EXHIBIT 2
PURCHASE AND ASSUMPTION AGREEMENT
between
COMMUNITY NATIONAL BANK
and
THE FIRST NATIONAL BANK OF GERMANTOWN
dated as of Xxxxx 00, 0000
XXXXXXXX AND ASSUMPTION AGREEMENT
TABLE OF CONTENTS
ARTICLE I DEFINED TERMS 1
Section 1.1 Defined Terms. 1
ARTICLE II TRANSFER OF ASSETS AND LIABILITIES 2
Section 2.1 Transferred Assets. 2
Section 2.2 Purchase Price. 3
Section 2.3 Deposit Liabilities. 5
Section 2.4 Records and Data Processing, etc. 8
Section 2.5 Proration of Premiums, Taxes and Expenses. 8
Section 2.6 Employee Matters. 8
Section 2.7 Title to Real Property. 9
Section 2.8 Environmental Matters. 10
ARTICLE III CLOSING AND EFFECTIVE TIME 11
Section 3.1 Effective Time. 11
Section 3.2 Closing. 11
Section 3.3 Post-Closing Adjustments. 13
ARTICLE IV INDEMNIFICATION 14
Section 4.1 Seller's Indemnification of Purchaser. 14
Section 4.2 Purchaser's Indemnification of Seller. 14
Section 4.3 Claims for Indemnity. 15
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER 16
Section 5.1 Corporate Organization. 16
Section 5.2 Authority. 16
Section 5.3 Non-Contravention. 16
Section 5.4 Personal Property. 16
Section 5.5 Real Property. 17
Section 5.6 Employees. 17
Section 5.7 Environmental Matters. 18
Section 5.8 Deposit Liabilities. 18
Section 5.9 Legal Proceedings. 19
Section 5.10 No Brokers. 19
Section 5.11 Financing Available. 19
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER 19
Section 6.1 Corporate Organization. 19
Section 6.2 Authority. 20
Section 6.3 Non-Contravention. 20
Section 6.4 Legal Proceedings. 20
Section 6.5 No Brokers. 20
Section 6.6 Financing Available. 20
ARTICLE VII OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME 21
Section 7.1 Full Access. 21
Section 7.2 Regulatory Approvals. 21
Section 7.3 Conduct of Business. 22
Section 7.4 No Solicitation; Restriction on New Branches. 22
Section 7.5 Branch Operations. 23
Section 7.6 Corporate and Other Consents. 24
Section 7.7 Data Processing Services. 24
Section 7.8 Public Announcements. 24
Section 7.9 Tax Reporting. 24
Section 7.10 Actions With Respect to XXX and Xxxxx Plan Deposit
Liabilities. 25
Section 7.11 Further Assurance. 25
Section 7.12 Account Statements. 26
ARTICLE VIII CONDITIONS TO PURCHASER'S OBLIGATIONS 26
Section 8.1 Representations and Warranties True. 26
Section 8.2 Obligations Performed. 26
Section 8.3 Regulatory Approvals. 26
Section 8.4 Due Diligence. 26
ARTICLE IX CONDITIONS TO SELLER'S OBLIGATIONS 27
Section 9.1 Representations and Warranties True. 27
Section 9.2 Obligations Performed. 27
Section 9.3 Regulatory Approvals. 27
Section 9.4 Consents of Third Parties. 27
ARTICLE X TERMINATION 27
Section 10.1 Methods of Termination. 27
Section 10.2 Procedure Upon and Effect of Termination. 28
Section 10.3 Payment of Expenses. 28
ARTICLE XI MISCELLANEOUS PROVISIONS 29
Section 11.1 Expenses. 29
Section 11.2 Amendment and Modification. 29
Section 11.3 Waiver or Extension. 29
Section 11.4 Successors and Assigns. 29
Section 11.5 Confidentiality. 29
Section 11.6 Addresses for Notices, Etc. 30
Section 11.7 Counterparts. 31
Section 11.8 Headings. 31
Section 11.9 Governing Law. 31
Section 11.10 Sole Agreement. 31
Section 11.11 Parties in Interest. 31
Section 11.12 Specific Performance. 32
PURCHASE AND ASSUMPTION AGREEMENT
This Purchase and Assumption Agreement (the "Agreement") is made and
entered into effective as of March 19, 2004 by and between Community National
Bank, a bank organized under the laws of the United States ("Purchaser"), and
The First National Bank of Germantown, a bank organized under the laws of the
United States ("Seller").
W I T N E S S E T H:
WHEREAS, Seller desires to sell certain assets of, and transfer certain
liabilities assigned to, the Carlisle, Ohio and Middletown, Ohio branches of
Seller; and
WHEREAS, Purchaser wishes to purchase such assets and assume such
liabilities upon the terms and conditions set forth herein;
NOW THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, Seller and Purchaser agree as follows:
ARTICLE 1
Defined Terms
Section 1.1 Defined Terms.
The following terms shall have the meanings ascribed to them for all
purposes of this Agreement.
"Branches" means, collectively the Carlisle Branch and the Middletown
Branch.
"Carlisle Branch" means the Branch location of Seller located at 000
Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000.
"Carlisle Real Property" means all of Seller's right, title and interest
in and to all real estate and improvements thereon and fixtures thereto at
the Carlisle Branch, together with all rights and appurtenances pertaining
thereto.
"Closing" and "Closing Date" have the meanings set forth in Section 3.1
"Code" has the meaning set forth in Section 2.2(c)(1).
"Deposit Liabilities" has the meaning set forth in Section 2.3(a).
"Effective Time" has the meaning set forth in Section 3.1.
"Excluded Deposit Liabilities" has the meaning set forth in Section 2.3
"Excluded XXX/Xxxxx Deposit Liabilities" has the meaning set forth in
Section 7.10.
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"FDIA" has the meaning set forth in Section 5.1.
"Initial Closing Statement" has the meaning set forth in Section 2.2(c).
"XXX" has the meaning set forth in Section 2.3.
"Middletown Branch" means the Branch location of Seller located at 000
Xxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxx 00000.
"Middletown Real Property" means all of Seller's right, title and
interest in and to all real estate and improvements thereon and fixtures
thereto at the Middletown Branch, together with all rights and appurtenances
pertaining thereto.
"Municipal Deposits" has the meaning set forth in Section 2.3(a).
"Final Closing Balance Sheet" and "Final Closing Balance Sheet Delivery
Date" have the meanings set forth in Section 3.3(a).
"Pre-Closing Balance Sheet" and "Pre-Closing Balance Sheet Date" have
the meanings set forth in Section 2.2(c).
"Purchase Price" has the meaning set forth in Section 2.2(a).
"Real Property" means the Carlisle Real Property and the Middletown Real
Property collectively.
"Regulatory Approvals" has the meaning set forth in Section 7.2.
"Transferred Assets" has the meaning set forth in Section 2.1.
ARTICLE II
TRANSFER OF ASSETS AND LIABILITIES
Section 2.1 Transferred Assets.
(a) As of the Effective Time 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 the following assets located at or
attributed to the Branches (collectively, the "Transferred Assets"):
(1) the Real Property in fee simple free of all mortgages, liens,
charges, assessments, fees and other encumbrances;
(2) the furniture, equipment and other tangible personal property
and fixed assets described on Exhibit 2.1(a)(2) (the "Fixed Assets");
(3) all leases for equipment and/or furniture located at the
Branches;
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(4) all safe deposit boxes located at the Branches and the leases
and contracts related thereto;
(5) all coins and currency located at the Branches as of the
Effective Time ("Coins and Currency"); and
(6) the contracts and agreements described on Exhibit 2.1(a)(6).
(b) The following items shall be excluded from the Transferred Assets (the
"Excluded Assets"):
(1) Seller's rights in and to the name "The First National Bank of
Germantown" 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;
(2) any loans made by Seller;
(3) any residential mortgage servicing rights for residential
mortgage loans originated by Seller;
(4) any bank regulatory licenses or any other non-assignable
licenses or permits;
(5) proprietary software of Seller; and
(6) all routing numbers of Seller used in connection with the
Deposit Liabilities or the Branches.
Seller shall remove or cause to be removed the Excluded Assets from the
Branches at or prior to the Effective Time, except as otherwise agreed by
Purchaser and Seller. Seller shall remove the Excluded Assets at its own
cost in such a manner as to minimize any damage to the Branches and the
Transferred Assets as a result of such removal. Seller shall repair or
replace, at its own cost and expense, any damage suffered to the Branches
or the Transferred Assets as a result of the removal of the Excluded Assets.
