EXHIBIT 2.1
PURCHASE AND ASSUMPTION AGREEMENT
BY AND BETWEEN
CAPITALBANK
AND
ENTERPRISE BANK OF SOUTH CAROLINA
January 29, 2001
THIS AGREEMENT IS SUBJECT TO BINDING ARBITRATION.
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This PURCHASE AND ASSUMPTION AGREEMENT (this "Agreement") is dated as
of January 29, 2001, by and between CapitalBank, a South Carolina banking
corporation headquartered in Greenwood, South Carolina ("Seller"), and
Enterprise Bank of South Carolina, a South Carolina banking corporation
headquartered in Ehrhardt, South Carolina ("Purchaser"):
Preamble
WHEREAS, Purchaser and Seller operate banking operations;
WHEREAS, Seller wishes, upon the terms and conditions set forth herein,
to sell certain assets and to transfer certain deposit and other liabilities
associated with its operations to Purchaser; and
WHEREAS, Purchaser wishes to buy such assets and assume such
liabilities upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and agreements set
forth herein, and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
Article 1
Definitions
Section 1.1 Definitions. As used in this Agreement, the following terms
have the definitions indicated.
"Accrued Interest Payable" means interest on Deposits which is accrued
but has neither been posted to a deposit account nor paid as of the Closing
Date.
"Accrued Interest Receivable" means interest on loans which is accrued
but unpaid as of the Closing Date.
"Adjustment Payment Date" shall have the meaning set forth in Section
4.3.
"Agreement" shall mean this Agreement, including all schedules and
exhibits attached hereto.
"Assets" shall have the meaning set forth in Section 2.1.
"Assumed Liabilities" shall have the meaning set forth in Section 2.3.
"Barnwell Office Building" means Seller's building located at 0000 Xxxx
Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxxxx.
"Branches" or "Branch Offices" means Seller's five branch offices
located at 000 Xxxx Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxxxx; 000 Xxxx Xxxxxx,
Xxxxxxxxxx, Xxxxx Xxxxxxxx; 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxx Xxxxxxxx; 0000
Xxxxxxxx Xxxxx Xxxx, Xxxxxxxxxxx, Xxxxx Xxxxxxxx; and 00 Xxxx Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx.
"Branch Deposit" means a Deposit as set forth on Schedule 2.3(a)
attached hereto, including Accrued Interest Payable thereon, which has been
opened at or assigned to any Branch Office, other than Excluded Deposits.
Schedule 2.3(a) may be supplemented by Seller at any time prior to the Effective
Time; provided
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however, Schedule 2.3(a) may not be supplemented to include a Brokered Deposit
without Purchaser's written consent which may be withheld for any or no reason.
"Branch Lease" means the lease of the real estate on which Seller's 00
Xxxx Xxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx branch is located.
"Branch Loan" means (i) any loan fully secured by any Branch Deposit,
and (ii) any checking line of credit or overdraft checking balance linked to any
Branch Deposit, and (iii) all other loans associated with any of the Branch
Offices as listed on Schedule 2.1(e) hereto, together with any Accrued Interest
Receivable thereon, the related Servicing Rights and all such loan documentation
as may be possessed by Seller with respect to such Branch Loans. With
Purchaser's prior written consent which may be withheld for any or no reason,
Schedule 2.1(e) may be supplemented by Seller at any time prior to the Effective
Time. Notwithstanding the foregoing, Branch Loans shall not include any loan
which is ninety (90) days or more past due as of the Effective Time or any loan
identified on Schedule 2.2(a) attached hereto.
"Branch Premises" means the Real Property and the improvements on the
Real Property, and the real property and improvements thereon subject to the
Branch Lease.
"Branch Property" means all automated teller machines, computer
hardware and software, teller equipment, communications equipment, furniture,
fixtures and equipment, prepaid expenses, and other tangible personal property
owned by Seller and located in any of the Branch Offices (except for Excluded
Assets), including, without limitation, the Branch Property described in
Schedule 2.1(b) hereto.
"Brokered Deposit" means a deposit, obtained, directly or indirectly,
by or through any deposit broker as defined in Section 29(f) of the Federal
Deposit Insurance Act, 12 U.S.C. 1831f and the corresponding federal
regulations, without regard to whether or not the depository institution in
which such funds are deposited is not well capitalized for purposes of that
section.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday, or
Friday that is not a Federal or State holiday generally recognized by banks in
the State of South Carolina.
"Cash Items" means all cash items, suspense items and items in process
of collection, that are related to the Branch Deposits and Branch Loans and (i)
which, on the Closing Date, have not been outstanding and uncollected for a
period in excess of 10 days, or (ii) which otherwise are acceptable to
Purchaser.
"Closing" and "Closing Date" shall have the meanings assigned to them
in Section 4.1 of the Agreement.
"Closing Payment" shall have the meaning set forth in Section 3.2.
"Demand Deposits" means individual, partnership, corporate and any
other negotiable deposits, including, without limitation, NOW accounts.
"Deposit" shall have the meaning set forth in Section 3(1) of the
Federal Deposit Insurance Act, 12 U.S.C. 1813(l), including, without limitation,
individual retirement accounts ("XXX") and cash management accounts.
"Effective Time" means 12:01 a.m. on the Closing Date.
"Equipment Leases" shall have the meaning set forth in Section 2.1(g).
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"Excess Unused Vacation" means an aggregate amount, mutually agreed
upon by Purchaser and Seller at Closing, equal to the value of (a) the unused
vacation days in calender year 2001 of all employees hired by Purchaser pursuant
to Section 11.1 herein, in excess of (b) the pro rata number of vacation days of
such employees allocable to the number of calender days between the Closing Date
and December 31, 2001 inclusive.
"Excluded Assets" shall have the meaning set forth in Section 2.2.
"Excluded Deposits" means (i) deposits which are the subject of
attachment, garnishment or other legal process, (ii) such other Deposits as are
described on Schedule 2.4(a) hereto, (iii) deposits which secure any loan other
than Branch Loans, and (iv) related Accrued Interest Payable on such Excluded
Deposits.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Funds Rate" shall be the weighted daily mean of the high and
low rates quoted for Federal Funds in the Money Rates Column of The Wall Street
Journal, or if not reported for such day, the average of such quotations for the
last previous day for which such quotations were reported, for the period
between the Closing Date and the Adjustment Payment Date.
"Final Closing Statement" shall have the meaning set forth in Section
4.3.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis.
"Net Book Value" means the value of an asset on the books of Seller as
of the Closing Date determined in accordance with GAAP, but without regard to
any general allowance for credit losses.
"Post-Closing Delivery Date" shall have the meaning set forth in
Section 4.3.
"Preliminary Closing Statement" shall have the meaning set forth in
Section 4.2.
"Purchase Price" shall have the meaning set forth in Section 3.1.
"Real Property" means the real property and all rights appurtenant
thereto on which the Branches and/or the Barnwell Office Building are located.
"Safe Deposit Leases" means all safe deposit contracts and leases for
the safe deposit boxes located at any of the Branch Offices including those
listed on Schedule 2.1(f) (as such Schedule may be amended by Seller as of the
Effective Time), together with Seller's keys to, and Seller's records related
to, such contracts and leases.
"Servicing Rights" means the rights to service loans including, without
limitation, any rights to receive compensation with respect to such servicing.
