PURCHASE AND ASSUMPTION AGREEMENT
Between
Signet Bank
and
Union Bankshares Corporation
Dated As Of
October 21, 1997
PURCHASE AND ASSUMPTION AGREEMENT
---------------------------------
Page Number
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ARTICLE I
TRANSFER OF ASSETS AND LIABILITIES
Section 1.1. Transferred Assets . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Purchase Price . . . . . . . . . . . . . . . . . . . . . 3
Section 1.3. Post-Closing Adjustments . . . . . . . . . . . . . . . . 4
Section 1.4. Deposit Liabilities . . . . . . . . . . . . . . . . . . 5
Section 1.5. Owned Branches . . . . . . . . . . . . . . . . . . . . . 9
Section 1.6. Safe Deposit Business . . . . . . . . . . . . . . . . 10
Section 1.7. Loans Transferred . . . . . . . . . . . . . . . . . . 11
Section 1.8. Records and Data Processing . . . . . . . . . . . . . . 12
Section 1.9. Taxes and Fees; Proration of
Certain Expenses . . . . . . . . . . . . . . . . . . . 13
Section 1.10. Processing of Certain Items After
Closing . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE II
CLOSING AND EFFECTIVE DATE
Section 2.1. Dates . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.2. Closing . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE III
INDEMNIFICATION
Section 3.1. Seller's Indemnification of Purchaser . . . . . . . . . 16
Section 3.2. Purchaser's Indemnification of Seller . . . . . . . . . 17
Section 3.3. Claims for Indemnity . . . . . . . . . . . . . . . . . 17
Section 3.4. Limitations on Indemnification . . . . . . . . . . . . 18
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 4.1. Corporate Organization . . . . . . . . . . . . . . . . 18
Section 4.2. No Violation . . . . . . . . . . . . . . . . . . . . . 18
Section 4.3. Corporate Authority . . . . . . . . . . . . . . . . . 19
Section 4.4. Enforceable Agreement . . . . . . . . . . . . . . . . . 19
Section 4.5. No Brokers . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.6. Personal Property . . . . . . . . . . . . . . . . . . . 19
Section 4.7. Owned Branches . . . . . . . . . . . . . . . . . . . . 19
Section 4.8. Condition of Property . . . . . . . . . . . . . . . . . 19
Section 4.9. Loans . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.10. Limitation of Representations
Warranties . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 5.1. Corporate Organization . . . . . . . . . . . . . . . . 20
Section 5.2. No Violation . . . . . . . . . . . . . . . . . . . . . 20
Section 5.3. Corporate Authority . . . . . . . . . . . . . . . . . . 20
Section 5.4. Enforceable Agreement . . . . . . . . . . . . . . . . . 22
Section 5.5. No Brokers . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.6. Regulatory Capital and Condition . . . . . . . . . . . 22
Section 5.7. Deposit Insurance; Individual
Retirement Accounts . . . . . . . . . . . . . . . . . . 22
Section 5.8. Regulatory Matters . . . . . . . . . . . . . . . . . . 22
ARTICLE VI
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE DATE
Section 6.1. Full Access . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.2. Delivery of Magnetic Media Records . . . . . . . . . . 24
Section 6.3. Application for Approval to Effect
Purchase of Assets and Assumption
of Liabilities . . . . . . . . . . . . . . . . . . . . 24
Section 6.4. Conduct of Business; Maintenance
of Properties . . . . . . . . . . . . . . . . . . . . . 24
Section 6.5. No Solicitation by Seller . . . . . . . . . . . . . . . 25
Section 6.6. Further Actions . . . . . . . . . . . . . . . . . . . . 25
Section 6.7. Fees and Expenses . . . . . . . . . . . . . . . . . . . 25
Section 6.8. Breaches with Third Parties . . . . . . . . . . . . . . 26
Section 6.9. Insurance . . . . . . . . . . . . . . . . . . . . . . . 26
Section 6.10. Public Announcements . . . . . . . . . . . . . . . . . 26
Section 6.11. Tax Reporting . . . . . . . . . . . . . . . . . . . . . 26
Section 6.12. Employee Matters . . . . . . . . . . . . . . . . . . . 26
Section 6.13. Security . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.14. Divestiture Branches . . . . . . . . . . . . . . . . . 29
Section 6.15. Systems Conversion . . . . . . . . . . . . . . . . . . 29
Section 6.16. Customer Notification . . . . . . . . . . . . . . . . . 29
ARTICLE VII
CONDITIONS TO PURCHASER'S OBLIGATIONS
Section 7.1. Representations and Warranties True . . . . . . . . . . 30
Section 7.2. Obligations Performed . . . . . . . . . . . . . . . . . 30
Section 7.3. No Adverse Litigation . . . . . . . . . . . . . . . . . 30
Section 7.4. Regulatory Approvals . . . . . . . . . . . . . . . . . 30
ARTICLE VIII
CONDITIONS TO SELLER'S OBLIGATIONS
Section 8.1. Representations and Warranties True . . . . . . . . . . 31
Section 8.2. Obligations Performed . . . . . . . . . . . . . . . . . 31
Section 8.3. No Adverse Litigation . . . . . . . . . . . . . . . . . 31
Section 8.4. Regulatory Approvals . . . . . . . . . . . . . . . . . 31
ARTICLE IX
TERMINATION
Section 9.1. Methods of Termination . . . . . . . . . . . . . . . . 32
Section 9.2. Procedure Upon Termination . . . . . . . . . . . . . . 33
Section 9.3. Payment of Expenses . . . . . . . . . . . . . . . . . . 33
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1. Entire Agreement; Modification . . . . . . . . . . . . 33
Section 10.2. Waiver or Extension . . . . . . . . . . . . . . . . . . 34
Section 10.3. Assignment . . . . . . . . . . . . . . . . . . . . . . 34
Section 10.4. Confidentiality . . . . . . . . . . . . . . . . . . . . 34
Section 10.5. Notices . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.6. Counterparts . . . . . . . . . . . . . . . . . . . . . 35
Section 10.7. Headings . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.8. Governing Law . . . . . . . . . . . . . . . . . . . . 35
Section 10.9. Expenses . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.10. Severability . . . . . . . . . . . . . . . . . . . . . 35
Section 10.11. Parties In Interest . . . . . . . . . . . . . . . . . 35
Definitions Index
Defined Term Section Number
------------ --------------
ACH 1.4(k)
Adjusted Closing Statement 1.3(b)
Adjustment Payment 1.3(b)
Adjusted Settlement Date 1.3(b)
Assignment and Assumption Agreement 2.2(b)(3)
Xxxx of Sale 2.2(b)(2)
Branch Business Recitals
Branches Recitals
Closing 2.1
Closing Statement 1.3(a)
Coins and Currency 1.1(a)(6)
Deposit Liabilities 1.4(a)
Divestiture Branches 1.2(a)(2)
Effective Date 2.1
Employees 6.12(a)
Excluded Assets 1.1(b)
Federal Funds Rate 1.3(e)
FRB 8.4
Gross Book Value 1.2(c)
Loan Instruments 4.11
Loans 1.1(a)(4)
Mediator 1.3(c)
Obligors 4.11
Owned Branches 1.1(a)(1)
Personal Property 1.1(a)(2)
Purchaser Recitals
Records 1.8(b)
Safe Deposit Contracts 1.1(a)(3)
Seller Recitals
Settlement Payment 1.3(a)
Title Defects 1.5(b)
VSCC 8.4
Working Agreement 1.10
PURCHASE AND ASSUMPTION AGREEMENT
---------------------------------
THIS AGREEMENT, dated as of October 21, 1997, by and between Signet
Bank, a Virginia banking corporation having its principal offices in Richmond,
Virginia (the "Seller"), and Union Bankshares Corporation, a registered bank
holding company having its principal offices in Bowling Green, Virginia (the
"Purchaser"):
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Seller wishes to transfer, upon the terms and conditions set
forth herein, (i) certain assets and certain deposit and other
liabilities of the branch offices listed in attached Exhibit A (the
"Branches"), and (ii) certain other assets and liabilities as set forth
in this Agreement (collectively, the "Branch Business"); and
WHEREAS, Purchaser wishes to acquire the Branch Business upon the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, Seller and Purchaser agree as follows:
ARTICLE I
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TRANSFER OF ASSETS AND LIABILITIES
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Section 1.1. Transferred Assets.
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(a) As of the Effective Date (as defined in Section 2.1 below) and
upon the terms and conditions set forth herein, Seller will
sell, assign, transfer, convey and deliver to Purchaser, and
Purchaser will purchase from Seller, all of the following assets
associated with the Branches and the Branch Business and
identified in this Agreement and the Schedules and Exhibits
hereto, and not otherwise excluded from sale pursuant to the
provisions of Subsection l.l(b) below:
(1) fee simple interest in any real property that is owned by
Seller and upon which a Branch is operated, including the
buildings and other improvements thereto (the "Owned
Branches") as set forth in Schedule 1.1(a)(1) hereto;
(2) except as provided in Subsection l.l(b), the furniture,
fixtures, leasehold improvements and other tangible personal
property owned by Seller
and located at the Branches as of the close of business on
the Effective Date (the "Personal Property");
(3) all safe deposit contracts and leases for the safe deposit
boxes located at the Branches as of the Effective Date
transferred pursuant to Section 1.6 (the "Safe Deposit
Contracts");
(4) all loans transferred pursuant to Section 1.7 (the "Loans");
(5) assignment, transfer and delivery to Purchaser of all
collateral security of any nature held by Seller as
collateral for any Loans acquired by Purchaser pursuant to
Subsection l.l (a) (4) above; and
(6) all coins and currency located at the Branches as of the
close of business on the Effective Date (the "Coins and
Currency").
(b) The assets, properties and rights listed below are specifically
excluded from the sale under this Agreement (the "Excluded Assets"):
(1) any rights to the name "Signet" and any of Seller's
corporate logos, trademarks, trade names, paper stock, forms
and other supplies containing any such logos, trademarks or
trade names;
(2) Seller's signs located at the Branches, except that Seller
and Buyer will attempt to coordinate the removal of the
Signet signage, while leaving the basic sign structure in
place pursuant to the provisions of the Working Agreement;
(3) any trust business conducted by Seller with any customers of
the Branches;
(4) any commercial loans with customers of any of the Branches
except as specifically contemplated by Section 1.7 hereof;
(5) any consumer loans with customers of any of the Branches,
including without limitation overdraft protection loans,
credit card loans, home equity loans or lines of credit,
mortgage loans and installment loans, except as specifically
contemplated by Section 1.7 hereof;
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(6) any brokerage accounts or mutual fund accounts with
customers of any of the Branches; and
(7) the assets listed on Schedule 1.1 (b) hereto.
(c) Seller shall coordinate with Purchaser to remove any Excluded Assets
located at the Branches by the Effective Date or as soon thereafter
as is reasonably practicable. Seller shall remove the Excluded
Assets at its own cost and, apart from making any repairs
necessitated by Seller's negligence in removing the Excluded Assets,
Seller shall be under no obligation to restore the Branches'
premises to their original conditions, which shall be the
responsibility of Purchaser.
Section 1.2. Purchase Price.
