Exhibit 10.v
PURCHASE AND ASSUMPTION AGREEMENT
This Agreement, dated as of September 13, 2000, is by and between
First Bancorp, a corporation organized under the laws of the State of North
Carolina ("Buyer"), and First Union National Bank, a national banking
association organized under the laws of the United States of America ("Seller").
RECITALS
WHEREAS, Seller desires to sell certain of its Branches, together with the
Assets, the Deposits and the other Liabilities (each as hereinafter defined) set
forth herein; and
WHEREAS, Buyer desires to purchase the Branches, including the Assets, and
to assume the Deposits and the other Liabilities set forth herein;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the parties hereto hereby agree as follows:
I. DEFINITIONS
1.1 Certain Defined Terms.
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Some of the capitalized terms appearing in this
Agreement are defined below. The definition of a term expressed in the singular
also applies to that term as used in the plural and vice versa. The word
"including" as used herein shall mean "including without limitation."
"Adjusted Closing Statement" has the meaning set
forth in Section 3.2(b) of this Agreement.
"Affiliate" means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, a specified Person, except in those cases where
the controlling Person exercises control solely in a fiduciary capacity.
"Amount of Premium" has the meaning set forth in
Section 3.1 of this Agreement.
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"Assets" has the meaning set forth in Section 2.1
of this Agreement.
"Benefit Plan" means any pension, profit-sharing,
or other employee benefit, fringe benefit, severance or welfare plan maintained
by or with respect to which contributions
are made by, Seller or any of its Affiliates with respect to Seller's Employees.
"Branches" means those branch offices and/or
financial centers of Seller listed on Schedule 1.1(a), indicating whether such
Branch is Owned Real Property or subject to a
Real Property Lease.
"Business Day" means any Monday, Tuesday,
Wednesday, Thursday or Friday on which Seller is open for business.
"Buyer Material Adverse Effect" means an event,
occurrence or circumstance which has a material adverse effect on Buyer's
ability to timely perform its obligations under
this Agreement or consummate the transactions contemplated by this Agreement
provided, that a Buyer Material Adverse Effect shall not include (i) events or
conditions generally affecting the financial services industry or effects
resulting from general economic conditions (including changes in interest
rates), changes in accounting practices or changes to statutes, regulations or
regulatory policies, that do not have a materially more adverse effect on Buyer
than that experienced by similarly situated financial services companies, or
(ii) events, impacts or conditions caused by the public announcement of, and
response or reaction of customers, vendors, licensors or employees of Buyer to,
this Agreement or any of the transactions contemplated by this Agreement.
"Cash Reserve Lines of Credit" means those consumer lines
of credit made available to customers of the Branches as a protection against
overdrafts on the Deposit Accounts.
"Cash Reserve Loans" means those loans outstanding
on the Closing Date pursuant to Cash Reserve Lines of Credit.
"Closing" means the purchase of the Assets by Buyer
and the assumption of the Liabilities by Buyer on the Closing Date.
"Closing Date" has the meaning set forth in Section
9.1 of this Agreement.
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"Closing Statement" has the meaning set forth in
Section 3.2(a) of this Agreement.
"Consumer Loans" means the consumer direct
installment loans and certain other consumer lines of credit and loans relating
to the Branches, as of the Closing Date. A listing of all such loans, as of July
31, 2000, is set forth on Schedule 1.1(b), and such schedule shall be updated by
Seller in connection with the preparation of the Closing Statement and the
Adjusted Closing Statement as set forth in Sections 3.1 and 3.2, respectively.
"Conversion Fee" has the meaning set forth in
Section 2.6 of this Agreement.
"Deposit Accounts" means the deposit accounts at
the Branches, the balances of which are included in the Deposits or would be so
included if the Deposit Account had a
positive balance.
"Deposits" means all deposits (as defined in 12 U.S.C.
Section 1813(l)) which are booked at each of the Branches on the Closing Date,
including, without limitation, consumer and
business and commercial (i) demand deposits, (ii) interest checking accounts,
(iii) money market accounts, (iv) savings deposits, (v) time deposits, (vi)
jumbo time deposits, (vii) deposits held pursuant to Retirement Plans, and
(viii) deposits relating to debit cards and ATM cards, including in each case
accrued but unpaid interest and both collected and uncollected funds, but
excluding (v) deposits which secure VISA or mastercard loans; (w) brokered
deposits, (x) deposits held in accounts for which Seller acts as fiduciary
(other than deposits held by Retirement Plans); (y) deposits held pursuant to
Seller's CAP asset management accounts; and (z) deposits constituting official
checks, travelers checks, money orders or certified checks.
"Employees" means the employees of Seller employed at the
Branches on the Closing Date, and listed on Schedule 8.1, as such schedule may
be adjusted on the Closing Date.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
"ERISA Affiliate" means any entity that is
considered one employer with Seller under Section 4001 of ERISA or Section 414
of the Internal Revenue Code of 1986, as amended.
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"Excluded Loan" has the meaning set forth in this
Section 1.1 in the definition of Loans.
"Federal Funds Rate" means, for any day, the rate
per annum (expressed on a basis of calculation of actual days in a year) equal
to the "near closing bid" federal funds rate published in The Wall Street
Journal on the Business Day following the Closing Date.
"Fixed Assets" means all fixtures (including
signage poles), leasehold improvements, furnishings (excluding artwork owned by
Seller), vaults, safe deposit boxes, equipment
(including, for example, all ATM machines, but excluding any proprietary
software), communications equipment, supplies (other than forms and other
supplies which bear Seller's name or logo), and other personal property, which
are located at the Owned Real Property and the Leased Facilities on the Closing
Date, and which are set forth on Schedule 1.1(c) (it being understood and agreed
that fixed assets that are being leased by Seller shall not be included in the
Fixed Assets).
"Governmental Entity" means any government or any
agency, bureau, board, commission, court, department, official, political
subdivision, tribunal or other instrumentality of any government having
authority in the United States, whether federal, state or local.
"Hazardous Material" means any substance presently
listed, defined, designated or classified as hazardous, toxic, radioactive or
dangerous or otherwise regulated, under
any applicable state or federal law relating to the protection, preservation or
restoration of the environment, including, but not limited to, the following
federal environmental laws: the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Superfund Amendment and
Reauthorization Act, the Water Pollution Control Act of 1972, the Clean Air Act,
the Clean Water Act, the Resource Conservation and Recovery Act of 1976, the
Solid Waste Disposal Act, the Toxic Substances Control Act and the Insecticide,
Fungicide and Rodenticide Act, each as amended.
"Leased Facilities" means all Branches and the
Other Leased Facilities (including, without limitation, any construction in
progress) that are leased under the Real
Property Leases.
"Liabilities" has the meaning set forth in Section
2.2 of this Agreement.
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"Loan Instruments" means the loan agreements,
promissory notes, mortgages, deeds of trust, security agreements, pledge
agreements, guaranty agreements, insurance policies, financing statements, and
any other such contract documents relating to the Loans.
"Loans" means the Consumer Loans to be transferred
to Buyer on the Closing Date; provided, however, Loans shall not include (i)
non-accrual loans (which term shall include
loans in which the collateral securing the same has been repossessed or as to
which collection efforts have been instituted or claim and delivery or
foreclosure proceedings have been filed); (ii) loans 90 days or more past due as
to principal or interest; or (iii) loans in connection with which the obligor
has filed a petition for relief under the United States Bankruptcy Code, or
otherwise has indicated an inability or refusal to pay the Loan as it becomes
due, prior to the Closing (Loans that satisfy any of such conditions set forth
in (i), (ii) or (iii) shall be referred to as "Excluded Loans").
"Mediator" means a firm of independent accountants
of nationally recognized standing (other than a firm that has performed services
for Seller or Buyer or any of their
Affiliates during the past three years) mutually agreeable to Seller and Buyer.
"Other Leased Facilities" means the land (including
the improvements thereon) and any building or other improvements relating to
real estate that are listed on Schedule
1.1(a).
"Overdrafts" means those overdrafts of the book
balance of any Deposit Accounts, which are not subject to Cash Reserve Lines of
Credit.
"Owned Real Property" means (i) the land (including
the improvements thereon) on which are located any Branches that are listed as
"Owned Real Property" on Schedule 1.1(a)
and (ii) any building or other improvements located upon such owned real estate
(including, without limitation, any construction in progress) that are owned by
Seller pursuant to which a Branch is operated.
"Person" means an association, a corporation, an
individual, a partnership, a trust or any other entity or organization,
including a Governmental Entity.
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"Real Property Leases" means the lease agreements
pursuant to which any Branches listed as leased real property in Schedule 1.1(a)
or Other Leased Facilities are leased by
Seller.
"Retirement Plans" means those non-discretionary
individual retirement accounts and qualified retirement plan accounts relating
to the Deposits for which Seller acts as
custodian or trustee.
"Seller Material Adverse Effect" shall mean an event,
occurrence or circumstance which has a material adverse effect on the Assets,
taken as a whole, or Seller's ability to timely perform its obligations under
this Agreement or consummate the transactions contemplated by this Agreement;
provided, that a Seller Material Adverse Effect shall not include (i) events or
conditions generally affecting the financial services industry or effects
resulting from general economic conditions (including changes in interest
rates), changes in accounting practices or changes to statutes, regulations or
regulatory policies, that do not have a materially more adverse effect on Seller
than that experienced by similarly situated financial services companies, or
(ii) events, impacts or conditions caused by the public announcement of, and
response or reaction of customers, vendors, licensors or employees of Seller to,
this Agreement or any of the transactions contemplated by this Agreement.
"Welfare Benefit Plans" means those Benefit Plans
which are "welfare benefit plans" as defined by ERISA.
"Working Agreement" has the meaning set forth in
Section 2.7 of the Agreement.
II. PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES
2.1 Purchase of Assets.
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Subject to the terms and conditions of this Agreement, including
Section 6.5 and 7.3, Seller agrees to sell, assign and transfer possession of
and all right, title and interest of the Seller in and to the following assets
to Buyer (the "Assets") and Buyer agrees to purchase the same from Seller, as of
the close of business on the Closing Date:
(a) the Owned Real Property;
(b) Seller's rights under the Real Property
Leases;
(c) the Fixed Assets;
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(d) the Loans, including the collateral for the
Loans, and the Loan Instruments;
(e) cash on hand in the Branches;
(f) the Cash Reserve Loans;
(g) the Overdrafts; and
(h) Seller's rights under the Cash Reserve Lines
of Credit and any safe deposit box rental agreements relating to
safe deposit boxes located at the Branches.
2.2 Assumption of Liabilities.
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Subject to the terms and conditions of this
Agreement, including Section 6.5 and Section 7.3, Buyer agrees to assume, pay,
perform and discharge the following liabilities
of Seller (the "Liabilities") as of the close of business on the Closing Date:
(a) the Deposits and all terms and agreements
relating to the Deposit Accounts;
(b) Seller's duties and responsibilities relating
to the Deposits with respect to: (i) the abandoned property laws
of any state, (ii) any legal process which is served on Seller on
or before the Closing Date with respect to claims against or for
the Deposits that is not over and above the amount of the
Deposits; or (iii) any other applicable law;
(c) Seller's duties and responsibilities with
respect to the Real Property Leases;
(d) Seller's duties and responsibilities with
respect to the Loans, including the collateral for the Loans, and
the Loan Instruments;
(e) Seller's duties and responsibilities with
respect to the Cash Reserve Lines of Credit;
(f) Seller's duties and responsibilities with
respect to the Cash Reserve Loans;
(g) Seller's duties and responsibilities with
respect to the Overdrafts;
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(h) Seller's duties and responsibilities with
respect to the safe deposit boxes located at the Branches; and
(i) Seller's duties and responsibilities with
respect to the Retirement Plans.
Buyer shall not assume any other liabilities of
Seller which relate to or arise out of the operation of the Branches before the
Closing Date or relate to or arise out of
any item excluded pursuant to Section 6.5 or 7.3.
2.3 Transfer and Availability of Books and Records.
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On the Closing Date, or as soon thereafter as is
practicable, Seller will transfer and deliver to Buyer such books and records
relating to the Assets and the Liabilities (other than such books and records
relating to the Loans, which are provided pursuant to the Loan Instruments) as
exist and are in the possession or control of Seller (except that, subject to
the same exceptions set forth in the next to last sentence of this Section 2.3,
Seller shall be permitted to retain such books and records that contain
information primarily relating to other assets and liabilities not constituting
Assets and Liabilities; provided that in any such case Seller shall provide to
Buyer such portions or copies of such books and records as are reasonably
necessary to service the Deposits and the Loans on an ongoing basis). All books
and records relating to the Assets and the Liabilities held by Seller or Buyer
after the Closing Date shall be maintained in accordance with (and for the
period provided in) that party's standard recordkeeping policies and procedures.
Throughout such period, the party holding such books and records shall comply
with the reasonable request of the other party to provide copies of specified
documents, at the expense of the requesting party; provided, however, the
parties shall not be required to provide access to, or copies of, any documents
or information to the other party to the extent that such access or copies would
violate or prejudice the legal rights of any customer or employee or
attorney-client privilege or would be contrary to law, rule, regulation or any
legal or regulatory order or process. The requesting party shall give reasonable
notice of any such request.
2.4 Tax Matters.
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(a) Notwithstanding Section 2.5, Buyer shall pay to
Seller or the relevant taxing jurisdiction (as appropriate under
the circumstances), or reimburse Seller if Seller shall have
paid, any sales and use taxes and any interest and penalties
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thereon which are payable or arise as a result of this Agreement
or the consummation of any of the transactions contemplated by
this Agreement.
(b) Notwithstanding Section 2.5, Seller shall pay
to Buyer or the relevant taxing jurisdiction (as appropriate
under the circumstances), or reimburse Buyer if Buyer shall have
paid, one half of all real property transfer, recording and
similar documentary taxes arising out of the transfer of the
Owned Real Property, the Leased Facilities, the Real Property
Leases, the Loans and the Fixed Assets.
2.5 Proration of Certain Expenses.
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Subject to the provisions of Section 2.4, all
rentals, real estate taxes, personal property taxes (tangible or intangible),
and ongoing and periodic expenses arising from
the utility, water and sewer charges and assessments, as well as semiannual
assessments paid to the Bank Insurance Fund or the Savings Association Insurance
Fund with respect to the Deposits, shall be prorated between Buyer and Seller as
of the close of business on the Closing Date.
2.6 Back Office Conversion and Expenses.
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Seller and Buyer shall cooperate with each other
and shall use their reasonable best efforts (consistent with their internal
day-to-day operations) in order to cause the
timely transfer of information concerning the Assets and the Liabilities which
is maintained on Seller's data processing systems so that Buyer can incorporate
such information into Buyer's data processing systems no later than the opening
of business on the Business Day following the Closing Date. Buyer hereby agrees
to pay Seller a nonrefundable conversion fee in the amount of $150,000 for the
Assets and Liabilities to be acquired and assumed hereunder in consideration of
Seller's expenses relating to the Conversion (the "Conversion Fee"). The
Conversion Fee shall be payable, by wire transfer of immediately available
funds, by the close of business on the Friday following the fourteenth calendar
day after the Closing Date; provided, however, if such Friday is not a Business
Day, then such payment shall be due on the next Business Day. Buyer also agrees
to pay a per item fee of $1.00 for each ACH or paper item after ninety (90)
days. In addition to the foregoing, Buyer hereby agrees to pay all fees and
expenses relating to the assignment of the Loans from Seller to Buyer.
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2.7 Processing of Certain Items Pre and Post Closing.
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A draft of the written practices and procedures under which
Buyer and Seller shall, among other things, complete the conversion of the
Branches and handle certain post closing matters, including, without limitation,
all items (including, for example, automated clearing house and electronic funds
transfer items) relating to the Assets and the Liabilities, which are presented
or returned following the Closing Date, and any claims relating to such items,
is attached to this Agreement as Exhibit A (the "Working Agreement"). As
promptly as practicable following the execution of this Agreement, the parties
agree to finalize the Working Agreement, which shall be substantially in the
form of Exhibit A. Notwithstanding the foregoing, it is understood and agreed
that the post-Closing exchange of ACH and paper items (checks and deposits)
between Seller and Buyer shall continue for a period of 90 days after the
Closing Date, and any items submitted to Seller following the expiration of such
90 day period shall be returned by Seller.
2.8 Information Returns.
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Unless otherwise agreed by Buyer and Seller in
writing, (i) Seller will report to the applicable tax authorities and customers
of the Branches all reportable payments made or received in connection with the
Branches (including without limitation amounts reportable on Internal Revenue
Service Form 1099) from January 1 of the year of the Closing Date through and
including the Closing Date and, in connection with any such payments, shall
withhold and pay over to the applicable tax authorities any amounts required to
be so withheld and paid over and (ii) Buyer will report to the applicable tax
authorities and customers of the Branches all reportable payments made or
received in connection with the Branches (including without limitation amounts
reportable on Internal Revenue Service Form 1099) from the day after the Closing
Date through and including December 31 of the year of the Closing Date and, in
connection with any such payments, shall withhold and pay over to the applicable
tax authorities any amounts required to be so withheld and paid over. For
purposes of the foregoing, the term reportable payments as used in this Section
2.8 shall include, but shall not be limited to, interest paid on the Deposits,
interest received on the Loans and the Cash Reserve Loans, and any other
information returns required with respect to the Assets and the Liabilities.
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III. CONSIDERATION
3.1 Calculation.
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In consideration of Buyer's purchase of the Assets
and its assumption of the Liabilities, Seller agree to pay to Buyer an amount
equal to the Deposits, plus accrued
interest thereon, less the sum of the following (the "Purchase Price"), in each
case calculated as of the close of business on the Closing Date:
(a) the net book value of the Fixed Assets as of
the Closing Date;
(b) the Fair Market Value of the Owned Real
Property as determined in accordance with Section 3.3 of this
Agreement;
(c) the principal amount of the Loans and the Cash
Reserve Loans, plus accrued interest thereon;
(d) the amount of cash on hand at the Branches;
(e) the principal amount of the Overdrafts;
(f) the net amount (which may be a negative
amount) of taxes payable by Buyer and Seller under Section 2.4
(i.e., the amount payable by Buyer less the amount payable by
Seller);
(g) the net amount (which may be a negative
amount) of any adjustments under Section 2.5 (i.e., the amount
payable by Buyer less the amount payable by Seller); and
(h) an amount equal to 14.35 percent of the daily
Deposit average for the calendar month preceding the month during
which the Closing Date occurs; provided, however, that in
calculating the average pursuant to this Section 3.1(h), there
shall be excluded from the Deposits the aggregate amount by which
the time deposits greater than $100,000 exceed $15,000,000 (it
being understood and agreed that such $15,000,000 shall be
reduced by the amount of any time deposits greater than $100,000
at a Branch that is excluded pursuant to Section 6.5 or 7.3) (the
"Amount of Premium").
3.2 Settlement.
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(a) Not later than the Saturday following the
Closing Date, Seller shall deliver to Buyer the closing statement
prepared in accordance with Seller's customary practices and
procedures used in preparing financial statements and in
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accordance with the terms of this Agreement, substantially in the
form of Exhibit B to this Agreement (the "Closing Statement"),
which shall be completed as of the close of business on the
Closing Date and be the basis of the payment to be made to
Buyer's account on the Monday following the Closing Date (the
"Settlement Payment").