Article 2
Transfer of Assets and Liabilities
Section 2.1 Sale of Assets. Subject to the terms and conditions set
forth herein, on the Closing Date, Purchaser shall purchase from Seller, and
Seller shall sell, assign, convey and transfer to Purchaser all of Seller's
right, title and interest in and to the following assets and not otherwise
excluded from transfer pursuant to the provisions of Section 2.2 below
(collectively, the "Assets"):
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(a) all rights under and to the Branch Lease;
(b) the Branch Property, Barnwell Office Building, and the Branch
Premises;
(c) all currency and coins on hand in the Branch Offices at the
close of business on the Business Day immediately preceding
the Closing Date;
(d) the Cash Items;
(e) the Branch Loans;
(f) the Safe Deposit Leases; and
(g) all equipment leases listed on Schedule 2.1(g) for equipment
or other Branch Property located at the Branch Offices (the
"Equipment Leases").
Section 2.2 Assets Excluded from Sale. The following assets
(collectively, the "Excluded Assets") shall not be transferred pursuant hereto:
(a) all Seller's loans or other extensions of credit other than
the Branch Loans, including but not limited to those loans
identified on Schedule 2.2(a) attached hereto; and
(b) any other asset of Seller which is identified on Schedule
2.2(b), as such Schedule may be amended by mutual agreement of
the Purchaser and Seller as of the Effective Time.
Seller shall coordinate with Purchaser to remove the Excluded Assets from the
Branch Offices on or prior to the Effective Time. Seller shall remove the
Excluded Assets at its own cost and shall repair any damage caused by such
removal.
Section 2.3 Assumption of Liabilities. Subject to the terms and
conditions set forth herein, on the Closing Date, Seller shall assign and
transfer to Purchaser, and Purchaser shall assume from Seller the following
liabilities (collectively, the "Assumed Liabilities"):
(a) the Branch Deposits and all obligations of Seller to provide
services incidental to the Branch Deposits;
(b) the Branch Lease and the Equipment Leases;
(c) any other liabilities set forth on Schedule 2.3(c).
Section 2.4 Liabilities Not Assumed. Except for the liabilities
specifically set forth in Section 2.3 of this Agreement or otherwise expressly
assumed herein, Purchaser is not assuming any other liabilities or obligations
of Seller, whether or not the same is in any way involved, either directly or
indirectly, with the operation by Seller of its business or to which Seller may
have become a party or liable by reason of its business. Liabilities not assumed
include, but are not limited to, the following:
(a) Excluded Deposits;
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(b) Seller's cashier checks, money orders, interest checks and
expense checks issued prior to Closing, consignments of U.S.
Government E and XX xxxxx and any and all traveler's checks;
(c) Except for the liabilities specifically set forth in Section
2.3 of this Agreement or otherwise expressly assumed by
Purchaser herein, all liabilities or obligations with respect
to any litigation, suits, claims, demands or governmental
proceedings arising out of or related to (i) Seller's
operation of the Branch Offices and Seller's business prior to
the Effective Time, or (ii) any event or condition that
occurred prior to the Effective Time;
(d) liabilities of Seller for or under any data processing
contracts;
(e) liabilities related to the safe deposit boxes at the Branch
Offices of which Seller has actual knowledge at the Closing
Date or that can reasonably be determined to have arisen prior
to the Effective Time; and
(f) all other liabilities or obligations related to or arising
from Seller's operation of the Branch Offices or Seller's
business prior to the Effective Time (except the Assumed
Liabilities).
Section 2.5 Procedures regarding Deposits Assumed. Purchaser and Seller
agree to the following with respect to the Deposits assumed:
(a) If, after the Closing Date, any such depositor, instead of
accepting the obligation of Purchaser to pay Deposit
liabilities assumed, 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 pays the same in accordance with
sound banking practices, Purchaser agrees to reimburse Seller
for any such payments to the extent that such depositor has
funds on deposit with Purchaser. Seller and Purchaser shall
make appropriate arrangements to provide for the daily
settlement with immediately available funds by Purchaser of
checks, drafts, withdrawal orders, returns and other items
presented to and paid by Seller within 120 days after the
Closing Date and drawn on or chargeable to accounts that have
been assumed by Purchaser. In order to reduce the continuing
charges to Seller through the check clearing system of the
banking industry that will result from check, draft or
withdrawal order forms of Seller being used after the Closing
Date by the depositors whose accounts are assumed, Purchaser
agrees, at its cost and expense, and without charge to such
depositors to notify depositors whose checks bear the routing
number of CapitalBank, on or before the Closing Date, in a
form and on a date mutually acceptable to Seller and
Purchaser, of Purchaser's assumption of Deposit liabilities
and to furnish each such depositor 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. Purchaser shall not be obligated to furnish
depositors whose checks bear the routing number of Community
Bank & Trust with checks on the forms of Purchaser, and
Purchaser and Seller shall cooperate in ensuring that checks
bearing such routing number shall be routed to Purchaser. In
addition, subsequent to regulatory approval, Seller will
notify the affected customers by letter of the pending
assignment of Seller's deposit accounts to Purchaser, which
notice shall be in a form mutually agreeable to Seller and
Purchaser.
(b) Purchaser agrees to pay promptly to Seller an amount
equivalent to the amount of any checks, drafts or withdrawal
orders credited to an assumed account as of the Closing Date
that are returned to Seller after the Closing Date.
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(c) Seller agrees to provide to Purchaser after the Closing Date
such information as Purchaser may reasonably request to enable
it to conduct a core deposit intangibles analysis of the
Deposit liabilities.
(d) Seller will render a final statement to each depositor of an
account assumed under this Agreement as to transactions
occurring through the Effective Time and will comply with all
laws, rules and regulations regarding tax reporting of
transactions of such accounts through the Effective Time.
Seller will be entitled to impose normal (bank-wide) fees,
including but not limited to, normal quarter-end charges on
savings accounts, or if the Closing does not occur at the end
of a quarter, a pro-rata portion of the normal quarter-end
charges on savings accounts, and service charges on a per-item
basis, but Seller will not impose periodic fees or blanket
charges in connection with such final statements.
(e) As of the Effective Time, Purchaser, at its expense, will
notify all Automated Clearing House ("ACH") originators of the
transfers and assumptions made pursuant to the Agreement. For
a period of 90 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. Items mistakenly routed or presented after the
90-day period should be returned to the presenting party.
(f) After the Closing Date, Purchaser agrees to use its reasonable
best efforts to collect from Purchaser's customers amounts
equal to any Visa or MasterCard charge backs under the
MasterCard and Visa Merchant Agreements between Seller and its
customers or amounts equal to any deposit items returned to
Seller after the Closing Date by its Federal Reserve Bank
which were honored by Seller prior to the Closing Date and
remit such amounts so collected to Seller. Purchaser agrees to
immediately freeze and remit to Seller any funds up to the
amount of the charged back or returned item that had been
previously credited by Seller if such funds are available at
the time of notification by Seller to Purchaser of the charged
back or returned item. Notwithstanding the foregoing,
Purchaser shall have no duty to remit funds for any item or
charge that has been improperly returned or charged to Seller.
Section 2.6 Interest Adjustment. Purchaser and Seller agree to make
such adjustment to interest paid on the Branch Deposits as may be necessary to
reconcile the differences in their respective methods of calculation of interest
to insure that depositors are paid the full amount of interest due to them.
Section 2.7 Safe Deposit Business. On and after the Effective Time,
Purchaser will assume and discharge Seller's obligations with respect to the
safe deposit box business at the Branch Offices in accordance with the terms and
conditions of contracts or rental agreements related to such business which are
assigned to Purchaser, and Purchaser will maintain all facilities necessary for
the use of such safe deposit boxes by persons entitled to use them. On and after
the Effective Time, Purchaser shall maintain and safeguard the records related
to such safe deposit box business transferred hereunder, and Purchaser shall be
responsible for granting access to and protecting the contents of safe deposit
boxes at the Branch Offices. Safe deposit box rental payment (not including late
payment fees) applicable for periods both prior to and after the Effective Time
and collected by Seller on or before the Effective Time shall be prorated as of
the Effective Time.
Section 2.8 Branch Loans Transferred.