Section 2.2 Purchase Price.
(a) As consideration for the purchase of the Transferred Assets,
Purchaser shall pay Seller a purchase price equal to the sum of the following
(the "Purchase Price"):
(1) $447,500 for the Real Property;
(2) $37,500 for the Fixed Assets;
(3) a premium for the Deposit Liabilities at the Carlisle Branch
equal to 10% (the "Carlisle Premium") of the amount of such Deposit
Liabilities as of the Effective Time; and
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(4) a premium for the Deposit Liabilities at the Middletown Branch
equal to 1.25% (the "Middletown Premium") of the amount of such Deposit
Liabilities as of the Effective Time.
(b) In addition, Purchaser shall assume, as of the Effective Time, all
of the duties, obligations and liabilities of Seller relating to the Deposit
Liabilities.
(c) Seller shall prepare a balance sheet (the "Pre-Closing Balance
Sheet") in accordance with generally accepted accounting principles
consistently applied as of a date not earlier than 10 business days prior to
the Effective Time anticipated by the parties (the "Pre-Closing Balance Sheet
Date") and a related initial closing statement (the "Initial Closing
Statement") reflecting the assets to be sold and assigned hereunder and the
liabilities to be transferred and assumed hereunder. Seller agrees to pay to
Purchaser at the Closing, in immediately available funds, the excess, if any,
of the amount of Deposit Liabilities assumed by Purchaser pursuant to
subsection (b) above, as reflected on the Pre-Closing Balance Sheet, over the
estimated aggregate Purchase Price computed in accordance with subsection (a)
above, as reflected on the Initial Closing Statement. Purchaser agrees to
pay Seller at the Closing, in immediately available funds, the excess, if
any, of the aggregate Purchase Price computed in accordance with subsection
(a) above, as reflected on the Initial Closing Statement, over the amount of
Deposit Liabilities assumed by Purchaser pursuant to subsection (b) above, as
reflected on the Pre-Closing Balance Sheet. Amounts paid at Closing shall be
subject to subsequent adjustment based on the Post-Closing Balance Sheet and
the Final Closing Statement.
(1) Seller and Purchaser agree to allocate the final Purchase Price
in accordance with Section 1060 of the Internal Revenue Code of 1986, as
amended (the "Code"). Within 10 business days prior to the Closing Date,
Purchaser shall provide to Seller Purchaser's proposed allocation of the
purchase price as finally determined and paid by Purchaser hereunder. Within
10 business days after the receipt of such allocation, Seller shall propose
to Purchaser any changes to such allocation or otherwise shall be deemed to
have agreed with such allocation.
(2) Seller and Purchaser shall reduce such allocation to writing,
including jointly and properly executing completed Internal Revenue Service
Form 8594, and any other forms or statements required by the Code, Treasury
Regulations or the Internal Revenue Service, together with any and all
attachments required to be filed therewith. Seller and Purchaser shall file
timely any such forms and statements with the Internal Revenue Service.
(3) To the extent consistent with applicable law, Seller and
Purchaser shall not file any tax return or other documents or otherwise take
any position with respect to taxes which is inconsistent with such allocation
of the final purchase price, provided, however, that neither Seller nor
Purchaser shall be obligated to litigate any challenge to such allocation of
the final purchase price by a governmental authority.
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(4) Seller and Purchaser shall promptly inform one another of any
challenge by any governmental authority to any allocation made pursuant to
this subsection and agree to consult with and keep one another informed with
respect to the state of, and any discussion, proposal or submission with
respect to, such challenge.
Section 2.3 Deposit Liabilities.
(a) For purposes of this Agreement, "Deposit Liabilities" shall mean all
deposit liabilities of Seller at the Branches that Purchaser may legally
assume, which shall consist of (i) all savings accounts, (ii) all
certificates of deposit, (iii) all negotiable order of withdrawal accounts,
(iv) all demand deposit accounts, including any amounts therein that may be
temporarily swept into other accounts or investments, (v) all money market
deposit accounts, (vi) all individual retirement accounts ("IRAs"), Xxxxx
Plan accounts and trust deposit accounts that Purchaser may legally assume,
(vii) all deposits of municipalities ("Municipal Deposits") and (viii) all
other deposit or savings accounts allocated on the records of Seller to the
Branches according to their respective terms as of the close of business on
the Closing Date, in each case together with interest accrued thereon but
unpaid as of the Closing Date, provided that Deposit Liabilities shall not
include the Excluded Deposit Liabilities (as hereinafter defined). Exhibit
2.3(a) sets forth the Deposit Liabilities as of the date hereof, which are
subject to changes in the ordinary course of business of the Branches.
(b) For purposes of this Agreement, "Excluded Deposit Liabilities" shall
mean (i) deposit liabilities of Seller with respect to the accounts set forth
on Exhibit 2.3(b), (ii) deposit liabilities of Seller with respect to
accounts which are booked by Seller at the Branches and are held by Seller
under or pursuant to any judgment, decree or order of any court, (iii) the
Excluded XXX/Xxxxx Deposit Liabilities, (iv) deposit accounts of any of
Seller's directors, officers or employees or any of their respective spouses,
parents, lineal descendants or other family members, (v) deposit accounts of
Seller's customers who are required by contract or agreement to maintain a
depository relationship with Seller, (vi) Seller's cashier checks, teller
checks, letters of credit, money orders, traveler's checks, interest checks
or expense checks, (vii) consignments of U.S. Government "E" and "EE" bonds,
(viii) cash items paid by Seller and not cleared prior to the Effective Time
and (ix) IRAs that, by their terms, are not permitted to be assigned or
transferred, it being understood that all other IRAs are intended to be
transferred.
(c) Purchaser shall not assume or be bound by any liabilities or
obligations of Seller of any kind or nature, known or unknown, contingent or
otherwise, including, without limitation, lease obligations, employee
compensation and benefits, employment contracts and agreements, utility
payments and real estate taxes other than the liabilities and obligations
specifically assumed by Purchaser under Section 2.2(b).
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(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, over the counter or through the check
clearing system of the banking industry, by depositors of the accounts
assumed, whether drawn on the checks, withdrawal or draft forms provided by
Seller or by 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; provided, however, Purchaser shall not be obligated to
honor or pay any item, if there are insufficient funds in the customer's
account when such item is presented.
(e) It is the Seller's intent that, after the Effective Time, all
Deposit Liability transactions will be referred to Purchaser, provided,
however, that if Seller shall, in good faith, honor and pay any Deposit
Liabilities which are presented to Seller for due payment, Purchaser shall
make a diligent effort to charge the applicable Deposit Liability account to
which the payment related and, to the extent funds are available in such
Deposit Liability account, Purchaser shall promptly disburse said moneys to
Seller. In the event sufficient funds are not available to cover such
payment, Purchaser will inform Seller, in a timely manner, to return such
items as uncollectible.
(f) Purchaser agrees, at its cost and expense, (i) to assign new account
numbers to depositors of assumed Deposit Liabilities, provided that Purchaser
need not take such actions if in its business judgment it is advisable not to
do so, (ii) to notify such depositors, on or before the Effective Time but
after receipt of all Regulatory Approvals (exclusive of applicable waiting
periods), in a form and on a date mutually acceptable to Seller and Purchaser
and in accordance with the requirements of applicable laws and regulations,
of Purchaser's assumption of the Deposit Liabilities, (iii) to furnish such
depositors with checks on the forms of Purchaser and with instructions to
utilize Purchaser's checks and to destroy unused check, draft and withdrawal
order forms of Seller, and (iv) to reissue all ATM and debit cards (with new
PIN numbers) associated with the depositors of assumed Deposit Liabilities.
(1) Purchaser agrees to pay promptly to Seller an amount equivalent
to the amount of any checks, drafts or withdrawal orders credited to any
assumed Deposit Liabilities as of the Effective Time that are returned to
Seller after the Effective Time as uncollectible, but only to the extent that
the collected balance of the relevant account is sufficient to permit payment
thereof.
(2) During the 30 calendar days after the Effective Time, Purchaser
agrees to pay promptly to Seller an amount equivalent to the amount of any
ATM or point-of-sale withdrawal from a Deposit Liability pursuant to a debit
card of Purchaser authorized prior to the Effective Time which has not been
received and processed by Seller as of the Effective Time.