--------------
(a) As consideration for the purchase of the Branches and the Branch
Business, Purchaser shall pay Seller a purchase price equal to the
sum of the following:
(1) Book value (cost less accumulated depreciation) for the
Personal Property as shown on Seller's books of account and
$ for the Owned Branches, which amount represents
Seller's best estimate of the fair market value of the Owned
Branches;
(2) A premium for the Branch Business equal to (i) % of the
Deposit Liabilities at the Effective Date of the Agreement
for the Branches located in White Stone, Virginia,
Kilmarnock, Virginia, Colonial Beach, Virginia, Xxxxxxx,
Virginia and Reedville, Virginia and (ii) % of the Deposit
Liabilities at the Effective Date of the Agreement for the
Branches (the "Divestiture Branches") located in Montross,
Virginia and Warsaw, Virginia, the amount of such premium to
remain confidential, unless required to be disclosed by law
or in connection with any regulatory requirement or
examination and Seller shall have the right to disclose such
information to First Union National Bank.
(3) The Gross Book Value (as defined in Subsection 1.2(c)
hereof), including accrued interest, or, in the case of
discount notes, Gross Book Value less unearned income, for
the Loans as set forth in Section 1.7 hereof; and
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(4) The face amount of the Coins and Currency as of the close of
business on the Effective Date.
(b) In addition, Purchaser shall assume, as of the Effective Date, all of
the duties, obligations and liabilities of Seller relating to the
Safe Deposit Contracts, Deposit Liabilities (including all accrued
interest relating thereto) and the Loans; provided, that any cash
items paid by Seller and not cleared prior to the Effective Date
shall be the responsibility of Seller, subject to the terms of
Section 1.4 below.
(c) For purposes of this Agreement, "Gross Book Value" means the value
determined from the Closing Statement, as defined in Section 1.3(a),
which value shall not include any loan loss reserve attributable to
any Loan or any general reserve.
Section 1.3. Post-Closing Adjustments.
------------------------
(a) Not later than the Saturday following the Effective Date, Seller
shall deliver to Purchaser a settlement statement (the "Closing
Statement") prepared in accordance with Seller's customary practices
and procedures used in preparing financial statements, substantially
in the form of Exhibit B to this Agreement, which shall be completed
as of the close of business on the Effective Date and be the basis
of the payment to be made to Purchaser's account by 2:00 p.m. on
the first business day following the Effective Date (the "Settlement
Payment").
(b) The parties shall cooperate in the preparation of an adjusted
closing statement within 30 days after the Effective Date which
shall be prepared in accordance with Seller's customary practices
and procedures used in preparing financial statements, substantially
in the form of Exhibit C to this Agreement (the "Adjusted Closing
Statement"), which Adjusted Closing Statement shall be prepared as
of the close of business on the Effective Date. On the business day
after Purchaser and Seller agree to the Adjusted Closing Statement,
or Purchaser and Seller receive notice of any determination of the
Adjusted Closing Statement under subsection (c) (the "Adjusted
Settlement Date"), Seller shall pay to Purchaser (or Purchaser 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 Effective Date until
the calendar day before the Adjustment Payment is made at a rate per
annum
4
(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 Effective Date, either party may submit the
matter to a firm of certified public accountants mutually agreeable
to Seller and Purchaser (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.
(e) The "Federal Funds Rate" shall be the weighted mean of the high and
low rates quoted for federal funds in the Money Rates Column of The
Wall Street Journal, adjusted as such mean may increase or decrease
during the period between the Effective Date and the date that the
Adjustment Payment is made.
Section 1.4. Deposit Liabilities.
-------------------
(a) "Deposit Liabilities" shall mean all of Seller's duties, obligations
and liabilities relating to the deposit accounts, including, without
limitation, passbook accounts, statement accounts, checking
accounts, money market accounts and certificates of deposit and
deposit accounts that represent Individual Retirement Accounts,
attributed on the books and records of Seller to the Branches as of
the Effective Date.
(b) Except for those liabilities and obligations specifically assumed by
Purchaser under Subsection 1.2(b) above, Purchaser is not
assuming any other liabilities or obligations. Liabilities not
assumed include, but are not limited to, the following:
5
(1) Seller's cashier checks, letters of credit, money orders, interest
checks and expense checks issued prior to Closing, consignments of
U.S. Government "E" and "EE" bonds and any and all traveler's
checks.
(2) Liability or obligations with respect to any litigation, suits,
claims, demands or governmental proceedings arising, commenced or
made known to Seller prior to Closing and related to the Branches.
(3) Deposit accounts associated with lines of credit where a line of
credit is excluded in accordance with Subsection 1.7(b).
(4) Deposit accounts associated with qualified retirement plans where
Seller is the trustee of such plan or the sponsor of a prototype
plan used by such plan.
(c) Seller does not represent or warrant that any deposit customers whose
accounts are assumed by Purchaser pursuant hereto will become or continue to
be customers of Purchaser after the Effective Date.
(d) Purchaser agrees to pay, in accordance with law and customary banking
practices, all properly drawn and presented checks, drafts and withdrawal
orders presented to Purchaser by mail, through automated teller machines,
over the counter or through the check clearing system or any other clearing
system of the banking industry, by depositors of the accounts assumed,
whether drawn on the checks or withdrawal or draft forms provided by Seller
or Purchaser, and in all other respects to discharge, in the usual course of
the banking business, the duties and obligations of Seller with respect to
the balances due and owing to the depositors whose accounts are assumed by
Purchaser pursuant hereto.
(e) If, after the Effective Date, any depositor, instead of accepting the
obligation of Purchaser to pay the Deposit Liabilities assumed pursuant
hereto, shall demand payment from Seller for all or any part of any such
assumed Deposit Liabilities, Seller shall not be liable or responsible for
making such payment; provided, that if Seller shall pay the same, Purchaser
agrees to reimburse Seller for any such payments, and Seller shall not be
deemed to have made any representations or warranties to Purchaser with
respect to any such checks, drafts or withdrawal orders and any
6
such representations or warranties implied by law are hereby expressly
disclaimed. Seller and Purchaser shall make arrangements to provide for the
daily settlement with immediately available funds of Purchaser of checks,
drafts, withdrawal orders, returns and other items presented to and paid by
Seller within 60 days after the Effective Date, but in no event later than
March 13, 1998, and drawn on or chargeable to accounts that have been
assumed by Purchaser; provided, however, that Seller shall be held harmless
and indemnified by Purchaser for acting in accordance with such
arrangements.
(f) Purchaser agrees, at its cost and expense, on or before the Effective Date,
(1) to assign new account numbers to depositors of assumed accounts, (2) to
notify such depositors, in a form and on a date mutually acceptable to
Seller and Purchaser, of Purchaser's assumption of Deposit Liabilities, and
(3) to furnish such depositors with checks on the forms of Purchaser and
with instructions to utilize Purchaser's checks and to destroy unused checks
and draft and withdrawal order forms of Seller. (If Purchaser so elects,
Purchaser may offer to buy from such depositors their unused Seller checks
and draft and withdrawal order forms.) In addition, if required by law,
Seller will notify its affected customers by letter of the pending
assignment of the Deposit Liabilities to Purchaser, which notice shall be at
Seller's cost and expense and shall be in a form mutually agreeable to
Seller and Purchaser.
(g) Purchaser agrees to pay promptly to Seller an amount equal to the amount of
any check, draft or withdrawal order credited to an assumed account with
respect to Deposit Liabilities as of the Effective Date that is returned to
Seller after the Effective Date.
(h) On and after the Effective Date, Purchaser will assume and discharge
Seller's duties and obligations in accordance with the terms, conditions,
laws, rules and regulations that apply to the Deposit Liabilities assumed
under this Agreement.
(i) On and after the Effective Date, Purchaser will maintain and safeguard in
accordance with applicable law and sound banking practices all account
documents, deposit contracts, signature cards, deposit slips, canceled items
and other records related to the Deposit Liabilities assumed under this
Agreement, subject to Seller's right of access to such records as provided
in this Agreement.
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(j) Seller will render a final statement to each depositor of an account assumed
under this Agreement, excluding time deposit accounts, as to transactions
occurring through the Effective Date, including accrued interest. Seller
will be entitled to impose normal fees and service charges on a per-item
basis.
(k) As of the Effective Date, Purchaser, at its expense and with the cooperation
of Seller, will notify all Automated Clearing House ("ACH") originators of
the transfers and assumptions made pursuant to the Agreement. For a period
of 60 days beginning on the Effective Date, but in no event later than March
13, 1998, Seller will honor all ACH items related to accounts assumed under
this Agreement which are mistakenly routed or presented to Seller, provided,
that if Seller shall honor the same, Purchaser agrees to reimburse Seller
for any such payments made in connection therewith. Seller will make no
charge to Purchaser for honoring such items, and will electronically
transmit such ACH data to Purchaser. If Purchaser cannot receive an
electronic transmission, Seller will make available to Purchaser, at
Seller's operations center, receiving items from the ACH tapes containing
such ACH data. Items mistakenly routed or presented after such period will
be returned to the presenting party.
(l) As of the Effective Date, all debit cards connected with a deposit account,
including master money cards and automated teller machine access cards,
issued by Seller to customers of the Branches who will not have master money
card-or automated teller machine-accessible accounts with Seller after the
Effective Date, will be void. Seller will notify customers in writing at
least 30 calendar days prior to the Effective Date of the cancellation of
such debit cards, effective as of the Effective Date.
Seller agrees to provide to Purchaser the necessary data tapes reasonably
required, prior to the Effective Date, to accommodate the processing of
master money or automated teller machine cards, which may then be issued,
but not activated prior to the Effective Date. Furthermore, both Purchaser
and Seller agree to settle, as soon as practicable after the Effective Date,
with immediately available funds of Purchaser, any debit card transactions
presented to and paid by Seller within 30 days after the Effective Date
which are chargeable to accounts that have been assumed by Purchaser;
provided, however, that Seller shall be held
8
harmless and indemnified by Purchaser for acting in accordance with such
arrangements.
Section 1.5. Owned Branches.
--------------
(a) Seller agrees to deliver to Purchaser as soon as reasonably possible after
the execution of this Agreement copies of all title information in
possession of or available to Seller, including but not limited to title
insurance policies, attorney's opinions on title, surveys, covenants, deeds,
notes and deeds of trust and easements relating to the Owned Branches. Such
delivery shall constitute no warranty as to the accuracy or completeness
thereof or that Purchaser is entitled to rely thereon.
(b) Purchaser agrees to notify Seller in writing within 30 days after the date
of this Agreement of any mortgages, pledges, material liens, encumbrances,
restrictions, reservations, tenancies, encroachments, overlaps or other
title exceptions or zoning violations related to the Owned Branches to which
Purchaser reasonably objects (the "Title Defects"). Purchaser agrees that
Title Defects shall not include real property taxes not yet due and payable
or easements and rights of way or similar encumbrances which do not
materially interfere with the use of the Owned Branch as a banking facility.
Seller shall make a good faith effort to correct any such Title Defect to
Purchaser's reasonable satisfaction at least 10 days prior to Closing;
provided, however, that Seller shall not be obligated to bring any lawsuit
or make any payments of money (except to pay liens that Seller does not
dispute in good faith) to cure a Title Defect. If Seller is unable to cure
any such Title Defect to Purchaser's reasonable satisfaction, Purchaser
shall have the option either to receive title in its then existing condition
or to terminate this Agreement with respect to the Owned Branch or Branches
having such Title Defect. Upon termination of this Agreement with respect to
any Owned Branch or Branches pursuant to this Section 1.5, neither party
shall have any further liability to the other party under this Agreement
with respect to such Branch or Branches and the purchase price shall be
adjusted accordingly.