(a) In connection with the transfer of any loans requiring notice
to the borrower, Seller agrees to comply with all notice and
reporting requirements of the loan documents or of any law or
regulation.
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(b) All Branch Loans or other indebtedness transferred under this
Agreement 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 Branch
Loans.
(c) On and after the Closing Date, Purchaser will be responsible
for maintaining and safeguarding all Branch Loan files,
documents and records (which have been transferred to
Purchaser by Seller) in accordance with applicable law and
sound banking practices.
Article 3
Purchase Price
Section 3.1 Purchase Price. As consideration for the purchase of the
Assets and the assumption of liabilities hereunder, Purchaser shall pay to
Seller, in the form and subject to the conditions set forth below, an aggregate
purchase price calculated as follows (the "Purchase Price"):
(a) One Hundred Percent (100%) of the Net Book Value of the Branch
Property, Barnwell Office Building, and Branch Premises as
shown on the most recent financial statements of Seller
immediately prior to the Closing Date; plus
(b) One Hundred Percent (100%) of the face value of all currency
and coins on hand at the Branch Offices at the Effective Time;
plus
(c) One Hundred Percent (100%) of the face value of all Cash
Items; plus
(d) One Hundred Percent (100%) of the Net Book Value of the Branch
Loans; minus
(e) Ninety-One and 37/100 Percent (91.37%) of the total amount of
the Branch Deposits on deposit in Seller on the Closing Date;
minus
(f) One Hundred Percent (100%) of the total amount of the Excess
Unused Vacation.
The Purchase Price shall be allocated among the Assets in accordance
with their Net Book Value, with any excess being allocated to the goodwill being
acquired by the Purchaser. Seller and Purchaser each hereby agrees to adhere to
such allocations in all reports, returns and other documents filed with any
governmental authority, including Form 8594 required by Section 1060 of the
Internal Revenue Code.
Section 3.2 Payment of the Purchase Price. If the results of the above
calculations are positive, that amount shall be paid by Purchaser to Seller, but
if the results of the above calculation are negative, that amount shall be paid
by Seller to Purchaser (in either case, the "Closing Payment"). The components
of the Purchase Price shall be set forth on the Preliminary Closing Statement.
All sums shall be paid in cash at Closing by way of wire transfer of funds.
Amounts paid at Closing shall be subject to subsequent adjustment based on the
Final Closing Statement.
Article 4
The Closing
Section 4.1 The Closing. The closing of the transactions contemplated
here (the "Closing") shall take place on a date (the "Closing Date") as soon as
reasonably practicable after receipt of all regulatory approvals and consents
required in connection herewith and the expiration of all waiting periods
required by law or regulation in connection with such approvals and consents, at
the offices of Xxxxxx Xxxxx Xxxxxx &
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Xxxxxxx, LLC, 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxx Xxxxxxxx, or at such
other place and time as the parties hereto may mutually agree; provided,
however, that in the event that Closing has not occurred by July 1, 2001, either
party hereto shall have the right to terminate this Agreement upon written
notice to the other party hereto.
Section 4.2 Preliminary Closing Statement. Seller shall prepare a
closing statement (the "Preliminary Closing Statement") in accordance with GAAP
as of a date not earlier than 45 days prior to the Closing Date reflecting the
calculation of the Purchase Price, including the assets to be sold and assigned
hereunder and the liabilities to be transferred and assumed hereunder; provided,
however, that the Preliminary Closing Statement shall reflect actual balances as
of a date not more than 7 days prior to the Closing Date for coins and currency
and deposits.
Section 4.3 Post-Closing Adjustments.
(a) Not later than 10 calendar days after the Closing Date (the
"Post-Closing Delivery Date"), Seller shall deliver to
Purchaser a final closing statement dated as of the Closing
Date and prepared in accordance with GAAP reflecting the
Assets sold and assigned and the liabilities transferred and
assumed hereunder as of the Closing Date (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
Statement. Within 15 calendar days following the Post-Closing
Delivery Date (the actual date being "Adjustment Payment
Date"), Seller and Purchaser shall effect the transfer of any
funds as may be necessary to reflect changes in such assets
and liabilities between the Preliminary Closing Statement and
the Final Closing Statement together with interest thereon
computed from the Closing Date to the Adjustment Payment Date
at the applicable Federal Funds Rate. Adjustments shall be
made for all items which would adjust the amount of assets
transferred and liabilities assumed, including but not limited
to, not-sufficient-funds checks, mis-postings and accounting
errors. Without limiting the foregoing, if the balance due on
any Branch Loan purchased has been reduced by Seller as a
result of a payment by check received prior to the Effective
Time, which item is returned after the Closing Date, the asset
value represented by the Branch 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.
(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 Adjustment Payment Date to the date paid at
the applicable Federal Funds Rate. The parties agree to
arbitrate any disputes arising under this subsection (b).
Arbitration shall be by single arbitrator experienced in the
matters at issue and selected by the Purchaser and the Seller
and in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. In the event the parties
cannot agree on an arbitrator, each party shall select an
arbitrator and the two arbitrators shall select a third. The
arbitration shall be held in such place in Columbia, South
Carolina as may be specified by the arbitrator(s), and shall
be conducted in accordance with the Commercial Arbitration
Rules existing at the date thereof of the American Arbitration
Association to the extent not inconsistent with this
Agreement. The decision of the arbitrator(s) shall be final
and binding as to any matters submitted, and any judgment
thereon promptly shall be satisfied; provided, however, that
if necessary, such decision and satisfaction may be enforced
by either Purchaser or Seller in any court of record
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having jurisdiction over the subject matter or over any of the
parties of this Agreement. All costs and expenses incurred in
connection with any such arbitration proceeding shall be borne
by the party against which the decision is rendered, or, if no
decision is rendered, or if the decision is a compromise,
equally by Purchaser and Seller.
Section 4.4 Closing Deliveries of Seller at Closing. At the Closing,
the following shall be delivered by Seller (or caused to be delivered by Seller)
to Purchaser:
(a) Limited warranty deeds with respect to the Real Property
("Deeds") and assignment of Branch Lease (the "Assignment and
Assumption of Lease Agreement") in substantially the form as
attached hereto in Exhibit A;
(b) A Xxxx of Sale, in substantially the form attached hereto as
Exhibit B (the "Xxxx of Sale").