(b) The parties shall cooperate in the preparation
of the adjusted closing statement within 30 days after the
Closing Date which shall be prepared in accordance with Seller's
customary practices and procedures used in preparing financial
statements and in accordance with the terms of this Agreement,
substantially in the form of Exhibit C to this Agreement (the
"Adjusted Closing Statement"), which shall be completed as of the
close of business on the Closing Date. On the Business Day after
Buyer and Seller agree to the Adjusted Closing Statement, or
Buyer and Seller receive notice of any determination of the
Adjusted Closing Statement under subsection (c) below, Seller
shall pay to Buyer (or Buyer shall pay to Seller, as the case may
be) an amount (the "Adjustment Payment") equal to the amount due
stated on the Adjusted Closing Statement, plus interest from the
day after the Closing Date until the calendar day before the
Adjustment Payment is made at a rate per annum (calculated daily
based on a 360-day year) equal to the Federal Funds Rate.
(c) If the parties are unable to agree on the
Adjusted Closing Statement within 30 days after the Closing Date,
either party may submit the matter to the Mediator, which shall
determine all disputed portions of the Adjusted Closing Statement
in accordance with the terms and conditions of this Agreement
within 30 days after the submission. The parties shall each pay
half of the fees and expenses of the Mediator, except that the
Mediator may assess the full amount of its fees and expenses
against either party if it determines that party negotiated the
Adjusted Closing Statement in bad faith. The Adjusted Closing
Statement, as agreed upon by the parties and/or determined under
this subsection, shall be final and binding upon the parties.
(d) The Settlement Payment and the Adjustment
Payment shall each be made by wire transfer of immediately
available funds to the account of the party receiving the
payment, which account shall be identified by the party receiving
the funds to the other party not less than two Business Days
prior to such payment.
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3.3 Fair Market Value.
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The fair market value of the Owned Real Property
for purposes of Section 3.1(b) (the "Fair Market Value") shall be determined in
accordance with this Section 3.3 no later
than sixty (60) days after the date hereof. After the date hereof, the parties
shall work together and cooperate in good faith in an effort to reach agreement
as to the Fair Market Value of each of the Owned Real Property. If the parties
are unable to reach such agreement as to each of the Owned Real Property within
10 days after the date hereof, then the Fair Market Value of all of the Owned
Real Property shall be determined by an appraisal of the fair market value of
such Owned Real Property for its current use prepared in accordance with
customary practices and procedures by an M.A.I. appraiser selected by agreement
between Seller and Buyer; provided, however, that in the event the parties
cannot agree on the selection of an appraiser within five (5) days, then such
appraiser shall be selected as follows: Seller and Buyer shall each select an
appraiser within five (5) days and the two selected appraisers shall select a
third appraiser, who shall be the appraiser who shall conduct the appraisal of
the Fair Market Value. If either party does not select an appraiser within five
(5) days, then the appraiser chosen by the other party shall be solely
responsible for determining the Fair Market Value, and if the two initial
appraisers shall fail to agree on the third appraiser within five (5) days, then
the parties shall request that the Mediator select such appraiser, failing which
the parties shall request that a court of competent jurisdiction in North
Carolina shall select the appraiser. Notwithstanding the foregoing, the ultimate
selection of an appraiser shall be completed within twenty (20) days after the
date hereof. For all purposes hereunder, the Fair Market Value shall be the
amount of cash which the appraiser or appraisers determine would be realized by
Seller if Seller sold the Owned Real Property, as a willing seller, to a willing
buyer on the Closing Date, in vacant condition to be used solely for their
current uses, subject to all liabilities, liens and other encumbrances to which
the Owned Real Property is subject. The costs of any such appraisals shall be
paid by Buyer.
3.4 Overdraft Repurchases.
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Subject to the provisions set forth in this Section 3.4,
Seller agrees to repurchase from Buyer, on demand, Overdrafts which have
remained Overdrafts for 30 calendar days following the Closing Date. Such
repurchase shall occur within five Business Days following the 30-day period.
The amount of such repurchase shall be equal to the lesser of the balance of the
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Overdraft as of the Closing Date or the lowest balance of the Overdraft during
such 30-day period. Notwithstanding Seller's obligation to repurchase
Overdrafts, Buyer shall use its reasonable best efforts to collect such
Overdrafts prior to the expiration of such 30-day period; provided, however,
that Buyer's reasonable best efforts to collect Overdrafts shall not require
that it initiate or pursue any legal action against any person. It is understood
that Seller shall have no obligation to repurchase Overdrafts with respect to a
Deposit Account except to the extent that the repurchase amount for such
Overdraft with respect to such Deposit Account exceeds $10,000.
IV. SELLER'S REPRESENTATIONS AND WARRANTIES
Seller makes the following representations and warranties to Buyer.
4.1 Organization, Power and Authority.
---------------------------------
(a) Seller is a national banking association duly
organized under the laws of the United States, validly existing
and in good standing. Seller has the corporate power and
authority to enter into and perform this Agreement. The execution
and delivery of this Agreement has been duly authorized by all
necessary corporate action by Seller. Upon execution and delivery
by the parties, this Agreement will constitute a valid and
binding obligation of Seller, enforceable in accordance with its
terms, subject to conservatorship, receivership, and a court's
right under general principles of equity to refuse to direct
specific performance.
(b) The performance of this Agreement by Seller
will not violate any provision of the Articles of Association or
charter or Bylaws of Seller, or any applicable law, rule,
regulation, or order or any contract or instrument by which
Seller is bound, except for such violations which alone, or taken
in the aggregate, would not reasonably be expected to have a
Seller Material Adverse Effect.
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4.2 Litigation and Regulatory Proceedings.
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There are no actions, complaints, petitions, suits
or other proceedings, or any decree, injunction, judgment, order or ruling,
entered, promulgated or pending or (to
Seller's knowledge) threatened against Seller or any of the Assets or the
Liabilities, which alone, or taken in the aggregate, reasonably would be
expected to have a Seller Material Adverse Effect. No governmental agency has
notified Seller that it would oppose or not approve or consent to the
transactions contemplated by this Agreement and Seller knows of no reason for
any such opposition, disapproval or nonconsent.
4.3 Consents and Approvals.
----------------------
Except for required regulatory approvals and third party consents set
forth on Schedule 4.3, no consents, approvals, filings or registrations
with any third party or any public body, agency or authority are
required in connection with Seller's consummation of the transactions
contemplated by this Agreement, other than any consents as may be
required as a result of any facts or circumstances relating solely to
Buyer.
4.4 Owned Real Property.
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(a) Seller will convey good and marketable title,
such as is insurable by any reputable title insurance company, to
the Owned Real Property, free and clear of all encumbrances,
except for easements, restrictions, and other encumbrances of
record or visible from the ground, applicable zoning laws,
building restrictions and all other laws of duly constituted
public authorities, grants of public rights of way, standard
exceptions in the title insurance policy, the rights of any
tenants or landlords pursuant to any ground leases relating to
the Owned Real Property, none of which shall interfere with
Buyer's ability to operate a bank branch on such Owned Real
Property as currently operated by Seller, and liens for taxes and
assessments not delinquent. Seller shall maintain in effect from
the date of this Agreement until the Closing Date, all property,
liability, fire and casualty insurance in effect as of the date
hereof with regard to the Owned Real Property, including the
structures, leasehold improvements and Fixed Assets relating to
the Branches.
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(b) To the knowledge of Seller, Seller has not
received any written notice of violation, citations, summonses,
subpoenas, compliance orders, directives, suits, other legal
process, or other written notice of potential liability under
applicable environmental, zoning, building, fire and other
applicable laws and regulations relating to the Owned Real
Property.
(c) To the knowledge of Seller, Seller has not
received any written notice of a condemnation proceeding relating
to the Branches.
4.5 Fixed Assets.
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Seller has good and marketable title to the Fixed
Assets, free and clear of all encumbrances, claims, charges, security interests,
or liens, except for those, if any,
which do not materially detract from the value of or interfere with the use of
the Fixed Assets. Other than any proprietary software and the property that
would constitute Fixed Assets but for the fact that such property has been
leased by third parties to Seller (which software and property are excluded from
Fixed Assets), the Fixed Assets to be transferred to Buyer hereunder represent
all of the fixed assets used by Seller at the Branches to operate the business
of the Branches on the date hereof.
4.6 Ownership of Cash Reserve Loans.
-------------------------------
Seller has full power and authority to hold each
Cash Reserve Loan, and has good title to the Cash Reserve Loans free and clear
of all liens and encumbrances. Seller is
authorized to sell and assign the Cash Reserve Loans to Buyer and, upon such
assignment, Buyer will have the rights of Seller with respect to the Cash
Reserve Loans in accordance with the terms and conditions thereof.
4.7 Loans.
-----
(a) Seller has full power and authority to hold each Loan,
and has good and marketable title to the Loans free and clear of
all liens and encumbrances. Seller is authorized to sell and
assign the Loans to Buyer and, upon assignment, Buyer will have
the rights of Seller with respect to the Loans in accordance with
the terms and conditions thereof.
19
(b) Each Loan was originated in conformity in all material
respects with applicable laws and regulations; and its principal
balance as shown on Seller's books and records is true and
correct as of the last day shown thereon. None of the Loans set
forth on Schedule 1.1(b) is an Excluded Loan. Seller has complied
in all material respects with all of their obligations under the
Loan Instruments.
(c) Other than the representations and warranties in Section
4.7(a) and (b), all Loans and Loan Instruments transferred to
Buyer on the Closing Date pursuant to Section 2.1(d) shall be
transferred on an "AS IS" basis and without recourse to Seller
and without any representations or warranties as to the
collectibility of any such Loan or the creditworthiness of any
such obligor.
4.8 Validity of and Compliance with Real Property Leases.
----------------------------------------------------
The Real Property Leases are valid and existing
leases under which Seller, as lessee, is entitled to possession of the leased
premises and use thereof as a bank branch.
To Seller's knowledge, no event has occurred and is continuing, which
constitutes a default under any of the Real Property Leases. The assignment of
such leases will transfer to Buyer all of Seller's rights under the Real
Property Leases.