(c) Purchaser shall have the right, at its own expense, to update title matters
at Closing for any changes which may have arisen between the Closing and the
date of Purchaser's original title search. If such update indicates any new
Title Defects, Seller may elect to delay the Closing with respect to the
affected Owned
9
Branch or Branches for up to 30 days while it makes a good faith effort to
cure any such Title Defect to Purchaser's reasonable satisfaction; provided
that Seller shall not be obligated to bring any lawsuit or make any payments
of money (except to pay liens that Seller does not dispute in good faith) to
cure a Title Defect. If Seller is unable to cure any such Title Defect
within such 30 day period, Purchaser shall have the option to receive title
in its then existing condition or to terminate this Agreement with respect
to such Owned Branch or Branches, in which event neither party shall have
any further liability to the other party under this Agreement with respect
to such Owned Branch or Branches and the purchase price shall be adjusted
accordingly.
(d) Purchaser shall have the right to conduct such investigation of
environmental matters with respect to the Owned Branches as it may
reasonably require and shall report the results of any such investigation to
Seller no later than 30 days after the date of this Agreement; provided,
however, that without the prior written consent of Seller, Purchaser shall
not conduct any ground water monitoring or install any test well or
undertake any other investigation which requires a permit or license from,
or the reporting of the investigation or the results thereof to, a local or
state environmental regulatory authority or the United States Environmental
Protection Agency and provided further that such investigation shall be
conducted in a manner that will not disrupt the business being conducted at,
or cause any damage to, the Owned Branches being investigated. Seller shall
have the right, but not the obligation, to cure any material violation of
law relating to the environment which is discovered by Purchaser's
investigation. If Seller either refuses to give such written consent or
refuses to cure any material violation of law relating to the environment,
Purchaser shall have the option either to purchase the Owned Branch or
Branches in their then existing condition or to terminate this Agreement
with respect to the Owned Branch or Branches affected by such refusal, in
which event neither party shall have any further liability to the other
under this Agreement with respect to such Owned Branch or Branches and the
purchase price shall be adjusted accordingly.
Section 1.6. Safe Deposit Business.
---------------------
(a) On and after the Effective Date, Purchaser will assume and discharge
Seller's obligations with respect to the safe deposit box business at the
Branches in accordance
10
with the terms and conditions of contracts or rental agreements related to
such business, and Purchaser will maintain all facilities necessary for the
use of such safe deposit boxes by persons entitled to use them. A current
list of the Safe Deposit Box Contracts is set forth in Schedule 1.6.
(b) On and after the Effective Date, Purchaser shall maintain and safeguard the
records related to such safe deposit box business, and Purchaser shall be
responsible for granting access to and protecting the contents of safe
deposit boxes at the Branches.
(c) Safe deposit box rental payments (not including late payment fees) collected
or uncollected by Seller on or before the Effective Date shall be prorated
as of the Effective Date.
Section 1.7. Loans Transferred.
-----------------
(a) Seller will transfer to Purchaser on the Effective Date, subject to the
terms and conditions of this Agreement, all of Seller's right, title and
interest in (including collateral relating thereto) Loans maintained,
serviced and listed in Seller's general ledger as small business loans or
private banking loans associated with the geographic area served by the
Branches as of the Effective Date, a list of which, as of June 30, 1997, is
included in Schedule 1.7.
(b) Notwithstanding the provisions of Subsection (a) above, the Loans shall not
include:
(1) nonaccruals (which term shall include loans in which the collateral
securing same has been repossessed or as to which collection efforts
have been instituted or, claim and delivery or foreclosure
proceedings have been filed);
(2) loans 90 days or more past due; and
(3) loans in connection with which the borrower has filed a petition for
relief under the United States Bankruptcy Code prior to the
Effective Date.
(c) In connection with the transfer of any Loans requiring notice to the
borrower, Purchaser and Seller agree to comply with all notice and reporting
requirements of the Loan documents or of any law or regulation.
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(d) All Loans transferred to Purchaser shall be valued at their Gross Book
Value, such value to include accrued interest, or in the case of discount
notes, Gross Book Value less unearned income.
(e) All Loans will be transferred without recourse and without any warranties or
representations as to their collectibility or the creditworthiness of any of
the obligors of such Loans.
(f) For a period of 30 days after the Effective Date, Seller will forward to
Purchaser loan payments received by Seller. Purchaser shall reimburse Seller
upon demand for checks returned on payments forwarded to Purchaser; however,
to the extent possible, Seller will deduct the amount of such returned
checks from payments received and shall settle with Purchaser by an official
check.
(g) On and after the Effective Date, Purchaser will be responsible for
maintaining and safeguarding all Loan files, documents and records related
to the Loans in accordance with applicable law and sound banking practices.
(h) If the balance due on any Loan purchased pursuant to this Section 1.7 has
been reduced by Seller as a result of a payment by check received prior to
the Effective Date, which item is returned after the Effective Date, the
asset value represented by the Loan transferred shall be correspondingly
increased and an amount in cash equal to such increase shall be paid by
Purchaser to Seller promptly upon demand.
Section 1.8. Records and Data Processing.
---------------------------
(a) On and after the Effective Date, Purchaser shall become responsible for
maintaining the files, documents and records delivered pursuant to this
Agreement. Purchaser will preserve and safekeep them as required by
applicable law and sound banking practice for the joint benefit of Seller
and Purchaser. After the Effective Date, Purchaser will permit Seller and
its representatives, for reasonable cause, at reasonable times and upon
reasonable notice and at Seller's expense, to examine, inspect, copy and
reproduce any such files, documents or records as Seller deems reasonably
necessary.
(b) On the Effective Date, Seller will transfer to Purchaser such open records,
Loan files and other original documents as exist and are available relating
12
to the assets being transferred and Deposit Liabilities being assumed by
Purchaser hereunder (collectively, the "Records"); provided that should
Purchaser require records or other information retained by Seller,
Seller shall promptly perform the required research on behalf of
Purchaser and make copies of, and excerpts from, such records as
reasonably requested by Purchaser. The cost of such research shall be
borne by Seller for 60 days after the Effective Date and thereafter by
Purchaser, based on the schedule of fees for such services set forth in
attached Schedule 1.8.
Section 1.9. Taxes and Fees; Proration of Certain Expenses.
(a) Purchaser 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
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) Purchaser shall pay to Seller or the relevant taxing jurisdiction (as
appropriate under the circumstances), or reimburse Seller if Seller
shall have paid, any real property transfer, recording and similar
documentary taxes arising out of any transfer pursuant to this
transaction, except that Seller shall pay any grantor's taxes arising
out of this transaction.
(c) Purchaser shall not be responsible for any income tax liability of
Seller arising from the business or operations of the Branches on or
before the Effective Date, and Seller shall not be responsible for any
tax liabilities of Purchaser arising from the business or operations of
the Branches after the Effective Date.
(d) Utility payments, telephone charges, real property taxes, personal
property taxes, rent, salaries, deposit insurance premiums, other
ordinary operating expenses of the Branches and other expenses related
to the liabilities assumed or assets purchased hereunder shall be
prorated between the parties as of the Effective Date. To the extent any
such item has been prepaid by Seller for a period extending beyond the
Effective Date, there shall be a proportionate monetary adjustment in
favor of Seller.
Section 1.10. Processing of Certain Items After Closing.
A draft of the written practices and procedures under which Purchaser and
Seller shall handle all items (including, for
13
example, automated clearing house and electronic funds transfer items)
relating to the transferred assets and Deposit Liabilities, which are
presented or returned following the Effective Date, and any claims relating
to such items, and certain other matters relating to the consummation of
the transactions contemplated hereby is attached to this Agreement as
Exhibit D (the "Working Agreement"). As promptly as practicable following
the execution of this Agreement, the parties agree to finalize the Working
Agreement.
ARTICLE II
CLOSING AND EFFECTIVE DATE
Section 2.1. Dates.
The purchase of assets and assumption of liabilities provided for in this
Agreement shall occur at a closing (the "Closing") to be held on a Friday
at the offices of Seller, 0 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx, at
10:00 a.m. Eastern Standard Time, or at such other place or time as the
parties shall mutually agree, on a mutually agreeable date between January
1 and February 13, 1998. The effective date of this Agreement (the
"Effective Date") shall be 2:00 p.m. Eastern Standard Time on the business
day on which the Closing occurs.
Section 2.2. Closing.
(a) All actions taken and documents delivered at the Closing shall be deemed
to have been taken and executed simultaneously, and no action shall be
deemed taken nor any document delivered until all have been taken and
delivered.
(b) At the Closing, subject to all the terms and conditions of this
Agreement, Seller shall deliver to Purchaser or, in the case of
Subsections (b) (5), (6), (8) and (9), make reasonably available to
Purchaser:
(1) Limited warranty deeds, transferring title to the Owned Branches to
Purchaser;
(2) A Xxxx of Sale, in substantially the form attached hereto as Exhibit
E (the "Xxxx of Sale"), transferring to Purchaser all of Seller's
interest in the Personal Property and the Loans;
(3) An Assignment and Assumption Agreement, in substantially the form
attached hereto as Exhibit F (the "Assignment and Assumption
Agreement"),
14
assigning to Purchaser Seller's interest in and
obligations under the Safe Deposit Contracts, Deposit Liabilities
and Loans;
(4) Consents from third persons that are required to effect the
assignments set forth in the Assignment and Assumption Agreement;
(5) Seller's keys to the safe deposit boxes and Seller's records related
to the safe deposit box business at the Branches;
(6) Seller's Records related to the Loans;
(7) Any collateral securing the Loans;
(8) The Coins and Currency;
(9) Such of the other assets to be purchased as shall be capable of
physical delivery;
(10) A certificate of a proper officer of Seller, dated as of the
Effective Date, certifying to the fulfillment of all conditions which
are the obligation of Seller and that all of the representations and
warranties of Seller set forth in this Agreement remain true and
correct in all material respects on the Effective Date;
(11) A resolution of the Board of Directors of Seller, or its Executive
Committee, approving the sale of the assets and the assumption of the
liabilities contemplated hereby; and
(12) Such certificates and other documents as Purchaser and its counsel
may reasonably require to evidence the receipt by Seller of all
necessary corporate and regulatory authorizations and approvals for
the consummation of the transactions provided for in this Agreement.
(c) At the Closing, subject to all the terms and conditions of this
Agreement, Purchaser shall deliver to Seller:
(1) The Assignment and Assumption Agreement;
(2) A certificate of receipt acknowledging the delivery and receipt of
possession of the property and records transferred pursuant to this
Agreement, including, without limitation, the collateral for any
Loans;
15
(3) A certificate of a proper officer of Purchaser, dated as of the
Effective Date, certifying to the fulfillment of all conditions which
are the obligation of Purchaser and that all of the representations
and warranties of Purchaser set forth in this Agreement remain true
and correct in all material respects on the Effective Date;
(4) A resolution of the Board of Directors of Purchaser, or its Executive
Committee, approving the purchase of the assets and the assumption of
the liabilities contemplated hereby; and
(5) Such certificates and other documents as Seller and its counsel may
reasonably require to evidence the receipt by Purchaser of all
necessary corporate and regulatory authorizations and approvals for
the consummation of the transactions provided for in this Agreement.
(d) All instruments, agreements and certificates described in this Section
2.2 shall be in form and substance reasonably satisfactory to the
parties' respective legal counsel.
ARTICLE III
INDEMNIFICATION
Section 3.1. Seller's Indemnification of Purchaser.