(c) An assignment and assumption agreement, in substantially the
form attached hereto as Exhibit C (the "Assignment and
Assumption Agreement");
(d) A certificate of a proper officer of Seller, dated the Closing
Date, certifying to the fulfillment of all conditions to be
fulfilled by 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 Closing Date;
(e) Certified copies of (A) the Articles of Incorporation and
Bylaws of Seller, and (B) a resolution of the Board of
Directors of Seller, approving the transactions contemplated
hereby;
(f) An opinion of counsel reasonably acceptable to Purchaser's
counsel covering matters typically included in transactions of
this type, including opinions to the effect that (A) Seller is
duly organized, validly existing and in good standing under
the laws of South Carolina, (B) this Agreement, the Deeds, the
Assignment and Assumption of Lease Agreement, the Xxxx of Sale
and the Assignment and Assumption Agreement have been duly
authorized, executed and delivered by Seller and are the
legal, valid and binding agreements of Seller enforceable
against Seller in accordance with their terms, except as
enforcement may be limited by bankruptcy, fraudulent
conveyance, insolvency or similar laws or equitable principles
affecting the enforcement of creditors' rights generally or
depository institutions the accounts of which are insured by
the FDIC and except as enforcement is subject to general
principles of equity, whether applied in a proceeding in
equity or at law, and (C) all proceedings or consents required
by law or regulation, and to such counsel's knowledge, any
agreement, instrument, judgment, decree or order, to be taken
or obtained by Seller in connection with the transactions
provided for by this Agreement have been duly and validly
taken or obtained, (D) the consummation of the transactions
contemplated by this Agreement will not result in the breach
of any term or provision of Seller's charter or bylaws, nor
result in the breach of any term or provision of, nor conflict
with, nor constitute a default under, nor result in, the
acceleration of any obligation under any agreement or other
instrument known to such counsel to which Seller or its
property is subject, nor result in the violation of any law,
rule or regulation to which Seller or its property is subject,
nor, to the knowledge of such counsel, result in the violation
of any order, judgment or decree to which Seller or its
property is subject, (E) to such counsel's knowledge, there is
no action, suit, proceeding or investigation pending nor
threatened against Seller before any court, arbitrator or
administrative or governmental body which may result in any
materially adverse change in or otherwise affect the Branch
Offices or the Assets or Assumed Liabilities or which could
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affect the ability of Seller to perform its obligations under
this Agreement or which in any manner questions the validity
of this Agreement and (F) to such counsel's knowledge, Seller
is not subject to any injunction, order or decree of specific
application of any court or administrative agency which
relates to or affects the Branch Offices or the Assets or
Assumed Liabilities;
(g) Such incumbency and other 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;
(h) The Preliminary Closing Statement;
(i) All Assets capable of physical delivery;
(j) A letter addressed to Purchaser from a reputable heating and air
conditioning service company stating that an inspection was made of the heating
and air conditioning systems of the Branch Offices and Xxxxxxxx Office Building
within 20 days of Closing and that at such inspection the systems were in good
working condition;
(k) A letter addressed to Purchaser from a reputable pest control
company (S.C. Form CL-100) stating that an inspection was made of the Branch
Offices and Xxxxxxxx Office Building within 20 days of the Closing and that at
the time of such inspection there was no termite or other insect infestation, no
decay fungi or fungi damaged wood, no excessive moisture conditions and no mold
or sap stain fungi.
Section 4.5 Documents of Purchaser to be Delivered at Closing. At
Closing, the following documents shall be delivered by Purchaser (or caused to
be delivered by Purchaser) to Seller:
(a) The Assignment and Assumption of Lease Agreement;
(b) The Assignment and Assumption Agreement;
(c) A certificate and receipt acknowledging the delivery and
receipt of possession of the property and records referred to
in this Agreement.
(d) A certificate of proper officers of Purchaser, dated the
Closing Date, certifying to the fulfillment of all conditions
to be fulfilled by 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 Closing Date;
(e) Certified copies of (A) the Articles of Incorporation and
Bylaws of Purchaser, and (B) a resolution of the Board of
Directors of Purchaser, approving the transactions
contemplated hereby;
(f) An opinion of counsel reasonably acceptable to Seller's
counsel covering matters typically included in transactions of
this type, including opinions to the effect that (A) Purchaser
is duly organized, validly existing and in good standing under
the laws of South Carolina, (B) this Agreement, the Assignment
and Assumption of Lease Agreement, and the Assignment and
Assumption Agreement have been duly authorized, executed and
delivered by Purchaser and are the legal, valid and binding
agreements of Purchaser enforceable against Purchaser in
accordance with their terms, except as enforcement may be
limited by bankruptcy,
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fraudulent conveyance, insolvency or similar laws or equitable
principles affecting the enforcement of creditors' rights
generally or depository institutions the accounts of which are
insured by the FDIC and except as enforcement is subject to
general principles of equity, whether applied in a proceeding
in equity or at law, and (C) all proceedings or consents
required by law or regulation, and to such counsel's
knowledge, any agreement, instrument, judgment, decree or
order, to be taken or obtained by Purchaser in connection with
the transactions provided for by this Agreement have been duly
and validly taken or obtained, (D) the consummation of the
transactions contemplated by this Agreement will not result in
the breach of any term or provision of Purchaser's charter or
bylaws, nor result in the breach of any term or provision of,
nor conflict with, nor constitute a default under, nor result
in, the acceleration of any obligation under any agreement or
other instrument known to such counsel to which Purchaser or
its property is subject, nor result in the violation of any
law, rule or regulation to which Purchaser or its property is
subject, nor, to the knowledge of such counsel, result in the
violation of any order, judgment or decree to which Purchaser
or its property is subject and (E) to such counsel's
knowledge, there is no action, suit, proceeding or
investigation pending nor threatened against Purchaser before
any court, arbitrator or administrative or governmental body
which could affect the ability of Purchaser to perform its
obligations under this Agreement or which in any manner
questions the validity of this Agreement;
(g) 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; and
(h) The Preliminary Closing Statement.
Section 4.6 Magnetic Media Records. Seller agrees to prepare at its
expense and deliver to Purchaser magnetic media records in a format consistent
with BISYS file not later than 20 days prior to the Closing Date, and further
shall deliver to Purchaser such records updated on the Closing Date, which
records shall contain the information related to the Branch Loans and Deposits
assumed above.
Article 5
Representations and Warranties of Purchaser
Purchaser hereby warrants and represents to Seller as set forth below,
which representations and warranties shall survive the Closing Date for a period
equal to twelve (12) months from the Closing Date (the "Warranty Period").
Section 5.1 Corporate Organization. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
South Carolina.
Section 5.2 Enforceable Agreement. This Agreement has been duly and
validly authorized, executed and delivered by Purchaser and is a valid, binding,
and enforceable obligation of Purchaser.
Section 5.3 No Violation. The consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of Purchaser's charter or bylaws, nor result in the breach of any term
or provision of, nor conflict with, nor constitute a default under, nor result
in, the acceleration of any obligation under any agreement or other instrument
to which Purchaser or its property is subject, nor, subject to obtaining all
necessary governmental and regulatory approvals and consents, result in the
violation of any law, rule, regulation, order, judgment or decree to which the
Purchaser or any of its property is subject.
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There is no action, suit or proceeding pending against the Purchaser, or to its
knowledge threatened, before any court or arbitrator or any governmental body,
agency or official which could materially and adversely affect the ability of
Purchaser to perform its obligations under this Agreement or which in any manner
questions the validity of this Agreement.
Section 5.4 Broker or Finder. Purchaser has not employed any broker or
finder in connection with this transaction.
Section 5.5 Necessary Consents. Except for any necessary filings with,
and approvals and authorizations of the applicable bank regulatory authorities,
or except as expressly contemplated herein, no consent, approval, authorization,
registration, or filing with any governmental authority or private third party,
is required on the part of Purchaser in connection with the execution and
delivery of this Agreement or the consummation by Purchaser of the transactions
contemplated hereby (except such consents, approvals authorizations
registrations or filings as shall have been made or obtained on or before
Closing).
Section 5.6 Information for Regulatory Applications. The information
furnished or to be furnished by the Purchaser to Seller for the purpose of
enabling Seller to complete and file applications with any regulatory body is or
will be true and complete in all material respects as of the date so furnished.
Article 6
Representations and Warranties of Seller
Seller warrants and represents to Purchaser as follows, which
representations and warranties shall survive the Closing Date for the duration
of the Warranty Period:
Section 6.1 Corporate Organization. Seller is a South Carolina
corporation duly organized, validly existing, and in good standing under the
laws of the South Carolina and has the corporate power and is duly qualified to
carry on its business where and as now conducted and to own the Branch Property
and operate the Branch Offices.
Section 6.2 Enforceable Agreement. This Agreement has been duly and
validly authorized, executed and delivered by Seller and is a valid, binding,
and enforceable obligation of Seller.
Section 6.3 No Violation. The consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of Seller's charter or its bylaws, nor result in the breach of any
term or provision of, nor conflict with, nor constitute a default under, nor
result in, the acceleration of any obligation under any agreement or other
instrument to which Seller or any of its property is subject, nor subject to
obtaining all necessary governmental and regulatory approvals and consents,
result in the violation of any law, rule, regulation, order, judgment or decree
to which Seller or any of its property is subject.