4.9 Compliance with Certain Laws.
----------------------------
The Deposit Accounts and the Cash Reserve Lines of
Credit were opened, extended or made, and have been maintained, in accordance
with all applicable federal and state
laws, regulations, rules and orders, and the Branches have been operated in
compliance with Seller's policies and procedures and all applicable federal and
state laws, regulations, rules and orders, except for such instances of
noncompliance which do not have, and are not reasonably likely to have, a Seller
Material Adverse Effect.
4.10 FDIC Insurance.
--------------
The Deposits are insured by the Federal Deposit
Insurance Corporation through the Bank Insurance Fund to the extent permitted by
law, and all premiums and assessments required to be paid in connection
therewith have been paid when due by Seller.
20
V. BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer makes the following representations and warranties to Seller.
5.1 Organization, Power and Authority.
---------------------------------
(a) Buyer is a corporation duly organized under the
laws of the State of North Carolina, validly existing and in good
standing. Buyer has the corporate power and authority to enter
into and perform this Agreement. The execution and delivery of
this Agreement has been duly authorized by all necessary
corporate action by Buyer. Upon execution and delivery by both
parties, this Agreement will constitute a valid and binding
obligation of Buyer, enforceable in accordance with its terms
subject to conservatorship, receivership, and a court's right
under general principles of equity to refuse to direct specific
performance.
(b) The performance of this Agreement by Buyer will
not violate any provision of the Articles of Association,
charter, Bylaws or similar governing documents of Buyer, or any
applicable law, rule, regulation, or order or any contract or
instrument by which Buyer is bound except for such violations
which alone, or taken in the aggregate, would not reasonably be
expected to have a Buyer Material Adverse Effect.
5.2 Litigation and Regulatory Proceedings.
-------------------------------------
There are no actions, complaints, petitions, suits
or other proceedings, or any decree, injunction, judgment, order or ruling,
entered, promulgated or pending or (to
Buyer's knowledge) threatened against Buyer or any of its properties or assets
which alone, or taken in the aggregate, reasonably would be expected to have a
Buyer Material Adverse Effect. No governmental agency has notified Buyer that it
would oppose or not approve or consent to the transactions contemplated by this
Agreement, and Buyer knows of no reason for any such opposition, disapproval or
nonconsent.
5.3 Consents and Approvals.
----------------------
Except for required regulatory approvals set forth on Schedule 5.3, no
consents, approvals, filings or registrations with any third party or
any public body, agency or authority are required in connection with
Buyer's consummation of the transactions contemplated by this Agreement
other than what may be required as a result of any facts or
circumstances relating solely to Seller.
21
5.4 Regulatory Capital and Condition.
--------------------------------
Buyer is in compliance with all capital standards as of the
date hereof, and has no reason to believe that it will be unable to obtain the
required regulatory approvals for the transactions contemplated by this
Agreement solely as a result of its current level of regulatory capital (subject
to the completion of the Buyer's pending merger with First Savings Bancorp,
Inc., which Buyer expects to occur on or before September 30, 2000, and Buyer
has no reason to believe that such merger will not occur by such date). As of
the date of this Agreement, there is no pending or threatened legal or
governmental proceedings against Buyer or any Affiliate that would affect
Buyer's ability to obtain the required regulatory approvals or satisfy any of
the other conditions required to be satisfied in order to consummate any of the
transactions contemplated by this Agreement.
VI. ADDITIONAL AGREEMENTS OF SELLER
6.1 Access to Seller's Premises, Records and Personnel.
--------------------------------------------------
(a) Upon execution of this Agreement, Seller shall
give Buyer and its representatives such access to the Branches as
Buyer may reasonably request, provided that Buyer does not
unreasonably interfere with the business operations of the
Branches. Seller shall not be required to provide access to or to
disclose information where such access or disclosure would
violate or prejudice the legal rights of any customer or employee
or attorney-client privilege or would be contrary to law, rule,
regulation or any legal or regulatory order or process or any
fiduciary duty or binding agreement entered into prior to the
date of this Agreement.
(b) Anything contained in this Agreement to the
contrary notwithstanding, Seller shall not be required to
disclose, or to cause the disclosure to Buyer or its
representatives (or provide access to any offices, properties,
books or records of Seller, that could result in the disclosure
to such Persons or others), of any tax returns and/or any work
papers relating thereto or any other confidential information
relating to income or franchise taxes or other taxes of Seller,
or trade secrets, patent or trademark applications, or product
research and development belonging to or performed by or for
22
Seller, nor shall Seller be required to permit or to cause others
to permit Buyer or its representatives to copy or remove from the
offices or properties of Seller any documents, drawings or other
materials that might reveal any such confidential information;
provided, however, Buyer shall have access to tax returns to the
extent that liability for the taxes at issue could be imposed on
Buyer.
(c) At Buyer's request and subject to Section
11.11, Seller shall authorize and permit certain of its officers
and members of management to engage in discussions with Buyer for
the purposes of discussing the operations of the Branches and
negotiating and concluding management employment contracts,
employee benefit plans, and new incentive plans and Buyer shall
maintain the confidentiality of any information furnished by such
officers or members of management of Seller pursuant to such
discussions with Buyer.
6.2 Regulatory Approvals.
--------------------
Seller agrees to use its reasonable best efforts to
obtain promptly any regulatory approval on which its consummation of the
transactions contemplated by this Agreement is
conditioned. Seller also agrees to cooperate with Buyer in obtaining any
regulatory approval which Buyer must obtain before the Closing. Seller shall
notify Buyer promptly of any significant development with respect to any
application it files under this Section. Seller also shall provide Buyer with a
copy of any regulatory approval it receives under this Section, promptly after
Seller's receipt of the same.
6.3 Conduct of Business.
-------------------
Except as provided in this Agreement or as may
otherwise be agreed upon by Buyer, Seller will continue to carry on its
operations at the Branches until the Closing in the
ordinary course of business, consistent with prudent business practices. Seller
shall maintain the Owned Real Property and the Leased Facilities in their
current condition, ordinary wear and tear excepted and shall not terminate the
operation of any Branch, unless those operations cease due to events beyond
Seller's control or as required by law. Without the prior written consent of
Buyer, which consent shall not be unreasonably withheld or delayed, from the
date of this Agreement until the Closing Date, Seller will not transfer any
Employee at the Branches as of the date hereof to any of Seller's other
branches, nor will Seller grant any increase in the salary or wages of any of
its Employees at the Branches other than normal increases at times and in
amounts consistent with Seller's past practices.
23
Seller will notify Buyer of any event of which Seller obtain knowledge which
would make any of Seller's representations under Article IV of this Agreement
false in any material respect.
6.4 Covenant of Seller's Not to Solicit.
-----------------------------------
Seller hereby agrees that for a period of one (1) year from
the Closing Date, Seller shall not specifically target and solicit customers of
the Branches whose Deposits or Loans are being assumed or purchased by Buyer;
provided, however, that nothing in this Section 6.4 shall (i) restrict general
mass mailings, telemarketing calls, statement stuffers, advertisements or other
similar communications whether in print, on radio, television, the Internet, or
by other means that are directed to the general public or to a group of
customers who may include customers of the Branches, provided that such group is
defined by criteria other than primarily as customers of the Branches,(ii)
otherwise prevent Seller from taking such actions as may be required to comply
with applicable federal or state laws, rules or regulations or from servicing or
communicating with the then-current customers of Seller, or (iii) restrict or
prevent Seller or its Affiliates from soliciting or providing any deposit,
lending, brokerage, capital markets, trust, investment advisory or any other
financial services to any customer whose Deposits are assumed by, or whose Loan
is assigned to, Buyer pursuant to this Agreement and who maintains other
customer relationships with Seller or its Affiliates after the Closing Date
which solicitations or provision arise from such other relationships, except
that neither Seller nor any of its Affiliates may specifically target and
solicit any deposit or lending business that has the purpose or effect of
replacing in whole or in part any Deposit assumed by, or Loan assigned to, Buyer
pursuant to this Agreement.
6.5 Consents.
Seller agrees to use its reasonable best efforts to obtain
from lessors and any other parties to any Real Property Leases any required
consents to the assignment of such leases and agreements that will occur as a
result of this Agreement or the transactions contemplated hereby. If any such
required consent cannot be obtained, notwithstanding any other provision hereof,
all Assets and Liabilities associated with any relevant Branch or other Owned
Real Property or Leased Facility, other than any such lease or agreement as to
which consent cannot be obtained, shall nevertheless be transferred to Buyer at
the Closing and the parties shall negotiate in good faith and Seller shall use
24
reasonable efforts to make alternative arrangements reasonably satisfactory to
Buyer and Seller that provide Buyer, to the maximum extent reasonably possible,
the benefits of such Branch or other Owned Real Property or Leased Facility in a
manner that does not violate the underlying lease or agreement. Notwithstanding
the foregoing or any other provision hereof, in the event that Seller is unable
to obtain any required consent of the lessor or sub-lessor of any Owned Real
Property or Leased Facility subject to a Real Property Lease for the assignment
thereof to Buyer hereunder and Seller and Buyer are unable to reach a mutually
satisfactory alternative arrangement pursuant to the immediately preceding
sentence, then Buyer shall have the option, exercisable upon written notice to
Seller, to terminate this Agreement with respect to the Branch for which any
required consent cannot be obtained, in which event neither party shall have any
further liability to the other under this Agreement with respect to such Branch,
including the Fixed Assets, Loans and Deposits of such Branch and the Purchase
Price shall be adjusted accordingly.
6.6 Buyer's Right to Reject Loans.
-----------------------------
(a) During the period beginning on a date no later than 60
calendar days after the execution of this Agreement and ending on the fifth
Business Day after such date (the "Review Period"), Seller shall afford to the
officers and authorized representatives of Buyer, subject to Seller's normal
security requirements, access to all necessary Loan Instruments relating to the
Loans existing on the date hereof in order that Buyer may have full opportunity
to make reasonable investigations of the Loans, the Loan Instruments and the
Loan collateral. Notwithstanding the foregoing, Seller shall not be required to
provide access to or to disclose information where such access or disclosure
would violate or prejudice the legal rights of any customer or employee or
attorney-client privilege or would be contrary to law, rule, regulation or any
legal or regulatory order or process or any fiduciary duty or binding agreement
entered into prior to the date of this Agreement.
