilities contemplated by this Agreement shall take place at a closing (the
"Closing") to be held at the offices of Xxxxxxx Xxxxxx & Xxxxxxx LLP, 0000
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Xxxxxxxxx Xxxxxx X.X., Xxxxxxxxxx, X.X. at 10:00 a.m. (which Closing shall be
effective as of the close of business on the Closing Date) on the fifth (5th)
Business Day following receipt of the last required Regulatory Approval and
expiration of all applicable waiting periods, provided all conditions to the
obligations of the parties set forth in Article XII hereof have been satisfied
or waived (other than obligations to be performed at the Closing) or at such
other place or at such other time or on such other date as Seller and Purchaser
may mutually agree in writing ("Closing Date").
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(b) It is anticipated that the conversion of Seller's account
information as to the Deposit Liabilities onto Purchaser's data processing
system will occur following the Closing Date. Seller and Purchaser shall each
use their commercially reasonable efforts to take such actions, and Seller and
Purchaser shall cooperate with each other to ensure that such input or
conversion is completed.
SECTION 5.2. SELLER'S DELIVERIES. On or before the Closing Date, Seller
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shall deliver to Purchaser, duly executed and acknowledged where required:
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(a) An assignment and assumption agreement with respect to the Assumed
Liabilities in substantially the form of Exhibit A hereto (the "Assignment and
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Assumption Agreement"), executed in counterparts by Seller;
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(b) The Draft Closing Statement;
(c) Subject to Section 11.6 hereof, the resignation of Seller as
trustee or custodian, as applicable, with respect to each XXX deposit account
included in the Deposit Liabilities and the designation of Purchaser as
successor trustee or custodian with respect thereto;
(d) Physical possession of all Purchased Assets as are capable of
physical delivery;
(e) Possession of all files for the Deposit Liabilities in custody of
Seller relating thereto, including signature cards for the Deposit Liabilities,
and at least sufficient to allow Purchaser to comply with its obligations under
Section 13 hereof;
(f) A certificate of the Secretary of Seller certifying to the
resolutions adopted by the Board of Directors of Seller approving and
authorizing the transactions contemplated hereby;
(g) A certificate of the Chief Executive Officer and Chief Financial
Officer of Seller as to the accuracy in all material respects of the
representations and warranties of the Seller herein as of such Closing Date and
as to the performance in all material respects by the Seller all its obligations
hereunder to be performed at or prior to such Closing Date;
(h) The written consent or the approval of the Office of Thrift
Supervision to a transfer application filed by the Seller on Form 1589 to
transfer the Deposit Liabilities and Purchased Assets of the Branch to the
Seller; and
(i ) Such other documents as are necessary to effect the transactions
contemplated hereby as Purchaser shall reasonably request.
SECTION 5.3. PURCHASER'S DELIVERIES. On or before the Closing Date,
----------------------
Purchaser shall deliver to Seller:
(a) The Assignment and Assumption Agreement, executed in counterparts
by Purchaser;
(b) Subject to Section 11.6 hereof, Purchaser's acceptance of its
appointment as of the close of business on the Closing Date as successor trustee
or custodian, as applicable, of the XXX deposit accounts included in the Deposit
Liabilities and its assumption of the fiduciary obligations of the trustee or
custodian with respect thereto;
(c) A certificate of the Secretary of Purchaser certifying to the
resolutions adopted by the Board of Directors of Purchaser approving and
authorizing the transactions contemplated hereby;
(d) A certificate of the Chief Executive Officer and Chief Financial
Officer of Purchaser as to the accuracy in all material respects of the
representations and warranties of the
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Purchaser herein as of such Closing Date and as to the performance in all
material respects by the Purchaser all its obligations hereunder to be performed
at or prior to such Closing Date; and
(e) Such other documents as are necessary to effect the transactions
contemplated hereby as Seller shall reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
SECTION 6.1. ORGANIZATION. Seller is a federal savings bank duly
------------
organized, and validly existing under the laws of the United States of America
with full power and authority to accept and maintain the Deposit Liabilities and
to transfer the Purchased Assets and Assumed Liabilities to Purchaser.
SECTION 6.2. AUTHORITY. Seller has the power and authority to enter
---------
into and perform this Agreement and any instruments or other documents executed
pursuant hereto. This Agreement and any other documents or instruments executed
pursuant hereto, and the execution, delivery and performance hereof and thereof
have been duly authorized and approved by all necessary corporate action on the
part of Seller, and this Agreement and the instruments and documents executed
pursuant hereto constitute, or when executed will constitute, the valid and
binding obligations of Seller, enforceable against Seller in accordance with
their terms, except as enforcement may be limited by receivership,
conservatorship and supervisory powers of bank regulatory agencies generally as
well as by bankruptcy, insolvency, reorganization, moratorium or other laws of
general applicability relating to or affecting creditors' rights, or the
limiting effect of rules of law governing specific performance, equitable relief
and other equitable remedies or the waiver of rights or remedies.
SECTION 6.3. NON-CONTRAVENTION. The execution and delivery of this
-----------------
Agreement and the instruments and documents executed pursuant hereto by Seller
do not and, subject to the receipt of all Regulatory Approvals and consents, the
consummation of the transactions contemplated by this Agreement will not
constitute (a) a material breach or violation of or default under any law, rule,
regulation, judgment, order, governmental permit or license of Seller or to
which Seller is subject, or (b) a breach or violation of or a default under the
organization certificate or bylaws of Seller or, to the Knowledge of Seller, any
material contract to which Seller is a party or by which it is bound, which
breach, violation or default would be likely to prevent or materially delay
Seller from being able to perform its obligations under this Agreement in all
material respects.
SECTION 6.4. COMPLIANCE WITH LAW. Seller's business with respect to the
-------------------
Purchased Assets and Assumed Liabilities is currently being conducted in
accordance with all applicable material federal, state, and local laws,
ordinances, statutes and codes, rules and regulations, orders, permits and
judgments (collectively, the "Laws") of all governmental authorities.
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SECTION 6.5. LEGAL PROCEEDINGS. There are no actions, suits, or
-----------------
proceedings, whether civil, criminal or administrative, pending or, to the
Knowledge of Seller threatened as of the date of this Agreement against or
affecting Seller which could reasonably be deemed to have the effect of
preventing or materially delaying Seller from performing its obligations under
this Agreement in all material respects.
SECTION 6.6. TITLE TO PURCHASED ASSETS. Seller is the lawful owner of
-------------------------
each of the Purchased Assets and has the right to sell, convey, transfer, assign
and deliver to Purchaser all of the Purchased Assets.
SECTION 6.7. NO BROKER. No broker or finder, or other party or agent
---------
performing similar functions, has been retained by Seller or its Affiliates or
is entitled to be paid based on any arrangements, agreements or understandings
made by Seller or its Affiliates in connection with the transactions
contemplated hereby, and no brokerage fee or other commission has been agreed to
be paid by Seller or its Affiliates on account of such transactions, except that
Seller has engaged, and will pay a fee to Sandler X'Xxxxx & Partners L.P. in
accordance with the terms of a letter agreement between Sandler X'Xxxxx &
Partners L.P. and Seller, dated January 30, 2006, a true and correct copy of
which has been previously made available by Seller to Purchaser.
SECTION 6.8. DEPOSIT LIABILITIES. All of the Deposit Liabilities were
-------------------
originated and maintained and are in material compliance with the documents
governing the relevant type of deposit account and with all applicable federal
and state laws, rules, regulations, orders, judgments, injunctions, decrees and
awards. None of the Deposit Liabilities are brokered deposits. Seller has
delivered to Purchaser a true and correct copy of the current account forms for
each of the types of Deposit Liabilities offered by Seller out of the Branch.
SECTION 6.9. LIMITATIONS ON AND DISCLAIMER OF REPRESENTATIONS AND
----------------------------------------------------
WARRANTIES AND PURCHASER'S RELEASE IN CONNECTION THEREWITH. Except as otherwise
----------------------------------------------------------
addressed in this Article VI, notwithstanding anything to the contrary contained
herein or in any other document or agreement delivered in connection herewith,
Seller makes no representations or warranties to Purchaser as to whether, or the
length of time during which, any accounts relating to Deposit Liabilities will
be maintained by the owners of such Deposit Liabilities after the Transfer Date.
SECTION 6.10. ASSUMED LIABILITIES. The Deposit Liabilities to be
-------------------
assumed by the Purchaser are insured by the FDIC through the Deposit Insurance
Fund to the extent permitted by law, and all premiums and assessments required
to be paid as of the date hereof in connection therewith have been paid by
Seller.
SECTION 6.11. REGULATORY MATTERS.
------------------
(a) The execution, delivery and performance of this Agreement and the
other agreements to be entered into in connection herewith by Seller do not and
will not require any consent, approval, authorization or other order of, action
by, filing or registration with or notification to any governmental authority
except as set forth on Schedule 6.11(a) hereto ("Regulatory Approvals").
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(b) There are no pending, or to the Knowledge of Seller, threatened
disputes or controversies between Seller and any federal, state or local
governmental authority that would reasonably be expected to prevent or
materially delay Seller from being able to perform its respective obligations
under this Agreement, or would reasonably be expected to impair the validity or
consummation of this Agreement or the transactions contemplated hereby. Seller
has not received any indication from any governmental authority that such
governmental authority would oppose or refuse to grant or issue its consent or
approval, if required, with respect to the transactions contemplated hereby. As
of the date hereof, Seller has no reason to believe that it will not be able to
obtain the consent or approval required by Section 5.2 of this Agreement.
SECTION 6.12 ACCURACY OF BOOKS AND RECORDS. To the knowledge of Seller,
-----------------------------
the books and records are true and accurate in all respects and have been
maintained in accordance with GAAP.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
SECTION 7.1. ORGANIZATION. Purchaser is a federal savings bank duly
------------
organized and validly existing under the laws of the United States of America
with full power and authority to conduct a banking business as now conducted by
it and to acquire the Purchased Assets and assume the Assumed Liabilities.