Section 6.4 Broker or Finder. Seller has not employed any broker or
finder in connection with this transaction.
Section 6.5 Necessary Consents. Except for any necessary filings with,
and approvals and authorizations of the applicable bank regulatory authorities,
or except as expressly contemplated herein, no consent, approval, authorization,
registration, or filing with any governmental authority or private third party,
is required on the part of Seller in connection with the execution and delivery
of this Agreement or the consummation by Seller of the transactions contemplated
hereby (except such consents, approvals authorizations registrations or filings
as shall have been made or obtained on or before Closing).
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Section 6.6 Marketable Title. The Assets, when transferred, shall be
sold, assigned, transferred, and conveyed free and clear of (i) all liens,
encumbrances, security interests or charges of any kind except as specifically
provided otherwise herein, and (ii) all liabilities and obligations of Seller,
except as provided herein.
Section 6.7 Branch Premises and Branch Property. The following
representations are made with respect to the Branch Premises, the Xxxxxxxx
Office Building, and the Branch Property.
(a) Seller has not utilized, discharged, dispersed, released,
stored, generated, disposed of, or allowed to escape on the
Branch Premises or Xxxxxxxx Office Building, any pollutants or
other toxic or hazardous substances except for cleaning
supplies used in reasonable amounts and for their ordinary
purpose. Seller has not installed, used, incorporated into, or
disposed of any asbestos or asbestos-containing materials in
or on any of the Branch Premises or Xxxxxxxx Office Building.
Seller has not used or disposed of any poly-chlorinated
biphenyls on or in the Branch Premises, Xxxxxxxx Office
Building or the Branch Property in any form. To the best of
Seller's knowledge, no underground storage tanks are located
on the Branch Premises or Xxxxxxxx Office Building or were
located on the Branch Premises or Xxxxxxxx Office Building and
were subsequently removed or filled. To the best of Seller's
knowledge, no investigation, administrative order, consent
order and agreement, litigation, or settlement with respect to
any hazardous or toxic substances is proposed, threatened,
anticipated or in existence with respect to the Branch
Premises or Xxxxxxxx Office Building. Seller has no knowledge
of information concerning (i) pollutants or other toxic or
hazardous substances which may be on the Branch Premises or
Xxxxxxxx Office Building as a result of any acts, or failures
to act by third parties, or (ii) any condition of the Branch
Premises, Xxxxxxxx Office Building or Branch Property which
may reasonably be expected to result in environmental
liability to Purchaser.
(b) Except as expressly provided herein, no other representations
are made with respect to the Branch Premises, Xxxxxxxx Office
Building or the Branch Property, and Purchaser agrees that
such Branch Premises, Xxxxxxxx Office Building and Branch
Property are being acquired "as is."
Section 6.8 Legal Action. There is no action, suit, proceeding or
investigation pending, nor to the knowledge of Seller, threatened against Seller
before any court, arbitrator or administrative or governmental body which may
result in any materially adverse change or otherwise may affect the Branch
Offices or the Assets or Assumed Liabilities or which could affect the ability
of Seller to perform its obligations under this Agreement or which in any manner
questions the validity of this Agreement. Seller is not subject to any
injunction, order or decree of any court or administrative agency directed only
at Seller which relates to or affects the Branch Offices or the Assets or
Assumed Liabilities.
Section 6.9 Accuracy of Records. As of the Closing Date, all records
related to the Assumed Liabilities and the Assets, which will be transferred to
Purchaser by Seller hereunder are true and correct in all material respects,
including genuineness of signatures.
Section 6.10 Information for Regulatory Applications. The information
furnished or to be furnished by Seller to Purchaser for the purpose of enabling
Purchaser to complete and file applications with any regulatory body is or will
be true and complete in all material respects as of the date so furnished.
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Article 7
Covenants of the Parties
Section 7.1 Access. Seller shall afford to the officers and authorized
representatives of the Purchaser, upon prior notice, access to the properties,
books, and records pertaining to the Branch Offices and Xxxxxxxx Office Building
in order that Purchaser may have full opportunity to make reasonable
investigations, at reasonable times without interfering with Seller's normal
business and operations, of the affairs of the Seller which relate to the Branch
Offices, Xxxxxxxx Office Building and their respective condition. The officers
of Seller shall furnish Purchaser with such additional financial and operating
data and other information as to its business and properties 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 and filings necessary to effect this transaction. Nothing in this
paragraph shall be deemed to require Seller to breach any obligation of
confidentiality or to reveal any proprietary information, trade secrets or
marketing or strategic plans.
Section 7.2 Fees and Expenses. Purchaser shall be responsible for the
payment of all regulatory fees related to this transaction. Purchaser shall not
be responsible for any income tax liability of Seller arising from the business
or operations of Seller on or before the Closing Date, and Seller shall not be
responsible for any tax liabilities of Purchaser arising from the business or
operations of the Branch Offices and Xxxxxxxx Office Building after the Closing
Date. Utility payments, telephone charges, real property taxes, personal
property taxes, rent, salaries, deposit insurance premiums, other ordinary
operating expenses of Seller and other standard expenses related to the
liabilities assumed or assets purchased hereunder shall be prorated between the
parties as of the Closing Date. 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, transfer fees, and other
expenses arising in connection therewith. Seller shall be responsible for its
own attorneys' and accountants' fees and expenses related to this transaction
and documentary stamps and deed recording fees relating to the Real Property and
Assignment and Assumption of Lease Agreement. Any items which are required to be
prorated hereunder which cannot be prorated, because of a lack of sufficient
information, by the Closing Date shall be prorated as soon as the requisite
information is available. The post closing adjustments necessitated by any such
proration shall be effected on the Adjustment Payment Date.
Section 7.3 Regulatory Approvals. Each party shall use its respective
best efforts to obtain all necessary regulatory approvals. Within 30 days
following the execution of this Agreement, Purchaser shall prepare and file
applications required by law with the appropriate regulatory authorities for
approval to consummate the transactions contemplated herein. Purchaser agrees to
proceed with the preparation of such applications in a diligent manner and to
provide Seller with a copy of all such applications filed (except for any
confidential portions thereof).
Section 7.4 Conduct of Business Pending Closing. From the date hereof
to Closing, Seller covenants and agrees to the following:
(a) Seller shall conduct its business only in the ordinary course;
maintain a pricing structure of deposit liabilities consistent
with local market conditions and good business practice, and
not increase interest rates paid on deposit liabilities above
those generally offered in the Branch Offices' respective
markets; use its best efforts to preserve its business
operation as conducted, and to preserve for the Purchaser the
good will of its customers; exercise reasonable efforts to
cooperate with and assist Purchaser in assuring the orderly
transition of such business from the Seller to Purchaser;
provided, however, that nothing in this paragraph shall be
construed as requiring Seller to engage in activities or
efforts outside the ordinary course of business as presently
conducted;
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(b) Seller shall not enter into any contracts on behalf of or
affecting the Assets, Xxxxxxxx Office Building, or the Branch
Offices in excess of $5,000 without prior consent of
Purchaser.
(c) Seller shall maintain (i) insurance sufficient to replace the
Assets in the event of their destruction, and (ii) all other
insurance policies in existence on the date hereof at their
current levels.
(d) Seller shall maintain the Branch Premises, Xxxxxxxx Office
Building, and Branch Property in its current condition and in
a manner conducive to normal business operations, ordinary
wear and tear excepted.
Section 7.5 Removal of Signs. Seller agrees to repair any damage caused
by the removal of the signs, or portions thereof, containing Seller's name
and/or logo, which signs or portions thereof are not being transferred to
Purchaser hereunder. The parties hereto acknowledge and agree that Purchaser
shall purchase hereunder any and all signs and portions thereof which do not
contain Seller's name and/or logo.