(b) No later than three Business Days following the
expiration of the Review Period, Buyer shall notify Seller in writing of the
existence of any of the following defects relating to the Loans (any such Loan
being called an "Identified Loan"):
(i) Loan Instruments, which are material to the
enforceability of a Loan, have been lost or are missing;
25
(ii) a Loan is an Excluded Loan;
(iii) a Loan was not originated or has not been
administered in compliance in all material respects with
applicable laws or the Loan Instruments pertaining to such Loan
are not legal, valid and binding or do not contain the true
signature of an obligor; or
(iv) Seller's rights in any collateral are not
perfected or enforceable, or the priority of such rights are not
as reflected in the records.
(c) Following receipt of any such notice, and at any time
prior to the date of notification to the customers of the assignment of the
Loans pursuant to applicable law, Seller may in its sole discretion attempt to
cure any such defect to Buyer's reasonable satisfaction. If Seller is unable or
unwilling to cure such defect to Buyer's reasonable satisfaction, Buyer shall
have the right to reject such Identified Loan in which case such Identified Loan
will be excluded from this Agreement.
VII. ADDITIONAL AGREEMENTS OF BUYER
7.1 Regulatory Approvals.
--------------------
Buyer shall prepare and file, with the assistance
of Seller, as soon as practicable, but not later than ten (10) Business Days
following the date of this Agreement, all
applications, as required by law, to the appropriate federal and/or state
regulatory authorities for approval to effect the transactions contemplated by
this Agreement and shall use its good faith efforts to obtain such approvals.
Buyer also agrees to cooperate with Seller in obtaining any regulatory approval
which Seller must obtain before the Closing. Buyer shall notify Seller promptly
of any significant development with respect to any application it files under
this Section. Buyer also shall provide Seller with a copy of any regulatory
approval it receives under this Section, promptly after Buyer's receipt of the
same.
7.2 Change of Name, Etc.
-------------------
Immediately after the Closing, Buyer will (a) change the name and
logo on all documents and facilities relating to the Assets and the Liabilities
to Buyer's name and logo, (b) notify all persons whose Cash Reserve Loans,
Loans, or Deposits are transferred under this Agreement of the consummation of
the transactions contemplated by this Agreement, and (c) provide all appropriate
notices to the Federal Deposit Insurance Corporation and any other regulatory
26
authorities required as a result of the consummation of such transactions.
Seller shall cooperate with any commercially reasonable request of Buyer
directed to accomplish the removal of Seller's signage by Buyer and the
installation of Buyer signage by Buyer at the Branches; provided, however, that
(i) all such removals and all such installations shall be at the expense of
Buyer, (ii) such removals and installations shall be performed in such a manner
that does not unreasonably interfere with the normal business activities and
operations of the Branches, (iii) such installed signage shall comply with the
applicable Real Property Lease relating to such Branch and all applicable zoning
and permitting laws and regulations, and (iv) such installed signage shall have,
if necessary, received the prior approval of the owner or landlord of the
facility, and such installed signage shall be covered in such a way as to make
the Buyer signage unreadable at all times prior to the Closing, but such cover
shall display the name and/or logo of Seller in a manner reasonably acceptable
to Seller. Buyer agrees not to use any forms or other documents bearing Seller's
or any Affiliates' name or logo after the Closing without the prior written
consent of Seller, and, if such consent is given, Buyer agrees that all such
forms or other documents to which such consent relates will be stamped or
otherwise marked in such a way that identifies Buyer as the party using the form
or other document. As soon as practicable and, in any event, not more than five
(5) nor less than two (2) calendar days prior to the Closing Date, Buyer will
mail new checks reflecting its transit and routing number to customers of the
Branches with check writing privileges. Buyer shall use its commercially
reasonable best efforts to encourage these customers to begin using such checks
and cease using checks bearing Seller's name.
7.3 Owned Real Property and Leased Facilities.
-----------------------------------------
(a) Except as expressly set forth herein, Buyer
hereby acknowledges and agrees that: (i) Buyer is expressly
purchasing the Owned Real Property and is taking assignments of
and assuming the Leased Facilities in its existing condition "AS
IS, WHERE IS, AND WITH ALL FAULTS" with respect to any facts,
circumstances, conditions and defects; (ii) Seller has no
obligation to repair or correct any such facts, circumstances,
conditions or defects or to compensate Buyer for same; (iii)
Seller has specifically bargained for the assumption by Buyer of
all responsibility to inspect and investigate the Owned Real
Property and the Leased Facilities and of all risk of adverse
conditions; and (iv) Buyer has or will have prior to the Closing
undertaken all such physical inspections and examinations of the
Owned Real Property and the Leased Facilities as Buyer deems
27
necessary or appropriate as to the condition of the Owned Real
Property and the Leased Facilities. Except as expressly set forth
herein, Buyer acknowledges that Seller has made no
representations or warranties and shall have no liability to
Buyer (and Buyer hereby waives any right to recourse against
Seller) with respect to the conditions of the soil, the existence
or nonexistence of hazardous substances, any past use of the
Owned Real Property, the economic feasibility of the Owned Real
Property and the Leased Facilities, or the Owned Real Property's
and Leased Facilities' compliance or noncompliance with all laws,
rules or regulations affecting the Owned Real Property and the
Leased Facilities.
(b) Seller agrees to deliver to Buyer, as soon as
reasonably possible after the execution of this Agreement and at
Buyer's expense, copies of all (i) title information in
possession of Seller, including, but not limited to, title
insurance policies, attorneys' opinions on title, surveys,
covenants, deeds, notes and mortgages and easements relating to
the Owned Real Property, and (ii) copies of reports, surveys,
notices, correspondence or other information available to Seller
and relating to the environmental condition of the Owned Real
Property or violations of laws or regulations relating to the
environment. Such delivery shall constitute no warranty by Seller
as to the accuracy or completeness thereof or that Buyer is
entitled to rely thereon. Notwithstanding the foregoing, Buyer
may, at Buyer's option, within forty-five (45) days from the date
of this Agreement, undertake such physical inspections and
examinations of the Owned Real Property and the Leased Facilities
(subject to any landlord's approval or consent as may be
required), and the legal title thereto, including such
inspections of the buildings thereon, as Buyer deems necessary or
appropriate. The cost of any such inspections and examinations
shall be responsibility of Buyer.
(i) If Buyer shall discover a Material Defect, as defined herein, as a result of
Buyer's inspections and examinations, Buyer shall give Seller written notice as
soon as possible (but in no event later than the expiration of the 45 day
period) describing the facts or conditions constituting such Material Defect and
the measures which Buyer reasonably believes are necessary to correct such
Material Defect. "Material Defect" shall mean the existence of (x) a lien or
encumbrance on the legal title to the Owned Real Property, except as previously
28
disclosed in writing to Buyer by Seller, which materially detracts from the
value of the Owned Real Property or Buyer's ability to use such Owned Real
Property as a bank branch and Seller cannot clear title by providing an
indemnification to the title insurance company or using reasonable efforts and
expending no more than $25,000 with respect to one Owned Real Property, (y) any
discharge, disposal, release or emission of any Hazardous Material in the ground
or the structure of the Owned Real Property or the existence of any underground
storage tank for which the Buyer has been advised in writing by its legal
counsel that the tank is not in compliance with Federal, state or local laws and
in which Buyer reasonably believes, based on the advice of its legal counsel and
documented findings of its environmental consultant/contractor, that the amount
of expense or liability which Buyer could reasonably incur or for which it could
reasonably become responsible or liable following consummation of the
transactions contemplated by this Agreement at any time or over any period of
time could equal or exceed $25,000 in the case of each affected Owned Real
Property or Leased Facility, or (z) with respect to the buildings, material
deficiencies in the plumbing, electrical, HVAC, drive thru air transport system,
roof, walls, or foundations as to which Buyer reasonably believes the cost of
repairs or corrections would equal or exceed $25,000 in the case of each
affected Owned Real Property or Leased Facility. It being understood and agreed
that Buyer shall bear the risk and responsibility (in each case with respect to
clauses (x), (y) and (z) above) of the first $25,000 in expense relating to the
remediation of a Material Defect at each of the Owned Real Property and Leased
Facilities, as applicable, and that the provisions set forth in Section
7.3(b)(ii) shall govern the risk and responsibility of any such expense in
excess of such amounts with respect to each Owned Real Property and Leased
Facilities.
(ii) If Seller does not elect to cure any such
Material Defect or is unable to cure such Material Defect to
Buyer's reasonable satisfaction at least ten (10) days prior to
the Closing, and Buyer does not elect to waive such Material
Defect, or if Buyer is denied the ability to make investigations
or inspections by a landlord or other party, the parties shall
negotiate in good faith with a view towards arriving at a
mutually acceptable resolution of the issue. The parties further
intend that the effort to identify a mutually acceptable
resolution shall generally be approached in the following order
of priority: (i) subject to Seller's ability to do so pursuant to
the terms of its Real Property Lease relating to any Leased
Facilities, Buyer shall purchase the assets related to the
subject Owned Real Property or Leased Facility other than the
29
Owned Real Property (in which case the Purchase Price shall be
adjusted accordingly) and assume the liabilities (other than the
Real Property Lease) associated with the Owned Real Property or
Leased Facility affected by the Material Defect, and lease (or
sublet in the case of any Leased Facilities) the real estate and
improvements associated therewith from Seller for a period of 12
months at their fair market rental value (or, in the case of a
sublease, Seller's then current rental payments), but without any
liability to Buyer for environmental matters, and on such other
terms as shall be mutually agreeable to Seller and Buyer and
during which time Buyer may construct or arrange for another
facility in which to operate the business of the affected Owned
Real Property or Leased Facility; (ii) indemnification of Buyer
by Seller; provided, however, with regard to the Leased
Facilities, Seller shall only indemnify and defend Buyer from any
expenses arising out of a Material Defect set forth in Section
7.3(b)(i)(z), identified by Buyer during the review period set
forth in Section 7.3(b) and for which timely notice has been
given to Seller, existing on the Leased Facilities on the date of
assignment of the Real Property Leases to Buyer which is the
responsibility of Seller as lessee under such Real Property
Lease, it being understood that this covenant shall be effective
only during the initial term of Buyer's leasehold interest
(excluding renewals, extensions, and new leases) and shall not
extend to liability arising out of Buyer's acts or omissions, and
provided, further, that Seller's obligation to indemnify Buyer
shall not exceed $200,000 in the aggregate; (iii) adjustment of
the Purchase Price; provided, however, any such Purchase Price
adjustment shall not exceed $200,000 in the aggregate; or (iv)
terminate this Agreement with respect to the Branch affected by
such Material Defect, in which event neither party shall have any
further liability to the other under this Agreement with respect
to such Branch, including the Fixed Assets, Loans and Deposits of
such Branch and the Purchase Price shall be adjusted accordingly.