SECTION 7.2. AUTHORITY. Purchaser has the power and authority to enter
---------
into and perform this Agreement and any instruments or other documents executed
pursuant hereto. This Agreement and any other documents or instruments executed
pursuant hereto, and the execution, delivery and performance hereof and thereof
have been duly authorized and approved by all necessary corporate action on the
part of Purchaser, and this Agreement and the instruments and documents executed
pursuant hereto constitute, or when executed will constitute, the valid and
binding obligations of Purchaser, enforceable against Purchaser in accordance
with their terms, except as enforcement may be limited by receivership,
conservatorship and supervisory powers of bank regulatory agencies generally as
well as by bankruptcy, insolvency, reorganization, moratorium or other laws of
general applicability relating to or affecting creditors' rights, or the
limiting effect of rules of law governing specific performance, equitable relief
and other equitable remedies or the waiver of rights or remedies.
SECTION 7.3. NON-CONTRAVENTION. The execution and delivery of this
-----------------
Agreement and the instruments and documents executed pursuant hereto by
Purchaser do not and, subject to the receipt of all Regulatory Approvals and
consents, the consummation of the transactions contemplated by this Agreement
will not constitute (a) a material breach or violation of or default under any
law, rule, regulation, judgment, order, governmental permit or license of
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Purchaser or to which Purchaser is subject, or (b) a breach or violation of or a
default under the organization certificate or bylaws of Purchaser or, to the
Knowledge of Purchaser, any material contract to which Purchaser is a party or
by which it is bound, which breach, violation or default would be likely to
prevent or materially delay Purchaser from being able to perform its obligations
under this Agreement in all material respects.
SECTION 7.4. LEGAL PROCEEDINGS. There are no actions, suits, or
-----------------
proceedings, whether civil, criminal or administrative, pending or, to the
Knowledge of Purchaser threatened as of the date of this Agreement against or
affecting Purchaser which could reasonably be deemed to have the effect of
preventing or materially delaying Purchaser from performing its obligations
under this Agreement in all material respects.
SECTION 7.5. REGULATORY MATTERS.
------------------
(a) The execution, delivery and performance of this Agreement and the
other agreements to be entered into in connection herewith by Purchaser do not
and will not require any Regulatory Approvals except as set forth on Schedule
--------
6.11(a) hereto.
------
(b) There are no pending, or to the Knowledge of Purchaser, threatened
disputes or controversies between Purchase and any federal, state or local
governmental authority that would reasonably be expected to prevent or
materially delay Purchaser from being able to perform its respective obligations
under this Agreement, or would reasonably be expected to impair the validity or
consummation of this Agreement or the transactions contemplated hereby.
Purchaser has not received any indication from any governmental authority that
such governmental authority would oppose or refuse to grant or issue its consent
or approval, if required, with respect to the transactions contemplated hereby.
Purchaser believes that it can satisfy all capital and other regulatory
requirements necessary to obtain all Regulatory Approvals.
(c) The deposits of Purchaser are insured by the FDIC through the
Deposit Insurance Fund to the extent permitted by law, and all premiums and
assessments required to be paid as of the date hereof in connection therewith
have been paid by Purchaser.
(d) As of the date hereof, without giving effect to the transactions
contemplated hereby, and following the transactions contemplated hereby, (i)
Purchaser is at least "adequately capitalized," as defined in the FDIA and in
the regulations of the Office of Thrift Supervision, (ii) neither Purchaser nor
any of its Affiliates has been advised by its primary federal banking
supervisory agency that Purchaser or its Affiliates is deemed to be in troubled
condition, and (iii) Purchaser meets all capital requirements, standards and
ratios required by each state or federal bank regulator with jurisdiction over
Purchaser, including without limitation, any such higher requirement, standard
or ratio as applies to institutions engaging in the acquisition of insured
institution deposits, assets or branches, and no such regulator is likely to, or
has indicated that it will, condition any of the Regulatory Approvals upon an
increase in Purchaser's capital or compliance with any capital requirement,
standard or ratio.
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(e) To the knowledge of Purchaser, it will not be required to divest
any of the Purchased Assets or Assumed Liabilities or any other asset or
liability as a condition to the receipt of any of the Regulatory Approvals.
(f) Purchaser was rated "Satisfactory" or "Outstanding" following its
most recent CRA examination by the regulatory agency responsible for its
supervision. Purchaser has received no notice of and has no knowledge of any
planned or threatened objection by any community group to the transactions
contemplated hereby.
SECTION 7.6. CAPITAL AVAILABLE. Purchaser has sufficient capital to
-----------------
support the acquisition of the Purchased Assets and the assumption of the
Assumed Liabilities and to perform Purchaser's other obligations hereunder and
under any of the other documents executed in connection herewith and Purchaser's
ability to purchase the Purchased Assets and to assume the Assumed Liabilities
and to perform Purchaser's other obligations hereunder is not contingent on
raising any equity capital, obtaining specific financing thereof, or obtaining
the consent of any lender.
ARTICLE VIII
COVENANTS OF SELLER
Seller covenants and agrees with Purchaser as follows:
SECTION 8.1. CONDUCT OF THE SELLER'S BUSINESS. (a) From the date hereof
--------------------------------
through the Closing Date, Seller shall (i) conduct its business with respect to
the Deposit Liabilities in the usual, regular and ordinary course consistent
with Law and past practice, (ii) use commercially reasonable efforts to maintain
and preserve intact its relationships generally with its Customers and (iii)
take all commercially reasonable actions to maintain the Branch and property in
the condition it existed in at the date of this Agreement, normal wear and tear
excepted; provided, however, that Seller shall be under no obligation to
advertise or promote new or substantially new customer services in the principal
market area of, or for the benefit of, the Branch; provided, further, that
Seller shall pay interest on the Deposit Liabilities at rates which are
determined in the ordinary course of business consistent with Seller's past
practices.
(b) Except as may be required by regulatory authorities, Seller shall
not, without the prior consent of Purchaser: (i) transfer to Seller's other
branches any Deposit Liabilities at the Branch (or transfer deposits to the
Branch from any other of Seller's branches) except upon the unsolicited request
of a depositor in the ordinary course of business; (ii) transfer, assign,
encumber or otherwise dispose of or enter into any contract, agreement or
understanding, or negotiate with any party with respect to entering into a
contract, agreement or understanding, to transfer, assign, encumber or otherwise
dispose of any or all of the Deposit Liabilities except in the ordinary course
of business or pursuant to this Agreement; (iii) offer to pay or pay on any
Deposit Liabilities at the Branch any rate that would deviate materially from
Seller's historical pricing practices and which is higher than that generally
offered by Seller on similar products at other offices of Seller; or (iv) reduce
fees on deposit accounts at the Branch below fees charged on similar deposit
products at other offices of Seller.
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(c) Between the date hereof and the Closing Date, Seller shall promptly
advise Purchaser in writing of any fact that, if existing or known as of the
date hereof, would have made any of the representations contained herein
inaccurate or untrue in any material respect.
SECTION 8.2. REGULATORY APPROVALS. Seller shall use its commercially
--------------------
reasonable efforts to assist Purchaser in obtaining the Regulatory Approvals.
Seller shall provide Purchaser or the appropriate governmental authorities with
all information reasonably required to be submitted by Seller in connection with
the Regulatory Approvals.
SECTION 8.3. TRANSFER OF DATA. Seller acknowledges that Purchaser will
----------------
utilize electronic records to convert all of the account data regarding the
Deposit Liabilities. Seller will use its commercially reasonable efforts to
provide Purchaser with a file that contains electronic records in a format that
may be utilized in an automated process that opens the accounts on the
Purchaser's system (the "Electronic Records"). From the date hereof through the
Closing Date, Seller shall cooperate and work with Purchaser to complete the
tasks required to facilitate the conversion of the Deposit Liabilities. Such
tasks include, but are not limited to, providing Purchaser with updated reports
and other items as are necessary to complete the conversion process and related
testing procedures. Seller shall provide (i) a written report to Purchaser, in a
format acceptable to Purchaser, detailing account data regarding the Deposit
Liabilities on the Closing Date; and (ii) within thirty (30) calendar days from
the date hereof, Seller shall provide Purchaser with initial reports and related
documentation of the Deposit Liabilities in a format acceptable to Purchaser.
Seller agrees to reasonably cooperate in resolving any conversion-related issues
arising from the conversion of the Deposit Liabilities for a period of ninety
(90) calendar days following the date that the conversion is completed.
SECTION 8.4. FORMS. No later than the date of this Agreement, Seller
-----
will have provided Purchaser with copies of the forms of signature cards,
deposit account forms, Regulation E disclosures, Truth-in-Savings disclosures,
deposit account agreements, and XXX trust agreements and beneficiary
designations, as well as the forms of any other instruments or agreements
presently in use at the Branch in connection with the Deposit Liabilities. For
purposes of this paragraph, all referenced documents shall be the forms used by
Seller as of the date of this Agreement for new customers. Completed and
executed forms of such documents for each respective depositor maintaining an
account included within the Deposit Liabilities shall be provided to Purchaser
on the Closing Date.
SECTION 8.5. INTEREST INFORMATION. Seller hereby covenants and agrees
--------------------
that within thirty (30) days of the Closing Date, it will provide Purchaser with
a report of all interest credited to, interest withheld from, and early
withdrawal penalties charged to the Deposit Liabilities from the first day of
the calendar year of closing through the Closing Date. Such report will be
provided in a form reasonably acceptable to Purchaser that will enable Purchaser
to issue the reports required to be furnished to depositors under Section 13.1
of this Agreement.
SECTION 8.6. NON-SOLICITATION. For a period of one (1) year following
----------------
the Closing Date, Seller shall not solicit by direct mail or telephone the
deposits of any person who on the Closing Date had a deposit account with Seller
solely at the Branch; provided, however, that the
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foregoing shall not limit the right of Seller to advertise or solicit for
banking business from the public generally.
ARTICLE IX
COVENANTS OF PURCHASER
Purchaser covenants and agrees with Seller as follows:
SECTION 9.1. REGULATORY APPROVALS AND STANDARDS
----------------------------------
(a) Purchaser will use its commercially reasonable efforts to obtain as
expeditiously as possible the Regulatory Approvals and will use its commercially
reasonable efforts to file within fifteen (15) calendar days, and in no event
later than thirty (30) calendar days, after the execution of this Agreement all
necessary applications of Purchaser to obtain the Regulatory Approvals.