Section 7.6 Transfer of Records. Seller shall assign, transfer and
deliver to Purchaser such of the following records pertaining to the Deposits as
exist and are available in whatever form or medium is maintained by Seller: (A)
signature cards, orders and contracts between the Seller and depositors, and
records of similar character, (B) deposit slips and canceled checks or
withdrawal orders representing charges to depositors, and (C) records of account
maintained at the Branch Offices. Seller shall retain all books and records of
account relating to the Branch Deposits which are not ordinarily maintained at
the Branch Offices, shall maintain such books and records of account for as long
as may be required by applicable law for the joint benefit of itself and the
Purchaser, and will permit the Purchaser or its representatives, at any
reasonable time and at the Purchaser's expense, to inspect, make extracts from
or copies of, any such files, books of account, or records as Purchaser shall
deem reasonably necessary.
Section 7.7 Maintenance of Records by Purchaser. On and after the
Closing Date, Purchaser shall become responsible for maintaining the files,
documents and records delivered to Purchaser pursuant to this Agreement.
Purchaser will preserve and safe keep them as required by applicable law and
sound banking practice for the joint benefit of Seller and Purchaser. For a
period of six (6) years after the Closing Date, Purchaser will permit Seller and
its representatives, for reasonable cause (and for no other purpose, it being
acknowledged that competitive reasons shall not be reasonable), 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.
Section 7.8 Fiduciary Relationships. Purchaser agrees to assume all of
the fiduciary relationships of Seller arising out of any XXX deposits assumed by
Purchaser pursuant to Section 2.3 hereof, to the same extent as if Purchaser had
originally acquired, incurred or entered into such fiduciary relationships.
Notwithstanding anything in this Agreement to the contrary, however, Purchaser
will not assume or be responsible for any act or failure to act of Seller in
connection with such XXX deposits prior to the Closing Date.
Section 7.9 Performance of Liabilities. Purchaser agrees to honor, to
the extent that such depositor has funds on deposit with Purchaser, all properly
payable checks, drafts, and non-negotiable withdrawal orders on forms previously
provided by Seller with respect to the Branch Deposits to the same extent as if
the checks, drafts, or orders were drawn on forms provided by Purchaser with
respect to similar deposits or accounts for a period of 120 days following the
Closing Date, and shall hold Seller harmless with respect to any wrongful
dishonor by Purchaser thereof within such period. Purchaser agrees to honor all
previously authorized ACH transfers with respect to the Branch Deposits to the
same extent as if the ACH transfer were made with respect to similar deposits or
accounts at Purchaser for a period of ninety (90) calendar days
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following the Closing Date, and shall hold Seller harmless with respect to any
wrongful dishonor by Purchaser thereof within such period.
Section 7.10 Further Assurances of Purchaser. On and after the Closing
Date, Purchaser shall give such further assurances to Seller and upon Seller's
request shall execute, acknowledge and deliver all such acknowledgments and
other instruments and take such further action as may be necessary and
appropriate to effectively relieve and discharge Seller from any obligations
remaining under the Branch Deposits; provided, however, that Purchaser need not
incur any material costs or expenses in connection with the undertakings
contained in this sentence unless Seller agrees to bear such costs or expenses.
In particular, and without limiting the foregoing:
(a) Purchaser will remit to Seller promptly after receipt by
Purchaser after the Closing Date at any of its offices all
amounts intended for deposit to accounts at Seller which were
not transferred to Purchaser pursuant to the Agreement; and
(b) With respect to checks or drafts drawn against accounts of
Seller which were not transferred to Purchaser pursuant to
this Agreement, Purchaser will cooperate with Seller and take
all reasonable steps requested by Seller to ensure that, on
and after the Closing Date, each such item which is coded for
presentment to Purchaser or to any bank for the account of
Purchaser is delivered to Seller in a timely manner and in
accordance with applicable law and clearing house rules or
agreement.
Section 7.11 Further Assurances of Seller. On and after the Closing
Date, Seller shall (i) give such further assistance to Purchaser and shall
execute, acknowledge and deliver all such bills of sale, deeds, acknowledgments
and other instruments and take such further action as may be necessary and
appropriate effectively to vest in Purchaser full, legal and equitable title to
the Assets, and (ii) use its best efforts to assist Purchaser in the orderly
transition of the liabilities being acquired by Purchaser; provided, however,
that Seller need not incur any material costs or expenses in connection with the
undertakings contained in this sentence unless such costs or expenses are paid
by Purchaser. In particular, and without limiting the foregoing:
(a) Seller will remit to Purchaser promptly after receipt by
Seller after the Closing Date at any of its other offices all
amounts intended for deposit to the accounts which are part of
the Branch Deposits or otherwise relating to the Branch
Deposits; and
(b) With respect to checks or drafts drawn against accounts which
are Branch Deposits, Seller will cooperate with Purchaser and
take all reasonable steps requested by Purchaser to ensure
that, on and after the Closing Date, each such item which is
coded for presentment to Seller or to any bank for the account
of Seller is delivered to Purchaser in a timely manner and in
accordance with applicable law and clearing house rules or
agreement; and
(c) After Closing, Seller shall assist Purchaser for a period of
120 days in any research reasonably requested by Purchaser
with respect to Branch Loans and Branch Deposits.
Section 7.12 Interest Reporting. Seller shall report from January 1,
2001 through the Closing Date all interest credited to, interest withheld from,
and early withdrawal penalties charged to the Branch Deposits which are assumed
by Purchaser under this Agreement. Purchaser shall report from the day after the
Closing Date through the end of the calendar year all interest credited to,
interest withheld from, and early withdrawal penalties charged to the Branch
Deposits assumed by Purchaser. Said reports shall be made to the holders of
these accounts and to the applicable Federal and State regulatory agencies.
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Section 7.13 Training Sessions. All training sessions and other staff
meetings and other staff communications shall be coordinated with a designated
Seller representative prior to any such sessions, meetings or communications.
Article 8
Conditions to Seller's Obligations
The obligation of Seller to complete the transactions contemplated in
this Agreement are conditioned upon fulfillment (or waiver by Seller), on or
before the Closing 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 at and as of the Closing 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 4.5 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 Closing
Date.
Section 8.3 Regulatory Approval. The parties hereto shall have received
from the appropriate regulatory authorities approval of the transactions
contemplated herein and approval for Purchaser to operate the Branch Offices and
all notice and waiting periods required by law to pass shall have passed and 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.
Section 8.4 No Adverse Litigation. On the Closing Date, no action, suit
or proceeding shall be pending or threatened against Purchaser which is
reasonably likely to materially and adversely affect the transaction
contemplated herein.
Article 9
Conditions to Purchaser's Obligations
The obligation of Purchaser to complete the transactions contemplated
in this Agreement are conditioned upon fulfillment (or waiver by Purchaser), on
or before the Closing Date, of each of the following conditions:
Section 9.1 Representations and Warranties True. The representations
and warranties made by Seller in this Agreement shall be true in all material
respects at and as of the Closing 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 9.2 Obligations Performed. Seller shall (a) deliver to
Purchaser those items required by Section 4.4 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 Closing
Date.
Section 9.3 No Adverse Litigation or Change. On the Closing Date, no
action, suit or proceeding shall be pending or threatened against Seller which
is reasonably likely to (a) materially and adversely affect the Assets or the
Branch Deposits or (b) materially and adversely affect the transactions
contemplated herein.
Section 9.4 Regulatory Approval. The parties hereto shall have received
from the appropriate regulatory authorities approval of the transactions
contemplated herein, and all notice and waiting periods
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required by law to pass shall have passed and 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.