Seller shall indemnify, hold harmless and defend Purchaser from and against
any breach by Seller of any representation or warranty contained herein and
all claims, losses, liabilities, demands and obligations, including
reasonable attorneys' fees and expenses, arising out of any actions, suits
or proceedings commenced prior to the Effective Date (other than proceedings
to prevent or limit the consummation of this transaction) relating to
operations at the Branches; and, except as otherwise provided in this
Agreement, Seller shall further indemnify, hold harmless and defend
Purchaser from and against all claims, losses, liabilities, demands and
obligations, including reasonable attorneys' fees and expenses, real estate
taxes, intangibles and franchise taxes, sales and use taxes, social security
and unemployment taxes, all accounts payable and operating expenses
(including salaries, rents and utility charges) incurred by Seller prior to
the Effective Date and which are claimed or demanded on or after the
Effective Date, or which arise out of any actions, suits or proceedings
commenced on or after the Effective Date and which relate to operations at
the Branches prior to the Effective Date.
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Section 3.2. Purchaser's Indemnification of Seller.
Purchaser shall indemnify, hold harmless and defend Seller from and against
any breach by Purchaser of any representation or warranty contained herein
and all claims, losses, liabilities, demands and obligations, including
reasonable attorneys' fees and expenses, arising out of any actions, suits
or proceedings commenced after the Effective Date relating to operations at
the Branches; and, except as otherwise provided in this Agreement, Purchaser
shall further indemnify, hold harmless and defend Seller from and against
all claims losses, liabilities, demands and obligations, including
reasonable attorneys' fees and expenses, real estate taxes, intangibles and
franchise taxes, sales and use taxes, social security and unemployment
taxes, all accounts payable and operating expenses (including salaries,
rents and utility charges), which Seller may receive, suffer or incur in
connection with operations and transactions occurring after the Effective
Date and which involve the Branches, the assets transferred or the
liabilities assumed pursuant to this Agreement.
Section 3.3. Claims for Indemnity.
(a) A claim for indemnity under Sections 3.1 or 3.2 of this Agreement may be
made by the claiming party at any time prior to 12 months after the
Effective Date by the giving of written notice thereof to the other
party. Such written notice shall set forth in reasonable detail the
basis upon which such claim for indemnity is made. In the event that any
such claim is made within such prescribed 12-month period, the indemnity
relating to such claim shall survive until such claim is resolved.
Claims not made within such 12-month period shall cease and no indemnity
shall be made therefor.
(b) In the event that any person or entity not a party to this Agreement
shall make any demand or claim or file or threaten to file any lawsuit,
which demand, claim or lawsuit may result in any liability, damage or
loss to one party hereto of the kind for which such party is entitled to
indemnification pursuant to Section 3.1 or 3.2 hereof, then, after
written notice is provided by the indemnified party to the indemnifying
party of such demand, claim or lawsuit, the indemnifying party shall
have the option, at its own cost and expense, to retain counsel for the
indemnified party to defend any such demand, claim or lawsuit. In the
event that the indemnifying party shall fail to respond within five days
after receipt of such notice of any such demand, claim or lawsuit, then
the indemnified party shall retain counsel and conduct the defense of
such demand,
17
claim or lawsuit as it may in its discretion deem proper, at the cost
and expense of the indemnifying party. In effecting the settlement of
any such demand, claim or lawsuit, an indemnified party shall act in
good faith, shall consult with the indemnifying party and shall enter
into only such settlement as the indemnifying party shall approve (the
indemnifying party's approval will be implied if it does not respond
within 10 days of its receipt of the notice of such settlement offer).
Section 3.4. Limitations on Indemnification.
Notwithstanding anything to the contrary contained in this Article III, no
indemnification shall be required to be made by Seller until the aggregate
amount of all such claims by Purchaser exceeds $100,000 and thereafter
Purchaser shall be entitled to seek indemnification under this Article III
only to the extent that the aggregate amount of liability under this Article
in excess of $100,000 does not exceed $3,000,000. IN ADDITION, THE PARTIES
SHALL HAVE NO OBLIGATIONS UNDER THIS ARTICLE III FOR ANY CONSEQUENTIAL
LIABILITY, DAMAGE OR LOSS THE INDEMNIFIED PARTY MAY SUFFER.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows, which
representations and warranties shall survive the Effective Date for a period of
12 months:
Section 4.1. Corporate Organization.
Seller is a banking corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Virginia. Seller has the
corporate power and authority to own its properties, carry on its business
as currently conducted and to effect the transactions contemplated herein.
Section 4.2. No Violation.
The Branches have been operated in all material respects in accordance with
applicable laws, rules and regulations. Except as set forth in Schedule 4.2,
neither the execution and delivery of this Agreement, nor the consummation
of the transactions contemplated herein, will violate or conflict with (a)
Seller's Articles of Incorporation or Bylaws, as amended; (b) any material
provision of any material agreement or any other material restriction of any
kind to which Seller is a party or by which Seller is bound; (c) any
18
material statute, law, decree, regulation or order of any governmental
authority; or (d) any material provision which will result in a default
under, or cause the acceleration of the maturity of, any material obligation
or loan to which Seller is a party.
Section 4.3. Corporate Authority.
The execution and delivery of this Agreement, and the consummation of the
transactions contemplated herein, have been duly authorized by Seller's
Board of Directors (or its Executive Committee). No further corporate
authorization is necessary for Seller to consummate the transactions
contemplated hereunder.
Section 4.4. Enforceable Agreement.
This Agreement has been duly authorized, executed and delivered by Seller
and is the legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, except to the extent that the
enforceability thereof may be limited by (a) bankruptcy laws, insolvency
laws or other similar laws generally affecting creditors' rights and (b) by
equitable principles of general application.
Section 4.5. No Brokers.
Except as otherwise disclosed in Schedule 4.5, no agent, broker, investment
banker or other person acting on behalf or under authority of Seller is or
will be entitled to any broker's or finder's fee or any other commission or
similar fee directly or indirectly in connection with any of the
transactions contemplated by this Agreement.
Section 4.6. Personal Property.
Seller owns, and will convey to Purchaser at the Closing, all of Seller's
right, title and interest to all of the Personal Property free and clear of
any claims, mortgages, liens, security interests, pledges or encumbrances
of any kind, except as set forth in Schedule 4.6 or elsewhere in this
Agreement.
Section 4.7. Owned Branches.
Seller makes the following representations regarding the Owned Branches.
(a) Seller has no knowledge of any condemnation proceedings pending against
the owned Branches.
19
(b) Except as set forth in Schedule 4.7, Seller has not entered into any
material agreement regarding the Owned Branches, and neither Seller nor
the Owned Branches is subject to any claim, demand, suit, unfiled lien,
proceeding or litigation of any kind, pending or outstanding, or to the
knowledge of Seller, threatened or likely to be made or instituted,
which would in any way be binding upon Purchaser or its successors or
assigns or materially affect or limit Purchaser's or its successors' or
assigns' use and enjoyment of the Owned Branches or which would
materially limit or restrict Purchaser's right or ability to enter into
this Agreement and consummate the sale and purchase contemplated
hereby.
(c) Seller has or will have at Closing, good and marketable fee simple
title to the Owned Branches and, at Closing, will own the Owned
Branches outright subject to no mortgage, pledge, lien, security
interest, lease, charge, encumbrance or conditional sales or other
title retention agreement except for real property taxes not yet due
and payable, and easements and rights of way which do not materially
interfere with the use of the Owned Branches as Branches. Purchaser's
sole remedy for a breach of the representations and warranties in this
Section 4.7 shall be to elect not to purchase a Branch as provided in
Section 1.5.
Section 4.8. Condition of Property.
The Owned Branches and Personal Property to be purchased by Purchaser
hereunder are sold AS IS, WHERE IS, with no warranties or representations
whatsoever, except as may be expressly represented or warranted in this
Agreement.
Section 4.9. Loans.
To the best of Seller's knowledge, each of the Loans, and all actions in
connection therewith, have been originated and administered in compliance
in all material respects with all applicable laws. To the best of Seller's
knowledge, each of the Loans (i) is a legal, valid and binding obligation
of the obligor, maker, co-maker, guarantor, endorser or debtor (such
person referred to herein as an "Obligor") thereof or thereunder and is
evidenced by legal, valid and binding instruments (such instruments, which
will be delivered to Purchaser on the Effective Date, referred to herein as
the "Loan Instruments") executed by the respective Obligors, each of whom
at the time of such execution had capacity to contract, and any signature
on any Loan Instrument is the true signature of the Obligor on the loan
involved, (ii) is enforceable in accordance with its terms
20
(except as enforceability may be limited by bankruptcy laws and other laws
of similar nature relating to creditors' rights), and (iii) is not subject
to any defense, counterclaim or set-off of any kind. Seller is not in
default under any of the Loans.
Section 4.10. Limitation of Representations and Warranties.
Except as may be expressly represented or warranted in this Agreement by
Seller, Seller makes no representations or warranties whatsoever with
regard to any asset being transferred to Purchaser or any liability or
obligation being assumed by Purchaser or as to any other matter or thing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows, which
representations and warranties shall survive the Effective Date for a period of
12 months:
Section 5.1. Corporate Organization.
Purchaser is a registered bank holding company, duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Virginia. Purchaser has the corporate power and authority to own the
properties being acquired, to assume the liabilities being transferred and
to effect the transactions contemplated herein.
Section 5.2. No Violation.
Except as set forth in Schedule 5.2, neither the execution and delivery by
Purchaser, of this Agreement, nor the consummation of the transactions
contemplated herein, will violate or conflict with (a) Purchaser's Articles
of Incorporation or Bylaws, as amended; (b) any material provision of any
material agreement or any other material restriction of any kind to which
Purchaser is a party or by which Purchaser is bound; (c) any material
statute, law, decree, regulation or order of any governmental authority; or
(d) any material provision which will result in a default under, or cause
the acceleration of the maturity of, any material obligation or loan to
which Purchaser is a party.
Section 5.3. Corporate Authority.
The execution and delivery of this Agreement, and the consummation of the
transactions contemplated herein, have been duly authorized by Purchaser's
Board of Directors (or
21
its Executive Committee). No further corporate authorization is necessary
for Purchaser to consummate the transactions contemplated hereunder.
Section 5.4. Enforceable Agreement.
This Agreement has been duly authorized, executed and delivered by
Purchaser and is the legal, valid and binding agreement of Purchaser,
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by (a) bankruptcy laws, insolvency
laws or other similar laws generally affecting creditors' rights and (b) by
equitable principles of general application.
Section 5.5. No Brokers.
Except as otherwise disclosed in Schedule 5.5, no agent, broker, investment
banker or other person acting on behalf or under authority of Purchaser is
or will be entitled to any broker's or finder's fee or any other commission
or similar fee directly or indirectly in connection with any of the
transactions contemplated by this Agreement.
Section 5.6. Regulatory Capital and Condition.
Purchaser 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 herein
solely as a result of its current level of regulatory capital. As of the
date hereof, there is no pending or threatened legal or governmental
proceedings against Purchaser or any affiliate of Purchaser that would
affect Purchaser's ability to obtain the required regulatory approvals or
satisfy any of the other conditions required to be satisfied in order to
consummate any transactions contemplated hereby.
Section 5.7. Deposit Insurance; Individual Retirement Accounts.
The deposit accounts of Purchaser are insured by the Federal Deposit
Insurance Corporation to the maximum extent permitted by law. Purchaser has
all power and authority necessary to serve as custodian for, and assume
obligations relating to, deposit accounts that represent Individual
Retirement Accounts.
Section 5.8. Regulatory Matters.