(g) As of the Effective Time, Purchaser will assume and discharge
Seller's duties and obligations in accordance with the terms and conditions
and laws, rules and regulations that apply to the Deposit Liabilities assumed
under this Agreement.
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(h) As of the Effective Time, 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.
(i) Prior to the Closing Date, Purchaser shall, at Purchaser's expense,
notify all Automated Clearing House ("ACH") originators of the transfers and
assumptions made pursuant to this Agreement. For a period of 60 calendar
days beginning on the Effective Time, Seller will honor all ACH items related
to accounts assumed under this Agreement which are mistakenly routed or
presented to Seller. Seller will make no charge to Purchaser for honoring
such items. Seller will make available to Purchaser at Seller's operations
center receiving items from the ACH data containing such ACH data. Items
mistakenly routed or presented after the 60-day period will be returned to
the presenting party. Seller and Purchaser shall make arrangements to
provide for the daily settlement with immediately available funds by
Purchaser of any ACH item honored by Seller, and Seller shall be held
harmless and indemnified by Purchaser for acting in accordance with this
arrangement to accept ACH items.
(j) As of the Effective Time, Seller shall transfer and assign all
files, documents and records related to the Deposit Liabilities to Purchaser,
including without limitation such information held in electronic form, and
Purchaser will be responsible for maintaining and safeguarding all such
materials in accordance with applicable law and sound banking practices.
(k) In case of any dispute with or inquiry by any customer whose account
is subject to this Agreement, which dispute or inquiry relates to the
servicing of such account by Seller prior to the date for which a deposit
history has been provided to Purchaser, Seller will provide Purchaser, where
available and to the extent reasonably requested by Purchaser, information
regarding the Deposit Liability account and copies of pertinent documents or
instruments with respect to such dispute or inquiry so as to permit Purchaser
to respond to the Deposit Liability account holder within a period of time
and in a manner which would comply with standard banking practices and
customs. Purchaser shall not be liable for any claims related thereto
pertaining to the period prior to the Effective Time.
(l) Seller shall deliver on the Closing Date to Purchaser a schedule of
stop payment orders that have been placed by Seller on particular Deposit
Liabilities or on individual checks, drafts or other items or instruments.
If following receipt of appropriate stop order documentation Purchaser makes
any payment in violation of any such stop payment order, Purchaser shall be
solely liable for any such payment.
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Section 2.4 Records and Data Processing, etc.
(a) As of the Effective Time, Purchaser shall become responsible for
maintaining the files, documents and records referred to in this Agreement.
After the Effective Time, Purchaser will permit Seller and its
representatives, for reasonable cause, at reasonable times and upon
reasonable notice, to examine, inspect, copy and reproduce any such files,
documents or records, and to have similar access to such records as may be
reasonably necessary for purposes of preparation of required records and
reports (including regulatory and tax reports and returns) and as may be
required in connection with any third party litigation.
(b) As of the Effective Time, Seller will permit Purchaser and its
representatives, for reasonable cause, at reasonable times and upon
reasonable notice, to examine, inspect, copy and reproduce files, documents
or records retained by Seller regarding the assets and liabilities
transferred under this Agreement as Purchaser deems reasonably necessary.
(c) For a period of 90 days after the Effective Time, the party
providing copies of records shall do so without charge; thereafter it may
charge its customary rate for such copies.
(d) It is understood that certain of Seller's records, including
certificates of deposit, may be available only in electronic form or in the
form of photocopies, film copies or other nonoriginal and non-paper media.
Section 2.5 Proration of Premiums, Taxes and Expenses.
Deposit insurance premiums and assessments, real property taxes and
assessments, and all other expenses, including without limitation accrued
interest, related to the Deposit Liabilities or Transferred Assets shall be
prorated between the parties as of the Effective Time. Without limiting the
generality of the foregoing sentence, Seller shall be responsible for the
timely payment of all real property taxes and assessments relating to the
Real Property for all periods prior to the Effective Time, whether such taxes
or assessments are due and payable prior to, at or after the Effective Time.
Seller and Purchaser shall each be responsible for their own costs with
respect to the preparation and filing of any tax returns, as well as the
preparation, review and analysis of the allocation statements and any forms
or statements prepared in connection with the allocation of the final
Purchase Price.
Section 2.6 Employee Matters.
(a) Purchaser will have the opportunity to hire those employees employed
by Seller at the Branches and listed on Exhibit 2.6(a) hereof (the
"Employees"), subject to Purchaser's standard screening procedures,
including, but not limited to, criminal background checks and drug testing.
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The compensation and benefits offered to each Employee hired by Purchaser
(the "Hired Employees") shall be determined by Purchaser in its sole
discretion. Purchaser shall not be responsible or liable for any benefits
accrued under the pension or welfare plans of Seller. Seller shall be
responsible for payment of all accrued compensation and benefits of the
Employees through the Closing Date and for all required filings of Forms W-2
and other required filings with federal, state and local tax authorities with
respect to the Employees for such period. As used in Section 2.6, the term
"Employees" shall not include Xxxxx Xxxxxx and Xxxx Xxxxx.
(b) Seller shall pay, discharge and be responsible for, with respect to
each Hired Employee (i) all salary and wages arising out of employment of the
Hired Employees through the Effective Time and (ii) any employee benefits
arising under Seller's employee benefit plans and employee programs prior to
the Effective Time, including benefits with respect to claims incurred prior
to the Effective Time but reported after the Effective Time.
(c) From and after the date of this Agreement, Seller shall continue to
staff the Branches consistent with past practices and safe and sound banking
practices. Additionally, from and after the date of the Agreement, Seller
shall: (i) maintain the Employees as employees of Seller at the Branches
until the Effective Time, subject to Seller's right to manage and discipline
employees as Seller deems appropriate in its absolute discretion, (ii)
refrain from dissuading any Employee from accepting an offer of employment
with Purchaser and (iii) refrain from recruiting Employees for alternate
positions with Seller. Seller shall affirmatively advise Employees that
their current positions with Seller will terminate as of the Effective Time.
Any Employee whose employment shall be terminated for any reason prior to the
Effective Time shall be dealt with by Seller in its sole and absolute
discretion.
(d) To the extent permitted under Purchaser's applicable 401(k) plan,
Seller shall cooperate in arranging for the transfer to Purchaser's 401(k)
plan, or to such other investment alternative as any Hired Employee may
elect, as soon as practicable after the Closing Date and in a manner that
satisfies sections 414(1) and 411(d)(6) of the Internal Revenue Code, as
amended, of those accounts held under Seller's 401(k) plan on behalf of such
Hired Employee, subject to receipt of any necessary consents and approvals of
the Hired Employee.
(e) Purchaser shall not have any responsibility, liability or obligation
to any current or former employees of Seller, their beneficiaries or to any
other person, with respect to any employee plans of Seller (including the
establishment, operation or termination thereof and the notification and
provision of COBRA coverage extension).
Section 2.7 Title to Real Property.
(a) Seller agrees to deliver to Purchaser upon Purchaser's request,
copies of all title information in possession of Seller, including but not
limited to, title insurance policies, attorneys' opinions on title, surveys,
covenants, deeds and easements relating to the Real Property.
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(b) Purchaser shall have the right to obtain, at Purchaser's sole cost
and expense a title insurance commitment from a title insurance company
selected by Purchaser and an owner's policy of title insurance insuring
Purchaser's title to the Real Property and related easements and rights
appurtenant thereto.
(c) Purchaser shall notify Seller, in writing, of any mortgages,
pledges, liens, encumbrances, reservations, tenancies, encroachments,
overlaps or other title exceptions, survey objections, or zoning or similar
land use violations or engineering or structural problems related to the Real
Property to which Purchaser reasonably objects (the "Title Defects").
Purchaser agrees that Title Defects shall not include real property taxes not
yet due and payable, legal highways, zoning ordinances or easements,
restrictions, tenancies, survey matters or other title matters, and rights of
way which do not interfere with the use of the Real Property as such facility
is currently utilized ("Permitted Encumbrances"). Within 30 days after
Seller's receipt of such notice of Title Defects from Purchaser, Seller shall
cure or correct any such Title Defect to Purchaser's reasonable satisfaction.
If Seller is unable or unwilling to cure any such Title Defects to
Purchaser's reasonable satisfaction during such 30-day period, Purchaser
shall have the option either to terminate this Agreement (upon written notice
to Seller) or to receive title subject to such Title Defect (upon written
notice to Seller).