(iii) With regard to the Leased Facilities, Buyer
and Seller understand that conducting the inspections and
affecting the cure of a Material Defect, if any, may require the
action or the consent of the lessor.
30
(c) Buyer shall be entitled to update its
inspections and examinations of the Owned Real Property and the
Leased Facilities to a date immediately prior to the Closing Date
in accordance with the provisions set forth in this Section
7.3(c). If in the course of updating any such inspection or
examination Buyer discovers a Material Defect that occurred after
the Buyer's review performed pursuant to Section 7.3(b), Buyer
may provide written notice to Seller no later than five Business
Days following Buyer's discovery thereof describing the facts or
conditions constituting the Material Defect and the measures
which Buyer reasonably believes are necessary to correct such
Material Defect. Seller and Buyer shall discuss and agree upon
what measures are necessary to remedy such defect and Seller
shall respond to Buyer's notice no later than the tenth Business
Day after its receipt of notice from Buyer advising Buyer whether
Seller elects to cure the Material Defect. If Seller elects to
cure, then Seller shall proceed with such cure and shall complete
such cure within 45 days thereafter or within such additional
period as shall have been agreed upon Seller and Buyer, provided
that completion of the cure of such Material Defect shall be a
condition to Buyer's obligation to close. If Seller elects not to
cure or is not able to cure, or if Buyer and Seller are not able
to agree on the steps necessary to cure a Material Defect, then
the matter shall be handled as provided in Section 7.3(b)(ii)
above.
(d) No information or the contents of any
environmental audits, nor the results of any investigation of the
Owned Real Property or the Leased Facilities conducted pursuant
to this section, including, but not limited to, the contents of
the report issued in connection therewith, shall be disclosed by
Buyer or its agents, consultants or employees to any third party
without Seller's prior written approval, unless and until Buyer
is legally compelled to make such disclosure under applicable
laws or until Buyer completes its purchase of the Owned Real
Property or assumes the Real Property Lease pursuant to this
Agreement. Notwithstanding the foregoing, Buyer may disclose such
matters to its directors, executive officers, legal counsel and
such employees who are reasonably required to receive such
disclosure (such parties being referred to as "Buyer" for
purposes of this section), the specific identities of whom shall
be supplied to Seller prior to any permitted disclosure to such
party by Buyer.
31
If this Agreement is terminated for any reason, Buyer shall immediately deliver
and/or return to Seller any and all documents, plans and other items furnished
to Buyer pursuant to this section.
7.4 Closing of Branches.
-------------------
Prior to the Closing Date, Buyer shall not provide any
notification to customers, regulatory agencies or any other party as to its
intention to close any of the Branches.
VIII. SELLER'S EMPLOYEES
8.1 Transferred Employees.
---------------------
(a) Buyer will offer to employ all of the Employees
effective as of the Closing Date. Buyer will communicate offers
of employment in accordance with legal requirements and in a form
mutually acceptable to Seller and Buyer. All such Employees shall
be offered employment with Buyer in all cases (i) in a position
requiring comparable skills and abilities as such Employee's
position with Seller on the Closing Date, (ii) with annual base
salary, or weekly or hourly rate of pay which is equal to such
Employee's pay with Seller on the Closing Date, (iii) at a work
location not more than 30 miles from such Employee's work
location with Seller on the Closing Date, and (iv) with a work
schedule that is not changed by more than 10% from such
Employee's work schedule with Seller on the Closing Date (a
"Comparable Job Offer"). Buyer hereby agrees to pay severance
benefits to any Employee who is not offered a Comparable Job
Offer and does not otherwise accept employment with Buyer in
accordance with the payment terms set forth on Schedule 8.1(a).
Each Employee who accepts Buyer's offer of employment and
commences employment with Buyer hereunder shall be referred to as
a "Transferred Employee" for purposes of this Agreement. Buyer
hereby agrees to cooperate with Seller in obtaining, in
connection with any acceptance of an offer of employment with
Buyer, an executed release from such Transferred Employee
providing that Seller and its Affiliates shall not be responsible
for any severance claims or obligations for such Transferred
Employee with respect to any severance plan, policy or practices
of Seller or any of its Affiliates or predecessors. With respect
to any Employee who accepts an offer of employment from Buyer who
on the Closing Date is on military leave, sick leave, maternity
leave, short-term disability or other leave of absence approved
by Seller (but excluding any Employee absent by reason of
long-term disability, for whom Seller will retain all liability),
32
except as required by applicable law, Buyer need only employ such
Employee for the period beginning after such absence if such
Employee returns to employment in accordance with the terms of
such Employee's leave. Any such Employee will cease employment
with Seller at the end of such leave of absence.
(b) Seller is responsible for the filing of Forms
W-2 with the Internal Revenue Service and any required filing
with state tax authorities, with respect to wages and benefits
paid to each Transferred Employee for periods ending on or prior
to the Closing Date.
8.2 Certain Other Obligations of Buyer.
----------------------------------
(a) (i) Buyer shall not have any liability or
obligation under any Benefit Plans or any other program or
arrangement of Seller or an ERISA Affiliate thereof under which
any current or former employee of Seller or any of its Affiliates
has any right to any benefits;
(ii) Upon the Closing, the participation of
Transferred Employees in the Benefit Plans shall cease in accordance with the
terms of such plans; and
(iii) With respect to the Transferred Employees,
Seller shall be responsible for any welfare benefits or claims
which, by reason of events which take place on or prior to the
Closing Date, become payable under the terms of any Welfare
Benefit Plan. With respect to Transferred Employees, Buyer shall
be responsible for any welfare benefits or claims which become
payable under any benefit plan offered by Buyer to such
Transferred Employees by reason of events that take place after
the Closing Date.
(b) (i) From and after the Closing Date, Buyer
shall provide the Transferred Employees with employee benefit
plans, programs, and arrangements (including a "group health
plan" within the meaning of Section 5000(b)(1) of the Code) that
are no less favorable in the aggregate than the employee benefit
plans, programs, and arrangements generally provided on the
Closing Date to other similarly situated employees of Buyer.
Subject to the terms and conditions of such arrangements, such
Transferred Employees will be fully eligible to participate in
Buyer's bonus and other incentive arrangements from the
commencement of such Transferred Employees employment with Buyer
to the same extent as Buyer's similarly situated employees;
33
(ii) Buyer will grant for purposes of vacation
benefits, severance pay and all welfare benefit plans (as defined
in ERISA) past service credit to all Transferred Employees for
periods of time credited to such Transferred Employees under the
Welfare Benefit Plans. To the extent that any Transferred
Employee has satisfied in whole or in part any annual deductible
under a Welfare Benefit Plan, or has paid any out-of-pocket
expenses pursuant to any Welfare Benefit Plan co-insurance
provision, such amount shall be counted toward the satisfaction
of any applicable deductible or out-of-pocket expense maximum,
respectively, under the benefit plans and programs provided to
Transferred Employees by Buyer, and such plans and programs shall
be applied without regard to any limitations relating to
preexisting conditions or required physical examinations that
would not otherwise apply under the respective Welfare Benefit
Plans to the extent that such Transferred Employees are covered
by the Welfare Benefit Plans on the Closing Date;
(iii) Buyer shall take whatever action is
necessary, including amendment of its defined contribution
pension plan, to grant to each Transferred Employee past service
credit for all purposes (including any waiting period) under
Buyer's defined contribution pension plan for all periods of
service credited to each such Transferred Employee under the
Seller's defined contribution pension plan. As soon as reasonably
practicable after the Closing Date, Seller shall provide to Buyer
such information as Buyer reasonably requires to establish the
service for the Transferred Employees credited under the Seller's
defined contribution pension plan;
(iv) As of the Closing Date, Seller will permit
participants in Seller's defined contribution pension plan who
become Transferred Employees to initiate a distribution from
Seller's 401(k) plan;
(v) Buyer shall take whatever action is necessary,
including amendment of its defined benefit pension plan, to grant
to each Transferred Employee past service credit for service
which has been granted under Seller's defined benefit pension
plan, for all purposes, other than benefit accrual, under Buyer's
defined benefit pension plan; and
(vi) Buyer shall provide coverage under Buyer's
severance plan, policies and practices for each Transferred
Employee as of the Closing Date, and for a period of 12 months
following the Closing Date any Transferred Employee entitled to
34
any such severance shall receive from Buyer the greater of the
benefits under either Buyer' severance plan, policies and
practices or Seller's current severance plan, policies and
practices.
8.3 Training.
--------
Seller shall permit Buyer to train the Transferred
Employees before Closing with regard to Buyer's operations, policies and
procedures at Buyer's sole cost and expense.