Purchaser has discussed with all appropriate regulatory authorities in
appropriate detail the proposed structure of its acquisition of the Branch
Business, including without limitation, the execution of this Agreement by
a bank
22
holding company, the filing of the requisite applications for regulatory
approval in the name of the bank holding company, any necessary reallocation of
capital among the Company's subsidiary banks and the subsequent assignment of
the Branch Business to one or more of such subsidiary banks at the Closing, and
such regulatory authorities have indicated that the proposed structure does not
present any material issues to such regulatory authorities and will not delay
the timely regulatory approval or closing of such acquisition. In addition,
Purchaser has been advised by its primary federal banking regulator that (i) it
will be allowed to acquire at the Closing all of the Branches and convert those
Branches to Purchaser's systems, but will be required to divest the Divestiture
Branches after the Closing and, in connection therewith, Purchaser will be
required to comply with certain restrictions, including the execution of
definitive sale agreements with respect to the Divestiture Branches by the
Closing and the consummation of the sale of the Divestiture Branches within 180
days after the Closing and (ii) if the restrictions with respect to the
Divestiture Branches are not complied with in respect of either or both of the
Divestiture Branches, Purchaser shall convey the affected Branch or Branches to
a federal trustee for disposition. Purchaser acknowledges that, notwithstanding
the restrictions referred to above, it will acquire at the Closing all of the
Branches (subject to the terms and conditions of this Agreement) and convert
them to its systems in a single conversion.
ARTICLE VI
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE DATE
Section 6.1. Full Access.
Seller shall afford to the officers and authorized representatives of Purchaser,
upon prior notice and subject to Seller's normal security requirements, access
to the properties, books and records pertaining to the Branches in order that
Purchaser may have full opportunity to make reasonable investigations, at
reasonable times without interfering with the normal business and operations of
the Branches, of the affairs of Seller relating to the Branches. The officers of
Seller shall furnish Purchaser with such additional financial and operating data
and other information as to the business and properties at the Branches, or
where otherwise located, as Purchaser may, from time to time, reasonably request
and as shall be available, including, without limitation, information required
for inclusion in all governmental applications necessary to effect this
transaction. Nothing in this Section 6.1 shall require Seller to breach any
obligation of confidentiality
23
or to reveal any proprietary information, trade secrets or marketing or
strategic plans.
Section 6.2. Delivery of Magnetic Media Records
Seller shall prepare at its expense and make available to Purchaser at Seller's
data processing center, magnetic media records in Seller's field format not
later than October 24, 1997 and further shall make available to Purchaser such
records updated as of the Closing Date, which records shall contain the
information related to the Deposit Liabilities. Such updated records shall be
made available at such time after Closing as agreed to by the parties.
Section 6.3. Application for Approval to Effect Purchase of Assets and
Assumption of Liabilities.
Within 30 days following the execution of this Agreement, Purchaser shall
prepare and file all applications required by law with the appropriate
regulatory authorities for approval to purchase and assume the aforesaid assets
and liabilities, to establish operations at the locations of the Branches, and
to effect in all other respects the transactions contemplated herein. Purchaser
agrees to process such applications in a diligent manner and on a priority basis
and to provide Seller promptly with a copy of such applications as filed (except
for any confidential portions thereof) and all material notices, orders,
opinions, correspondence and other documents with respect thereto, and to use
its best efforts to obtain all necessary regulatory approvals. On the date
hereof, Purchaser knows of no reason why such applications should not receive
all such approvals. Purchaser shall promptly notify Seller upon receipt by
Purchaser of notification that any application provided for hereunder has been
denied. Seller shall provide such assistance and information to Purchaser as
shall be reasonably necessary for Purchaser to comply with the requirements of
the applicable regulatory authorities.
Section 6.4. Conduct of Business; Maintenance of Properties.
From the date hereof until the Effective Date, Seller covenants that it will:
(a) Carry on the business of the Branches substantially in the same manner as on
the date hereof, use all reasonable efforts to preserve intact its current
business organization and preserve its business relationships with
depositors, customers and others having business relationships with it and
whose accounts will be retained at the Branches; provided, however, that
Seller need not, in its sole discretion,
24
advertise or promote new or substantially new customer services in the
principal market area of the Branches;
(b) Cooperate with and assist Purchaser in assuring the orderly transition of
the business of the Branches to Purchaser from Seller; and
(c) Maintain the Owned Branches and Personal Property in their current
condition, ordinary wear and tear excepted.
Section 6.5. No Solicitation by Seller.
For a period of 12 months after the Effective Date, Seller will not specifically
target and solicit customers of the Branches for deposit business utilizing any
customer or mailing list which consists primarily of customers of the Branches;
provided, however, these restrictions shall not restrict general mass mailings,
telemarketing calls, statement stuffers, Internet banking services and other
similar communications directed to all the current customers of Seller or
Seller's affiliates, or to the public or newspaper, radio or television
advertisements of a general nature, prohibit the solicitation of such customers
whose names appear on other customer lists obtained by Seller or otherwise
prevent Seller from taking such actions as may be required to comply with any
applicable federal or state laws, rules or regulations. In addition, these
restrictions shall not restrict the solicitation of (i) commercial deposit
accounts normally established and maintained in offices or other branches other
than the Branches or (ii) those customers of the Branches maintaining accounts,
including, without limitation, brokerage accounts, consumer loan accounts,
commercial loan accounts, trust accounts and cash management accounts, which
will remain unaffected by this transaction, as to those unaffected accounts.
Section 6.6. Further Actions.
The parties hereto shall execute and deliver such instruments and take such
other actions as the other party may reasonably require in order to carry out
the intent of this Agreement.
Section 6.7. Fees and Expenses.
Purchaser shall be responsible for the costs of all title examinations, title
insurance fees, surveys, its own attorneys' and accountants' fees and expenses,
recording costs (other than grantor's taxes), transfer fees, documentary stamps
and fees associated with the regulatory approval process and other expenses
arising in connection
25
therewith. Seller shall be responsible for its own attorneys' and accountants'
fees and expenses related to this transaction.
Section 6.8. Breaches with Third Parties.
If the assignment of any material claim, contract, license, lease or commitment
(or any benefit arising thereunder) without the consent of a third party would
constitute a breach thereof or materially affect the rights of Purchaser or
Seller thereunder, then such assignment is hereby made subject to such consent
or approval being obtained.
Section 6.9. Insurance.
On the Effective Date, Seller will discontinue its insurance coverage maintained
in connection with the Branches and the activities conducted thereon. Purchaser
shall be responsible for all insurance protection for the Branches' premises and
the activities conducted thereon immediately following the Effective Date.
Section. 6.10. Public Announcements.
Seller and Purchaser agree that, from the date hereof, neither shall make any
public announcement or public comment regarding this Agreement or the
transactions contemplated herein without first consulting with the other party
hereto and reaching an agreement upon the substance and timing of such
announcement or comment, it being acknowledged and agreed that this transaction
is deemed a material transaction to Purchaser requiring timely announcement by
it, at its own expense. Further, Seller and Purchaser acknowledge the
sensitivity of this transaction to the Employees (as defined in Section 6.12
below) and no announcements to or communications with the public or the
Employees shall be made without the prior approval of Seller.
Section 6.11. Tax Reporting.
Seller shall comply with all tax reporting obligations in connection with
transferred assets and liabilities on or before the Effective Date, and
Purchaser shall comply with all tax reporting obligations with respect to the
transferred assets and liabilities after the Effective Date.
Section 6.12. Employee Matters.
(a) Purchaser shall retain all employees employed by Seller in connection with
the Branch Business at the Effective Date (the "Employees"), in their then
current
26
functional positions at each Branch with remuneration not less than
current levels (subject to normal salary increases) and benefits
generally equivalent to current levels. In addition to currently active
Employees, Employees shall include for purposes of this Agreement:
Employees employed by Seller in connection with the Branch Business who,
as of the Effective Date, are on leave for purposes of jury duty,
vacation, military duty, medical leave, sick leave, leave under the
Family and Medical Leave Act, short-term disability leave, or other
approved leave.
(b) As of the Effective Date, Purchaser will permit Employees to participate
in employee benefit plans generally comparable to the programs previously
made available to them for their prior service with Seller under
Purchaser's vacation, sick leave and leave of absence policies. With
respect to Purchaser's pension and retirement plans, Purchaser will treat
service by any Employee with Seller prior to the Effective Date as
service with Purchaser for purposes of vesting and participating in (but
not for the purpose of the accrual of benefits under) such plans and
programs. The Employees' accrual of benefits under pension plans and
retirement programs covering employees of Purchaser shall be based solely
on their service with Purchaser after the Effective Date. Purchaser will
waive any waiting periods and pre-existing conditions under its welfare
plan(s) with respect to Employees and dependents.
(c) If applicable, Purchaser agrees to permit and shall modify its existing
401(k) plan to the extent necessary to permit a trustee-to-trustee
transfer from Seller's 401(k) plan of the vested account balances of
participants in that plan who become employees of Purchaser. Seller will
cause the vested account balances of participants in Seller's 401(k) plan
who become employees of Purchaser to be transferred to Purchaser's 401(k)
plan in a trustee-to-trustee transfer.
(d) Purchaser will assume the responsibility for all workers' compensation
claims made by Employees arising from events occurring after the
Effective Date. Seller will retain the responsibility for all workers'
compensation claims made by its employees or former employees that arise
from events that occur before the Effective Date.
(e) Seller's plans will be responsible for expenses covered by Seller's
medical plans; provided, that such expenses
27
are incurred before the Effective Date. For Employees who elect to
participate, Purchaser's plans will assume responsibility for health and
accident claims relating to Employees incurred after the Effective Date.
(f) Seller's plans will be responsible for obligations under Internal Revenue
Code Section 4980B and ERISA Section 601 ("COBRA") with respect to
qualifying events of Employees and their dependents occurring before the
Effective Date, and Purchaser's plans will be responsible for such COBRA
obligations effective after the Effective Date.
(g) Seller makes no representations or warranties about whether any of the
Employees will accept employment with Purchaser or remain employed at the
Branches after the date hereof or after the Effective Date. Seller will
use reasonable efforts to encourage the Employees to continue employment
with Seller at the Branches until the Effective Date. Any Employee whose
employment shall be terminated for any reason prior to the Effective Date
or who shall elect not to be an employee of Purchaser shall be dealt with
by Seller in its sole and absolute discretion. Seller agrees that, for a
period of 12 months after the Effective Date, it will not solicit for
employment any Employee who remains employed by Purchaser; provided that
Seller shall not be precluded from hiring any Employee who (i) initiates
discussions regarding such employment without any direct or indirect
solicitation by Seller or (ii) responds to any public advertisement
placed by Seller.
(h) For a period of 12 months after the Effective Date, Purchaser will not
terminate an Employee without cause without paying to such Employee a
severance benefit no less than the applicable severance benefit described
in Schedule 6.12.
(i) If the transactions contemplated by this Agreement are not consummated
for any reason, Purchaser shall not solicit for hire any Employee or
employee associated with the Branch Business of Seller for a period of
two years from the date hereof.
(j) Nothing in this Section 6.12 is intended, nor shall it be construed, to
confer any express or implied third party beneficiary rights in any
person including present or former employees of Seller, or any
beneficiaries or dependents thereof, other than Purchaser or Seller.
28
Section 6.13. Security
On and after the Effective Date, Purchaser shall be solely responsible for the
security of and insurance on all persons and property located in or about the
Branches.
Section 6.14. Divestiture Branches
Purchaser agrees to use its best efforts to (i) market the Divestiture Branches
in order to obtain the highest possible premium value, (ii) enter into
definitive sale agreements with respect to the Divestiture Branches by the
Closing, (iii) comply promptly with all restrictions imposed on Purchaser by its
banking regulators with respect to such Branches and (iv) to refrain from taking
any action which would adversely affect the level of deposits in the Divestiture
Branches.