Purchaser will use its best efforts to supply to Seller, at least two (2)
Business Days prior to filing, copies of all proposed regulatory applications
and filings (other than confidential portions thereof) and will use reasonable
efforts to reflect any comments of Seller in such filings. As of the Closing
Date, Purchaser will satisfy any and all of the standards and requirements
reasonably within its control imposed as a condition to obtaining or necessary
to comply with the Regulatory Approvals. Purchaser shall pay any fees charged by
any governmental authorities to which it must apply to obtain any of the
Regulatory Approvals. Purchaser shall take no action which would adversely
affect or delay the ability of any other party hereto to obtain any Regulatory
Approval or to perform its covenants and agreements under this Agreement.
Purchaser shall notify Seller promptly (and in no event later than one Business
Day following notice) of any significant development with respect to any
application or notice Purchaser files with any governmental authority in
connection with the transactions contemplated by this Agreement.
(b) From the date hereof through the Transfer Date, the Purchaser shall
(i) remain at least "adequately capitalized," as defined in the FDIA, (ii) meet
all capital requirements, standards and ratios required by each federal bank
regulator with jurisdiction over the Purchaser, including without limitation,
any such higher requirement, standard or ratio as shall apply to institutions
engaging in the acquisition of insured institution deposits, assets or branches
and (iii) maintain at least "satisfactory" CRA ratings.
SECTION 9.2. SOLICITATION OF ACCOUNTS. Prior to the Closing Date,
------------------------
neither Purchaser nor any of its Affiliates shall solicit Customers through
advertising specifically referencing or targeted to such Customers nor transact
their respective businesses in such a way which is reasonably likely to (a)
induce such Customers to close Deposit Liability accounts and open deposit
accounts directly with Purchaser or any of its Affiliates, or (b) result in the
transfer of all or a portion of an existing Liability from Seller.
SECTION 9.3. RECORDING OF INSTRUMENTS OF ASSIGNMENT. No later than six
--------------------------------------
months following the Closing Date, Purchaser shall have recorded all other
instruments required,
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necessary or reasonably desirable to evidence the acquisition, assignment and
assumption of the Purchased Assets and the Assumed Liabilities.
SECTION 9.4. OTHER TRANSACTIONS. From the date of this Agreement until
------------------
the earlier of the Closing Date or the date of termination of this Agreement,
Purchaser covenants and agrees that it shall not take any action which would
materially adversely affect or delay the consummation of the transactions
contemplated by this Agreement.
ARTICLE X
ACCESS; AND CUSTOMER COMMUNICATIONS
SECTION 10.1. ACCESS BY PURCHASER. Upon execution of this Agreement,
-------------------
Seller shall provide Purchaser and its representatives, accountants and counsel
reasonable access during normal business hours and upon one (1) Business Day
notice to Seller to the depository records and all other documents and other
information concerning the Purchased Assets and the Assumed Liabilities as
Purchaser may reasonably request. Notwithstanding the foregoing, in no event
shall Seller be required to provide (a) any information which Seller, in its
sole discretion deems proprietary, including without limitation, Seller's
"credit scoring" system, branch or credit practices, policies or procedures, or
staffing models, (b) any information, which is protected by attorney-client
privilege, or (c) its or any of its Affiliates' tax returns.
SECTION 10.2. COMMUNICATIONS WITH CUSTOMERS.
-----------------------------
(a) Following the Final Approval Date, Purchaser shall send statements
to the Customers announcing the transactions contemplated hereby (such
statements being herein called "Customer Notices"). The form and content of each
----------------
Customer Notice shall be subject to the approval of both parties and the cost of
printing and mailing the Customer Notices shall be borne solely by Purchaser.
Following the Final Approval Date, Purchaser shall also be entitled to provide
solely at its own expense such other notices or communications to Customers
relating to the transactions contemplated hereby as may be required by law;
provided that the text of any such notice or communication and the timing of
such notice or communication which is provided prior to the Closing shall be
approved in advance by Seller, which approval shall not unreasonably be withheld
or delayed.
(b) Except as specifically provided herein, in no event will Purchaser
or its Affiliates contact any Customers prior to the Final Approval Date without
the prior written consent of Seller which may be granted or withheld in its sole
discretion; provided that Purchaser may contact Customers in connection with (i)
advertising, solicitations or marketing campaigns not primarily directed to or
targeted at Customers, (ii) lending, deposit, safe deposit, trust or other
financial services relationships of Purchaser with Customers through branch
offices of Purchaser existing as of the date hereof, (iii) unsolicited inquiries
by Customers to Purchaser with respect to banking or other financial services
provided by Purchaser, and (iv) notices or communications relating to the
transactions contemplated hereby in accordance with the provisions hereof.
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ARTICLE XI
TRANSITIONAL MATTERS
SECTION 11.1. PAYMENT OF DEPOSIT LIABILITIES.
------------------------------
(a) From and after the Closing Date, Purchaser shall (i) pay all
properly drawn and presented checks, negotiable orders of withdrawal, drafts,
debits and other withdrawal orders presented to Purchaser by Deposit Liability
account customers, whether drawn on checks, negotiable orders of withdrawal,
drafts, or other withdrawal order forms provided by Seller or by Purchaser and
(ii) in all other respects discharge, in the usual course of the banking
business, all of the duties and obligations of Seller with respect to the
balances due and owing to the Customers who have Deposit Liability accounts. If
any Customer who has a Deposit Liability account draws checks, drafts, or
negotiable orders of withdrawal against the Deposit Liabilities which are
presented or delivered to Seller not later than forty-five (45) days after the
Closing Date, Seller shall use its commercially reasonable efforts to batch all
such checks, drafts, negotiable orders of withdrawal, or other withdrawal order
forms and to deliver the same to Purchaser at Purchaser's sole reasonable
expense. Purchaser acknowledges that any delay, failure, or inability on its
part to comply with the obligations imposed upon it as a depository institution
under applicable federal or state law, with regard to such checks, drafts,
negotiable orders of withdrawal or other withdrawal orders shall not result in
any liability or obligation of Seller and shall not affect any of the rights of
Seller under this Agreement. Seller shall not be deemed to have made any
representations or warranties to Purchaser with respect to any such checks,
drafts, negotiable orders of withdrawal or other withdrawal orders and any such
representations or warranties implied by law are hereby disclaimed and are the
responsibility of Purchaser, except that Seller shall be chargeable with the
warranties and representations implied by law with respect to any such check,
draft, negotiable orders of withdrawal order, or other withdrawal order, which
is paid by Seller over the counter.
(b) Purchaser hereby acknowledges that if, after the Closing Date, any
Customer who has a Deposit Liability account, instead of accepting the
obligation of Purchaser to pay the Deposit Liabilities (including Accrued
Interest thereon) shall demand payment from Seller for all or any part of any
such Deposit Liabilities (including Accrued Interest thereon), Seller shall not
be liable or responsible for making such payment.
(c) It is Seller's intent to act in a commercially reasonable manner to
ensure that all Deposit Liability transactions will be referred to Purchaser;
provided however that, if, after the Closing Date, Seller honors and pays any
Deposit Liabilities which are presented to Seller for payment, or pays any
check, draft, negotiable order of withdrawal or other withdrawal order,
Purchaser shall upon demand by Seller reimburse Seller for such payment;
provided, however, that Seller shall reimburse Purchaser for any payments made
by Purchaser to Seller under this Section 11.1(c) as a result of Seller honoring
and paying a fraudulent check, draft, negotiable order of withdrawal or other
withdrawal order. Any payment made under this Section 11.1 shall be made within
three (3) Business Days after demand by Seller, by wire transfer of immediately
available funds to an account designated by Seller.
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(d) Seller will deliver to Purchaser at Closing a schedule of holds and
stop-payments placed on particular Deposit Liability accounts or individual
checks at the Branch and the terms of such holds. Except as otherwise required
by applicable law, Purchaser will continue such holds and stop-payments under
the same terms Seller shows on the schedule of holds and stop-payments.
SECTION 11.2. DELIVERY OF PURCHASER'S CHECK FORMS. Following the Final
-----------------------------------
Approval Date, but not less than five (5) days prior to the Closing Date,
Purchaser shall, at its sole cost and expense, notify all Customers who have a
Liability account, in a form reasonably acceptable to Seller, of Purchaser's
assumption of the Deposit Liabilities (which shall include a notification to
those Liability account Customers whose accounts are then covered by any type of
overdraft protection offered by Seller, that from and after the Closing Date all
such overdraft protection from Seller shall terminate) and furnish each such
Customer with checks, deposit tickets, or other similar instruments using the
forms of Purchaser, which shall be appropriately encoded with Purchaser's
routing number and with accurate account numbers, and with instructions to the
Customer to utilize such checks, deposit tickets, or other similar instruments
on Purchaser's forms on and after the Closing Date and thereafter to destroy any
unused checks on Seller's forms; such notice and such delivery of checks by
Purchaser shall be by first class U.S. mail. Within thirty (30) calendar days
after the execution of the Agreement, Seller will provide Purchaser all
necessary information for Purchaser to supply such checks, deposit tickets or
other similar instruments.
SECTION 11.3. UNCOLLECTED CHECKS RETURNED TO SELLER. From and after the
-------------------------------------
Closing Date, Purchaser shall promptly pay to Seller an amount equivalent to the
amount of any checks, negotiable orders of withdrawal, drafts, or any other
withdrawal orders (net of the applicable deposit premium paid by Purchaser with
respect to the Deposit Liabilities represented by any such instrument) credited
as of the close of business on the Closing Date to any Deposit Liability
accounts which are returned uncollected to Seller after the Closing Date and
which shall include an amount equivalent to holds placed upon such Deposit
Liability accounts for Items cashed by Seller (net of the applicable deposit
premium paid by Purchaser with respect to the Deposit Liabilities represented by
any such instrument), as of the close of business on the Closing Date which
Items are subsequently dishonored; provided, however, that if Seller shall have
failed to make or properly reflect in the information provided to Purchaser any
provisional credit or hold on any such Liability accounts in respect of
uncollected funds represented by any such item, Purchaser's obligations under
this Section 11.3 in respect of such Item shall be limited to the amount of
collected funds in such Liability accounts.