(d) Purchaser shall have the right to request that the title insurance
company update title matters up to 10 business days prior to the Closing Date
for any changes which may have arisen between the date of the original title
search and the Closing Date. If such update indicates that any Title Defects
have been placed of record since the date of Purchaser's original title
search, and Purchaser reasonably objects thereto in writing, then Seller
shall cure or correct any such Title Defect on or prior to the Closing Date
to Purchaser's reasonable satisfaction. If Seller is unable or unwilling to
cure any such Title Defect, Purchaser shall have the option to either to
terminate this Agreement (upon written notice to Seller) or to receive title
subject to such Title Defect (upon written notice to Seller).
Section 2.8 Environmental Matters.
(a) Seller shall deliver to Purchaser, upon Purchaser's request, copies
of all environmental studies, reports and audits in Seller's possession
related to the Real Property. If Purchaser objects to any adverse
environmental condition which impacts the Real Property or the Branches,
Seller shall have thirty (30) days to cure or correct, to Purchaser's
satisfaction, any such adverse environmental condition set forth in such
studies, reports or audits. If Seller is unable or unwilling to cure such
adverse environmental condition within such thirty (30) -day period,
Purchaser shall have the option to accept the premises in its then existing
condition (upon written notice to Seller) or to terminate this Agreement
(upon written notice to Seller).
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(b) Seller shall, at its own cost and expense, not to exceed $2,400,
within 10 calendar days after the date of this Agreement, engage a licensed
and qualified environmental testing firm satisfactory to Purchaser to perform
a Phase II environmental assessment of the Carlisle Real Property, which
assessment shall include, at a minimum, investigations and tests to determine
whether there has been any soil, surface water, groundwater or building space
contamination in, on or under the Carlisle Real Property. Seller shall
provide Purchaser with a copy of a written report from such environmental
testing firm detailing the results of the investigations or tests no later
than thirty (30) calendar days after the date of this Agreement. If
Purchaser objects to any adverse environmental condition which impacts the
Carlisle Real Property or the Carlisle Branch, Seller shall have thirty (30)
days to cure or correct, to Purchaser's satisfaction, any such adverse
environmental condition. If Seller is unable or unwilling to cure such
problem within such thirty (30) -day period, Purchaser shall have the option
to accept the premises in its then existing condition (upon written notice to
Seller) or to terminate this Agreement (upon written notice to Seller).
ARTICLE III
CLOSING AND EFFECTIVE TIME
Section 3.1 Effective Time.
The purchase of assets and assumption of liabilities provided for in
this Agreement shall occur at a closing (the "Closing") to be held at
Purchaser's Franklin location, 0000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxx, Xxxx at
10:00 a.m., local time, on June 5, 2004 or such other a mutually agreeable
date. The effective time of the transactions contemplated by this Agreement
(the "Effective Time") shall be 5:00 p.m., local time, on the day on which
the Closing occurs (the "Closing Date"), unless otherwise mutually agreed
upon by the parties.
Section 3.2 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 execute and/or deliver to Purchaser or, in the case
of subsections (b) (4) and (5), make reasonably available to Purchaser:
(1) a general warranty deed in recordable form for each of the
Carlisle Real Property and the Middletown Real Property executed by Seller
transferring good and marketable title to the Carlisle Real Property and
Middletown Real Property, free and clear of all mortgages, liens, changes,
assessments, fees and other encumbrances;
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(2) a Xxxx of Sale, in substantially the form attached hereto as
Exhibit 3.2(b)(2) (the "Xxxx of Sale"), transferring to Purchaser all of
Seller's interest in the Transferred Assets (other than the Real Property);
(3) an Assignment and Assumption Agreement, in substantially the
form attached hereto as Exhibit 3.2(b)(3) (the "Assignment and Assumption
Agreement"), assigning Seller's interest in the Deposit Liabilities;
(4) Seller's records, in whatever form or medium maintained by
Seller, related to (i) the Deposit Liabilities and (ii) the Transferred
Assets;
(5) Seller's keys to the safe deposit boxes and Seller's records
related to the safe deposit box business at the Branches;
(6) immediately available funds in the net amount shown as owing to
Purchaser by Seller on the Initial Closing Statement, if any;
(7) the Coins and Currency;
(8) a copy of the resolutions of the board of directors of Seller
approving this Agreement and the transactions contemplated hereunder;
(9) such affidavits and other documents and instruments as may be
required by the title insurance company that Purchaser selects to issue title
insurance on the Real Property;
(10) a certificate of a proper officer of Seller, dated as of the
Closing Date, in the form of Exhibit 3.2(b)(10), certifying to the
fulfillment of the conditions to the obligations of Purchaser contained in
Section 8.1 and Section 8.2;
(11) the Initial Closing Statement;
(12) Seller's resignation as trustee or custodian, as applicable,
with respect to each XXX or Xxxxx Plan account included in the Deposit
Liabilities and designation of Purchaser as successor trustee or custodian
with respect thereto, as contemplated by;
(13) a copy of the resolutions of the board of directors of Seller
approving this Agreement and the transactions contemplated hereunder; and
(14) such certificates and other documents as Purchaser and its
counsel may reasonably require (i) to evidence receipt by Seller of all
necessary Regulatory Approvals for the consummation by Seller of the
transactions provided for in this Agreement and (ii) to effect the
transactions provided for in this Agreement.
(c) At the Closing, subject to all the terms and conditions of this
Agreement, Purchaser shall execute and/or deliver to Seller:
(1) the Assignment and Assumption Agreement;
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(2) immediately available funds in the net amount shown as owing to
Seller by Purchaser on the Initial Closing Statement, if any;
(3) a certificate of a proper officer of Purchaser, dated as of the
Closing Date, in the form of Exhibit 3.2(c)(3), certifying to the fulfillment
of the conditions to the obligations of Seller contained in Section 9.1 and
Section 9.2;
(4) purchaser's acceptance of its appointment as successor trustee
or custodian, as applicable, of the XXX and Xxxxx Plan accounts included in
the Deposit Liabilities and assumption of the fiduciary obligations of the
trustee or custodian with respect thereto;
(5) the Initial Closing Statement;
(6) a copy of the resolutions of the board of directors of Purchase
approving this Agreement and the transactions contemplated hereunder; and
(7) such certificates and other documents as Seller and its counsel
may reasonably require (i) to evidence the receipt by Purchaser of all
necessary Regulatory Approvals for the consummation by Purchaser of the
transactions provided for in this Agreement and (ii) to effect the
transactions provided for in this Agreement.
(d) All instruments, agreements and certificates described in this
Section 3.2 shall be in form and substance reasonably satisfactory to the
parties' respective legal counsel.
Section 3.3 Post-Closing Adjustments.
(a) Not later than 10 business days after the Effective Time (the "Final
Closing Balance Sheet Delivery Date"), Seller shall deliver to Purchaser a
balance sheet dated as of the Effective Time, prepared in accordance with
generally accepted accounting principles consistently applied, reflecting the
assets sold and assigned and the liabilities transferred and assumed
hereunder (the "Final Closing Balance Sheet") together with a copy of
Seller's calculation of the adjusted Purchase Price and amounts payable
thereunder, as reflected in a final closing statement (the "Final Closing
Statement"). Seller shall afford Purchaser and its accountants and attorneys
the opportunity to review all work papers and documentation used by Seller in
preparing the Final Closing Balance Sheet and the Final Closing Statement.
Within 10 business days following the Final Closing Balance Sheet Delivery
Date (the "Adjustment Payment Date"), Seller and Purchaser shall meet at the
office of Purchaser at 10:00 a.m. local time, or at such other time and place
as the parties shall mutually agree, to effect the transfer of any funds as
may be necessary to reflect changes in such assets and liabilities between
the Pre-Closing Balance Sheet and the Final Closing Balance Sheet and
resulting changes in the Purchase Price, as reflected in the Final Closing
Statement, together with interest thereon computed from the Effective Time to
the Adjustment Payment Date at the applicable Federal Funds Rate (as
hereinafter defined).
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(b) In the event that a dispute arises as to the appropriate amounts to
be paid to either party on the Adjustment Payment Date, each party shall pay
to the other on such Adjustment Payment Date all amounts other than those as
to which a dispute exists. Any disputed amounts retained by a party which
are later found to be due to the other party shall be paid to such other
party promptly upon resolution with interest thereon from the Effective Time
to the date paid at the applicable Federal Funds Rate.