Section 6.15. Systems Conversion.
Purchaser agrees to use its best efforts to obtain a commitment from its
outsourcer to be prepared to complete its systems conversion as early as January
15, 1998 and to provide written evidence of such commitment to Seller within two
weeks of the signing of this Agreement.
Section 6.16. Customer Notification.
Promptly following Purchaser's receipt of all required regulatory approvals and
not later than 30 days prior to Closing, Seller agrees to permit Purchaser to
mail notifications that are required to be given, or otherwise are reasonable
and customary, in transactions of this type to Seller's customers whose deposit
accounts are to be transferred to Purchaser in connection with its acquisition
of the Branches. Purchaser agrees to furnish copies of all written materials to
be used in connection with such notification to Seller for its review and to
obtain Seller's consent, which consent shall not be unreasonably withheld, prior
to mailing the notification to Seller's customers.
29
ARTICLE VII
CONDITIONS TO PURCHASER`S OBLIGATIONS
The obligation of Purchaser to complete the transactions contemplated in
this Agreement are conditioned upon fulfillment or the waiver in writing by
Purchaser, on or before the Effective Date, of each of the following conditions:
Section 7.1. Representations and Warranties True.
The representations and warranties made by Seller in this Agreement shall be
true in all material respects on and as of the Effective Date as though such
representations and warranties were made at and as of such time, except for any
changes permitted by the terms hereof or consented to by Purchaser.
Section 7.2. Obligations Performed.
Seller shall (a) deliver or make available to Purchaser those items required by
Section 2.2 hereof and (b) perform and comply in all material respects with all
obligations and agreements required by this Agreement to be performed or
complied with by it prior to or on the Effective Date.
Section 7.3. No Adverse Litigation.
On the Effective Date, no action, suit or proceeding shall be pending or
threatened against Seller which is reasonably likely to (a) materially and
adversely affect the business, properties and assets of the Branches, or (b)
materially and adversely affect the transactions contemplated herein.
Section 7.4. Regulatory Approvals.
Seller shall have received all necessary regulatory approvals of the
transactions contemplated herein, all notice and waiting periods required by law
to pass shall have passed, no proceeding to enjoin, restrain, prohibit or
invalidate such transactions shall have been instituted or threatened, and any
conditions of any regulatory approval shall have been met. Purchaser
acknowledges its obligation to complete the transactions contemplated in this
Agreement, notwithstanding the imposition by its regulators of the restrictions
described in Section 5.8.
30
ARTICLE VIII
CONDITIONS TO SELLER'S
OBLIGATIONS
The obligation of Seller to complete the transactions contemplated in
this Agreement are conditioned upon fulfillment or the waiver in writing by
Seller, on or before the Effective Date, of each of the following conditions:
Section 8.1. Representations and Warranties True.
The representations and warranties made by Purchaser in this Agreement shall be
true in all material respects on and as of the Effective Date as though such
representations and warranties were made at and as of such time, except for any
changes permitted by the terms hereof or consented to by Seller.
Section 8.2. Obligations Performed.
Purchaser shall (a) deliver to Seller those items required by Section 2.2 hereof
and (b) perform and comply in all material respects with all obligations and
agreements required by this Agreement to be performed or complied with by it
prior to or on the Effective Date.
Section 8.3. No Adverse Litigation.
On the Effective Date, no action, suit or proceeding shall be pending or
threatened against Purchaser or Seller which might materially and adversely
affect the transactions contemplated herein.
Section 8.4. Regulatory Approvals.
Purchaser shall have received all necessary regulatory approvals of the
transactions contemplated herein, including without limitation approval of the
Federal Reserve Board ("FRB") and the Virginia State Corporation Commission
("VSCC"), all notice and waiting periods required by law to pass shall have
passed, no proceeding to enjoin, restrain, prohibit or invalidate such
transactions shall have been instituted or threatened, and any conditions of any
regulatory approval shall have been met.
31
ARTICLE IX
TERMINATION
Section 9.1. Methods of Termination.
This Agreement may be terminated in any of the following ways:
(a) by either Purchaser or Seller, in writing 5 days in advance of such
termination, if the Closing has not occurred by February 13, 1998;
(b) at any time on or prior to the Effective Date by the mutual consent in
writing of Purchaser and Seller;
(c) on the Effective Date, by Purchaser in writing if the conditions set forth
in Article VII of this Agreement shall not have been met by Seller or waived
in writing by Purchaser;
(d) on the Effective Date, by Seller in writing if the conditions set forth in
Article VIII of this Agreement shall not have been met by Purchaser or
waived in writing by Seller;
(e) any time on or prior to the Effective Date, by Purchaser or Seller in
writing if the other shall have been in breach of any representation or
warranty in any material respect (as if such representation or warranty had
been made on and as of the date hereof and on the date of the notice of
breach referred to below), or in breach of any covenant, undertaking or
obligation contained herein, and such breach has not been cured by the
earlier of 30 days after the giving of notice to the breaching party of such
breach or the Effective Date; provided, however, that there shall be no cure
period in connection with any breach of Section 6.3 hereof, so long as such
breach by Purchaser was not caused by any action or inaction of Seller, and
Seller may terminate this Agreement immediately if regulatory applications
are not filed within 30 days after the date of this Agreement as provided in
that Section;
(f) by Seller in writing at any time after any applicable regulatory authority
has denied approval of any application of Purchaser for approval of the
transactions contemplated herein; or
(g) in accordance with Section 1.5 hereof.
32
Section 9.2. Procedure Upon Termination.
In the event of termination pursuant to Section 9.1 hereof, and except as
otherwise stated therein, written notice thereof shall be given to the other
party, and this Agreement shall terminate immediately upon receipt of such
notice unless an extension is consented to by the party having the right to
terminate.
If this Agreement is terminated as provided herein,
(a) each party will return all documents, work papers and other materials of the
other party, including photocopies or other duplications thereof, relating
to this transaction, whether obtained before or after the execution hereof,
to the party furnishing the same; and
(b) all information received by either party hereto with respect to the business
of the other party (other than information which is a matter of public
knowledge or which has heretofore been published in any publication for
public distribution or filed as public information with any governmental
authority) shall not at any time be used for any business purpose by such
party or disclosed by such party to third persons.
Section 9.3. Payment of Expenses.
Should the transactions contemplated herein not be consummated because of a
party's breach of this Agreement, in addition to such damages as may be
recoverable in law or equity, the other party shall be entitled to recover from
the breaching party upon demand, itemization and documentation, its reasonable
outside legal, accounting, consulting and other out-of-pocket expenses.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1. Entire Agreement; Modification.
This Agreement, and the Exhibits and Schedules attached hereto, constitute the
entire agreement between the parties pertaining to the subject matter hereof,
and supersedes all prior and contemporaneous agreements and understandings of
the parties in connection therewith. No modification of this Agreement shall be
binding unless executed in writing by both of the parties hereto.
33
Section 10.2. Waiver or Extension.
Except with respect to required approvals of the applicable governmental
authorities, either party, by written instrument signed by a duly authorized
officer, may extend the time for the performance of any of the obligations or
other acts of the other party and may waive (a) any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto or (b) compliance with any of the undertakings, obligations,
covenants or other acts contained herein. No failure or delay on the part of any
party hereto in exercising any power, right or privilege hereunder shall operate
as a waiver thereof; and no single or partial exercise of any such power, right
or privilege shall preclude any other or further exercise thereof or of any
other power, right or privilege.
Section 10.3. Assignment.
This Agreement and all of the provisions hereof shall be binding upon, and shall
inure to the benefit of, the parties hereto and their permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by either of the parties hereto without the prior written
consent of the other; provided that, (i) Seller may assign its rights, interests
and obligations hereunder to First Union National Bank, Charlotte, North
Carolina or any of its affiliates without the consent of Purchaser and (ii)
Purchaser may assign its rights, interests and obligations hereunder to its
subsidiary banks with the consent of Seller, which consent shall not be
unreasonably withheld and any such assignment by Purchaser will not relieve
Purchaser of its obligations hereunder.
Section 10.4. Confidentiality.
Seller and Purchaser covenant and agree that all information received by either
of them with respect to the business of the other (other than information which
is a matter of public knowledge or which has heretofore been published in any
publication for public distribution or which has heretofore or which is
hereafter filed as public information with any governmental authority) shall not
at any time be used for any business purpose or disclosed by such party to third
persons. The provisions of the Confidentiality Letter dated July 9, 1997,
between Seller and Purchaser are incorporated herein by reference. This covenant
and agreement shall survive the consummation of the transactions contemplated
herein.
34
Section 10.5. Notices.
All notices, requests, demands, consents and other communications provided for
hereunder and under related documents shall be in writing and mailed (by
registered or certified mail, return receipt requested), telegraphed, telexed,
telecopied or personally delivered (provided that receipt thereof is
acknowledged) to the applicable party at the address indicated below:
If to Seller: Signet Bank
0 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn:: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
with a copy to: McGuire, Woods, Battle & Xxxxxx, L.L.P.
One Xxxxx Center
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxx, III
Fax: (000) 000-0000
If to Purchaser: Union Bankshares Corporation
000 X. Xxxx Xxxxxx
Post Xxxxxx Xxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: G. Xxxxxxx Xxxxx
Fax: (000) 000-0000
with a copy to: XxXxxxx Xxxx, A Professional
Corporation
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section.
Section 10.6. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
35
Section 10.7. Headings.
The headings of the Sections and Articles of this Agreement are inserted for
convenience only and shall not constitute a part thereof.
Section 10.8. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws
of the Commonwealth of Virginia.
Section 10.9. 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 Branch Business under this Agreement; provided, however, that Purchaser
shall pay all the fees and expenses associated with the regulatory applications.
Each party shall be responsible for any fee payable to any agent, broker or
finder acting on its behalf in this transaction.
Section 10.10. Severability.
If any provision of this Agreement is determined to be invalid or unenforceable,
the balance of this Agreement shall remain in effect.
Section 10.11. Parties In Interest.
Nothing in this Agreement, express or implied, is intended or shall be construed
to confer upon or give to any person (other than the parties hereto, their
successors and permitted assigns) any rights or remedies under or by reason of
this Agreement, or any term, provision, condition, undertaking, warranty,
representation, indemnity, covenant or agreement contained herein.
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized officers as of the date first written above.