SECTION 11.4. NEW ATM/DEBIT CARDS. Purchaser shall, following the Final
-------------------
Approval Date, but no later than three (3) days prior to the Closing Date,
furnish ATM/Debit cards to Customers who have Liability accounts and Seller
ATM/Debit cards to replace Seller's ATM/Debit cards. Purchaser shall, no later
than three (3) days prior to the Transfer Date, notify affected Customers to
destroy Seller's ATM/Debit cards as of the Transfer Date and shall notify such
Customers of Purchaser's withdrawal limits immediately following the Closing by
form of notice reasonably acceptable to Seller.
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SECTION 11.5. DEACTIVATION OF ATM AND ATM/DEBIT CARDS. On the Transfer
---------------------------------------
Date, Seller shall deactivate all ATM/Debit cards issued with respect to all
Deposit Liability accounts and shall electronically block access of those cards
to the Deposit Liability accounts, and shall deactivate the ATM as promptly as
possible following the Closing, but in no event later than 8:00 a.m. on the day
after the Closing Date. Point of sale transactions shall be settled between
Purchaser and Seller for a period of forty-five (45) days after the Closing
Date.
SECTION 11.6. ACTIONS WITH RESPECT TO XXX DEPOSIT LIABILITIES.
-----------------------------------------------
(a) On or before the Closing Date, except as otherwise provided in this
Section 11.6(a), Seller shall (i) resign as of the close of business on the
Closing Date as the trustee or custodian, as applicable, of each XXX that holds
any Deposit Liability of which it is the trustee or custodian, (ii) to the
extent permitted by the documentation governing each such XXX and applicable
law, appoint Purchaser as successor trustee or custodian, as applicable, of each
such XXX, and Purchaser hereby accepts each such trusteeship or custodianship
under the terms and conditions of Purchaser's plan documents for its XXX, and
assumes all fiduciary and custodial obligations with respect thereto as of the
close of business on the Closing Date, and (iii) deliver to the XXX grantor or
named fiduciary of each such XXX such notice of the foregoing as is required by
the documentation governing each such XXX or applicable law. Purchaser shall be
solely responsible for delivering its XXX documents to the applicable XXX
grantor or named fiduciary, including but not limited to a beneficiary
designation form to be completed by the applicable XXX grantor; provided,
however, that in the event that an XXX grantor dies before such time as
Purchaser receives a properly completed beneficiary designation form, Seller
shall make available to Purchaser such information as may exist in Seller's
files regarding any beneficiary designation it may have regarding such decedent.
If, pursuant to the terms of the documentation governing any such XXX or
applicable law, (X) Seller is not permitted to appoint Purchaser as successor
trustee or custodian, or the XXX grantor or named fiduciary objects in writing
to such designation, or is entitled to, and does, in fact, name a successor
trustee or custodian other than Purchaser, or (Y) such XXX includes assets which
are not Deposit Liabilities and are not being transferred to Purchaser or the
assumption of such Deposit Liabilities included in such XXX would result in a
loss of qualification of such XXX under the Code or applicable IRS regulations,
Seller shall not take the actions specified in the first sentence of this
Section 11.6(a) and all Deposit Liabilities of Seller held under such XXX shall
be excluded from the Deposit Liabilities (such excluded Deposit Liabilities
being herein called the "Excluded XXX Deposits"). Upon appointment as a
successor custodian for such XXX Deposit Liabilities or as a successor trustee
for such IRAs, Purchaser shall perform the services and carry out the duties and
obligations required of it under the applicable plans, the Code and applicable
Federal and state laws and regulations.
(b) To the extent the Deposit Liabilities include certain IRAs that are
required to make certain periodic distributions to the XXX account owner (or
beneficiary) either at the account owner's or participant's request or because
the account owner or participant has attained age 70-1/2, effective as of the
Transfer Date, Purchaser agrees to continue to make such periodic distributions
in accordance with the reasonable distribution instructions forwarded by Seller
to Purchaser. Purchaser hereby assumes the obligation to pay each minimum
distribution required by federal law by December 31 of the calendar year in
which the Closing occurs and, in
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consideration thereof, Seller agrees not to withhold the amount of such
distributions from the aggregate amount of the Deposit Liabilities.
(c) Prior to the Closing Date, Seller shall provide to Purchaser copies
of all plan documents and beneficiary designation forms in Seller's possession
with respect to the IRAs included in the Deposit Liabilities.
SECTION 11.7. BULK TRANSFER LAWS. Seller and Purchaser hereby waive
------------------
compliance with any applicable bulk transfer laws.
SECTION 11.8 PROCESSING OF ELECTRONIC ITEMS. Seller will provide
------------------------------
Purchaser, at least twenty (20) Business Days prior to Closing Date, the list of
Automated Clearing House ("ACH") entries for electronic transfer accounts
domiciled at the Branch. Purchaser shall continue such ACH arrangements and such
recurring debit arrangements as are originated and administered by third parties
and for which Purchaser need act only as processor. Purchaser shall have no
obligation to continue any such arrangements that were originated and
administered by Seller and Seller shall terminate such arrangements on or prior
to the Closing Date. Within five (5) days after the Closing Date, Purchaser
shall notify ACH originators with respect to Deposit Liabilities to change the
routing numbers and account numbers from those of Seller to those of Purchaser.
Seller will continue to accept and forward to Purchaser ACH entries and
corresponding funds and notifications of changes to ACH originators for sixty
(60) calendar days following Closing. Seller agrees that any daily magnetic
tapes or electronic transmissions provided to an agent for processing designated
by Purchaser shall include a record of all such recurring ACH transfers received
by Seller on the previous Business Day. After the sixty (60) day period, Seller
may discontinue accepting and forwarding ACH entries and funds and return them
to the originators marked "Account Closed."
SECTION 11.9 ACCOUNT STATEMENTS. Within thirty (30) calendar days after
------------------
the Closing Date, Seller, at its own expense, shall mail to each holder of a
Deposit Liability a final account statement as of the close of business on the
Closing Date.
ARTICLE XII
CONDITIONS TO CLOSING
SECTION 12.1. CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of
-----------------------------------
Seller under this Agreement are subject to the satisfaction (or, if applicable,
waiver in the sole discretion of Seller, except as to the condition described in
Section 12.1(c) and Section 12.1(d)) on or before the Closing Date, of each of
the following conditions:
(a) All of the covenants and other agreements required by this
Agreement to be complied with and performed by Purchaser on or before the
Closing Date shall have been duly complied with and performed in all material
respects;
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(b) The representations and warranties made by Purchaser herein or in
any certificate or other document delivered pursuant to the provisions hereof or
in connection with the transactions contemplated hereby shall be true and
correct in all material respects on and as of the Closing Date, with the same
force and effect as though such representations and warranties had been made on
the Closing Date, disregarding for these purposes any qualification or exception
for, or reference to, materiality in any such representation or warranty;
(c) All Regulatory Approvals shall have been obtained and shall be
Final;
(d) No court or governmental or regulatory authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect to enjoin, or which
prohibits, consummation of the transactions contemplated hereby; and
(e) Seller shall have received the items to be delivered by Purchaser
pursuant to Section 5.3.
SECTION 12.2. CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations
--------------------------------------
of Purchaser under this Agreement are subject to the satisfaction (or, if
applicable, waiver in the sole discretion of Purchaser, except as to the
condition described in Section 12.2(c)) on or before the Closing Date, of each
of the following conditions:
(a) All of the covenants and agreements required by this Agreement to
be complied with and performed by Seller on or before the Closing Date shall
have been duly complied with and performed in all material respects;
(b) The representations and warranties made by Seller herein or in any
certificate or other document delivered pursuant to the provisions hereof or in
connection with the transactions contemplated hereby shall be true and correct
in all material respects on and as of the Closing Date, with the same force and
effect as though such representations and warranties had been made on the
Closing Date, disregarding for these purposes any qualification or exception
for, or reference to, materiality in any such representation or warranty;
(c) The Regulatory Approvals shall have been obtained and shall be
Final;
(d) No court or governmental or regulatory authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect to enjoin, or which
prohibits, consummation of the transactions contemplated hereby; and
(e) Purchaser shall have received the items to be delivered by Seller
pursuant to Section 5.2.
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ARTICLE XIII
DATA PROCESSING
SECTION 13.1. CONVERSION. Seller and Purchaser shall, before and after
----------
the Closing Date, cooperate in good faith to ensure the orderly and efficient
transfer and conversion of the Purchased Assets and Assumed Liabilities as
provided herein to Purchaser's ownership and operation. The provisions of this
Article shall apply unless other provisions to accomplish the same results are
agreed to by the parties in order to reduce costs, increase efficiency or
expedite operations.
(a) Electronic Records. Upon Purchaser's written request, Seller will
------------------
provide Purchaser with copies of the Electronic Records of each Deposit
Liability (each, an "Account").
(b) Statement of Accounts. Seller shall, at its sole expense, prepare
---------------------
and distribute all statements regarding the Accounts as of the Closing Date.
Seller shall be responsible for all accrued interest and accrued fees on such
Accounts as of the Closing Date and shall prorate fees and charges on such
Accounts as of the Closing Date.
(c) Account Histories: Checks. Within ten (10) business days after the
-------------------------
Closing Date, Seller shall provide Purchaser with a copy of all account
histories at Seller's expense. For the purpose of this Agreement, the term
"Account Histories" means a copy of the last statement Seller cuts on the
Closing Date and a complete history of IRA's.