Article 10
Indemnification
Section 10.1 Indemnification of Purchaser. Seller agrees to indemnify
and hold Purchaser harmless from and against any claim, loss, liability, damage
or expense that Purchaser sustains or becomes subject to as a result of (a) the
operation by Seller of the Branch Offices and Xxxxxxxx Office Building prior to
the Effective Time except to the extent such liabilities are expressly assumed
by Purchaser hereunder, (b) the breach or nonfulfillment by Seller of any
warranty, representation or covenant of Seller set forth herein, and (c) any
claim against, or liability or obligation of, Seller which (i) is asserted
against or sustained by Purchaser, its agents or employees, and (ii) has not
been expressly assumed by Purchaser pursuant to this Agreement. Any such
indemnification shall include any costs, including reasonable attorneys' fees
incurred by Purchaser, whether or not suit is brought, subject to Section 10.3.
Further, subject to Section 10.3, in the event Seller breaches any warranty or
representation made in this Agreement or fails to perform any requirement or
obligation undertaken in this Agreement, Seller agrees to pay all costs,
including attorneys' fees (including at the appellate level), incurred by
Purchaser in the enforcement hereof, whether or not suit is brought. Any such
demands or claims arising out of breach of warranties, covenants, or indemnities
must be made prior to the expiration of the Warranty Period.
Section 10.2 Indemnification of Seller. Purchaser agrees to indemnify
and hold Seller harmless from and against any claim, loss, liability, damage or
expense that Seller sustains or becomes subject to as a result of (a) the
operation by Purchaser of the Branch Offices and Xxxxxxxx Office Building from
and after the Effective Time, including but not limited to any and all current
and long-term liabilities, contingent liabilities, environmental claims,
workers' compensation claims, and sales and payroll taxes, (b) as a result of
the breach or nonfulfillment by Purchaser of any warranty, representation or
covenant of such parties set forth herein, and (c) any claim against, or
liability or obligation of, Seller which (i) is asserted against or sustained by
Seller, its agents or employees and (ii) has been assumed by Purchaser pursuant
to this Agreement. Any such indemnification shall include any costs, including
attorneys' fees incurred by Seller, whether or not suit is brought, subject to
Section 10.3. Further, subject to Section 10.3, in the event Purchaser breaches
any warranty or representation made in this Agreement or fails to perform any
requirement or obligation undertaken in this Agreement, Purchaser agrees to pay
all costs, including reasonable attorneys' fees (including at the appellate
level), incurred by Seller in the enforcement hereof, whether or not suit is
brought. Any such demands or claims arising out of breach of warranties,
covenants, or indemnities must be made prior to the expiration of the Warranty
Period.
Section 10.3 Defense and Settlement. A party seeking indemnification
pursuant to this Article 10 (an "indemnified party") shall give prompt notice to
the party from whom such indemnification is sought (the "indemnifying party") of
the assertion of any claim, or the commencement of any action or proceeding, in
respect of which indemnity may be sought hereunder. The parties agree to
cooperate fully with each other in connection with the mitigation, defense,
negotiation or settlement of any such legal proceeding, claim or demand, and in
any event, all parties shall retain the right to participate in the defense of
any such legal proceeding, claim or demand. The indemnified party shall assist
the indemnifying party in the defense of any such action or proceeding. The
indemnifying party shall have the right to, and shall at the request of the
indemnified party, assume the defense of any such action or proceeding at its
own expense so long as it conducts the defense actively and diligently and keeps
the indemnified party apprised of all developments, including settlement offers,
with respect to such action or proceeding. In any such action or proceeding, the
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at its own expense unless:
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(a) The indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel; or
(b) The named parties to any such suit, action or proceeding
(including any impleaded parties) include both the
indemnifying party and the indemnified party and, in the
reasonable judgment of the indemnified party, representation
of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them.
An indemnifying party shall not be liable under this Section 10.3 for
any settlement effected without its consent of any claim, litigation or
proceeding in respect of which indemnity may be sought hereunder. The
indemnifying party may settle any claim without the consent of the indemnified
party, but only if the sole relief awarded is monetary damages that are paid in
full by the indemnifying party. An indemnified party shall, subject to its
reasonable business needs, use reasonable efforts to minimize the
indemnification sought from the indemnifying party hereunder. Notwithstanding
the foregoing, no investigation by an indemnified party at or prior to the
Closing shall relieve an indemnifying party of any liability hereunder.
Section 10.4 Limitations on Indemnification. Notwithstanding anything
to the contrary contained in this Article 10, no indemnification shall be
required to be made by either party until the aggregate amount of all such
claims by a party exceeds an aggregate of $25,000. Once such aggregate amounts
exceed $25,000, such party (or parties, in the case of a party's affiliate)
shall thereupon be entitled to indemnification for all amounts in excess of such
$25,000. In addition, the parties shall have no obligation under this Article 10
for any consequential liability, damage or loss the indemnified party may suffer
as the result of any demand, claim or lawsuit.
Section 10.5 Exclusive Remedy. Notwithstanding anything contained in
this Agreement or any agreement, document or instrument executed in connection
therewith, the indemnification rights set forth in this Article 10, all of which
are subject to the terms, limitations, and restrictions of this Article 10,
shall be the exclusive remedy after Closing for monetary damages sustained as a
result of a breach of a representation, warranty, covenant, or agreement under
this Agreement or any agreement, document or instrument executed in connection
therewith, except claims arising out of Seller's fraud. Such limitations set
forth in this Article 10 shall not impair the rights of any of the parties to
seek non-monetary equitable relief, including (without limitation) specific
performance or injunctive relief to redress any default or breach of this
Agreement or any agreement, document or instrument executed in connection
therewith.
Article 11
Personnel
Section 11.1 Responsibilities of Purchaser. Seller shall make available
for employment by Purchaser all of Seller's employees working at the Branch
Offices on the Closing Date, and Purchaser will offer, for a period of at least
ninety (90) days following the Closing Date, employment on an "at will" basis to
all such employees, it being understood that nothing herein shall prohibit
Purchaser from terminating an employee for cause. The acceptance of Purchaser's
offer of employment by any or all such employees shall not constitute a
condition of Closing hereunder. Schedule 11.1 attached hereto and updated to the
Closing Date sets forth a true, correct and complete list showing all such
employees, their respective dates of hire and salary levels. Seller shall remain
liable for any salaries, wages, employee benefits, bonuses, or commissions
earned or accrued by all such personnel before the Closing Date.
Section 11.2 Benefit Plans. All employees hired by Purchaser in
accordance with Section 11.1 above shall receive full credit for their prior
service with Seller under Purchaser's benefit plans and policies, including its
vacation and sick leave policies. Unless the Purchaser's profit sharing plan
otherwise expressly
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prohibits, such employees' tenure with Seller shall be given full credit with
respect to the ability to participate in the Purchaser's profit sharing plan and
to immediately vest as to all contributions thereto. As of the Closing Date,
such employees and their dependents, if any, previously covered under Seller's
health insurance plan shall be covered under Purchaser's health insurance plan
without being subject to any pre-existing condition limitations or exclusions
except (a) those excluded under Seller's health insurance plan, or (b) those
lawfully excluded in writing by Purchaser's health insurance carrier. Prior to
Closing, each of Seller and Purchaser shall have provided to the other copies of
the summary plan descriptions of all employee benefit plans.
Section 11.3 Representations with Respect to Employees. Seller
represents and warrants to Purchaser that Seller is not a party to any employee
contracts or compensation arrangements with respect to its employees working at
the Branches, and Seller will indemnify Purchaser with respect to any and all
liabilities arising under any such contract or arrangement. During the period of
time from the date hereof through the Closing Date, Seller agrees not to
increase the number of employees, employee compensation or employee benefits,
other than employee compensation increases which would have otherwise occurred
in the ordinary course of business. Seller represents and warrants that Seller's
employees are not represented by a labor union nor are they parties to a
collective bargaining agreement and that no request for such representation is
pending.