This training shall take place outside of business hours and may, as mutually
agreed upon by Seller and Buyer, take place at the Branches; provided, however,
that any training that occurs shall be conducted in a manner not disruptive to
operations of the Branches.
IX. CLOSING AND CONDITIONS TO CLOSING
9.1 Time and Place of Closing.
-------------------------
The date of the Closing (the "Closing Date"), which
shall be after the last regulatory approval (and the expiration of any statutory
waiting periods following such
approval) necessary for the Closing has been obtained, shall be on a Friday and,
unless otherwise mutually agreed upon by the parties, shall be on February 9,
2001, and in no event later than March 30, 2001. The Closing shall take place at
Seller's offices located at Xxx Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000, at 10:00 a.m. on the Closing Date, or at a time and place otherwise
determined by mutual agreement of the parties.
9.2 Exchange of Closing Documents.
-----------------------------
The parties shall exchange drafts of all documents
to be delivered at the Closing (other than the Closing Statement) at least ten
Business Days prior to the Closing Date.
9.3 Buyer's Conditions to Closing.
-----------------------------
Buyer's obligations to purchase the Assets and
assume the Liabilities is contingent upon and subject to the fulfillment of the
following conditions:
(a) the parties obtaining all regulatory approvals
which are required in order for them to proceed with the
transactions contemplated by this Agreement and the expiration of
any required waiting period without the commencement of adverse
proceedings by any governmental authority with jurisdiction over
the transactions contemplated by this Agreement;
35
(b) the representations and warranties of Seller in
this Agreement being true and correct as of the Closing Date
(except that representations and warranties as of a specified
date need be true and correct only as of such date); (provided,
however, that for purposes of determining the satisfaction of the
condition contained in this Section 9.3(b), such representations
and warranties shall be deemed to be true and correct if the
failure or failures of such representations and warranties to be
so true and correct (excluding the effect of any qualification
set forth therein relating to "materiality" or "Seller Material
Adverse Effect") do not constitute or give rise to, and are not
reasonably likely to constitute or give rise to, individually or
in the aggregate, a Seller Material Adverse Effect), and all
covenants and conditions of Seller to be performed or met by
Seller on or before the Closing Date having been performed or met
in all material respects;
(c) Seller's delivery to Buyer of the following
documents in form and substance reasonably satisfactory to Buyer:
(i) subject to Section 7.3, special warranty
deeds conveying the Owned Real Property;
(ii) bills of sale, assignments and other
instruments of transfer sufficient to convey to Buyer
all of Seller's right, title, and interest in and to the
remaining Assets;
(iii) a certificate executed by an appropriate
officer of Seller attesting, to the officer's best
knowledge, to Seller's compliance with the conditions
set forth in Section 9.3(b); and
(iv) subject to Section 6.5, appropriate
estoppel certificates executed by the lessors of the
Leased Facilities, to the extent Seller can obtain such
certificates using its reasonable efforts and without
the payment of any fees to such lessors; and
(d) All consents of third parties listed on
Schedule 4.3 or required pursuant to the terms of the Real
Property Leases shall have been obtained; and
36
(e) Buyer's agreement to receive the Closing
Statement and the Settlement Payment as provided in Section 3.2.
9.4 Seller's Conditions to Closing.
------------------------------
Seller's obligation to sell the Assets and transfer
the Liabilities to Buyer is contingent upon and subject to the fulfillment of
the following conditions:
(a) the parties obtaining all regulatory approvals
which are required in order for them to proceed with the
transactions contemplated by this Agreement and the expiration of
any required waiting period without the commencement of adverse
proceedings by any governmental authority with jurisdiction over
the transactions contemplated by this Agreement;
(b) the representations and warranties of Buyer in
this Agreement being true and correct as of the Closing Date
(except that representations and warranties as of a specified
date need be true and correct only as of such date); (provided,
however, that for purposes of determining the satisfaction of the
condition contained in this Section 9.4(b), such representations
and warranties shall be deemed to be true and correct if the
failure or failures of such representations and warranties to be
so true and correct (excluding the effect of any qualification
set forth therein relating to "materiality" or "Buyer Material
Adverse Effect") do not constitute or give rise to, and are not
reasonably likely to constitute or give rise to, individually or
in the aggregate, a Buyer Material Adverse Effect), and all
covenants and conditions of Buyer to be performed or met by Buyer
on or before the Closing Date having been performed or met in all
material respects;
(c) Buyer's delivery to Seller of the following
documents in form and substance reasonably satisfactory to
Seller:
(i) one or more executed assumptions of the
Real Property Leases;
(ii) one or more executed instruments assuming
the remaining Liabilities; and
37
(iii) a certificate executed by an appropriate
officer of Buyer attesting, to the officer's best
knowledge, to Buyer's compliance with the conditions set
forth in Section 9.4(b).
9.5 Survival of Representations, Warranties and Covenants.
-----------------------------------------------------
Unless provided otherwise in this Agreement,
Buyer's and Seller's representations and warranties under this Agreement or
contained in any certificate or instrument
delivered by either party at the Closing shall survive for a period of one year
following the Closing Date. The agreements and covenants contained in this
Agreement shall not survive the Closing except to the extent expressly set forth
herein; provided that the agreements and covenants set forth in Section 11.12
shall survive the Closing or any termination of this Agreement.
X. TERMINATION
10.1 Termination by Either Party.
---------------------------
Either party may terminate this Agreement upon
written notice to the other if:
(a) as a result of any material breach of any
representation, warranty or covenant of Seller (in the case of a
termination by Buyer) or of Buyer (in the case of termination by
Seller), the party terminating this Agreement has given the other
party written notice of such breach and such breach is not cured
within 30 days thereafter;
(b) the Closing does not occur within two hundred
seventy (270) days after the date of this Agreement; provided,
however, that Seller may not terminate this Agreement pursuant to
this paragraph (b) to the extent that the failure of the Closing
to occur within such period arises out of or results from the
actions or omissions of Seller, and that Buyer may not terminate
this Agreement pursuant to this paragraph (b) to the extent that
the failure of the Closing to occur within such period arises out
of or results from the actions or omissions of Buyer; or
(c) the other party so agrees in writing.
The termination of this Agreement under subsection
(a) shall not absolve the breaching party from any liability to the other party
arising out of its breach of this Agreement.
38
XI. MISCELLANEOUS
11.1 Continuing Cooperation.
----------------------
(a) On and after the Closing Date, Seller agrees to
execute, acknowledge and deliver such documents and instruments
as Buyer may reasonably request to vest in Buyer the full legal
and equitable title to the Assets and Liabilities.
(b) On and after the Closing Date, Buyer shall
execute, acknowledge and deliver such documents and instruments
as Seller may reasonably request to relieve and discharge Seller
from its obligations with respect to the Liabilities.
(c) Seller and Buyer shall cooperate with each
other in connection with any examination conducted by any tax
authority subsequent to the Closing Date by promptly providing
upon request information relating to the tax liability of any
business operated by Seller or Buyer with respect to the Branches
and promptly informing the other of the institution of, any
material developments concerning, and the outcome of, the same.
(d) Except as provided in Section 7.2, no interest
in or right to use First Union National Bank's logo or the name
"First Union" or any other similar word, name, symbol or device
in which Seller has any interest by itself or in combination with
any other word, name, symbol or device, or any similar variation
of any of the foregoing (collectively, the "Retained Names and
Marks") is being transferred to Buyer pursuant to the
transactions contemplated hereby. Unless permitted pursuant to
Section 7.2, Buyer shall not after the Closing Date in any way
knowingly use any materials or property, whether or not in
existence on the Closing Date, that bear any Retained Name or
Xxxx. Buyer agrees that Seller shall have no responsibility for
claims by third parties arising out of, or relating to, the use
by the Buyer of any Retained Name or Xxxx after the Closing Date,
and Buyer agrees to indemnify and hold harmless Seller from any
and all claims (and all expenses, including reasonable attorneys'
fees and disbursements incurred in connection with any such
claim) that may arise out of the use thereof by Buyer.
(e) Buyer agrees to provide reasonable assistance
and cooperation to Seller and its Affiliates in activities
related to the prosecution or defense of any pending or future
39
lawsuits, arbitrations, other proceedings or claims involving the
Seller's or its Affiliates and the Branches ("Seller's
Litigation"). In addition, Buyer shall facilitate, without
expense to Seller, the reasonable availability to Seller of the
Transferred Employees, without the need for issuance of any
subpoena or similar process, to testify or assist Seller in the
Seller's Litigation.
11.2 Merger and Amendment.
--------------------
This Agreement sets out the complete agreement of
the parties with respect to the matters discussed in this Agreement, and it
supersedes all prior agreements between the
parties, whether written or oral, which apply to these matters. No provision of
this Agreement may be changed or waived except as expressly stated in a document
executed by both parties.
11.3 Dispute Resolution.
------------------
(a) Neither Seller nor Buyer shall assert any claim
arising out of or relating to this Agreement (except with respect
to claims to be handled under the Working Agreement or submitted
to the Mediator under Section 3.2(c)), unless:
(i) except for claims arising in
respect of Sections 2.4, 2.5 or 11.1(d), the
aggregate amount of all claims by Buyer or Seller
(as the case may be) which satisfy the preceding
clause exceeds $50,000, in which case a claim may
be asserted only to the extent that such threshold
has been exceeded;
(ii) except for claims arising under
Sections 2.4, 2.5, or 11.1(d), the aggregate amount
of all claims by Buyer or Seller (as the case may
be) shall not exceed $2,000,000; and
(iii) except for claims arising
under Sections 2.4, 2.5 or 11.1(d), the
notification required by Section 11.3(b) (if any)
is given on or before the first anniversary of the
Closing Date.
(b) The parties shall attempt in good faith to
resolve any dispute arising out of or relating to this Agreement
promptly by negotiations, as provided in this subsection (b).