(d) Payment Items. Purchaser shall establish a correspondent account
-------------
with Seller prior to the Closing. Then, for a period of forty-five (45) days
after the Closing Date, Seller shall forward to Purchaser all items presented to
Seller for payment against the Accounts ("Payment Items") on the next business
day after such Payment Items are received. Seller will deduct payment for these
items from Purchaser's correspondent account held by Seller. Seller shall notify
Purchaser by noon each day of the items presented to Seller for payment against
the Accounts and Purchaser shall wire funds sufficient to cover the items
presented to the Purchaser each day to the Purchaser correspondent account held
by Seller. Purchaser shall issue Payment Items bearing Purchaser's routing
transit and account number to Account customers within ten (10) business days
following the Closing Date. These items shall replace items issued with Seller's
identification on them. Seller shall have no obligation to pay such Payment
Items and Seller shall use its commercially reasonable efforts not to return any
Payment Item.
(e) Magnetic Tape. In the event Purchaser is unable to utilize the
-------------
Electronic Records to automate the account opening process on the Purchaser's
system, and upon Purchaser's written request, Seller shall provide Purchaser
with a magnetic tape of all Account information. Seller will bear all costs
associated with the creation of the tape.
(f) Deposit Interest Reporting and Withholding. With respect to the
------------------------------------------
Deposit Liabilities assumed by Purchaser pursuant to this Agreement, Purchaser
shall be responsible for reporting to the customer and to the IRS (and any state
or local taxing authority as required by law) all interest paid during calendar
year 2007. In order to assist Purchaser, Seller will provide Purchaser at
Settlement with a schedule identifying each account that is a Deposit Liability
and
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the interest accrued on that account to the Closing Date. Any amounts required
by any governmental agencies to be withheld from any of the Accounts through the
Closing Date will be withheld by Seller in accordance with applicable law or
appropriate notice from any governmental agency and will be remitted by Seller
to the appropriate agency on or prior to the applicable due date. Any such
withholding required to be made subsequent to the Closing Date shall be withheld
by Purchaser in accordance with applicable law or the appropriate notice from
any governmental agency and will be remitted by Purchaser to the appropriate
agency on or prior to the applicable due date. Promptly after the Closing Date,
but in no event later than the date such amounts are required to be remitted to
the applicable governmental agency, Seller will pay to Purchaser that portion of
any sums theretofore withheld by Seller from any of the Accounts which are or
may be required to be remitted by Purchaser pursuant to the foregoing and shall
directly remit to the applicable governmental agency that portion of any such
sums which are required to be remitted by Seller. Seller shall be responsible
for delivering to payees all IRS notices received by Seller that are required to
be delivered with respect to the Accounts, and Purchaser shall be responsible
for delivery to payees all such notices received by Purchaser that are required
to be delivered with respect to the Accounts. Seller shall deliver to Purchaser,
on or before the Closing Date, a list of all "B" notices (TINs do not match) and
"C" notices (underreporting/IRS imposed withholding) issued by the IRS imposing
withholding restrictions, relating to the Accounts. Seller shall continue to
provide Purchaser with notice of such IRS notices it receives regarding Account
customers for a period of one hundred and twenty (120) days from the Closing
Date. All notices received by Seller from the IRS releasing withholding
restrictions on accounts will be forwarded promptly to Purchaser. Seller agrees
to indemnify Purchaser in an amount equal to any penalty and interest imposed
upon Purchaser by the IRS or state taxing authority or properly self-assessed by
Purchaser on IRS Form 8210 or corresponding state form which Purchaser is
thereafter required to, and does, pay to the IRS or state taxing authority,
where such penalty and interest arises out of actions taken or omitted to be
taken by Purchaser in reliance upon information provided by Seller under this
subsection (f), and such penalty and interest does not result from an act or
omission of Purchaser not made in reliance upon such information.
(g) Returned Items. Any item credited for deposit to an Account on or
--------------
prior to the Closing Date and returned unpaid within sixty (60) days after the
Closing Date (each a "Returned Item") will be handled as provided in this
subsection (g). If Seller's bank account is charged for the Returned Item and if
there are sufficient funds in the Account to which such Returned Item was
credited or any other Accounts on deposit at the Branch or accounts at any other
branch office of Purchaser standing in the name of the party liable for such
Returned Item, upon proper identification of such party, Seller shall
immediately notify Purchaser and Purchaser will debit any or all such accounts
in an amount equal in the aggregate, net of any premium associated with such
Returned Item paid by Purchaser pursuant to Section 3.1, to the Returned Item
and shall repay that amount to Seller. Any Returned Item returned unpaid after
the 60-day period will be the responsibility of the Purchaser, except that for
"a period of time" after the Closing Date, checks drawn on the United States
Treasury, checks issued by state governments and municipalities, and checks
returned for endorsement irregularities will be the responsibility of Seller. "A
period of time" as used in the preceding sentence shall be the time period
designated under applicable state or federal law with respect to checks drawn on
the United States Treasury, checks issued by state governments and
municipalities, and checks returned for endorsement irregularities, as the case
may be.
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(h) XXX Reporting. Unless applicable law requires Seller to perform
-------------
such reporting responsibility (in which case Seller will perform these tasks),
Purchaser shall prepare and file all required annual reports for all activity
under the XXX accounts transferred to Purchaser, including but not limited to
IRS Form W-2P, IRS Form 1099R, IRS Form 5498, and state tax forms for the
portion of the year of the Closing Date, to and including the Closing Date.
Purchaser shall prepare and file such reports, where applicable, for the balance
of the calendar year of the Closing Date and thereafter. It is further agreed
that Purchaser and Seller will each report their portion of withholding for the
XXX accounts to the appropriate state and federal agencies.
(i) Cooperation on Certain Tax Matters. After the Closing Date, Seller
----------------------------------
and Purchaser shall each use commercially reasonable efforts to (a) assist (and
cause their respective affiliates to assist) the other party in preparing any
tax returns that such other party is responsible for preparing and filing in
accordance with this Agreement; (b) cooperate fully in preparing any audits of
or disputes with taxing authorities regarding any tax returns with respect to
the Deposit Liabilities or payments in respect thereof; (c) make available to
the other and to any taxing authority as reasonably requested all relevant
information, records, and documents relating to taxes with respect to the
Deposit Liabilities or payments in respect thereof; (d) provide timely written
notice to the other of any pending proposed tax audits or assessments with
respect to the Deposit Liabilities or payments in respect thereto for taxable
periods for which the other may have liability under this Agreement; and (e)
furnish the other with copies of all relevant correspondence received from any
taxing authority in connections with any tax audit or information request with
respect to any taxable period referred to in clause (d) above. Notwithstanding
any other provision of this Agreement, the party requesting assistance or
cooperation shall pay the other party's out-of-pocket expenses in complying with
such request to the extent that such expenses are attributable to fees and other
costs of unaffiliated third party service providers.
ARTICLE XIV
INDEMNITY
SECTION 14.1. SELLER INDEMNITY. Seller shall indemnify, hold harmless
----------------
and defend Purchaser, its Affiliates, and their respective successors, permitted
assigns, directors, shareholders, officers, agents and employees from and
against all claims, losses, liabilities, demands and obligations of any nature
whatsoever (including reasonable legal fees and expenses) (collectively,
"Damages") which Purchaser or any of its Affiliates or their respective
-------
successors, permitted assigns, directors, shareholders, officers, agents or
employees shall receive, suffer or incur, arising out of or resulting from:
(a) Any liability of Seller which is not an Assumed Liability;
(b) The breach of any representation or warranty made by Seller in this
Agreement;
(c) The breach of any covenant or other agreement made by Seller in
this Agreement; or
(d) Any actions taken or omitted to be taken by Seller from or after
the Closing Date and relating to the Purchased Assets and the Assumed
Liabilities, and any suits or proceedings commenced in connection therewith
(other than proceedings to prevent or limit the consummation of the transactions
contemplated by this Agreement).
SECTION 14.2. PURCHASER INDEMNITY. Purchaser shall indemnify, hold
-------------------
harmless and defend Seller, its Affiliates and their respective successors,
permitted assigns, directors, shareholders, officers, agents and employees from
and against all Damages which Seller or any of its Affiliates or their
respective successors, permitted assigns, directors, shareholders, officers,
agents or employees shall receive, suffer or incur, arising out of or resulting
from:
(a) Any Assumed Liability;
(b) Any actions taken or omitted to be taken by Purchaser from or after
the Closing Date and relating to the Purchased Assets and the Assumed
Liabilities, and any suits or proceedings commenced in connection therewith
(other than proceedings to prevent or limit the consummation of the transactions
contemplated by this Agreement);
(c) The breach of any representation or warranty made by Purchaser in
this Agreement; or
(d) The breach of any covenant or other agreement made by Purchaser in
this Agreement.
SECTION 14.3. INDEMNIFICATION PROCEDURE. If a party entitled to
-------------------------
indemnification hereunder ("Indemnified Party") is aware that a claim, demand or
-----------------
other circumstance exists that has given or may reasonably be expected to give
rise to a right of indemnification under this Article XIV (whether or not the
amount of the claim is then quantifiable), such Indemnified Party shall promptly
give written notice thereof to the other party ("Indemnitor"), and the
----------
Indemnified Party will thereafter keep the Indemnitor reasonably informed with
respect thereto, provided that failure of the Indemnified Party to give the
Indemnitor prompt notice as provided herein shall not relieve the Indemnitor of
its obligations hereunder except to the extent, if any, that the Indemnitor's
rights shall have been prejudiced or the Indemnitor's liability shall have been
materially increased thereby. In case any such action, suit or proceeding is
brought against an Indemnified Party, the Indemnitor shall be entitled to
participate in (and, in its discretion, to assume) the defense thereof with
counsel reasonably satisfactory to the Indemnified Party; provided, however,
that the Indemnified Party shall be entitled to participate in any such action,
suit or proceeding with counsel of its own choice at the expense of the
Indemnitor if, in the good faith judgment of the Indemnified Party's counsel,
representation by the Indemnitor's counsel may present a conflict of interest or
there may be defenses available to the Indemnified Party which are different
from or in addition to those available to the Indemnitor. In no event shall
Indemnitor be liable for the fees and expenses of more than one counsel,
separate from its own counsel, for all Indemnified Parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same allegations or circumstances. The
Indemnitor will not settle any claim, action, suit or proceeding which would
give rise to the Indemnitor's liability under its indemnity unless such
settlement includes as an unconditional
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term thereof the giving by the claimant or plaintiff of a release of the
Indemnified Party, in form and substance reasonably satisfactory to the
Indemnified Party and its counsel, from all liability with respect to such
claim, action, suit or proceeding. If the Indemnitor assumes the defense of any
claim, action, suit or proceeding as provided in this Section 14.3, the
Indemnified Party shall be permitted to join in the defense thereof with counsel
of its own selection and at its own expense. If the Indemnitor shall not assume
the defense of any claim, action, suit or proceeding, the Indemnified Party may
defend against such claim, action, suit or proceeding in such manner as it may
deem appropriate, provided that an Indemnified Party shall not settle any claim,
action, suit or proceeding which would give rise to the Indemnitor's liability
under its indemnity without the prior written consent of the Indemnitor, which
consent shall not be unreasonably withheld or delayed.