(c) The "Federal Funds Rate" shall be the 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 Time and the date paid.
ARTICLE IV
INDEMNIFICATION
Section 4.1 Seller's Indemnification of Purchaser.
Seller shall indemnify, hold harmless and defend Purchaser and its
affiliates from and against (i) any breach by Seller of any agreement,
covenant, representation or warranty contained herein and (ii) all damages,
claims, losses, liabilities, demands, obligations, expenses, including
reasonable attorneys' fees and expenses, arising out of any actions, suits or
proceedings commenced prior to the Effective Time (other than proceedings to
prevent or limit the consummation of this transaction) relating to Seller's
operations at the Branches; and, except as otherwise provided in this
Agreement, Seller shall further indemnify, hold harmless and defend Purchaser
and its affiliates from and against all damages, claims, losses, liabilities,
demands, obligations, expenses, 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 Time and which are claimed or demanded on or
after the Effective Time, or which arise out of any actions, suits or
proceedings commenced on or after the Effective Time, in connection with
operations or transactions occurring prior to the Effective Time and which
involve the Branches, the Transferred Assets, the Deposit Liabilities and any
other liabilities retained by Seller pursuant to this Agreement.
Section 4.2 Purchaser's Indemnification of Seller.
Purchaser shall indemnify, hold harmless and defend Seller and its
affiliates from and against any breach by Purchaser of any agreement,
covenant, representation or warranty contained herein and all damages,
claims, losses, liabilities, demands, obligations and expenses, including
reasonable attorneys' fees and expenses, which Seller may receive, suffer or
incur in connection with transactions occurring after the Effective Time and
which involve the Transferred Assets or the Deposit Liabilities.
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Section 4.3 Claims for Indemnity.
(a) Except as otherwise provided in Sectin 4.3(b), a claim for
indemnity under Section 4.1 or Section 4.2 of this Agreement may be made by
the claiming party at any time prior to one year after the Effective Time by
the giving of written notice thereof to the other party. In the event that
any such claim is made within the prescribed period, the indemnity relating
to such claim shall survive until such claim is resolved. Claims not made
within such period shall cease and no indemnity shall be made therefor.
(b) Promptly after receipt by either party of notice of the assertion of
any claim or the commencement of any action, suit or proceeding with respect
to which a claim for indemnification will be made under this Agreement, such
party (the "Indemnified Party") shall give written notice thereof to the
other party (the "Indemnitor") and will thereafter keep the Indemnitor
reasonably informed with respect thereto, provided that failure of the
Indemnified Party to give the Indemnitor prompt notice as provided herein
shall not relieve the Indemnitor of its obligations hereunder except to the
extent, if any, it shall have been materially prejudiced thereby. In case
any such action, suit or proceeding is brought against an Indemnified Party,
the Indemnitor shall be entitled to participate in (and, in its discretion,
to assume) the defense thereof with counsel reasonably satisfactory to the
Indemnified Party, provided, however, that the Indemnified Party shall be
entitled to participate in any such action, suit or proceeding with counsel
of its own choice at the expense of the Indemnitor if, in the good faith
judgment of the Indemnified Party's counsel, representation by the
Indemnitor's counsel may present a conflict of interest or that there may be
defenses available to the Indemnified Party which are different from or in
addition to those available to the Indemnitor. The Indemnitor will not
settle any claim, action, suit or proceeding which would give rise to the
Indemnitor's liability under its indemnity unless such settlement includes as
an unconditional term thereof the giving by the claimant or plaintiff of a
release of the Indemnified Party, in form and substance satisfactory to the
Indemnified Party and its counsel, from all liability with respect to such
claim, action, suit or proceeding. If the Indemnitor assumes the defense of
any claim, action, suit or proceeding as provided in this Section 4.3, the
Indemnified Party shall be permitted to join in the defense thereof with
counsel of its own selection and at its own expense. If the Indemnitor shall
not assume the defense of any claim, action, suit or proceeding, the
Indemnified Party may defend against such claim, action, suit or proceeding
in such manner as it may deem appropriate, provided that an Indemnified Party
shall not settle any claim, action, suit or proceeding which would give rise
to the Indemnitor's liability under its indemnity without the prior written
consent of the Indemnitor.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
Section 5.1 Corporate Organization.
Seller is an "insured depository institution," as defined in Section
3(c)(2) of the Federal Deposit Insurance Act, as amended (the "FDIA"), duly
organized, validly existing and in good standing under the laws of the United
States.
Section 5.2 Authority.
Seller has the power and authority to enter into and perform this
Agreement. This Agreement and the execution, delivery and performance hereof
have been, or prior to the Closing will be, duly authorized and approved by
the Board of Directors of Seller, and this Agreement constitutes a valid and
binding obligation of Seller, enforceable against Seller in accordance with
its terms, except as enforcement may be limited by federal regulators of
Seller or by bankruptcy, insolvency, reorganization, moratorium or other laws
of general applicability relating to or affecting creditors' rights, or the
limiting effect of rules of law governing specific performance, equitable
relief and other equitable remedies or the waiver of rights or remedies.
Section 5.3 Non-Contravention.
The execution and delivery of this Agreement by Seller do not and,
subject to the receipt of all required approvals and consents, the
consummation of the transactions contemplated by this Agreement will not
constitute (i) a breach or violation of or default under any law, rule,
regulation, judgment, order, governmental permit or license, agreement,
indenture or instrument of Seller or to which Seller is subject, which
breach, violation or default would have an adverse effect on Seller, or (ii)
a breach or violation of or a default under the articles of association or
bylaws of Seller or any contract or other instrument to which Seller is a
party or by which Seller is bound.
Section 5.4 Personal Property.
Seller owns, and will convey to Purchaser at the closing, all of
Seller's right, title and interest in and to each item of personal property
within the Included Fixed Assets free and clear of any mortgage, lien,
security interest or pledge. Such items of personal property are in good
working order.
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Section 5.5 Real Property.
(a) Seller owns, and will convey to Purchaser at the Closing, good and
marketable title in and to the Real Property free and clear of any mortgage,
lien, security interest or pledge.
(b) There is not pending or threatened any condemnation proceeding
against the Real Property.
(c) Seller has not entered into any agreement regarding the Real
Property and the Real Property is not subject to any claim, demand, suit,
lien, proceeding or litigation of any kind, pending or threatened, which
would affect or limit Purchaser's interest in or use or enjoyment of the Real
Property, or which would limit or restrict Sellers' right or ability to
transfer the Real Property to Purchaser in accordance with the terms and
provisions of this Agreement.
(d) No fact or condition exists which would result in the permanent
termination or impairment of access to the Real Property from adjoining
public streets or highways or in the permanent discontinuance of necessary
utility services to the Real Property, and all sanitation, plumbing, refuse
disposal and similar facilities servicing the Real Property are in compliance
with all applicable laws, regulations, ordinances and rules.
(e) No complaint has been received by Seller that Seller, or the Real
Property, is in violation of any applicable building, zoning, platting,
subdivision, use, safety or similar law, regulation, ordinance or
restriction. There are no special or general assessments pending against or
affecting the Real Property and no public improvements have been recently
made which would cause special or general assessments to be assessed against
the Real Property. There is no encroachment upon the Real Property from any
buildings or improvements located on any property adjacent to the Real
Property. There is no encroachment by the Real Property upon any adjacent
property or upon any easement with respect to any adjacent property. There
are no leases or other agreements by which any person possesses or has a
right to possess all or any portion of the real property. There is no
violation of any applicable building restriction or restrictive covenant
affecting the Real Property. The Real Property is adequately services by all
utilities necessary for the effective operation of a financial institution
office.
Section 5.6 Employees.
No employee assigned to the Branches is a party to any collective
bargaining, employment, severance, termination or change of control
agreement, whether formal or informal, oral or written, or is represented
under any collective bargaining agreement relating to employment with Seller.
Seller is not aware of any efforts during the past three years to unionize or
organize the employees assigned to the Branches.
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Section 5.7 Environmental Matters.
(a) To Sellers actual knowledge the Real Property and the Branches are
in compliance with all applicable Federal, State, Local and municipal
statutes, ordinances, laws and regulations and all orders, rulings or other
decisions of any court, administrative agency or any other government
authority relating to the protection of the environment.