Either party shall give the other party written notice of any
dispute not resolved in the normal course of business. Executives
of both parties at comparable levels at least one step above the
40
personnel who have previously been involved in the dispute shall
meet at a mutually acceptable time and place within ten days
after delivery of such notice, and thereafter as often as they
reasonably deem necessary, to exchange relevant information and
to attempt to resolve the dispute. If the matter has not been
resolved by these persons within 30 days of the disputing party's
notice, or if the parties fail to meet within ten days, the
dispute shall be referred to more senior executives of both
parties who have authority to settle the dispute and who shall
likewise meet to attempt to resolve the dispute. All negotiations
under this subsection (b) are confidential and shall be treated
as compromise and settlement negotiations for purposes of the
Federal Rules of Evidence, applicable state rules of evidence,
and common law. The procedures set forth above will be followed
in advance of litigation of any dispute between the parties;
nevertheless, either party may seek a preliminary injunction or
other provisional judicial relief if in its judgment such an
action is necessary to avoid irreparable damage or to preserve
the status quo. Despite any such action, the parties will
continue to participate in good faith in the procedures set forth
in this subsection (b).
(c) Neither party shall have any liability for lost
profits or punitive damages with respect to any claim arising out
of or relating to this Agreement. The sole recourse and remedy of
a party hereto for breach of this Agreement by the other party
hereto shall be against such other party and its assets, and no
officer, director, employee, stockholder or affiliate of any
party shall be liable at law or in equity for the breach by such
party of any of its obligations under this Agreement.
11.4 Indemnification.
---------------
After the Closing Date, and unless otherwise
provided in the Agreement:
(a) Buyer shall indemnify and hold Seller harmless
from and against all claims, lawsuits, costs (including
reasonable counsel fees) and liabilities which arise out of or
relate to transactions or operations at the Branches after the
41
Closing Date, and from any loss or damage resulting from any
breach by Buyer of any representation, warranty or covenant of
Buyer contained in this Agreement. If any claim or lawsuit is
made or commenced as to which Seller proposes to demand such
indemnification, it shall notify Buyer with reasonable
promptness; provided, however, that any failure by Seller to
notify Buyer shall not relieve Buyer from its obligations
hereunder, except to the extent that Buyer is actually prejudiced
by such failure to give notice. Buyer shall have the option of
defending such claim or lawsuit with counsel of its own choosing
at its own cost and expense and such counsel shall, to the extent
consistent with its professional responsibilities, cooperate with
Seller and any counsel designated by Seller. Buyer shall be
liable for any settlement of any claim or lawsuit against Seller
made with Buyer's written consent, which consent shall not be
unreasonably withheld.
(b) Seller shall indemnify and hold Buyer harmless
from and against all claims, lawsuits, costs (including
reasonable counsel fees) and liabilities which arise out of or
relate to transactions or operations at the Branches on or before
the Closing Date, and from any loss or damage resulting from any
breach by Seller of any representation, warranty or covenant of
Seller contained in this Agreement. If any claim or lawsuit is
made or commenced as to which Buyer proposes to demand such
indemnification, it shall notify Seller with reasonable
promptness; provided, however, that any failure by Buyer to
notify Seller shall not relieve Seller from its obligations
hereunder, except to the extent the Seller is actually prejudiced
by such failure to give notice. Seller shall have the option of
defending such claim or lawsuit with counsel of its own choosing
at its own cost and expense and such counsel shall, to the extent
consistent with its professional responsibilities, cooperate with
Buyer and any counsel designated by Buyer. Seller shall be liable
for any settlement of any claim or lawsuit against Buyer made
with Seller's written consent, which consent shall not be
unreasonably withheld.
(c) Any claims for indemnification brought under
this Section shall be subject to the provisions of Section 11.3.
11.5 Counterparts.
------------
This Agreement may be executed in any number of
counterparts, each of which will constitute an original, but all of which taken
42
together shall constitute one and the same instrument.
11.6 Exhibits and Schedules.
----------------------
All exhibits and schedules referred to in this
Agreement shall constitute a part of this Agreement.
11.7 Assignment.
----------
This Agreement is not assignable by either party
without the written consent of the other party, which shall not be unreasonably
withheld; provided, however, Buyer may
assign this Agreement to First Bank, its wholly-owned subsidiary, provided that
Buyer shall nonetheless remain liable and responsible for the performance of all
of its obligations hereunder.
11.8 Headings.
--------
The headings contained in this Agreement are
inserted for convenience only and shall not affect the meaning of this Agreement
or any of its provisions.
11.9 Notices.
-------
Any notice under this Agreement shall be made in
writing and shall be deemed given when delivered in person, when delivered by
first class mail postage prepaid (in which
case the notice shall be deemed given on the third Business Day following the
date on which the notice is postmarked), or when delivered by facsimile
transmission, which transmission also shall be sent by first class mail, postage
prepaid before the second Business Day following the transmission (in which case
the notice shall be deemed given on the day transmitted if transmitted before or
during normal business hours or, otherwise, on the next succeeding Business Day)
to the parties at the respective addresses set forth below or at such other
addresses as each party shall inform the other in writing.
If to Seller to: Xxxxx X. Xxxxxxx
Senior Vice president
First Union National Bank
0000 Xxxx X.X. Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxx X. Xxxxxxx, Esq.
Executive Vice President
43
and General Counsel
First Union Corporation
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
If to Buyer to: Xxxxx X. Xxxxxx
First Xxxxxxx
Xxxx Xxxxxx Xxx 000
Xxxx, Xxxxx Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxx X. Xxxxxxx
Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile: (000) 000-0000
11.10 Expenses.
--------
Unless specifically stated to the contrary in this
Agreement, each party will assume and pay for the expenses it incurs with
respect to the purchase and sale of the Assets
and assumption of the Liabilities under this Agreement, including any expenses
relating to the regulatory application process. Each party shall be responsible
for any fee payable to any agent, broker or finder acting on its behalf in this
transaction.
11.11 Communications.
--------------
During the period from the date of this Agreement
to the Closing Date, Buyer and Seller shall not communicate with the Employees,
depositors, or customers of the Branches,
except as specifically required by the relevant regulatory agencies as part of
the approval process, or as specifically provided for herein:
(a) As soon as practicable following the date of
this Agreement, Seller and Buyer shall jointly communicate, at Buyer's and
Seller's equal expense, with the Employees, depositors or customers of the
Branches advising them of the transactions contemplated by this Agreement. Such
communication shall be in form and substance mutually satisfactory to the
parties hereto and to any regulatory authorities as may be required by
applicable law or regulation. Any and all public announcements or press releases
by either party must comply with Section 11.12 of this Agreement.
44
(b) With the exception of the communications
provided for in paragraph (a) above, and in Section 8.1 (to the extent necessary
to convey an offer of employment) and Section 8.3 (regarding training), Buyer
may not communicate with the Employees, depositors and other customers of the
Branches prior to the Closing Date without the prior written consent of Seller.
Any such permitted communications may not interrupt or interfere with the normal
operations of the Branches, and shall be at Buyer's sole cost and expense.
(c) In addition to the communications provided for
in paragraph (a) above, Seller at its own cost and expense may communicate with
the Employees, depositors and other customers of the Branches at such times and
in such form as deemed appropriate by Seller; provided, that no such
communication shall recommend any actions by any person that shall be in
contravention with the terms of this Agreement or reflect adversely upon Buyer.
11.12 Public Announcements.
--------------------
Each party shall consult with the other before
making any announcement or other public communication with respect to the
transactions contemplated by this Agreement and,
prior to such announcement or other public communication, shall mutually agree
upon the substance and timing thereof.
11.13 Governing Law; Jurisdiction.
---------------------------
This Agreement and the legal relations between the parties
shall be governed by and construed in accordance with the laws of the State of
North Carolina applicable to contracts
made and to be performed entirely within the State of North Carolina.
11.14 No Third Party Beneficiaries.
----------------------------
45
The parties intend that this Agreement shall not
benefit or create any right or cause of action in or on behalf of any Person
other than Seller and Buyer.
IN WITNESS WHEREOF, each of the parties to this Agreement has
caused this Agreement to be executed by a duly authorized officer as of the date
written on page one of this Agreement.
FIRST BANCORP
By: /s/ Xxxxx X. Xxxxxx
---------------------
Xxxxx X. Xxxxxx
Its: Pres. CEO
FIRST UNION NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Xxxxx X. Xxxxxxx
Its: Sr. Vice President
EXHIBIT B
FORM OF CLOSING STATEMENT
Amount of Liabilities Settlement Amount
--------------------- -----------------
Principal Amount of Deposits _______________
Accrued Interest _______________
(Less) Value of Assets
and Amount of Premium
Owned Real Property (_______________)
Fixed Assets (_______________)
Cash on Hand (_______________)
Cash Reserve Loans (_______________)
Loans (_______________)
Overdrafts (_______________)
Amount of Premium (_______________)
(Less) Plus Taxes (_______________)
(Less) Plus Prorated Tax and Expense
Items (_______________)
=======================================
Payment Amount
_______________
B-1
EXHIBIT C
FORM OF ADJUSTED CLOSING STATEMENT
Settlement Adjusted
Amount of Liabilities Amount Amount
Principal Amount of Deposits
------------ ------------
Accrued Interest
------------ ------------
(Less) Value of Assets
and Amount of Premium
Owned Real Property (_________) (________)
Fixed Assets (__________) (________)
Cash on Hand (__________) (________)
Cash Reserve Loans (__________) (________)
Loans ( ) ( )
Overdrafts (__________) (________)
Amount of Premium (__________) (________)
(Less) Plus Taxes (__________) (________)
(Less) Plus Prorated Tax and Expense
Items (__________) (________)
Adjustment Payment
Settlement Payment Amount
---------------- ----------------
Increase (Decrease) from
Settlement Payment Amount
---------------- ----------------
Payment of Training Expenses
---------------- ----------------
Total Increase (Decrease)
and Reimbursement
---------------- -----------------
Interest
---------------- ----------------
Amount Due from Seller
(Buyer)
---------------- ----------------
(Total Adjustment Payment)
---------------- ----------------