SECTION 14.4. LIMITATION ON LIABILITY. Notwithstanding anything to the
-----------------------
contrary contained in this Article XIV, no party shall be entitled to
indemnification for any breach of any representation or warranty pursuant to
Section 14.1 or Section 14.2 unless and until its aggregate Damages shall be in
excess of $25,000, at which time such party shall be entitled to indemnification
for any amount of its Damages to the extent such Damages exceed such amount. In
no event shall the Damages payable by Seller in the aggregate or by Purchaser in
the aggregate exceed the Purchase Price and in no event shall any party be
entitled to any incidental, consequential, special, exemplary or punitive
Damages except to the extent that the Indemnified Party becomes liable to any
third party for incidental, consequential, special, exemplary or punitive
damages.
SECTION 14.5. GENERAL.
-------
(a) Each Indemnified Party shall be obligated in connection with any
claim for indemnification under this Article XIV to use all commercially
reasonable efforts to obtain any insurance proceeds available to such
Indemnified Party with regard to the applicable claims. The amount which any
Indemnitor is or may be required to pay to any Indemnified Party pursuant to
this Article XIV shall be reduced (retroactively, if necessary) by any insurance
proceeds or other amounts actually recovered (net of any direct relevant
collections costs) by or on behalf of such Indemnified Party in reduction of the
related Damages. If an Indemnified Party shall have received the payment
required by this Agreement from the Indemnitor in respect of Damages and shall
subsequently receive insurance proceeds or other amounts in respect of such
Damages, then such Indemnified Party shall promptly repay to the Indemnitor a
sum equal to the amount of such insurance proceeds or other amounts actually
received (net of any direct relevant collection costs).
(b) In addition to the requirements of paragraph (a) above, each
Indemnified Party shall be obligated in connection with any claim for
indemnification under this Article XIV to use all commercially reasonable
efforts to mitigate Damages upon and after becoming aware of any event which
could reasonably be expected to give rise to such Damages.
(c) Subject to the rights of existing insurers of an Indemnified Party,
an Indemnitor shall be subrogated to any right of action which the Indemnified
Party may have against any
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other Person with respect to any matter giving rise to a claim for
indemnification from such Indemnitor hereunder.
(d) Except for the parties' rights to specific performance and
injunctive relief as described in Section 16.14, the indemnification provided in
this Article XIV shall be the exclusive post-Closing Date remedy available to
any Indemnified Party with respect to any breach of any representation,
warranty, covenant or agreement made by Purchaser or Seller in this Agreement.
The parties hereto further acknowledge that no indemnity shall be payable for
any Damages with respect to any breach of representations or warranties in this
Agreement if prior to Closing such party receives a written notice from the
other party disclosing such breach or breaches.
(e) All indemnification payments under this Article XIV shall be deemed
adjustments to the Purchase Price as defined in Section 3.1 of Article III.
SECTION 14.6. SURVIVAL. All representations, warranties and covenants
--------
contained in or made pursuant to this Agreement shall survive the execution and
delivery of the Agreement and shall continue in full force and effect for a
period of one (1) year after the Closing Date and thereafter shall terminate,
except as to any claim for which written notice shall have been given prior to
such date; provided, however, that all covenants or agreements which by their
terms are to be performed after the first (1st) anniversary of the Closing Date
shall survive until fully discharged.
ARTICLE XV
POST-CLOSING MATTERS
SECTION 15.1. FURTHER ASSURANCES. From and after the Closing Date:
------------------
(a) Except as specifically provided otherwise herein, Seller shall
assist Purchaser in the orderly transition of the Purchased Assets and Assumed
Liabilities and shall give such further assurances to Purchaser and shall
execute, acknowledge and deliver all such acknowledgments and other instruments
and take such further action as may be necessary and appropriate to effectively
vest in Purchaser title in the Purchased Assets in the manner contemplated
hereby; provided that Seller need not incur any out-of-pocket costs or expenses
in connection with its agreements in this Section 15.1 unless such costs or
expenses are reimbursed by Purchaser; and
(b) Except as specifically provided otherwise herein, Purchaser shall
give such further assurances to Seller and shall execute, acknowledge and
deliver all such acknowledgments and other instruments and take such further
action as may be necessary and appropriate to effectively relieve and discharge
Seller from any obligations remaining with respect to the Assumed Liabilities;
provided that Purchaser need not incur any out-of-pocket costs or expenses in
connection with its agreements in this Section 15.1 unless such costs or
expenses are reimbursed by Seller.
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SECTION 15.2. ACCESS TO AND RETENTION OF BOOKS AND RECORDS. For a
--------------------------------------------
period of six (6) years from the Closing Date and to the extent permitted by
law, each party shall have commercially reasonable access to any books and
records of the other party relating to the Purchased Assets and the Assumed
Liabilities, and the requesting party, at its own expense, may make copies and
extracts when such copies and extracts are required by regulatory authorities,
for litigation purposes, or for tax or accounting purposes; provided that in the
event that as of the end of such period, any tax year of Seller is under
examination by any taxing authority, such books and records shall be maintained
by Purchaser until a final determination of the tax liability of Seller for that
year has been made. If such copies or extracts require use of a party's
equipment or facilities, the user shall reimburse the other party for all costs
incurred, including without limitation employee expenses.
SECTION 15.3. DEPOSIT HISTORIES. In case of any dispute with or inquiry
-----------------
by any Customer whose account is included in the Assumed Liabilities, which
dispute or inquiry relates to the servicing of such account by Seller prior to
the date for which a deposit history has been provided to Purchaser, Seller will
provide Purchaser, where available and to the extent reasonably requested by
Purchaser and not already provided to Purchaser, information regarding such
account and copies of pertinent documents or instruments with respect to such
dispute or inquiry so as to permit Purchaser to respond to such Customer within
a period of time and in a manner which would comply with standard banking
practices and customs and all applicable Laws.
ARTICLE XVI
MISCELLANEOUS
SECTION 16.1. EXPENSES.
--------
(a) Except as otherwise provided herein, Seller and Purchaser shall
each pay all of their own out-of-pocket expenses in connection with this
Agreement, including investment banking, appraisal, accounting, consulting,
professional and legal fees, if any, whether or not the transactions
contemplated by this Agreement are consummated.
(b) Purchaser shall pay all costs and expenses relating to the
recording of assignments of financing statements, notes, security agreements or
other instruments applicable to or arising in connection with the transfer,
assignment or assumption of the Purchased Assets and Assumed Liabilities.
SECTION 16.2. TRADE NAMES AND TRADEMARKS.
--------------------------
(a) The Purchaser acknowledges and agrees that notwithstanding anything
to the contrary contained herein, it has, and following the Closing shall have,
no interest in or to the names "Greater Atlantic Bank", "Greater Atlantic Bank
FSB", or any trade name, trademark or service xxxx, logo or corporate name of
Seller, or any of its Affiliates or predecessors. After the Closing Date,
neither Purchaser nor any of its Affiliates shall use any of the trade names,
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trademarks, service marks, logos or corporate names of Seller or any of its
Affiliates or predecessors.
(b) From and after the Closing, Purchaser agrees not to use any forms
or other documents bearing any name or logo of Seller, or the name or logo of
any Affiliate or predecessor of Seller, without the prior written consent of
Seller, which consent may be denied or given in Seller's sole discretion. If
such consent is given, Purchaser hereby agrees that all forms or other documents
to which such consent relates will be stamped or otherwise marked in such a way
that identifies Purchaser as the party using the form or document.
SECTION 16.3. TERMINATION: EXTENSION OF CLOSING DATE. This Agreement
--------------------------------------
shall terminate and shall be of no further force or effect as between the
parties hereto, except as to the liability for actual direct damages due to a
willful breach of any material representation, warranty or covenant occurring or
arising prior to the date of termination, upon the occurrence of any of the
following:
(a) Upon mutual agreement of the parties;
(b) Upon written notice by either Purchaser or Seller to the other
parties immediately upon receipt by Purchaser or Seller of notice from any
governmental authority that Purchaser or Seller, as the case may be, has been
denied any Regulatory Approval by Final order;
(c) Upon written notice by either Purchaser or Seller to the other
parties, if the Closing has not occurred on or before December 31, 2007; or
(d) By either the Purchaser or Seller (provided that the terminating
party is not then in material breach of any representation, warranty, covenant
or other agreement contained herein) if there shall have been a material breach
of any of the representations, warranties, covenants or other agreements set
forth in this Agreement on the part of the other party, which breach is not
cured within thirty (30) days following written notice to the party committing
such breach, or which breach, by its nature, cannot be cured prior to the
Closing.
SECTION 16.4. MODIFICATION AND WAIVER. No modification of any provision
-----------------------
of this Agreement shall be binding unless in writing and executed by the party
or parties sought to be bound thereby. Performance of or compliance with any
covenant given herein or satisfaction of any condition to the obligations of
either party hereunder may be waived by the parties to whom such covenant is
given or whom such condition is intended to benefit, except as otherwise
provided in this Agreement or to the extent any such condition is required by
law; provided, that, any such waiver must be in writing.