(b) To Sellers actual knowledge the Real Property and the Branches are
free of friable asbestos except to the extent properly sealed or encapsulated
in compliance with all applicable Environmental Laws. No part of the Real
Property or the Branches have been used for the manufacture, handling,
storage or disposal of Hazardous Substances, except in compliance with
Environmental Laws.
(c) To Sellers actual knowledge the Real Property does not contain, nor
has it ever contained an "underground storage tank" as that term is defined
in the Federal Hazardous and Solid Waste Amendments of 1984 to the Resource
Conservation and Recovery Act.
(d) There is no action, suit, investigation, inquiry or other
proceeding, ruling, order or citation involving Seller, pending, threatened
or previously asserted, as a result of any actual or alleged failure to
comply with any requirement of any environmental law with respect to the Real
Property or the Branches.
(e) Seller has not received notice that, with respect to the Real
Property or the Branches, Seller is an "owner" or "operator" of a "facility"
as those terms are defined in the Comprehensive Environmental Compensation
and Liability Act of 1980 ("CERCLA").
(f) For purposes of this Section 5.7, "Hazardous Substances" has the
meaning set forth in Section 9601 of CERCLA; and "Environmental Law" means
all laws, ordinances, rules and regulations that: (i) regulate waste
management, including the containment, storage, handling, transportation,
disposal or management of Hazardous Substances; (ii) regulated or prescribed
requirements for air, water, or soil quality; (iii) protect the environment;
or (iv) establish liability for the investigation, removal or cleanup of, or
damage caused by any Hazardous Substance.
(g) For purposes of this Agreement, "to Seller's actual knowledge" shall
mean the personal knowledge of any of Seller's directors or officers.
Section 5.8 Deposit Liabilities.
Deposit Liabilities are insured by the FDIC to the fullest extent
permitted by Federal Law, and no action is pending or has been threatened by
the FDIC against Seller with respect to the termination of such insurance.
The Deposit Liabilities (i) are in all respects genuine and enforceable
obligations of Seller and have been acquired and maintained in full
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compliance with all applicable laws, including but not limited to the Truth
in Savings Act and regulations promulgated thereunder; (ii) were acquired in
the ordinary course of Sellers' business; and (iii) are not subject to any
claim that is superior to the rights of persons shown on the records
delivered to Purchaser indicating the owners of the Deposit Liabilities other
than claims against such owners of the Deposit Liabilities, such as state and
federal tax liens, garnishments and other judgment claims, which have matured
or may mature into claims against the respective Deposit Liabilities.
Section 5.9 Legal Proceedings.
There are no actions, suits or proceedings, whether civil, criminal or
administrative, pending or, to Seller's knowledge, threatened against or
affecting Seller which would be reasonably likely to have an adverse effect
on the Transferred Assets, Deposit Liabilities, the Branches or consummation
of the transactions contemplated hereby.
Section 5.10 No Brokers.
All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Seller and Purchaser, and there
has been no participation or intervention by any other person, firm or
corporation employee or engaged by or on behalf of Seller in such a manner as
to give rise to any valid claim against Seller or Purchaser for a brokerage
commission, finder's fee or like commission.
Section 5.11 Financing Available.
Seller's ability to consummate the transactions contemplated hereby is
not contingent on raising any equity capital, obtaining specific financing
therefor, consent of any lender or other matter.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
Section 6.1 Corporate Organization.
Purchaser is an "insured depository institution," as defined in Section
3(c)(2) of the FDIA, duly organized, validly existing and in good standing
under the laws of the United States.
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Section 6.2 Authority.
Purchaser has the power and authority to enter into and perform this
Agreement. This Agreement and the execution, delivery and performance hereof
have been, or prior to Closing will be, duly authorized and approved by the
Board of Directors of Purchaser, and this Agreement constitutes a valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms, except as enforcement may be limited by federal and state
regulators of Purchaser or by bankruptcy, insolvency, reorganization,
moratorium or other laws of general applicability relating to or affecting
creditors' rights, or the limiting effect of rules of law governing specific
performance, equitable relief and other equitable remedies or the waiver of
rights or remedies.
Section 6.3 Non-Contravention.
The execution and delivery of this Agreement by Purchaser do not and,
subject to the receipt of all required approvals and consents, the consummation
of the transactions contemplated by this Agreement will not constitute (i) a
breach or violation of or default under any law, rule, regulation, judgment,
order, governmental permit or license, agreement, indenture or instrument of
Purchaser or to which Purchaser is subject, which breach, violation or default
would have a material and adverse effect on Purchaser, or (ii) a breach or
violation of or a default under the articles of association or bylaws of
Purchaser or any material contract or other instrument to which Purchaser is
a party or by which Purchaser is bound.
Section 6.4 Legal Proceedings.
There are no actions, suits or proceedings, whether civil, criminal or
administrative, pending or, to Purchaser's knowledge, threatened against or
affecting Purchaser which would be reasonably likely to have a material
adverse effect on the consummation of the transactions contemplated hereby.
Section 6.5 No Brokers.
There has been no participation or intervention by any person, firm or
corporation employed or engaged by or on behalf of Purchaser in such a manner
as to give rise to any valid claim against Seller for a brokerage commission,
finder's fee or like commission.
Section 6.6 Financing Available.
Purchaser's ability to consummate the transactions contemplated hereby
is not contingent on raising any equity capital, obtaining specific financing
therefor, consent of any lender or any other matter, other than the receipt
of any required Regulatory Approval.
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ARTICLE VII
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME
Section 7.1 Full Access.
From the date hereof until the Effective Time, 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, specifically
including but not limited to all books and records relating to the Deposit
Liabilities and the Transferred Assets in order that Purchaser may have full
opportunity to make reasonable investigations and to engage in operational
planning, at reasonable times, without interfering with the normal business
and operations of the Branches or the affairs of Seller relating to the
Branches. Seller will cooperate with Purchaser to the extent reasonably
requested and legally permissible to provide Purchaser with information about
the Employees and a means to meet with the Employees. The officers of Seller
shall furnish Purchaser with two standard sets of such additional financial
and operating data and other information as to its business and properties at
the Branches, 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. Any additional copies of such information shall be produced and
provided at Purchaser's expense. Nothing in this Section 7.1 shall require
Seller to breach any obligation of confidentiality or to reveal any
proprietary information, trade secrets or marketing or strategic plans. It
is understood that certain of Seller's records may be available only in the
form of photocopies, film copies, or other non-original and non-paper media.
Section 7.2 Regulatory Approvals.
Purchaser and Seller shall cooperate with each other to prepare and file
as soon as practicable after the date hereof all necessary applications,
notices, petitions and filings, and to obtain as promptly as practicable all
permits, consents, approvals and authorizations of all federal and state
regulatory authorities or instrumentalities which are necessary or advisable
to consummate the transactions contemplated by this Agreement (collectively,
the "Regulatory Approvals"). Purchaser agrees to promptly advise Seller or
Seller's counsel of the status of the applications and of actions which may
be necessary or desirable in order to obtain the Regulatory Approvals and any
substantial developments in the course of obtaining the Regulatory Approvals.
Purchaser and Seller shall have the right to review in advance, and will
consult with the other on, all information which appears in any filing made
with or written materials submitted to any regulatory authority or
instrumentality or third party in connection with the transactions
contemplated by this Agreement.
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Section 7.3 Conduct of Business.
From the date hereof until the Effective Time, Seller shall:
(a) carry on, or cause to be carried on, the business of the Branches
substantially in the same manner as on the date hereof, preserve intact its
current business organization and use its best efforts to preserve its
business relationships with depositors, customers and others having business
relationships with it and whose accounts will be transferred to Purchaser;
(b) continue to staff the Branches with consistent with past practices
and safe and sound banking practices;
(c) cooperate with and assist Buyer in assuring the orderly transition
of the business of the Branches to Purchaser from Seller; and
(d) maintain the Transferred Assets, including without limitation the
Real Property, in their current condition, ordinary wear and tear excepted.
Section 7.4 No Solicitation; Restriction on New Branches.