Article 12
Miscellaneous
Section 12.1 Notices. Any notice, request, approval, consent, demand or
other communication shall be effective upon the first to occur of the following:
(i) upon receipt by the party to whom such notice, request, approval, consent,
demand or other communication is being given; or (ii) three (3) business days
after being duly deposited in the United States mail, registered or certified,
return receipt requested, and addressed as follows:
(a) If to Purchaser, to: Enterprise Bank of South Carolina
X.X. Xxx 0
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: X. X. Xxxx, Xx.
with a copy to: Xxxx, Xxxxx & XxXxxxxx, L.L.C.
000X X. Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: H. Xxxxx Xxxxx, Xx., Esquire
Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P.
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: X. Xxxxxxx Xxxxx, Esquire
(b) If to Seller, to: CapitalBank
X.X. Xxx 000
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
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with a copy to: Nexsen, Pruet, Xxxxxx & Xxxxxxx, LLC
X.X. Xxxxxx 0000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxx III, Esquire
The parties hereto may change their respective addresses by notice in
writing given to the other party to this Agreement.
Section 12.2 Conditions for Termination. In addition to the provisions
for termination as provided elsewhere in this Agreement, this Agreement shall
terminate and be of no further force or effect as between the parties, except as
to liability for breach of any duty or obligation arising prior to the date of
termination, upon the occurrence of any of the following:
(a) The expiration of thirty (30) calendar days after any
governmental agency shall have denied or refused to grant the
approvals or consents required to be obtained pursuant to this
Agreement, unless within said thirty (30) day period Purchaser
and Seller agree to submit or resubmit an application to, or
appeal the decision of, the regulatory authority which denied
or refused to grant approval thereof;
(b) The expiration of thirty (30) Business Days from the date that
either party has given notice to the other party of such other
party's material breach of any covenant or failure to fulfill
any condition to such party's performance under this
Agreement; provided, however, that no such termination shall
take effect if within said thirty (30) day period the party so
notified shall have fully and completely corrected the grounds
for termination as specified in such notice;
(c) Upon the failure to consummate the transaction on or before
July 1, 2001, unless such date is extended in writing agreed
to by both parties; and
(d) Upon mutual consent of the parties to terminate.
Notwithstanding anything to the contrary contained in this Agreement,
no party hereto shall have the right to terminate this Agreement on account of
its own breach, a breach by its affiliate, or any immaterial breach by another
party.
Section 12.3 Effect of Termination. No termination of this Agreement
pursuant to this Article 12 or for any reason or in any manner shall release, or
be construed to release, either party hereto from liability or damage to the
other party arising out of, in connection with, or otherwise relating to,
directly or indirectly, such party's breach, default or failure in performance
of any material covenants, agreements, duties or obligations arising hereunder.
Section 12.4 Rights Upon Default. The parties hereto each acknowledge
that the rights of the other to consummate the transactions contemplated by this
Agreement are special, unique and of extraordinary character, and that, in the
event that any party violates or fails or refuses to perform any covenant or
agreement made in this Agreement, then the other party may be without adequate
remedy at law. The parties each agree, therefore, that in the event that any of
them violates or fails or refuses to perform any covenant or agreement made in
this Agreement, any other party may, in addition to any remedies at law for
damages or other relief, institute and prosecute an action in any court of
competent jurisdiction to enforce specific performance of such covenant or
agreement or seek any other equitable relief.
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Section 12.5 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the undersigned parties and their respective
successors and permitted assigns (and to or for the benefit of no other person
or entity whatsoever). Except for such assignments as may be necessary to effect
the transactions through wholly-owned subsidiaries of the parties hereto and for
the transfer of any or all of Purchaser's rights hereunder to its parent
corporation, no assignment of this Agreement shall be made by the parties prior
to the Closing without the prior written consent of all parties.
Section 12.6 Governing Law. Except as required by federal law, this
Agreement shall be controlled, construed and enforced in accordance with the
laws of South Carolina.
Section 12.7 Announcements. The parties agree that the terms and
conditions of the transactions contemplated in this Agreement are to remain
confidential, except and only to the extent that applicable law requires
disclosure (and then notice of such disclosure shall be given to the other). Any
announcement or notice to third parties or to the public concerning the
transactions contemplated by this Agreement shall be jointly planned and
coordinated between the parties hereto.
Section 12.8 Confidentiality. The parties agree that all information
provided to the other parties hereunder (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) is confidential and shall be used by the other parties
only for the purposes hereof. Should this Agreement be terminated for any
reason, each party shall return all such information, including all copies, to
the other party or parties.
Section 12.9 Integration. This Agreement and other agreements,
documents, and instruments to be delivered pursuant hereto supersedes all prior
negotiations, agreements and understandings between the parties and shall
constitute the entire agreement of the parties with respect to the subject
matter hereof, and may not be altered or amended except in a writing signed by
the parties.
Section 12.10 Waiver. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
to enforce the same; and no waiver by a party of any provision (or breach of a
provision) hereof, whether by conduct or otherwise, in any one or more instances
shall be denied or construed either as a further or continuing waiver of any
such provision or breach or as a waiver of any other provision or breach hereof.
Section 12.11 Headings. The headings of the Sections and Articles of
this Agreement are inserted for convenience only and shall not constitute a part
hereof.
Section 12.12 Expenses. Except as otherwise provided in this Agreement,
all legal, accounting and other costs and expenses incurred in connection with
the execution, delivery and performance of this Agreement and the transactions
contemplated hereby shall be borne and paid by the party incurring such costs
and expenses, and neither party shall be obligated for any cost or expense
incurred by the other party.
Section 12.13 Severability. In the event that any court of competent
jurisdiction shall determine that any provision of this Agreement is invalid,
such determination shall not affect the validity of the other provisions of this
Agreement, which shall remain in full force and effect and which shall be
construed as to be valid under applicable law.
Section 12.14 Time of the Essence. Due to the sensitive nature of this
transaction, it understood and agreed that time is of the essence of this
Agreement.
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Section 12.15 No Inference Against Author. No provision of this
Agreement shall be interpreted against any party because such party or its legal
representative drafted such provision.
Section 12.16 Counterparts. This Agreement may be executed
simultaneously in several counterparts, each of which shall be deemed an
original but which together shall constitute one and the same original.
[SIGNATURE PAGE ATTACHED]
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IN WITNESS WHEREOF, the parties have duly executed this Purchase and
Assumption Agreement as of the day first above written.
PURCHASER:
----------
ENTERPRISE BANK OF SOUTH CAROLINA
/s/ Xxxxx Xxxxx By: /s/ X.X. Xxxx, Xx.
--------------- ------------------------
Witness X. X. Xxxx, Xx.
Its: President
SELLER:
-------
CAPITALBANK
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
--------------- ------------------------
Witness Xxxxxxx X. Xxxxxxx
Its: President and Chief Executive Officer
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List of Exhibits
----------------
Exhibit A - Assignment and Assumption Agreement
Exhibit B - Xxxx of Sale
Exhibit C - Assignment and Assumption of Lease Agreement
Schedule 2.1(b) - Branch Property
Schedule 2.1(c) - Branch Lease
Schedule 2.1(f) - Safe Deposit Leases
Schedule 2.1(g) - Equipment Leases
Schedule 2.2(a) - Excluded Leases
Schedule 2.2(b) - Excluded Assets
Schedule 2.3(a) - Branch Deposits
Schedule 2.3(c) - Additional Liabilities
Schedule 2.4(a) - Excluded Deposits
Schedule 11.1 - Employees
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