SECTION 16.5. BINDING EFFECT: ASSIGNMENT. This Agreement shall be
--------------------------
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however, that neither
this Agreement nor any rights, privileges, duties or obligations of the parties
hereto may be assigned without the prior written consent of the other parties
hereto.
31
38
SECTION 16.6. CONFIDENTIALITY.
---------------
(a) From and after the date hereof, the parties hereto and their
Affiliates shall keep confidential the terms of this Agreement and the
negotiations relating hereto and all documents and information obtained by a
party from another party in connection with the transactions contemplated
hereby, except (i) to the extent this Agreement and such negotiations need to be
disclosed to obtain a Regulatory Approval, (ii) for disclosures made in
accordance with the terms of this Agreement, and (iii) to the extent required by
applicable law or by any applicable national securities exchange. This section
shall survive any termination of this Agreement.
(b) Except as otherwise required by Law, including the rules of any
self regulatory organization (as defined in the Securities Exchange Act of 1934,
as amended), the parties hereto shall each furnish to the other the text of all
notices and communications, written or oral, proposed to be sent by the
furnishing party regarding the transactions contemplated hereby. Except as
otherwise required by Law of the National Association of Securities Dealers,
Inc. or any national stock exchange, the furnishing party shall not send or
transmit such notices or communications or otherwise make them public unless and
until the consent of the other parties is received, which consent shall not be
unreasonably withheld or delayed. This section shall survive any termination of
this Agreement.
(c) Purchaser and Seller shall issue mutually agreed upon press
releases on the date of this Agreement and on the Closing Date or the first
(1st) Business Day thereafter.
SECTION 16.7. ENTIRE AGREEMENT; GOVERNING LAW. This Agreement, together
-------------------------------
with the exhibits and schedules attached hereto and made a part hereof, contains
the entire agreement between the parties hereto with respect to the transactions
covered and contemplated hereunder, and supersedes all prior agreements or
understandings between the parties hereto relating to the subject matter hereof,
provided that the terms of the Confidentiality Agreement, to the extent not
inconsistent with the terms hereof, shall continue to apply. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Maryland (without reference to conflicts or choice of law provisions).
SECTION 16.8. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
---------------------------------------------
(a) Each party hereto, to the extent it may lawfully do so, hereby
submits to the jurisdiction of the courts of the State of Maryland and the
United States District Court for the District of Maryland, as well as to the
jurisdiction of all courts from which an appeal may be taken or other review
sought from the aforesaid courts, for the purpose of any suit, action or other
proceeding arising out of such party's obligations under or with respect to this
agreement or any of the agreements, instruments or documents contemplated hereby
(other than the confidentiality agreement), and expressly waives any and all
objections it may have as to venue in any of such courts.
(b) Each party hereto hereby waives trial by jury in any action,
proceeding or counterclaim arising out of or in any way concerned with this
agreement or any of the agreements, instruments or documents contemplated
hereby. No party hereto, nor any Purchaser or successor of a party hereto shall
seek a jury trial in any lawsuit, proceeding, counterclaim or
32
39
any other litigation procedure based upon, or arising out of, this agreement or
any of the agreements, instruments or documents contemplated hereby. No party
will seek to consolidate any such action, in which a jury trial has been waived,
with any other action in which a jury trial cannot be or has not been waived.
The provisions of this have been fully discussed by the parties hereto, and the
provisions shall be subject to no exceptions. No party has in anyway agreed with
or represented to any other party that the provisions of this section will not
be fully enforced in all instances.
SECTION 16.9. WAIVER OF CERTAIN DAMAGES. Each of the parties hereto to
-------------------------
the fullest extent permitted by law irrevocably waives any rights that they may
have to punitive, special, incidental, exemplary or consequential damages in
respect of any litigation based upon, or arising out of, this agreement or any
related agreement or any course of conduct, course of dealing, statements or
actions of any of them relating thereto.
SECTION 16.10. SEVERABILITY. In the event that any provision of this
------------
Agreement shall be held invalid, illegal, or unenforceable in any respect, the
validity, legality, and enforceability of the remaining provisions contained in
this Agreement shall not in any way be affected or impaired thereby, and this
Agreement shall otherwise remain in full force and effect.
SECTION 16.11. COUNTERPARTS. This Agreement may be executed in one or
------------
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties hereto.
SECTION 16.12. NOTICES. All notices, consents, requests, instructions,
-------
approvals, waivers, stipulations and other communications provided for herein to
be given by one party hereto to the other party shall be deemed validly given,
made or served, if in writing and delivered personally or sent by certified
mail, return receipt requested, nationally recognized overnight delivery
service, or facsimile transmission as follows:
(a) If to Seller:
Greater Atlantic Bank
00000 Xxxxxxxxx Xxxxxxxxx -- Xxxxx X00
Attention: Xxxxxxx X. Xxxx
Facsimile number: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxx, Xx., Esq.
Facsimile number: (000) 000-0000
33
40
(b) If to Purchaser:
Bay-Vanguard Federal Savings Bank
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile number: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C.
0000 Xxxxxxxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxx, Esq.
Facsimile number: (000) 000-0000
Notice by certified mail shall be deemed to be received three (3)
Business Days after mailing of the same. Either party may change the persons or
addresses to whom or to which notices may be sent by written notice to the
others.
SECTION 16.13. INTERPRETATION. Article titles, headings to sections and
--------------
any table of contents are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation hereof. The
Schedules and Exhibits referred to herein shall be construed with and as an
integral part of this Agreement to the same extent as if they were set forth
verbatim herein. As used herein, "include", "includes" and "including" are
deemed to be followed by "without limitation" whether or not they are in fact
followed by such words or words of like import; "writing", "written" and
comparable terms refer to printing, typing, lithography and other means of
reproducing words in a visible form; references to a person are also to its
successors and assigns; except as the context may otherwise require, "hereof",
"herein", "hereunder" and comparable terms refer to the entirety hereof and not
to any particular article, section or other subdivision hereof or attachment
hereto; references to any gender include the other, except as the context may
otherwise require, the singular includes the plural and vice versa; references
to any agreement or other document are to such agreement or document as amended
and supplemented from time to time; references to "Article", "Section" or
another subdivision or to an "Exhibit" or "Schedule" are to an article, section
or subdivision hereof or an "Exhibit" or "Schedule". The parties acknowledge
that each party and its counsel have reviewed and revised this Agreement and
that the normal rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be employed in the
interpretation, construction and enforcement of this Agreement or any amendment,
schedule or exhibit hereto.
SECTION 16.14. SPECIFIC PERFORMANCE. The parties hereto acknowledge
--------------------
that monetary damages could not adequately compensate either party hereto in the
event of a breach of this Agreement by the other, that the non-breaching party
would suffer irreparable harm in the event
34
41
of such breach and that the non-breaching party shall have, in addition to any
other rights or remedies it may have at law or in equity, specific performance
and injunctive relief as a remedy for the enforcement hereof.
SECTION 16.15. NO THIRD PARTY BENEFICIARIES. The parties hereto intend
----------------------------
that this Agreement shall not benefit or create any right or cause of action in
or on behalf of any person other than the parties hereto. No future or present
employee or customer of either of the parties nor their affiliates, successors
or assigns or other person shall be treated as a third party beneficiary in or
under this Agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
35
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, by their duly authorized representatives, as of the day and year first
above written.
GREATER ATLANTIC BANK
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
BAY-VANGUARD FEDERAL SAVINGS BANK
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman
36
43
EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement") dated as of
---------
[_________], 2007, by and between Greater Atlantic Bank, a federal savings bank
with its principal office in Reston, Virginia ("Seller"), and Bay-Vanguard
Federal Savings Bank, a federal savings bank with its principal office in
Baltimore, Maryland ("Purchaser").
RECITALS
--------
WHEREAS, Seller and Purchaser are parties to a Purchase and Assumption
Agreement dated as of [________], 2007 (the "Purchase Agreement"), providing
------------------
for, among other things, assignment by Seller of all of its rights and interests
in and to certain leases, contracts, deposit accounts and other Deposit
Liabilities related to Seller's office located at 0000 Xxxxxxx Xxxxxxx Xxxxxxxx,
Xxxxxxxx, 00000 and the assumption of certain Deposit Liabilities of Seller by
Purchaser, upon the terms and subject to the conditions set forth therein and
herein (capitalized terms used and not otherwise defined shall have the
respective meanings set forth in the Purchase Agreement).
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
AGREEMENT
---------
1. ASSUMPTION OF LIABILITIES.
-------------------------
(a) In partial consideration for the Purchase Price as set forth
in the Purchase Agreement, the receipt of which is hereby
acknowledged, effective as of the close of business on the
date hereof, Purchaser, by this Agreement, hereby assumes,
becomes responsible for and agrees to pay and hold Seller
harmless from and against the Assumed Liabilities set forth on
Schedule 2.2 of the Purchase Agreement.
------------
(b) Other than the Assumed Liabilities set forth on Schedule 2.2
------------
to the Purchase Agreement, Purchaser does not assume, nor
shall it be bound by, any other duties, responsibilities,
obligations or liabilities of Seller.
2. ASSIGNMENT OF ASSETS
--------------------
(a) In partial consideration for the assumption of the Assumed
Liabilities as set forth in the Purchase Agreement, the
assumption of which is hereby acknowledged, effective as of
the close of business on the date hereof, Purchaser, by this
Agreement, hereby assigns, sets over and transfers to
Purchaser all of its rights
44
and interests in and to the Purchased Assets all as set forth
on Schedule 2.1 of the Purchase Agreement.
------------
3. REPRESENTATIONS AND WARRANTIES.
------------------------------
(a) Seller hereby represents, warrants and certifies to Purchaser
that:
(i) the representations and warranties of Seller set forth in
Article VI of the Purchase Agreement, to the extent that they relate to the
transactions contemplated by this Agreement, are true and correct in all
material respects as of the date hereof (except to the extent such
representations and warranties speak as of an earlier date) as though made on
and as of the date hereof;
(ii) Seller has performed in all material respects all covenants
and agreements required to be performed by it under the Purchase Agreement at or
prior to the date hereof, to the extent they relate to the transactions
contemplated by this Agreement; and
(iii) to Seller's knowledge, no court or governmental or
regulatory authority of competent jurisdiction has enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, judgment, decree, injunction
or other order (whether temporary, preliminary or permanent) which is in effect
to enjoin, or which prohibits, consummation of the transactions contemplated
hereby.