(a) Prior to the Closing Date, Purchaser shall not solicit holders of
Deposit Liabilities (collectively, the "Branch Customers") through
advertising specifically referencing or targeted to such Branch Customers,
nor attempt to induce such Branch Customers to close deposit accounts with
Seller and open accounts directly with Purchaser. Notwithstanding the
foregoing sentence, Purchaser and its affiliates shall be permitted to (i)
engage in advertising, solicitations or marketing campaigns not primarily
directed to or targeted at the Branch Customers, (ii) engage in lending,
deposit, safe deposit and other financial services relationships existing as
of the date hereof with the Branch Customers, (iii) respond to unsolicited
inquiries by the Branch Customers with respect to banking or other financial
services and (iv) provide notices or communications relating to the
transactions contemplated hereby in accordance with the provisions hereof.
(b) For a period of four years after the Closing Date, Seller shall not,
directly or indirectly, solicit banking or other financial services business
from the Branch Customers, but Seller may respond to and act upon unsolicited
inquiries from Branch Customers with respect to banking or other financial
services.
(c) For a period of four years after the Closing Date, Seller shall not,
without the prior written approval of Purchaser, open a lending or deposit-
taking office or install an ATM within Xxxxxx County, Xxxxxxxx Xxxxxxxx,
Xxxxxxx xx Xxxxxxxx, Xxxx of Franklin, City of Middletown, or the geographic
territory shaded in green on the map attached hereto as Exhibit 7.4(c) (the
"Seller Non-Compete Territory"). For a period of three years and six months
after the Closing Date, Seller shall not, without the prior written approval
of Purchaser, acquire a lending or deposit-taking office or ATM within the
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Seller Non-Compete Territory. For a period of three years after the Closing
Date, Seller shall not, without the prior written approval of Purchaser,
acquire an office or ATM in connection with Seller's acquisition of another
financial institution, or acquire another financial institution, within the
Seller Non-Compete Territory.
(d) For a period of four years after the Closing Date, Purchaser shall
not, without the prior written approval of Seller, open a lending or deposit-
taking office or install an ATM within the geographic territory shaded
yellow, or the geographic territory shaded green, on the map attached hereto
as Exhibit 7.4(c) (the "Purchaser Non-Compete Territory"). For a period of
three years and six months after the Closing Date, Purchaser shall not,
without the prior written approval of Seller, acquire a lending or deposit-
taking office or ATM within the Purchaser Non-Compete Territory. For a
period of three years after the Closing Date, Purchaser shall not, without
the prior written approval of Seller, acquire an office or ATM in connection
with Purchaser's acquisition of another financial institution, or acquire
another financial institution, within the Purchaser Non-Compete Territory.
Section 7.5 Branch Operations.
Notwithstanding the foregoing, between the date of this Agreement and
the Effective Time, and except as may be otherwise required by a governmental
or regulatory authority, Seller shall not, without the prior written consent
of Purchaser:
(a) engage or participate in any transaction or incur or sustain any
obligation which is material to the business, condition or operation of the
Branches;
(b) except in the ordinary course of business at the unsolicited
direction of depositors (i) cause the Branches to transfer to Seller's other
operations or to a third party (other than Purchaser) any Deposit Liabilities
or (ii) cause any of Seller's other operations to transfer to the Branches
any Deposit Liabilities;
(c) undertake any actions which are inconsistent with the maintenance of
good relations with customers of the Branches;
(d) make any change to its customary policies for setting rates on
deposits offered at the Branches;
(e) amend or modify any of its promotional or deposit account practices
at the Branches; or
(f) reduce the service charges on any deposit product or fee-based
product (e.g. safe deposit boxes, money orders, cashier's checks).
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Section 7.6 Corporate and Other Consents.
Seller shall secure all corporate and other non-regulatory consents
which are necessary or advisable to consummate the transactions contemplated
hereby, except those involving Purchaser, and Purchaser shall secure all
corporate and other non-regulatory consents which are necessary or advisable
to consummate the transactions contemplated hereby, except those involving
Seller.
Section 7.7 Data Processing Services.
Each party hereto agrees to provide to the other data processing and
transfer services as shall be reasonably necessary for the conversion and
transfer of information concerning the Deposit Liabilities into Purchaser's
data processing system. As soon as practicable after execution of this
Agreement, each party hereto shall provide to the other computer file
instructions which maintain information on the deposit accounts, together
with operational procedures necessary to implement the transfer of the
information to Purchaser. Seller and Purchaser shall each designate an
individual to serve as liaison from the date hereto through the Closing Date
concerning operational matters. Seller shall continue to provide post-
closing assistance to Purchaser as may be reasonably necessary for one
hundred twenty (120) days following the Closing Date.
Section 7.8 Public Announcements.
Seller and Purchaser agree that, from the date hereof, and except as
otherwise required by law, neither shall issue any press release or make any
other public announcement regarding this Agreement or the transactions
contemplated hereby without first consulting with the other party hereto upon
the substance and timing of such announcement or comment. Further, Seller
and Purchaser acknowledge the sensitivity of this transaction to the
employees of Seller and agree that prior to the Effective Time no
announcements or communications with the employees of Seller shall be made
without the prior approval of both Purchaser and Seller which approval shall
not be unreasonably withheld.
Section 7.9 Tax Reporting.
Except as otherwise required by applicable laws and regulations,
Purchaser shall comply with all tax reporting obligations in connection with
the Deposit Liabilities and other liabilities transferred pursuant to this
Agreement with respect to the calendar year in which the Closing Date occurs.
To the extent that Purchaser is not permitted to make such reports, Seller
shall so report with respect to the period from January 1 of the year in
which the Closing occurs through the Closing Date and Purchaser shall so
report with respect to all periods from the day after the Closing Date. Any
amounts required by any governmental entity to be withheld from any of the
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Deposit Liabilities through the Closing Date shall be withheld by Seller in
accordance with applicable laws and regulations and shall be remitted by
Seller to the appropriate governmental entity on or prior to the applicable
due date. Any such withholding required to be made subsequent to the Closing
Date shall be withheld by Purchaser in accordance with applicable laws and
regulations and shall be remitted by Purchaser to the appropriate
governmental entity on or prior to the applicable due date. Purchaser and
Seller shall, prior to the Closing Date, consult with each other, and Seller
shall take such actions as are reasonably necessary, to permit Purchaser
timely to comply with its obligations pursuant to this Section 7.9.
Section 7.10 Actions With Respect to XXX and Xxxxx Plan Deposit
Liabilities.
Seller shall (i) resign as of the close of business on the Closing Date
as the trustee or custodian, as applicable, of each XXX Deposit Liability and
Xxxxx Plan Deposit Liability of which it is the trustee or custodian, (ii) to
the extent permitted by the documentation governing each such XXX or Xxxxx
Plan and applicable law, appoint Purchaser as successor trustee or custodian
as of the close of business on the Closing Date, as applicable, of each such
XXX or Xxxxx Plan, and Purchaser agrees to accept each such trusteeship or
custodianship and assume all fiduciary obligations with respect thereto as of
the close of business on the Closing Date, and (iii) deliver to the XXX
grantor or Xxxxx Plan named fiduciary of each such XXX or Xxxxx Plan such
notice of the foregoing as is required by the documentation governing each
such XXX or Xxxxx Plan or applicable law. If, pursuant to the terms of the
documentation governing any such XXX or Xxxxx Plan or applicable law, (y)
Seller is not permitted to name Purchaser as successor trustee or custodian
or the XXX grantor or Xxxxx Plan named fiduciary objects in writing to such
assignment, or is entitled to, and does, in fact, name a successor trustee or
custodian other than Purchaser, or (z) such XXX or Xxxxx Plan includes
assets, which are not Deposit Liabilities of Seller and are not being
transferred to Purchaser, and the assumption of the deposit liabilities of
Seller included in such XXX or Xxxxx Plan would result in a loss of
qualification of such XXX or Xxxxx Plan under the Code or applicable
regulations, all Deposits Liabilities of Seller held under such XXX or Xxxxx
Plan shall be excluded from the Deposit Liabilities (such excluded Deposit
Liabilities being herein called the "Excluded XXX/Xxxxx Deposit
Liabilities").
Section 7.11 Further Assurance.
Each of Purchaser and Seller shall use its reasonable best efforts in
good faith to take, or cause to be taken, all actions, and to do, or cause to
be done, all things necessary or advisable under applicable laws and
regulations or otherwise so as to permit consummation of the transactions
contemplated hereby as promptly as reasonably practicable and to otherwise
enable consummation of the transactions contemplated hereby, and shall
cooperate fully with each other to that end.
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Section 7.12 Account Statements.