SIGNET BANK
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Its: Executive Vice President & Treasurer
UNION BANKSHARES CORPORATION
By: /s/ Xxxxxxx Xxxxx
----------------------------
Its: President
37
PURCHASE AND ASSUMPTION AGREEMENT
Between
SIGNET BANK
and
UNION BANKSHARES CORPORATION
EXHIBIT LIST
Exhibit No. Description
A Branches
B Closing Statement
C Adjusted Closing Statement
D Working Agreement
E Form of Xxxx of Sale
F Form of Assignment and
Assumption Agreement
EXHIBIT A
---------
LIST OF BRANCHES
Northern Neck
-------------
1. Branch 1240: 000 Xxxxxxxxxx Xxxxx, Xxxxx Xxxxx, XX
2. Branch 1241: 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxxx, XX
3. Branch 1246: Xxxxx 0, Xxxxx Xxx., Xxxxxxxx, XX
4. Branch 1247: 000 Xxxx Xxxxxxxx Xxxx, Xxxxxx, XX
5. Branch 1248: Xxxxx Xxxxx 000 - XxXxxxxx Xxxx., Xxxxxxxx Xxxxx, XX
6. Branch 1249: 00000 Xxxxxxxxxxxxxx Xxx., Xxxxxxx, XX
7. Branch 1250: Xxxxx 000 - Xxxx Xxxxxx, Xxxxxxxxx, XX
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 Branches* (_________________)
Personal Property* (_________________)
Loans* (_________________)
Coins and Currency (_________________)
Amount of Premium* (_________________)
(Less) Plus Taxes* (_________________)
(Less) Plus Prorated Tax and Expense Items* (_________________)
=================
Payment Amount _________________
*See Attached Schedules for Calculations
B-1
EXHIBIT C
---------
FORM OF ADJUSTED CLOSING STATEMENT
Amount of Liabilities Settlement Amount Adjusted Amount
--------------------- ----------------- ---------------
Principal Amount of Deposits _________________ _________________
Accrued Interest _________________ _________________
(Less) Value of Assets
and Amount of Premium
--------------------- (_________________) (_________________)
Owned Branches* (_________________) (_________________)
Personal Property* (_________________) (_________________)
Loans* (_________________) (_________________)
Coins and Currency (_________________) (_________________)
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) _________________ _________________
*See Attached Schedules for Calculations
C-1
Exhibit D
---------
WORKING AGREEMENT
-----------------
Made this ____ day of _____, 1997, between Signet Bank, a Virginia
banking corporation (the "Seller") and Union Bankshares Corporation, a
registered bank holding company (the "Purchaser").
RECITALS
--------
A. Seller and Purchaser are parties to a Purchase and Assumption
Agreement dated as of October 21, 1997 relating to the sale by Seller to
Purchaser of certain assets and deposit and other liabilities of certain branch
offices (the "Agreement").
B. Pursuant to the Agreement, Seller and Purchaser have agreed to
certain practices and procedures under which they shall handle all items
relating to the transferred assets and liabilities, which are presented or
returned after the Effective Date (as defined in the Agreement).
C. Capitalized terms used and not otherwise defined herein, shall have,
as used herein, the respective meanings provided for in the Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
Seller and Purchaser agree to comply with the terms and conditions of
the procedures attached hereto with respect to the processing of certain items
after the Effective Date.
IN WITNESS WHEREOF and intending to be bound hereby, the parties hereto
have caused this Working Agreement to be executed by their duly authorized
representatives as of the date and year first above written.
UNION BANKSHARES CORPORATION SIGNET BANK
By:____________________ By:___________________
Title:_________________ Title:________________
D-1
GENERAL
Resolution
Date
----------
1. The target date and time for the Closing is Friday at 2:00 p.m.
on _________________.
2. The Branches will close at 2:00 p.m. on the Effective Date and not
reopen until the following business day.
3. Deposit interest will be accrued to the next business day following the
Effective Date.
4. Accounting for the transferred assets and deposit liabilities will be as
of 12:01 a.m., on the Saturday following the Effective Date.
5. All post-Closing ACH and paper debits and credits received by Seller
will be forwarded to Purchaser for a period of 60 days following the
Effective Date, but in no event later than March 13, 1998. These items
will be returned to the originator on or before 90 days after the
Effective Date.
6. File layouts and two sets of test files will be provided to Purchaser by
Seller for each application no later than October 24, 1997. Seller will
provide Purchaser with a hard copy of selected customer information by
Branch on all applications. This would include but not be limited to
such information as customer name, address, account type, account number
and account balance.
7. Seller will forward wire transfer items to Purchaser for a period of 30
days after the Effective Date. After expiration of this period, items
will be returned to the originators but in no event later than March 13,
1998.
8. The transfer of personnel file contents will include documentation
typically found in personnel files and will be delivered on or before
the Effective Date.
9. Purchaser and Seller agree to jointly review and approve all customer
communication to be sent prior to the Effective Date providing at least
three days lead time. Seller will provide labels to Purchaser for this
purpose by Branch.
D-2
10. Seller will provide Purchaser with information regarding any material
changes being made to any product or service prior to the Effective Date
which would affect the transferred assets or Deposit Liabilities.
11. Seller will provide Purchaser with a hard copy of all Master Money and
ATM cards issued by Branch.
D-3
FINANCIAL SETTLEMENT
Resolution
Date
----------
ONE-TIME
1. Purchaser will pay property taxes and prorate to Seller as of the
Effective Date.
2. Both teller working cash and vault cash will be included in the assets
to be sold.
3. Loans, if any, made during the two business days prior to the Effective
Date, will not be booked to Seller's system but will be held to be
booked on Purchaser's system. Special settlement will be required for
these loans.
ONGOING:
1. Seller will establish a single day settlement with Purchaser for all
post-Closing monetary transaction activity to Deposit Liability accounts.
This settlement will be via a separate wire until activity slows.
2. Loan payments received by Seller after the Effective Date will be sent to
Purchaser with a single check for settlement as required.
D-4
BRANCHES
Resolution
Date
----------
1. Generally, training by Purchaser will be conducted during non-banking
hours with time to be recorded by affected employees and billed to
Purchaser. Out-of-pocket expenses (meals, mileage) will be paid directly
by Purchaser. Seller will not unreasonably deny Purchaser the opportunity
for training during banking hours when such training will not interfere
with Seller's ability to conduct its business. Training times and
schedules will be coordinated with Sales and Service Manager and/or
Operations Manager of Seller before contact with branch personnel.
2. Purchaser will have Seller's cooperation in installing any needed
training terminals prior to the Effective Date, provided that the Branch
facilities have sufficient excess space.
3. Seller's consignment items will be removed prior to the Effective Date.
Purchaser's consignment items and supplies can be delivered after 2:00
p.m. on the Effective Date, provided that there is joint agreement on
space to accommodate the shipment.
4. Purchaser will work with Seller to accommodate removal of branch
automation (PCS), terminals and telecommunication equipment not
purchased, if any, with said equipment to be removed following 2:00 p.m.
on the Effective Date.
5. Purchaser's telecommunication lines will be switched on Friday evening or
Saturday following the Closing depending on local phone service
availability.
6. Purchaser may have a total of 1-3 individuals in the Branches on the
Effective Date to observe the close-out and sign for any transferred
items (e.g., cash, keys).
7. Seller will remove all cash items from the Branches on the Effective
Date, except those that are to be picked up by customers. "Pick up" cash
items will be included in the assets to be sold and treated as cash.
Purchaser's representatives will be available to review any such items
from the Wednesday before the Effective Date through the Effective Date.
Cash items are
D-5
defined as any item for which the customer is to provide cash funds to
replace.
8. Purchaser will assume Seller's post office boxes. After the Closing,
Seller's mail will be forwarded by Purchaser to a location designated by
Seller.
9. There will be joint notification of the Closing by Seller and Purchaser
to all vendors (e.g., water, electricity, business licenses, etc.)
10. Branch signage will not change until after Closing. After Closing, Seller
will remove Signet signage from the existing sign structure or foundation
and, to the extent practicable, leave the sign structure or foundation in
place for use by Purchaser.
11. Seller will provide to Purchaser, within 30 days of the signing of this
Agreement, a fixed asset listing, by Branch.
D-6
DDA/SAVINGS
Resolution
Date
----------
1. DDA/savings accounts with a zero balance and accounts closed in the last
month prior to Closing will be included in the Deposit Liabilities.
2. Dormant accounts will be included in the Deposit Liabilities. Purchaser
will be responsible for escheat processing unless Seller has already
completed the process.
3. Seller will report actual interest withholding amounts and interest paid
by Seller through the Effective Date for 1099 purposes for both active
and closed accounts.
4. Purchaser will be responsible for W-9 mailings following the Effective
Date unless Seller has already completed the process.
5. Purchaser will mail new checks to customers within 30 days after the
Effective Date.
6. Seller will provide all DDA and savings signature cards in its possession
at branch locations, at Closing. Missing signature cards will be
indicated on reports provided to Purchaser. Special cut-off statements
and special instructions for accounts will be provided.
7. Seller will provide all resolutions (corporate, check cashing) to
Purchaser. A list indicating any missing resolutions will also be
provided. Resolutions and list will be available as soon after the
Effective Date as practicable.
8. Seller will retain all draft authorizations; Purchaser will be provided
copies or assistance upon request.
9. A paper report will list all stop pay and hold information; for balancing
purposes, a dollar and number total will accompany the report. ACH and
all other stop pays will be on a paper report and included in the
"Stop/Hold" file.
10. Special cut-off statements will be dropped by the Seller on all active
divested accounts, except for time deposits and IRAs, after posting on
the Effective Date. Seller will mail statements with appropriate items
enclosed to the customer within five business days of the Closing.
D-7
11. Accounts will be paid (credited) interest through the Sunday (or Monday
if Monday is a holiday) following the Effective Date.
12. Purchaser will not receive a fiche of the last special cut-off statement
for personal or commercial accounts. Seller will continue to handle
inquiries about those last special cut-off statements.
13. To set up Purchaser's related (linked) accounts for no-charge checking,
Seller will provide linkage information via a report which will include
transfers.
14. No audit confirmations will be placed in the final special cut-off
statements. A statement stuffer and/or statement message will be jointly
agreed to and will be used to notify the customers that the account is
being sold.
15. Accounts with special overdraft limits will be identified on the master
file per file documentation.
16. Purchaser agrees to honor collateral holds for loans not included in the
transferred assets.
D-8
CHECK ORDERS
Resolution
Date
----------
1. Purchaser will develop a customer check reorder information tape from
Seller's tapes to order replacement checks from Purchaser's printer.
D-9
CERTIFICATES OF DEPOSIT AND
INDIVIDUAL RETIREMENT ACCOUNTS (XXX)
Resolution
Date
----------
1. Dormant accounts will be included in the Deposit Liabilities. Purchaser
will be responsible for escheat process provided Seller has not already
completed the process.
2. Seller will report actual interest withholding amounts and interest paid
by Seller through the Effective Date for 1099 purposes.
3. Purchaser will be responsible for W-9 mailings after the Effective Date,
provided Seller has not already completed the process.
4. Interest accrual and payment:
a. Interest will be accrued through the next business day following the
Effective Date.
b. Advance interest payments (checks or credits) will have been created
and outstanding through the next business day following the Effective
Date for CDS and IRAs. Payments will be reflected in the Adjusted
Closing Statement.
5. Maturity notices:
a. Maturity notices will be mailed by Seller for CDS that mature 20 days
following the Effective Date.
b. Maturity notices will be mailed by Seller for IRAs that mature 20 days
following the Effective Date.
c. No inserts or special messages will be placed in notices mailed by
Seller.
6. Interest payment/transfers of CDS' interest into accounts retained by
Seller will no longer occur after the Effective Date. Seller's customers
will be advised by Seller that their transfers are being converted into
regular interest checks as part of the standard Branch closing process.
Seller will provide a list of affected accounts to Purchaser.
D-10
7. Seller will provide a file copy of physical CD documentation in its
possession on the Monday after the Effective Date. Pledge/assignment
information will be attached to the CD copies if applicable.
D-11
CERTIFICATES OF DEPOSIT AND
INDIVIDUAL RETIREMENT ACCOUNTS (continued)
8. The appropriate Individual Retirement Account documentation will be
transferred to Purchaser.
9. XXX 1099Rs due for 1998 will be the responsibility of Seller for activity
through the Effective Date.
10. IRS 5498 reporting for 1997 will be responsibility of Seller for activity
through the Effective Date.
11. Purchaser agrees to honor holds on CDS that are collateral for loans not
included in the transferred assets.
D-12
LOANS
Resolution
Date
----------
1. The overdraft protection product will be discontinued as of the Effective
Date.
2. Purchaser will report to the customer the amount of interest paid by the
customer during the year 1998 on each loan included in the transferred
assets.