(b) Purchaser hereby represents, warrants and certifies to Seller
that:
(i) the representations and warranties of Purchaser set forth in
Article VII of the Purchase Agreement, to the extent that they relate to the
transactions contemplated by this Agreement, are true and correct in all
material respects as of the date hereof (except to the extent such
representations and warranties speak as of an earlier date) as though made on
and as of the date hereof;
(ii) Purchaser has performed in all material respects all
covenants and agreements required to be performed by it under the Purchase
Agreement at or prior to the date hereof, to the extent they relate to the
transactions contemplated by this Agreement; and
(iii) to Purchaser's knowledge, no court or governmental or
regulatory authority of competent jurisdiction has enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, judgment, decree, injunction
or other order (whether temporary, preliminary or permanent) which is in effect
to enjoin, or which prohibits, consummation of the transactions contemplated
hereby.
3. FURTHER ASSURANCES. From time to time after the date hereof, and
------------------
without further consideration, Purchaser and Assignor shall each execute and
deliver such other instruments of conveyance, assignment, transfer, and delivery
and take such other action as Assignor or Purchaser may reasonably request in
order to consummate the transactions contemplated hereby.
2
45
4. RIGHTS CUMULATIVE; CONFLICT WITH PURCHASE AGREEMENT. The rights,
---------------------------------------------------
remedies, duties and obligations of Assignor and Purchaser hereunder shall be
cumulative and in addition to the rights, remedies, duties and obligations of
Assignor and Purchaser under the Purchase Agreement. Notwithstanding anything to
the contrary herein, nothing herein is intended to, nor shall it, extend,
amplify or otherwise alter the representations, warranties, covenants and
obligations of Assignor or Purchaser contained in the Purchase Agreement or the
survival thereof (except that the representations and warranties referred to in
Sections 2(a)(i) and 2(b)(i) above are given as of the date hereof and as of the
dates set forth in the Purchase Agreement).
5. GOVERNING LAW. This Agreement shall be construed in accordance with
-------------
the laws of the State of Maryland, without giving effect to the choice of law
principles thereof.
6. NON-ASSIGNABILITY. Neither this Agreement nor any rights or
-----------------
obligations hereunder shall be assignable by any party without the written
consent of the other parties. This Agreement shall be binding on each party and
its respective successors and permitted assigns.
7. COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which shall constitute an original, but all of which taken
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
3
46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
GREATER ATLANTIC BANK
By:
-------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
BAY-VANGUARD FEDERAL SAVINGS BANK
By:
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman
4
47
SCHEDULE 2.1
PURCHASED ASSETS
48
GREATER ATLANTIC BANK
BUILDING AND EQUIPMENT DETAIL LISTING
31-MAR-07
ASSET # DESC ACQ DATE G/L DEPT LIFE ACQ VALUE ACCUM DEPR BOOK VAL MONTHLY
------------------------------------------------------------------------------------------------------------------------------------
LEASEHOLD
436 Comtech Phone Systems 10011998 480010 5 240 8,296.04 3,526.03 4,770.01 34.57
437 Carpeting 10011998 480010 5 240 4,386.50 1,864.47 2,522.03 18.28
438 KHI-Build Out 10011998 480010 5 240 3,500.00 1,487.27 2,012.73 14.58
439 Various Expenses 10011998 480010 5 240 7,649.48 3,250.83 4,398.65 31.87
807 Carpeting 2042004 480010 5 55 2,608.00 2,608.00 -- --
819 Counterette 4212004 480010 5 52 9,697.60 4,577.50 5,120.10 186.49
839 Kiosk Work 1052005 480010 5 43 3,960.00 2,486.48 1,473.52 92.09
------------------------------------------------------------------------------------------------------------------------------------
PASADENA 40,097.62 19,800.58 20,297.04 377.89
------------------------------------------------------------------------------------------------------------------------------------
FFE
415 Panafax Facsimile 1061999 480020 5 84 2,021.25 2,021.25 -- --
416 HP 4000T Printer 1061999 480020 5 84 1,533.90 1,533.90 -- --
429 Signage by Arundel Signs 10011998 480020 5 180 11,228.25 6,362.75 4,865.50 62.38
430 Diebold Alarm System 10011998 480020 5 180 19,451.37 11,022.26 8,429.11 108.06
431 Diebold Cash Drawars 10011998 480020 5 180 859.56 487.23 372.33 4.78
432 Diebold Video Monitor 10011998 480020 5 180 2,198.45 1,245.66 952.79 12.21
433 Diebold ATM 10011998 480020 5 180 33,639.00 19,061.97 14,577.03 186.88
434 Signage by Signs Unlimited 10011998 480020 5 180 1,375.94 779.59 596.35 7.64
435 Signage by Signs Unlimited 10011998 480020 5 180 8,105.60 4,593.10 3,512.50 45.03
457 Arundel Signs 4221999 480020 5 180 6,911.00 3,685.82 3,225.18 38.39
513 Magtek ATM Machine 4112000 480020 5 60 2,405.75 2,405.75 -- --
532 Lobby Poster 8311999 480020 5 84 1,714.00 1,714.00 -- --
540 Safe Deposit Boxes 6142000 480020 5 120 6,656.38 4,548.54 2,107.84 55.47
640 Optiplex Peniums-7 11202001 480020 5 60 8,925.35 8,925.35 -- --
659 Diebold VCR 2192002 480020 5 60 2,491.90 2,491.90 -- --
676 D9000 Software/Hardware 4102002 480020 5 60 4,817.00 4,817.00 -- --
875 Dell Optiplex GX620 9272005 480020 5 60 1,126.05 337.85 788.20 18.77
880 ATM Upgrade-Diebold 8022005 480020 5 84 6,954.11 1,655.78 5,298.33 82.79
887 Dell 520 Server 11222005 480020 5 60 1,222.66 346.45 876.21 20.38
909 Panasonic Copier 8222006 480020 5 84 4,058.25 386.48 3,671.77 48.31
------------------------------------------------------------------------------------------------------------------------------------
PASADENA 127,695.77 78,422.63 49,273.14 691.10
------------------------------------------------------------------------------------------------------------------------------------
TOTAL LEASEHOLD & FFE 167,793.39 98,223.21 69,570.18 1,068.98
49
SCHEDULE 2.2
ASSUMED LIABILITIES
50
DDA ACCOUNTS
TOTAL NUMBER
BRANCH CLASS CURRENT OF
NUMBER CODE BALANCE ACCOUNTS
--------------------------------------------------------------------------------
5 1 $ 382,343.13 205
2 $ 386.44 1
3 $ 3,005,391.25 216
4 $ 865,078.27 76
5 $13,943,833.37 292
6 $ 1,809,978.93 80
7 $ 692,854.99 17
8 $ 973,278.34 26
9 $ 3,419,251.71 51
10 $ 214,871.59 5
77 $ 612,318.83 3
BRANCH TOTALS $25,919,586.85 972
CERTIFICATES OF DEPOSIT
TOTAL NUMBER
BRANCH CLASS CURRENT OF
NUMBER CODE BALANCE ACCOUNTS
--------------------------------------------------------------------------------
5 50 $ 221,154.96 16
51 $ 259,393.95 26
52 $ 479,949.87 33
53 $ 98,791.61 10
54 $ 52,520.93 9
55 $ 162,794.09 12
56 $ 237,798.35 6
57 $ 1,674,613.13 60
58 $ 2,986.10 4
59 $ 124,872.44 20
61 $ 5,562,771.64 119
62 $ 53,955.77 15
63 $ 1,404,162.09 68
64 $ 5,561,263.72 147
65 $ 2,041,769.35 77
71 $ 814,537.91 63
72 $ 210,453.83 17
73 $ 190,793.13 12
74 $ 139,552.11 7
75 $ 74,234.58 6
76 $ 980,283.45 61
80 $ 4,116,149.78 98
BRANCH TOTALS $24,464,802.79 886
51
SAVINGS ACCOUNTS
TOTAL NUMBER
BRANCH CLASS CURRENT OF
NUMBER CODE BALANCE ACCOUNTS
--------------------------------------------------------------------------------
5 20 $ 254.13 1
45 $ 484,442.84 164
46 $ 4,524.23 4
47 $ 2,742.60 4
BRANCH TOTALS $ 491,963.80 173
Savings 45
Business Savings 46
Automated Escrow 47
Column Sweep 77
COD CLASS CODES
3 month SAV/XXX 30
12 month SAV/XXX 31
18 month SAV/XXX 32
24 month SAV/XXX 33
36 month SAV/XXX 34
48 month SAV/XXX 35
60 month SAV/XXX 36
3 month CD 50
6 month CD 51
12 month CD 52
18 month CD 53
24 month CD 54
36 month CD 55
48 month CD 56
60 month CD 57
Special 7 month CD 61
Special 9 month CD 62
Special 14 month CD 63
Special 13 month CD 64
Special 25 month CD 65
12 month COD/XXX 71
18 month COD/XXX 72
24 month COD/XXX 73
36 month COD/XXX 74
48 month COD/XXX 75
60 month COD/XXX 76
Mini Jumbo 80
Jumbo's 90
DDA CLASS CODES
No Cost Checking 01
Interest Checking 02
Money Mkt Sav 04
Premier Money Mkt 05
Small Bus Ck 06
Business Analysis 07
Business Int Ck 08
Business Money Mkt 09
Premier Checking 10
Savings 45
Business Savings 46
Automated Escrow 47
Comm Sweep 77
52
SCHEDULE 6.11(a)
REGULATORY APPROVALS
1. Application to the Office of Thrift Supervision under section 18(c) of the
FDIA (12 U.S.C. section 1828(c)) and section 563.22 of the regulations of
the Office of Thrift Supervision (12 C.F.R. section 563.22).
2. Application to the Office of Thrift Supervision under section 42 of the
FDIA (12 U.S.C. section 1831r-1).