On the business day immediately preceding the Closing Date, Seller shall
produce a bank statement dated as of that date, for each of the Deposit
Liabilities and mail, at Seller's expense, such statement to the respective
account holders.
ARTICLE VIII
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of Purchaser to complete the transactions contemplated in
this Agreement are conditioned upon fulfillment, on or before the Closing, of
each of the following conditions.
Section 8.1 Representations and Warranties True.
The representations and warranties made by Seller in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date as though such representations and warranties were made on and as of the
Closing Date.
Section 8.2 Obligations Performed.
Seller shall (i) deliver or make available to Purchaser those items
required by Section 3.2 hereof and (ii) 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 Time.
Section 8.3 Regulatory Approvals.
All Regulatory Approvals shall have been obtained and all necessary
conditions, including without limitation the giving of all legally required
notices and the expiration of all legally required waiting or protest
periods, of or relating to such Regulatory Approvals shall have been met as
required.
Section 8.4 Due Diligence.
Purchaser shall have completed its due diligence with respect to the
Branches, the Deposit Liabilities and the Transferred Assets and shall have
been satisfied with the results of such due diligence in its sole discretion.
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ARTICLE IX
CONDITIONS TO SELLER'S OBLIGATIONS
The obligation of Seller to complete the transactions contemplated in
this Agreement are conditioned upon fulfillment, on or before the Closing, of
each of the following conditions.
Section 9.1 Representations and Warranties True.
The representations and warranties made by Purchaser in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date as though such representations and warranties were made on and as of the
Closing Date.
Section 9.2 Obligations Performed.
Purchaser shall (i) deliver to Seller those items required by Section
3.2 hereof and (ii) 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 Time.
Section 9.3 Regulatory Approvals.
The condition set forth in Section 8.3 shall have been satisfied.
Section 9.4 Consents of Third Parties.
Seller shall have obtained all consents of third parties, if any, which
are necessary to consummate the transactions contemplated hereby.
ARTICLE X
TERMINATION
Section 10.1 Methods of Termination.
This Agreement may be terminated in any of the following ways:
(a) by Seller or Purchaser if the Closing has not occurred on or before
the 90th day following the date hereof, provided that this right to terminate
shall not be available to any party whose failure to perform an obligation in
breach of such party's obligations under this Agreement has been the cause
of, or resulted in, the failure of the Effective Time to occur by such time;
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(b) at any time on or prior to the Effective Time by the mutual consent
in writing of Purchaser and Seller;
(c) by Purchaser in writing if the conditions set forth in ARTICLE VIII
of this Agreement shall not have been met by Seller or waived in writing by
Purchaser prior to the date fixed for Closing, provided that Purchaser's
failure to perform an obligation in breach of its obligations under this
Agreement was not the cause of, or resulted in, Seller's failure to fulfill
any such condition;
(d) by Seller in writing if the conditions set forth in ARTICLE IX of
this Agreement shall not have been met by Purchaser or waived in writing by
Seller prior to the date fixed for Closing, provided that Seller's failure to
perform an obligation in breach of its obligations under this Agreement was
not the cause of, or resulted in, Purchaser's failure to fulfill any such
condition;
(e) any time prior to the Effective Time, by Seller or Purchaser in
writing if the other shall have been in breach of any representation and
warranty in any material respect (as if such representation and warranty had
been made on and as of the date hereof and on the date of the notice of
breach referred to below), or in breach of any covenant, undertaking or
obligation contained herein, and such breach has not been cured by the
earlier of 15 calendar days after the giving of notice to the breaching party
of such breach or the Effective Time; or
(f) by Seller or Purchaser in writing at any time after any applicable
regulatory authority has denied approval of any application for a Regulatory
Approval.
Section 10.2 Procedure Upon and Effect of Termination.
In the event of termination pursuant to Section 10.1 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, provided that (i)Section 10.3, Section 11.1, Section 11.5 and
this Section 10.2 shall survive any such termination and (ii) a termination
shall not relieve a breaching party from liability for an intentional or
grossly negligent breach of any covenant, undertaking, representation or
warranty giving rise to such termination.
Section 10.3 Payment of Expenses.
Should the transactions contemplated herein not be consummated because
of a party's intentional or grossly negligent breach of this Agreement, in
addition to such damages as may be recoverable in law or equity and as
otherwise provided herein, 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.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1 Expenses.
Except as otherwise provided herein, Seller and Purchaser each shall pay
all of their own out-of-pocket expenses in connection with this Agreement,
including appraisal, accounting, consulting, data processing and conversion
expenses and professional and legal fees, if any, whether or not the
transactions contemplated by this Agreement are consummated.
Section 11.2 Amendment and Modification.
The parties hereto, by mutual consent, may amend, modify and supplement
this Agreement in such manner as may be agreed upon by them in writing.
Section 11.3 Waiver or Extension.
Except with respect to the Regulatory Approvals, 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.
Section 11.4 Successors and Assigns.
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 here under shall be assigned by either of the parties hereto
without the prior written consent of the other.
Section 11.5 Confidentiality.
All information furnished previously in connection with the transactions
contemplated by this Agreement or pursuant hereto shall be treated as the
sole property of the party furnishing the information until consummation of
the transactions contemplated hereby and, if such transactions shall not
occur, the party receiving the information shall return to the party which
furnished such information all documents or other materials containing,
reflecting or referring to such information, shall use its best efforts to
keep confidential all such information, and shall not directly or indirectly
use such information for any competitive or other commercial purposes. The
obligation to keep such information confidential shall continue for five
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years from the date the proposed transactions are abandoned but shall not
apply to (i) any information which (x) the party receiving the information
can establish by convincing evidence was already in its possession prior to
the disclosure thereof by the party furnishing the information; (y) was then
generally known to the public; or (z) became known to the public through no
fault of the party receiving the information; or (ii) disclosures pursuant to
a legal requirement or in accordance with an order of a court of competent
jurisdiction, provided that the party which is the subject of any such legal
requirement or order shall use its reasonable best efforts to give the other
party at least ten business days prior notice thereof.
Section 11.6 Addresses for Notices, Etc.
All notices, consents, waivers and other communications under this
Agreement must be in writing and will be deemed to have been duly given when
(a) delivered by hand (with written confirmation of receipt), (b) deposited
in the United States Mail by registered or certified mail, return receipt
requested, (c) sent by telecopier (with electronic confirmation of receipt),
provided that a copy is mailed by registered or certified mail, return
receipt requested, or (d) when received by the addressee, if sent by a
nationally recognized overnight delivery service (receipt requested), in each
case to the appropriate addresses and telecopier numbers set forth below (or
to such other addresses and telecopier numbers as a party may designate by
notice to the other parties):
If to Purchaser:
Community National Bank
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxx Xxxxxxxxxxx, President
Fax: (000) 000-0000
With a copy to:
Xxxxxxxx & Shohl LLP
1900 Chemed Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxx Xxxxxxxxxxx, Esq.
Fax: (000) 000-0000
If to Seller:
The First National Bank of Germantown
00 X. Xxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxxx Winning, President
Fax: (000) 000-0000
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With a copy to:
Coolidge, Wall, Xxxxxxx & Lombord
00 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
Section 11.7 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.
Section 11.8 Headings.
The headings of the Sections and Articles of this Agreement are inserted
for convenience only and shall not constitute a part thereof or affect in any
way the meaning or interpretation of this Agreement.
Section 11.9 Governing Law.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Ohio.
Section 10.10 Sole Agreement.
This Agreement and the exhibits hereto represent the entire agreement
between the parties hereto respecting the transactions contemplated hereby
and all prior or contemporaneous written or oral proposals, agreements in
principle, representations, warranties and understandings between the parties
with respect to such matters are superseded hereby and merged herein.
Section 11.11 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.
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Section 11.12 Specific Performance.
The parties hereto acknowledge that monetary damages could not
adequately compensate either party hereto in the event of a breach of this
Agreement by the other, that the non-breaching party would suffer irreparable
harm in the event of such breach and that the non-breaching party shall have,
in addition to any other rights or remedies it may have at law or in equity,
specific performance and injunctive relief as a remedy for the enforcement
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers as of the date first above
written.
COMMUNITY NATIONAL BANK
By: /s/ Xxxx X. Xxxxxxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxxxxxx
Title: President
THE FIRST NATIONAL BANK OF GERMANTOWN
By: /s/ Xxxxxx X. Winning
--------------------------------------
Name: Xxxxxx X. Winning
Title: President
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