3. Interest accruals will be to the next business day following the Effective
Date.
4. 1098 reporting requirements for the year 1998 will be the responsibility of
Purchaser.
5. Seller will provide Purchaser with hard copy reports of loan histories.
D-13
DIVESTITURE DAY
Resolution
Date
----------
1. Purchaser will pick up and sign for tapes, deliverable reports and
documentation at Seller's site in Richmond. All data will be available by
noon on the Saturday following the Effective Date. (Request that Purchaser's
representative report into the control center by 9:00 a.m.)
2. Seller will provide back-up tapes in case the original tapes cannot be read.
3. Purchaser will have individuals on site in the Branches (or available by
phone) on the Effective Date and the Saturday following the Effective Date to
assist in making pay/return decisions on NSF items.
D-14
POST DIVESTITURE PROCESSING
Resolution
Date
----------
1. Seller will make items available to Purchaser per business day:
a. Cash letters will be available to be picked up at Seller's operations
center in Richmond, Virginia.
b. Seller will make available for pickup all ACH transactions by Branch via
report at Seller's operations center in Richmond, Virginia. (The report
can be sent via fax.)
2. Purchaser and Seller will each establish a single sold accounts inquiry desk
to handle requests and speed research. The communication link will be between
Purchaser's and Seller's desks only. All questions and requests for account
research will flow between these inquiry desks. Purchaser will contact the
Branches if their assistance is required. All Branches will place their
inquiries through Purchaser's inquiry desk.
3. Purchaser will pay Seller for all research and photocopies necessary to
satisfy historical reconstruction and/or third party account inquiries at
Seller's then current rate unless such research is directly related to
Seller's error.
4. Seller will forward adjustments to Purchaser with description (including
account number and customer name if available). Adjustments will settle
through the settlement account.
5. Interest adjustments required on accounts after the Effective Date due to
Seller's error prior to the Effective Date will be handled by Seller. The
customer will be sent a check and 1099 if applicable.
6. Items in process of collection at the time of Closing will be identified to
Purchaser and the dollar entries will pass through the settlement account.
7. Government reclamation notices on account will be complied with, to the
extent that funds are available in the account at the time the notice is
received. In the event that funds are not available to cover all or part of
the reclamation activity prior to the Effective
D-15
Date, Purchaser will comply with the reclamation to the extent funds are
available (on a FIFO basis) and then return the reclamation to the government
agency with notice that the account was owned by Seller at the time covered
by the period for which funds are not remitted.
8. Funds transfers received for accounts during the grace period will be posted
to Purchaser's single correspondent DDA (the settlement account) with Seller.
Purchaser will be advised by phone.
D-16
RETURN MAIL
Resolution
Date
----------
1. Seller will send all returned mail from the Branch closing customer
communication to Purchaser's designee. No attempt will be made to remail.
These accounts will still be included in the Deposit Liabilities.
2. Returned special cutoff statement (DDA and savings) will be kept by Seller.
Purchaser may request copies/information as needed.
3. If any CD maturity notices are returned to Seller, its account services area
will contact Purchaser's designee who will secure proper addresses and
complete notifications.
4. Seller will keep returned interest checks and notify the Purchaser's
designee.
5. Seller will keep 1099s as per current procedure. No effort will be made to
locate customers.
6. Seller will keep returned NSF and OD notices. Seller will also keep returned
ICR notices.
7. Chargebacks (with checks attached), proof corrections, deposit adjustments,
and all miscellaneous adjustments will be sent to Purchaser's designee.
D-17
EXHIBIT E
---------
XXXX OF SALE
THIS XXXX OF SALE is dated this ____ day of ________ 1997, by Signet
Bank, a Virginia banking corporation ("Seller").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Seller and Union Bankshares Corporation, a registered bank
holding company ("Purchaser") have entered into a Purchase and Assumption
Agreement dated as of October 21, 1997, (the "Agreement") which provides for the
sale by Seller to Purchaser of certain personal property and loans related to
Seller's branches set forth in Exhibit A to the Agreement (the "Branches"), all
as set forth in the Agreement;
NOW, THEREFORE, Seller, for good and valuable consideration, receipt of
which is hereby acknowledged, does hereby grant, bargain, sell, assign, set
over, convey and transfer to Purchaser all of its right, title and interest in
and to the following assets (the "Assets"):
(a) All furniture, fixtures and tangible personal property located in
the Branches, except for:
(1) Seller's rights in any leased equipment;
(2) any rights to the name "Signet" and any of Seller's corporate
logos, trademarks, trade names, signs, paper stock, forms and
other supplies containing any such logos, trademarks or trade
names;
(3) Seller's signs located at the Branches;
(4) any trust business conducted by Seller with any customers of the
Branches;
(5) any commercial loans with customers of any of the Branches
except as specifically contemplated by Section 1.7 of the
Agreement;
(6) any consumer loans with customer of any of the Branches,
including, without limitation, overdraft protection loans,
credit card loans, home equity loans or lines of credit,
mortgage loans and
E-1
installment loans, except as specifically contemplated by
Section 1.7 of the Agreement;
(7) any brokerage accounts or mutual fund accounts with customers of
any of the Branches; and
(8) the assets listed on Schedule l.l(b) to the Agreement.
(b) All of the loans maintained, serviced and listed in Seller's general
ledger as loans of the Branches (except for those loans described in
Subsection 1.7 (b) of the Agreement), a list of such specific loans
will be attached hereto on the Closing Statement (as defined in the
Agreement) (the "Loans"); and
(c) All of Seller's files and records related to the Loans.
Seller, for itself and its successors and assigns, does hereby covenant
and agree to and with Purchaser and its successors and assigns that it (i) is
seized of, and has the right to convey to Purchaser, such title to the Assets as
is provided in the Agreement, (ii) will warrant and defend said title to the
Assets in the manner provided in the Agreement, and (iii) shall, from time to
time, at the request of Purchaser, execute, acknowledge and deliver to Purchaser
any and all further instruments, documents, endorsements, assignments,
information, materials and other papers that may be reasonably required to
transfer the Assets to Purchaser, enable Purchaser to xxxx, collect, service and
administer the Loans and give full force and effect to the full intent and
purposes of this Xxxx of Sale.
IN WITNESS WHEREOF, Seller has caused this Xxxx of Sale to be duly
executed by its duly authorized officers and its corporate seal to be affixed
hereto, all as of the day and year first above written.
SIGNET BANK
By:___________________________
Title:________________________
E-2
EXHIBIT F
---------
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into this __________
day of ________, 1997, by and between Signet Bank, a Virginia banking
corporation ("Seller"), and Union Bankshares Corporation, a registered bank
holding company ("Purchaser").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Seller and Purchaser have entered into a Purchase and
Assumption Agreement dated as of October 21, 1997 (the "Agreement"), which
provides for the assignment by Seller of all of its rights and interests in and
to certain leases, contracts, deposit accounts and other liabilities related to
Seller's branches set forth in Exhibit A to the Agreement (the "Branches"), and
the assumption by Purchaser of all of Seller's liabilities and obligations
thereunder, all as set forth in the Agreement;
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, receipt of which is hereby acknowledged by Seller
and Purchaser, Seller hereby assigns, transfers and sets over to Purchaser all
of Seller's rights and interest to, and Purchaser does hereby assume all of
Seller's liabilities and obligations in connection with, the following assets
(the "Assets"):
(a) The Deposit Liabilities described in Section 1.4 of the Agreement,
except for those Deposit Liabilities described in
Subsection 1.4 (b);
(b) The Loans described in Section 1.7 of the Agreement; and
(c) The Safe Deposit Contracts described in Section 1.6 of the
Agreement.
This Assignment and Assumption Agreement shall be binding upon, and
shall inure to the benefit of, Seller, Purchaser and each of their successors
and assigns and shall be subject to the terms and conditions of the Agreement.
In the event of a conflict between any of the terms and provisions hereof and
the Agreement, the Agreement shall be deemed to control. Terms used and not
defined otherwise herein shall have the meanings set forth in the Agreement.
F-1
EXHIBIT F
---------
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into this ____ day
of ________, 1997, by and between Signet Bank, a Virginia banking corporation
("Seller"), and Union Bankshares Corporation, a registered bank holding company
("Purchaser").
W I T N E S S E T H:
-------------------
WHEREAS, Seller and Purchaser have entered into a Purchase and
Assumption Agreement dated as of October 20, 1997 (the "Agreement"), which
provides for the assignment by Seller of all of its rights and interests in and
to certain leases, contracts, deposit accounts and other liabilities related to
Seller's branches set forth in Exhibit A to the Agreement (the "Branches"), and
the assumption by Purchaser of all of Seller's liabilities and obligations
thereunder, all as set forth in the Agreement;
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, receipt of which is hereby acknowledged by Seller
and Purchaser, Seller hereby assigns, transfers and sets over to Purchaser all
of Seller's rights and interest to, and Purchaser does hereby assume all of
Seller's liabilities and obligations in connection with, the following assets
(the "Assets"):
(a) The Deposit Liabilities described in Section 1.4 of the Agreement,
except for those Deposit Liabilities described in
Subsection 1.4(b);
(b) The Loans described in Section 1.7 of the Agreement; and
(c) The Safe Deposit Contracts described in Section 1.6 of the
Agreement.
This Assignment and Assumption Agreement shall be binding upon, and
shall inure to the benefit of, Seller, Purchaser and each of their successors
and assigns and shall be subject to the terms and conditions of the Agreement.
In the event of a conflict between any of the terms and provisions hereof and
the Agreement, the Agreement shall be deemed to control. Terms used and not
defined otherwise herein shall have the meanings set forth in the Agreement.
F-1
This Assignment and Assumption Agreement, and the rights and obligations
of the parties hereunder, shall be governed by and construed in accordance with
the laws of the Commonwealth of Virginia.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed by their duly authorized officers and their
corporate seals to be affixed hereto, all as of the day and year first above
written.
SIGNET BANK
By:
---------------------------
Title:
---------------------------
UNION BANKSHARES CORPORATION
By:
---------------------------
Title:
---------------------------
F-2
PURCHASE AND ASSUMPTION AGREEMENT
Between
SIGNET BANK
and
UNION BANKSHARES CORPORATION
SCHEDULE LIST
Schedule No. Description
------------ -----------
1.1 (a)(1) Owned Branches
1.1 (b) Excluded Assets
1.6 Safe Deposit Contracts
1.7 Loans
1.8 Fees
4.2 Violations
4.5 Brokers
4.6 Personal Property
4.7 Owned Branches
5.2 Violations
5.5 Brokers
6.12 Severance Benefits
SCHEDULE 1.1 (a) (1)
--------------------
OWNED BRANCHES
See attached.
SCHEDULE 1.1 (b)
----------------
EXCLUDED ASSETS
None.
SCHEDULE 1.6
------------
SAFE DEPOSIT CONTRACTS
See attached.
SCHEDULE 1.7
------------
LOANS
See attached.
SCHEDULE 1.8
------------
FEES
See attached.
SCHEDULE 4.2
------------
VIOLATIONS
None.
SCHEDULE 4.5
------------
BROKERS
X. X. Xxxxxx Securities, Inc.
SCHEDULE 4.6
------------
PERSONAL PROPERTY
None.
SCHEDULE 4.7
------------
OWNED BRANCHES
None.
SCHEDULE 5.2
------------
VIOLATIONS
SCHEDULE 5.5
------------
BROKERS
Wheat First Butcher Singer
SCHEDULE 6.12
-------------
SEVERANCE BENEFITS
See attached.
